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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): August 15, 1997
IRT PROPERTY COMPANY
(Exact Name of Registrant as Specified in Charter)
Georgia 1-7859 58-1366611
------- ------ ----------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
200 Galleria Parkway, N.W., Suite 1400, Atlanta, Georgia 30339
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(Addresses of Principal Executive Offices, including Zip Code)
(770) 955-4406
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(Registrant's Telephone Number, including Area Code)
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ITEM 5. OTHER EVENTS.
IRT Property Company (the "Company") has completed the offering of
$75,000,000 of 7.25% Senior Notes due 2007 (the "Notes"). The offering of the
Notes was made pursuant to a Prospectus Supplement dated August 12, 1997
relating to the Prospectus dated November 9, 1995 filed with the Company's Shelf
Registration Statement No.
33-63523 on Form S-3.
The Notes will pay interest semi-annually on February 1 and August 1,
commencing February 1, 1998, and will mature on August 15, 2007. The Notes are
senior unsecured obligations of the Company and will rank equally with the
Company's other unsecured and unsubordinated indebtedness. The Notes will be
effectively subordinated to mortgages and other secured indebtedness of the
Company and to indebtedness and other liabilities of the Company's subsidiaries.
The Notes will be senior to the Company's 7.3% Convertible Subordinated
Debentures due 2003.
The net proceeds from the sale of the Notes are estimated to be
approximately $73,824,000 million and will be used primarily to repay
indebtedness under the Company's $100 million unsecured revolving line of
credit. Any excess proceeds will be used for general corporate purposes.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND
EXHIBITS.
<TABLE>
<CAPTION>
C. Exhibits
<S> <C>
1 Underwriting Agreement, dated August 12, 1997, by and among
IRT Property Company, PaineWebber Incorporated and Salomon
Brothers Inc
4 Supplemental Indenture No. 2, dated August 15, 1997,
between IRT Property Company and SunTrust Bank, Atlanta
5 Opinion of Alston & Bird LLP as to the legality of the
Notes
</TABLE>
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SIGNATURE
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.
IRT PROPERTY COMPANY
(REGISTRANT)
/s/ W. BENJAMIN JONES III
-----------------------------
W. Benjamin Jones III
Executive Vice President
Date: August 15, 1997
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
<S> <C>
1 Underwriting Agreement, dated August 12, 1997, by and among IRT Property Company,
PaineWebber Incorporated and Salomon Brothers Inc
4 Supplemental Indenture No. 2, dated August 15, 1997, between IRT Property Company and
SunTrust Bank, Atlanta
5 Opinion of Alston & Bird LLP as to the legality of the Notes
</TABLE>
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EXHIBIT 1
Underwriting Agreement, dated August 12, 1997, by and among
IRT Property Company, PaineWebber Incorporated and Salomon Brothers Inc
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IRT PROPERTY COMPANY
$75,000,000 OF 7.25% SENIOR NOTES DUE 2007
UNDERWRITING AGREEMENT
August 12, 1997
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Ladies and Gentlemen:
IRT Property Company, a Georgia corporation (the "Company"),
confirms its agreement with PaineWebber Incorporated and Salomon Brothers Inc,
as underwriters (collectively, the "Underwriters"), as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue
and sell to you the principal amount of its debt securities identified on
Schedule A hereto (the "Securities") to be issued under an Indenture, dated
November 9, 1995 (the "Base Indenture"), as supplemented by Supplemental
Indenture No. 2 thereto to be dated August 15, 1997 (the "Supplemental
Indenture" and, together with the Base Indenture, the "Indenture") between the
Company and SunTrust Bank, Atlanta, as trustee (the ---------- "Trustee").
2. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with you that:
(i) A registration statement on Form S-3 (File No. 33-63523)
with respect to the Securities being offered by the Company,
including a prospectus, has been 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 "1933
Act Rules and Regulations") of the Securities and Exchange
Commission (the
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"Commission") thereunder, has been filed with the Commission and
has been declared effective. Such registration statement and
prospectus may have been amended or supplemented prior to the
date of this Underwriting 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
been declared effective. No stop order suspending the
effectiveness of the registration statement has been issued, and
no proceeding for that purpose has been instituted or threatened
by the Commission. A prospectus supplement (the "Prospectus
Supplement") setting forth the terms of the offering, sale and
plan of distribution of the Securities being offered by the
Company and additional information concerning the Company and its
business has been or will be so prepared and will be filed
pursuant to Rule 424(b) of the 1933 Act Rules and Regulations on
or before the second business day after the date hereof (or such
earlier time as may be required by the 1933 Act Rules and
Regulations). 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 Underwriting Agreement
have been delivered or made available to you and your counsel.
Such registration statement, as it may have heretofore been
amended, is referred to herein as the "Registration Statement,"
and the final form of prospectus included in the Registration
Statement, as supplemented by the Prospectus Supplement, is
referred to herein as the "Prospectus." Any reference herein to
the Registration Statement, the Prospectus, any preliminary
prospectus or any amendment or supplement thereto shall be deemed
to refer to and include the documents incorporated by reference
therein, and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration
Statement, Prospectus or any preliminary 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, any preliminary 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 to any Prospectus delivered to you for use in
connection with the offering of the Securities by the Company.
(ii) Each part of the Registration Statement (excluding any
prospectus supplement with respect to an offering of securities
other than the offering of the Securities contemplated hereby),
when such part became or becomes effective, and the Prospectus
and any amendment or supplement to such Registration Statement or
such Prospectus, on the date of filing thereof with the
Commission and at the Closing Date (as hereinafter defined)
conformed or will conform in all material respects with the
requirements of the Act and the 1933 Act Rules and Regulations;
the Indenture, on the date of filing thereof with the Commission
and at the Closing Date (as hereinafter defined) conformed or
will conform in all material respects with the requirements of
the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the
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Commission thereunder (the "TIA"); each part of the Registration
Statement (excluding any prospectus supplement with respect to an
offering of securities other than the offering of the Securities
contemplated hereby), 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 the light of the circumstances
under which they were made, not misleading; except that the
foregoing shall not apply to (i) that part of the Registration
Statement which constitutes the Statement of Eligibility and
Qualification under the TIA (the "Form T-1") and (ii) statements
in, or omissions from, any such document in reliance upon, and in
conformity with, written information concerning the Underwriters
that was furnished to the Company by the Underwriters
specifically for use in the preparation thereof.
(iii) The documents incorporated by reference in the
Registration Statement, the Prospectus and any amendment or
supplement to such Registration Statement or such Prospectus,
when they became or become effective under the Act or were or are
filed with the Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as the case may be,
conformed or will conform in all material respects with the
requirements of the Act, the 1933 Act Rules and Regulations, the
Exchange Act and the rules and regulations of the Commission
thereunder (the "Exchange Act Rules and Regulations"), as
applicable.
(iv) The consolidated financial statements of the Company,
together with the related schedules and notes thereto, set forth
or included or incorporated by reference in the Registration
Statement and Prospectus fairly present, in all material
respects, the financial condition of the Company and its
consolidated subsidiaries as of the dates indicated and the
results of operations, changes in financial position,
stockholders' equity and cash flows for the periods therein
specified, in conformity with generally accepted accounting
principles ("GAAP") consistently applied throughout the periods
involved (except as otherwise stated therein and except for
changes in GAAP). In addition, any pro forma financial statements
of the Company, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly, in all material respects, the
information provided therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly compiled on the
basis described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
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(v) Arthur Andersen LLP, whose reports are incorporated by
reference in the Registration Statement, are and, during the
periods covered by their reports, were independent public
accountants as required by the Act and the 1933 Act Rules and
Regulations.
(vi) The only subsidiaries (as defined in the 1933 Act Rules
and Regulations) of the Company are the subsidiaries listed on
Schedule B hereto (the "Subsidiaries"). The Company and each of
its Subsidiaries has been duly incorporated or formed, as the
case may be, and is an existing corporation, general or limited
partnership or other business entity, as the case may be, in good
standing under the laws of its jurisdiction of incorporation or
formation, as the case may be. The Company and each of its
Subsidiaries has full power and authority (corporate and other)
to conduct its business as described in the Registration
Statement and Prospectus, and is duly qualified or registered to
do business in each jurisdiction in which it owns or leases real
property or in which the conduct of its business requires such
qualification or registration, except where the failure to be so
qualified or registered, considering all such cases in the
aggregate, would not have a material adverse affect on the
business, properties, financial position or results of operations
of the Company and its Subsidiaries taken as a whole; and, other
than the Subsidiaries, the Company owns no stock or other
beneficial interest in any corporation, partnership, joint
venture or other business entity which is a controlling interest
in such entity or which interests are, individually or
collectively, material to the Company and its Subsidiaries on a
consolidated basis.
