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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
DECEMBER 18, 1996
AVALON PROPERTIES, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
MARYLAND 1-12452 06-1379111
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
</TABLE>
15 RIVER ROAD, WILTON, CONNECTICUT 06897
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
203-761-6500
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ITEM 5. OTHER EVENTS
On December 13, 1996 Avalon Properties, Inc. sold 2,645,000 shares
(including the over-allotment option of 345,000 shares) of Common Stock to
PaineWebber Incorporated under its existing shelf registration statement at a
per share price to the public of $26 1/4. The Company intends to use the net
cash proceeds from the sale of the Common Stock (approximately $104,113,750) to
repay outstanding indebtedness, to fund the acquisition and development of
additional apartment communities and for general corporate purposes.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED:
Not Applicable
(b) PRO FORMA FINANCIAL INFORMATION:
Not Applicable
(c) EXHIBITS:
Exhibit No.
1.1 Underwriting Agreement dated December 9, 1996.
1.2 Price Determination Agreement dated December 9, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 18, 1996 AVALON PROPERTIES, INC.
/s/ Thomas J. Sargeant
----------------------------
By: Thomas J. Sargeant
Chief Financial Officer
and Treasurer
341391.c1
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EXHIBIT 1.1
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2,300,000 Shares
AVALON PROPERTIES, INC.
Common Stock
(par value $0.01 per share)
UNDERWRITING AGREEMENT
December 9, 1996
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Avalon Properties, Inc., a Maryland corporation (the
``COMPANY''), proposes to sell an aggregate of 2,300,000 shares (the ``FIRM
SHARES'') of the Company's Common Stock, $.01 par value per share (the ``COMMON
SHARES''), to you in connection with the offering and sale of the Firm Shares.
The Company has also agreed to grant to you an option (the ``OPTION'') to
purchase up to an additional 345,000 Common Shares (the ``OPTION SHARES'') on
the terms and for the purposes set forth in Section 1(b) hereof. The Firm
Shares and the Option Shares are hereinafter collectively referred to as the
``SHARES''.
The public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by you shall be agreed upon
by the Company and you, and such agreement shall be set forth in a separate
written instrument substantially in the form of Exhibit A hereto (the ``PRICE
DETERMINATION AGREEMENT''). The Price Determination Agreement may take the
form of an exchange of any standard form of written telecommunication among the
Company and you and shall specify such applicable information as is indicated
in Exhibit A hereto. The offering of the Shares will be governed by this
Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context otherwise indicates, all references contained herein to ``this
Agreement'' and to the phrase ``herein'' shall be deemed to include, the Price
Determination Agreement.
The Company confirms as follows its agreements with you:
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1. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations,
warranties and agreements of the Company herein contained and subject to all
the terms and conditions of this Agreement, the Company agrees to sell to you,
and you agree to purchase from the Company at the purchase price per share for
the Firm Shares to be agreed upon by you and the Company in accordance with
Section 1(c) hereof and set forth in the Price Determination Agreement, the
number of Firm Shares set forth on Schedule I.
(b) Subject to all the terms and conditions of
this Agreement, the Company grants the Option to you to purchase up to 262,500
Option Shares from the Company at the same price per share as you shall pay for
the Firm Shares. The Option may be exercised only to cover over-allotments in
the sale of the Firm Shares by you and may be exercised in whole or in part at
any time (but not more than once) on or before the 30th day after the date of
this Agreement, upon written or telegraphic notice (the ``OPTION SHARES
NOTICE'') by you to the Company. The date for the closing of the sale of the
Option Shares (the ``OPTION CLOSING DATE'') shall be determined by you but
shall be no later than 10 days after delivery of the Option Shares Notice. On
the Option Closing Date, the Company will issue and sell to you the number of
Option Shares set forth in the Option Shares Notice. The right to purchase the
Option Shares or any portion thereof may be surrendered and terminated at any
time upon notice by you to the Company.
(c) The public offering price per share for the
Firm Shares and the purchase price per share for the Firm Shares to be paid by
you shall be agreed upon and set forth in the Price Determination Agreement.
2. DELIVERY AND PAYMENT. Delivery of the Firm Shares
shall be made to you at the office of PaineWebber Incorporated, 1285 Avenue of
the Americas, New York, New York against payment of the purchase price by wire
transfer of same-day funds to the Company. Such payments shall be made at
10:00 a.m., New York City time, on the fourth business day following the date
of this Agreement (or if the New York Stock Exchange or American Stock Exchange
or commercial banks in the City of New York are not open on such day, the next
day on which such exchanges and banks are open), or at such time on such other
date, not later than eight full business days after the date of this Agreement,
as may be agreed upon by the Company and you (such date is hereinafter referred
to as the ``CLOSING DATE'').
To the extent the Option is exercised, delivery of the Option
Shares against payment by you (in the manner specified above) will take place
at the offices specified above at the time and date (which may be the Closing
Date) specified in the Option Shares Notice.
If requested by you, certificates evidencing the Shares shall
be in definitive form
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and shall be registered in such names and in such denominations as you shall
request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the
Shares, the Company agrees to make such certificates available for inspection
at least 24 hours prior to the Closing Date or the Option Closing Date, as the
case may be.
The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Firm Shares and Option Shares by the
Company to you shall be borne by the Company. The Company will pay and save
you and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
you of the Firm Shares and Option Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents, warrants and covenants to you that:
(a) The Company meets the requirements for use of
Form S-3 and a registration statement (Registration No. 333-00766) on Form S-3
relating to the Shares, including a prospectus, has been carefully prepared by
the Company in conformity with the requirements of the Securities Act of 1933,
as amended (the ``ACT''), and the rules and regulations (the ``RULES AND
REGULATIONS'') of the Securities and Exchange Commission (the ``COMMISSION'')
thereunder and has been filed with the Commission and has become effective.
