<PAGE>
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): Commission File Number:
NOVEMBER 3, 1997 1-12358
COLONIAL PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
ALABAMA 59-7007599
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)
2101 SIXTH AVENUE NORTH
Suite 750
BIRMINGHAM, ALABAMA 35202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(205) 250-8700
NOT APPLICABLE
(Former name or former address, if changed since last report)
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COLONIAL PROPERTIES TRUST
ITEM 5 - OTHER EVENTS
Attached as Exhibits to this form are the documents listed below:
Exhibit Document
------- --------
1 Terms Agreement dated November 3, 1997, and the
Underwriting Agreement dated November 3, 1997, by
and among Colonial Properties Trust, Colonial
Realty Limited Partnership and Merrill Lynch & Co.
and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Lehman Brothers Inc., Morgan Stanley
& Co. Incorporated, and Smith Barney Inc.
3 Declaration of Trust of the Company as amended on
October 24, 1997.
5.1 Opinion of Hogan & Hartson L.L.P. regarding the
legality of the Shares
5.2 Opinion of Sirote & Permutt, P.C., regarding
Alabama law
-2-
<PAGE>
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.
COLONIAL PROPERTIES TRUST
Date: November 5, 1997 By: /s/ Douglas B. Nunnelley
--------------------------
Douglas B. Nunnelley,
Senior Vice President and
Secretary
-3-
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EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Description Page
------- ----------- ----
<S> <C> <C>
1 Terms Agreement dated November 3, 1997, and the
Underwriting Agreement dated November 3, 1997, by and
among Colonial Properties Trust, Colonial Realty Limited
Partnership and Merrill Lynch & Co. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, and Lehman Brothers
Inc., Morgan Stanley & Co. Incorporated, and Smith
Barney Inc.
3 Declaration of Trust of the Company as amended on October
24, 1997.
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality
of the Shares
5.2 Opinion of Sirote & Permutt, P.C. as to Alabama law
</TABLE>
<PAGE>
Exhibit 1
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
8.75% Series A Cumulative Redeemable Preferred
Shares of Beneficial Interest
(Liquidation Preference $25.00 Per Share)
TERMS AGREEMENT
---------------
Dated: November 3, 1997
To: COLONIAL PROPERTIES TRUST
2101 6th Avenue North
Suite 750
Birmingham, Alabama
Attention: Chairman of the Board of Trustees
Ladies and Gentlemen:
We (the "Underwriters") understand that Colonial Properties Trust, an
Alabama real estate investment trust (the "Company"), proposes to issue and sell
preferred shares of beneficial interest, $.01 par value (the "Preferred Shares")
(such Preferred Shares being hereinafter referred to as the "Underwritten
Securities"). Subject to the terms and conditions set forth or incorporated by
reference herein, the Underwriters named below offer to purchase, severally and
not jointly, the respective numbers of Initial Underwritten Securities (as
defined in the Underwriting Agreement dated November 3, 1997 (the "Underwriting
Agreement")) set forth below opposite their respective names and a proportionate
number of the Option Securities (as defined in the Underwriting Agreement), to
the extent any are purchased, at the purchase price, and with the underwriting
discount, set forth below.
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares of
Initial
Underwritten
Underwriter Securities
----------- ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................. 1,250,000
Lehman Brothers Inc.................... 1,250,000
Morgan Stanley & Co., Incorporated..... 1,250,000
Smith Barney Inc....................... 1,250,000
---------
TOTAL............... 5,000,000
=========
</TABLE>
The Underwritten Securities shall have the following terms:
Title of Securities: 8.75% Series A Cumulative Redeemable Preferred
Shares of Beneficial Interest, par value $0.01
per share
Number of Shares: 5,000,000
Current Ratings: Moody's: ba1
Standard & Poor's: BB+
Duff & Phelps: BBB-
Dividend Rate: 8.75% per annum, Payable: last day
of March, June, September and
December, commencing December 31, 1997
Liquidation Preference: $25.00 per share
Ranking: As set forth in the Prospectus
Supplement dated November 3, 1997
Public offering price
per share: $25.00, plus accrued dividends from
the date of original issue of the
Initial Underwritten Securities
Purchase price per share: $25.00, plus accrued dividends from
the date of original issue of the
Initial Underwritten Securities
Underwriting discount
per share: $.7875, to be paid by Colonial
Realty Limited Partnership
Conversion Provisions: None
2
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Redemption Provisions: As set forth in the Prospectus
Supplement dated November 3, 1997
Sinking Fund Requirements: None
Number of Option Securities,
if any, that may be
purchased by the
Underwriter: 750,000
Delayed Delivery Contracts: Not authorized
Additional co-managers,
if any: Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
Smith Barney Inc.
Other terms: The provisions of Section 3(n) of the
Underwriting Agreement will not be applicable to
the Preferred Shares, provided, however,
-------- -------
that the Company will not, between the date
hereof and the Closing Time, with respect to the
Preferred Shares, without the prior written
consent of Merrill Lynch & Co., offer or sell,
grant any option for the sale of, or enter into
any agreement to sell, any securities of the
same class or series or ranking on a parity with
such Preferred Shares (other than the Preferred
Shares which are to be sold pursuant hereto).
The Company will use its best efforts to list
the Preferred Shares on the New York Stock
Exchange
Closing date and
location: November 6, 1997, at 9:00 A.M., New York City
time, at Brown & Wood LLP, One World Trade
Center, New York, New York 10048-0557
3
<PAGE>
All the provisions contained in the document attached as Annex A hereto
entitled "Colonial Properties Trust - Preferred Shares, Common Shares, and
Common Share Warrants - Underwriting Agreement" are hereby incorporated by
reference in their entirety herein and shall be deemed to be a part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Terms defined in such document are used herein as therein defined.
Please accept this offer no later than seven o'clock P.M. (New York City
time) on November 3, 1997 by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
By: Merrill Lynch & Co.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ John P. Case
---------------------------------------
Name: John P. Case
Title: Vice President
Accepted:
COLONIAL PROPERTIES TRUST
By /s/ Thomas H. Lowder
---------------------------------------------
Name: Thomas H. Lowder
Title: President and Chief Executive Officer
COLONIAL REALTY LIMITED PARTNERSHIP,
the Operating Partnership
By: Colonial Properties Holding
Company, Inc.
(its general partner)
By: /s/ Thomas H. Lowder
--------------------------------------------
Name: Thomas H. Lowder
Title: President and Chief Executive Officer
4
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COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
Preferred Shares, Common Shares, and Common Share Warrants
UNDERWRITING AGREEMENT
----------------------
November 3, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281-1326
Ladies and Gentlemen:
Colonial Properties Trust, an Alabama real estate investment trust (the
"Company") and a limited partner and the indirect general partner of Colonial
Realty Limited Partnership, a limited Partnership organized under the laws of
Delaware (the "Operating Partnership"), proposes to issue and sell preferred
shares of beneficial interest ("Preferred Shares"), common shares of beneficial
interest, $.01 par value ("Common Shares"), and warrants exercisable for Common
Shares ("Common Share Warrants"), from time to time, in one or more offerings on
terms to be determined at the time of sale. Each series of Preferred Shares may
vary as to the specific number of shares, title, stated value, liquidation
preference, issuance price, ranking, dividend rate or rates (or method of
calculation), dividend payment dates,
<PAGE>
redemption provisions, sinking fund requirements, conversion or exchange
provisions and any other variable terms established by the Company's Board of
Trustees. The Common Share Warrants will be issued pursuant to a warrant
agreement (the "Warrant Agreement") between the Company and a warrant agent (the
"Warrant Agent"). As used herein, "Securities" shall mean the Preferred Shares,
Common Shares and Common Share Warrants; and "Warrant Securities" shall mean the
Common Shares issuable upon exercise of Common Share Warrants. As used herein,
"you" and "your", unless the context otherwise requires, shall mean the parties
to whom this underwriting agreement (this "Agreement") is addressed together
with the other parties, if any, identified in the applicable Terms Agreement (as
defined herein) as additional co-managers with respect to Underwritten
Securities (as hereinafter defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities through
you or through an underwriting syndicate managed by you, the Company will enter
into an agreement (the "Terms Agreement") providing for the sale of such
Securities (the "Underwritten Securities") to, and the purchase and offering
thereof by, you and such other underwriters, if any, selected by you as have
authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the sale of
the Underwritten Securities or as a member of an underwriting syndicate and any
Underwriter substituted pursuant to Section 10 hereof). The Terms Agreement
relating to the offering of Underwritten Securities shall specify the number of
Underwritten Securities of each class or series to be initially issued (the
"Initial Underwritten Securities"), the names of the Underwriters participating
in such offering (subject to substitution as provided in Section 10 hereof), the
number of Initial Underwritten Securities which each such Underwriter severally
agrees to purchase, the names of such of you or such other Underwriters acting
as co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, if any, the time, date and place of
delivery and payment, any delayed delivery arrangements and any other variable
terms of the Initial Underwritten Securities (including but not limited to,
current
2
<PAGE>
ratings, designations, liquidation preferences, conversion or exchange
provisions, redemption provisions and sinking fund requirements (in the case of
Preferred Shares only) and the terms of the Warrant Securities and the terms,
prices and dates upon which such Warrant Securities may be purchased). In
addition, each Terms Agreement shall specify whether the Company has agreed to
grant to the Underwriters an option to purchase additional Underwritten
Securities to cover over-allotments, if any, and the number of Underwritten
Securities subject to such option (the "Option Securities"). As used herein,
the term "Underwritten Securities" shall include the Initial Underwritten
Securities and all or any portion of the Option Securities agreed to be
purchased by the Underwriters as provided herein, if any. The Terms Agreement,
which shall be substantially in the form of Exhibit A hereto, may take the form
of an exchange of any standard form of written telecommunication between you and
the Company. Each offering of Underwritten Securities through you or through an
underwriting syndicate managed by you will be governed by this Agreement, as
supplemented by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-18259) for the
registration of up to $216,762,500 of the Securities and Warrant Securities and
certain of the Company's debt securities, under the Securities Act of 1933, as
amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"), and the Company has filed such
amendments thereto as may have been required prior to the execution of the
applicable Terms Agreement. Such registration statement (as amended, if
applicable) has been declared effective by the Commission. Such registration
statement and the prospectus constituting a part thereof, in each case as
supplemented by a prospectus supplement relating to the offering of Underwritten
Securities (the "Prospectus Supplement"), including in each case all documents
incorporated therein by reference and the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) or Rule 434 of the 1933 Act Regulations as
from time to time amended or supplemented pursuant to the 1933 Act, the
Securities Exchange
3
<PAGE>
Act of 1934, as amended (the "1934 Act"), or otherwise, are
collectively referred to herein as the "Registration Statement" and the
"Prospectus", respectively; provided, however, that a Prospectus Supplement
-------- -------
shall be deemed to have supplemented the Prospectus only with respect to the
offering of Underwritten Securities to which it relates. All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be. If the Company elects to rely
on Rule 434 under the 1933 Act Regulations, all references to the Prospectus
shall be deemed to include, without limitation, the form of prospectus and the
abbreviated term sheet, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the 1933 Act (the "Rule 434 Prospectus").
If the Company files a registration statement to register a portion of the
Securities and Warrant Securities and relies on Rule 462(b) for such
registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 333-18259) and the Rule 462 Registration
Statement, as each such registration statement may be amended pursuant to the
1933 Act.
Section 1. Representations and Warranties.
------------------------------
(a) The Company and the Operating Partnership each severally represents
and warrants to you, as of the date hereof, and to you and each other
Underwriter named in the applicable Terms Agreement, as of the date thereof (in
each case, a "Representation Date"), as follows:
4
<PAGE>
(i) The Registration Statement and the Prospectus, at the time
the Registration Statement became effective and at each time thereafter on
which the Company filed an Annual Report on Form 10-K with the Commission,
complied, and as of each Representation Date will comply, in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations; the Registration Statement, at the time the Registration
Statement became effective and at each time thereafter on which the Company
filed an Annual Report on Form 10-K with the Commission, did not, and at
each time thereafter on which any amendment to the Registration Statement
becomes effective or the Company files an Annual Report on Form 10-K with
the Commission and as of each Representation Date, and at the Closing Time
(as hereinafter defined), 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; and the
Prospectus, as of the date hereof, does not, and as of each Representation
Date will not, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
-------- -------
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through you expressly for use in the Registration Statement or
Prospectus.
(ii) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations; and
there have been no disagreements with any accountants or "reportable
events" (as defined in Item 304 of Regulation S-K promulgated by the
Commission), in either case as required to be disclosed in the Prospectus
or elsewhere pursuant to such Item 304.
5
<PAGE>
(iii) The historical financial statements of the Company
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company, its
consolidated Subsidiaries and the Operating Partnership as at the dates
indicated and the results of operations for the periods specified; except
as otherwise stated in the Registration Statement and the Prospectus, said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis and comply
with the applicable accounting requirements of the 1933 Act (including,
without limitation, Rule 3-14 of Regulation S-X promulgated by the
Commission), and all adjustments necessary for a fair presentation of the
results for such periods have been made; the supporting schedules included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly the information required to be stated therein;
and the selected financial data (both historical and pro forma) included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the information shown therein and have been compiled on a
basis consistent with the related financial statements presented therein.
(iv) The historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the revenue and those operating
expenses included in such summaries of the properties related thereto for
the periods specified in conformity with generally accepted accounting
principles; the pro forma consolidated financial statements included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the pro forma financial position of the Company and its
consolidated Subsidiaries as of the dates indicated and the results of
operations for the periods specified; and such pro forma financial
statements have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with the audited
financial statements of the Company included or incorporated by reference
in the Registration Statement and the Prospectus, the assumptions
6
<PAGE>
on which such pro forma financial statements have been prepared are
reasonable and are set forth in the notes thereto, and such pro forma
financial statements have been prepared, and the pro forma adjustments set
forth therein have been applied, in accordance with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations
(including, without limitation, Regulation S-X promulgated by the
Commission), and such pro forma adjustments have been properly applied to
the historical amounts in the compilation of such statements.
(v) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, (a) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, and its Subsidiaries (which term, as
used in this Agreement, includes majority-owned corporations, partnerships
and other entities, including Colonial Properties Holding Company, Inc.
("CPHC"), the Operating Partnership, Colonial Properties Services Limited
Partnership and Colonial Properties Services, Inc., and includes direct and
indirect Subsidiaries, if any) considered as one enterprise, or any of the
real property or improvements thereon owned by either the Company or any of
its Subsidiaries (each individually a "Property" and collectively the
"Properties"), whether or not arising in the ordinary course of business,
(b) no material casualty loss or material condemnation or other material
adverse event with respect to any of the Properties has occurred, (c) there
have been no transactions entered into by the Company or any of its
Subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company, and its Subsidiaries considered
as one enterprise, and (d) except for regular quarterly dividends on the
Company's Common Shares or dividends or distributions declared paid or made
in accordance with the terms of any series of the Company's Preferred
Shares, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
7
<PAGE>
(vi) The Company has been duly organized and is validly existing
as a real estate investment trust in good standing under the laws of the
State of Alabama, with power and authority to own, lease and operate its
Properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement and the
Terms Agreement and the Company is duly qualified to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or to be in
good standing would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise.
(vii) The Agreement of Limited Partnership of the Operating
Partnership, as amended and restated (the "Agreement of Limited
Partnership"), has been duly and validly authorized, executed and delivered
by Colonial Properties Holding Company, Inc., a wholly-owned Subsidiary of
the Company ("CPHC"), as general partner of the Operating Partnership, and
by the limited partners of the Operating Partnership, including the
Company, and is a valid and binding agreement of CPHC and such limited
partners of the Operating Partnership, enforceable in accordance with its
terms, except as limited by (a) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors or (b) the
effect of general principles of equity, whether enforcement is considered
in a proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought. The Operating Partnership
has been duly formed and is validly existing and is in good standing under
the laws of the State of Delaware, has power and authority to own, lease
and operate its Properties and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
8
<PAGE>
the conduct of business, except where the failure to so qualify or to be in
good standing would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company, its Subsidiaries and the Operating Partnership
considered as one enterprise.
(viii) Each Subsidiary of the Company has been duly formed and is
validly existing and in good standing under the laws of the jurisdiction of
its origin, has power and authority to own, lease and operate its
Properties and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or to be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company, its
Subsidiaries and the Operating Partnership considered as one enterprise.
Except as otherwise stated in the Prospectus, all of the issued and
outstanding capital stock or other ownership interests in each such
Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company, directly or through
Subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity, except for security interests granted
in respect of indebtedness of the Company or any of its Subsidiaries and
described in the Prospectus.
(ix) Each of the partnership agreements to which the Company or any of
its Subsidiaries is a party has been duly authorized, executed and
delivered by the parties thereto and constitutes the valid agreement
thereof, enforceable in accordance with its terms, except as limited by (a)
the effect of bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting the rights
or remedies of creditors or (b) the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at law, and
the
9
<PAGE>
discretion of the court before which any proceeding therefor may be
brought; and the execution, delivery and performance of any of such
agreements by the Company or any of its Subsidiaries, as applicable, did
not, at the time of execution and delivery, and does not constitute a
breach of, or default under, the charter, by-laws, partnership agreement
(or other organizational documents) of such party or any material contract,
lease or other instrument to which such party is a party or by which its
properties may be bound or any law, administrative regulation or
administrative or court decree.
(x) The authorized, issued and outstanding capital shares of the
Company is as set forth in the applicable prospectus supplement under
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements, employee benefit plans, dividend reinvestment or
stock purchase plans, employee and director stock option or restricted
stock plans or upon the exercise of options or convertible securities
referred to in the Prospectus); and such shares have been duly authorized
and validly issued and are fully paid and non-assessable and are not
subject to preemptive or other similar rights.
(xi) The Underwritten Securities being sold pursuant to this
Agreement and the applicable Terms Agreement have, as of each
Representation Date, been duly authorized by the Company, and such
Underwritten Securities have been duly authorized for issuance and sale
pursuant to this Agreement and such Terms Agreement, and such Underwritten
Securities, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in such Terms
Agreement or any Delayed Delivery Contract (as hereinafter defined), will
be validly issued, fully paid and non-assessable, and the issuance of such
Underwritten Securities will not be subject to preemptive or other similar
rights; the Preferred Shares, if applicable, conform to the provisions
established by the Board of Trustees of the Company; and the Underwritten
Securities being sold pursuant to the applicable Terms Agreement conform in
all
10
<PAGE>
material respects to all statements relating thereto contained in the
Prospectus.
(xii) If applicable, the Common Share Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement and
countersigned by the Warrant Agent as provided in the Warrant Agreement,
will have been duly executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Warrant Agreement under which they are to be
issued; the issuance of the Warrant Securities upon exercise of the Common
Share Warrants will not be subject to preemptive or other similar rights;
and the Common Share Warrants conform in all material respects to all
statements relating thereto contained in the Prospectus.
(xiii) If applicable, the Common Shares issuable upon conversion of
any of the Preferred Shares or the Warrant Securities will have been duly
and validly authorized and reserved for issuance upon such conversion by
all necessary corporate action and such shares, when issued upon such
conversion, will be duly authorized and validly issued and will be fully
paid and non-assessable, and the issuance of such shares upon conversion
will not be subject to preemptive or other similar rights; the Common
Shares issuable upon conversion of any of the Preferred Shares or the
Warrant Securities, conform in all material respects to all statements
relating thereto contained in the Prospectus.
(xiv) The applicable Warrant Agreement, if any, will have been duly
authorized, executed and delivered by the Company prior to the issuance of
any applicable Underwritten Securities, and each constitutes a valid and
legally binding agreement of the Company enforceable in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting creditors' rights
generally and by general equity principles (regardless of whether
enforcement is considered in a proceeding in equity or at law); and the
Warrant
11
<PAGE>
Agreement, if any, conforms in all material respects to all statements
relating thereto contained in the Prospectus.
(xv) None of the Company or any of its Subsidiaries is in violation of
its charter, by-laws, partnership agreement or other organizational
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or any of its Subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or
any of its Subsidiaries is subject, except for any such violation or
default that would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise,
and the execution, delivery and performance of this Agreement, the
applicable Terms Agreement or the applicable Warrant Agreement, if any, and
the consummation of the transactions contemplated herein and therein and
compliance by the Company and the Operating Partnership (with respect to
this Agreement), each severally, with obligations hereunder and thereunder
have been duly authorized by all necessary corporate, trust or partnership
action, and will not materially conflict with or constitute a material
breach of, or material default under, or result in the creation or
imposition of any material lien, charge or encumbrance upon any property or
assets of the Company or any of its Subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them may be bound, or to which any of the property or assets of the Company
or any of its Subsidiaries is subject, nor will such action result in any
violation of the charter, by-laws, the partnership agreement or other
organizational documents of the Company or any of its Subsidiaries, or any
applicable law, administrative regulation or administrative or court
decree.
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(xvi) The Company has qualified as a real estate investment
trust ("REIT") for its taxable years ended December 31, 1993, December 31,
1994, December 31, 1995, and December 31, 1996 and the Company is organized
and operates in a manner that will enable it to qualify to be taxed as a
REIT under the Code for the taxable year ended December 31, 1997 and
thereafter provided the Company continues to meet the asset composition,
source of income, shareholder diversification, distributions, record
keeping, and other requirements of the Code which are necessary for the
Company to qualify as a REIT.
(xvii) None of the Company or any of its Subsidiaries is
required to be registered as an "investment company" under the Investment
Company Act of 1940, as amended (the "1940 Act").