(vii) All of the issued and outstanding capital stock or
ownership interests of each Subsidiary has been duly authorized
and validly issued, is fully paid and nonassessable and, other
than 99 shares of the Class A (voting) common stock of IRT
Capital Corporation (the "IRT Capital Voting Stock") and 396
shares of Class B common stock of IRT Capital Corporation (the
"IRT Capital Class B Stock"), is wholly owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity,
except as otherwise stated in IRT Capital Corporation's articles
of incorporation, by-laws and other governing documents. The IRT
Capital Voting Stock and the IRT Capital Class B Stock not owned
by the Company has been duly authorized and validly issued, is
fully paid and nonassessable and is owned by certain individuals
without transfer restrictions (other than those arising under the
Act, the 1933 Act Rules and Regulations, the Exchange Act, the
Exchange Act Rules and Regulations and state securities laws, as
applicable; and except as otherwise stated in IRT Capital
Corporation's articles of incorporation, by-laws and other
governing documents).
(viii) The Company's authorized, issued and outstanding debt
and shareholders' equity as set forth under the caption
"Capitalization" in the Prospectus Supplement was and will be
correct as of the dates of such information. All of the
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issued and outstanding shares of capital stock of the Company
have been duly authorized and are validly issued, fully paid and
nonassessable by the Company and conform to the description
thereof in the Prospectus.
(ix) The Securities will be as of the Closing Date duly
authorized by the Company 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 by, the Underwriters pursuant to this Underwriting
Agreement, the Securities will be valid and legally binding
obligations of the Company 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) and (c) the
discretion of the court before which any proceeding therefor may
be brought (clauses (a), (b) and (c) are collectively referred to
as the "Enforceability Limitations"); the Indenture has been duly
qualified under the TIA and prior to the issuance of the
Securities will be duly authorized, executed and delivered by the
Company, and assuming due authorization, execution and delivery
thereof by the Trustee, will constitute a valid and legally
binding obligation of the Company, enforceable against the
Company 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 are, in
all material respects, in the form contemplated by the Indenture.
(x) Except as contemplated in the Prospectus, subsequent to
the later of (a) the respective dates as of which information is
given in the Registration Statement and the Prospectus and (b)
the date as of which information is incorporated therein, the
Company and its Subsidiaries have not incurred any liabilities or
obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are
material to the Company and its Subsidiaries on a consolidated
basis, there has not been any material change in the capital
stock or structure, short-term debt or long-term debt of the
Company or any material adverse change in the capital stock or
structure, short-term debt or long-term debt of the Subsidiaries,
or any material adverse change, or any development that is
reasonably likely to involve a prospective material adverse
change, in the condition (financial or other), business,
prospects, net worth or results of operations of the Company and
its Subsidiaries on a consolidated basis and, except for regular
distributions with respect to the Company's common stock, par
value $1.00 per share (the "Common Stock"), in amounts per share
that are consistent with past practice or the Company's articles
of incorporation or by-laws, there has been no dividend or
distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
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(xi) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened any
action, suit or proceeding to which the Company or any of its
Subsidiaries is a party, or that any of its properties or other
assets is the subject of, before or by any court or governmental
agency or body, that is reasonably likely to result in any
material adverse change in the condition (financial or other),
business, prospects, net worth or results of operations of the
Company and its Subsidiaries on a consolidated basis.
(xii) During the period of at least the last 36 calendar
months prior to the date of this Underwriting Agreement, the
Company has timely filed with the Commission all documents and
other material required to be filed pursuant to Sections 13, 14
and 15(d) under the Exchange Act.
(xiii) There are no contracts or documents of the Company
that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference
therein by the Act or the Exchange Act or by the rules and
regulations of the Commission thereunder that have not been so
filed.
(xiv) This Underwriting Agreement and the Indenture have
been duly authorized, executed and delivered by the Company.
(xv) The execution of this Underwriting Agreement and the
Indenture and the consummation of the transactions contemplated
herein and therein will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, (i) any agreement or instrument to which the Company or
its Subsidiaries is a party or by which they are bound or to
which any of the property or other assets of the Company or its
Subsidiaries are subject, except where such default(s) would not
have a material adverse effect on the Company and its
Subsidiaries on a consolidated basis, (ii) the articles of
incorporation, by-laws, certificate of general or limited
partnership, partnership agreement or other organizational
document, as applicable, of the Company or its Subsidiaries, or
(iii) any statute, order, rule or regulation of any court of
governmental agency or body having jurisdiction over the Company
or its Subsidiaries or any of their properties or other assets;
no consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required for the
consummation of the transactions contemplated by this
Underwriting Agreement and the Indenture in connection with the
issuance or sale of the Securities being offered by the Company,
except such as may be required under the Act, the TIA and
applicable state securities laws (if any); and the Company has
full power and authority to authorize, issue and sell the
Securities to be offered by it as contemplated by this
Underwriting Agreement and the Indenture.
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(xvi) The Company and its Subsidiaries are not in default
under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or the
evidence of indebtedness, lease, contract or other agreement or
instrument to which they are a party or by which they or any of
their properties or other assets are bound, the violation of
which would individually or in the aggregate have a material
adverse effect on the Company and its Subsidiaries on a
consolidated basis, and no other party under any such agreement
or instrument to which the Company or its Subsidiaries are a
party is, to the knowledge of the Company, in default thereunder
where such default would have a material adverse effect on the
Company and its Subsidiaries on a consolidated basis; and the
Company and its Subsidiaries are not in violation of their
respective articles of incorporation, by-laws, certificates of
general or limited partnership, partnership agreements, or other
organizational documents, as the case may be.
(xvii) The Company and each of its Subsidiaries have good
and marketable title to all properties and assets described in
the Prospectus as owned by them, free and clear of all liens,
charges, encumbrances or restrictions, except as described in the
Prospectus or where such exceptions do not have a material
adverse effect on the Company and its Subsidiaries taken as a
whole, and the Company and its Subsidiaries have valid,
subsisting and enforceable leases for the properties described in
the Prospectus as leased by the Company and its Subsidiaries with
such exceptions, individually and in the aggregate, as do not
interfere with the use made and proposed to be made of such
properties by the Company and its Subsidiaries and would not have
a material adverse effect on the Company and its Subsidiaries
taken as a whole; except as set forth in Schedule C, no tenant
under any of the leases pursuant to which the Company or its
Subsidiaries lease their 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
and its Subsidiaries complies with all applicable codes and
zoning laws and regulations with such exceptions, individually
and in the aggregate, as would not have a material adverse effect
on the Company and its Subsidiaries taken as a whole; the Company
and its Subsidiaries have no knowledge of any pending or
threatened condemnation or zoning change that will affect the
size of, use of, improvement of, construction on, or access to
any of the properties of the Company and its Subsidiaries with
such exceptions, individually and in the aggregate, as would not
have a material adverse effect on the Company and its
Subsidiaries taken as a whole; and the Company and its
Subsidiaries have no knowledge of any pending or threatened
proceeding or action that will affect the size of, use of,
improvements on, construction on, or access to any of the
properties of the Company or its Subsidiaries with such
exceptions, individually and in the aggregate, as would not have
a material adverse effect on the Company and its Subsidiaries
taken as a whole.
(xviii) The Company or its Subsidiaries (including its
predecessors) have acquired title insurance with respect to each
of the properties described in the
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Prospectus as being owned by the Company or its Subsidiaries,
except, in each case, where the failure to maintain such title
insurance is not reasonably likely to 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.
