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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
OCTOBER 5, 1998
GABLES REALTY LIMITED PARTNERSHIP
(Exact name of Registrant as specified in its charter)
DELAWARE 000-22683 58-2077966
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
2859 PACES FERRY ROAD, SUITE 1450
ATLANTA, GEORGIA 30339
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
770-436-4600
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ITEM 5. OTHER EVENTS.
On October 5, 1998, Gables Realty Limited Partnership (the
"Partnership"), the entity through which Gables Residential Trust (the
"Company") conducts substantially all of its business and owns (either directly
or through subsidiaries) substantially all of its assets, completed the offering
of an aggregate $50,000,000 principal amount of its 6.55% Senior Notes due 2000
(the "Notes"). The offering of the Notes was made pursuant to a Prospectus
Supplement dated September 30, 1998 relating to the Prospectus dated August 11,
1997 filed with the Partnership's and the Company's shelf registration statement
on Form S-3 (File No. 333-30093).
The Notes bear interest at 6.55% per annum from October 1, 1998, with
interest payable in arrears each April 1 and October 1 commencing April 1, 1999.
The entire principal amount of the Notes is due October 1, 2000. 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 Supplemental Indenture No. 2 referenced below),
if any, with respect to such Notes.
The Notes were issued under an Indenture dated March 23, 1998 and a
Supplemental Indenture No. 2 dated September 30, 1998, each between the
Partnership and First Union National Bank, as trustee. The offering of the Notes
was underwritten by PaineWebber Incorporated, Chase Securities Inc. and J.P.
Morgan Securities Inc. The underwriting discount was 0.300% and the price to the
public was 99.925% of the principal amount of the Notes.
The net proceeds to the Partnership from the sale of the Notes, after
deducting the underwriting discount and related issuance costs, were
approximately $49.7 million. The Partnership will use the net proceeds to reduce
borrowings under its credit facilities.
Delivery of the Notes was made on October 5, 1998 through the
facilities of the Depository Trust Company, against payment therefor in
immediately available funds.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED:
Not Applicable
(b) PRO FORMA FINANCIAL INFORMATION:
Not Applicable
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(c) EXHIBITS:
Exhibit No.
- -----------
1.1 Underwriting Agreement, dated September 30, 1998.
4.1 Indenture, dated as of March 23, 1998, between Gables Realty
Limited Partnership and First Union National Bank (incorporated
herein by reference to the Partnership's Current Report on
Form 8-K dated March 23, 1998).
4.2 Supplemental Indenture No. 2, dated September 30, 1998, between
Gables Realty Limited Partnership and First Union National Bank,
including a form of the 6.55% Senior Note due 2000.
4.3 Gables Realty Limited Partnership 6.55% Senior Note due 2000.
5.1 Opinion as to the legality of the Notes.
12.1 Gables Realty Limited Partnership Calculation of Ratios of
Earnings to Fixed Charges.
12.2 Gables Realty Limited Partnership Calculation of Ratios of
Earnings to Combined Fixed Charges and Preferred Dividends.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 7, 1998 GABLES REALTY LIMITED PARTNERSHIP
By: Gables GP, Inc., its general partner
/s/ Marvin R. Banks, Jr.
-------------------------------------
By: Marvin R. Banks, Jr.
Chief Financial Officer
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Exhibit 1.1
$50,000,000
GABLES REALTY LIMITED PARTNERSHIP
6.55% SENIOR NOTES DUE 2000
UNDERWRITING AGREEMENT
DATED SEPTEMBER 30, 1998
PAINEWEBBER INCORPORATED
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
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$50,000,000
GABLES REALTY LIMITED PARTNERSHIP
6.55% Senior Notes due 2000
UNDERWRITING AGREEMENT
September 30, 1998
PAINEWEBBER INCORPORATED
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
c/o PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
INTRODUCTORY. Gables Realty Limited Partnership, a Delaware limited
partnership (the "Operating Partnership") of which the sole general partner is
Gables GP, Inc. ("Gables GP"), a Texas corporation and a wholly-owned subsidiary
of Gables Residential Trust, a Maryland real estate investment trust (the "REIT"
and, together with the Operating Partnership and Gables GP, the "Company"),
proposes to sell to the Underwriters named in SCHEDULE 1 hereto (the
"Underwriters") the aggregate principal amounts listed in SCHEDULE 1 hereto of
the Operating Partnership's debt securities identified in SCHEDULE 2 hereto (the
"Securities"), to be issued under that certain indenture, dated as of March 23,
1998, as supplemented by that certain First Supplemental Indenture, dated as of
March 23, 1998, and a Second Supplemental Indenture, to be dated as of September
30, 1998, each by and between the Operating Partnership and First Union National
Bank (the "Trustee"), as trustee (as so supplemented, the "Indenture").
The REIT and the Operating Partnership confirm their agreements with
the Underwriters as follows.
1. AGREEMENT TO SELL AND PURCHASE.
On the basis of the representations, warranties and agreements
contained herein, but subject to the terms and conditions set forth herein, the
Operating Partnership agrees to issue and sell the Securities to the
Underwriters as hereinafter provided, and the Underwriters agree to purchase
from the Operating Partnership the Securities at the purchase price set forth in
SCHEDULE 2 hereto plus accrued interest, if any, from the date specified in
SCHEDULE 2 hereto to the date of payment and delivery.
The Company understands that the Underwriters intend (i) to make a
public offering of the Securities, and (ii) initially to offer the Securities
upon the terms set forth in the Prospectus.
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2. DELIVERY AND PAYMENT.
Payment for the Securities shall be made to the Operating Partnership
or to its order in immediately available funds in the amount and on the date and
time set forth in SCHEDULE 2 hereto or at such place and at such other time on
the same date or such other date, not later than the eighth Business Day
thereafter, as the Underwriters and the Operating Partnership may agree in
writing (or if the NYSE or American Stock Exchange or commercial banks in the
City of New York are not open on such day, the next day on which such exchanges
and banks are open). Such payment will be made upon delivery to the Underwriters
of the Securities registered in such names and in such denominations as the
Underwriters shall request not less than two full Business Days prior to the
date of delivery, with transfer taxes, if any, payable in connection with
transfer to the Underwriters duly paid by the Company. 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." The Securities will be delivered through the book entry facilities of The
Depository Trust Company ("DTC") and, if requested by the Underwriters, will be
made available for inspection by the Underwriters no later than 1:00 P.M. New
York City time on the Business Day prior to the Closing Date at such place in
New York City as the Underwriters, DTC and the Operating Partnership shall
agree.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Securities by the Operating Partnership to the
Underwriters shall be borne by the Company. The Company will pay and save the
Underwriters and any subsequent holder of the Securities harmless from any and
all liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
the Underwriters of the Securities.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The REIT and the
Operating Partnership, jointly and severally, represent, warrant and covenant to
the Underwriters that:
(a) The Operating Partnership meets the requirements for use of
Form S3 and a registration statement (Registration No. 333-30093) on Form
S-3 relating to the Securities, including a prospectus (as amended, the
"Base Prospectus"), has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the rules and regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder and
has been filed with the Commission and has become effective; and on or
prior to the Closing Date the Indenture shall have been qualified under the
Trust Indenture Act of 1939, as amended (together with the rules and
regulations of the Commission thereunder, the "Trust Indenture Act"). Such
registration statement and prospectus may have been amended or supplemented
prior to the date of this Agreement; any such amendment or supplement was
so prepared and filed, and any such amendment filed after the effective
date of such registration statement has become effective. No stop order
suspending the effectiveness of the registration statement has been issued,
and no proceeding for that purpose has been instituted or, to the Company's
knowledge, threatened by the Commission. Copies of such registration
statement and prospectus, any such amendments or supplements and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Agreement have been delivered or
made available to the Underwriters. A prospectus supplement (the
"Prospectus Supplement") setting forth the terms of the Securities and of
their sale and distribution has been or will be so prepared and will be
filed pursuant to Rule 424(b) of the Rules and Regulations on or
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before the second business day after the date hereof (or such earlier time
as may be required by the Rules and Regulations). The term "Registration
Statement" means such registration statement as amended at the time it
became effective (the "Effective Date"), including financial statements and
all exhibits and any information deemed by virtue of Rule 430A of the Rules
and Regulations to be included in such Registration Statement at the
Effective Date and any prospectus supplement filed thereafter with the
Commission and shall include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The term
"Prospectus" means, collectively, the Base Prospectus together with any
prospectus supplement, in the respective forms they are filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, and
includes the documents incorporated by reference in the Base Prospectus and
in any prospectus supplement. Any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement or
the Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be
incorporated by reference therein. For purposes of this Underwriting
Agreement, all references to the Registration Statement, the Prospectus or
any amendment or supplement thereto shall be deemed to include any copy
filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System (EDGAR), and such copy shall be identical
(except to the extent permitted by Regulation S-T) to any Registration
Statement or Prospectus, as the case may be, delivered to you for use in
connection with the offering of the Securities by the Operating
Partnership.
(b) Each part of the Registration Statement, when such part
became or becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and
at the Closing Date, including the financial statements included or to be
included or incorporated by reference or to be incorporated by reference in
the Registration Statement or the Prospectus, conformed or will conform in
all material respects with the requirements of the Act, the Rules and
Regulations, the Exchange Act and the rules and regulations thereunder (the
"Exchange Act Rules and Regulations") and will contain all statements
required to be stated therein in accordance with the Act, the Rules and
Regulations, the Exchange Act and the Exchange Act Rules and Regulations;
the Indenture, on the date of filing thereof with the Commission and at the
Closing Date conformed or will conform in all material respects with the
requirements of the Trust Indenture Act; each part of the Registration
Statement, when such part became or becomes effective, did not or will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the
Closing Date, did not or will not include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this Section
3(b) do not apply to (i) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification under the Trust
Indenture Act (the "Form T-1") and (ii) any statements or omissions made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by such Underwriter specifically for
inclusion in the Registration Statement or the Prospectus or any amendment
or supplement thereto. The Company acknowledges that the only information
furnished in writing to the Company by the Underwriters specifically for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus is the information set forth in EXHIBIT A hereto. The Company
has not distributed any offering material in connection with the offering
or sale of the Securities other than the Registration Statement, the
Prospectus, or other materials, if any, permitted by the Act.