(xviii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company or any of its Subsidiaries threatened
against or affecting the Company or any of its Subsidiaries which is
required to be disclosed in the Prospectus (other than as disclosed
therein), or which might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, or which might materially and adversely affect the property or
assets thereof or which might materially and adversely affect the
consummation of this Agreement, the applicable Terms Agreement, or the
applicable Warrant Agreement, if any, or the transactions contemplated
herein or therein; all pending legal or governmental proceedings to which
the Company or any of its Subsidiaries is a party or of which any property
or assets of the Company or any of its Subsidiaries is subject which are
not described in the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material
to the condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its Subsidiaries considered as one
enterprise;
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and there are no contracts or documents of the Company or any
of its Subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations which
have not been so filed.
(xix) The Company and its Subsidiaries own or possess any
trademarks, service marks, trade names or copyrights required in order to
conduct their respective businesses as described in the Prospectus, other
than those the failure to possess or own would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise.
(xx) No authorization, approval, permit or consent of any court
or governmental authority or agency is necessary in connection with the
consummation by the Company or the Operating Partnership of the
transactions contemplated by this Agreement, the applicable Terms
Agreement, or any Depositary Agreement, except such as have been obtained
or as may be required under the 1933 Act or the 1933 Act Regulations, state
securities laws, real estate syndication laws or under the rules and
regulations of the National Association of Securities Dealers, Inc.
(xxi) The Company and its Subsidiaries possess such
certificates, authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct their
respective businesses as described in the Prospectus, other than those the
failure to possess or own would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, and neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
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Company and its Subsidiaries considered as one enterprise.
(xxii) The Company has full right, power and authority under its
organizational documents to enter into this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, and this Agreement
has been, and as of each Representation Date, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, will have been, duly
authorized, executed and delivered by the Company.
(xxiii) The Operating Partnership has full right, power and
authority under its organizational documents to enter into this Agreement
and this Agreement has been duly authorized, executed and delivered by the
Operating Partnership.
(xxiv) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective and as
of the applicable Representation Date or Closing Time (as defined herein)
or during the period specified in Section 3(f), did not and will not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(xxv) There are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement.
(xxvi) None of the Company or any of its Subsidiaries, or any of
the officers, directors, trustees or partners
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thereof has taken nor will any of them take, directly or indirectly, any
action resulting in a violation of Regulation M under the 1934 Act or
designed to cause or result in, or which has constituted or which
reasonably might be expected to constitute, the stabilization or
manipulation of the price of the Underwritten Securities, Common Shares
issuable upon conversion of any of the Preferred Shares or facilitation of
the sale or resale of the Underwritten Securities.
(xxvii) Except as otherwise disclosed in the Prospectus and
except as would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise:
(a) except for the portion of Macon Mall that is leased by the Company
pursuant to a long-term subordinated ground lease, the Company or its
Subsidiaries have good and marketable title in fee simple to all real
property and improvements described in the Prospectus as being owned in fee
and, at the Closing Time, the Company and its Subsidiaries will have good
and marketable title in fee simple to all real property and improvements as
described in the Prospectus as being owned in fee; (b) all liens, charges,
encumbrances, claims or restrictions on or affecting the real property and
improvements owned by the Company or any of its Subsidiaries which are
required to be disclosed in the Prospectus are disclosed therein; (c) none
of the Company or any of its Subsidiaries, or to the knowledge of the
Company, any lessee of any portion of the real property or improvements
owned by the Company or any of its Subsidiaries, is in default under any of
the leases pursuant to which the Company or any of its Subsidiaries leases
such real property or improvements, and the Company and its Subsidiaries
know of no event which, but for the passage of time or the giving of
notice, or both, would constitute a default under any of such leases;
(d) all the real property and improvements owned by the Company or its
Subsidiaries comply with all applicable codes and zoning laws and
regulations; and (e) the Company and its Subsidiaries have no knowledge of
any pending or threatened condemnation, zoning change or other proceeding
or action
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<PAGE>
that would in any manner affect the size of, use of, improvements
on, construction on, or access to any of the real property or improvements
owned by the Company, any of its Subsidiaries or the Operating Partnership.
(xxviii) The Company, its Subsidiaries or the Operating
Partnership has adequate title insurance on each Property owned in fee by
the Company or its Subsidiaries.
(xxix) Except as otherwise disclosed in the Prospectus, each of
the Company and the Operating Partnership has no knowledge of: (a) the
unlawful presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous Materials") on any
of the Properties or (b) any unlawful spills, releases, discharges or
disposal of Hazardous Materials that have occurred or are presently
occurring on or from the Properties as a result of any construction on or
operation and use of the Properties, which presence or occurrence would
have a material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company, its
Subsidiaries and the Operating Partnership considered as one enterprise;
and in connection with the construction on or operation and use of the
Properties, each of the Company, and the Operating Partnership has no
knowledge of any material failure to comply with all applicable local,
state and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation, recycling,
reuse, sale, storage, handling, transport and disposal of any Hazardous
Materials that could have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company, its Subsidiaries and the Operating Partnership
considered as one enterprise.
(b) Any certificate signed by any officer of the Company in such capacity
or as indirect general partner of the Operating Partnership and delivered to you
or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by the
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<PAGE>
Company or the Operating Partnership, as the case may be, to each Underwriter
participating in such offering as to the matters covered thereby on the date of
such certificate.
Section 2. Purchase and Sale.
-----------------
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities less the amount of any
distribution payable with respect to an Initial Underwritten Security but not
payable with respect to an Option Security. Such option, if granted, will
expire 30 days or such lesser number of days as may be specified in the
applicable Terms Agreement after the Representation Date relating to the Initial
Underwritten Securities, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
you, but shall not be later than three full business days and not be earlier
than two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of
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<PAGE>
Option Securities then being purchased which the number of Initial Underwritten
Securities each such Underwriter has severally agreed to purchase as set forth
in the applicable Terms Agreement bears to the total number of Initial
Underwritten Securities (except as otherwise provided in the applicable Terms
Agreement), subject to such adjustments as you in your discretion shall make to
eliminate any sales or purchases of fractional Initial Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the Underwritten
Securities to be purchased by the Underwriters shall be made at the office of
Brown & Wood LLP, 58th Floor, One World Trade Center, New York, New York 10048-
0557, or at such other place as shall be agreed upon by you and the Company, at
9:00 A.M., New York City time, on the third business day (unless postponed in
accordance with the provisions of Section 10) following the date of the
applicable Terms Agreement or, if pricing takes place after 4:30 p.m. New York
City time on the date of the applicable Terms Agreement, on the fourth business
day (unless postponed in accordance with the provisions of Section 10) following
the date of the applicable Terms Agreement or at such other time as shall be
agreed upon by you and the Company (each such time and date being referred to as
a "Closing Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates representing, such Option Securities, shall be made
at the above-mentioned offices of Brown & Wood llp, or at such other place as
shall be agreed upon by you and the Company on each Date of Delivery as
specified in the notice from you to the Company. Unless otherwise specified in
the applicable Terms Agreement, payment shall be made to the Company by
certified or official bank check or checks in Federal or similar same-day funds
payable to the order of the Company against delivery to you for the respective
accounts of the Underwriters for the Underwritten Securities to be purchased by
them. The Underwritten Securities shall be in such authorized denominations and
registered in such names as you may request in writing at least one business day
prior to the applicable Closing Time or Date of Delivery, as the case may be.
The Underwritten Securities, which may be in temporary form, will be made
available for examination and packaging by you on or
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<PAGE>
before the first business day prior to the Closing Time or Date of Delivery, as
the case may be.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase Underwritten Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types described
in the Prospectus. At the Closing Time, the Company will enter into Delayed
Delivery Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate number of
Underwritten Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to the
Closing Time, the names of any institutional investors with which it is proposed
that the Company will enter into Delayed Delivery Contracts and the number of
Underwritten Securities to be purchased by each of them, and the Company will
advise you, at least two business days prior to the Closing Time, of the names
of the institutions with which the making of Delayed Delivery Contracts is
approved by the Company and the number of Underwritten Securities to be covered
by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the several
Underwriters pursuant to the applicable Terms Agreement shall be reduced by the
number of Underwritten Securities covered by Delayed Delivery Contracts, as to
each
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<PAGE>
Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
-------- -------
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company and the Operating Partnership. Each
-------------------------------------------------------
of the Company and the Operating Partnership covenants with you, and with each
Underwriter participating in the offering of Underwritten Securities, as
follows:
(a) Immediately following the execution of the applicable Terms Agreement,
the Company will prepare a Prospectus Supplement setting forth the number of
Underwritten Securities covered thereby and their terms not otherwise specified
in the Prospectus pursuant to which the Underwritten Securities are being
issued, the names of the Underwriters participating in the offering and the
number of Underwritten Securities which each severally has agreed to purchase,
the names of the Underwriters acting as co-managers in connection with the
offering, the price at which the Underwritten Securities are to be purchased by
the Underwriters from the Company, the initial public offering price, if any,
the selling concession and reallowance, if any, any delayed delivery
arrangements, and such other information as you and the Company deem appropriate
in connection with the offering of the Underwritten Securities; and the Company
will, by the close of business in New York on the business day immediately
succeeding the date of the applicable Terms Agreement, transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations and will furnish to the Underwriters named therein as
many copies of the Prospectus (including such Prospectus Supplement) as you
shall reasonably request. If the Company elects to rely on Rule 434 under the
1933 Act Regulations, the Company will prepare an abbreviated term sheet that
complies with the requirements of Rule 434 under the 1933 Act Regulations and
will provide the Underwriters with copies of the form of Rule 434 Prospectus, in
such number as the Underwriters may reasonably request, and file or transmit for
filing with the Commission the form of Prospectus complying with Rule 434(c)(2)
of the 1933 Act Regulations in accordance with
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Rule 424(b) of the 1933 Act Regulations by the close of business in New York on
the business day immediately succeeding the date of the applicable Terms
Agreement.
(b) The Company will notify you immediately, and confirm such notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document to
be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the
Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Company will make every reasonable effort
to prevent the issuance of any such stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or prepare
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise
(including any revised Prospectus which the Company proposes for use by the
Underwriters in connection with an offering of Underwritten Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
Prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations), and will furnish you with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or preparation, as the case may be, and will not file or prepare any such
amendment or supplement or other documents in a form to which you or counsel for
the Underwriters shall reasonably object.
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<PAGE>
(d) The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as such Underwriter reasonably requests.
(e) The Company will furnish to each Underwriter, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act in connection with sales of the Underwritten Securities, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(f) If at any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities any event shall occur or condition exist as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters or counsel
for the Company, to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of either such counsel, at any such time to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, then the Company will promptly prepare and file
with the Commission such amendment or supplement, whether by filing documents
pursuant to the 1933 Act, the 1934 Act or otherwise, as may be necessary to
correct such untrue statement or omission or to make the Registration Statement
and Prospectus comply with such requirements, and the Company will furnish to
the Underwriters a reasonable number of copies of such amendment or supplement.
(g) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities, the Warrant
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Securities, if any, and Common Shares issuable upon conversion of the
Preferred Shares for offering and sale under the applicable securities
laws and real estate syndication laws of such states and other jurisdictions
of the United States as you may designate. In each jurisdiction in which the
Underwritten Securities, the Warrant Securities, if any, and Common Shares
issuable upon conversion of the Preferred Shares have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for
so long as may be required for the distribution of the Underwritten
Securities and the Warrant Securities; provided, however, that
-------- -------
the Company shall not be obligated to (A) qualify as a foreign entity in any
jurisdiction where it is not so qualified, (B) file any general consent to
service of process, or (C) take any action that would subject it to income
taxation in any such jurisdiction.
(h) With respect to each sale of Underwritten Securities, the Company will
make generally available to its security holders as soon as practicable, but not
later than 90 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve month period beginning not later than the first
day of the Company's fiscal quarter next following the "effective date" (as
defined in such Rule 158) of the Registration Statement.
(i) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable year
in which sales of the Underwritten Securities are to occur.
(j) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) If the Preferred Shares are convertible into Common Shares, the
Company will reserve and keep available at all times,
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<PAGE>
free of preemptive or other similar rights, a sufficient number of Common Shares
for the purpose of enabling the Company to satisfy any obligations to issue such
shares upon conversion of the Preferred Shares, as the case may be, or upon the
exercise of the Common Share Warrants.
(l) If applicable, the Company will use its best efforts to list the
Common Shares on the New York Stock Exchange or such other national exchange on
which the Company's Common Shares are then listed.
(m) If Preferred Shares are convertible into Common Shares, the Company
will use its best efforts to list the Common Shares issuable on Conversion of
the Preferred Shares on the New York Stock Exchange or such other national
exchange on which the Company's Common Shares are then listed.
(n) Neither the Company nor the Operating Partnership will, during a period
of 90 days from the date of the applicable Terms Agreement, with respect to the
Underwritten Securities covered thereby, without your prior written consent,
offer or sell, grant any option for the sale of, or enter into any agreement to
sell, any of the Company's or the Operating Partnership's equity securities
(other than the Underwritten Securities which are to be sold pursuant to such
Terms Agreement), except for Common shares issued, or to be issued pursuant to
this Agreement, pursuant to dividend reinvestment and stock purchase plans,
employee and director stock option and restricted stock plans, pursuant to
redemption of limited partnership interests in the Operating Partnership or as
partial or full payment for properties acquired or to be acquired by the Company
or the Operating Partnership.
Section 4. Payment of Expenses. The Company will pay all expenses
-------------------
incident to the performance of its obligations under this Agreement or the
applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the reproduction and filing of this Agreement and the applicable Terms
Agreement, (iii) the preparation, issuance and delivery of the Underwritten
Securities and the Warrant Securities, if any,
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<PAGE>
to the Underwriters, (iv) the fees and disbursements of the Company's counsel
and accountants, (v) the qualification of the Underwritten Securities, the
Warrant Securities and the Common Shares issuable upon conversion of Preferred
Shares, if any, under securities laws and real estate syndication laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of any Blue Sky Survey, (vi) the
reproduction and delivery to the Underwriters of copies of any Blue Sky Survey,
(vii) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto, each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (viii) the providing and delivery to the Underwriters of copies of the
applicable Warrant Agreement, if any, (ix) any fees charged by nationally
recognized statistical rating organizations for the rating of the Securities,
(x) the fees and expenses, if any, incurred with respect to the listing of the
Underwritten Securities, or the Common Shares issuable on conversion of the
Preferred Shares, if any, on any national securities exchange, and (xi) the fees
and expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance with
the provisions of Section 5, Section 9(b)(i) or 9(b)(ii), the Company shall
reimburse the Underwriters named in such Terms Agreement for all of their out-
of-pocket expenses, including the reasonable fees and disbursements of counsel
for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
---------------------------------------
obligations of the Underwriters to purchase Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company and the Operating Partnership
herein contained, to the accuracy of the statements of the Company's officers on
behalf of the Company, and on behalf of the Company in its capacity as indirect
general partner of the Operating Partnership, made in any certificate pursuant
to the provisions hereof, to the
26
<PAGE>
performance by each of the Company and the Operating Partnership of all of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, (ii) if Preferred Shares are
being offered, the rating assigned by any nationally recognized statistical
rating organization to any preferred stock of the Company as of the date of the
applicable Terms Agreement shall not have been lowered since such date nor shall
such rating organization have publicly announced that it has placed any
preferred stock of the Company on what is commonly termed a "watch list" for
possible downgrading, and (iii) there shall not have come to your attention any
facts that would reasonably cause you to believe that the Prospectus, together
with the applicable Prospectus Supplement, at the time it was required to be
delivered to purchasers of the Underwritten Securities, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances existing at
such time, not misleading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of Hogan &
Hartson L.L.P., counsel for the Company and the Operating Partnership, in
form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) The Company has been duly organized and is validly
existing and in good standing as a real estate investment trust under
the laws of the State of Alabama.
(ii) Each of the Subsidiaries has been organized and is
validly existing and is in good standing as a trust, partnership or
corporation (as indicated on a schedule attached to such opinion)
under
27
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the laws of its respective jurisdiction of organization (as
indicated on a schedule attached to such opinion).
(iii) Based solely on certificates of public officials, each of
the Company and its Subsidiaries is qualified to do business in the
jurisdictions indicated on a schedule attached to such opinion.
(iv) Each of the Company and its Subsidiaries has full trust,
corporate or partnership power and authority, as the case may be, to
own, lease and operate the Properties (in the case of the Operating
Partnership only) and to conduct its business as described in the
Prospectus.
(v) The Company has an authorized capitalization as set forth
under the caption "Description of Common Shares of Beneficial
Interest" in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly authorized and, assuming receipt
of consideration therefor as provided in the resolutions authorizing
issuance thereof of the board of trustees of the Company, are validly
issued and conform in all material respects to the description thereof
contained in the Prospectus under the caption "Capitalization" in the
Prospectus Supplement. All of the issued shares of capital stock of
each corporate Subsidiary of the Company have been duly authorized
and, assuming receipt of consideration therefor as provided in the
applicable resolutions authorizing issuance thereof of the board of
directors, are validly issued and are fully paid, non-assessable and
(except as set forth in the Prospectus) are owned of record by the
Company, to the knowledge of such counsel, free and clear of all
liens, charges and encumbrances. The partnership units of each
partnership Subsidiary have been authorized for issuance and are
validly issued and fully paid. CPHC is a wholly owned Subsidiary of
the Company and the sole general partner of the Operating Partnership.
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(vi) Except as set forth in the Prospectus, to the knowledge
of counsel, there are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of,
any Underwritten Securities pursuant to the Company's declaration of
trust or bylaws or any agreement or other instrument.
(vii) Each of this Agreement, the applicable Terms Agreement
and the Delayed Delivery Contracts, if any, has been duly authorized,
executed and delivered by the Company.
(viii) This Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(ix) The Underwritten Securities being sold pursuant to this
Agreement and the applicable Terms Agreement have been duly and
validly authorized by all necessary corporate action on the part of
the Company; and such Underwritten Securities, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth in such Terms Agreement or any Delayed
Delivery Contract, will be validly issued, fully paid and non-
assessable, and the issuance of such Underwritten Securities will not
be subject to preemptive or other similar rights and, if applicable,
the Preferred Shares, as the case may be, conform to the provisions
set forth by the Board of Trustees.
(x) If applicable, the Common Share Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement
and countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued.
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(xi) If applicable, the Common Shares issuable upon conversion
of any of the Preferred Shares or the exercise of Warrant Securities
have been duly and validly authorized and reserved for issuance upon
such conversion or exercise by all necessary action on the part of the
Company and such shares, when issued upon such conversion in
accordance with the charter of the Company, the Warrant Agreement, the
Terms Agreement and the Delayed Delivery Contract, as the case may be,
will be duly authorized and validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such conversion
will not be subject to preemptive or other similar rights arising by
operation of law or otherwise.
(xii) The applicable Warrant Agreement, if any, has been duly
authorized, executed and delivered by the Company, and (assuming due
authorization, execution and delivery by the Warrant Agent in the case
of the Warrant Agreement), constitutes a valid and legally binding
agreement of the Company enforceable in accordance with its terms; and
the Warrant Agreement, if any, conforms in all material respects to
all statements relating thereto contained in the Prospectus.
(xiii) If applicable, the relative rights, preferences,
interests and powers of the Preferred Shares, as the case may be, are
as set forth by the Board of Trustees relating thereto, and all such
provisions are valid under Alabama law.
(xiv) Except as set forth in the Prospectus, to such counsel's
knowledge, based on an officer's certificate from the Company, there
are no proceedings before or by any court, governmental agency, or
arbitrator pending or threatened against the Company or any of its
Subsidiaries which, if determined adversely to the Company or any of
its Subsidiaries, would have a material adverse effect on the
financial condition,
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results of operations or business of the Company and its Subsidiaries,
considered as one enterprise.
(xv) The Registration Statement was declared effective under
the 1933 Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to Rule 424 of the
1933 Act Regulations on the date specified in such opinion, and, to
the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(xvi) The Registration Statement and the Prospectus, as of
their respective effective or issue dates (other than the financial
statements and supporting schedules and other financial and
statistical information and data included therein or omitted
therefrom, as to which such counsel need express no opinion), comply
as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xvii) The documents incorporated by reference in the Prospectus
and any further amendment or supplement to any such incorporated
document made by the Company prior to the applicable Date of Delivery
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of
the 1933 Act and the 1934 Act and the rules and regulations of the
Commission thereunder.
(xviii) The Company has qualified as a REIT for its taxable years
ended December 31, 1993, December 31, 1994, December 31, 1995, and
December 31, 1996 and the Company is organized and operates in a
manner that will enable it to qualify to be taxed as a REIT under the
Code for the taxable year ended December 31, 1997 and
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thereafter provided the Company continues to meet the asset
composition, source of income, shareholder diversification,
distributions, record keeping, and other requirements of the Code
which are necessary for the Company to qualify as a REIT.
(xix) The statements contained in the Prospectus under the
heading "Description of Common Shares of Beneficial Interest," insofar
as they describe Alabama statutory law governing real estate
investment trusts organized under the laws of the State of Alabama,
constitute a fair summary thereof.
(xx) The Underwritten Securities, Warrant Securities and the
Common Shares issuable upon conversion of the Preferred Shares,
conform in all material respects to the statements relating thereto
contained in the Prospectus and the form of certificate used to
evidence the Underwritten Securities, is in due and proper form and
complies in all material respects with all applicable statutory
requirements under the laws of the State of Alabama.
(xxi) To such counsel's knowledge, there are no contracts or
other documents subsequent to July 30, 1997 which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have
not been described or filed as exhibits to the Registration Statement
or incorporated therein by reference as permitted by the 1933 Act
Regulations.