Such registration statement and prospectus may have been amended or
supplemented prior to the date of this Agreement; any such amendment or
supplement was so prepared and filed, and any such amendment filed after the
effective date of such registration statement has become effective. No stop
order suspending the effectiveness of the registration statement has been
issued, and no proceeding for that purpose has been instituted or, to the
Company's knowledge, threatened by the Commission. Copies of such registration
statement and prospectus, any such amendments or supplements and all documents
incorporated by reference therein that were filed with the Commission on or
prior to the date of this Agreement have been delivered to you. A prospectus
supplement (the ``PROSPECTUS SUPPLEMENT'') setting forth the terms of the
Common Shares and of their sale and distribution has been or will be so
prepared and will be filed pursuant to Rule 424(b) of the Rules and Regulations
on or before the second business day after the date hereof (or such earlier
time as may be required by the Rules and Regulations). The registration
statement, as it may have heretofore been amended, is referred to herein as the
``REGISTRATION STATEMENT,'' and the final form of prospectus included in the
Registration Statement, as supplemented by the Prospectus Supplement, is
referred to herein as the ``PROSPECTUS''. Each form of Prospectus, or
Prospectus and Prospectus Supplement heretofore made available for use in
offering the Shares is referred to herein as a ``PRELIMINARY PROSPECTUS.'' Any
reference herein to the Registration Statement, the Prospectus, any amendment
or supplement thereto or any Preliminary Prospectus shall be deemed to refer to
and include the exhibits thereto (or, in the case of the Prospectus or
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Preliminary Prospectus, to the exhibits to the Registration Statement) and the
documents incorporated by reference therein, and any reference herein to the
terms ``amend,'' ``amendment'' or ``supplement'' with respect to Registration
Statement or Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed to be
incorporated by reference therein.
(b) Each part of the Registration Statement, when
such part became or becomes effective, each Preliminary Prospectus on the date
of filing thereof with the Commission, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission and at
the Closing Date, and if later, the Option Closing Date, including the
financial statements included or to be included or incorporated by reference or
to be incorporated by reference into the Prospectus, conformed or will conform
in all material respects with the requirements of the Act, the Securities
Exchange Act of 1934, as amended (the ``EXCHANGE ACT''), the rules and
regulations thereunder (the ``EXCHANGE ACT RULES AND REGULATIONS'') and the
Rules and Regulations and will contain all statements required to be stated
therein in accordance with the Act, the Exchange Act, the Exchange Act Rules
and Regulations and the Rules and Regulations; each part of the Registration
Statement, when such part became or becomes effective, did not or will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; each Preliminary Prospectus on the date of filing thereof with the
Commission, and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at the Closing Date, did not or
will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to you furnished in writing to the Company by you specifically for
inclusion in the Registration Statement or Prospectus or any amendment or
supplement thereto. The Company acknowledges that the statements set forth
under the heading ``Underwriting'' in the Registration Statement, the
Preliminary Prospectus and the Prospectus constitute the only information
relating to you furnished in writing to the Company by you expressly for
inclusion in the Registration Statement, the Preliminary Prospectus or the
Prospectus. The Company has not distributed any offering material in
connection with the offering or sale of the Shares other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or any other materials,
if any, permitted by the Act.
(c) The documents incorporated or to be
incorporated by reference in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any Preliminary Prospectus or from which
information is so incorporated by reference, when they became or become
effective or were or are filed with the Commission, as the case may be,
complied or will comply in all material respects with the requirements of the
Act or the Exchange Act, as applicable, the Exchange Act Rules and Regulations
and the Rules and Regulations.
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(d) The only subsidiaries (as defined in the
Rules and Regulations) of the Company are the subsidiaries listed on Exhibit C
hereto (the ``SUBSIDIARIES''). The Company and each of its subsidiaries is,
and at the Closing Date will be, an entity duly organized or formed, as the
case may be, and, in the case of an entity that is not a general partnership,
validly existing and in good standing under the laws of the jurisdiction of its
organization or incorporation. The Company and each of its subsidiaries has,
and at the Closing Date will have, full power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by
it and to conduct its business as described in the Registration Statement and
the Prospectus. The Company and each of its subsidiaries is, and at the
Closing Date will be, duly licensed or qualified to do business and is and will
be in good standing as a corporation, limited liability company or limited
partnership, as the case may be, in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased
by it makes such licensing or qualification necessary except where the failure
to be so qualified does not have a material adverse effect on the business,
properties, financial position or results of the Company and its subsidiaries,
taken as a whole. Except for the stock or other equity interests of the
subsidiaries and as disclosed in the Registration Statement, the Company does
not own, and at the Closing Date will not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity. Complete and correct copies of the
Amended and Restated Articles of Incorporation and Amended and Restated Bylaws
of the Company and the charter documents of each of its subsidiaries and all
amendments thereto have been delivered to you, and no changes therein will be
made subsequent to the date hereof and prior to the Closing Date or, if later,
the Option Closing Date.
(e) The outstanding Common Shares, the
outstanding shares of 9% of Series A Cumulative Redeemable Preferred Stock,
$.01 par value (the ``SERIES A PREFERRED'') and the outstanding shares of 8.96%
Series B Cumulative Redeemable Preferred Stock, $.01 par value (the ``SERIES B
PREFERRED''), of the Company have been, and the Shares to be issued and sold by
the Company upon such issuance and payment pursuant hereto of the purchase
price thereof will be, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right. The
description of the Shares in the Registration Statement and the Prospectus is,
and at the Closing Date will be, in all material respects, complete and
accurate. Except as set forth in the Registration Statement, the Company does
not have outstanding, and at the Closing Date will not have outstanding, any
options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any Common Shares, Series A Preferred or Series B Preferred, any
shares of capital stock of any subsidiary or any such warrants, convertible
securities or obligations.