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(c) The documents incorporated or to be incorporated by
reference in the Registration Statement or the Prospectus or any amendment
or supplement thereto or from which information is so incorporated by
reference, when they became or become effective or were or are filed with
the Commission, as the case may be, complied or will comply in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations.
(d) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on SCHEDULE 3
hereto (the "subsidiaries"). The Company and each of its subsidiaries is,
and at the Closing Date will be, an entity duly organized or formed, as the
case may be, and, in the case of an entity that is not a general
partnership, validly existing and in good standing under the laws of the
jurisdiction of its organization or incorporation. The Company and each of
its subsidiaries has, and at the Closing Date will have, full power and
authority to conduct all the activities conducted by it, to own or lease
all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The Company and
each of its subsidiaries is, and at the Closing Date will be, duly licensed
or qualified to do business and (except for subsidiaries that are general
partnerships) in good standing as a foreign trust, limited partnership or
corporation, as the case may be, in all jurisdictions in which the nature
of the activities conducted by it or the character of the assets owned or
leased by it makes such licensing or qualification necessary except where
the failure to be so qualified does not have a material adverse effect on
the business, properties, financial position or results of the Company and
its subsidiaries, taken as a whole. Except for the stock or partnership
interests of the subsidiaries and as disclosed in the Registration
Statement, the Company does not own, and at the Closing Date will not own,
directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in
any firm, partnership, joint venture, association or other entity. Complete
and correct copies of the Amended and Restated Declaration of Trust and the
Second Amended and Restated By-laws of the Company and the charter
documents of each of its subsidiaries and all amendments thereto have been
delivered or made available to the Underwriters and no changes therein will
be made subsequent to the date hereof and prior to the Closing Date.
(e) The outstanding securities of the REIT, have been duly
authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right. The description of the REIT's
common shares of beneficial interest, par value $0.01 per share (the
"Common Shares") in the Registration Statement and the Prospectus is, and
at the Closing Date will be, in all material respects, complete and
accurate. Except as set forth in the Prospectus, the REIT does not have
outstanding, and at the Closing Date will not have outstanding, any options
to purchase, or any rights or warrants to subscribe for, or any securities
or obligations convertible into, or any contracts or commitments to issue
or sell, any Common Shares, any preferred shares of the REIT, any shares of
capital stock of any subsidiary or any such warrants, convertible
securities or obligations other than (i) pursuant to the REIT's dividend
reinvestment plan and (ii) the REIT's Third Amended and Restated 1994 Share
Option and Incentive Plan, as amended.
(f) The outstanding securities of the Operating Partnership,
have been duly authorized and validly issued and will not be subject to any
preemptive or similar right. Except as set forth in the Prospectus, the
Operating Partnership does not have outstanding, and at the Closing Date
will not have outstanding, any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations convertible
into, or any contracts or commitments to issue or sell,
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any shares of capital stock of the Operating Partnership. There are no
requirements, restrictions or limitations in the terms of the preferred
units of partnership interest in the Operating Partnership ("Preferred
Units") applicable to the issuance and sale of the Securities.
(g) The Securities will be, as of the Closing Date, duly
authorized by the Operating Partnership for issuance and sale pursuant to
this Underwriting Agreement and the Indenture, and when duly authenticated
and delivered by the Trustee in accordance with the terms of the Indenture
(assuming the due authorization, execution and delivery of the Indenture by
the Trustee), and delivered to, and paid for in full by, the Underwriters
pursuant to this Underwriting Agreement, will be valid and legally binding
obligations of the Operating Partnership entitled to the benefit of the
Indenture and will be enforceable against the Company in accordance with
their terms, subject to (a) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, (b) general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or law), (c) the discretion
of the court before which any proceeding therefor may be brought, and (d)
applicable Federal and state securities laws and public policy which may
limit the application of provisions relating to indemnification and
contribution with respect to securities law matters (clauses (a), (b), (c)
and (d) are collectively referred to as the "Enforceability Limitations");
the Indenture has been duly qualified under the Trust Indenture Act and
prior to the issuance of the Securities will be duly authorized, executed
and delivered by the Operating Partnership, and assuming due authorization,
execution and delivery thereof by the Trustee, will constitute a valid and
legally binding obligation of the Operating Partnership, enforceable
against the Operating Partnership in accordance with its terms, subject to
the Enforceability Limitations; the Securities and the Indenture will
conform in all material respects to the statements relating thereto
contained in the Prospectus; and the Securities will be, in all material
respects, in the form contemplated by the Indenture.
(h) The financial statements and schedules of the Company
included or incorporated by reference in the Registration Statement or the
Prospectus present fairly the consolidated financial condition of the
Company as of the respective dates thereof and the consolidated results of
operations and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved, except
as otherwise disclosed in the Prospectus. The pro forma financial
statements of the Company, if any, included in the Registration Statement
and the Prospectus comply in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X of the Commission and the pro
forma adjustments have been properly applied to the historical amounts in
the compilation of such statements. No other financial statements or
schedules of the Company are required by the Act, the Exchange Act or the
Rules and Regulations to be included in the Registration Statement or the
Prospectus. Arthur Andersen LLP, independent public accountants (the
"Accountants"), who have reported on those of such financial statements and
schedules which are audited, are independent accountants with respect to
the Company as required by the Act and the Rules and Regulations. The
statements included in the Registration Statement with respect to the
Accountants pursuant to Rule 509 of Regulation S-K of the Rules and
Regulations are true and correct in all material respects.
(i) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain
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accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(j) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been
any change in the capitalization of the Company, or in the business,
properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its subsidiaries, arising for any
reason whatsoever, other than pursuant to the REIT's dividend reinvestment
plan or by way of grants of Common Shares or options to purchase Common
Shares or the exercise of such options, in any such case under the
Company's Third Amended and Restated 1994 Share Option and Incentive Plan,
as amended, (ii) neither the Company nor any of its subsidiaries has
incurred nor will it incur any material liabilities or obligations, direct
or contingent, nor has it entered into nor will it enter into any material
transactions other than pursuant to this Agreement and the transactions
referred to herein and (iii) the Company has not and will not have paid or
declared any dividends or other distributions of any kind on any class of
its capital stock.
(k) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended.
(l) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or
threatened against or affecting the Company or any of its subsidiaries or
any of their respective officers in their capacity as such, before or by
any Federal or state court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, wherein an
unfavorable ruling, decision or finding might materially and adversely
affect the Company or any of its subsidiaries or its business, properties,
business prospects, condition (financial or otherwise) or results of
operations.
(m) The Company and each of its subsidiaries has, and at the
Closing Date will have, (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its
business as contemplated in the Prospectus, except where failure to obtain
any of the foregoing will not have a material adverse effect on the
business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries,
taken as a whole (a "Material Adverse Effect"), (ii) complied in all
material respects with all laws, regulations and orders applicable to it or
its business except where failure to comply with any of the foregoing would
not have a Material Adverse Effect, and (iii) performed all its material
obligations required to be performed by it, and is not, and at the Closing
Date will not be, in default, under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement,
lease, contract or other agreement or instrument (collectively, a "contract
or other agreement") to which it is a party or by which its property is
bound or affected, the violation of which would have a Material Adverse
Effect. To the best knowledge of the Company and each of its subsidiaries,
no other party under any contract or other agreement to which it is a party
is in default thereunder in such a manner that, individually or in the
aggregate, would have a reasonable likelihood of causing a Material Adverse
Effect. The Company is not, nor at the Closing Date will be, in violation
of any provision of its Amended and Restated Declaration of Trust
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and Second Amended and Restated By-laws. No subsidiary of the Company is,
nor at the Closing Date will any of them be, in violation of any provision
in their respective charter documents.
(n) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is
required for the consummation by the Company of the transactions on its
part herein contemplated, except such as have been obtained under the Act
or the Rules and Regulations and such as may be required under state or
Canadian securities or blue sky laws or the by-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in connection
with the purchase and distribution by the Underwriters of the Securities to
be sold by the Company.
(o) The Operating Partnership has full power and authority to
enter into this Agreement and the Indenture. The REIT has full power and
authority to enter into this Agreement and the Indenture. This Agreement
has been duly authorized, executed and delivered by the REIT and the
Operating Partnership and constitutes a valid and binding agreement of the
REIT and the Operating Partnership and is enforceable against the REIT and
the Operating Partnership in accordance with the terms hereof. The
performance of this Agreement and the Indenture and the consummation of the
transactions contemplated hereby and thereby will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or any of its subsidiaries pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any other party a
right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the Amended and Restated Declaration
of Trust or Second Amended and Restated By-laws of the REIT or the
Partnership Agreement and any other organizational documents of the
Operating Partnership or the charter documents of Gables GP or any of the
Company's subsidiaries, any contract or other agreement to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule
or regulation of any court or other governmental agency or body applicable
to the business or properties of the Company or any of its subsidiaries.