(xxii) The compliance by the Company and the Operating
Partnership with all of the provisions of this Agreement and the
applicable Terms Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action, and the issuance and delivery of the
Underwritten Securities being sold pursuant to this Agreement and the
applicable Terms
32
<PAGE>
Agreement and the compliance by the Company and the Operating
Partnership with all of the provisions of this Agreement and the
applicable Terms Agreement and the consummation of the transactions
contemplated hereby and thereby did not and will not result in a
breach or default under any of Exhibits 10.1, 10.2, 10.6, 10.13 and
10.17 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, or, to such counsel's knowledge, in the creation or
imposition of any lien, charge or encumbrance upon any of the
Properties or any other properties or assets of the Company or any of
its Subsidiaries pursuant to any such Exhibit, nor will such actions
result in any violation of the provisions of the charter or by-laws of
the Company or any of its Subsidiaries or any federal, Delaware or
Alabama statute, order, rule or regulation known to such counsel or
any federal, Delaware or Alabama court or governmental agency or body
having jurisdiction over the Company or any of its Subsidiaries or any
of the Properties (the foregoing opinion shall not be deemed to
address any federal securities law matters specifically addressed
elsewhere in such opinion letter); and, except for the registration of
the Underwritten Securities under the 1933 Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the 1934 Act and applicable state securities laws in
connection with the purchase and distribution of the Underwritten
Securities, no consent, approval, authorization or order of, or filing
or registration with, any federal, Delaware or Alabama court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement and the applicable Terms Agreement
by the Company and Operating Partnership and the consummation of the
transactions contemplated hereby and thereby.
(xxiii) None of the Company, any of its Subsidiaries or the
Operating Partnership is an "investment company" as such term is
defined in the Investment Company Act of 1940.
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(2) The favorable opinion, dated as of Closing Time, of Leitman,
Siegal, Payne & Campbell, P.C., special real estate counsel to the Company,
in form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) The issuance and sale of the Shares being delivered on such
Date of Delivery by the Company and the compliance by the Company and
the Operating Partnership with all the provisions of this Agreement
and the consummation of the transactions contemplated hereby did not
and will not result in a breach or violation of any of the terms of
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of
the Properties or any other properties or assets of the Company or any
of its Subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries is bound or to which
any of the Properties is subject.
(ii) The descriptions of or references to any contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments described or referred to in the Registration Statement or
the Prospectus or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits thereto, are
correct in all material respects, and, to the best of their knowledge
and information, no default exists in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described, referred to
or filed which would 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 considered as one
enterprise.
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<PAGE>
(3) The favorable opinion, dated as of Closing Time, of Brown & Wood
LLP, counsel for the Underwriters, with respect to the matters set forth in
(i), (vii) to (xiii), inclusive, (xv) and (xvi) of subsection (b)(1).
(4) In giving their opinions required by subsections (b)(1), (b)(2)
and (b)(3), respectively, of this Section, Hogan & Hartson L.L.P., Leitman,
Siegal, Payne & Campbell, P.C. and Brown & Wood LLP shall each additionally
state that nothing has come to their attention that causes them to believe
that the Registration Statement (except for financial statements and
schedules and other financial and statistical data, as to which counsel
need make no statement) at the time it became effective (or, if an
amendment to the Registration Statement or an Annual Report on Form 10-K
has been filed by the Company with the Commission subsequent to the
effectiveness of the Registration Statement, then at the time such
amendment becomes effective or at the time of the most recent filing of
such Annual Report, as the case may be) or at the Representation Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and
schedules and other financial and statistical data, as to which counsel
need make no statement), at the Representation Date or at Closing Time,
included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. In giving their opinions required by subsections (b)(1),
(b)(2) and (b)(3), respectively, of this Section, Hogan & Hartson L.L.P.,
Leitman, Siegal, Payne & Campbell, P.C. and Brown & Wood llp may rely, (1)
as to all matters of fact, upon certificates and written statements of
officers and employees of and accountants for the Company and Operating
Partnership, (2) with respect to certain other matters, upon certificates
of appropriate government officials in such jurisdiction, and
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<PAGE>
Hogan & Hartson L.L.P. and Brown & Wood llp may additionally rely, as to
matters involving the laws of the State of Alabama, upon the opinion of
Sirote & Permutt P.C. (or other counsel reasonably satisfactory to counsel
for the Underwriters) in form and substance satisfactory to counsel for the
Underwriters.
(c) At Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its Subsidiaries considered as one enterprise, or any of the
Properties, whether or not arising in the ordinary course of business; no
proceedings shall be pending or, to the knowledge of the Company, or the
Operating Partnership, threatened against the Company, any of its Subsidiaries,
or any of the Properties before or by any federal, state or other commission
board or administrative agency wherein an unfavorable decision, ruling or
finding would materially and adversely affect the business, property, financial
condition or income of the Company and its Subsidiaries, considered as one
enterprise or any of the Properties; and you shall have received a certificate
of the President and Chief Executive Officer or a Vice President of the Company
and of the Senior Vice President and Secretary of the Company, and a certificate
of the Secretary of CPHC in its capacity as general partner of the Operating
Partnership, dated as of such Closing Time, to the effect that (i) there has
been no such material adverse change and (ii) the representations and warranties
in Section 1 are true and correct with the same force and effect as though such
Closing Time were a Representation Date. As used in this Section 5(c), the term
"Prospectus" means the Prospectus in the form first used to confirm sales of the
Underwritten Securities.
(d) At the time of the execution of the applicable Terms Agreement, you
shall have received a letter dated such date from Coopers & Lybrand L.L.P., in
form and substance reasonably satisfactory to you, to the effect that (i) they
are independent public accountants with respect to the Company and its
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<PAGE>
Subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations
thereunder; (ii) it is their opinion that the consolidated financial statements
and financial statement schedules of the Company and its Subsidiaries included
or incorporated by reference in the Registration Statement and the Prospectus
and audited by them and covered by their opinions therein comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations; (iii) they have performed limited procedures,
not constituting an audit, including a reading of the latest available unaudited
interim consolidated financial statements of the Company, a reading of the
minute books of the Company, inquiries of certain officials of the Company who
have responsibility for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, and on the basis of
such limited review and procedures (which shall include, without limitation, the
procedures specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in SAS No. 71,
Interim Financial Information, with respect to the unaudited condensed
consolidated financial statement of the Company and its Subsidiaries included or
incorporated by reference in the Registration Statement), nothing has come to
their attention which causes them to believe (A) that any material modifications
should be made to the unaudited condensed financial statements of the Company
and its Subsidiaries included in the Registration Statement for them to be in
conformity with generally accepted accounting principles or that such unaudited
financial statements do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the 1934 Act Regulations,
or (B) at a specified date not more than three days prior to Closing Time, there
has been any change in the capital shares of the Company or in the consolidated
indebtedness of the Company and its Subsidiaries or any decrease in consolidated
total assets or net assets of the Company, as compared with the amounts shown in
the most recent consolidated balance sheet included or incorporated by reference
in the Registration Statement and the Prospectus or, during the period from the
date of the most recent consolidated statement of operations included or
incorporated by reference in the Registration Statement and the Prospectus to a
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<PAGE>
specified date not more than three days prior to Closing Time, there were any
decreases, as compared with the corresponding period in the preceding year, in
consolidated revenues, operating income, net income or net income per share of
the Company and its Subsidiaries, except in all instances for changes, increases
or decreases which the Registration Statement and the Prospectus disclose have
occurred or may occur; (iv) they have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects with the
disclosure requirements of Items 301 and 302, respectively, of Regulation S-K;
and (v) in addition to the examination referred to in their opinion and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included or
incorporated by reference in the Registration Statement and Prospectus and which
are specified by you, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial and other
records of the Company and its Subsidiaries identified in such letter.
(e) At Closing Time, you shall have received a letter, dated as of Closing
Time, from Coopers & Lybrand L.L.P., to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities and the Warrant Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Operating
Partnership in connection with the
38
<PAGE>
issuance and sale of the Underwritten Securities and the Warrant Securities, as
herein contemplated shall be reasonably satisfactory in form and substance to
you and counsel for the Underwriters.
(g) In the event that the Underwriters exercise their option provided in a
Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company and the Operating Partnership contained herein and the statements in any
certificates furnished by the Company and the Operating Partnership hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, you shall have received:
(1) A certificate, dated such Date of Delivery, of the President and
Chief Executive Officer or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company and of the President
and Chief Executive Officer of CPHC, in its capacity as general partner of
the Operating Partnership, confirming that the certificates delivered at
the Closing Time pursuant to Section 5(c) hereof remain true and correct as
of such Date of Delivery.
(2) The favorable opinion of Hogan & Hartson L.L.P., counsel for the
Company and the Operating Partnership, in form and substance reasonably
satisfactory to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Sections
5(b)(1) and 5(b)(4) hereof.
(3) The favorable opinion of Leitman, Siegal, Payne & Campbell, P.C.,
special real estate counsel to the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Sections 5(b)(2) and 5(b)(4) hereof.
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<PAGE>
(4) The favorable opinion of Brown & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Sections 5(b)(3) and 5(b)(4) hereof.
(5) A letter from Coopers & Lybrand L.L.P., in form and substance
reasonably satisfactory to you and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished to you
pursuant to Section 5(e) hereof, except that the "specified date" in the
letter furnished pursuant to this Section 5(g)(4) shall be a date not more
than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, the applicable Terms Agreement may be
terminated by you by notice to the Company at any time at or prior to the
Closing Time or Date of Delivery, as the case may be, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof.
Section 6. Indemnification. (a) The Company and the Operating
---------------
Partnership, jointly and severally, hereby agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A(b) or Rule 434 of the 1933
Act Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission, or
alleged omission
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<PAGE>
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the indemnifying party; and
(3) against any and all expense whatsoever (including, the fees and
disbursements of counsel chosen by you) reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceedings by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) and the Prospectus (or any amendment or supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company and the Operating Partnership, the trustees of the Company, each of the
officers who signed the Registration Statement and each person, if any, who
controls the Company or the Operating Partnership within the meaning of Section
15 of the 1933 Act (including the directors and officers of CPHC), against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, but
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only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them which are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
(d) For purposes of this Section 6, all references to the Registration
Statement, any preliminary prospectus or the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include, without
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limitation, any electronically transmitted copies thereof, including, without
limitation, any copies filed with the Commission pursuant to EDGAR.
Section 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Operating
Partnership and the Underwriters with respect to the offering of the
Underwritten Securities shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the Operating Partnership and one or more of
the Underwriters in respect of such offering, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus in respect of such offering bears to the initial public offering
price appearing thereon and the Company and the Operating Partnership are
responsible for the balance; provided, however, that no person guilty of
-------- -------
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwith standing the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Underwritten Securities
purchased by it pursuant to the applicable Terms Agreement and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company and the Operating
Partnership. The Underwriter's obligations to contribute pursuant to this
Section 7 are several in proportion to their respective underwriting commitments
and not joint. For
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purposes of this Section 7, the Company and the Operating Partnership shall be
deemed one party jointly and severally liable for any obligations hereunder.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or
the applicable Terms Agreement, or contained in certificates of officers of the
Company and the Operating Partnership submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any termination of this
Agreement or the applicable Terms Agreement, or investigation made by or on
behalf of any Underwriter or any controlling person, or by or on behalf of the
Company or the Operating Partnership, and shall survive delivery of and payment
for the Underwritten Securities.
Section 9. Termination of Agreement. (a) This Agreement (excluding the
------------------------
applicable Terms Agreement) may be terminated for any reason at any time by the
Company, the Operating Partnership or by you upon the giving of 30 days' written
notice of such termination to the other parties hereto.
(b) You may also terminate the applicable Terms Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
since the date of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, any of its Subsidiaries or the Operating
Partnership, whether or not arising in the ordinary course of business, or (ii)
if Preferred Shares are being offered and the rating assigned by any nationally
recognized statistical rating organization to any preferred stock of the Company
as of the date of the applicable Terms Agreement shall have been lowered since
such date or if any such rating organization shall have publicly announced that
it has placed any preferred stock of the Company on what is commonly termed a
"watch list" for possible downgrading; (iii) if there has occurred any material
adverse change in the financial markets in the United States or elsewhere or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of
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which is such as to make it, in your judgment, impracticable to market
the Underwritten Securities or enforce contracts for the sale of the
Underwritten Securities, or (iv) if trading in any of the securities of the
Company has been suspended or limited by the Commission or the New York Stock
Exchange, or if trading generally on either the New York Stock Exchange or the
American Stock Exchange has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by either of said Exchanges or by order of the Commission or
any other governmental authority, or if a banking moratorium has been declared
by either Federal, New York or Alabama authorities. As used in this Section
9(b), the term "Prospectus" means the Prospectus in the form first used to
confirm sales of the Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set forth in
Section 3 with respect to any offering of Underwritten Securities shall remain
in effect so long as any Underwriter owns any such Underwritten Securities
purchased from the Company pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(h) hereof, the provisions of Section 4
hereof, the indemnity and contribution agreements set forth in Sections 6 and 7
hereof, and the provisions of Sections 8 and 13 hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then you shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:
(a) if the total number of Defaulted Securities does not exceed 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the non-defaulting Underwriters named in such Terms Agreement shall
be obligated,
45
<PAGE>
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of the total
number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination of
the applicable Terms Agreement, either you or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, World Financial Center, North Tower, New York, New
York 10281-1326, attention of John P. Case, Vice President; and notices to the
Company shall be directed to it at 2101 6th Avenue North, Suite 750, Birmingham,
Alabama, attention: Chief Financial Officer.
Section 12. Parties. This Agreement and the applicable Terms Agreement
-------
shall each inure to the benefit of and be binding upon you and the Company, the
Operating Partnership and any Underwriter who becomes a party to such Terms
Agreement, and their respective successors. Nothing expressed or mentioned in
this Agreement or the applicable Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than those referred to
in Sections 6 and 7 and their heirs and
46
<PAGE>
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or such Terms Agreement or any provision herein or
therein contained. This Agreement and the applicable Terms Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the applicable
----------------------
Terms Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed in
said State. Specified times of day refer to New York City time.
Section 14. Counterparts. This Agreement and the applicable Terms
------------
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall constitute a single
instrument.
47
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts will become a binding agreement between
you, the Company and the Operating Partnership in accordance with its terms.
Very truly yours,
COLONIAL PROPERTIES TRUST
By: /s/ Thomas H. Lowder
-------------------------------
Name: Thomas H. Lowder
Title: President and Chief
Executive Officer
COLONIAL REALTY LIMITED PARTNERSHIP,
the Operating Partnership
By: Colonial Properties Holding
Company, Inc.
(its general partner)
By: /s/ Thomas H. Lowder
--------------------------------
Name: Thomas H. Lowder
Title: President and Chief
Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ John P. Case
-----------------------------------
Name: John P. Case
Title: Vice President
48
<PAGE>
Exhibit A
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
[Title of Securities]
TERMS AGREEMENT
---------------
Dated: , 199_
To: COLONIAL PROPERTIES TRUST
2101 6th Avenue North
Suite 750
Birmingham, Alabama
Attention: Chairman of the Board of Trustees
Dear Sirs:
We (the "Representative") understand that Colonial Properties Trust, an
Alabama real estate investment trust (the "Company"), proposes to issue and sell
the number of [Preferred Shares of beneficial interest (the "Preferred Shares")]
common shares of beneficial interest $.01 par value (the "Common Shares") and
warrants exercisable for Common Shares ("Common Share Warrants") (such
[Preferred Shares] [Common Shares] [Common Share Warrants] being [collectively
hereinafter referred to as the "Underwritten Securities")]. Subject to the
terms and conditions set forth or incorporated by reference herein, the
underwriters named below (the "Underwriters") offer to purchase, severally and
not jointly, the respective numbers of [Initial Underwritten Securities (as
defined in the Underwriting Agreement referenced to below)] set forth below
opposite their respective names, and a proportionate share of Option Securities
(as defined in the Underwriting Agreement referred to below) to the extent any
are purchased) at the purchase price set forth below.
A-1
<PAGE>
Number of Shares
of Initial
Underwriter Underwritten Securities
- ----------- -----------------------
__________
Total $
==========
The Underwritten Securities shall have the following terms:
Title of Securities:
Number of Shares:
[Current Ratings:]
[Dividend Rate: [$ ] [ %], Payable:]
[Stated Value:]
[Liquidation Preference:]
[Ranking:]
Public offering price per share: $ [, plus accumulated dividends,
if any, from , 19 .]
Purchase price per share: $ [, plus accumulated dividends,
if any, from , 19 .]
[Conversion provisions:]
[Redemption provisions:]
[Sinking fund requirements:]
Number of Option Securities, if any, that may be purchased by the Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized]
[Date of Delivery:
Minimum Contract:
Maximum number of Shares:
Fee: ]
Additional co-managers, if any:
Other terms:
Closing date and location:
COMMON SHARE WARRANTS
Number of Common Share Warrants to be issued:
Warrant Agent:
Issuable jointly with Common Shares: [Yes] [No]
[Number of Common Stock Warrants issued
with each share of
Beneficial Interest:]
[Detachable data:]
Date from which Common Share Warrants are exercisable:
Date on which Common Share Warrants expire:
Exercise price(s) of Common Share Warrants:
A-2
<PAGE>
Initial public offering price: $
Purchase price: $
Title of Warrant Securities:
Principal amount purchasable upon exercise of one Common Share Warrant:
Interest rate: Payable:
Date of maturity:
Redemption provisions:
Sinking fund requirements:
[Delayed Delivery Contracts: [authorized][not authorized]
[Date of delivery:
Minimum contract:
Maximum aggregate principal amount:
Fee: %]
Other terms:
[Closing date and location:]]
All the provisions contained in the document attached as Annex A hereto
entitled "Colonial Properties Trust - Preferred Shares, Common Shares, and
Common Share Warrants - Underwriting Agreement" are hereby incorporated by
reference in their entirety herein and shall be deemed to be a part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Terms defined in such document are used herein as therein defined.
A-3
<PAGE>
Please accept this offer no later than o'clock P.M. (New York City
time) on by signing a copy of this Terms Agreement in the space set forth
below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By
------------------------------
Acting on behalf of itself and
the other named Underwriters.
Accepted:
COLONIAL PROPERTIES TRUST
By
----------------------------
Name:
Title:
A-4
<PAGE>
Exhibit B
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
[Title of Securities]
DELAYED DELIVERY CONTRACT
-------------------------
, 199_
COLONIAL PROPERTIES TRUST
2101 6th Avenue North
Suite 750
Birmingham, Alabama
Attention: Chairman of the Board of Directors
Dear Sirs:
The undersigned hereby agrees to purchase from Colonial Properties Trust
(the "Company"), and the Company agrees to sell to the undersigned on
__________, 19__ (the "Delivery Date"), of the Company's [insert title of
security] (the "Securities"), offered by the Company's Prospectus dated
__________, 19__, as supplemented by its Prospectus Supplement dated
___________, 19__, receipt of which is hereby acknowledged at a purchase price
of [$__________] [and, $__________ per Warrant, respectively] to the Delivery
Date, and on the further terms and conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company or its order by certified or
official bank check in Federal or other same day funds at the office of
B-1
<PAGE>
, on the Delivery Date, upon delivery to the undersigned of the
Securities to be purchased by the undersigned in definitive form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than five
full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date shall be subject only to the conditions that (1)
the purchase of Securities to be made by the undersigned shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company, on or before __________, 19__, shall
have sold to the Underwriters of the Securities (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Terms Agreement dated __________, 19__ between the Company and the Underwriters.
The obligation of the undersigned to take delivery of and make payment for
Securities shall not be affected by the failure of any purchaser to take
delivery of and make payments for Securities pursuant to other contracts similar
to this contract. The undersigned represents and warrants to you that its
investment in the Securities is not, as of the date hereof, prohibited under the
laws of any jurisdiction to which the undersigned is subject and which govern
such investment.
Promptly after completion of the sale to the Underwriters, the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company that all necessary corporate action for the due execution and delivery
of this contract and the payment for and purchase of the Securities has been
taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this
B-2
<PAGE>
contract will constitute a valid and binding agreement of the undersigned in
accordance with its terms.
This contract will inure to the benefit of and binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for a number of Securities in excess of ________ and that the
acceptance of any Delayed Delivery Contract is in the Company's sole discretion
and, without limiting the foregoing, need not be on a first-come, first-served
basis. If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance on a copy hereof and mail or deliver a
signed copy hereof to the undersigned at its address set forth below. This will
become a binding contract between the Company and the undersigned when such copy
is so mailed or delivered.
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
_____________________________
(Name of Purchaser)
By___________________________
(Title)
_____________________________
_____________________________
(Address)
Accepted as of the date first above written.
COLONIAL PROPERTIES TRUST
By___________________________
(Title)
B-3
<PAGE>
PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser with
whom details of delivery on the Delivery Date may be discussed are as follows:
(Please print.)
<TABLE>
<CAPTION>
Telephone No.
(including
Name Area Code)
---- -------------
<S> <C>
</TABLE>
B-4
<PAGE>
Exhibit 3
COLONIAL PROPERTIES TRUST
DECLARATION OF TRUST
Dated August 21, 1995
This DECLARATION OF TRUST (this "Declaration of Trust") is made as of
the date set forth above by the undersigned trustee.
WHEREAS, the Trustees (as defined herein) desire that this trust
qualify as a "real estate investment trust" under the Internal Revenue Code of
1986, as amended and the regulations promulgated thereunder (the "Code"), and
under the Alabama Real Estate Investment Trust Act (the "Act"); and
WHEREAS, the beneficial interests in the real estate investment trust
shall be divided into transferable shares of one or more classes evidenced by
certificates.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
property which they have or may hereafter acquire as such Trustees, together
with the proceeds thereof, in trust, and manage the Trust Property (as defined
herein) for the benefit of the Shareholders (as hereinafter defined) as provided
by this Declaration of Trust.