(f) The financial statements and schedules of the
Company included or incorporated by reference in the Registration Statement or
the Prospectus present fairly the consolidated financial condition of the
Company as of the respective dates thereof and the
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consolidated results of operations and cash flows of the Company for the
respective periods covered thereby, except in the case of interim unaudited
financial statements, for normal recurring year end adjustments, all in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. No other financial statements or schedules of the
Company are required by the Act, the Exchange Act or the Rules and Regulations
to be included in the Registration Statement or the Prospectus. Coopers &
Lybrand L.L.P., independent public accountants (the ``ACCOUNTANTS''), who have
reported on those of such financial statements and schedules which are audited,
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations. The statements included in the Registration
Statement with respect to the Accountants pursuant to Rule 509 of Regulation
S-K of the Rules and Regulations are true and correct in all material respects.
(g) The Company maintains a system of internal
accounting control sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(h) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus and
prior to the Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been and will not
have been any change in the capitalization of the Company, or in the business,
properties, business prospects, condition (financial or otherwise) or results
of operations of the Company and its subsidiaries, arising for any reason
whatsoever, (ii) neither the Company nor any of its subsidiaries has incurred
nor will it incur any material liabilities or obligations, direct or
contingent, nor has it entered into nor will it enter into any material
transactions other than pursuant to this Agreement and the transactions
referred to herein and (iii) the Company has not and will not have paid or
declared any dividends or other distributions of any kind on any class of its
capital stock.
(i) The Company is not an ``investment company''
or an ``affiliated person'' of, or ``promoter'' or ``principal underwriter''
for, an ``investment company,'' as such terms are defined in the Investment
Company Act of 1940, as amended.
(j) Except as set forth in the Registration
Statement and the Prospectus, there are no actions, suits or proceedings
pending or, to the Company's best knowledge, threatened against or affecting
the Company or any of its subsidiaries or any of their respective officers in
their capacity as such, before or by any Federal or state court, commission,
regulatory
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body, administrative agency or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision or finding might materially and
adversely affect the Company or any of its subsidiaries or its business,
properties, business prospects, condition (financial or otherwise) or results
of operations.
(k) The Company and each of its subsidiaries has,
and at the Closing Date will have, (i) all governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to carry on its
business as contemplated in the Prospectus, (ii) complied in all respects with
all laws, regulations and orders applicable to it or its business and (iii)
performed all its obligations required to be performed by it, and is not, and
at the Closing Date will not be, in default, under any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement, lease, contract or other agreement or instrument (collectively, a
``CONTRACT OR OTHER AGREEMENT'') to which it is a party or by which its
property is bound or affected, the violation of which would have a material
adverse effect on the business, properties, financial position or results of
operations of the Company and its subsidiaries, taken as a whole. To the best
knowledge of the Company and each of its subsidiaries, no other party under any
contract or other agreement to which it is a party is in default in any
material respect thereunder. The Company is not, nor at the Closing Date will
be, in violation of any provision of its Amended and Restated Articles of
Incorporation or Amended and Restated Bylaws. No subsidiary of the Company is,
nor at the Closing Date will any of them be, in violation of any provision in
their respective charter documents.
(l) No consent, approval, authorization or order
of, or any filing or declaration with, any court or governmental agency or body
is required for the consummation by the Company of the transactions on its part
herein contemplated, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution by you of the
Shares to be sold by the Company.
(m) The Company has full corporate power and
corporate authority to enter into this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof. The performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or any of its subsidiaries pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any other party a right
to terminate any of its obligations under, or result in the acceleration of any
obligation under, the Amended and Restated Articles of Incorporation, Amended
and Restated Bylaws of the Company or the charter documents of any of its
subsidiaries, any contract or other agreement to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of its properties is bound or affected, or violate or conflict with any
judgment, ruling,
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decree, order, statute, rule or regulation of any court or other governmental
agency or body applicable to the business or properties of the Company or any
of its subsidiaries.
(n) The Company and each of its subsidiaries has
good and marketable title to all properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges, encumbrances
or restrictions, except such as (i) are described in the Prospectus or (ii) are
not material to the business of the Company or its subsidiaries, taken as a
whole. The Company and each of its subsidiaries has valid, subsisting and
enforceable leases for the properties described in the Prospectus as leased by
it, with such exceptions as are not material and do not materially interfere
with the use made and proposed to be made of such properties by the Company and
such subsidiaries; no tenant under any of the leases pursuant to which the
Company leases its properties has an option or right of first refusal to
purchase the premises demised under such lease; the use and occupancy of each
of the properties of the Company complies in all material respects with all
applicable codes and zoning laws and regulations; the Company has no knowledge
of any pending or threatened condemnation or zoning change that will in any
material respect affect the size of, use of, improvements of, construction on,
or access to any of the properties of the Company; and the Company has no
knowledge of any pending or threatened proceeding or action that will in any
manner affect the size of, use of, improvements on, construction on, or access
to any of the properties of the Company.
(o) Title insurance in favor of the Company is
maintained with respect to (i) each of the Current Communities (as such term is
defined in the Prospectus) in an amount at least equal to the cost of
acquisition of such Current Community and (ii) each of the Development
Communities (as such term is defined in the Prospectus) in an amount at least
equal to the total budgeted cost of such Development Community, except, in each
case, where the failure to maintain such title insurance would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries taken as a whole. Title insurance in favor of the mortgagee is
maintained in an amount equal to the maximum commitment of the related loan.