(p) The Company and each of its subsidiaries has good and
marketable title to all properties and assets described in the Prospectus
as owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as (i) are described in the Prospectus or (ii)
are not material to the business of the Company or its subsidiaries, taken
as a whole. The Company and each of its subsidiaries has valid, subsisting
and enforceable leases for the properties described in the Prospectus as
leased by it, with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such
properties by the Company and such subsidiaries; no tenant under any of the
leases pursuant to which the Company leases its properties has an option or
right of first refusal to purchase the premises demised under such lease;
the use and occupancy of each of the properties of the Company complies in
all material respects with all applicable codes and zoning laws and
regulations; the Company has no knowledge of any pending or threatened
condemnation or zoning change that will in any material respect affect the
size of, use of, improvements of, construction on, or access to any of the
properties of the Company; and the Company has no knowledge of any pending
or threatened proceeding or action that will in any manner affect the size
of, use of, improvements on, construction on, or access to any of the
properties of the Company.
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(q) Title insurance in favor of the Company (or the subsidiary
which holds title to such property) is maintained with respect to each of
the properties owned by the Company in an amount at least equal to the
greater of (i) the cost of acquisition of such property or (ii) the cost of
construction by the Company of the improvements located on such property
(measured at the time of such construction), except, in each case, where
the failure to maintain such title insurance would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
taken as a whole. Title insurance in favor of the mortgagee is maintained
in an amount equal to the maximum commitment of the related loan.
(r) The mortgages and deeds of trust encumbering the properties
and assets described in the Prospectus are not convertible nor does the
Company hold a participating interest therein.
(s) The Company has no knowledge of (i) the unlawful presence of
any hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, "Hazardous Materials") on any of the properties
owned by it, or (ii) any unlawful spills, releases, discharges or disposal
of Hazardous Materials that have occurred or are presently occurring off
such properties as a result of any construction on or operation and use of
such properties, which presence or occurrence would have a Material Adverse
Effect. In connection with the construction or operation and use of the
properties owned by the Company, the Company represents that, as of the
date of this Agreement, it has no knowledge of any failure to comply with
all applicable local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to the
generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials, which failure would have a Material
Adverse Effect.
(t) Property and casualty insurance in favor of the Company is
maintained with respect to each of the properties owned by it in an amount
and on such terms as is reasonable and customary for businesses of this
type.
(u) There is no document or contract of a character required to
be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or filed
as required. All such contracts and all contracts relating to any tax
exempt financings to which the Company or any subsidiary is a party have
been duly authorized, executed and delivered by the Company or such
subsidiary, constitute valid and binding agreements of the Company or such
subsidiary and are enforceable against the Company or such subsidiary in
accordance with the terms thereof.
(v) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Underwriters was or will
be, when made, inaccurate, untrue or incorrect.
(w) Neither the Company nor any of its trustees, officers or
controlling persons has taken, directly or indirectly, any action intended,
or which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities.
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<PAGE> 10
(x) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(y) Neither the Company nor any of its subsidiaries is involved
in any material labor dispute nor, to the knowledge of the Company, is any
such dispute threatened.
(z) The Company and its subsidiaries own, or are licensed or
otherwise have the full exclusive right to use, all material trademarks and
trade names which are used in or necessary for the conduct of their
respective businesses as described in the Prospectus, including, without
limitation, the name "Gables" for use in connection with residential
communities. No claims have been asserted by any person to the use of any
such trademarks or trade names or challenging or questioning the validity
or effectiveness of any such trademark or trade name. The use, in
connection with the business and operations of the Company and its
subsidiaries of such trademarks and trade names does not, to the Company's
knowledge, infringe on the rights of any person.
(aa) Neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any subsidiary
has made any payment of funds of the Company or any subsidiary or received
or retained any funds in violation of any law, rule or regulation or of a
character required to be disclosed in the Prospectus.
(bb) The REIT has continuously been organized and operated in
conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended (the
"Code") for all taxable years commencing with its taxable year ended
December 31, 1994. The REIT has filed an election to be taxable as a real
estate investment trust for its taxable year ended December 31, 1994, and
such election has not been terminated. The REIT's method of operation will
permit it to continue to meet the requirements for taxation as a real
estate investment trust under the Code. The REIT intends to continue to
operate in a manner which would permit it to qualify as a real estate
investment trust under the Code.
4. AGREEMENTS OF THE REIT AND THE OPERATING PARTNERSHIP. The REIT and
the Operating Partnership agree with the Underwriters as follows:
(a) The Company will cause the Prospectus Supplement to be filed
as required by Section 3(a) hereof (but only if the Underwriters have not
reasonably objected thereto by notice to the Company after having been
furnished a copy a reasonable time prior to filing) and will notify you
promptly of such filing. The Company will not, during such period as the
Prospectus is required by law to be delivered in connection with sales of
the Securities by any Underwriter or dealer (the "Prospectus Delivery
Period"), file any amendment or supplement to the Registration Statement or
the Prospectus, unless a copy thereof shall first have been submitted to
the Underwriters within a reasonable period of time prior to the filing
thereof and the Underwriters shall not have objected thereto in good faith.
(b) The Company will notify the Underwriters promptly, and will
confirm such advice in writing, (1) when any post-effective amendment to
the Registration Statement becomes effective, (2) of any request by the
Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information, (3) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any
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<PAGE> 11
proceedings for that purpose or the threat thereof, (4) of the happening of
any event during the Prospectus Delivery Period that in the judgment of the
Company makes any statement made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not
misleading and (5) of receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission
relating to the Company, the Registration Statement, or the Prospectus. If
at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment.
(c) The Company will furnish to the Underwriters, upon request
and without charge, two signed copies of the Registration Statement and of
any post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus).
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) The Company will deliver to each Underwriter, without
charge, as many copies of the Prospectus containing the Prospectus
Supplement or any amendment or supplement thereto as such Underwriter may
reasonably request. The Company consents to the use of the Prospectus or
any amendment or supplement thereto by the Underwriters and by all dealers
to whom the Securities may be sold, both in connection with the offering or
sale of the Securities and for any period of time thereafter during which
the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment
of the Company or counsel to the Underwriters should be set forth in the
Prospectus in order to make any statement therein, in the light of the
circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with law, the
Company will forthwith prepare and duly file with the Commission an
appropriate supplement or amendment thereto, and will deliver to each
Underwriter, without charge, such number of copies of such supplement or
amendment to the Prospectus as such Underwriter may reasonably request. The
Company shall not file any document under the Exchange Act before the
termination of the offering of the Securities by the Underwriters if such
document would be deemed to be incorporated by reference into the
Prospectus which is not approved by the Underwriters after reasonable
notice thereof.
(f) Prior to any public offering of the Securities the Company
will cooperate with the Underwriters and counsel to the Underwriters in
connection with the registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of such jurisdictions
as the Underwriters may request including, without limitation,
jurisdictions outside of the United States; provided, that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which
would subject it to general service of process in any jurisdiction where it
is not now so subject.
(g) During the period of five years commencing on the date
hereof, the Company will, upon request for such item by an Underwriter,
furnish to such Underwriter such
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<PAGE> 12
financial statements and other periodic and special reports as the Company
may from time to time distribute generally to the holders of any class of
its capital stock, and will, upon request for such item by such
Underwriter, furnish to such Underwriter a copy of each annual or other
report it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the end of the
Company's current fiscal quarter, an earnings statement (which need not be
audited but shall be in reasonable detail) for a period of 12 months
beginning after the date upon which the Prospectus Supplement is filed
pursuant to Rule 424 under the Act, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will
pay, or reimburse if paid by the Underwriters, all fees, costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to fees, costs and expenses of or
relating to (i) the preparation, printing and filing of the Registration
Statement and exhibits to it, the Prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (ii) the
preparation and delivery of notes representing the Securities, (iii) the
printing of this Agreement and any Dealer Agreements, (iv) furnishing
(including costs of shipping and mailing) such copies of the Registration
Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in
connection with the offering and sale of the Securities by the Underwriters
or by dealers to whom Securities may be sold, (v) filings required to
be made by or on behalf of the Company or the Underwriters, including
without limitation filings to be made by the Underwriters with the NASD,
and the fees and disbursements and other charges (other than counsel for
the Underwriters) in connection therewith and filings to be made by the
Company with the Commission, and the fees, disbursements and other charges
of counsel for the Company in connection therewith, (vi) the registration
or qualification of the Securities for offer and sale under the securities
or blue sky laws of such jurisdictions designated pursuant to Section 4(f),
including the fees, disbursements and other reasonable charges of counsel
to the Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final blue sky memoranda, (vii)
counsel to the Company and any surveyors, engineers, appraisers,
photographers, accountants and other professionals engaged by or on behalf
of the Company, (viii) the Trustee, (ix) preparation of slides, overheads
and other presentation material to be used in any "road show" or other
presentation to potential investors and the hotel, travel and other
expenses of the Company's employees in connection with any such "road show"
or presentation, and (x) Moody's Investors Service, Inc. ("Moody's") and
Standard and Poor's Rating Services ("S&P" and, together with Moody's, the
"Rating Agencies") in connection with the rating of the Securities at the
request of the Company; provided, however, that with respect to any fees,
disbursements and other charges of counsel for the Underwriters in
connection with the registration and qualification of the Securities under
blue sky laws and the preparation of blue sky memorandum, the Company shall
not be responsible for counsel fees, disbursements and other charges in
excess of $15,000. The filing fee paid to the NASD shall not be considered
to be "fees, disbursements or other charges" for the purposes of this
Section 4(i) and shall be paid by the Company.
(j) If this Agreement shall be terminated by the Company
pursuant to any of the provisions hereof (otherwise than pursuant to
Section 8 hereof) or if for any reason the Company
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<PAGE> 13
shall be unable to perform its obligations hereunder, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including the
fees, disbursements and other charges of counsel to the Underwriters)
reasonably incurred by it in connection herewith.
(k) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause
or result in, or which will constitute, stabilization of the price of the
Securities to facilitate the sale or resale of any of the Securities.
(l) The Company will apply the net proceeds from the offering
and sale of the Securities to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds."