ARTICLE I
THE TRUST; DEFINITIONS
SECTION 1.1 Name. The name of the trust (the "Trust") is:
----
Colonial Properties Trust
So far as may be practicable, the business of the Trust shall be conducted and
transacted under that name, which name (and the word "Trust" wherever used in
this Declaration of Trust, except where the context otherwise requires) shall
refer to the Trustees collectively but not individually or personally and shall
not refer to the Shareholders or to any officers, employees or agents of the
Trust or of such Trustees.
Under circumstances in which the Trustees determine that the use of
the name "Colonial Properties Trust" is not practicable, they may use any other
designation or name for the Trust.
Where the context so requires, references to the "Trust" shall include
the Trust's predecessor entity, Colonial Properties Trust, a Maryland real
estate investment trust.
SECTION 1.2 Resident Agent. The name and address of the resident
--------------
agent for service of process of the Trust in the State of Alabama is Thomas H.
Lowder, Energen Plaza, 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama
35203. The Trust may have such offices or places of business within or without
the State of Alabama as the Trustees may from time to time determine.
<PAGE>
SECTION 1.3 Nature of Trust. The Trust is a real estate investment
---------------
trust within the meaning of the Act. The Trust shall not be deemed to be a
general partnership, limited partnership, joint venture, joint stock company or
a corporation (but nothing herein shall preclude the Trust from being treated
for tax purposes as an association under the Code).
SECTION 1.4 Powers. The Trust shall have all of the powers granted
------
to real estate investment trusts pursuant to the Act or any successor statute
and shall have any other and further powers as are not inconsistent with and are
appropriate to promote and attain the purposes set forth in this Declaration of
Trust.
SECTION 1.5 Definitions. As used in this Declaration of Trust, the
-----------
following terms shall have the following meanings unless the context otherwise
requires (certain other terms used in Section 6.4 and/or Section 6.7 hereof are
defined in Sections 6.2, 6.3 and 6.7(a) hereof):
"Adviser" means the Person, if any, appointed, employed or contracted
-------
with by the Trust pursuant to Section 4.1 hereof.
"Affiliate" or "Affiliated" means, as to any individual, corporation,
--------- ----------
partnership, trust or other association (other than the Trust), any Person (i)
that holds beneficially, directly or indirectly, 5% or more of the outstanding
stock or equity interests thereof or (ii) who is an officer, director, partner
or trustee thereof or of any Person which controls, is controlled by, or is
under common control with, such corporation, partnership, trust or other
association or (iii) which controls, is controlled by or under common control
with, such corporation, partnership, trust or other association.
"Excess Shares" shall mean the Shares described in Section 6.4.
--------------
"Mortgages" means mortgages, deeds of trust or other security
---------
interests on or applicable to Real Property.
"Person" shall mean an individual, trust, partnership, estate, trust
------
(including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a
portion of a trust permanently set aside for or to be used exclusively for the
purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity and also includes a group as that term is used for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended; but does
not include an underwriter which participates in a public offering of Shares for
a period of 90 days following the purchase by such underwriter of the Shares,
provided that the ownership of Shares by such underwriter would not result in
the Trust being "closely held" within the meaning of Section 856(h) of the Code,
or would otherwise result in the Trust failing to qualify as a REIT.
"Real Property" or "Real Estate" means land, rights in land (including
------------- -----------
leasehold interests), and any buildings, structures, improvements, furnishings,
fixtures and equipment located on or used in connection with land and rights or
interests in land.
"REIT" shall mean a "real estate investment trust" under Section 856
----
of the Code.
"REIT Provisions of the Code" means Sections 856 through 860 of the
---------------------------
Code and any successor or other provisions of the Code relating to real estate
investment trusts (including provisions as to the attribution of ownership of
beneficial interests therein) and the regulations promulgated thereunder.
"Securities" means Shares, any stock, shares or other evidence of
----------
equity or beneficial or other interests, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any
-2-
<PAGE>
instruments commonly known as "securities" or any certificates of interest,
shares or participations in, temporary or interim certificates for, receipts
for, guarantees of, or warrants, options or rights to subscribe to, purchase or
acquire, any of the foregoing.
"Securities of the Trust" means any Securities issued by the Trust.
-----------------------
"Shareholders" means holders of record of outstanding Shares.
------------
"Shares" means transferable shares of beneficial interest of the Trust
------
of any class or series.
"Trustees" or "Board of Trustees" means, collectively, the individuals
-------- -----------------
named in Section 2.2 of this Declaration of Trust so long as they continue in
office and all other individuals who have been duly elected and qualify as
trustees of the Trust hereunder.
"Trust Property" means any and all property, real, personal or
--------------
otherwise, tangible or intangible, which is transferred or conveyed to the Trust
or the Trustees (including all rents, income, profits and gains therefrom),
which is owned or held by, or for the account of, the Trust or the Trustees.
ARTICLE II
TRUSTEES
SECTION 2.1 Number. The number of Trustees initially shall be one
------
(1) and may thereafter be increased or decreased from time to time by a two-
thirds vote of the Trustees then in office or by a majority vote of the
Shareholders; provided, however, that the total number of Trustees shall be not
-------- -------
fewer than three (3) and not more than fifteen (15). No reduction in the number
of Trustees shall cause the removal of any Trustee from office prior to the
expiration of his term.
SECTION 2.2 Initial Board; Term. The initial Trustee (the "Initial
-------------------
Trustee") is Thomas H. Lowder, only for so long as he shall continue to serve as
a Trustee of the Trust hereunder. The term of the Initial Trustee shall
continue until the annual meeting of Shareholders in 1997 and until his
successor shall have been duly elected and shall have qualified. The Trustees
shall be divided into three classes, as nearly equal in number as possible with
the term of office of one class expiring each year.
Beginning with the annual meeting of Shareholders in 1996 and at each
succeeding annual meeting of Shareholders, the Trustees of the class of Trustees
whose term expires at such meeting will be elected to hold office for a term
expiring at the third succeeding annual meeting. Each Trustee will hold office
for the term for which he is elected and until his successor is duly elected and
qualified.
SECTION 2.3 Resignation, Removal or Death. Any Trustee may resign by
-----------------------------
written notice to the Board of Trustees, effective upon execution and delivery
to the Trust of such written notice or upon any future date specified in the
notice. A Trustee may be removed from office with or without cause only at a
meeting of the Shareholders called for that purpose, by the affirmative vote of
the holders of not less than two-thirds of the Shares then outstanding and
entitled to vote in the election of Trustees. Upon the resignation or removal
of any Trustee, or his otherwise ceasing to be a Trustee, he shall automatically
cease to have any right, title or interest in and to the Trust Property and
shall execute and deliver such documents as the remaining Trustees require for
the conveyance of any Trust Property held in his name, and shall account to the
remaining Trustees as they require for all property which he holds as Trustee.
Upon the incapacity or death of any Trustee, his legal representative shall
perform the acts described in the foregoing sentence.
-3-
<PAGE>
SECTION 2.4 Legal Title. Legal title to all Trust Property shall be
-----------
vested in the Trustees, but they may cause legal title to any Trust Property to
be held by or in the name of any Trustee, or the Trust, or any other Person as
nominee. The right, title and interest of the Trustees in and to the Trust
Property shall automatically vest in successor and additional Trustees upon
their qualification and acceptance of election or appointment as Trustees, and
they shall thereupon have all the rights and obligations of Trustees, whether or
not conveyancing documents have been executed and delivered pursuant to Section
2.3 hereof or otherwise. Written evidence of the qualification and acceptance
of election or appointment of successor and additional Trustees may be filed
with the records of the Trust and in such other offices, agencies or places as
the Trustees may deem necessary or desirable.
ARTICLE III
POWERS OF TRUSTEES
SECTION 3.1 General. Subject to the express limitations herein, (1)
-------
the business and affairs of the Trust shall be managed under the direction of
the Board of Trustees and (2) the Trustees shall have full, exclusive and
absolute power, control and authority over the Trust Property and over the
business of the Trust as if they, in their own right, were the sole owners
thereof. The Trustees may take any actions that, in their sole judgment and
discretion, are necessary or desirable to conduct the business of the Trust.
This Declaration of Trust shall be construed with a presumption in favor of the
grant of power and authority to the Trustees. Any construction of this
Declaration of Trust or determination made in good faith by the Trustees
concerning their powers and authority hereunder shall be conclusive. The
enumeration and definition of particular powers of the Trustees included in this
Article III shall in no way be limited or restricted by reference to or
inference from the terms of this or any other provision of this Declaration of
Trust or construed or deemed by inference or otherwise in any manner to exclude
or limit the powers conferred upon the Trustees under the general laws of the
State of Alabama as now or hereafter in force.
SECTION 3.2 Specific Powers and Authority. Subject only to the
-----------------------------
express limitations herein, and in addition to all other powers and authority
conferred by this Declaration of Trust or by law, the Trustees, without any
vote, action or consent by the Shareholders, shall have and may exercise, at any
time or times, in the name of the Trust or on its behalf the following powers
and authorities:
(a) Investments. Subject to Section 8.5 hereof, to invest in,
-----------
purchase or otherwise acquire and to hold real, personal or mixed, tangible or
intangible, property of any kind wherever located, or rights or interests
therein or in connection therewith, all without regard to whether such property,
interests or rights are authorized by law for the investment of funds held by
trustees or other fiduciaries, or whether obligations the Trust acquires have a
term greater or lesser than the term of office of the Trustees or the possible
termination of the Trust, for such consideration as the Trustees may deem proper
(including cash, property of any kind or Securities of the Trust); provided,
--------
however, that the Trustees shall take such actions as they deem necessary and
- -------
desirable to comply with any requirements of the Act relating to the types of
assets held by the Trust.
(b) Sale, Disposition and Use of Property. Subject to Article V and
-------------------------------------
Sections 8.5 and 9.3 hereof, to sell, rent, lease, hire, exchange, release,
partition, assign, mortgage, grant security interests in, encumber, negotiate,
dedicate, grant easements in and options with respect to, convey, transfer
(including transfers to entities wholly or partially owned by the Trust or the
Trustees) or otherwise dispose of any or all of the Trust Property by deeds
(including deeds in lieu of foreclosure with or without consideration), trust
deeds, assignments, bills of sale, transfers, leases, mortgages, financing
statements, security agreements and other instruments for any of such purposes
executed and delivered for and on behalf of the Trust or the Trustees by one or
more of the Trustees or by a duly authorized officer, employee, agent or nominee
of the Trust, on such terms as they deem
-4-
<PAGE>
appropriate; to give consents and make contracts relating to the Trust Property
and its use or other property or matters; to develop, improve, manage, use,
alter or otherwise deal with the Trust Property; and to rent, lease or hire from
others property of any kind; provided, however, that the Trust may not use or
-------- -------
apply land for any purposes not permitted by applicable law.
(c) Financings. To borrow or in any other manner raise money for the
----------
purposes and on the terms they determine, and to evidence the same by issuance
of Securities of the Trust, which may have such provisions as the Trustees
determine; to reacquire such Securities of the Trust; to enter into other
contracts or obligations on behalf of the Trust; to guarantee, indemnify or act
as surety with respect to payment or performance of obligations of any Person;
to mortgage, pledge, assign, grant security interests in or otherwise encumber
the Trust Property to secure any such Securities of the Trust, contracts or
obligations (including guarantees, indemnifications and suretyships); and to
renew, modify, release, compromise, extend, consolidate or cancel, in whole or
in part, any obligation to or of the Trust or participate in any reorganization
of obligors to the Trust.
(d) Loans. Subject to the provisions of Section 8.5 hereof, to lend
-----
money or other Trust Property on such terms, for such purposes and to such
Persons as they may determine.
(e) Issuance of Securities. Subject to the provisions of Article VI
----------------------
hereof, to create and authorize and direct the issuance (on either a pro rata or
a non-pro rata basis) by the Trust, in shares, units or amounts of one or more
types, series or classes, of Securities of the Trust, which may have such voting
rights, dividend or interest rates, preferences, subordinations, conversion or
redemption prices or rights, maturity dates, distribution, exchange, or
liquidation rights or other rights as the Trustees may determine, without vote
of or other action by the Shareholders, to such Persons for such consideration,
at such time or times and in such manner and on such terms as the Trustees
determine; to list any of the Securities of the Trust on any securities
exchange; and to purchase or otherwise acquire, hold, cancel, reissue, sell and
transfer any Securities of the Trust.
(f) Expenses and Taxes. To pay any charges, expenses or liabilities
------------------
necessary or desirable, in the sole discretion of the Trustees, for carrying out
the purposes of this Declaration of Trust and conducting the business of the
Trust, including compensation or fees to Trustees, officers, employees and
agents of the Trust, and to Persons contracting with the Trust, and any taxes,
levies, charges and assessments of any kind imposed upon or chargeable against
the Trust, the Trust Property or the Trustees in connection therewith; and to
prepare and file any tax returns, reports or other documents and take any other
appropriate action relating to the payment of any such charges, expenses or
liabilities.
(g) Collection and Enforcement. To collect, sue for and receive money
--------------------------
or other property due to the Trust; to consent to extensions of the time for
payment, or to the renewal, of any Securities or obligations; to engage or to
intervene in, prosecute, defend, compound, enforce, compromise, release, abandon
or adjust any actions, suits, proceedings, disputes, claims, demands, security
interests or things relating to the Trust, the Trust Property or the Trust's
affairs; to exercise any rights and enter into any agreements and take any other
action necessary or desirable in connection with the foregoing.
(h) Deposits. To deposit funds or Securities constituting part of the
--------
Trust Property in banks, trust companies, savings and loan associations,
financial institutions and other depositories, whether or not such deposits will
draw interest, subject to withdrawal on such terms and in such manner as the
Trustees determine.
(i) Allocation; Accounts. To determine whether moneys, profits or
--------------------
other assets of the Trust shall be charged or credited to, or allocated between,
income and capital, including whether or not to amortize any premium or discount
and to determine in what manner any expenses or disbursements are to be borne as
between income and capital (regardless of how such items would normally or
otherwise be charged to or allocated between income and capital without such
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determination); to treat any dividend or other distribution on any investment
as, or apportion it between, income and capital; in their discretion to provide
reserves for depreciation, amortization, obsolescence or other purposes in
respect of any Trust Property in such amounts and by such methods as they
determine; to determine what constitutes net earnings, profits or surplus; to
determine the method or form in which the accounts and records of the Trust
shall be maintained; and to allocate to the Shareholders equity account less
than all of the consideration paid for Shares and to allocate the balance to
paid-in capital or capital surplus.
(j) Valuation of Property. To determine the value of all or any part
---------------------
of the Trust Property and of any services, Securities, property or other
consideration to be furnished to or acquired by the Trust, and to revalue all or
any part of the Trust Property, all in accordance with such appraisals or other
information as are reasonable, in their sole judgment.
(k) Ownership and Voting Powers. To exercise all of the rights,
---------------------------
powers, options and privileges pertaining to the ownership of any Mortgages,
Securities, Real Estate and other Trust Property to the same extent that an
individual owner might, including without limitation to vote or give any
consent, request or notice or waive any notice, either in person or by proxy or
power of attorney, which proxies and powers of attorney may be for any general
or special meetings or action, and may include the exercise of discretionary
powers.
(l) Officers, Etc.; Delegation of Powers. To elect, appoint or employ
------------------------------------
such officers for the Trust and such committees of the Board of Trustees with
such powers and duties as the Trustees may determine or the bylaws of the Trust
(the "Bylaws") provide; to engage, employ or contract with and pay compensation
to any Person (including subject to Section 8.5 hereof, any Trustee and any
Person who is an Affiliate of any Trustee) as agent, representative, Adviser,
member of an advisory board, employee or independent contractor (including
advisers, consultants, transfer agents, registrars, underwriters, accountants,
attorneys-at-law, real estate agents, property and other managers, appraisers,
brokers, architects, engineers, construction managers, general contractors or
otherwise) in one or more capacities, to perform such services on such terms as
the Trustees may determine; to delegate to one or more Trustees, officers or
other Persons engaged or employed as aforesaid or to committees of Trustees or
to the Adviser, the performance of acts or other things (including granting of
consents), the making of decisions and the execution of such deeds, contracts or
other instruments, either in the names of the Trust, the Trustees or as their
attorneys or otherwise, as the Trustees may determine; and to establish such
committees as they deem appropriate.
(m) Associations. Subject to Section 8.5 hereof, to cause the Trust
------------
to enter into joint ventures, general or limited partnerships, participation or
agency arrangements or any other lawful combinations, relationships, or
associations of any kind.
(n) Reorganizations, Etc. Subject to Sections 9.2 and 9.3 hereof, to
--------------------
cause to be organized or assist in organizing any Person under the laws of any
jurisdiction to acquire all or any part of the Trust Property, carry on any
business in which the Trust shall have an interest or otherwise exercise the
powers the Trustees deem necessary, useful or desirable to carry on the business
of the Trust or to carry out the provisions of this Declaration of Trust; to
merge or consolidate the Trust with any Person; to sell, rent, lease, hire,
convey, negotiate, assign, exchange or transfer all or any part of the Trust
Property to or with any Person in exchange for Securities of such Person or
otherwise; and to lend money to, subscribe for and purchase the Securities of,
and enter into any contracts with, any Person in which the Trust holds, or is
about to acquire, Securities or any other interests.
(o) Insurance. To purchase and pay for out of Trust Property
---------
insurance policies insuring the Trust and the Trust Property against any and all
risks, and insuring the Shareholders, Trustees, officers, employees and agents
of the Trust individually against all claims and liabilities of every nature
arising by reason of holding or having held any such status, office or position
or by
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reason of any action alleged to have been taken or omitted (including those
alleged to constitute misconduct, gross negligence, reckless disregard of duty
or bad faith) by any such Person in such capacity, whether or not the Trust
would have the power to indemnify such Person against such claim or liability.
(p) Executive Compensation, Pension and Other Plans. To adopt and
-----------------------------------------------
implement executive compensation, pension, profit sharing, share option, share
bonus, share purchase, share appreciation rights, restricted share, savings,
thrift, retirement, incentive or benefit plans, trusts or provisions, applicable
to any or all Trustees, officers, employees or agents of the Trust, or to other
Persons who have benefited the Trust, all on such terms and for such purposes
as the Trustees may determine.
(q) Distributions. To declare and pay dividends or other
-------------
distributions to Shareholders, subject to the provisions of Section 6.5 hereof.
(r) Indemnification. In addition to the indemnification provided for
---------------
in Section 8.4 hereof, to indemnify any Person, including any Adviser or
independent contractor, with whom the Trust has dealings.
(s) Charitable Contributions. To make donations for the public
------------------------
welfare or for community, charitable, religious, educational, scientific, civic
or similar purposes, regardless of any direct benefit to the Trust.
(t) Discontinue Operations; Bankruptcy. To discontinue the operations
----------------------------------
of the Trust (subject to Section 10.2 hereof); to petition or apply for relief
under any provision of federal or state bankruptcy, insolvency or reorganization
laws or similar laws for the relief of debtors; to permit any Trust Property to
be foreclosed upon without raising any legal or equitable defenses that may be
available to the Trust or the Trustees or otherwise defending or responding to
such foreclosure; to confess judgment against the Trust; or to take such other
action with respect to indebtedness or other obligations of the Trustees, in
such capacity, the Trust Property or the Trust as the Trustees in their
discretion may determine.
(u) Termination of Status. To terminate the status of the Trust as a
---------------------
real estate investment trust under the REIT Provisions of the Code; provided,
--------
however, that the Board of Trustees shall take no action to terminate the
- -------
Trust's status as a real estate investment trust under the REIT Provisions of
the Code until such time as (i) the Board of Trustees adopts a resolution
recommending that the Trust terminate its status as a real estate investment
trust under the REIT Provisions of the Code, (ii) the Board of Trustees presents
the resolution at an annual or special meeting of the Shareholders and (iii)
such resolution is approved by the holders of a majority of the issued and
outstanding Common Shares (as defined in Section 6.2 hereof).
(v) Fiscal Year. Subject to the Code, to adopt, and from time to time
-----------
change, a fiscal year for the Trust.
(w) Seal. To adopt and use a seal, but the use of a seal shall not be
----
required for the execution of instruments or obligations of the Trust.
(x) Bylaws. To adopt, implement and from time to time alter, amend or
------
repeal Bylaws of the Trust relating to the business and organization of the
Trust which are not inconsistent with the provisions of this Declaration of
Trust.
(y) Voting Trust. To participate in, and accept Securities issued
------------
under or subject to, any voting trust.
(z) Proxies. To solicit proxies of the Shareholders at the expense of
-------
the Trust.
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(aa) Further Powers. To do all other acts and things and execute and
--------------
deliver all instruments incident to the foregoing powers, and to exercise all
powers which they deem necessary, useful or desirable to carry on the business
of the Trust or to carry out the provisions of this Declaration of Trust, even
if such powers are not specifically provided hereby.
SECTION 3.3 Determination of Best Interest of Trust. In determining
---------------------------------------
what is in the best interest of the Trust, a Trustee shall consider the
interests of the Shareholders of the Trust and applicable legal requirements
(including contractual obligations to parties other than shareholders) and, in
his or her sole and absolute discretion, may consider (a) the interests of the
Trust's employees, suppliers, creditors and customers, (b) the economy of the
nation, (c) community and societal interests and (d) the long-term as well as
short-term interests of the Trust and its Shareholders, including the
possibility that these interests may be best served by the continued
independence of the Trust.