(p) The Company has no knowledge of (i) the
unlawful presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, ``HAZARDOUS MATERIALS'') on any of
the properties owned by it, or (ii) any unlawful spills, releases, discharges
or disposal of Hazardous Materials that have occurred or are presently
occurring off such properties as a result of any construction on or operation
and use of such properties, which presence or occurrence would have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
taken as a whole. In connection with the construction or operation and use of
the properties owned by the Company, the Company represents that, as of the
date of this Agreement, it has no knowledge of any failure to comply with all
applicable local, state and federal environmental laws, regulations, ordinances
and administrative and judicial orders relating to the generation, recycling,
reuse, sale, storage, handling, transport and disposal of any Hazardous
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Materials, which failure 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 taken as a whole.
(q) Property and casualty insurance in favor of
the Company is maintained with respect to each of the properties owned by it in
an amount and on such terms as is reasonable and customary for businesses of
this type.
(r) There is no document or contract of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which is
not described or filed as required. All such contracts and all contracts
relating to any tax exempt financings to which the Company or any subsidiary is
a party have been duly authorized, executed and delivered by the Company or
such subsidiary, constitute valid and binding agreements of the Company or such
subsidiary and are enforceable against the Company or such subsidiary in
accordance with the terms thereof.
(s) No statement, representation, warranty or
covenant made by the Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to you was or will be, when
made, inaccurate, untrue or incorrect.
(t) Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares.
(u) No holder of securities of the Company has
rights to the registration of any securities of the Company because of the
filing of the Registration Statement.
(v) The Company has applied to list the Shares on
the New York Stock Exchange.
(w) Neither the Company nor any of its
subsidiaries is involved in any material labor dispute nor, to the knowledge of
the Company, is any such dispute threatened.
(x) Neither the Company nor any of its
subsidiaries nor, to the Company's knowledge, any employee or agent of the
Company or any subsidiary has made any payment of funds of the Company or any
subsidiary or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus.
(y) The Company has continuously been organized
and operated in conformity with the requirements for qualification as a real
estate investment trust under the
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Internal Revenue Code of 1986, as amended (the ``CODE'') for all taxable years
commencing with its taxable year ended December 31, 1993. The Company has
filed an election to be taxable as a real estate investment trust for its
taxable year ended December 31, 1993, and such election has not been
terminated. The Company's method of operation will permit it to continue to
meet the requirements for taxation as a real estate investment trust under the
Code. The Company intends to continue to operate in a manner which would
permit it to qualify as a real estate investment trust under the Code.
4. AGREEMENTS OF THE COMPANY. The Company agrees with
you as follows:
(a) The Company will cause the Prospectus
Supplement to be filed as required by Section 3(a) hereof (but only if you have
not reasonably objected thereto by notice to the Company after having been
furnished a copy within a reasonable time prior to filing) and will notify you
promptly of such filing. The Company will not during such period as the
Prospectus is required by law to be delivered in connection with sales of the
Shares by you or a dealer, file any amendment or supplement to the Registration
Statement or the Prospectus, unless a copy thereof shall first have been
submitted to you within a reasonable period of time prior to the filing thereof
and you shall not have objected thereto in good faith.
(b) The Company will notify you promptly, and
will confirm such advice in writing, (1) when any post-effective amendment to
the Registration Statement becomes effective, (2) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (3) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose or the threat thereof, (4)
of the happening of any event during the period mentioned in the second
sentence of Section 4(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading and (5) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any Preliminary Prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment.
(c) The Company will furnish to you without
charge two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto (including any document filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus).
(d) The Company will comply with all the
provisions of any undertakings contained in the Registration Statement.
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(e) The Company will deliver to you, without
charge, as many copies of the Prospectus containing the Prospectus Supplement
or any amendment or supplement thereto as you may reasonably request. The
Company consents to the use of the Prospectus or any amendment or supplement
thereto by you and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur
which in the judgment of the Company or your counsel should be set forth in the
Prospectus in order to make any statement therein, in the light of the
circumstances under which it was made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement
or amendment thereto, and will deliver to you, without charge, such number of
copies of such supplement or amendment to the Prospectus as you may reasonably
request. The Company shall not file any document under the Exchange Act before
the termination of the offering of the Shares by you if such document would be
deemed to be incorporated by reference into the Prospectus to which you
reasonably object.
(f) Prior to any public offering of the Shares
the Company will cooperate with you and your counsel in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you may request including,
without limitation, other jurisdictions outside of the United States; provided,
that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action which
would subject it to general service of process in any jurisdiction where it is
not now so subject.
(g) During the period of five years commencing on
the date hereof, the Company will furnish to you copies of such financial
statements and other periodic and special reports as the Company may from time
to time distribute generally to the holders of any class of its capital stock,
and will furnish to you a copy of each annual or other report it shall be
required to file with the Commission.
(h) The Company will make generally available to
holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the end of the
Company's current fiscal quarter, an earnings statement (which need not be
audited but shall be in reasonable detail) for a period of 12 months beginning
after the date upon which the Prospectus Supplement is filed pursuant to Rule
424 under the Act, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by you, all fees, costs and expenses incident to
the performance of the obligations of the Company under this Agreement,
including but not limited to fees, costs and expenses of or relating to (1) the
16
<PAGE> 13
preparation, printing and filing of the Registration Statement and exhibits to
it, each Preliminary Prospectus, the Prospectus and any amendment or supplement
to the Registration Statement or the Prospectus, (2) the preparation and
delivery of certificates representing the Shares, (3) the printing of this
Agreement and any Dealer Agreements, (4) furnishing (including costs of
shipping and mailing) such copies of the Registration Statement, the Prospectus
and any Preliminary Prospectus, and all amendments and supplements thereto, as
may be requested for use in connection with the offering and sale of the Shares
by you or by dealers to whom Shares may be sold, (5) the listing of the Shares
on the New York Stock Exchange, (6) filings required to be made by or on behalf
of the Company or you, including without limitation filings to be made by the
Company with the Commission, and the fees, disbursements and other charges of
counsel for the Company in connection therewith, (7) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 4(f), including the
fees, disbursements and other charges of counsel to you in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (8) counsel to the Company and any surveyors,
engineers, appraisers, photographers, accountants and other professionals
engaged by or on behalf of the Company, (9) the transfer agent and registrar
for the Shares, and (10) preparation of slides, overheads and other
presentation material to be used in any ``road show'' or other presentation to
potential investors and the hotel, travel and other expenses of the Company's
employees in connection with any such ``road show'' or presentation.