(xix) Except as described, or incorporated by reference, in
the Registration Statement and the Prospectus or included in the
environmental reports reviewed by you or your counsel regarding
the Company's properties, (i) there does not exist on any of the
properties described in the Prospectus any hazardous substances,
hazardous materials, toxic substances or waste materials
(collectively, "Hazardous Materials") in unlawful quantities
which, individually and in the aggregate, are reasonably likely
to 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,
(ii) there has not occurred on or, to the Company's knowledge,
off such properties any unlawful spills, releases, discharges or
disposal of Hazardous Materials, which presence or occurrence is
reasonably likely to 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, and (iii) the Company and its Subsidiaries have
not failed to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative
and judicial orders relating to the generation, recycling, sale,
storage, handling, transport and disposal of any Hazardous
Materials, except for such failures which are not reasonably
likely to 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.
(xx) Property and casualty insurance in favor of each of
the Company and its Subsidiaries is maintained with respect to
each of the properties owned by each of them in an amount and on
such items as is reasonable and customary for businesses of this
type.
(xxi) No holder of outstanding shares of capital stock of
the Company has any rights to the registration of shares of
capital stock of the Company which would or could require such
securities to be included in the Registration Statement.
(xxii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as described or incorporated therein, (i)
there has not been any material adverse change in the business,
results of operations, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course
of business; and (ii) neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with
its assets, businesses or properties
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(whether owned or leased) from fire, explosion, earthquake, flood
or other calamity, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other
governmental action, order or decree that materially and
adversely affects the business, prospects, condition (financial
or other), net worth or results of operations of the Company and
its Subsidiaries taken as a whole.
(xxiii) The Company has filed all federal, state, local and
foreign income tax returns which have been required to be filed
and has paid all taxes indicated by said returns and all
assessments received by it to the extent that such taxes have
become due and payable, and which are not being contested by the
Company in good faith.
(xxiv) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection
with the execution and delivery by the Company of this
Underwriting Agreement and the Indenture and the consummation of
the transactions contemplated herein and therein has been or will
be obtained or made and is or at the Closing Date will be in full
force and effect.
(xxv) The Company and its Subsidiaries hold all material
licenses, certificates and permits from governmental authorities
which are necessary to the conduct of their businesses and are in
compliance with the terms and conditions of such licenses,
certificates and permits; and to the best of the Company's
knowledge, the Company and its Subsidiaries have not infringed on
any patents, patent rights, trade names, trademarks or
copyrights, which infringement is reasonably likely to have a
material adverse affect upon the business, prospects, condition
(financial or other), net worth or results of operations of the
Company and its Subsidiaries taken as a whole.
(xxvi) To the Company's knowledge, the Company and its
Subsidiaries are conducting their respective businesses in
compliance with all applicable laws, orders, rules and
regulations of the jurisdictions in which they are conducting
business, including, without limitation, the Americans with
Disabilities Act of 1990 and all applicable local, state and
federal employment, truth-in-advertising, franchising and
immigration laws and regulations, except where the failure to be
so in compliance would not have a material adverse effect on the
assets or properties, business, results of operations, prospects
or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole.
(xxvii) To the Company's knowledge, no transaction has
occurred between or among the Company and any of its officers or
directors or any affiliate or affiliates of any such officer or
director that is required by the Act or the 1933 Act Rules and
Regulations to be described in and is not described or
incorporated by reference in the Registration Statement and the
Prospectus.
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(xxviii) The Company satisfies all conditions and
requirements for filing the Registration Statement on Form S-3
under the Act.
(xxix) Other than in connection with this Underwriting
Agreement, the Company has not taken, nor will it take, directly
or indirectly, any action designed to or which is reasonably
expected to cause or result in, or which has constituted or which
is reasonably expected to constitute, the stabilization or
manipulation of the price of the Securities.
(xxx) For all applicable tax years as to which the
Company's tax returns are subject to audit and the Company is
subject to assessment for taxes reportable therein, the Company
has continuously been organized and operating in conformity with
the requirements for qualification as the real estate investment
trust under the Internal Revenue Code of 1986, as amended (the
"Code"). The Company's present operations are consistent with
the current requirements for taxation as a real estate
investment trust under the Code. The Company has no intention of
changing its operations or engaging in activities which would
adversely affect its ability to qualify as a real estate
investment trust.
(xxxi) Neither the Company nor any Subsidiary is an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
On the basis of the representations, warranties and agreements
contained herein, but subject to the terms and conditions set forth herein, the
Company agrees to issue and sell the Securities to the Underwriters as
hereinafter provided, and each Underwriter agrees to purchase, severally and not
jointly, from the Company the respective principal amount of Securities set
forth opposite such Underwriter's name on Schedule D hereto at the purchase
price set forth on Schedule A hereto plus accrued interest, if any, from the
date specified on Schedule A hereto to the date of payment and delivery.
The Company understands that the Underwriters intend (i) to
make a public offering of their respective portions of the Securities and (ii)
initially to offer the Securities upon the terms set forth in the Prospectus.
Payment for the Securities shall be made to the Company or to
its order in immediately available funds in the amount, on the date and at the
time and place set forth on Schedule A hereto (or at such other time and place
on the same or such other date, not later than the third Business Day
thereafter, as the Underwriters and the Company may agree in writing). 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
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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 or
Atlanta, Georgia. 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 will be made available for inspection by the Underwriters by 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 Company shall agree.
4. COVENANTS. The Company covenants and agrees with the
Underwriters that:
(i) The Company will cause the Prospectus Supplement to be
filed as required by Section 2(a)(i) hereof (but only if you or
your counsel 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.
During the period in which a prospectus relating to the
Securities is required to be delivered under the Act, the Company
will (i) notify you promptly of the time when any subsequent
amendment to the Registration Statement has become effective or
any subsequent supplement to the Prospectus has been filed and of
any request by the Commission for any amendment or supplement to
the Registration Statement or Prospectus or for additional
information, (ii) prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the
Registration Statement or Prospectus that, in your opinion, may
be necessary or advisable in connection with your distribution of
the Securities, and (iii) file no amendment or supplement to the
Registration Statement or Prospectus (other than any document
required to be filed under the Exchange Act that upon filing is
deemed to be incorporated by reference therein) to which you or
your counsel shall reasonably object by notice to the Company
after having been furnished a copy a reasonable time prior to the
filing.
(ii) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by
the Commission of any stop order suspending the effectiveness of
the Registration Statement, of the suspension of the
qualification or registration of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of
any proceeding for any such purpose; and it will promptly use its
best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such a stop order should be issued.
(iii) The Company will comply with all requirements imposed
upon it by the Act, the 1933 Act Rules and Regulations, the
Exchange Act, the Exchange Act Rules and Regulations and the TIA
as from time to time in force, so far as necessary to permit the
continuance of sales of, or dealings in, the Securities as
contemplated by the
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<PAGE> 13
provisions hereof and the Prospectus. If during such period any
event occurs as a result of which, in the opinion of your
counsel, the Registration Statement contains an untrue statement
of a material fact or omits to state a material fact required to
be based therein or necessary to make the statements therein not
misleading or the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein,
in the light of the circumstances then existing, not misleading,
or if during such period it is necessary to amend or supplement
the Registration Statement or Prospectus to comply with the Act,
the Company will promptly notify you and will amend or supplement
the Registration Statement or Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect
such compliance.
(iv) The Company will furnish to you copies of the
Registration Statement, the Prospectus (including all documents
incorporated by reference therein), each preliminary prospectus
and all amendments and supplements to the Registration Statement
and Prospectus that are filed with the Commission during the
period in which a prospectus relating to the Securities is
required to be delivered under the Act (including all documents
filed with the Commission during such period that are deemed to
be incorporated by reference therein), in each case as soon as
available and in such quantities as you may from time to time
reasonably request.
(v) During the period of five years commencing on the date
upon which the Prospectus Supplement is filed pursuant to Rule
424(b) under the Act, the Company will furnish you with copies of
filings of the Company under the Act and Exchange Act and with
all other financial statements and reports it distributes
generally to the holders of any class of its capital stock.
(vi) The Company will make generally available to its
security holders as soon as practicable and in the manner
contemplated by Rule 158 of the 1933 Act Rules and Regulations,
but in any event not later than 15 months after the end of the
Company's current fiscal quarter, an earning statement (which
need not be audited) covering a 12-month period beginning after
the date upon which the Prospectus Supplement is filed pursuant
to Rule 424(b) under the Act that shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 of the 1933 Act Rules and
Regulations and will advise you in writing when such statement
has been made available.