ARTICLE IV
ADVISER
SECTION 4.1 Appointment. The Trustees are responsible for setting
-----------
the general policies of the Trust and for the general supervision of its
business conducted by officers, agents, employees, advisers or independent
contractors of the Trust. However, the Trustees are not required personally to
conduct the business of the Trust, and they may (but need not) appoint, employ
or contract with any Person (including a Person Affiliated with any Trustee) as
an Adviser and may grant or delegate such authority to the Adviser as the
Trustees may, in their sole discretion, deem necessary or desirable. The
Trustees may determine the terms of retention and the compensation of the
Adviser and may exercise broad discretion in allowing the Adviser to administer
and regulate the operations of the Trust, to act as agent for the Trust, to
execute documents on behalf of the Trust and to make executive decisions which
conform to general policies and principles established by the Trustees.
SECTION 4.2 Affiliation and Functions. The Trustees, by resolution
-------------------------
or in the Bylaws, may provide guidelines, provisions, or requirements concerning
the affiliation and functions of the Adviser.
ARTICLE V
INVESTMENT POLICY
The fundamental investment policy of the Trust is to make investments
in such a manner as to comply with the REIT Provisions of the Code and with the
requirements of the Act, with respect to the composition of the Trust's
investments and the derivation of its income. Subject to Section 3.2(u) hereof,
the Trustees will use their best efforts to carry out this fundamental
investment policy and to conduct the affairs of the Trust in such a manner as to
continue to qualify the Trust for the tax treatment provided in the REIT
Provisions of the Code; provided, however, no Trustee, officer, employee or
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agent of the Trust shall be liable for any act or omission resulting in the loss
of tax benefits under the Code, except to the extent provided in Section 8.2
hereof. The Trustees may change from time to time by resolution or in the
Bylaws of the Trust, such investment policies as they determine to be in the
best interests of the Trust, including prohibitions or restrictions upon certain
types of investments.
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ARTICLE VI
SHARES
SECTION 6.1 Authorized Shares. The beneficial interest in the Trust
-----------------
shall be divided into Shares. The total number of Shares which the Trust is
authorized to issue is fifty million (50,000,000) shares, and shall consist of
common shares and such other types or classes of Securities of the Trust as the
Trustees may create and authorize from time to time and designate as
representing a beneficial interest in the Trust. Shares may be issued for such
consideration as the Trustees determine or, if issued as a result of a Share
dividend or Share split, without any consideration, in which case all Shares so
issued shall be fully paid and nonassessable.
SECTION 6.2 Common Shares. Common Shares ("Common Shares") shall
-------------
have a par value of $.01 per share and shall entitle the holders to one vote per
share on all matters upon which Shareholders are entitled to vote pursuant to
Section 7.2 hereof, and shares of a particular class of issued Common Shares
shall have equal dividend, distribution, liquidation and other rights, and shall
have no preference, cumulative, preemptive, appraisal, conversion or exchange
rights. The Trustees may classify or reclassify any unissued Common Shares by
setting or changing the number, designation, preferences, conversion or other
rights voting powers, restrictions, limitations as to dividends qualifications
or terms or conditions of redemption of any such Common Shares and in such
event, the Trust shall file for record with the judge of probate in the county
in which its principal place of business is located articles supplementary in
substance and form as prescribed by the Act, including Section 7(b) thereof.
SECTION 6.3 Preferred Shares. The Trustees are hereby expressly
----------------
granted the authority to authorize from time to time the issuance of one or more
series of preferred Shares ("Preferred Shares") and with respect to any such
series to fix the numbers, designations, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms or conditions of redemption of such series. The Trustees may classify
or reclassify any unissued Preferred Shares by setting or changing the number,
designation, preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or conditions
of redemption of any such Preferred Shares and in such event, the Trust shall
file for record with the judge of probate in the county in which its principal
place of business is located articles supplementary in substance and form as
prescribed by the Act, including Section 7(b) thereof.
SECTION 6.4 Excess Shares. The following is a description of the
-------------
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of the Excess Shares ("Excess Shares") of the
Trust (certain capitalized terms used in this Section 6.4 and not previously
defined are defined in Section 6.7(a)):
(a) Ownership in Trust. Without limiting subparagraph (b) and (c) of
------------------
Section 6.7, upon any purported Transfer or other event that results in the
issuance of Excess Shares pursuant to subparagraph (d) of Section 6.7, such
Excess Shares shall be deemed to have been Transferred to the Trust, as trustee
of an Excess Shares Trust for the exclusive benefit of the Beneficiary or
Beneficiaries to whom an interest in such Excess Shares Trust may later be
transferred pursuant to subparagraph (e) of Section 6.4. Excess Shares so held
in trust shall be issued and outstanding shares of the Trust but shall not be
considered issued and outstanding for purposes of any shareholder vote. The
Purported Record Transferee or, in the case of Excess Shares resulting from an
event other than a Transfer, the Purported Record Holder, shall have no rights
in such Excess Shares. The Purported Beneficial Transferee or, in the case of
Excess Shares resulting from an event other than a Transfer, the Purported
Beneficial Holder, shall have no rights in such Excess Shares except as provided
in subparagraph (e) of Section 6.4.
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<PAGE>
(b) No Dividend Rights. Excess Shares shall not be entitled to any
------------------
dividend or other periodic distributions. Any dividend or distribution paid
with respect to Common Shares or Preferred Shares prior to the discovery by the
Trust that such Shares previously were converted into and exchanged for Excess
Shares pursuant to subparagraph (d) of Section 6.7 shall be repaid to the Trust
upon demand, and any dividend or distribution declared but unpaid shall be void
ab initio with respect to such Excess Shares.
- -- ------
(c) Liquidation Rights. In the event of any voluntary or involuntary
------------------
liquidation, dissolution or winding up of, or any distribution of the assets of,
the Trust, each Excess Share in trust shall be entitled to (i) if such Excess
Share results from an exchange of a Common Share, that portion of the assets of
the Trust which a Common Share that was exchanged for such Excess Share would
have been entitled had the Common Share remained outstanding, or (ii) if such
Excess Share results from an exchange of a Preferred Share, that portion of the
assets of the Trust which a Preferred Share that was exchanged for such Excess
Share would have been entitled had the Preferred Share remained outstanding.
The Trust, as holder of the Excess Shares in trust, or if the Trust has been
dissolved, any trustee appointed by the Trust prior to its dissolution, shall
ratably distribute to the Beneficiaries of the Excess Shares Trust, when and if
determined in accordance with subparagraph (e) of Section 6.4, any such assets
received in respect of the Excess Shares in any liquidation, dissolution or
winding up of, or any distribution of the assets, of the Trust.
(d) Voting Rights. The Excess Shares shall not have voting rights on
-------------
any matters.
(e) Restrictions on Transfer; Designation of Beneficiary. Excess
----------------------------------------------------
Shares shall not be transferable. The Trust shall have the sole right to
designate one or more Beneficiaries of an interest in the Excess Shares Trust
(representing the number of Excess Shares held by the Excess Shares Trust
attributable to the purported Transfer or other event that resulted in the
issuance of such Excess Shares), subject to the condition that the Excess Shares
held in the Excess Shares Trust would not be Excess Shares in the hands of any
such Beneficiary. Any consideration payable by such Beneficiary or
Beneficiaries in connection with such designation up to the "Excess Share
Limitation Price," shall be paid to the Purported Beneficial Transferee or, in
the case of Excess Shares resulting from an event other than a Transfer, the
Purported Beneficial Holder. The Excess Share Limitation Price is the lesser of
(1) (x) in the case of Excess Shares resulting from a Transfer for value, the
price per Share that the Purported Beneficial Transferee paid for the Shares in
the purported Transfer that resulted in the issuance of the Excess Shares, or,
(y) in the case of Excess Shares resulting from (I) a Transfer other than for
value (such as a gift, devise or similar Transfer) or (II) an event other than a
Transfer, a price per share equal to the Market Price of the Shares that were
exchanged for such Excess Shares on the date of the purported Transfer or other
event that resulted in the issuance of the Excess Shares or (2) a price per
share equal to the Market Price of the Shares on the date of the designation of
the Beneficiary of the interest in the Excess Shares Trust. If the
consideration payable by the designated Beneficiary of an interest in the Excess
Shares Trust exceeds the Excess Share Limitation Price, the amount by which such
consideration exceeds the Excess Share Limitation Price shall be paid to the
Trust. The Trust must designate a Beneficiary of the interest in the Excess
Shares Trust within 30 days from the later of (i) the date of the Transfer that
resulted in the issuance of the Excess Shares, or in the case of Excess Shares
resulting from an event other than a Transfer, the date of such other event, and
(ii) if the Trust does not receive actual notice of a Transfer or other event
pursuant to subparagraph (e) of Section 6.7, the date the Board of Trustees
determines in good faith that such a Transfer or other event resulting in the
issuance of Excess Shares has occurred. Upon the designation of a Beneficiary
of an interest in the Trust, the corresponding Excess Shares in the Excess
Shares Trust shall be automatically exchanged (i) for an equal number of Common
Shares if such Excess Shares resulted from an exchange of Common Shares or (ii)
for an equal number of Preferred Shares if such Excess Shares resulted from an
exchange of Preferred Shares, and such Common Shares or Preferred Shares, as the
case may be, shall be transferred of record to the Beneficiary of the interest
in the Excess Shares Trust designated
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<PAGE>
by the Trust as described above so long as such Common Shares or Preferred
Shares, as the case may be, would not be Excess Shares in the hands of such
Beneficiary.
(f) Purchase Right in Excess Shares. Notwithstanding subparagraph (e)
-------------------------------
of Section 6.4, Excess Shares shall be deemed to have been offered for sale to
the Trust, or its designee, at a price per share equal to the Excess Share
Limitation Price (determined by substituting "the date on which the Trust, or
its designee, accepts the offer to sell" for "the date of the designation of the
Beneficiary of the interest in the Excess Shares Trust" in clause (2) of the
definition of Excess Share Limitation Price in subparagraph (e) of Section 6.4).
The Trust shall have the right to accept such offer for a period of thirty days
after the later of (i) the date of the Transfer or other event which resulted in
the issuance of such Excess Shares and (ii) if the Trust does not receive actual
notice of a Transfer or other event pursuant to subparagraph (e) of Section 6.7,
the date the Board of Trustees determines in good faith that such a Transfer or
other event resulting in the issuance of Excess Shares has occurred.
SECTION 6.5 Dividends or Distributions. The Trustees may from time
--------------------------
to time declare and pay to Shareholders such dividends or distributions in cash,
property or other assets of the Trust or in Securities of the Trust or from any
other source as the Trustees in their discretion shall determine. The Trustees
shall endeavor to declare and pay such dividends and distributions as shall be
necessary for the Trust to qualify as a real estate investment trust under the
REIT Provisions of the Code; provided, however, Shareholders shall have no right
--------- -------
to any dividend or distribution unless and until declared by the Trustees. The
exercise of the powers and rights of the Trustees pursuant to this section shall
be subject to the provisions of any class or series of Shares at the time
outstanding. The receipt by any Person in whose name any Shares are registered
on the records of the Trust or by his duly authorized agent shall be a
sufficient discharge for all dividends or distributions payable or deliverable
in respect of such Shares and from all liability to see to the application
thereof.
SECTION 6.6 General Nature of Shares. All Shares shall be personal
------------------------
property entitling the Shareholders only to those rights provided in this
Declaration of Trust, the Act or in the resolution creating any class or series
of Shares. The legal ownership of the Trust Property and the right to conduct
the business of the Trust are vested exclusively in the Trustees; the
Shareholders shall have no interest therein other than the beneficial interest
in the Trust conferred by their Shares and shall have no right to compel any
partition, division, dividend or distribution of the Trust or any of the Trust
Property. The death of a Shareholder shall not terminate the Trust or give his
legal representative any rights against other Shareholders, the Trustees or the
Trust Property, except the right, exercised in accordance with applicable
provisions of the Bylaws, to receive a new certificate for Shares in exchange
for the certificate held by the deceased Shareholder. Holders of Shares shall
not have any preemptive or other right to purchase or subscribe for any class of
securities of the Trust which the Trust may at any time issue or sell.
SECTION 6.7 Restrictions On Ownership and Transfer.
---------------------------------------
(a) Certain Definitions. The following terms shall have the following
-------------------
meanings:
(1) "Acquire" shall mean the acquisition of Beneficial or Constructive
Ownership of Shares by any means including, without limitation, (i) the
acquisition of direct ownership of shares by any Person, including through the
exercise of Acquisition Rights or any other option, warrant, pledge, other
security interest or similar right to acquire shares, and (ii) the acquisition
of indirect ownership of shares (taking into account the constructive ownership
rules of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the
Code) by a Person who is an individual within the meaning of Section 542(a)(2)
of the Code, including, without limitation, through the acquisition by any
Person of Acquisition Rights or any option, warrant, pledge, security interest,
or similar right to acquire shares. The term "Acquisition" shall have the
correlative meaning.
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<PAGE>
(2) "Acquisition Rights" shall mean rights to Acquire Shares pursuant
to: (i) exercise of any option to acquire Shares or (ii) any pledge of Shares.
(3) "Aggregate Ownership Limit" shall mean 9.8% either in number of
Shares or value (whichever is more restrictive) of the outstanding Shares of the
Trust.
(4) "Beneficial Ownership" shall mean, with respect to any Person,
ownership of Shares by that Person equal to the sum of (i) the Shares directly
owned by such Person and (ii) the Shares indirectly owned by such Person (if
such Person is an "individual" as defined in Section 542(a)(2) of the Code)
taking into account constructive ownership determined under Section 544 of the
Code, as modified by Section 856(h)(1)(B) of the Code (except where expressly
provided otherwise). The terms "Beneficial Owner," "Beneficially Owns" and
"Beneficially Owned" shall have the correlative meanings.
(5) "Beneficiary" shall mean a beneficiary of the Excess Shares Trust
as determined pursuant to subparagraph (e) of Section 6.4.
(6) "Common Shares Ownership Limit" shall mean not more than 5.0% in
value or in number (whichever is more restrictive) of the aggregate of the
outstanding Common Shares of the Trust and the outstanding Excess Shares of the
Trust.
(7) "Constructive Ownership" shall mean ownership of Shares either
directly by a Person or constructively by a Person through the application of
Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The
terms "Constructive Owner," "Constructively Owns," and "Constructively Owned"
shall have the correlative meanings.
(8) "Constructive Ownership Prohibitions" shall mean as follows: no
Person (other than an Excluded Holder) shall be permitted to Acquire Shares
(whether by reason of exercise of the Redemption Right or otherwise) if, after
giving effect to and as a result of such acquisition, such Person would
Constructively Own more than 9.8% of the outstanding Shares.
(9) "Excess Share Limitation Price" shall have the meaning set forth
in subparagraph (e) of Section 6.4.
(10) "Excess Shares Trustee" shall mean the Trust, acting as trustee
for any of the Excess Shares Trusts or any successor trustee appointed by the
Trust.
(11) "Excluded Holder" shall mean Catherine K. Lowder, Thomas H.
Lowder, Robert E. Lowder, James K. Lowder, Colonial Properties, Inc., The
Colonial Company, Equity Partners II Joint Venture, Colonial Commercial
Investments, Inc., CBC Realty, Inc., and Colonial Properties Management
Association (and any Person who is or would be a Beneficial Owner of Shares as a
result of the Beneficial Ownership of Shares by any such Person) (collectively,
the "Excluded Holders").
(12) "Excluded Holder Limit" shall mean as follows: (i) no Excluded
Holder, nor any Person whose ownership of Shares would cause an Excluded Holder
to be considered to Constructively Own such Shares, nor any Person who would be
considered to Constructively Own Shares Constructively Owned by an Excluded
Holder, shall be permitted to Acquire Shares (whether by reason of the exercise
the Redemption Right or otherwise) if, after giving effect to such acquisition
(A) The Colonial Company or any direct or indirect subsidiary of The Colonial
Company would be regarded as a "related party tenant" of the Trust for purposes
of Section 856(d)(2)(B) of the Code and (B) the total rental income considered
derived by the Trust for the calendar year of such acquisition or any calendar
year thereafter from all "related party tenants" could reasonably be expected to
exceed one percent (1%) of the gross income of the Trust (as determined for
purposes of Section 856(c)(2) of the Code) for such calendar year; and (ii) no
Excluded Holder, nor any Person whose
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ownership of Shares would cause an Excluded Holder to be considered to
Beneficially Own such Shares, nor any Person who would be considered to
Beneficially Own Shares Beneficially Owned by an Excluded Holder shall be
permitted to Acquire Shares (whether by reason of the exercise the Redemption
Right or otherwise) if, after giving effect to such acquisition (A) any single
Person described in this clause (ii) who is considered an "individual" for
purposes of Section 542(a)(2) of the Code would be considered to Beneficially
Own more than twenty-nine percent (29%)of the outstanding Shares (as determined
for purposes of Sections 542(a)(2) and 856(a)(6) of the Code), (B) any two
Persons described in this clause (ii) who are considered "individuals" for
purposes of Section 542(a)(2) of the Code would be considered to Beneficially
Own more than 34 percent of the outstanding Shares (as determined for purposes
of Sections 542(a)(2) and 856(a)(6) of the Code), (C) any three Persons
described in this clause (ii) who are considered "individuals" for purposes of
Section 542(a)(2) of the Code would be considered to Beneficially Own more than
39 percent of the outstanding Shares (as determined for purposes of Sections
542(a)(2) and 856(a)(6) of the Code), or (D) any four Persons described in this
clause (ii) who are considered "individuals" for purposes of Section 542(a)(2)
of the Code would be considered to Beneficially Own more than 44 percent of the
outstanding Shares (as determined for purposes of Sections 542(a)(2) and
856(a)(6) of the Code).
(13) "Market Price" on any date shall mean, with respect to any class
or series of outstanding Shares, the average of the Closing Price for such
Shares for the five consecutive Trading Days ending on such date. The "Closing
Price" on any date shall mean the last sale price for such Shares, regular way,
or, in case no such sale takes place on such date, the average of the closing
bid and asked prices, regular way, for such Shares, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, for such Shares in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange (the "NYSE") or, if such
Shares are not listed or admitted to trading on the NYSE, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such Shares are
listed or admitted to trading or, if such Shares are not listed or admitted to
trading on any national securities exchange, the last quoted price, or, if not
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or, if such system is no longer in use, the
principal other automated quotation systems that may then be in use or, if such
Shares are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
such Shares selected by the Board of Trustees of the Trust. The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which the applicable Shares are listed or admitted to trading is open for the
transaction of business, or, if such Shares are not listed or admitted to
trading on any national securities exchange, shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(14) "Preferred Shares Ownership Limit" shall mean with respect to
each series or class of Preferred Shares, not more than 9.8% in value or in
number of Shares (whichever is more restrictive) of the aggregate of the
outstanding Preferred Shares of the Trust of such class or series.
(15) "Purported Beneficial Holder" shall mean, with respect to any
event other than a purported Transfer which results in Excess Shares, the person
for whom the applicable Purported Record Holder held the Shares that were,
pursuant to subparagraph (d) of Section 6.7, automatically exchanged for Excess
Shares upon the occurrence of such event. The Purported Beneficial Holder and
the Purported Record Holder may be the same Person.
(16) "Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which results in Excess Shares, the purported beneficial
transferee for whom the Purported Record Transferee would have acquired Shares
if such Transfer had not violated the provisions of subparagraph (b) of Section
6.7. The Purported Beneficial Transferee and the Purported Record Transferee
may be the same Person.
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<PAGE>
(17) "Purported Record Holder" shall mean, with respect to any event
other than a purported Transfer which results in Excess Shares, the record
holder of the Shares that were, pursuant to subparagraph (d) of Section 6.7,
automatically exchanged for Excess Shares upon the occurrence of such event.
The Purported Record Holder and the Purported Beneficial Holder may be the same
Person.
(18) "Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Shares, the Person who would have
been the record holder of the Shares if such Transfer had not violated the
provisions of subparagraph (b) of Section 6.7. The Purported Beneficial
Transferee and the Purported Record Transferee may be the same Person.
(19) "Redemption Right" shall mean the right set forth in Section
8.6 of the Second Amended and Restated Agreement of Limited Partnership of
Colonial Realty Limited Partnership, as effective from time to time, including
any modification of such right by contract or otherwise.
(20) "Restriction Termination Date" shall mean the first day after
the effective date hereof on which the Trust determines pursuant to subparagraph
(u) of Section 3.2 hereof that it is no longer in the best interests of the
Trust to attempt to, or continue to, qualify as a REIT.
(21) "Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Shares that results in a change in the record,
Beneficial or Constructive Ownership of Shares or the right to vote or receive
dividends on Shares (including without limitation (i) the granting of any
option or entering into any agreement for the sale, transfer or other
disposition of Shares or the right to vote or receive dividends on Shares or
(ii) the sale, transfer, assignment or other disposition or grant of any
Acquisition Rights or other securities or rights convertible into or
exchangeable for Shares, or the right to vote or receive dividends on Shares),
whether voluntary or involuntary, whether of record, Beneficially or
Constructively and whether by operation of law or otherwise.
(22) "Units" shall mean Partnership Units as that term is defined in
the Second Amended and Restated Agreement of Limited Partnership of Colonial
Realty Limited Partnership, a Delaware limited partnership, as effective on the
effective date hereof.
(b) Restrictions.
------------
(1) Except as provided in subparagraph (k) of Section 6.7 hereof,
during the period prior to the Restriction Termination Date:
(i) No Person (other than in the case of Common Shares, an Excluded
Holder) shall Acquire or Beneficially Own any Shares if, as the
result of such Acquisition or Beneficial Ownership, such Person
would Beneficially Own Shares in excess of either the Common
Shares Ownership Limit or the Aggregate Ownership Limit;
(ii) No Person shall Acquire or Beneficially Own any series or class
of Preferred Shares if, as the result of such Acquisition or
Beneficial Ownership, such Person would Beneficially Own Shares
of such series or class of Preferred Shares in excess of the
Preferred Shares Ownership Limit;
(iii) No Person (other than, in the case of Common Shares, an
Excluded Holder) shall Acquire or Constructively Own any
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<PAGE>
Shares if, as the result of such Acquisition or Constructive
Ownership any Person would Constructively Own Shares in
violation of the Constructive Ownership Prohibitions.