(j) If this Agreement shall be terminated by the
Company pursuant to any of the provisions hereof (otherwise than pursuant to
Section 8 hereof) or if for any reason the Company shall be unable to perform
its obligations hereunder or thereunder, the Company will reimburse you for all
out-of-pocket expenses (including the fees, disbursements and other charges of
your counsel) reasonably incurred by them in connection herewith.
(k) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
Shares to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from
the offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under ``Use of Proceeds.''
(m) The Company will continue to elect to qualify
as a ``real estate investment trust'' under the Code, and will use its best
efforts to continue to meet the requirements to qualify as a ``real estate
investment trust.''
17
<PAGE> 14
5. CONDITIONS OF YOUR OBLIGATIONS. In addition to the
execution and delivery of the Price Determination Agreement, your obligations
hereunder are subject to the following conditions:
(a) The Prospectus shall have been filed as
required by Section 3(a) and (i) no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the
Commission or such authorities and (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to you and you did not object
thereto in good faith, and you shall have received certificates, dated the
Closing Date and the Option Closing Date and signed by the Chief Executive
Officer or the Chairman of the Board of Directors of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).
(b) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i)
there shall not have been a material adverse change in the general affairs,
business, business prospects, properties, management, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (ii) neither the Company nor any
of its subsidiaries shall have sustained any material loss or interference with
its business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not set
forth in the Registration Statement and the Prospectus, if in your judgment any
such development makes it impracticable or inadvisable to consummate the sale
and delivery of the Shares by you at the public offering price.
(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall have been no litigation or other proceeding instituted against the
Company or any of its subsidiaries or any of their respective officers or
directors in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding would materially and adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results
of operations of the Company and its subsidiaries taken as a whole.
18
<PAGE> 15
(d) Each of the representations and warranties of
the Company contained herein shall be true and correct in all material respects
at the Closing Date and, with respect to the Option Shares, at the Option
Closing Date, as if made at the Closing Date and, with respect to the Option
Shares, at the Option Closing Date, and all covenants and agreements contained
herein to be performed on the part of the Company and all conditions contained
herein to be fulfilled or complied with by the Company at or prior to the
Closing Date and, with respect to the Option Shares, at or prior to the Option
Closing Date, shall have been duly performed, fulfilled or complied with.
(e) You shall have received one or more opinions,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, satisfactory in form and substance to your counsel, from Goodwin,
Procter & Hoar, counsel to the Company, to the effect set forth in Exhibit B.
(f) You shall have received an opinion, dated the
Closing Date and the Option Closing Date, from O'Melveny & Myers, your counsel,
with respect to the Registration Statement, the Prospectus and this Agreement,
which opinion shall be satisfactory in all respects to you.
(g) Concurrently with the execution and delivery
of this Agreement, the Accountants shall have furnished to you a letter, dated
the date of its delivery, addressed to you and in form and substance
satisfactory to you, confirming that they are independent accountants with
respect to the Company as required by the Act and the Rules and Regulations and
with respect to the financial and other statistical and numerical information
contained in the Registration Statement or incorporated by reference therein.
At the Closing Date and, as to the Option Shares, the Option Closing Date, the
Accountants shall have furnished to you a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that nothing has come
to their attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the letter) not more than three days
prior to the Closing Date and the Option Closing Date which would require any
change in their letter dated the date hereof if it were required to be dated
and delivered at the Closing Date and the Option Closing Date.
(h) Concurrently with the execution and delivery
of this Agreement and at the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall be furnished to you an accurate certificate,
dated the date of its delivery, signed by each of the Chief Executive Officer
and the Chief Financial Officer of the Company, in form and substance
satisfactory to you, to the effect that:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus
(including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus) and (A)
19
<PAGE> 16
as of the date of such certificate, such documents are true and
correct in all material respects and do not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not untrue or misleading and (B) in the case of the
certificate delivered at the Closing Date and the Option Closing Date,
no event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect and there has been no
document required to be filed under the Exchange Act and the Exchange
Act Rules and Regulations that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so
filed.
(ii) Each of the representations and
warranties of the Company contained in this Agreement were, when
originally made, and are, at the time such certificate is delivered,
true and correct in all material respects.
(iii) Each of the covenants required to be
performed by the Company herein on or prior to the delivery of such
certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company on or
prior to the date of such certificate has been duly, timely and fully
complied with.
(i) The Shares shall be qualified for sale in
such states as you may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing
Date and the Option Closing Date.
(j) The Company shall have furnished to you such
certificates, in addition to those specifically mentioned herein, as you may
have reasonably requested as to the accuracy and completeness at the Closing
Date and the Option Closing Date of any statement in the Registration Statement
or the Prospectus or any documents filed under the Exchange Act and deemed to
be incorporated by reference into the Prospectus, as to the accuracy at the
Closing Date and the Option Closing Date of the representations and warranties
of the Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to your obligations hereunder.
6. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless
you and each of your directors, officers, employees and agents and each person,
if any, who controls you within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (and actions in respect thereof) (including
any and all investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they, or any of them, may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities,
20
<PAGE> 17
expenses or damages arise out of or are based on a breach of any
representation, warranty, agreement or covenant made by the Company in this
Agreement or based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or in any documents filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus, or the omission
or alleged omission to state in such document a material fact required to be
stated in it or necessary to make the statements in it not misleading, provided
that the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by you and is based on an untrue statement or omission
or alleged untrue statement or omission made in reliance on and in conformity
with information relating to you furnished in writing to the Company by you
expressly for inclusion in any Preliminary Prospectus, the Registration
Statement or the Prospectus and provided further that the Company shall not be
liable to you under the indemnity agreement in this subsection with respect to
the Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of you results solely from an untrue statement or alleged untrue
statement of material fact contained in, or the omission or alleged omission of
a material fact from, such Preliminary Prospectus which untrue statement or
omission was corrected in the Prospectus, if the Company shall sustain the
burden of proving that you sold Shares to the person alleging such loss, claim,
damage or liability without sending or giving, at or prior to the written
confirmation of such sale, a copy of the Prospectus (or of the Prospectus as
then amended or supplemented) if the Company had previously furnished copies
thereof to you. The Company acknowledges that the statements set forth under
the heading ``Underwriting'' in the Preliminary Prospectus and the Prospectus
constitute the only information relating to you furnished in writing to the
Company by you expressly for inclusion in the Registration Statement, the
Preliminary Prospectus or the Prospectus. This indemnity agreement will be in
addition to any liability that the Company might otherwise have.
(b) You will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to you, but only
insofar as losses, claims, liabilities, expenses or damages (or actions in
respect thereof) arise out of or are based on any untrue statement or omission
or alleged untrue statement or omission of a material fact contained in any
part of the Registration Statement when such part became effective, or in the
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made therein in reliance on and in conformity with
information relating to you furnished in writing to the Company by you
expressly for use in the Registration Statement, the Preliminary Prospectus or
the Prospectus. This indemnity will be in addition to any liability that you
might otherwise have. The Company
21
<PAGE> 18
acknowledges that the statements set forth under the heading ``Underwriting''
in the Registration Statement, the Preliminary Prospectus and the Prospectus
constitute the only information relating to you furnished in writing to the
Company by you expressly for inclusion in the Registration Statement, the
Preliminary Prospectus or the Prospectus.
(c) Any party that proposes to assert the right
to be indemnified under this Section 6 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a claim is
to be made against an indemnifying party or parties under this Section 6,
notify each such indemnifying party of the commencement of such action,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action
is brought against any indemnified party and it notifies the indemnifying party
of its commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement of the
action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing
by the indemnifying party, (2) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it
or other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict
exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not in fact employed
counsel to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm admitted
to practice in such jurisdiction at any one time for all such indemnified party
or parties. All such fees, disbursements and other charges will be reimbursed
by the indemnifying party promptly as they are incurred. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld).
22
<PAGE> 19
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or you, the
Company and you will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than you, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) to which the Company and you may be
subject in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and you on the other. The
relative benefits received by the Company on the one hand and you on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by you in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and you, on the other, with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or you, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and you agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 6(d) shall be deemed to include, for purpose of this Section 6(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), you shall not be required
to contribute any amount in excess of the underwriting discounts received by
it, and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 6(d), any person who controls a party to this Agreement within
the meaning of the Act will have the same rights to contribution as that party,
and each officer of the Company who signed the Registration Statement will have
the same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt
of notice of commencement of any action against such party in respect of which
a claim for contribution may be made under this Section 6(d), will notify any
such party
23
<PAGE> 20
or parties from whom contribution may be sought, but the omission so to notify
will not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 6(d). No party
will be liable for contribution with respect to any action or claim settled
without its written consent (which consent will not be unreasonably withheld).
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties, agreements and covenants of the Company herein
or in certificates delivered pursuant hereto, and your agreements contained in
Section 6 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of you or any controlling
persons, or the Company or any of its officers, directors or any controlling
persons, and shall survive (i) termination of this Agreement and (ii) delivery
of and payment for the Shares hereunder.
8. TERMINATION. Your obligations under this Agreement
may be terminated at any time on or prior to the Closing Date (or, with respect
to the Option Shares, on or prior to the Option Closing Date), by notice to the
Company from you, without liability on the part of you to the Company, if,
prior to delivery and payment for the Shares (or the Option Shares, as the case
may be), in your sole judgment, (i) trading in any of the equity securities of
the Company shall have been suspended by the Commission, by an exchange that
lists the Shares or by the National Association of Securities Dealers Automated
Quotation National Market System, (ii) trading in securities generally on the
New York Stock Exchange shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by
either Federal or New York State authorities or (iv) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred the effect of any of which is such as to make it, in your sole
judgment, impracticable or inadvisable to market the Shares on the terms and in
the manner contemplated by the Prospectus.
9. MISCELLANEOUS. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office of
the Company, 15 River Road, Suite 210, Wilton, Connecticut 06897, Attention:
Thomas J. Sargeant, or (b) if to PaineWebber Incorporated, at the offices of
PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New York
10019, Attention: Corporate Real Estate Department. Any such notice shall be
effective only upon receipt. Any notice under Section 8 hereof may be made by
telex or telephone, but if so made
24
<PAGE> 21
shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of
you and the Company and of the controlling persons, directors and officers
referred to in Section 6, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term ``successors and assigns'' as used in this Agreement shall
not include a purchaser, as such purchaser, of Shares from you.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Company and you each hereby irrevocably waive any right
they may have to a trial by jury in respect of any claim based upon or arising
out of this Agreement or the transactions contemplated hereby.