(m) Unless the Board of Trustees of the REIT determines in its
reasonable business judgment that continued qualification as a "real estate
investment trust" under the Code is not in the Company's best interest, the
REIT will not terminate its election to be taxed as a "real estate
investment trust" under the Code, and the Company will use its best efforts
to, and will continue to meet the requirements to, so qualify as a "real
estate investment trust."
(n) The Company will take all commercially reasonable action
necessary to enable the Rating Agencies to provide their respective credit
ratings of the Company, the Operating Partnership or the Securities, as the
case may be.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. In addition to
the execution and delivery of the Price Determination Agreement, the obligations
of the Underwriters hereunder are subject to the following conditions:
(a) The Prospectus shall have been filed as required by Section
3(a) and (i) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
be pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or
registration of the Securities under the securities or blue sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff
of the Commission or such authorities and (iv) after the date hereof no
amendment or supplement to the Registration Statement or the Prospectus
shall have been filed unless a copy thereof was first submitted to the
Underwriters and the Underwriters did not object thereto in good faith.
(b) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or
results of operations of Operating Partnership and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (ii) neither the Company nor
any of its subsidiaries shall have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action, order
13
<PAGE> 14
or decree, which is not set forth in the Registration Statement and the
Prospectus, if in the judgment of the Underwriters any such development
makes it impracticable or inadvisable to consummate the sale and delivery
of the Securities by the Underwriters and at the public offering price.
(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
subsidiaries or any of their respective officers or directors or trustees,
as the case may be, in their capacities as such, before or by any Federal,
state or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or
proceeding it is reasonably probable that an unfavorable ruling, decision
or finding would have a Material Adverse Effect.
(d) Each of the representations and warranties of the REIT and
the Operating Partnership contained herein shall be true and correct in all
material respects at the Closing Date, as if made at the Closing Date, and
all covenants and agreements contained herein to be performed on the part
of the Company and all conditions contained herein to be fulfilled or
complied with by the Company at or prior to the Closing Date, shall have
been duly performed, fulfilled or complied with.
(e) Subsequent to the execution and delivery of this
Underwriting Agreement and prior to the Closing Date, there shall not have
occurred any downgrading in the rating accorded the Securities or any other
debt securities of the Company by any Rating Agency nor shall any notice
have been given to the Company of (i) any intended or potential downgrading
by any Rating Agency in such securities, or (ii) any review or possible
change by any Rating Agency that does not indicate a stable, positive or
improving rating accorded such securities.
(f) The Underwriters shall have received one or more opinions,
dated the Closing Date and satisfactory in form and substance to the
Underwriters' counsel, from Goodwin, Procter & Hoar LLP, counsel to the
Company, (i) to the effect set forth in EXHIBIT B and (ii) concerning the
tax matters set forth below:
(i) Commencing with the Company's first taxable year ended
December 31, 1994, the Company has been organized in conformity with
the requirements for qualification as a REIT under the Code, and the
Company's method of operation, as described in the Prospectus and in
company certificates delivered to such counsel, will enable it to
continue to meet the requirements for qualification and taxation as a
REIT under the Code; and
(ii) Subject to a discussion of the Taxpayer Relief Act of
1997, which may be included in such opinion, the statements in the
Prospectus Supplement and the Prospectus under the captions "Certain
Federal Income Tax Consequences" and "Federal Income Tax
Considerations," to the extent such information constitutes matters of
law, summaries of legal matters, or legal conclusions, have been
reviewed by such counsel and are accurate in all material respects as
of the date of such opinion.
(g) The Underwriters shall have received an opinion, dated the
Closing Date, from O'Melveny & Myers LLP, Underwriters' counsel, with
respect to the Registration Statement,
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<PAGE> 15
the Prospectus and this Agreement, which opinion shall be satisfactory in
all respects to the Underwriters.
(h) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Underwriters a
letter, dated the date of its delivery, addressed to the Underwriters and
in form and substance satisfactory to the Underwriters, confirming that
they are independent accountants with respect to the Company as required by
the Act and the Rules and Regulations and with respect to the financial and
other statistical and numerical information contained in the Registration
Statement or incorporated by reference therein. At the Closing Date, the
Accountants shall have furnished to the Underwriters a letter, dated the
date of its delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter from the
Accountants, that nothing has come to their attention during the period
from the date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than three days prior to the Closing
Date which would require any change in their letter dated the date hereof
if it were required to be dated and delivered at the Closing Date.
(i) At the Closing Date, there shall be furnished to the
Underwriters an accurate certificate, dated the date of its delivery,
signed by each of the Chief Executive Officer and the Chief Financial
Officer of each of (a) Gables GP on behalf of the Operating Partnership and
(b) the REIT, in form and substance satisfactory to the Underwriters, to
the effect that:
(i) The Prospectus has been filed as required by Section
3(a) and no stop order suspending the effectiveness of the Registration
Statement under the Act or the blue sky laws of any jurisdiction has
been issued and, to the best of their knowledge, information and
belief, no proceeding for such purpose is pending before or threatened
or contemplated by the Commission or the authorities of any such
jurisdiction.
(ii) Any request for additional information on the part
of the staff of the Commission or any such authorities has been
complied with to the satisfaction of the staff of the Commission or
such authorities.
(iii) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus (including any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus) and (A) believes that as of the date of
such certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue
or misleading and (B) does not know of any event that has occurred as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or misleading in any
material respect and there has been no document required to be filed
under the Exchange Act and the Exchange Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference into
the Prospectus that has not been so filed.
(iv) Each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct in all
material respects.
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<PAGE> 16
(v) Each of the covenants required to be performed by
the Company herein on or prior to the delivery of such certificate has
been duly, timely and fully performed and each condition herein
required to be complied with by the Company on or prior to the date of
such certificate has been duly, timely and fully complied with.
(vi) Since the execution and delivery of the Underwriting
Agreement and prior to the Closing Date, there has not occurred any
downgrading in the rating accorded the Securities or any other debt
securities of the Company by any Rating Agency nor has any notice been
given to the Company of (A) any intended or potential downgrading by
any Rating Agency in such securities, or (B) any review or possible
change by any Rating Agency that does not indicate a stable, positive
or improving rating accorded such securities.
(j) The Securities shall be qualified for sale in such states as
the Underwriters may reasonably request, each such qualification shall be
in effect and not subject to any stop order or other proceeding on the
Closing Date.
(k) The Company shall have furnished to the Underwriters such
certificates, including, without limitation, one or more certificates of
the Secretary of the REIT and the Secretary of Gables GP on behalf of the
Operating Partnership, in addition to those otherwise specifically
mentioned herein, as the Underwriters may have reasonably requested as to
the accuracy and completeness at the Closing Date of any statement in the
Registration Statement or the Prospectus or any documents filed under the
Exchange Act and deemed to be incorporated by reference into the
Prospectus, as to the accuracy at the Closing Date of the representations
and warranties of the Company herein as to the performance by the Company
of its obligations hereunder or as to the fulfillment of the conditions
concurrent and precedent to the obligations hereunder of the Underwriters.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Operating Partnership and the REIT will indemnify and
hold each Underwriter, its directors, officers, employees and agents and
each person, if any, who controls it within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act harmless from and against any and
all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of,
any action, suit or proceeding between any of the indemnified parties and
any indemnifying parties or between any indemnified party and any third
party, or otherwise, or any claim asserted), as and when incurred, to which
any Underwriter, or any such person may become subject under the Act, the
Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based on (i) any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment
or supplement to the Registration Statement or the Prospectus or in any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, or in any application or other document
executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order
to qualify the Securities under the securities or blue sky laws thereof or
filed with the Commission, (ii) the omission or alleged omission to state
in such document a material fact required
16
<PAGE> 17
to be stated in it or necessary to make the statements in it, in the light
of the circumstances under which they were made, not misleading or (iii)
any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the
Securities or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability, expense or
action arising out of or based upon matters covered by clause (i) or (ii)
above (provided that the Company shall not be liable under this clause
(iii) to the extent it is finally judicially determined by a court of
competent jurisdiction that such loss, claim, damage, liability, expense or
action resulted directly from any such acts or failures to act undertaken
or omitted to be taken by such Underwriter through its gross negligence or
willful misconduct); provided, that the Company will not be liable to the
extent that such loss, claim, damage, liability, expense or action arises
from the sale of the Securities in the public offering to any person by any
Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to the Underwriter furnished in writing to the Company
by such Underwriter expressly for inclusion in the Registration Statement,
any preliminary prospectus or the Prospectus. This indemnity agreement will
be in addition to any liability that the Operating Partnership or the REIT
might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Operating Partnership, the REIT, each person, if any, who controls the
Operating Partnership or the REIT within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each trustee of the REIT and each
officer of the REIT or the Operating Partnership who signs the Registration
Statement to the same extent as the foregoing indemnity from the Operating
Partnership and the REIT to each Underwriter, but only insofar as losses,
claims, damages, liabilities, expenses or actions arise out of or are based
on any untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by such Underwriter
expressly for use in the Registration Statement or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting
discounts and commissions received by such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim
is to be made against an indemnifying party or parties under this Section
6, notify each such indemnifying party of the commencement of such action,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have
to any indemnified party under the foregoing provisions of this Section 6
unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If
any such action is brought against any indemnified party and it notifies
the indemnifying party of its commencement, the indemnifying party will be
entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of
the commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense of the
action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable
to the indemnified party for any legal or other expenses except as provided
below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel
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<PAGE> 18
in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (i) the
employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel to assume the defense
of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party
or parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one additional firm admitted
to practice in such jurisdiction at any one time for all such indemnified
party or parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or
claim effected without its written consent (which consent will not be
unreasonably withheld); provided, however, no indemnifying party shall,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding relating to the matters contemplated
by this Section 6 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
or that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but
for any reason is held to be unavailable from the Company or the
Underwriter, the Company and the Underwriters will contribute to the total
losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted, but after deducting any contribution received by the
Company from persons other than the Underwriters, such as persons who
control the Company within the meaning of the Act, officers of the Company
who signed the Registration Statement and trustees of the Company, who also
may be liable for contribution) to which the Company and any one or more of
the Underwriters may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus.