(iv) No Person shall Acquire any Shares if, as a result of such
Acquisition, the Shares would be Beneficially Owned by less
than 100 Persons (determined without reference to any rules of
attribution);
(v) No Person shall Acquire or Beneficially Own any Shares if, as a
result of such Acquisition or Beneficial Ownership, the Trust
would be "closely held" within the meaning of Section 856(h) of
the Code or otherwise fail to qualify as a REIT; and
(vi) No Excluded Holder shall Acquire or Beneficially Own any Shares
if, as the result of such Acquisition or Beneficial Ownership,
such Excluded Holder would Beneficially Own Shares in excess of
the Excluded Holder Limit.
(2) Any Transfer (whether or not such Transfer is the result of a
transaction entered into through the facilities of the NYSE) that, if effective,
would result in a violation of the restrictions in subparagraph (b) (1) of
Section 6.7, shall be void ab initio as to the Transfer of such Shares that
-- ------
would cause the violation of the applicable restriction in subparagraph (b) (1)
of Section 6.7, and the intended transferee shall acquire no rights in such
Shares.
(c) Remedies for Breach. If the Board of Trustees or a committee
-------------------
thereof shall at any time determine in good faith that a purported Transfer or
other event has taken place in violation of subparagraph (b) (1) of Section 6.7
or that a Person intends to Acquire or has attempted to Acquire Beneficial
Ownership or Constructive Ownership of any Shares of the Trust that will result
in violation of subparagraph (b) (1) of Section 6.7 (whether or not such
violation is intended), the Board of Trustees or a committee thereof shall take
such action as it or they deem advisable to refuse to give effect to or to
prevent such Transfer or other event, including, but not limited to, refusing to
give effect to such Transfer on the books of the Trust or instituting
proceedings to enjoin such Transfer; provided, however, that any Acquisition in
-------- -------
violation of subparagraph (b) (l) of Section 6.7 shall automatically result in
the exchange described in subparagraph (d) of Section 6.7, irrespective of any
action (or non-action) by the Board of Trustees or a committee thereof.
(d) Exchange for Excess Shares. If, at any time prior to the
---------------------------
Restriction Termination Date, there is a purported Transfer (whether or not such
Transfer is the result of a transaction entered into through the facilities of
the NYSE) or other event such that one or more of the restrictions on Beneficial
Ownership, Constructive Ownership and Transfer of the Shares described in
subparagraph (b) of Section 6.7 would have been violated, then, except as
otherwise provided in subparagraph (k) of Section 6.7, the Shares being
Transferred (or, in the case of an event other than a Transfer, the Shares
Beneficially Owned or Constructively Owned, which would cause one or more of
such restrictions to be violated (rounded up to the nearest whole share)) shall
be automatically converted into and exchanged for an equal number of Excess
Shares. Such conversion and exchange shall be effective as of the close of
business on the business day prior to the date of such purported Transfer or
other event.
(e) Notice of Restricted Transfer. Any Person who Acquires or
-----------------------------
attempts or intends to Acquire Shares in violation of subparagraph (b) of
Section 6.7 or any Person who is a transferee in a Transfer or is otherwise
affected by an event other than a Transfer that results in the issuance of
Excess Shares pursuant to subparagraph (d) of Section 6.7, shall immediately
give written notice to the Trust of such Transfer or other event and shall
provide to the Trust such other
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<PAGE>
information as the Trust may request in order to determine the effect, if any,
of such Transfer or attempted, intended or purported Transfer or other event on
the Trust's status as a REIT.
(f) Owners Required To Provide Information. Prior to the Restriction
--------------------------------------
Termination Date:
(1) every shareholder of record of more than 5% (or such lower
percentage as required by the Code or regulations promulgated thereunder) of the
number or value of the outstanding Shares of the Trust shall, within 30 days
after December 31 of each year, give written notice to the Trust stating the
name and address of such record shareholder, the number of Shares Beneficially
Owned by it, and a description of how such Shares are held; provided that a
-------------
shareholder of record who holds outstanding Shares of the Trust as nominee for
another person, which other person is required to include in gross income, for
U.S. federal income tax purposes, the dividends received on such Shares (an
"Actual Owner"), shall give written notice to the Trust stating the name and
address of such Actual Owner and the number of shares of such Actual Owner with
respect to which the shareholder of record is nominee.
(2) every Actual Owner of more than 5% (or such lower percentage as
required by the Code or regulations promulgated thereunder) of the number or
value of the outstanding Shares of the Trust who is not a shareholder of record
of the Trust, shall within 30 days after December 31 of each year give written
notice to the Trust stating the name and address of such Actual Owner, the
number of Shares Beneficially Owned, and a description of how such Shares are
held.
(3) each person who is a Beneficial Owner or Constructive Owner of
Shares and each Person (including the shareholder of record) who is holding
Shares for a Beneficial Owner or Constructive Owner shall provide to the Trust
such information as the Trust may request, in good faith, in order to determine
the Trust's compliance with the REIT Provisions of the Code.
(g) Remedies Not Limited. Subject to Section (m), nothing contained
--------------------
in this Section 6.7 shall limit the authority of the Board of Trustees to take
such other action as it deems necessary or advisable to protect the Trust and
the interests of its shareholders in preserving the Trust's status as a REIT.
(h) No Remedy Against Transferor. A purported transferee shall have
----------------------------
no claim, cause of action, or any other recourse whatsoever against a transferor
of Shares acquired by such purported transferee in violation of subparagraph (b)
of Section 6.7. The purported transferee's or holder's sole right with respect
to such shares shall be to receive, at the Trust's sole and absolute discretion,
either (i) consideration for such shares upon the resale of the shares as
directed by the Trust pursuant to subparagraph (e) of Section 6.4 or (ii) the
Excess Share Limitation Price pursuant to subparagraph (e) of Section 6.4.
Notwithstanding the foregoing, no Trustee or officer of the Trust shall be
liable to the Trust for any damages, costs or expenses arising from any dividend
or other distribution paid by the Trust to such purported holder prior to the
discovery by such director or officer that such purported holder was not
entitled to receive such dividend or distribution by virtue of the provisions of
subparagraph (b) of Section 6.4, and no corporate action authorized by the
shareholders of the Trust prior to the discovery that a purported holder is not
entitled to vote Shares shall be void or voidable as a result of the inclusion
of the vote of such purported holder in approving a Trust action or on
determining the presence of a quorum prior to the discovery that such purported
holder was not entitled to vote by virtue of the provisions of subparagraph (d)
of Section 6.4.
(i) Ambiguity. In the case of an ambiguity in the application of any
---------
of the provisions of this Section 6.7, including any definition contained in
subparagraph (a) of Section 6.7 (or Section 6.4, relating to Excess Shares), the
Board of Trustees shall have the power to determine the application of the
provisions of this Section 6.6 and Section 6.4 with respect to any situation
based on the facts known to it.
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<PAGE>
(j) Waiver. The Trust shall have authority at any time to waive the
------
requirements that Excess Shares be issued or be deemed outstanding in accordance
with the provisions of Section 6.7 if the Trust determines, based on an opinion
of nationally recognized tax counsel, that the issuance of such Excess Shares or
the fact that such Excess Shares are deemed to be outstanding would jeopardize
the status of the Trust as a REIT for federal income tax purposes.
(k) Exception. The Board of Trustees, in its sole and absolute
---------
discretion, may exempt a Person from the Aggregate Ownership Limit, the Common
Shares Ownership Limit, the Preferred Shares Ownership Limit, the Constructive
Ownership Prohibitions or the Excluded Holder Limits, as the case may be, with
respect to Shares to be Acquired, Beneficially Owned, or Constructively Owned by
such Person (A) if such Person is not an individual for purposes of Section
542(a)(2) of the Code and the Board of Trustees obtains such representations and
undertakings from such Person as it determines are reasonably necessary to
ascertain that no individual's Beneficial or Constructive Ownership of such
Shares will violate the Aggregate Ownership Limit, the Common Shares Ownership
Limit, the Preferred Shares Ownership Limit, the Constructive Ownership
Prohibitions or the Excluded Holder Limits, as the case may be, or otherwise
violate subparagraph (b) of Section 6.7, (B) if such Person does not own,
actually or Constructively, an interest in a tenant of the Trust (or a tenant of
an entity owned or controlled by the Trust) that would cause the Trust to own,
actually or Constructively, more than a 9.8% interest (as set forth in Section
856(d)(2)(B) of the Code) in such tenant and the Board of Trustees obtains such
representations and undertakings from such Person as it determines are
reasonably necessary to ascertain this fact, and (C) if such Person agrees that
any violation of such representations or undertaking (or other action which is
contrary to the restrictions contained in this Section 6.7) or attempted
violation will result in such Shares being exchanged for Excess Shares in
accordance with subparagraph (d) of Section 6.7. Prior to granting any
exception pursuant to this subparagraph (k) of Section 6.7, the Board of
Trustees may require a ruling from the Internal Revenue Service, or an opinion
of counsel, in either case in form and substance satisfactory to the Board of
Trustees in its sole and absolute discretion, as it may deem necessary or
advisable in order to determine or ensure the Trust's status as a REIT.
Notwithstanding the receipt of any ruling or opinion, the Board of Trustees may
impose such conditions or restrictions as it deems appropriate in connection
with granting such exception.
(l) Legend. Each certificate for Shares shall bear substantially the
------
following legend:
"The shares represented by this certificate are subject to
restrictions on transfer and ownership for the purpose of assisting
the Trust in maintaining its status as a Real Estate Investment Trust
under the Internal Revenue Code of 1986, as amended. Subject to
certain further restrictions and except as expressly provided in the
Trust's Declaration of Trust, no Person may Beneficially Own Shares of
the Trust in excess of 9.8 percent in number or value of the
outstanding Shares of the Trust, no Person (other than an Excluded
Holder) may own Common Shares in excess of 5.0 percent in number or
value of the outstanding Common Shares of the Trust and no Person may
Beneficially Own Shares of any class or series of Preferred Shares of
the Trust in excess of 9.8 percent of the aggregate of the outstanding
Preferred Shares of such class or series. Separate restrictions set
forth in Section 6.7 of the Declaration of Trust apply to restrict the
permissible Constructive Ownership of Shares. Any Person who
Beneficially Owns or attempts to Beneficially Own Shares in excess of
the above limitations must immediately notify the Trust, any Shares so
held may be subject to mandatory redemption or sale in certain events,
certain purported acquisitions of Shares in excess of such
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<PAGE>
limitations shall be void ab initio, and any Shares purported to be
-- ------
Acquired or Beneficially Owned in excess of such limitation will be
automatically converted into and exchanged for shares of Excess
Shares. Excess Shares have limited economic rights, no dividend
rights and no voting rights. A Person who attempts to Beneficially
Own Shares in violation of the ownership limitations set forth in
subparagraph (b) of Section 6.7 of the Declaration of Trust of the
Trust shall have no claim, cause of action, or any other recourse
whatsoever against a transferor of such shares. All capitalized terms
in this legend have the meanings defined in the Trust's Declaration of
Trust, a copy of which, including the restrictions on transfer, will
be sent without charge to each shareholder who so requests."
(m) NYSE Settlement. Nothing in this Section 6.7 shall preclude the
---------------
settlement of any transaction with respect to the Shares entered into through
the facilities of the NYSE, provided that any transferee in such a transaction
shall be subject to all of the provisions and limitations set forth in this
Section 6.7.
SECTION 6.8 Severability. If any provision of this Article VI or any
------------
application of any such provision is determined to be invalid by any federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
ARTICLE VII
SHAREHOLDERS
SECTION 7.1 Meetings of Shareholders. There shall be an annual
------------------------
meeting of the Shareholders, to be held at such time and place as shall be
determined by or in the manner prescribed in the Bylaws, at which the Trustees
shall be elected and any other proper business may be conducted. Prior to or at
such annual meetings, the Trust shall provide each Shareholder a copy of its
most recent annual report of operations. Except as otherwise provided in this
Declaration of Trust, special meetings of Shareholders may be called in the
manner provided in the Bylaws. If there are no Trustees, the officers of the
Trust shall promptly call a special meeting of the Shareholders entitled to vote
for the election of successor Trustees. Any meeting may be adjourned and
reconvened as the Trustees determine or as provided in the Bylaws.
SECTION 7.2 Voting Rights of Shareholders. Subject to the provisions
-----------------------------
of any class or series of Shares then outstanding and the mandatory provisions
of any applicable laws or regulations, the Shareholders shall be entitled to
vote only on the following matters: (a) an increase or decrease in the number
of Trustees as provided in Section 2.1 hereof; (b) election or removal of
Trustees as provided in Sections 7.1 and 2.3 hereof; (c) amendment of this
Declaration of Trust as provided in Section 9.1 hereof; (d) termination of the
Trust as provided in Section 10.2 hereof; (e) reorganization of the Trust as
provided in Section 9.2 hereof; (f) merger, consolidation or sale or other
disposition of all or substantially all of the Trust Property, as provided in
Section 9.3 hereof; and (g) termination of the Trust's status as a real estate
investment trust under the REIT Provisions of the Code, as provided in Section
3.2(u) hereof. Except with respect to the foregoing matters, no action taken by
the Shareholders at any meeting shall in any way bind the Trustees.
SECTION 7.3 Shareholder Action to be Taken by Meeting. Any action
-----------------------------------------
required or permitted to be taken by the Shareholders of the Trust must be
effected at a duly called annual or special meeting of Shareholders of the Trust
and may not be effected by any consent in writing of such Shareholders.
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<PAGE>
SECTION 7.4 Right of Inspection. Each Shareholder shall have such
-------------------
rights to inspect the Trust's accounts, books and records as are required in
Article 16 of Chapter 2B of Title 10 of the Code of Alabama, 1975, which rights
shall not be abolished or limited by the Trust's By-laws or this Declaration.
ARTICLE VIII
LIABILITY OF SHAREHOLDERS, TRUSTEES, OFFICERS,
EMPLOYEES AND AGENTS;
TRANSACTIONS BETWEEN AFFILIATES AND THE TRUST
SECTION 8.1 Limitation of Shareholder Liability. No Shareholder or
-----------------------------------
beneficial owner of Shares shall be liable for any debt, claim, demand, judgment
or obligation of any kind of, against or with respect to the Trust by reason of
his being a Shareholder or beneficial owner of Shares, nor shall any Shareholder
or beneficial owner of Shares be subject to any personal liability whatsoever,
in tort, contract or otherwise, to any Person in connection with the Trust
Property or the affairs of the Trust by reason of his being a Shareholder or
beneficial owner of Shares.
SECTION 8.2 Limitation of Trustee and Officer Liability. To the
-------------------------------------------
maximum extent that Alabama law in effect from time to time permits limitation
of the liability of trustees and officers of a real estate investment trust, no
Trustee or officer of the Trust shall be liable to the Trust or to any
Shareholder for money damages. Neither the amendment nor repeal of this Section
8.2, nor the adoption or amendment of any other provision of this Declaration of
Trust inconsistent with this Section 8.2, shall apply to or affect in any
respect the applicability of the preceding sentence with respect to any act or
failure to act which occurred prior to such amendment, repeal or adoption. In
the absence of any Alabama statute limiting the liability of trustees and
officers of an Alabama real estate investment trust for money damages in a suit
by or on behalf of the Trust or by any Shareholder, no Trustee or officer of the
Trust shall be liable to the Trust or to any Shareholder for money damages
except to the extent that (i) the Trustee or officer actually received an
improper benefit or profit in money, property, or services, for the amount of
the benefit or profit in money, property, or services actually received, or (ii)
a judgment or other final adjudication adverse to the Trustee or officer is
entered in a proceeding based on a finding in the proceeding that the Trustee's
or officer's action or failure to act was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding.
SECTION 8.3 Express Exculpatory Clauses in Instruments. Neither the
------------------------------------------
Shareholders nor the Trustees, officers, employees or agents of the Trust shall
be liable under any written instrument creating an obligation of the Trust by
reason of their being Shareholders, Trustees, officers, employees or agents of
the Trust, and all Persons shall look solely to the Trust Property for the
payment of any claim under or for the performance of that instrument. The
omission of the foregoing exculpatory language from any instrument shall not
affect the validity or enforceability of such instrument and shall not render
any Shareholder, Trustee, officer, employee or agent liable thereunder to any
third party, nor shall the Trustees or any officer, employee or agent of the
Trust be liable to anyone as a result of such omission.
SECTION 8.4 Indemnification. The Trust shall indemnify (i) its
---------------
Trustees and officers, whether serving the Trust or at its request any other
entity, to the full extent required or permitted by the laws of the State of
Alabama applicable to business corporations now or hereafter in force, including
the advance of expenses under the procedures and to the full extent permitted by
such laws, and (ii) the Shareholders and other employees and agents of the Trust
to such extent as shall be authorized by the Trustees or the Bylaws and as
permitted by law. Nothing contained herein shall be construed to protect any
Person against any liability to the extent such protection would violate Alabama
statutory or decisional law applicable to real estate investment trusts
organized under the Act or any successor provision. The foregoing rights of
indemnification shall not
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<PAGE>
be exclusive of any other rights to which those seeking indemnification may be
entitled. The Trustees may take such action as is necessary to carry out these
indemnification provisions and are expressly empowered to adopt, approve and
amend from time to time such bylaws, resolutions or contracts implementing such
provisions or such further indemnification arrangements as may be permitted by
law. No amendment of this Declaration of Trust or repeal of any of its
provisions shall limit or eliminate the right of indemnification provided
hereunder with respect to acts or omissions occurring prior to such amendment or
repeal.
SECTION 8.5. Transactions Between the Trust and its Trustees,
------------------------------------------------
Officers, Employees and Agents. Subject to any express restrictions in this
- ------------------------------
Declaration of Trust or adopted by the Trustees in the Bylaws or by resolution,
the Trust (which, for purposes of this Section 8.5, shall include the Trust and
any of its subsidiaries) may enter into any contract or transaction of any kind
(including without limitation for the purchase or sale of property or for any
type of services, including those in connection with underwriting or the offer
or sale of Securities of the Trust) with any Person, including any Trustee,
officer, employee or agent of the Trust or any Person Affiliated with the Trust
or a Trustee, officer, employee or agent of the Trust, whether or not any of
them has a financial interest in such transaction.
ARTICLE IX
AMENDMENT; REORGANIZATION; MERGER, ETC.
SECTION 9.1 Amendment.
---------
(a) Subject to Section 6.3 hereof, this Declaration of Trust may
be amended by (i) the adoption of a proposed amendment by the Trustees and
submission of such proposed amendment to the Shareholders for their
consideration, and (ii) the affirmative vote of the holders of not less than a
majority of the Shares then outstanding and entitled to vote thereon, except
that Sections 2.3 and 10.2 hereof and this Section 9.1 shall not be amended (or
any other provision of this Declaration of Trust be amended or any provision of
this Declaration of Trust be added that would have the effect of amending such
sections) without the affirmative vote of the holders of two-thirds of the
Shares then outstanding and entitled to vote thereon.
(b) The Trustees, by a two-thirds vote, may amend provisions of
this Declaration of Trust from time to time as necessary to enable the Trust to
qualify as a real estate investment trust under the REIT Provisions of the Code
or under the Act.
(c) The Trustees, by a two-thirds vote, may amend this
Declaration of Trust from time to time as necessary to increase or decrease the
aggregate number of Shares or the number of Shares of any class that the Trust
has authority to issue.
(d) An amendment to this Declaration of Trust shall become
effective as provided in Section 11.5.
(e) This Declaration of Trust may not be amended except as
provided in this Section 9.1.
SECTION 9.2 Reorganization. Subject to the provisions of any class
--------------
or series of Shares at the time outstanding, the Trustees shall have the power
(i) to cause the organization of a corporation, association, trust or other
organization to take over the Trust Property and carry on the affairs of the
Trust, or (ii) merge the Trust into, or sell, convey and transfer the Trust
Property to, any such corporation, association, trust or organization in
exchange for Securities thereof or beneficial interests therein, and the
assumption by the transferee of the liabilities of the Trust, and upon the
occurrence of (i) or (ii) above terminate the Trust and deliver such Securities
or beneficial
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<PAGE>
interests ratably among the Shareholders according to the respective rights of
the class or series of Shares held by them; provided, however, that any such
-------- -------
action shall have been approved, at a meeting of the Shareholders called for
that purpose, by the affirmative vote of the holders of not less than a majority
of the Shares then outstanding and entitled to vote thereon.
SECTION 9.3 Merger, Consolidation or Sale of Trust Property. Subject
-----------------------------------------------
to the provisions of any class or series of Shares at the time outstanding, the
Trustees shall have the power to (i) merge the Trust into another entity, (ii)
consolidate the Trust with one or more other entities into a new entity or (iii)
sell or otherwise dispose of all or substantially all of the Trust Property;
provided, however, that such action shall have been approved, at a meeting of
- -------- -------
the Shareholders called for that purpose, by the affirmative vote of the holders
of not less than a majority of the Shares then outstanding and entitled to vote
thereon.
ARTICLE X
DURATION AND TERMINATION OF TRUST
SECTION 10.1 Duration of Trust. The Trust shall continue perpetually
-----------------
unless terminated pursuant to Section 10.2 or pursuant to any applicable
provision of the Act.
SECTION 10.2 Termination of Trust.