25
<PAGE> 22
Please confirm that the foregoing correctly sets forth the
agreement among the Company and you.
Very truly yours,
AVALON PROPERTIES, INC.
By: /s/ Thomas J. Sargeant
Name: Thomas J. Sargeant
Title: Chief Financial Officer
and Treasurer
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
By: /s/ Frederick T. Caven, Jr.
Name: Frederick T. Caven, Jr.
Title: Managing Director
S-11
<PAGE> 23
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm
Shares to be
Purchased
----------
<S> <C>
PaineWebber Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,300,000
_________
</TABLE>
I-11
<PAGE> 24
EXHIBIT A
Form of Price Determination Agreement
AVALON PROPERTIES, INC.
---------------------
Price Determination Agreement
December __, 1996
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Reference is made to the Underwriting Agreement, dated
concurrently herewith (the ``UNDERWRITING AGREEMENT''), among Avalon
Properties, Inc., a Maryland corporation (the ``COMPANY''), and you. The
Underwriting Agreement provides for the purchase by you from the Company,
subject to the terms and conditions set forth therein, of an aggregate of
2,300,000 shares (the ``FIRM SHARES'') of the Company's Common Stock, par value
$.01 per share. This Agreement is the Price Determination Agreement referred
to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agree with you as follows:
1. The public offering price per share for the Firm
Shares shall be $_______.
2. The purchase price per share for the Firm
Shares to be paid by you shall be $_______ representing an amount equal to the
public offering price set forth above, less $______ per share.
The Company represents and warrants to you that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
A - 1
<PAGE> 25
LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of
the agreement among you and the Company, please sign and return to the Company
a counterpart hereof, whereupon this instrument along with all counterparts and
together with the Underwriting Agreement shall be a binding agreement among you
and the Company in accordance with its terms and the terms of the Underwriting
Agreement.
Very truly yours,
AVALON PROPERTIES, INC.
By:
-------------------------
Name:
Title:
A - 2
<PAGE> 26
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
By:
---------------------------------
Name: Frederick T. Caven, Jr.
Title: Managing Director
A - 3
<PAGE> 27
Exhibit B
Form of Opinion of
Counsel to the Company
1. The Company and each of its subsidiaries is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, is duly licensed or qualified to do business
and is in good standing as a foreign corporation in all jurisdictions in which
the nature of the activities conducted by it or the character of the assets
owned or leased by it makes such license or qualification necessary, has full
power and authority to conduct all the activities conducted by it, to own or
lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus and has all
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus. The Company is the sole record and beneficial owner of all of the
capital stock of each of its subsidiaries.
2. All of the outstanding Common Shares, Series A
Preferred and Series B Preferred have been, and the Shares when paid for by
PaineWebber Incorporated in accordance with the terms of the Agreement will be,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right.
3. No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or body is
required in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, in connection with the execution,
delivery and performance of the Agreement by the Company or in connection with
the taking by the Company of any action contemplated thereby, except such as
have been obtained
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under the Act and the Rules and Regulations and such as may be required by the
by-laws and rules of the NASD in connection with the purchase and distribution
by PaineWebber Incorporated of the Shares. All references in this opinion to
the Agreement shall include the Price Determination Agreement.
4. The authorized and outstanding capital stock of the
Company is as set forth in the Registration Statement and the Prospectus. The
description of the Common Shares contained in the Prospectus conforms to the
terms thereof contained in the Company's Amended and Restated Articles of
Incorporation.
5. The Registration Statement and the Prospectus
(including any documents incorporated by reference into the Prospectus, at the
time they were filed) comply or complied in all material respects as to form
with the requirements of the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations (except that we express no opinion as
to financial statements, schedules and other financial and statistical data
contained in the Registration Statement or the Prospectus or incorporated by
reference therein).
6. We have participated in the preparation of the
Registration Statement and the Prospectus and nothing has come to our attention
which has caused us to believe that, both as of the date of filing of the
Prospectus and as of the Closing Date and the Option Closing Date, the
Registration Statement, or any amendment thereto, contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that any Prospectus or any amendment or
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supplement thereto including any documents incorporated by reference into the
Prospectus, at the time such Prospectus was issued, at the time any such
amended or supplemented Prospectus was issued, at the Closing Date and the
Option Closing Date, contained or contains any 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 in which they were
made not misleading (except that we express no opinion as to financial
statements, schedules and other financial or statistical data contained in the
Registration Statement or the Prospectus or incorporated by reference therein).
7. The Registration Statement has become effective under
the Act and, to the best of our knowledge, no order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been instituted or is threatened, pending or contemplated.
8. We have reviewed all contracts, instruments or other
documents referred to in the Registration Statement and the Prospectus and such
contracts or other documents are fairly summarized or disclosed therein, and
filed as exhibits thereto as required, and, after due inquiry, we do not know
of any contracts, instruments or other documents required to be so summarized
or disclosed or filed or required to be filed under the Exchange Act if upon
such filing they would be incorporated, in whole or in part, by reference
therein which have not been so summarized or disclosed or filed.
9. All descriptions in the Prospectus of statutes,
regulations or legal or
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governmental proceedings are accurate and fairly present the information
required to be shown.
10. The Company has full corporate power and authority to
enter into the Agreement, and the Agreement has been duly authorized, executed
and delivered by the Company, is a valid and binding agreement of the Company
and, except for the indemnification and contribution provisions thereof, as to
which we express no opinion, and subject to applicable bankruptcy laws, is
enforceable against the Company in accordance with the terms thereof.