If, but only if, the allocation provided by the foregoing sentence is not
permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative
benefits referred to in the foregoing sentence but also the relative fault
of the Company, on the one hand, and the Underwriters, on the other, with
respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any
other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or
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omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purposes) or
by any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section
6(d) shall be deemed to include, for purpose of this Section 6(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), no Underwriter shall
be required to contribute any amount in excess of the underwriting
discounts and commissions received by it and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 6(d) are several in proportion to
their respective underwriting obligations and not joint. For purposes of
this Section 6(d), any person who controls a party to this Agreement within
the meaning of the Act will have the same rights to contribution as that
party, and each officer of the Company who signed the Registration
Statement will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim for contribution may be made under this
Section 6(d), will notify any such party or parties from whom contribution
may be sought, but the omission so to notify will not relieve the party or
parties from whom contribution may be sought from any other obligation it
or they may have under this Section 6(d). No party will be liable for
contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained
in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of the Securities and payment therefor or
(iii) any termination of this Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, agreements and covenants of the Company herein or
in certificates delivered pursuant hereto, and the agreements of the
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or the Company or any of its officers,
trustees, or any controlling persons, and shall survive (i) termination of this
Agreement and (ii) delivery of and payment for the Securities hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and
pay for the aggregate principal amount of Securities agreed by such
Underwriter or Underwriters to be purchased hereunder, upon tender of such
Securities in accordance with the terms hereof, and the aggregate principal
amount of Securities not purchased does not aggregate more than 10% of the
total aggregate principal amount of Securities that the Underwriters are
obligated to purchase hereunder at the Closing Date, the remaining
Underwriters shall be obligated to take up and pay for
19
<PAGE> 20
(in proportion to their respective underwriting obligations hereunder as
set forth in SCHEDULE 1 hereto except as may otherwise be determined by
you) the Securities that the withdrawing or defaulting Underwriter or
Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and
pay for the aggregate principal amount of Securities agreed by such
Underwriter or Underwriters to be purchased hereunder, upon tender of such
Securities in accordance with the terms hereof, and the principal amount of
Securities not purchased aggregates more than 10% of the total principal
amount of Securities that the Underwriters are obligated to purchase
hereunder at the Closing Date, and arrangements satisfactory to you and the
Company for the purchase of such Securities by other persons are not made
within 36 hours thereafter, this Agreement shall terminate. In the event of
any such termination the Company shall not be under any liability to any
Underwriter with respect to Securities not purchased by reason of such
termination (except to the extent provided in Section 4(j), regarding
payment of expenses, and Section 6, regarding indemnification and
contribution, hereof) nor shall any Underwriter (other than an Underwriter
who shall have failed, otherwise than for some reason permitted under this
Agreement, to purchase the amount of Securities agreed by such Underwriter
to be purchased hereunder) be under any liability to the Company with
respect to such Securities (except to the extent provided in Section 6
hereof).
9. TERMINATION. The obligations of the Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date, by
notice to the Company from the Underwriters, without liability on the part of
the Underwriters to the Company, if, prior to delivery and payment for the
Securities, in the sole judgment of the Underwriters, (i) trading in any of the
equity securities of the Company shall have been suspended by the Commission, by
an exchange that lists such equity securities or by the National Association of
Securities Dealers Automated Quotation National Market System, (ii) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum or maximum prices shall have been generally established on
such exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by either Federal or New York State authorities or (iv) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred the
effect of any of which is such as to make it impracticable or inadvisable to
market the Securities on the terms and in the manner contemplated by the
Prospectus.
10. NOTICES. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, 2859 Paces
Ferry Road, Atlanta, Georgia 30339, Attention: Marcus E. Bromley, or (b) if to
the Underwriters, to the offices of PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, Attention: Corporate Real Estate Department.
Any such notice shall be effective only upon receipt. Any notice under Section
10 hereof may be made by telex, facsimile or telephone, but if so made shall be
subsequently confirmed in writing.
11. PARTIES. This Agreement has been and is made solely for the
benefit of the Underwriters, the Operating Partnership and the REIT and of the
controlling persons, directors, trustees, and officers referred to in Section 6,
and their respective successors and assigns, and no other person shall
20
<PAGE> 21
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" as used in this Agreement shall not include a
purchaser, as such purchaser, of Securities from the Underwriters.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. COUNTERPARTS. This Agreement may be signed in two or more
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
14. SEVERABILITY. In case any provision in this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
15. WAIVER OF TRIAL BY JURY. The Operating Partnership, the REIT and
each of the Underwriters each hereby irrevocably waive any right they may have
to a trial by jury in respect of any claim based upon or arising out of this
Agreement or the transactions contemplated hereby.
16. MANAGING UNDERWRITER. Any action required or permitted to be taken
by the Underwriters under this Agreement may be taken by them jointly or by
PaineWebber Incorporated.
[Signature page follows.]
21
<PAGE> 22
Please confirm that the foregoing correctly sets forth the agreement
among the REIT, the Operating Partnership and the Underwriters.
Very truly yours,
GABLES REALTY LIMITED PARTNERSHIP
By: GABLES GP, INC.,
General Partner
By: /s/ Marvin R. Banks, Jr.
-----------------------------
Marvin R. Banks, Jr.,
Chief Financial Officer
GABLES RESIDENTIAL TRUST
By: /s/ Marvin R. Banks, Jr.
-----------------------------
Marvin R. Banks, Jr.,
Chief Financial Officer
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
By: PAINEWEBBER INCORPORATED
By: /s/ Frederick T. Caven, Jr.
---------------------------
Frederick T. Caven, Jr.
Managing Director
22
<PAGE> 23
SCHEDULE 1
UNDERWRITING COMMITMENTS
Aggregate Principal
Underwriter Amount of
Securities to be
Purchased
======================================================== ===================
PaineWebber Incorporated.............................. $ 25,000,000
Chase Securities Inc.................................. 12,500,000
J. P. Morgan Securities Inc........................... 12,500,000
===================
Total........................................ $ 50,000,000
===================
23
<PAGE> 24
SCHEDULE 2
DESCRIPTION OF SECURITIES AND
PRICING INFORMATION
TITLE OF SECURITIES: 6.55% Senior Notes due 2000
AGGREGATE PRINCIPAL AMOUNT: $50,000,000
MATURITY DATE: October 1, 2000
INTEREST RATE: 6.55% per annum from October 1, 1998
COUPON PAYMENT DATES: April 1 and October 1
PRICE TO PUBLIC: 99.925% plus accrued interest from October 1,
1998 to the Delivery Date
UNDERWRITING DISCOUNT: 0.300%
NET PRICE TO OPERATING
PARTNERSHIP: 99.625% plus accrued interest from October 1,
1998 to the Delivery Date
ACCRUED INTEREST FROM
OCTOBER 1, 1998 TO THE
DELIVERY DATE: $36,388.89
GROSS PROCEEDS TO BE PAID
TO THE OPERATING PARTNERSHIP: $49,848,888.89
24
<PAGE> 25
DELIVERY DATE AND TIME: Monday, October 5, 1998, 10:00 a.m. (New York
City time)
25
<PAGE> 26
SCHEDULE 3
SUBSIDIARIES
Gables Realty Limited Partnership, a Delaware limited partnership
Gables-Tennessee Properties, a Tennessee general partnership
Gables GP, Inc., a Texas corporation
Gables East Construction, Inc., a Georgia corporation
East Apartment Management, Inc., a Georgia corporation
Gables Central Construction, Inc., a Texas corporation
Central Apartment Management, Inc., a Texas corporation
Pin Oak Green, a Texas general partnership
Pin Oak Park Apartments, a Texas general partnership
Candlewood Gen Par, Inc., a Georgia corporation
Candlewood-Indian Creek Limited Partnership, a Georgia limited partnership
GRT Villas Gen Par, Inc. (F.K.A. Candle Creek, Inc.), a Georgia corporation
GRT Villas Limited Partnership, a Texas limited partnership
Boca Place Associates, Ltd., a Florida limited partnership
Boynton Beach I Limited Partnership, a Florida limited partnership
CM Bay Associates, a Florida general partnership
Hampton Lakes Associates, a Florida general partnership
Hampton Lakes II Associates, a Florida general partnership
Hampton Place Joint Venture, a Florida general partnership
Kings Colony Associates, Ltd., a Florida limited partnership
Mizner I Limited Partnership, a Florida limited partnership
San Michele Joint Venture, a Florida general partnership
San Remo Limited Partnership, a Florida limited partnership
TCRDAD Vinings at Boynton Beach II Limited Partnership, a Florida limited
partnership
TCRDAD Wellington Limited Partnership, a Florida limited partnership
Town Colony Associates, a Florida general partnership
Town Colony II Associates, a Florida general partnership
Gables Lions Head Limited Partnership, a Texas limited partnership
Gables Rivercrest II Limited Partnership, a Texas limited partnership
26
<PAGE> 27
EXHIBIT A
INFORMATION IN REGISTRATION STATEMENT AND PROSPECTUS
FURNISHED BY THE UNDERWRITERS
The following information appearing in the Prospectus has been
furnished by the Underwriters expressly for use in the preparation of the
Prospectus:
1. The names of the Underwriters.
2. The stabilization legend on the inside front cover page of the
Prospectus Supplement.
3. The following information contained in the Prospectus Supplement
under the heading "Underwriting":
a. The allocation of securities between the Underwriters in the
table following the first paragraph; and
b. The information in the second paragraph.