--------------------
(a) Subject to the provisions of any class or series of Shares
at the time outstanding, the Trust may be terminated at any meeting of
Shareholders called for that purpose, by the affirmative vote of the holders of
not less than two-thirds of the Shares outstanding and entitled to vote thereon.
Upon the termination of the Trust:
(i) The Trust shall carry on no business except for the
purpose of winding up its affairs;
(ii) The Trustees shall proceed to wind up the affairs of
the Trust and all of the powers of the Trustees under this Declaration of
Trust shall continue, including the powers to fulfill or discharge the
Trust's contracts, collect its assets, sell, convey, assign, exchange,
transfer or otherwise dispose of all or any part of the remaining Trust
Property to one or more Persons at public or private sale for consideration
which may consist in whole or in part of cash, Securities or other property
of any kind, discharge or pay its liabilities and do all other acts
appropriate to liquidate its business; and
(iii) After paying or adequately providing for the payment
of all liabilities, and upon receipt of such releases, indemnities and
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly each,
among the Shareholders according to their respective rights, so that after
payment in full or the setting apart for payment of such preferential
amounts, if any, to which the holders of any Shares (other than Common
Shares) at the time outstanding shall be entitled, the remaining Trust
Property available for payment and distribution to Shareholders shall,
subject to any participating or similar rights of Shares (other than Common
Shares) at the time outstanding, be distributed ratably among the holders
of Common Shares at the time outstanding.
(b) After termination of the Trust, the liquidation of its
business, and the distribution to the Shareholders as herein provided, a
majority of the Trustees shall execute and file with the Trust's records a
document certifying that the Trust has been duly terminated, and the Trustees
shall be discharged from all liabilities and duties hereunder, and the rights
and interests of all Shareholders shall cease.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Governing Law. This Declaration of Trust is executed by
-------------
the undersigned Trustees and delivered in the State of Alabama with reference to
the laws thereof, and the rights of all parties and the validity, construction
and effect of every provision hereof shall be subject to and construed according
to the laws of the State of Alabama without regard to conflicts of laws
provisions thereof.
SECTION 11.2 Reliance by Third Parties. Any certificate shall be
-------------------------
final and conclusive as to any persons dealing with the Trust if executed by an
individual who, according to the records of the Trust or of any recording office
in which this Declaration of Trust may be recorded, appears to be the Secretary
or an Assistant Secretary of the Trust or a Trustee, and if certifying to: (i)
the number or identity of Trustees, officers of the Trust or shareholders; (ii)
the due authorization of the execution of any document; (iii) the action or vote
taken, and the existence of a quorum, at a meeting of Trustees or Shareholders;
(iv) a copy of this Declaration or of the Bylaws as a true and complete copy as
then in force; (v) an amendment to this Declaration of Trust; (vi) the
termination of the Trust; or (vii) the existence of any fact or facts which
relate to the affairs of the Trust. No purchaser. lender, transfer agent or
other person shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made on behalf of the Trust by the Trustees or by
any duly authorized officer, employee or agent of the Trust.
SECTION 11.3 Provisions in Conflict with Law or Regulations.
----------------------------------------------
(a) The provisions of this Declaration of Trust are severable,
and if the Trustees shall determine that any one or more of such provisions are
in conflict with the REIT Provisions of the Code, the Act or other applicable
federal or state laws, the conflicting provisions shall be deemed never to have
constituted a part of this Declaration of Trust, even without any amendment of
this Declaration pursuant to Section 9.1 hereof; provided, however, that such
-------- -------
determination by the Trustees shall not affect or impair any of the remaining
provisions of this Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination. No Trustee shall be liable for
making or failing to make such a determination.
(b) If any provision of this Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such holding shall not in any
manner affect or render invalid or unenforceable such provision in any other
jurisdiction or any other provision of this Declaration of Trust in any
jurisdiction.
SECTION 11.4 Construction. In this Declaration of Trust, unless the
------------
context otherwise requires, words used in the singular or in the plural include
both the plural and singular and words denoting any gender include all genders.
The title and headings of different parts are inserted for convenience and shall
not affect the meaning, construction or effect of this Declaration. In defining
or interpreting the powers and duties of the Trust and its Trustees and
officers, reference may be made, to the extent appropriate and not inconsistent
with the Code or the Act, to Chapter 2B, Title 10, of the Code of Alabama, 1975,
as amended.
SECTION 11.5 Recordation. This Declaration of Trust and any
-----------
amendment hereto shall be filed for record with the judge of probate in the
county in which the Trust's place of business is located in accordance with the
requirements of the Act and may also be filed or recorded in such other places
as the Trustees deem appropriate, but failure to file for record this
Declaration or Trust or any amendment hereto in any office other than the judge
of probate in the county in which the Trust's place of business is located shall
not affect or impair the validity or effectiveness of this
-22-
<PAGE>
Declaration of Trust or any amendment hereto. A restated Declaration of Trust
shall, upon filing, be conclusive evidence of all amendments contained therein
and may thereafter be referred to in lieu of the original Declaration of Trust
and the various amendments thereto.
IN WITNESS WHEREOF, this Declaration of Trust has been signed on this
21st day of August, 1995 by the undersigned Trustee, who acknowledges, under
penalty of perjury, that this document is his free act and deed, and that to the
best of his knowledge, information and belief, the matters and facts set forth
herein are true in all material respects.
/s/ Thomas H. Lowder
-------------------------------
Thomas H. Lowder
STATE OF ALABAMA )
ss:
COUNTY OF )
On the 21st day of August, 1995, before me personally came Thomas H.
Lowder, to me known, who, being by me duly sworn, did depose and say that he is
Chairman of the Board of Trustees, President and Chief Executive Officer of
Colonial Properties Trust, and that he as such officer, being authorized to do
so, executed the foregoing instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/ Notary Public
(Notarial Seal) ------------------------------
Notary Public
-23-
<PAGE>
STATE OF ALABAMA )
JEFFERSON COUNTY )
ARTICLES OF AMENDMENT
TO
DECLARATION OF TRUST
OF
COLONIAL PROPERTIES TRUST
Pursuant to Section 10-13-14 of the Code of Alabama 1975, Colonial
Properties Trust, a real estate investment trust organized and existing under
the laws of Alabama (the "Company"), hereby submits the following:
1. The name of the real estate investment trust is Colonial Properties
Trust.
2. The Declaration of Trust shall be amended as follows:
The Declaration of Trust is hereby amended by deleting Sections
6.1 and 6.3 of Article VI thereof in their entirety and inserting in
lieu thereof the following new Sections 6.1 and 6.3:
SECTION 6.1 Authorized Shares. The beneficial interest in
the Trust shall be divided into Shares. The total number of
Shares which the Trust is authorized to issue is seventy-five
million (75,000,000), consisting of sixty-five million
(65,000,000) common Shares and ten million (10,000,000) preferred
Shares. The Trust also is authorized to issue Excess Shares,
which shall constitute a separate class of shares of the Trust,
in such number as is necessary to permit the conversion of
outstanding Shares into Excess Shares in accordance with Section
6.7(d) hereof. Any Excess Shares issued with respect to an
outstanding class or series of common Shares or preferred Shares
shall constitute a separate series of Excess Shares, with the
number of permitted series of Excess Shares equaling the
aggregate number of classes and series of common Shares and
preferred Shares of the Trust at any time outstanding. Any
issuance of Excess Shares shall, for so long as such Excess
Shares are outstanding, reduce the number of authorized Shares of
the class or series so converted into Excess Shares by the number
of Excess Shares so issued. Shares may be issued for such
consideration as the Trustees determine or, if issued as a result
of a Share dividend or Share split, without any consideration, in
which case all Shares so issued shall be fully paid and
nonassessable.
<PAGE>
SECTION 6.3. Preferred Shares. Subject to any shareholder
approval required by the Constitution of the State of Alabama,
the Trustees are hereby expressly granted the authority to
authorize from time to time the issuance of one or more series of
preferred Shares ("Preferred Shares") and with respect to any
such series to fix the numbers, designations, preferences,
conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms or
conditions of redemption of such series. Subject to any
shareholder approval required by the Constitution of the State of
Alabama, the Trustees may classify or reclassify any unissued
Preferred Shares by setting or changing the number, designation,
preferences, conversion or other rights, voting powers,
restrictions, limitation as to dividends, qualification or terms
or conditions of redemption of any such Preferred Shares and in
such event, the Trust shall file for record with the judge of
probate in the county in which its principal place of business is
located articles supplementary in substance and form as
prescribed by the Act, including Section 7(b) thereof.
The Declaration of Trust is hereby further amended by deleting
Section 3.2(e) of Article III thereof in its entirety and inserting in
lieu thereof the following new Section 3.2(e) (language added is
underlined):
(e) Issuance of Securities. Subject to the provisions of Article
VI hereof, to create and authorize and direct the issuance (on
either a pro rata or a non-pro rata basis) by the Trust, in
shares, units or amounts of one or more types, series or classes,
of Securities of the Trust, which may have such voting rights,
dividend or interest rates, preferences, subordinations,
conversion or redemption prices or rights, maturity dates,
distribution, exchange, or liquidation rights or other rights as
the Trustees may determine, without vote of or other action by
the Shareholders except as may be required by the Constitution of
the State of Alabama, to such Persons for such consideration, at
such time or times and in such manner and on such terms as the
Trustees determine; to list any of the Securities of the Trust on
any securities exchange; and to purchase or otherwise acquire,
hold, cancel, reissue, sell and transfer any Securities of the
Trust.
3. The Board of Trustees of the Company adopted a resolution setting
forth the foregoing amendment and declared it advisable in a Unanimous
Written Consent of Trustees dated as of August 29, 1997.
4. There were 20,934,055 of the Company's common shares of beneficial
interest, par value $.01 per share ("Common Shares"), outstanding as
of September 22, 1997, the record date for the special meeting held on
<PAGE>
October 23, 1997, to consider the foregoing amendment (the "Special
Meeting"). Common Shares represented the only class of securities
entitled to vote at the Special Meeting, and each share thereof
entitled its holder to one vote. Of the 20,934,055 votes entitled to
be cast on the foregoing amendment, 15,124,025 were indisputably
represented at the Special Meeting. The total number of undisputed
votes cast FOR the foregoing amendment at the Special Meeting was
11,953,101, which number was sufficient for approval of the foregoing
amendment by the holders of Common Shares.
5. The foregoing amendment was duly adopted in accordance with the
applicable provisions of Section 10-13-14 of the Code of Alabama,
1975 and of Sections 234 and 237 of the Constitution of the State of
Alabama.
These Articles of Amendment are being filed in the Office of the Judge of
Probate of Jefferson County, Alabama, for the purpose of effecting the foregoing
amendment in accordance with the Code of Alabama 1975, Sections 10-2B-1.25 and
10-13-14(f).
IN WITNESS WHEREOF, the Company, by its duly authorized officer and with
full authority, has executed these Articles of Amendment as of this 23rd day of
October, 1997.
COLONIAL PROPERTIES TRUST
By: /s/ Thomas H. Lowder
------------------------------
Thomas H. Lowder
President and Chief Executive Officer
<PAGE>
ARTICLES SUPPLEMENTARY OF
8 3/4% SERIES A CUMULATIVE REDEEMABLE PREFERRED SHARES
OF BENEFICIAL INTEREST OF
COLONIAL PROPERTIES TRUST
Pursuant to Sections 10-13-7 and 13-7B of the
Code of Alabama 1975
Colonial Properties Trust, an Alabama real estate investment trust
(the "Company"), hereby certifies that on November 3, 1997, pursuant to
authority conferred by Sections 3.2(e) and 6.3 of the Charter (as defined below)
and in accordance with Section 10-13-17 of the Code of Alabama 1975, a committee
of the Board of Trustees, pursuant to authority expressly delegated by the Board
of Trustees on October 23, 1997, duly classified unissued Preferred Shares of
the Company, and the description of such Preferred Shares, including the number,
designation, preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption thereof, as set by the committee of the Board of
Trustees, are as follows:
Section 1. Number of Shares and Designation. This series of
--------------------------------
Preferred Shares shall be designated as 8 3/4% Series A Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value $.01 per share (the "Series A
Preferred Shares"). The number of Preferred Shares constituting the Series A
Preferred Shares is 5,000,000.
Section 2. Definitions. The following terms shall have the following
-----------
meanings herein:
(a) "Board of Trustees" shall mean the Board of Trustees of the
Company or any committee authorized by the Board of Trustees to perform any of
its responsibilities with respect to the Series A Preferred Shares.
(b) "Business Day" shall mean any day other than a Saturday, Sunday or
day on which state or federally chartered banking institutions in New York City,
New York are not required to be open.
(c) "Call Date" shall have the meaning set forth in Section 6(b).
(d) "Capital Gains Amount" shall have the meaning set forth in Section
3(d).
(e) "Charter" means the Declaration of Trust of the Company, as
amended to the date hereof and as the same may be amended hereafter from time to
time.
<PAGE>
(f) "Code" shall have the meaning set forth in Section 12.
(g) "Common Shares" shall mean the Company's common shares of
beneficial interest, par value $.01 per share.
(h) "Dividend Payment Date" shall mean the last day (or, if such day
is not a Business Day, the next Business Day thereafter) of each March, June,
September and December, commencing on December 31, 1997.
(i) "Dividend Periods" shall mean quarterly dividend periods
commencing on January 1, April 1, July 1 and October 1 of each year and ending
on and including the next succeeding Dividend Payment Date (other than the
initial Dividend Period, which shall commence on the Issue Date, and other than
the Dividend Period during which any Series A Preferred Shares shall be redeemed
pursuant to Section 6, which shall end on and include the Call Date with respect
to the Series A Preferred Shares being redeemed).
(j) "Fully Junior Shares" shall mean the Common Shares and any other
class or series of shares of beneficial interest of the Company now or hereafter
issued and outstanding over which the Series A Preferred Shares has preference
or priority in both (i) the payment of dividends and (ii) the distribution of
assets on any liquidation, dissolution or winding up of the Company.
(k) "Issue Date" shall mean the first date on which the pertinent
Series A Preferred Shares are issued and sold.
(l) "Junior Shares" shall mean the Common Shares and any other class
or series of shares of beneficial interest of the Company now or hereafter
issued and outstanding over which the Series A Preferred Shares have preference
or priority in the payment of dividends or in the distribution of assets on any
liquidation, dissolution or winding up of the Company.
(m) "Parity Shares" shall have the meaning set forth in Section 8(b).
(n) "Preferred Shares" shall mean the Company's preferred shares of
beneficial interest, par value $.01 per share.
(o) "Series A Preferred Shares" shall have the meaning set forth in
Section 1.
(p) "set apart for payment" shall be deemed to include, without any
action other than the following, the recording by the Company in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board of Trustees, the
allocation of funds to be so paid on any series or class of shares of
beneficial interest of the Company; provided, however, that if any funds
-------- -------
for any class or series of
-2-
<PAGE>
Junior Shares or Fully Junior Shares or any class or series of shares of
beneficial interest ranking on a parity with the Series A Preferred Shares as to
the payment of dividends are placed in a separate account of the Company or
delivered to a disbursing, paying or other similar agent, then "set apart for
payment" with respect to the Series A Preferred Shares shall mean placing such
funds in such separate account or delivering such funds to a disbursing, paying
or other similar agent.
(q) "Total Dividends" shall have the meaning set forth in Section
3(d).
(r) "Transfer Agent" means BankBoston, N.A., Boston, Massachusetts, or
such other agent or agents of the Company as may be designated by the Board of
Trustees or their designee as the transfer agent, registrar and dividend
disbursing agent for the Series A Preferred Shares.
Section 3. Dividends.
---------
(a) The holders of Series A Preferred Shares shall be entitled to
receive, when, as and if declared by the Board of Trustees out of funds legally
available for that purpose, cumulative, preferential dividends payable in cash
at the rate of $2.1875 per annum per share. Such dividends shall begin to
accrue and shall be fully cumulative from the Issue Date, whether or not in any
Dividend Period or Periods there shall be funds of the Company legally available
for the payment of such dividends, and shall be payable quarterly, when, as and
if declared by the Board of Trustees, in arrears on Dividend Payment Dates,
commencing on the first Dividend Payment Date after the Issue Date. Such
dividends shall be payable in arrears to the holders of record of Series A
Preferred Shares, as they appear on the share records of the Company at the
close of business on the record date, not more than 30 nor less than 10 days
preceding the relevant Dividend Payment Date, as shall be fixed by the Board of
Trustees. Accrued and unpaid dividends for any past Dividend Periods may be
declared and paid on any date and for such interim periods, without reference to
any regular Dividend Payment Date, to holders of record on such date, not more
than 30 nor less than 10 days preceding the payment date thereof, as may be
fixed by the Board of Trustees. Any dividend payment made on the Series A
Preferred Shares shall first be credited against the earliest accrued but unpaid
dividend due with respect to the Series A Preferred Shares which remains
payable.
(b) The amount of dividends referred to in Section 3(a) payable for
each full Dividend Period for the Series A Preferred Shares shall be computed by
dividing the annual dividend rate by four, except that the amount of dividends
payable for the initial Dividend Period, and for any Dividend Period shorter
than a full Dividend Period, for the Series A Preferred Shares shall be computed
on the basis of a 360-day year consisting of twelve 30-day months. Holders of
Series A Preferred Shares shall not be entitled to any dividends, whether
payable in cash,
-3-
<PAGE>
property or shares of stock, in excess of cumulative dividends, as herein
provided, on the Series A Preferred Shares. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series A Preferred Shares that may be in arrears.
(c) Dividends on Series A Preferred Shares will accrue whether or not
the Company has earnings, whether or not there are funds legally available for
the payment of such dividends and whether or not such dividends are declared.
(d) If, for any taxable year, the Company elects to designate as
"capital gain dividends" (as defined in Section 857 of the Code), any portion
(the "Capital Gains Amount") of the total dividends (within the meaning of the
Code) paid or made available for the year to holders of all classes of capital
stock (the "Total Dividends"), then the portion of the Capital Gains Amount that
shall be allocable to holders of Series A Preferred Shares shall be in the same
portion that the Total Dividends paid or made available to the holders of Series
A Preferred Shares for the year bears to the Total Dividends.
(e) So long as any Series A Preferred Shares are outstanding, no
dividends, except as described in the immediately following sentence, shall be
declared or paid or set apart for payment on any class or series of Parity
Shares for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Series A Preferred Shares for
all Dividend Periods terminating on or prior to the dividend payment date for
such class or series of Parity Shares. When dividends are not paid in full or a
sum sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon Series A Preferred Shares and all dividends declared upon any
other class or series of Parity Shares shall be declared ratably in proportion
to the respective amounts of dividends accumulated and unpaid on the Series A
Preferred Shares and accumulated and unpaid on such Parity Shares.
(f) So long as any Series A Preferred Shares are outstanding, no
dividends (other than dividends or distributions paid solely in, or options,
warrants or rights to subscribe for or purchase, Fully Junior Shares) shall be
declared or paid or set apart for payment or other distribution declared or made
upon Junior Shares or Fully Junior Shares, nor shall any Junior Shares or Fully
Junior Shares be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Shares made for purposes of
any employee incentive or benefit plan of the Company or any subsidiary) for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any such shares) by the Company, directly or indirectly
(except by conversion into or exchange for Fully Junior Shares), unless in each
case (i) the full cumulative dividends on all outstanding Series A Preferred
Shares and any Parity Shares shall have been or contemporaneously are declared
and paid or declared and set apart for
-4-
<PAGE>
payment for all past Dividend Periods with respect to the Series A Preferred
Shares and all past dividend periods with respect to such Parity Shares and (ii)
sufficient funds shall have been or contemporaneously are declared and paid or
declared and set apart for the payment of the dividend for the current Dividend
Period with respect to the Series A Preferred Shares and the current dividend
period with respect to such Parity Shares.
(g) No dividends on Series A Preferred Shares shall be declared by the
Board of Trustees or paid or set apart for payment by the Company at such time
as the terms and provisions of any agreement of the Company, including any
agreement relating to its indebtedness, prohibits such declaration, payment or
setting apart for payment or provides that such declaration, payment or setting
apart for payment would constitute a breach thereof or a default thereunder, or
if such declaration or payment shall be restricted or prohibited by law.
Section 4. Liquidation Rights.
------------------
(a) In the event of any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, before any payment or distribution of
the assets of the Company (whether capital or surplus) shall be made to or set
apart for the holders of Junior Shares, the holders of the Series A Preferred
Shares shall be entitled to receive Twenty Five Dollars ($25.00) per Series A
Preferred Share plus an amount equal to all dividends (whether or not earned or
declared) accrued and unpaid thereon to the date of final distribution to such
holders; but such holders shall not be entitled to any further payment. If,
upon any liquidation, dissolution or winding up of the Company, the assets of
the Company, or proceeds thereof, distributable among the holders of the Series
A Preferred Shares shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares of any class or series of
Parity Shares, then such assets, or the proceeds thereof, shall be distributed
among the holders of the Series A Preferred Shares and any such Parity Shares
ratably in accordance with the respective amounts that would be payable on such
Series A Preferred Shares and any such Parity Shares if all amounts payable
thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Company with one or more corporations, real
estate investment trusts, or other entities and (ii) a sale, lease or transfer
of all or substantially all of the Company's assets shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Company.
(b) Subject to the rights of the holders of any series or class or
classes of shares of beneficial interest ranking on a parity with or prior to
the Series A Preferred Shares upon liquidation, dissolution or winding up, upon
any liquidation, dissolution or winding up of the Company, after payment shall
have been made in full to the holders of the Series A Preferred Shares, as
provided in this Section 4, any other series or class or classes of Junior
Shares or Fully Junior
-5-
<PAGE>
Shares shall, subject to the respective terms and provisions (if any) applying
thereto, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series A Preferred Shares shall not be
entitled to share therein.