11. The execution and delivery of the Agreement by the
Company, the consummation by the Company of the transactions therein
contemplated and the compliance by the Company with the terms of the Agreement
do not and will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its subsidiaries
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default or result in the
acceleration of any obligation under, the Amended and Restated Articles of
Incorporation or Amended and Restated Bylaws of the Company or organizational
documents of any of its subsidiaries, any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument known to us to which the Company or any of its subsidiaries is a
party or by which it or any of its properties is bound or affected, or any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company or any of its subsidiaries (except that we express no opinion as to
the securities or Blue Sky laws of
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any jurisdiction other than the United States).
12. Delivery of certificates for the Shares will transfer
valid and marketable title thereto to PaineWebber Incorporated and we are not
aware, after due inquiry, of any adverse claim with respect thereto, and such
Shares are free and clear of all liens, encumbrances and claims.
13. We know of no actions, suits or proceedings pending
or threatened against or affecting the Company or any of its subsidiaries or
the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company or any of its subsidiaries,
or any of their respective officers in their capacities as such, before or by
any Federal or state or foreign court, commission, regulatory body,
administrative agency or other governmental body, wherein an unfavorable
ruling, decision or finding might materially and adversely affect the Company
or any of its subsidiaries or its business, properties, business prospects,
condition (financial or otherwise) or results of operations, except as set
forth in or contemplated by the Registration Statement and the Prospectus.
14. To the best of our knowledge, neither the Company nor
any of its subsidiaries is in violation of its organizational documents or in
default (nor has an event occurred which with notice or lapse of time or both
would constitute a default or acceleration) in the performance of any
obligation, agreement or condition contained in any indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other agreement
or instrument known to us to which
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<PAGE> 32
the Company or any of its subsidiaries is a party or by which it or its
properties is bound or affected and neither the Company nor any of its
subsidiaries is in violation of any judgment, ruling, decree, order, franchise,
license or permit known to us or any statute, rule or regulation of any court
or other governmental agency or body applicable to the business or properties
of the Company or any of its subsidiaries, which violation or default might
have a material adverse effect on the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company or
any of its subsidiaries.
15. The Company is not an ``investment company'' or an
``affiliated person'' of, or ``promoter'' or ``principal underwriter'' for, an
``investment company,'' as such terms are defined in the Investment Company Act
of 1940, as amended.
16. The Shares have been duly authorized for listing by
the New York Stock Exchange upon official notice of issuance.
In rendering the foregoing opinion, counsel may rely, to the
extent they deem such reliance proper, on the opinions (in form and substance
reasonably satisfactory to PaineWebber Incorporated's counsel) of other counsel
reasonably acceptable to PaineWebber Incorporated's counsel as to matters
governed by the laws of jurisdictions other than the United States, and as to
matters of fact, upon certificates of officers of the Company and of government
officials; provided that such counsel shall state that the opinion of any other
counsel is in form satisfactory to such counsel and, in such counsel's opinion,
such counsel and PaineWebber Incorporated is justified in relying on such
opinions of other counsel. Copies of all such opinions and certificates
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shall be furnished to counsel to PaineWebber Incorporated on the Closing Date.
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Exhibit C
Subsidiaries of the Company
Avalon Town Green II, Inc.
Avalon Chase Ridge, Inc.
Avalon Chase Glen, Inc.
Avalon Chase Grove, Inc.
Avalon Chase Hampton II, Inc.
Avalon Chase Heritage, Inc.
Avalon Chase Knoll, Inc.
Avalon Chase Lea, Inc.
Lexington Ridge-Avalon, Inc.
Avalon Town Meadows, Inc.
Avalon Town View, Inc.
Avalon 4100 Massachusetts Avenue, Inc.
Town Cove Jersey City Urban Renewal, Inc.
Avalon Transactions, Inc.
Avalon Captain's Walk, Inc.
Avalon Decoverly, Inc.
Avalon Lake Arbor, Inc.
Avalon Commons, Inc.
Falkland Partners
Town Run Associates
4100 Massachusetts Avenue Associates L.P.
Avalon Lake Arbor Associates L.P.
Avalon Decoverly Associates L.P.
Town Grove L.L.C.
Town Close Associates L.P.
Smithtown Galleria Associates Limited Partnership
Avalon Collateral, Inc.
Avalon Fairway II, Inc.
Avalon Fairway Hills I Associates
Avalon Fairway Hills II Associates
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<PAGE> 1
EXHIBIT 1.2
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<PAGE> 2
AVALON PROPERTIES, INC.
---------------------
Price Determination Agreement
December 9, 1996
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Reference is made to the Underwriting Agreement, dated
concurrently herewith (the ``UNDERWRITING AGREEMENT''), among Avalon
Properties, Inc., a Maryland corporation (the ``COMPANY''), and you. The
Underwriting Agreement provides for the purchase by you from the Company,
subject to the terms and conditions set forth therein, of an aggregate of
2,300,000 shares (the ``FIRM SHARES'') of the Company's Common Stock, par value
$.01 per share. This Agreement is the Price Determination Agreement referred
to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agree with you as follows:
1. The public offering price per share for the Firm
Shares shall be $26.25.
2. The purchase price per share for the Firm
Shares to be paid by you shall be $24.94 representing an amount equal to the
public offering price set forth above, less $1.31 per share.
The Company represents and warrants to you that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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<PAGE> 3
If the foregoing is in accordance with your understanding of
the agreement between the Company and you, please sign and return to the
Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among you and the Company in accordance with its terms and the terms
of the Underwriting Agreement.
Very truly yours,
AVALON PROPERTIES, INC.
By: /s/ Thomas J. Sargeant
Name: Thomas J. Sargeant
Title: Chief Financial Officer
and Treasurer
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
By: /s/ Frederick T. Caven, Jr.
Name: Frederick T. Caven, Jr.
Title: Managing Director
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