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<PAGE> 28
EXHIBIT B
OPINION OF COMPANY COUNSEL
1. The Registration Statement has been declared effective under the
1933 Act. The Prospectus has been filed with the Commission pursuant to Rule 424
under the 1933 Act. To the best of our knowledge (based solely on an oral
representation of a member of the Commission's staff), no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act and no proceeding for that purpose has been instituted or threatened by the
Commission.
2. Each of (a) the Registration Statement, when it became effective,
(b) any amendment or supplement thereto, on the date of filing and effectiveness
thereof with the Commission and (c) the Prospectus and any supplement thereto,
as of the date thereof, complied as to form in all material respects with the
requirements of the 1933 Act and the rules and regulations thereunder (other
than (i) the financial statements and schedules and other financial and
statistical information and data included therein or omitted therefrom, and (ii)
any documents incorporated by reference into the Registration Statement, as to
which we express no opinion) it being understood that, in passing upon
compliance as to the form of the Registration Statement, we assume that the
statements made therein are correct and complete.
3. The descriptions in the Registration Statement and the Prospectus
(other than the documents incorporated by reference and other than with respect
to the matters in the Prospectus under the captions "Federal Income Tax
Considerations," for which reference is made to our separate opinion delivered
to you this day) of statutes are accurate in all material respects and fairly
present the information required to be disclosed therein. We do not know of any
statutes or legal or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any contracts or documents
of a character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement that are not
so described or filed.
4. Neither the REIT nor the Operating Partnership (after giving
effect to the sale of the Securities) is required to be registered under the
Investment Company Act of 1940, as amended.
5. The REIT has been duly organized and is validly existing as a real
estate investment trust in good standing under the laws of the State of
Maryland. Each of the REIT and the Operating Partnership has full power and
authority to conduct its business as described in the Registration Statement and
Prospectus.
6. The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware. All of the issued and outstanding partnership interests of the
Operating Partnership have been duly authorized and are validly issued.
7. Each Subsidiary has been duly organized and, except for
Subsidiaries which are general partnerships, is validly existing as a limited
partnership or corporation, as the case may be, in good standing under the laws
of its state of organization or formation as set forth on EXHIBIT 1 hereto.
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<PAGE> 29
8. Except as set forth in EXHIBIT 2 hereto, the REIT, directly or
through Subsidiaries, is the sole record owner of all of the capital stock or
partnership interests, as the case may be, of each Subsidiary.
9. Each of the Subsidiaries has corporate or partnership power, as
the case may be, and authority to conduct its business as described in the
Prospectus.
10. Each of the Operating Partnership and the Subsidiaries,
respectively, is duly qualified or registered as a foreign corporation or
foreign partnership, as the case may be, to transact business and is in good
standing in each jurisdiction listed in EXHIBIT 1 hereto.
11. All of the outstanding shares of the Company identified in the
Prospectus have been duly authorized and are validly issued, fully paid and
nonassessable and conform to the description thereof in the Prospectus.
12. (i) The Securities have been duly authorized, executed and
delivered by the Operating 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 the
Underwriting Agreement, will constitute valid and binding obligations
of the Company entitled to the benefits provided by the Indenture and
enforceable against the Operating Partnership in accordance with their
terms;
(ii) the Indenture has been duly authorized, executed and
delivered by the Operating Partnership and constitutes a valid and
binding agreement of the Operating Partnership enforceable against the
Operating Partnership in accordance with its terms;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act;
(iv) the Indenture and the Securities conform in all material
respects to the descriptions thereof in the Registration Statement and
the Prospectus.
13. The REIT and the Operating Partnership have full power and
authority to enter into the Underwriting Agreement, and the Underwriting
Agreement has been duly authorized, executed and delivered by each of the REIT
and the Operating Partnership. To our knowledge, the issuance and sale of the
Securities to the Underwriters on the terms contemplated in the Underwriting
Agreement will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the REIT, the Operating Partnership, or
any of the Subsidiaries, pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute a
default or result in the acceleration of any obligation under, (i) the
Declaration of Trust or Bylaws of the REIT, (ii) the articles or certificate of
incorporation, partnership agreement or bylaws of any of the Subsidiaries, (iii)
the limited partnership agreement of the Operating Partnership, (iv) any
agreement or instrument filed as an exhibit to the Registration Statement and
incorporated therein by reference to which the REIT, the Operating Partnership
or any of the Subsidiaries is a party or by or pursuant to which any of them or
their respective properties is bound, affected or financed, or (v) any statute,
rule or regulation or judgment, ruling, decree or order, known to us, of any
court or other governmental agency or body applicable to the business or
properties of the REIT, the Operating Partnership or any of the Subsidiaries
(except that (i) we express no opinion as to the securities or blue sky laws of
any jurisdiction other than the United States and (ii) insofar as compliance
with the federal securities laws of the United States is concerned, our opinions
are limited to numbered paragraphs (1), (2), (3), (4) and (14) and (iii) our
opinion in this paragraph (13) should not be interpreted to address the
29
<PAGE> 30
disclosure requirements of the securities laws, for which we make reference to
our statements following numbered paragraph (14) below), where such violation or
default, individually or in the aggregate, might have a material adverse effect
on the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the REIT, the Operating Partnership and
the Subsidiaries taken as a whole.
14. To our knowledge, no consent, approval, authorization or order of,
or filing with, any court or governmental agency or body is required in
connection with the issuance or sale of the Securities by the Company, except
(i) such as have been obtained under the 1933 Act or the Securities Exchange Act
of 1934, as amended, or (ii) such as may be required under state securities laws
or the bylaws or rules of the NASD in connection with the purchase and
distribution of the Securities by the Underwriters.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process are such that we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and we make no
representation that we have independently verified the accuracy, completeness or
fairness of such statements. Without limiting the foregoing, we assume no
responsibility for, and have not independently verified, the accuracy,
completeness or fairness of the financial statements or notes thereto, financial
schedules and other financial and statistical data incorporated by reference
into the Registration Statement, and we have not examined the accounting,
financial or statistical records from which such statements and notes, schedules
and data are derived. However, in the course of our acting as counsel to the
Company in connection with the preparation of the Registration Statement and the
Prospectus and the public offering of the Securities we participated in
conferences and telephone conversations with representatives of the Company,
Arthur Andersen LLP, accountants for the Company, your representatives and
representatives of O'Melveny & Myers LLP, your counsel, during which conferences
and conversations the contents of the Registration Statement and the Prospectus
and related matters were discussed. In addition, we reviewed certain documents
made available to us by the Company or otherwise in our possession.
Based on our participation in the above-mentioned conferences and
conversations, our review of the documents described above and our understanding
of applicable law, we advise you that:
(a) No facts have come to our attention which cause us to believe that
the Registration Statement (excluding the financial statements and
notes thereto, financial schedules and other financial or
statistical information and data included or incorporated by
reference therein or omitted therefrom and the Trustee's Statement
of Eligibility and Qualification on Form T-1 (the "T-1")
incorporated by reference therein, as to which we make no
statement), 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
(b) No facts have come to our attention which cause us to believe that
the Prospectus (excluding the financial statements and notes
thereto, financial schedules and other financial or statistical
information and data included or incorporated by reference therein
or omitted therefrom and the T-1, as to which we make no
statement), as of its date or the date hereof, contained or
contains an untrue statement of a material fact
30
<PAGE> 31
or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
31
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
GABLES REALTY LIMITED PARTNERSHIP
ISSUER
to
FIRST UNION NATIONAL BANK
TRUSTEE
-------------------------
Supplemental Indenture No. 2
Dated as of September 30, 1998
-------------------------
$50,000,000
of
6.55% Senior Notes Due 2000
<PAGE> 2
SUPPLEMENTAL INDENTURE NO. 2, dated as of September 30, 1998 (the
"Supplemental Indenture"), between GABLES REALTY LIMITED PARTNERSHIP, 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,
as Trustee (herein called the "Trustee").
RECITALS OF THE PARTNERSHIP
The Partnership has heretofore delivered to the Trustee an Indenture
dated as of March 23, 1998, as supplemented by Supplemental Indenture No.1,
dated as of March 23, 1998 (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. 333-30093), providing for the issuance by the
Partnership from time to time of its senior debt securities evidencing its
unsecured and unsubordinated indebtedness (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 Gables GP, 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 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
Securities of such series, as follows:
<PAGE> 3
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.
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 Debt" means Debt 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 Debt incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Debt 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.
"Adjusted Total Assets" as of any date means the sum of (i) the amount
determined by multiplying the price at which the Common Shares of Gables were
offered in the initial public offering (the "IPO") of Common Shares of Gables by
the sum of (A) the Common Shares issued in the IPO and (B) the Units of the
Partnership not held by Gables that were issued in connection with the IPO, (ii)
the principal amount of outstanding Debt of the Partnership immediately
following the IPO and (iii) the purchase price or cost of any real estate assets
or mortgages receivable (or interests therein) acquired (including the value of
any Units issued in connection therewith) or developed after the IPO and the
amount of any securities offering proceeds and other proceeds of Debt received
after the IPO (to the extent such proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Debt), adjusted for the
proceeds of any real estate assets disposed of by the Partnership. This
definition of "Adjusted Total Assets" values the assets owned by the Partnership
at the time of the IPO at the market capitalization of the Partnership at that
time, which the Partnership believes
2
<PAGE> 4
to be a more appropriate measure of the value of those assets than undepreciated
book value, which reflects their pre-IPO cost before accumulated depreciation.
"Annual Debt Service Charge" as of any date means the amount of any
interest expensed during the four consecutive fiscal quarters most recently
ended prior to such date.
"Common Shares" mean the common shares of beneficial interest, par
value $0.01 per share, of Gables.