(vii) (1) Whether or not the transactions contemplated by
this Underwriting Agreement are consummated or this Underwriting
Agreement is terminated, the Company will pay, or reimburse if
paid by you, all costs and expenses incident to the performance
of the obligations of the Company under this Underwriting
Agreement, including but not limited to costs and expenses of or
relating to (A) the preparation, printing and filing of the
Registration Statement and exhibits thereto, the
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<PAGE> 14
Prospectus, each preliminary prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (B)
the word processing and reproduction of this Underwriting
Agreement and the Indenture, (C) the costs incurred by the
Company in furnishing (including costs of shipping, mailing and
courier) such copies of the Registration Statement, the
Prospectus, each 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 you or by dealers
to whom Securities may be sold, (D) any registration or
qualification of the Securities for offer and sale under the
securities or blue sky laws of such jurisdictions designated by
you, including the reasonable fees, disbursements and other
charges of your counsel in connection therewith, and the
preparation of a blue sky memoranda, (E) the fees charged by
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Rating Services ("S&P" and, together with Moody's, the "Rating
Agencies") for the rating of the Securities at the request of the
Company, (F) counsel to the Company, (G) the transfer agent for
the Securities, (H) the costs and expenses of the Trustee under
the Indenture and (I) Arthur Andersen LLP or any other
accountants engaged by the Company in connection with the
offering of the Securities.
(viii) If this Underwriting Agreement shall be terminated
pursuant to any of the provisions hereof or if for any reason the
Company shall be unable to perform their obligations hereunder,
the Company will reimburse you for all out-of-pocket expenses
(including the reasonable fees, disbursements and other charges
of your counsel) incurred by you in connection herewith.
(ix) Other than in connection with this Underwriting
Agreement, the Company will not at any time, directly or
indirectly, take any action designed to, or which might
reasonably be expected to cause or result in, or which has
constituted or which might reasonably be expected to constitute,
the stabilization of the price of the Securities.
(x) The Company will take all reasonable action necessary
to enable the Rating Agencies to provide their respective credit
ratings of the Securities.
(xi) The Company will execute the Supplemental Indenture
designating the Securities, as the debt securities to be offered,
and their terms and provisions in accordance with the provisions
of the Base Indenture.
(xii) The Company will apply the net proceeds to the
Company from the sale of the Securities by the Company as set
forth under the caption "Use of Proceeds" in the Prospectus
Supplement.
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<PAGE> 15
(xiii) The Company will continue to elect to qualify as a
"real estate investment trust" under the Code, and will use its
best efforts to continue to meet the requirements to qualify as a
"real estate investment trust."
5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. Your obligation to
purchase and pay for the Securities as provided herein shall be subject to the
accuracy, as of the date hereof and the Closing Date (as if made at the Closing
Date), of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Prospectus shall have been filed by the Company as
required by Section 2(a)(i) hereof; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceeding for that purpose shall have been instituted or, to your
knowledge or the knowledge of the Company, threatened by the
Commission, nor, to your knowledge or the knowledge of the Company, has
any state securities authority suspended the qualification or
registration of the Securities for offering or sale in any
jurisdiction, and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of you and your counsel.
(b) You shall not have advised the Company that the
Registration Statement, or any amendment thereto, contains an untrue
statement of fact that in the reasonable opinion of you or your counsel
is material or omits to state a fact that in the opinion of you or your
counsel is material and is required to be stated therein or is
necessary to make the statements therein not misleading, or that the
Prospectus, or any amendment or supplement thereto, contains an untrue
statement of fact that in the opinion of you and your counsel is
material or is necessary, in the light of the circumstances under which
they were made, to make the statements therein not misleading and which
statement has not been or is not being corrected to your satisfaction.
(c) 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.
(d) Except as contemplated in the Prospectus Supplement,
subsequent to the respective dates as of which information is included
or incorporated in the Registration Statement, the Prospectus, the
Prospectus Supplement and each preliminary prospectus, there shall not
have been any change, on a consolidated basis, in the equity
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<PAGE> 16
capitalization, short-term debt or long-term debt of the Company, or
any adverse change, or any development involving a prospective adverse
change, in the condition (financial or other), business, prospects, net
worth or results of operations of the Company and its Subsidiaries
taken as a whole or any adverse change in the rating assigned to any
securities of the Company, that, in your judgment, makes it impractical
or inadvisable to offer or deliver the Securities on the terms and in
the manner contemplated in the Prospectus.
(e) You shall have received the opinion of Alston & Bird LLP,
counsel for the Company, dated the Closing Date, in form and substance
reasonably satisfactory to your counsel to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation and in good standing under the laws of
its jurisdiction of incorporation, has full corporate power and
authority to conduct its business as described in the
Registration Statement and Prospectus, and is duly qualified or
registered to do business in each jurisdiction in which it owns
or leases real property or in which the conduct of its business
requires such qualification or registration, except where the
failure to be so qualified or registered, considering all such
cases in the aggregate, is not reasonably likely to have a
material adverse effect on the business, properties, financial
position or results of operations of the Company and its
Subsidiaries taken as a whole;
(ii) The Company has the authorized, issued and outstanding
debt, Common Stock and preferred stock as set forth under the
caption "Capitalization" in the Prospectus Supplement and in its
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997; and all of the outstanding shares of capital stock of the
Company are fully paid and nonassessable and, to the knowledge of
such counsel, none of them was issued in violation of any
preemptive or other similar right. The issuance of the Securities
has been duly authorized by the Company 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 by, the Underwriters pursuant to this Underwriting
Agreement, such Securities will constitute valid and legally
binding obligations of the Company entitled to the benefits
provided for in the Indenture and will be enforceable against the
Company in accordance with their terms, subject to the
Enforceability Limitations. To the knowledge of such counsel, no
holder of any security of the Company has the right to have any
security owned by such holder included for registration in the
Registration Statement or to demand registration of any security
owned by such holder during the 180 days after the date of this
Agreement.
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<PAGE> 17
(iii) The Registration Statement has become effective under
the Act, the Indenture has been qualified under the TIA, the
Prospectus Supplement has been filed as required by Section
2(a)(i) hereof and, to the best knowledge of such counsel, after
due inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission;
(iv) Each part of the Registration Statement, when such
part became effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, complied as to form in all
material respects with the requirements of the Act and the 1933
Act Rules and Regulations, and such counsel has no reason to
believe that either (A) any part of the Registration Statement
(excluding any prospectus supplement with respect to an offering
of securities other than the offering contemplated hereby), when
such part became effective or was filed under the Act or the
Exchange Act, 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 or (B)
the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission or at the Closing
Date, included an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; to the knowledge of such counsel, the
documents incorporated by reference in the Registration Statement
or Prospectus or any amendment or supplement thereto, when they
became effective under the Act or were filed with the Commission
under the Act or the Exchange Act, as the case may be, complied
as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; it being understood
that such counsel need express no opinion as to the financial
statements or other financial data included in any documents
mentioned in this clause; and 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 TIA;
(v) This Underwriting Agreement has been duly authorized,
executed and delivered by the Company; the execution, delivery
and performance of this Underwriting Agreement and the
consummation of the transactions contemplated herein will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the articles of
incorporation or by-laws of the Company or any statute applicable
to the Company;
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<PAGE> 18
(vi) The Indenture has been duly and validly authorized,
executed and delivered by the Company and assuming due
authorization, execution and delivery thereof by the Trustee,
will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its
terms, subject to the Enforceability Limitations; the execution,
delivery and performance of the Indenture and the consummation of
the transactions contemplated therein will not result in a breach
or violation of any of the terms and provisions of, or constitute
a default under, the articles of incorporation or by-laws of the
Company or any statute applicable to the Company; and the
Indenture has been duly qualified under the TIA;
(vii) The Indenture and the Securities conform in all
material respects to the descriptions thereof in the Registration
Statement and the Prospectus under the captions "Description of
Notes" and "Description of Debt Securities;"
(viii) For all applicable tax years as to which the
Company's tax returns are subject to audit and the Company is
subject to assessment for taxes reportable therein, the Company
has continuously been organized and operated in conformity with
the requirements for qualification as a "real estate investment
trust" under the Code. The Company's method of operation will
permit it to continue to meet the requirements for taxation as a
"real estate investment trust" under the Code;
(ix) The Company satisfies all conditions and requirements
for the use of a Registration Statement on Form S-3 under the
Act;
(x) The Company is not subject to the provisions of
Section 14-2-1131 through 14-2-1133 of the Georgia Business
Corporation Code; and
(xi) Neither the Company nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended.