Section 5. Conversion. The Series A Preferred Shares are not
----------
convertible into or exchangeable for any other property or securities of the
Company.
Section 6. Redemption at the Option of the Company.
---------------------------------------
(a) The Series A Preferred Shares shall not be redeemable by the
Company prior to November 6, 2002. On and after November 6, 2002, the Company,
at its option, may redeem the Series A Preferred Shares, in whole or in part, at
any time or from time to time, for cash at a redemption price of Twenty Five
Dollars ($25.00) per Series A Preferred Share, plus the amounts indicated in
Section 6(b).
(b) Upon any redemption of the Series A Preferred Shares pursuant to
this Section 6, the Company shall pay all accrued and unpaid dividends, if any,
thereon ending on or prior to the date of such redemption (the "Call Date"),
without interest. If the Call Date falls after a dividend payment record date
and prior to the corresponding Dividend Payment Date, then each holder of Series
A Preferred Shares at the close of business on such dividend payment record date
shall be entitled to the dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the redemption of such shares before such
Dividend Payment Date. Except as provided above, the Company shall make no
payment or allowance for unpaid dividends, whether or not in arrears, on Series
A Preferred Shares called for redemption.
(c) If full cumulative dividends on the Series A Preferred Shares and
any class or series of Parity Shares of the Company have not been declared and
paid or declared and set apart for payment, the Series A Preferred Shares or
Parity Shares may not be redeemed under this Section 6 in part and the Company
may not purchase or otherwise acquire any Series A Preferred Shares or any
Parity Shares, otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of Series A Preferred Shares or Parity Shares, as
the case may be.
(d) The redemption price of any Series A Preferred Shares called for
redemption pursuant to this Section 6 (other than any portion thereof consisting
of accrued dividends) shall be paid solely from the sale proceeds of other
capital stock of the Company and not from any other source. For purposes of the
preceding sentence, "capital stock" means any Common Shares, Preferred Shares,
depositary shares, interests, participation or other ownership interests
(however designated) and any rights (other than debt securities convertible into
or exchangeable for equity securities) or options to purchase any of the
foregoing.
-6-
<PAGE>
(e) Notice of the redemption of any Series A Preferred Shares under
this Section 6 shall be given by publication in a newspaper of general
circulation in the City of New York, such publication to be made once a week for
two successive weeks commencing not less than 30 nor more than 60 days prior to
the Call Date. A similar notice furnished by the Company will be mailed by
first-class mail, postage prepaid, by the registrar to each holder of record of
Series A Preferred Shares to be redeemed at the address of each such holder as
shown on the share transfer books of the Company, not less than 30 nor more than
60 days prior to the Call Date. No failure to give any notice required by this
Section 6(d), nor any defect therein or in the mailing thereof, to any
particular holder, shall affect the sufficiency of the notice or the validity of
the proceedings for redemption with respect to the other holders. Any notice
which was mailed in the manner herein provided shall be conclusively presumed to
have been duly given on the date mailed whether or not the holder receives the
notice. Each notice shall state: (i) the Call Date, (ii) the number of Series
A Preferred Shares to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder, (iii) the redemption price per share, (iv) the place or places at which
certificates for such shares are to be surrendered for payment of the redemption
price, and (v) that dividends on the shares to be redeemed shall cease to accrue
on such Call Date. Notice having been given as aforesaid, from and after the
Call Date, (1) dividends on the Series A Preferred Shares so called for
redemption shall cease to accrue, (2) such Series A Preferred Shares shall no
longer be deemed to be outstanding, and (3) all rights of the holders thereof as
holders of Series A Preferred Shares of the Company (except the right to receive
the cash redemption price payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so required and
to receive any dividends payable thereon) shall cease and terminate and such
shares shall not thereafter be transferred (except with the consent of the
Company) on the Company's books. The Company's obligation to provide cash in
accordance with the preceding sentence shall be deemed fulfilled if, on or
before the Call Date, the Company shall deposit with a bank or trust company
(which may be an affiliate of the Company) that has, or is an affiliate of a
bank or trust company that has, capital and surplus of at least $50,000,000, the
amount of cash necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to the redemption of the Series A
Preferred Shares so called for redemption. No interest shall accrue for the
benefit of the holders of Series A Preferred Shares to be redeemed on any cash
so set aside by the Company. If the Company elects to so deposit the cash
necessary for the redemption of the called Series A Preferred Shares, any notice
to the holders of Series A Preferred Shares called for redemption required by
this Section 6(d) shall (x) state the date of such deposit, (y) specify the
office of such bank or trust company as the place of payment of the redemption
price and (z) call upon such holders to surrender the share certificates
representing such shares at such place on or about the date fixed in such notice
(which shall not be later than the Call Date) against payment of the redemption
price (including all accrued and unpaid dividends up to the Call Date). Subject
to applicable escheat laws, any cash so deposited which
-7-
<PAGE>
remains unclaimed at the end of two years from the Call Date shall revert to the
general funds of the Company, after which reversion, again subject to applicable
escheat laws, the holders of such shares so called for redemption shall look
only to the general funds of the Company for the payment of such cash.
As promptly as practicable after the surrender in accordance with said
notice of the certificates for any such shares so redeemed (properly endorsed or
assigned for transfer, if the Company shall so require and if the notice shall
so state), such shares shall be exchanged for any cash (without interest
thereon) for which such shares have been redeemed. If fewer than all the
outstanding Series A Preferred Shares are to redeemed, the shares to be redeemed
shall be determined pro rata (as nearly as practicable without creating
fractional shares) or by lot or in such other equitable manner as prescribed by
the Company's Board of Trustees in its sole discretion to be equitable. If
fewer than all the Series A Preferred Shares represented by any certificate are
redeemed, then new certificates representing the unredeemed shares shall be
issued without cost to the holder thereof.
Section 7. Shares to be Retired. All Series A Preferred Shares which
--------------------
shall have been issued and reacquired in any manner by the Company shall be
restored to the status of authorized but unissued Preferred Shares of the
Company, without designation as to class or series.
Section 8. Ranking. Any class or series of shares of beneficial
-------
interest of the Company shall be deemed to rank:
(a) prior to the Series A Preferred Shares, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, if the holders of such class or series of shares of beneficial
interest shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of Series A Preferred Shares;
(b) on a parity with the Series A Preferred Shares, as to the payment
of dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Series A Preferred Shares, if the holders of such class or series of shares
of beneficial interest and the Series A Preferred Shares shall be entitled to
the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued
and unpaid dividends per share or liquidation preferences, without preference or
priority one over the other ("Parity Shares");
(c) junior to the Series A Preferred Shares, as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, if such shares of beneficial of interest shall be Junior Shares; and
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<PAGE>
(d) junior to the Series A Preferred Shares, as to the payment of
dividends and as to the distribution of assets upon liquidation dissolution or
winding up, if such shares of stock shall be Fully Junior Shares.
Section 9. Voting.
------
(a) If and whenever dividends on the Series A Preferred Shares are in
arrears (which shall, with respect to any such quarterly dividend, mean that any
such dividend has not been paid in full) for six or more quarterly periods,
whether or not such quarterly periods are consecutive, the number of Trustees
then constituting the Board of Trustees shall be increased by two, and the
holders of Series A Preferred Shares, together with the holders of shares of
every series of Parity Shares upon which like voting rights have been conferred
and are exercisable, voting as a single class regardless of series, shall be
entitled to elect the two additional Trustees to serve on the Board of Trustees
at any annual meeting of shareholders or special meeting held in place thereof,
or at a special meeting of the holders of the Series A Preferred Shares and such
Parity Shares called as hereinafter provided. Whenever all arrears in dividends
on the Series A Preferred Shares and such Parity Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, then the right of
the holders of the Series A Preferred Shares and such Parity Shares to elect
such additional two Trustees shall immediately cease (but subject always to the
same provision for the vesting of such voting rights in the case of any similar
future arrearages), and the terms of office of all persons elected as Trustees
by the holders of the Series A Preferred Shares and such Parity Shares shall
immediately terminate and the number of the Board of Trustees shall be reduced
accordingly. At any time after such voting rights shall have been so vested in
the holders of Series A Preferred Shares and such Parity Shares, the secretary
of the Company may, and upon the written request of any holder of Series A
Preferred Shares (addressed to the secretary at the principal office of the
Company) shall, call a special meeting of the holders of the Series A Preferred
Shares and of such Parity Shares for the election of the two Trustees to be
elected by them as herein provided, such call to be made by notice similar to
that provided in the Bylaws of the Company for a special meeting of the
shareholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the secretary within 20 days
after receipt of any such request, then any holder of Series A Preferred Shares
may call such meeting, upon the notice above provided, and for that purpose
shall have access to the share records of the Company. The Trustees elected at
any such special meeting shall hold office until the next annual meeting of the
shareholders or special meeting held in lieu thereof if such office shall not
have previously terminated as above provided. If any vacancy shall occur among
the Trustees elected by the holders of the Series A Preferred Shares and such
Parity Shares, a successor shall be elected by the Board of Trustees, upon the
nomination of the then-remaining director elected by the holders of the Series A
Preferred Shares and such Parity Shares or
-9-
<PAGE>
the successor of such remaining Trustee, to serve until the next annual meeting
of the shareholders or special meeting held in place thereof if such office
shall not have previously terminated as provided above.
(b) So long as any Series A Preferred Shares remain outstanding, the
Company will not, without the affirmative vote or consent of the holders of at
least two-thirds of the Series A Preferred Shares outstanding at the time, given
in person or by proxy, either in writing or at a meeting (such series voting
separately as a class), (i) authorize or create, or increase the authorized or
issued amount of, any class or series of capital shares ranking prior to the
Series A Preferred Shares with respect to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or reclassify
any authorized shares of the Company into such shares, or create, authorize or
issue any obligation or security convertible into or evidencing the right to
purchase any such shares; or (ii) amend, alter or repeal the provisions of the
Charter, including these Articles Supplementary, whether by merger,
consolidation or otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of the Series A
Preferred Shares or the holders thereof; provided, however, with respect to the
occurrence of any of the Events set forth in (ii) above, that so long as the
Series A Preferred Shares remain outstanding with the terms thereof materially
unchanged, taking into account that upon the occurrence of an Event, the Company
may not be the surviving entity, the occurrence of any such Event shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting power of holders of Series A Preferred Shares and provided further
that (x) any increase in the amount of the authorized Preferred Shares or the
creating or issuance of any other series of Preferred Shares, or (y) any
increase in the amount of authorized Series A Preferred Shares or any other
series of Preferred Shares, in each case ranking on a parity with or junior to
the Series A Preferred Shares with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers. The voting provisions set forth in this paragraph (b) will
not apply if, at or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all outstanding Series A
Preferred Shares shall have been redeemed or called for redemption and
sufficient funds shall have been deposited in trust to effect such redemption.
(c) For purposes of the foregoing provisions of this Section 9, each
Series A Preferred Share shall have one (1) vote per share, except that when any
other series of Preferred Shares shall have the right to vote with the Series A
Preferred Shares as a single class on any matter, then the Series A Preferred
Shares and such other series shall have with respect to such matters one (1)
vote per $25.00 of stated liquidation preference. Except as otherwise required
by applicable law or as set forth herein, the Series A Preferred Shares shall
not have any relative, participating, optional or other special voting rights
and powers, and
-10-
<PAGE>
the consent of the holders thereof shall not be required for the taking of any
corporate action.
Section 10. Record Holders. The Company and the Transfer Agent may
--------------
deem and treat the record holder of any Series A Preferred Shares as the true
and lawful owner thereof for all purposes, and neither the Company nor the
Transfer Agent shall be affected by any notice to the contrary.
Section 11. Sinking Fund. The Series A Preferred Shares shall not be
------------
entitled to the benefits of any retirement or sinking fund.
Section 12. Restrictions on Ownership and Transfer. The beneficial
--------------------------------------
ownership and transfer of the Series A Preferred Shares shall in all respects be
subject to the applicable provisions of Section 6.7 of the Charter.
IN WITNESS WHEREOF, the Company has caused these Articles
Supplementary to be signed in its name and on its behalf by its Chief Financial
Officer as of November 3, 1997.
COLONIAL PROPERTIES TRUST
By: /s/ Howard B. Nelson, Jr.
-------------------------
Howard B. Nelson, Jr.
Chief Financial Officer
-11-
<PAGE>
Exhibit 5.1
[LETTERHEAD OF HOGAN & HARTSON L.L.P.]
November 5, 1997
Board of Trustees
Colonial Properties Trust
2101 Sixth Avenue North
Suite 750
Birmingham, Alabama 35202
Ladies and Gentlemen:
We are acting as counsel to Colonial Properties Trust, an Alabama real
estate investment trust (the "Company"), in connection with its registration
statement on Form S-3 (SEC File No. 333-18259) (the "Registration Statement"),
previously declared effective by the Securities and Exchange Commission,
relating to the proposed public offering of securities of the Company that may
be offered and sold by the Company from time to time as set forth in the
prospectus which forms a part of the Registration Statement (the "Prospectus"),
and as to be set forth in one or more supplements to the Prospectus (each, a
"Prospectus Supplement"). This opinion letter is rendered in connection with
the proposed public offering of up to 5,750,000 shares (the "Shares") of Series
A Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $.01
per share (the "Series A Preferred Shares"), of the Company, as described in a
Prospectus Supplement dated November 3, 1997. This opinion letter is furnished
to you at your request to enable you to fulfill the requirements of Item
601(b)(5) of Regulation S-K, 17 C.F.R. (S) 229.601(b)(5), in connection with the
Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Declaration of Trust of the Company, as certified by the
Secretary of the Company on the date hereof as being complete,
accurate and in effect.
<PAGE>
Board of Trustees
Colonial Properties Trust
November 5, 1997
Page 2
3. The Bylaws of the Company, as certified by the Secretary of the
Company on the date hereof as being complete, accurate and in
effect.
4. Certain resolutions of the Board of Trustees of the Company
adopted at a meeting duly held on January 23, 1997, approving and
confirming the preparation, execution and filing of the
Registration Statement, as certified by the Secretary of the
Company on the date hereof as being complete, accurate and in
effect.
5. Certain resolutions of the Board of Trustees of the Company
adopted at a meeting held on October 23, 1997, and of the Pricing
Committee of the Board of Trustees adopted on November 3, 1997,
as certified by the Secretary of the Company on the date hereof
as being complete, accurate and in effect, relating to, among
other things, the establishment of the Series A Preferred Shares,
the authorization of the Underwriting Agreement (as defined
below) and the Terms Agreement (as defined below) and
arrangements in connection therewith, and the authorization of
the issuance of the Shares on the terms set forth in the Terms
Agreement.
6. Executed copies of the Underwriting Agreement dated November 3,
1997 among the Company, Colonial Realty Limited Partnership (the
"Operating Partnership") and certain Underwriters named therein
(the "Underwriting Agreement") and the Terms Agreement dated
November 3, 1997 among the Company, the Operating Partnership and
certain Underwriters named therein (the "Terms Agreement").
7. Opinion letter, of even date herewith, of Sirote & Permutt, P.C.,
special counsel to the Company in the State of Alabama.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents and the conformity to authentic original documents of all
documents submitted to us as copies (including telecopies). This opinion letter
is given, and all statements herein are made, in the context of the foregoing.
<PAGE>
Board of Trustees
Colonial Properties Trust
November 5, 1997
Page 3
This opinion letter is based as to matters of law solely on the
Alabama Real Estate Investment Trust Act of 1995, and we express no opinion
herein as to any other laws, statutes, regulations or ordinances. In rendering
this opinion letter, we are relying, to the extent that the laws of Alabama are
relevant (without any independent verification or investigation), upon the
opinion letter of Sirote & Permutt, P.C., special counsel to the Company in the
State of Alabama, described in paragraph 7 above, with respect to the matters
addressed therein.
Based upon, subject to and limited by the foregoing, we are of the
opinion that, following issuance of the Shares pursuant to the terms of the
Underwriting Agreement and the Terms Agreement and receipt by the Company of the
consideration for the Shares specified in the resolutions of the Board of
Trustees and the Pricing Committee described in paragraph 5 above, the Shares
will be validly issued, fully paid and nonassessable under the Alabama Real
Estate Investment Trust Act of 1995.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely in connection with the filing by the Company of a Current Report
on Form 8-K on the date hereof, which Form 8-K will be incorporated by reference
into the Registration Statement. We hereby consent to the filing of this
opinion letter as Exhibit 5.1 to the above-described Form 8-K and to the
reference to this firm under the caption "Legal Matters" in the Prospectus and
the Prospectus Supplement. In giving this consent, we do not thereby admit that
we are an "expert" within the meaning of the Securities Act of 1933, as amended.
Subject to the foregoing consent, this opinion letter should not be quoted in
whole or in part or otherwise be referred to, nor filed with or furnished to any
governmental agency or other person or entity, without the prior written consent
of this firm.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE>
Exhibit 5.2
[LETTERHEAD OF SIROTE & PERMUTT APPEARS HERE]
November 5, 1997
Board of Trustees
Colonial Properties Trust
2101 Sixth Avenue North
Suite 750
Birmingham, AL 35202
Ladies and Gentlemen:
We have acted as special Alabama counsel to Colonial Properties Trust,
an Alabama real estate investment trust (the "Company"), in connection with its
registration statement of Form S-3 (SEC File No. 333-18259) (the "Registration
Statement") previously declared effective by the Securities and Exchange
Commission relating to the proposed public offering of securities of the Company
that may be offered and sold by the Company from time to time as set forth in
the prospectus which forms a part of the Registration Statement (the
"Prospectus"), and as to be set forth in one or more supplements to the
Prospectus (each, a "Prospectus Supplement"). This opinion letter is rendered in
connection with the proposed public offering of up to 5,000,000 8 3/4% Series A
Cumulative Redeemable Preferred Shares, par value $.01 per share (the "Shares"),
of the Company, as described in a Prospectus Supplement dated November 3, 1997.
This opinion letter is furnished to you at your request to enable you to
fulfill the requirements of Item 601(b)(5) of Regulations S-K, 17 C.F.R.
(S)229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Declaration of Trust of the Company, as amended (the "Declaration
of Trust"), as certified by the Secretary of the Company on the date hereof as
then being complete, accurate and in effect.
<PAGE>
Board of Trustees
Colonial Properties Trust
November 5, 1997
Page 2
3. The Bylaws of the Company, as certified by the Secretary of the
Company on the date hereof as then being complete, accurate and in effect.
4. Certain resolutions of the Board of Trustees of the Company adopted
at a meeting held on January 23, 1997, approving and ratifying the preparation,
execution and filing of the Registration Statement, as certified by the
Secretary of the Company on the date hereof as being complete, accurate and in
effect.
5. Certain resolutions of the Board of Trustees of the Company adopted
at a meeting held on October 23, 1997, and of the Pricing Committee of the Board
of Trustees adopted on November 3, 1997, as certified by the Secretary of the
Company on the date hereof as being complete, accurate and in effect, relating
to, among other things, authorization of the Underwriting Agreement (as defined
below) and the Terms Agreement (as defined below) and arrangements in connection
therewith, and authorization of the issuance of the Shares on the terms set
forth in the Terms Agreement.
6. Executed copies of the Underwriting Agreement dated November 3,
1997 among the Company, Colonial Realty Limited Partnership ("the Operating
Partnership") and certain Underwriters named therein (the "Underwriting
Agreement") and the Terms Agreement dated November 3, 1997 between the Company,
the Operating Partnership and certain Underwriters named therein (the "Terms
Agreement").
7. Opinion Letter, of even date herewith, of Hogan & Hartson L.L.P.,
counsel to the Company.
We have not, except as specifically identified above, made any
independent review or investigation of factual or other matters, including the
organization, existence, good standing, assets, business or affairs of the
Company. In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all documents submitted to us as
originals, the conformity to the original documents of all documents submitted
to us as certified, telecopied, photostatic, or reproduced copies, and the
authenticity, accuracy and completeness of the originals of such latter
documents. This opinion letter is given, and all statements herein are made, in
the context of the foregoing.
This opinion letter is based as to matters of law solely on the Alabama
Real Estate Investment Trust Act of 1995 and we express no opinion herein as to
any other laws, statutes regulations, or ordinances.
<PAGE>
Board of Trustees
Colonial Properties Trust
November 5, 1997
Page 3
Based upon, subject to, and limited by the foregoing, we are of the
opinion that following issuance of the Shares pursuant to the terms of the
Underwriting Agreement and receipt by the Company of the consideration for the
Shares specified in the resolutions of the Board of Trustees and the Pricing
Committee and as set forth in the Terms Agreement referred to above, the Shares
will be validly issued, fully paid and nonassessable under the Alabama Real
Estate Investment Trust Act of 1995.
In accordance with the general policies of this law firm in rendering
legal opinions, we have assumed for the purposes of the opinions expressed
herein that no fraud exists with respect to any of the matters relevant to the
opinions expressed herein, although we have no reason to believe that there
exists any fraud which would render invalid the opinions expressed below.
We are members of the Bar of the State of Alabama, and we do not express
any opinion concerning any law other than the law of the State of Alabama and
the Federal law of the United States. We assume no obligation to advise you of
any changes in the foregoing subsequent to delivery of this opinion letter. This
opinion letter has been prepared solely in connection with the filing by the
Company of a Current Report on Form 8-K on the date hereof, which Form 8-K will
be incorporated by reference into the Registration Statement. This opinion
letter should not be quoted in whole or in part or otherwise be referred to, nor
filed with or furnished to any governmental agency or other person or entity,
without the prior written consent of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5.2 to
the Form 8-K of the Company and to the reference to this firm under the caption
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement. In giving this consent, we do not thereby admit that we are an
"expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