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income of the Partnership and its Subsidiaries plus amounts
which have been deducted for: (i) interest on Debt 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, (v) depreciation and amortization, (vi) the effect of
any noncash charge resulting from a change in accounting principles in
determining Consolidated Net Income for such period and (vii) amortization of
deferred charges.
"Consolidated Net Income" for any period means the amount of net income
(or loss) of the Partnership and its Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP.
"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 administered, which office at the date hereof is
located at 999 Peachtree Street, N.E., Atlanta, Georgia 30309.
"Debt" 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 evidenced by bonds, notes, debentures or similar instruments,
(ii) indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or
any security interest existing on property owned by the Partnership or any
Subsidiary, (iii) reimbursement obligations in connection with any letters of
credit actually issued or amounts representing the balance deferred and unpaid
of the purchase price of any property except any such balance that constitutes
an accrued expense or trade payable or (iv) any lease of property by the
Partnership or any Subsidiary as lessee which is reflected on the Partnership's
consolidated balance sheet as a capitalized lease in accordance with GAAP; in
the case of items of indebtedness incurred under (i) through (iii) above to the
extent that any such items (other than letters of credit) would appear as a
liability on the Partnership's consolidated balance sheet in accordance with
GAAP; and also includes, to the extent not otherwise included, any obligation of
the Partnership or any Subsidiary to be liable
3
<PAGE> 5
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).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"Gables" mean Gables Residential Trust, a Maryland real estate
investment trust.
"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 Notes
being re deemed or paid. Any Make-Whole Amount shall be determined by the
Partnership, when owing, in an Officers' Certificate to be filed with the
Trustee, which certificate shall set out the computation of such Make Whole
Amount.
"Management Companies" means certain corporations, of which the
Partnership owns 100% of the nonvoting stock and 1% of the voting stock, which
do not qualify as "qualified REIT subsidiaries" under the Internal Revenue Code
of 1986, as amended.
"Notes" has the meaning specified in Section 2.1 hereof.
"Reinvestment Rate" means the yield on Treasury securities at a
constant maturity corresponding to the remaining life (as of the date of
redemption, and rounded to the nearest month) to stated maturity of the
principal being redeemed (the "Treasury Yield"), plus 0.25%. For purposes
hereof, the Treasury Yield shall be equal to the arithmetic mean of the yields
published in the Statistical Release (as defined below) under the heading "Week
Ending" for the "U.S. Government Securities--Treasury Constant Maturities" with
a maturity equal to such remaining life; provided, that if no published maturity
exactly corresponds to such remaining life, then the Treasury Yield shall be
interpolated or extrapolated on a straight-line basis from the arithmetic means
of the yields for the next shortest
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<PAGE> 6
and next longest published maturities. For 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. If the format or
content of the Statistical Release changes in a manner that precludes
determination of the Treasury Yield in the above manner, then the Treasury Yield
shall be determined in the manner that most closely approximates the above
manner, as reasonably determined by the Partnership.
"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. For the purposes of this definition,
"voting equity securi ties" 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.
"Unencumbered Total Asset Value" as of any date means the sum of (i)
the portion of Adjusted Total Assets allocable to the Partnership's real estate
assets and (ii) the value of all other assets of the Partnership and its
Subsidiaries on a consolidated basis determined in accordance with GAAP (but
excluding intangibles and accounts receivable), in each case which are
unencumbered by any mortgage, lien, charge, pledge or security interest.
"Units" means units of limited partnership of the Partnership.
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<PAGE> 7
ARTICLE TWO
THE NOTES
SECTION 2.1. TITLE OF THE SECURITIES.
There shall be a series of Securities designated the "6.55% Senior
Notes Due 2000" (the "Notes").
SECTION 2.2. LIMITATION ON AGGREGATE PRINCIPAL AMOUNT.
The aggregate principal amount of the Notes shall be limited to
$50,000,000, 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 6.55% per annum from October 1, 1998 or
from the immediately preceding Interest Payment Date (as defined below) to which
interest has been paid, payable semi-annually in arrears on April 1 and October
1 of each year, commencing April 1, 1999 (each, an "Interest Payment Date"), to
the persons (the "Holders") in whose name the applicable Notes are registered in
the Security Register at the close of business 15 calendar days prior to such
Interest Payment Date, i.e., March 15 and September 15, respectively (regardless
of whether such day is a Business Day, as defined below), as the case may be
(each, a "Regular Record Date"). Interest on the Notes will be computed on the
basis of a 360-day year of twelve 30-day months. Any interest not punctually
paid or duly provided for on any Interest Payment Date with respect to a Note
("Defaulted Interest") will forthwith cease to be payable to the Holder on the
applicable Regular Record Date and may either be paid to the person in whose
name such Note is registered at the close of business on a special record date
(the "Special Record Date") for the payment of such Defaulted Interest to be
fixed by the Trustee, notice whereof shall be given to the Holder of such Note
not less than ten days prior to such Special Record Date, or may be paid at any
time in any other lawful manner, as more particularly described in the
Indenture.
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<PAGE> 8
If any Interest Payment Date or Maturity falls on a day that is not a
Business Day, the required payment shall be 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 October 1, 2000.
SECTION 2.4. LIMITATIONS ON INCURRENCE OF DEBT.
(a) The Partnership will not, and will not permit any Subsidiary to,
incur any Debt, other than intercompany Debt (representing Debt to which the
only parties are Gables, any of its Subsidiaries, the Partnership or the
Management Companies, but only so long as such Debt is held solely by any of the
foregoing), if, immediately after giving effect to the incurrence of such
additional Debt and the application of the proceeds thereof, the aggregate
principal amount of all outstand ing Debt 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 Partnership's
Adjusted Total Assets 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, filed with the Trustee) prior to the
incurrence of such additional Debt, (ii) the purchase price of any real estate
assets or mortgages receivable (or interests therein) acquired by the
Partnership or any Subsidiary since the end of such calendar quarter, including
those obtained in connection with the incurrence of such additional Debt and
(iii) the amount of any securities offering proceeds received by the Partnership
or any Subsidiary since the end of such calendar quarter (to the extent that
such proceeds were not used to acquire such real estate assets or mortgages
receivable or used to reduce Debt).
(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 Debt if the ratio of Consolidated Income Available for Debt Service to
the Annual Service Charge for the four consecutive fiscal quarters most recently
ended prior to the date on which such additional Debt is to be incurred shall
have been less than 1.5:1, 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 Debt and any other Debt 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 Debt , had occurred at
the beginning of such period; (ii) the repayment or retirement of any other Debt
by the Partnership and its Subsidiaries since the first day of such four-quarter
period had been repaid or retired at the beginning of such period (except that,
in making such computation, the amount of Debt under any revolving credit
facility shall be computed based
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<PAGE> 9
upon the average daily balance of such Debt during such period); (iii) in the
case of Acquired Debt or Debt 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
Debt 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 Debt secured by any mortgage, lien, charge, pledge,
encumbrance or security interest of any kind upon any of the property of the
Partnership or any Subsidiary ("Secured Debt"), whether owned at the date hereof
or thereafter acquired, if, immediately after giving effect to the incurrence of
such Secured Debt and the application of the proceeds therefrom, the aggregate
principal amount of all outstanding Secured Debt of the Partnership and its
Subsidiaries on a consolidated basis is greater than 40% of the sum of (without
duplication) (i) the Partnership's Adjusted Total Assets 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, filed
with the Trustee) prior to the incurrence of such additional Debt, (ii) the
purchase price of any real estate assets or mort gages receivable (or interests
therein) acquired 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 Debt and (iii) the amount of any securities
offering proceeds received by the Partnership or any Subsidiary since the end of
such calendar quarter (to the extent that such proceeds were not used to acquire
such real estate assets or mortgages receivable or used to reduce Debt).
(d) The Partnership and its Subsidiaries will at all times maintain
an Unencumbered Total Asset Value in an amount not less than 150% of the
aggregate principal amount of all outstanding unsecured Debt of the Partnership
and its Subsidiaries on a consolidated basis.
(e) For purposes of this Section 2.4, Debt 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.
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<PAGE> 10
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").
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
Atlanta, Georgia and the office or agency for such purpose shall initially be
located at c/o First Union National Bank, Corporate Trust Department, 999
Peachtree Street, N.E., Atlanta, Georgia 30309.
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 Atlanta, Georgia (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 Company ("DTC"). The Notes shall not be issuable in
definitive form except as provided in Section 305 of the Senior Indenture.
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<PAGE> 11
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.
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 2.14 of
this Supplemental Indenture and to those covenants specified in Section 1403 of
the Senior Indenture.
SECTION 2.13. 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.
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<PAGE> 12
SECTION 2.14. 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 2.14 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 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.
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<PAGE> 13
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.
GABLES REALTY LIMITED
PARTNERSHIP
By: Gables GP, Inc.,
its general partner
By: /s/ Marvin R. Banks, Jr.
---------------------------
Marvin Banks, Jr.
Chief Financial Officer
FIRST UNION NATIONAL BANK,
as Trustee
By: /s/ Teresa L. Davis
---------------------------
Name: Teresa L. Davis
Title: Vice President
12
<PAGE> 14
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.
GABLES REALTY LIMITED PARTNERSHIP
6.55% Senior Notes Due 2000
Register No. 1 Principal Amount
CUSIP No. $50,000,000
GABLES REALTY LIMITED PARTNERSHIP, 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
$50,000,000 Dollars on October 1, 2000 (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 October 1, 1998 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on April 1 and October 1 in each year (each, an
"Interest Payment Date"), commencing April 1, 1999, at the rate of 6.55% per
annum, until the principal
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<PAGE> 15
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 March 15 or September 15
(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 main tained 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 Atlanta, Georgia
(which initially shall 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 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
October 1, 1998, 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 day, other than a
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<PAGE> 16
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in the City of New York 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.