(f) You shall have received the opinion of W. Benjamin Jones,
III, Esq., Executive Vice President of the Company, dated the Closing
Date, in form and substance satisfactory to your counsel to the effect
that:
(i) All of the issued and outstanding shares of capital
stock of the Company have been duly and validly authorized and
have been duly and validly issued;
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<PAGE> 19
(ii) Each of the Subsidiaries has been duly incorporated or
formed, as the case may be, and is validly existing as a
corporation, general or limited partnership or other legal
entity, as the case may be, and in good standing under the laws
of its jurisdiction of incorporation or formation, as the case
may be, has full power (corporate or other) and authority to
conduct its business as described in the Registration Statement
and Prospectus, and is duly qualified or registered to do
business in each jurisdiction in which it owns or leases real
property or in which the conduct of its business requires such
qualification or registration, except where the failure to be so
qualified or registered, considering all such cases in the
aggregate, is not reasonably likely to have a material adverse
effect on the business, financial position or results of
operations of the Company and its Subsidiaries taken as a whole;
(iii) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate and fairly present, in
all material respects, the information required to be shown; and
such counsel does 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 required to be filed
under the Exchange Act if upon such filing they would be
incorporated by reference therein) or to be filed as exhibits to
the Registration Statement that are not described and filed as
required;
(iv) The execution, delivery and performance of this
Underwriting Agreement and the Indenture and the consummation of
the transactions contemplated herein and therein will not result
in a breach or violation of any of the terms and provisions of,
or constitute a default under, (A) any statute, indenture,
mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or the evidence of indebtedness,
lease, contract or other agreement or instrument to which the
Company or its Subsidiaries are a party or by which they are
bound or to which any of the property or other assets of the
Company or its Subsidiaries is subject, (B) the articles of
incorporation, by-laws, certificate of general or limited
partnership, partnership agreement or other organizational
document of the Company or any of its Subsidiaries, as
applicable, or (C) any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company
or its Subsidiaries or any of their properties or other assets;
and no consent, approval, authorization, notice to, order of, or
filing with, any court or governmental agency or body is required
for the consummation of the transactions contemplated by this
Agreement in connection with the issuance or sale of the
Securities by the Company, except such as have been obtained
under the Act or the TIA or the absence of which would not have a
material adverse
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<PAGE> 20
effect upon the business, prospects, condition (financial or
other), net worth or results of operations of the Company audits
and its Subsidiaries taken as a whole;
(v) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of their respective articles
of incorporation, by-laws, certificate of general or limited
partnership, partnership agreement or other organizational
document, as applicable, or in violation of or default under any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or evidence of
indebtedness, lease, contract, permit, judgment, decree, order,
statute, rule or regulation, except where such default would not
have a material adverse effect on the Company and its
Subsidiaries on a consolidated basis; and
(vi) There is no litigation or governmental or other
proceeding or investigation, before any court or before or by any
public body or board pending or, or to such counsel's knowledge,
threatened against, or involving the assets, properties or
businesses of, the Company or any of its Subsidiaries, involving
the Company's or any of its Subsidiaries' officers or directors
or to which any of the Company's or any of its Subsidiaries'
properties or other assets is subject which would have a material
adverse effect upon the assets or properties, business, results
of operations, prospects or condition (financial or otherwise) of
the Company and its Subsidiaries taken as a whole.
(g) You shall have received from Rogers & Wells, your counsel,
such opinion or opinions, dated the Closing Date, with respect to the
organization of the Company, the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as you reasonably may
request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(h) At the time of execution of this Agreement and at the Closing
Date, you shall have received a letter, dated the date of delivery thereof, from
Arthur Andersen LLP, the independent public accountants of the Company, in the
form previously agreed to by you.
(i) You shall have received from the Company a certificate,
signed by the President or a Vice President and by the principal financial or
accounting officer of the Company, dated the Closing Date, to the effect that,
to the best of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in
this Underwriting Agreement are true and correct, as if made at
and as of the
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<PAGE> 21
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for
that purpose has been instituted or is threatened by the
Commission and, if applicable, no state securities authority has
suspended the qualification or registration of the Securities for
offering or sale in any jurisdiction;
(iii) Since the effective date of the Registration
Statement, there has occurred no event required to be set forth
in an amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, 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 in the Prospectus that has
not been so filed; and
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (A) there
has not been, and no development has occurred which could
reasonably be expected to result in, a material adverse change in
the general affairs, business, business prospects, properties,
management, condition (financial or otherwise) or results of
operations of the Company 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
(B) neither the Company nor any of its Subsidiaries has 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 or decree, which
is not set forth in the Registration Statement and the
Prospectus.
Such certificate shall address such other matters as you may reasonably
request.
(j) All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel. The Company will
furnish you with such conformed copies of such opinions, certificates, letters
and other documents as you shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
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<PAGE> 22
(a) The Company agrees to indemnify and hold harmless you and
your directors, officers, employees, agents and representatives and each person,
if any, who controls you within the meaning of Section 15 of the Act or Section
20 of the Exchange Act 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 you 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 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 to be stated in it or necessary to make the
statements in it not misleading or (iii) any act or failure to act or any
alleged act or failure to act by you 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 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 determined by the Commission or a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by you through your gross negligence or willful misconduct); provided that the
Company will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Securities in the public offering
to any person 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 you furnished in writing to the Company by you expressly for
inclusion in the Registration Statement or the Prospectus. You confirm to the
Company, and the Company acknowledges that only the following information
appearing in the Prospectus with respect to the public offering of the
Securities has been furnished to the Company by you for use in the Prospectus:
(i) your names contained on the cover page and back cover page of the Prospectus
Supplement; (ii) the last full paragraph contained on the cover page of the
Prospectus Supplement; (iii) the stabilization legend on the inside front cover
page of the Prospectus Supplement; and (iv) the information relating to you in
the third, fourth, sixth and seventh paragraphs under the caption "Underwriting"
in the Prospectus Supplement. This indemnity agreement will be in addition to
any liability that the Company might otherwise have.
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<PAGE> 23
(b) You will indemnify and hold harmless the Company, its
directors, officers, employees, agents and representatives, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to you, but only insofar as losses, claims, liabilities,
expenses or damages 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 you furnished in writing to the Company
by you expressly for use in the Registration Statement or the Prospectus. This
indemnity will be in addition to any liability that you might otherwise have.
Notwithstanding any other provision of this Section 6(b), in no case shall you
be liable or responsible for any amount in excess of the underwriting discounts
and commissions received by you.
(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 under this Section 6, notify such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission to so 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 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 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. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings
22
<PAGE> 24
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 full release of each indemnified party from all liability arising
or that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section 6(c), if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement effected without its written consent if (x) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (y) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (z) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(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 you, the Company and
you 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 you who may be liable for
contribution) to which the Company and you may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on
the one hand and you on the other. The relative benefits received by the Company
on the one hand and you 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 you, in each case as set forth in the table on the cover
page of the Prospectus Supplement. 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 you 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 omission or alleged omission to state a material
fact relates to
23
<PAGE> 25
information supplied by the Company or you, 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 you 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 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), you shall not be required
to contribute any amount in excess of the underwriting discounts and commissions
received by you 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. For purposes of this Section 6(d), any person who controls a
party to this Underwriting Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer and director 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 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). Except for a settlement entered
into pursuant to the last sentence of Section 6(c) hereof, 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 shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of you, (ii) acceptance of the
Securities and payment therefor or (iii) any termination of this Underwriting
Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company contained herein or in
certificates delivered pursuant hereto, and your agreements contained in Section
6 hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of you or any controlling persons or the
Company or any of its officers, directors or controlling persons, and shall
survive delivery of and payment for the Securities hereunder.
8. TERMINATION. You shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Underwriting Agreement if (i) the Company shall have failed, refused or
been unable, at or prior to the Closing Date, to perform any agreement on its
part to be performed hereunder, (ii) any other condition of your
24
<PAGE> 26
obligations hereunder is not fulfilled when due, (iii) trading on the NYSE shall
have been wholly suspended, (iv) minimum or maximum prices for trading shall
have been fixed for the Common Stock, or maximum ranges for prices for the
Common Stock shall have been required on the NYSE by the NYSE or by order of the
Commission or any other governmental authority having jurisdiction, (v) a
banking moratorium shall have been declared by federal or New York authorities,
or (vi) an outbreak of major hostilities in which the United States is involved,
a declaration of war by Congress, any other substantial national or
international calamity or any other event or occurrence of a similar character
shall have occurred since the execution of this Underwriting Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party with respect to
Securities not purchased by reason of such termination except that the
provisions of Sections 4(a)(vii) and 6 hereof shall at all times be effective.
If you elect to terminate this Underwriting Agreement as provided in this
Section, the Company shall be notified promptly by you by telephone, telex or
telecopy, confirmed by letter.
9. NOTICES. All notices or communications hereunder shall be
in writing and if sent to you shall be mailed, delivered, telexed or telecopied
and confirmed to the Underwriters in care of PaineWebber Incorporated at 1285
Avenue of the Americas, New York, New York 10019, Attention: Corporate Finance
Department (with copy to Jay L. Bernstein, Esq., c/o Rogers & Wells, 200 Park
Avenue, New York, New York 10166), or if sent to the Company, shall be mailed,
delivered, telexed or telecopied and confirmed to the Company at 200 Galleria
Parkway, Suite 1400, Atlanta, Georgia 30339, Attention: W. Benjamin Jones, III,
Esq. (with copy to Ralph F. MacDonald, III, Esq., c/o Alston & Bird, 1201 West
Peachtree Street, Atlanta, Georgia 30309-3424). Any party to this Underwriting
Agreement may change such address for notices by sending to the other party to
this Underwriting Agreement written notice of a new address for such purpose.
10. PARTIES. This Agreement shall inure to the benefit of, and
be binding upon, the Company and the Underwriters and their respective
successors and the controlling persons, officers, directors, employees and
representatives referred to in Section 6 hereof, and no other person will have
any right or obligation hereunder.
11. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
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<PAGE> 27
If the foregoing correctly sets forth the understanding
between the Company and the Underwriters, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among the Company and the Underwriters.
Very truly yours,
IRT PROPERTY COMPANY
By: /s/ MARY M. THOMAS
---------------------------------------
Name: Mary M. Thomas
--------------------------------
Title: Executive Vice President
--------------------------------
ACCEPTED as of the date first above written
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
By: PAINEWEBBER INCORPORATED
By: /s/ DAVID JARVIS
---------------------------
Name: David Jarvis
Title: Managing Director
26
<PAGE> 28
SCHEDULE A
Underwriters: PaineWebber Incorporated
Salomon Brothers Inc
Title of Securities: 7.25% Senior Notes due 2007
Aggregate principal amount: $75,000,000
Price to Public: 99.432%
Underwriting Discount: 0.65%
Purchase Price to be paid
to Company: $74,086,500
Closing Date and Time of Delivery: August 15, 1997, 10:00 a.m. (New York City
time)
Closing Location: Rogers & Wells
200 Park Avenue
New York, New York 10166
<PAGE> 29
SCHEDULE B
Subsidiaries
1) IRT Capital Corporation
2) IRT Management Company
3) VW Mall, Inc.
4) The Rudderson Company
5) IRT Alabama, Inc.
<PAGE> 30
SCHEDULE C
Tenants with Options or Rights of First Refusal
1) The lessees under the following land-purchase-leaseback
investments have options to purchase the land leased to them by the Company
at established prices:
Manatee County Shopping Center
Lawrence County Shopping Center
2) Wal-Mart Stores, Inc. has a right of first refusal to purchase
facilities leased to them by the Company in Matthews, Louisiana and Marble
Falls, Texas.
<PAGE> 31
SCHEDULE D
Principal Amount
of Notes
Underwriters To Be Purchased
PaineWebber Incorporated...................... $37,500,000
Salomon Brothers Inc.......................... 37,500,000
Total....................................... $75,000,000
<PAGE> 1
EXHIBIT 4
Supplemental Indenture No. 2, dated August 15, 1997, between
IRT Property Company and SunTrust Bank, Atlanta
<PAGE> 2
IRT PROPERTY COMPANY
Issuer
to
SUNTRUST BANK, ATLANTA
Trustee
--------------------------------
Supplemental Indenture No. 2
Dated as of August 15, 1997
-------------------------------
$75,000,000
7.25% Senior Notes due 2007
<PAGE> 3
SUPPLEMENTAL INDENTURE NO. 2, dated as of August 15, 1997 (the
"Supplemental Indenture"), between IRT PROPERTY COMPANY, a corporation duly
organized and existing under the laws of the State of Georgia (herein called the
"Company"), and SUNTRUST BANK, ATLANTA, a Georgia banking corporation duly
organized and existing under the laws of the State of Georgia, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore delivered to the Trustee an Indenture dated
as of November 9, 1995 (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 Company's Registration Statement on Form S-3
(Registration No. 33-63523), providing for the issuance from time to time of
Senior Debt Securities of the Company (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 Company 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 the Company has duly adopted resolutions
authorizing the Company 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 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
the Securities or of any series thereof, as follows:
<PAGE> 4
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.
"Annual Service Charge" for any period means the maximum amount which
is payable during such period for interest on, and the amortization during such
period of any original issue discount of, Debt of the Company and its
Subsidiaries and the amount of dividends which are payable during such period in
respect of any Disqualified Stock.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in the City of
New York or in the City of Atlanta are authorized or required by law, regulation
or executive order to close.
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations of the Company and its Subsidiaries plus amounts which
have been deducted, and minus amounts which have been added, for the following
(without duplication): (a) interest on Debt of the Company and its Subsidiaries,
(b) provision for taxes of the Company and its Subsidiaries based on income, (c)
amortization of debt discount, (d) provisions for gains and losses on properties
and property depreciation and amortization, (e) the effect of any noncash charge
resulting from a change in accounting principles in determining Earnings from
Operations for such period and (f) amortization of deferred charges.
"Corporate Trust Office" 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 58 Edgewood Avenue,
4th Floor, Atlanta, Georgia 30303 and, for purposes of the Place of Payment
provisions of Sections 305 and 1002 of the Senior Indenture, is located at First
Chicago Trust Company of New York, 14 Wall Street, 8th Floor, New York, New York
10005.
"Debt" of the Company or any Subsidiary means any indebtedness of the
Company or any Subsidiary, whether or not contingent, in respect of (i) money
borrowed or evidenced by bonds, notes, debentures or similar instruments, (ii)
indebtedness for borrowed money secured by any
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<PAGE> 5
mortgage, lien, charge, pledge, or security interest of any kind existing on
property owned by the Company or any Subsidiary (each securing such debt, an
"Encumbrance"), (iii) the reimbursement obligations, contingent or otherwise, in
connection with any letters of credit actually issued or amounts representing
the balance deferred and unpaid of the purchase price of any property or
services, except any such balance that constitutes an accrued expense or trade
payable, or all conditional obligations or obligations under any title retention
agreement, (iv) the principal amount of all obligations of the Company or any
Subsidiary with respect to redemption, repayment or other repurchase of any
Disqualified Stock or (v) any lease of property by the Company or any Subsidiary
as lessee which is reflected on the Company's Consolidated Balance Sheet as a
capitalized lease in accordance with GAAP, to the extent, in the case of items
of indebtedness under (i) through (iii) above, that any such items (other than
letters of credit) would appear as a liability on the Company's Consolidated
Balance sheet in accordance with GAAP, and also includes, to the extent not
otherwise included, any obligations by the Company or any Subsidiary to be
liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Debt of another
Person (other than the Company or any Subsidiary) (it being understood that Debt
shall be deemed to be incurred by the Company or any Subsidiary whenever the
Company or such Subsidiary shall create, assume, guarantee or otherwise become
liable in respect thereof).
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for Debt or
Disqualified Stock or (iii) is redeemable at the option of the holder thereof,
in whole or in part (other than Capital Stock which is redeemable solely in
exchange for common stock), in each case on or prior to the Stated Maturity of
the Notes.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items, and net property
valuation losses, as reflected in the financial statements of the Company and
its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"Encumbrance" has the meaning specified in the definition of "Debt" set
forth in this Section 1.2.
"Financial Statements" has the meaning specified in Section 1009 of the
Senior Indenture.
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Notes, 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 each 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
- 3 -
<PAGE> 6
payment had not been made to the date of redemption or accelerated payment, over
(ii) the aggregate principal amount of the Notes being redeemed or paid.