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<PAGE> 17
IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly
executed under the facsimile corporate seal of its general partner.
Dated:
GABLES REALTY LIMITED
PARTNERSHIP
By: Gables GP, Inc.,
its general partner
By: __________________________
Marvin R. Banks, Jr.
Chief Financial Officer
Attest: ______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of Securities of the series designated therein referred to
in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By: _______________________
Name:
Title:
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<PAGE> 18
[Reverse of Security]
GABLES REALTY LIMITED PARTNERSHIP
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 March 23, 1998, as supplemented by Supplemental
Indenture No. 1, dated as of March 23, 1998 and Supplemental Indenture No. 2,
dated as of September 30, 1998 (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 $50,000,000 (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.
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<PAGE> 19
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> 20
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> 21
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 Gables Realty Limited Partnership 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 4.3
[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.
GABLES REALTY LIMITED PARTNERSHIP
6.55% Senior Notes Due 2000
Register No. 1 Principal Amount
CUSIP No. 362415 AB 7 $50,000,000
GABLES REALTY LIMITED PARTNERSHIP, 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
$50,000,000 Dollars on October 1, 2000 (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 October 1, 1998 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on April 1 and October 1 in each year (each, an
"Interest Payment Date"), commencing April 1, 1999, at the rate of 6.55% per
annum, until the 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 March 15
or September 15 (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
<PAGE> 2
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 Atlanta, Georgia
(which initially shall 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 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
October 1, 1998, 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 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 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.
<PAGE> 3
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.
<PAGE> 4
IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly
executed under the facsimile corporate seal of its general partner.
Dated: GABLES REALTY LIMITED
PARTNERSHIP
By: Gables GP, Inc.,
its general partner
By: /s/ Marvin R. Banks, Jr.
----------------------------
Marvin R. Banks, Jr.
Chief Financial Officer
Attest: /s/ Dawn H. Severt
------------------------
Name: Dawn H. Severt
Title: Vice President
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of Securities of the series designated therein referred to
in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By: /s/ Teresa L. Davis
--------------------------------------
Name:
Title:
<PAGE> 5
[Reverse of Security]
GABLES REALTY LIMITED PARTNERSHIP
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 March 23, 1998, as supplemented by Supplemental
Indenture No. 1, dated as of March 23, 1998, and Supplemental Indenture No. 2,
dated as of September 30, 1998 (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 $50,000,000 (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.
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
<PAGE> 6
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.
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
<PAGE> 7
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.
<PAGE> 8
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 Gables Realty Limited Partnership 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.
<PAGE> 1
EXHIBIT 5.1
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-01000
TELECOPIE (617) 523-1231
October 5, 1998
Gables Residential Trust
Gables Realty Limited Partnership
2859 Paces Ferry Road
Overlook III, Suite 1450
Atlanta, Georgia 30339
Ladies and Gentlemen:
We have acted as counsel to Gables Residential Trust, a Maryland real
estate investment trust (the "Company"), and Gables Realty Limited Partnership,
a Delaware limited partnership (the "Partnership"), in connection with the offer
and sale by the Partnership of $50,000,000 aggregate principal amount of the
Partnership's 6.55% Senior Notes due 2000 (the "Notes"). This opinion is being
delivered in connection with (i) the Company's and the Partnership's
Registration Statement on Form S-3 (No. 333-30093) (the "Registration
Statement") relating to the registration of the offering and sale under the
Securities Act of 1933, as amended, of up to $300,000,000 of securities of the
Company and up to $200,000,000 of debt securities of the Partnership, and (ii) a
prospectus supplement dated September 30, 1998 (the "Prospectus Supplement")
which supplements the prospectus included in such Registration Statement,
relating to the offering of the Notes by the Partnership. The Notes will be
offered by the Underwriters (as defined below) pursuant to that certain
Underwriting Agreement dated September 30, 1998 between the Partnership and the
Company and PaineWebber Incorporated, Chase Securities Inc. and J.P. Morgan
Securities Inc. (the "Underwriters"). The Notes will be issued under an
Indenture dated March 23, 1998 between the Partnership and First Union National
Bank, as trustee, as amended and supplemented by Supplemental Indenture No. 2
dated September 30, 1998 (collectively, the "Indenture").
As the basis for the opinion hereinafter expressed, we have examined
such statutes, regulations, corporate records and documents, certificates of
public officials and other instruments as we have deemed necessary or advisable
for the purposes of this opinion. In such examination, we have assumed the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies.
<PAGE> 2
GOODWIN, PROCTER & HOAR LLP
Gables Residential Trust
Gables Realty Limited Partnership
October 5, 1998
Page 2
The opinions expressed below are qualified to the extent that (i) the
validity or enforceability of any provision of the Notes and the Indenture or
any rights granted thereunder may be subject to or affected by any bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar law
relating to or affecting the rights of creditors generally, (ii) the remedy of
specific performance or any other equitable remedy may be unavailable in any
jurisdiction or may be withheld as a matter of judicial discretion, and (iii)
general principles of equity, including without limitation, concepts of
materiality, reasonableness, good faith and fair dealing may be applied in the
exercise of judicial discretion in construing or enforcing the provisions of any
instrument or document (regardless of whether enforcement is sought in a
proceeding in equity or at law).
We express no opinion concerning the laws of any jurisdictions other
than the laws of the United States of America, The Commonwealth of Massachusetts
and the Delaware Revised Uniform Limited Partnership Act.
Based on the foregoing and on such legal considerations as we deem
relevant, we are of the opinion that the Notes have been duly authorized,
executed and delivered by the Partnership and, assuming the due authentication
of the Notes in accordance with the terms of the Indenture, when delivered to
and paid for by the Underwriters, will constitute valid and binding obligations
of the Partnership, entitled to the benefits of the Indenture and enforceable
against the Partnership in accordance with their terms.
We hereby consent to the use of this opinion as an exhibit to the
Partnership's Current Report on Form 8-K dated October 5, 1998 and the Company's
Current Report on Form 8-K dated October 5, 1998, which are incorporated by
reference into the Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
EXHIBIT 12.1
Gables Realty Limited Partnership
Ratio of earnings to fixed charges
Dollars in thousands
<TABLE>
<CAPTION>
Gables Realty Limited
Gables Realty Limited Partnership Partnership Predecessor
--------------------------------------------------- -----------------------
Six months Years ended 12-31
ended --------------------------- 1-26-94- 1-1-94- Year ended
6-30-98 1997 1996 1995 12-31-94 1-25-94 12-31-93
---------- ------- ------- ------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income before gain on sale of
real estate assets, loss on treasury
lock extension and extraordinary items $18,134 $31,931 $27,541 $18,369 $15,972 ($92) $ 4,520
--------------------------------------------------- ----------------------
Plus Fixed Charges:
Interest expense 17,498 24,804 21,112 13,088 8,345 1,043 12,253
Credit enhancement fees 562 509 576 710 661 35 591
Interest capitalized 3,641 5,161 4,373 7,481 3,031 54 1,053
Loan cost amortization expense 507 992 1,348 932 893 234 1,132
Loan cost amortization capitalized 98 182 285 1,508 1,176 0 110
--------------------------------------------------- ----------------------
Total fixed charges(1) 22,306 31,648 27,694 23,719 14,106 1,366 15,139
Less:
Interest capitalized 3,641 5,161 4,373 7,481 3,031 54 1,053
Loan cost amortization capitalized 98 182 285 1,508 1,176 0 110
--------------------------------------------------- ----------------------
Adjusted earnings(2) 36,701 58,236 50,577 33,099 25,871 1,220 18,496
--------------------------------------------------- ----------------------
Ratio (2 divided by 1) 1.65 1.84 1.83 1.40 1.83 0.89 1.22
=================================================== =======================
Coverage deficiency (146)
</TABLE>
<PAGE> 1
EXHIBIT 12.2
Gables Realty Limited Partnership
Ratio of earnings to combined fixed charges and preferred dividends
Dollars in thousands
<TABLE>
<CAPTION>
Gables Realty Limited
Gables Realty Limited Partnership Partnership Predecessor
--------------------------------------------------- -----------------------
Six months Years ended 12-31
ended --------------------------- 1-26-94- 1-1-94- Year ended
6-30-98 1997 1996 1995 12-31-94 1-25-94 12-31-93
---------- ------- ------- ------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income before gain on sale of
real estate assets, loss on treasury
lock extension and extraordinary items $18,134 $31,931 $27,541 $18,369 $15,972 ($92) $ 4,520
--------------------------------------------------- ----------------------
Plus Fixed Charges and Preferred
Dividends:
Interest expense 17,498 24,804 21,112 13,088 8,345 1,043 12,253
Credit enhancement fees 562 509 576 710 661 35 591
Interest capitalized 3,641 5,161 4,373 7,481 3,031 54 1,053
Loan cost amortization expense 507 992 1,348 932 893 234 1,132
Loan cost amortization capitalized 98 182 285 1,508 1,176 0 110
Preferred Dividends 4,780 4,163 0 0 0 0 0
--------------------------------------------------- ----------------------
Total fixed charges and preferred
dividends(1) 27,086 35,811 27,694 23,719 14,106 1,366 15,139
Less:
Interest capitalized 3,641 5,161 4,373 7,481 3,031 54 1,053
Loan cost amortization capitalized 98 182 285 1,508 1,176 0 110
--------------------------------------------------- ----------------------
Adjusted earnings(2) 41,481 62,399 50,577 33,099 25,871 1,220 18,496
--------------------------------------------------- ----------------------
Ratio (2 divided by 1) 1.53 1.74 1.83 1.40 1.83 0.89 1.22
=================================================== =======================
Coverage deficiency (146)
</TABLE>