"Notes" has the meaning specified in Section 2.1 hereof.
"Redemption Price" has the meaning specified in Section 2.5 hereof.
"Reinvestment Rate" means 0.25% (one quarter of one percent) plus the
arithmetic mean of the yields under the heading "Week Ending" published in the
most recent Statistical Release under the caption "Treasury Constant Maturities"
for the maturity (rounded to the nearest month) corresponding to the remaining
life to maturity, as of the payment date of the principal being redeemed or
paid. If no maturity exactly corresponds to such maturity, yields for the two
published maturities most closely corresponding to such maturity shall be
calculated pursuant to the immediately preceding sentence and the Reinvestment
Rate shall be interpolated or extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month. For the
purposes of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount
shall be used.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which reports 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
hereunder, then such other reasonably comparable index which shall be designated
by the Company.
"Total Assets" as of any date means the sum of (i) the Undepreciated
Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with GAAP (but excluding accounts receivable and
intangibles).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money determined in accordance with GAAP (but excluding accounts
receivable and intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Company
and its Subsidiaries on such date, before depreciation and amortization
determined on a consolidated basis in accordance with GAAP.
"Unsecured Debt" means Debt which is not secured by any Encumbrance
upon any of the properties of the Company or any Subsidiary.
- 4 -
<PAGE> 7
ARTICLE TWO
THE SERIES OF NOTES
SECTION 2.1. Title of the Securities.
There shall be a series of Securities designated the 7.25% Senior Notes
due 2007 (the "Notes").
SECTION 2.2. Limitation on Aggregate Principal Amount.
The aggregate principal amount of the Notes shall be limited to
$75,000,000, and, except as provided in this Section and in Section 306 of the
Senior Indenture, the Company 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
Company or authentication or delivery by the Trustee of the Notes under the
circumstances contemplated in Sections 303, 304, 306, 906 and 1304 of the Senior
Indenture.
SECTION 2.3. Interest and Interest Rates; Maturity Date of Notes.
The Notes will bear interest at a rate of 7.25% per annum from August
15, 1997 or from the immediately preceding Interest Payment Date to which
interest has been paid or duly provided for, payable semi-annually in arrears on
February 15 and August 15 of each year, commencing February 15, 1998 (each, an
"Interest Payment Date"), to the Person in whose name such Note is registered at
the close of business on February 1 or August 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date (each, a "Regular
Record Date"). Interest will be computed the basis of a 360-day year comprised
of twelve 30-day months. The interest so payable on any Note which is not
punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the Person in whose name such Note as
registered on the relevant Regular Record Date, and such defaulted interest
shall instead be payable to the Person in whose name such Note is registered on
the Special Record Date or other specified date determined in accordance with
the Senior Indenture.
If any Interest Payment Date or Maturity falls on a day that is not a
Business Day, the required payment shall be made on the next Business Day as if
it were made on the date such payment was due and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date
or Maturity, as the case may be.
The Notes will mature on August 15, 2007.
SECTION 2.4. Limitations on Incurrence of Debt.
(a) The Company will not, and will not permit any Subsidiary to, incur
any Debt if, immediately after giving effect to the incurrence of such
additional Debt and the application of
- 5 -
<PAGE> 8
the proceeds thereof, the aggregate principal amount of all outstanding Debt of
the Company and its Subsidiaries on a consolidated basis determined in
accordance with GAAP is greater than 60% of the sum of (without duplication) (i)
the Total Assets of the Company and its Subsidiaries as of the end of the
calendar quarter covered in the Company's Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as the case may be, most recently filed with the
Commission (or, if such filing is not permitted under the Exchange Act, with the
Trustee) prior to the incurrence of such additional Debt and (ii) the purchase
price of any real estate assets or mortgages receivable acquired, and the amount
of any securities offering proceeds received (to the extent such proceeds were
not used to acquire real estate assets or mortgages receivable or used to reduce
Debt), by the Company or any Subsidiary since the end of such calendar quarter,
including those proceeds obtained in connection with the incurrence of such
additional Debt.
(b) In addition to the limitation set forth in subsection (a) of this
Section 2.4, the Company will not, and will not permit any Subsidiary to, incur
any Debt if the ratio of Consolidated Income Available for Debt Service to the
Annual Service Charge for the four consecutive fiscal quarters most recently
ended prior to the date on which such additional Debt is to be incurred shall
have been less than 1.5:1, 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 Company 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 Company 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 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 Company 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 Company will not, and will not permit any Subsidiary
to, incur any Debt secured by any Encumbrance upon any of the property of the
Company or any Subsidiary, 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 outstanding Debt of the Company and its
Subsidiaries on a consolidated basis which is secured by any Encumbrance on
property of the Company or any Subsidiary is greater than 40% of the sum of
(without duplication) (i) the Total Assets of the Company and its Subsidiaries
as of the end of the calendar quarter covered in the Company's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not permitted under the
Exchange Act, with the Trustee) prior to the incurrence of such additional Debt
and (ii) the purchase price of any real estate assets or mortgages receivable
acquired, and the amount of any securities offering proceeds received (to the
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<PAGE> 9
extent that such proceeds were not used to acquire real estate assets or
mortgages receivable or used to reduce Debt), by the Company or any Subsidiary
since the end of such calendar quarter, including those proceeds obtained in
connection with the incurrence of such additional Debt.
(d) The Company and its Subsidiaries may not at any time own Total
Unencumbered Assets equal to less than 150% of the aggregate outstanding
principal amount of the Unsecured Debt of the Company and its Subsidiaries on a
consolidated basis.
(e) For purposes of this Section 2.4, Debt shall be deemed to be
"incurred" by the Company or a Subsidiary whenever the Company or such
Subsidiary shall create, assume, guarantee or otherwise become liable in respect
thereof.
SECTION 2.5. Optional Redemption.
(a) Subject to this Section 2.5, the Notes may be redeemed at any time
at the option and in the sole discretion of the Company, in whole or from time
to time 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"). If (i) notice has been given as provided in
Sections 2.5(b) and (c) and (ii) funds for the redemption of any Notes called
for redemption shall have been made available as provided in the Senior
Indenture on the redemption date referred to in such notice, such Notes will
cease to bear interest on the date fixed for such redemption specified in such
notice, and the only right of the Holders of the Notes will be to receive
payment of the Redemption Price.
(b) Notice of any optional redemption of any Notes will be given to
Holders at their addresses, as shown in the Security Register, not more than 60
nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, in addition to the items required by the Senior
Indenture, the Redemption Price and the principal amount of the Notes held by
each Holder to be redeemed.
(c) If less than all the Notes are to be redeemed at the option and in
the sole discretion of the Company, the Company will notify the Trustee at least
45 days prior to giving the notice of redemption required by Section 2.5(b) (or
such shorter period as is satisfactory to the Trustee) of the aggregate
principal amount of Notes to be redeemed and their redemption date. The Trustee
shall select not more than 60 days prior to the redemption date, in such manner
as it shall deem fair and appropriate, Notes to be redeemed in whole or in part.
(d) In the event of any conflict between the terms of this Supplemental
Indenture and the terms of the Senior Indenture, the terms of this Supplemental
Indenture shall control.
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 Company in respect of the
Notes and the Senior Indenture may be served shall be in (i) the Borough of
Manhattan, The City of New York, New York, and the office or
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<PAGE> 10
agency for such purpose shall initially be First Chicago Trust Company of New
York, 14 Wall Street, 8th Floor, New York, New York 10005 and (ii) the City of
Atlanta, Georgia, and the office or agency for such purpose shall initially be
located at SunTrust Bank, Atlanta, 58 Edgewood Avenue, 4th Floor, Atlanta,
Georgia 30303.
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 Company maintained for that purpose in the Borough
of Manhattan, The City of New York (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 Company, 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 inside
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 depositary for the Notes shall
be DTC. The Notes shall not be issuable in definitive form except as provided in
Section 305 of the Senior Indenture.
SECTION 2.10. Form of Notes.
The Notes shall be substantially in the form attached as Exhibit A
hereto.
SECTION 2.11. Registrar and Paying Agent.
The Trustee shall initially serve as 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 XIV 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 Section 2.4 of this
Supplemental Indenture and to those covenants specified in Section 1403 of the
Senior Indenture.
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<PAGE> 11
SECTION 2.13. Acceleration of Maturity; Rescission and Annulment.
The first paragraph of Section 502 of the Senior Indenture shall be
amended and restated in its entirety to read as follows:
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25 % in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) of, and the Make-Whole
Amount, if any, on, all the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Holders), and upon any such declaration such principal or specified
portion thereof shall become immediately due and payable. If an Event of Default
with respect to the Securities of any series set forth in Section 501(7) of the
Senior Indenture occurs and is continuing, then in every such case all the
Securities of that series shall become immediately due and payable, without
notice to the Company, at the principal amount thereof (or, if any Securities
are Original Issue Discount Securities or Indexed Securities, such portion of
the principal as may be specified in the terms thereof) plus accrued interest to
the date the Securities of that series are paid plus the Make-Whole Amount, if
any, on the Securities of that series.
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 Georgia. 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> 12
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.
IRT PROPERTY COMPANY
By: /s/ MARY M. THOMAS
-------------------------------
Name: Mary M. Thomas
Title: Chief Financial Officer
SUNTRUST BANK, ATLANTA,
as Trustee
By: /s/ M.R. SMITH, JR.
------------------------------
Name: M. R. Smith, Jr.
-----------------------
Title: Vice President
-----------------------
<PAGE> 13
EXHIBIT A TO
SUPPLEMENTAL INDENTURE
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is 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 inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
Registered No. PRINCIPAL AMOUNT
CUSIP No.: 450058AC6 --$75,000,000--
IRT PROPERTY COMPANY
7.25% SENIOR NOTE DUE 2007
IRT PROPERTY COMPANY, a corporation duly organized and existing under
the laws of the State of Georgia (herein referred to as the "Company" which term
shall include any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to CEDE & CO., or registered
assigns, upon presentation, the principal sum of SEVENTY-FIVE MILLION AND NO/100
DOLLARS on August 15, 2007, and to pay interest on the outstanding principal
amount thereon from August 15, 1997, or from the immediately preceding Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on February 15 and August 15 of each year, commencing February 15,
1998, at the rate of 7.25% per annum, until the entire principal hereof is paid
or made available for payment. The interest so payable and punctually paid or
duly provided for on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security is registered at
the close of business on the Regular Record Date for such interest which shall
be the February 1 or August 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. 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 either be paid to the Person in
whose name this Security 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 the Securities not more
than 15 days and 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 may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Payment of the
A-1
<PAGE> 14
principal of and interest on this Security will be made at the office or agency
maintained for that purpose in the City of New York, New York, or elsewhere as
provided in the Indenture, 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 Company 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 of the Person entitled thereto located
inside the United States.
Securities of this series are one of a duly authorized issue of
securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of November 9, 1995,
as supplemented by Supplemental Indenture No. 2, dated as of August 15, 1997 (as
so supplemented, herein called the "Indenture"), between the Company and
SunTrust Bank, Atlanta (herein called the "Trustee," which term includes any
successor trustee under the Indenture), 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 Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are authenticated and delivered. This Security is one of the series
designated in the first page thereof, limited in aggregate principal amount to
$75,000,000.
Securities of this series may be redeemed at any time at the option and
in the sole discretion of the Company, in whole or from time to time in part, at
a redemption price equal to the sum of (i) the principal amount of the
Securities of this series being redeemed plus accrued interest thereon to the
redemption date and (ii) the Make-Whole Amount, if any, with respect to such
Securities (the "Redemption Price"). If (i) notice has been given as provided in
the next paragraph and (ii) funds for the redemption of any Securities of this
series called for redemption shall have been made available as provided in the
Indenture on the redemption date referred to in such notice, such Securities
will cease to bear interest on the date fixed for such redemption specified in
such notice, and the only right of the Holders of such Securities will be to
receive payment of the Redemption Price.
Notice of any optional redemption of any Securities of this series will
be given to Holders at their addresses, as shown in the Security Register, not
more than 60 nor less than 30 days prior to the date fixed for redemption. The
notice of redemption will specify, among other items, the Redemption Price and
the principal amount of the Securities of this series held by each Holder to be
redeemed. If less than all the Securities of this series are to be redeemed at
the option and in the sole discretion of the Company, the Company will notify
the Trustee at least 45 days prior to giving notice of redemption (or such
shorter period as is satisfactory to the Trustee) of the aggregate principal
amount of the Securities of this series to be redeemed and their redemption
date. The Trustee shall select not more than 60 days prior to the redemption
date, in such manner as it shall deem fair and appropriate, Securities of this
series to be redeemed in whole or in part.
A-2
<PAGE> 15
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to the Securities shall occur and
be continuing, the principal of the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
written notice to the Trustee of a continuing Event of Default with respect to
the Securities, the Holders of not less than 25% in principal amount of the
Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any interest on or after the
respective due dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series of Securities then Outstanding affected
thereby. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
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 of any
Security 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 Company, which
is absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
A-3
<PAGE> 16
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any Place of Payment where the principal of
and interest on this Security are payable duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company 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 Company, the Trustee and any agent of the Company 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 Company, the
Trustee nor any such agent shall be affected by notice 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, shall be had against any promoter, as such, or
against any past, present or future shareholder, officer or director, as such,
of the Company or of any successor, either directly or through 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 expressly waived and released by the
acceptance of this Security by the Holder thereof and as part of the
consideration for the issue of the Securities of this series.
All capitalized terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
A-4
<PAGE> 17
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company 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 or
on behalf of the Trustee by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, IRT PROPERTY COMPANY has caused this instrument to
be duly executed under its corporate seal.
Dated:
IRT PROPERTY COMPANY
By:
----------------------------------
Name:
Title:
[Corporate Seal]
Attest:
- ---------------------------------------
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series referred to in the
within-mentioned Indenture.
SUNTRUST BANK, ATLANTA
as Trustee
By:
------------------------------------
Authorized Signatory
A-5
<PAGE> 18
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 IRT Property Company and hereby does irrevocably
constitute and appoint
______________________________________________ Attorney to transfer said
Security on the books of the within-named Company 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
Opinion of Alston & Bird LLP as to the legality of the Notes
<PAGE> 2
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
404-881-7000
Fax: 404-881-7777
August 12, 1997
IRT Property Company
200 Galleria Parkway, N.W.
Suite 1400
Atlanta, Georgia 30339
Ladies and Gentlemen:
This opinion is given in connection with the public offering by IRT
Property Company (the "Company") of $75,000,000 principal amount of 7.25% Senior
Notes due 2007 of the Company (the "Notes"). The offering of the Notes will be
made pursuant to a Prospectus Supplement dated August 12, 1997 (the "Prospectus
Supplement"), relating to the Prospectus dated November 9, 1995, filed with the
Company's Shelf Registration Statement (Commission File No. 33-63523) on Form
S-3 (the "Registration Statement"). The Notes are proposed to be issued by the
Company pursuant to an indenture dated November 9, 1995 between the Company and
SunTrust Bank, Atlanta, Georgia, as Trustee, to be supplemented by Supplemental
Indenture No. 2 on August 15, 1997 (the "Indenture").
As counsel to the Company, we have examined the relevant corporate and
other documents incident to the giving of this opinion. In our examination, we
have assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as original documents, and conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies. Based upon the foregoing, we are of the following opinion:
The Notes covered by the Registration Statement, when issued, sold and
authenticated in accordance with the terms of the Indenture pursuant to the
Underwriting Agreement between the Company and PaineWebber Incorporated and
Salomon Brothers Inc will be duly authorized, legally issued, valid and binding
obligations of the Company.
1211 East Morehead Street 3605 Glenwood Avenue 601 Pennsylvania Avenue, N.W.
P. O. Drawer 34009 P. O. Drawer 31107 North Building, Suite 250
Charlotte, NC 28234-4009 Raleigh, NC 27622-1107 Washington, DC 20004-2601
704-331-6000 919-420-2200 202-508-3300
Fax: 704-334-2014 Fax: 919-881-3175 Fax: 202-508-3333
<PAGE> 3
IRT Property Company
August 12, 1997
Page 2
We hereby consent to the incorporation by reference of this opinion
into the Registration Statement. We further consent to the reference to our firm
under the heading "Legal Opinions" in the Prospectus Supplement.
Very truly yours,
/s/ RALPH F. MACDONALD, III
------------------------------
Ralph F. MacDonald, III
REM:mls
