UNITED STATES
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
March 19, 1997
Date of Report (Date of earliest event reported)
MID-AMERICA APARTMENT COMMUNITIES, INC.
(Exact Name of Registrant as Specified in Charter)
TENNESSEE 1-12762 62-1543819
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
6584 POPLAR AVENUE, SUITE 340
MEMPHIS, TENNESSEE 38138
(Address of principal executive offices)
(901) 682-6600
Registrant's telephone number, including area code
(Former name or address, if changed since last report)
<PAGE>
Item 5. Other Events.
Following notification of the New York Stock Exchange, the
following press releases were released to the press on March 11,
1997 and March 19, 1997.
Memphis, TN March 11, 1997. Mid-America Apartment Communities,
Inc. (NYSE:MAA) announced that it has sold 2,000,000 shares of
common stock at $28.75 per share subject to the terms and
conditions of a prospectus supplement filed with the Securities
and Exchange Commission. The transaction is scheduled to close
on March 14, 1997.
Managing underwriters for the offering were Morgan Stanley & Co.
Incorporated, Raymond James & Associates, Inc., Morgan Keegan &
Company, Inc. and J.C. Bradford & Co.
This press release does not constitute an offer to sell or a
solicitation of an offer to purchase the subject securities and
such offers or solicitations shall be made only by means of a
Prospectus Supplement and accompanying Prospectus, copies of
which may be obtained from the Company or the underwriters.
Mid-America Apartment Communities, Inc. is a self-administered,
self-managed apartment-only real estate investment trust which
owns and operates 74 apartment communities containing 19,628
apartment units in 12 states in the Southeastern United States
and Texas.
For further information, contact Simon R. C. Wadsworth: 901-682-
6668, ext. 104.
- ----------------------------
Memphis, TN March 19, 1997. Mid-America Apartment Communities,
Inc. (NYSE:MAA) announced today the purchase of the 384-unit
Balcones Woods apartment community in Austin, TX for $6.6 million
in cash and assumed debt of $9.2 million. The property was built
in 1983, and is presently 90% occupied with an average rent of
$650.
This acquisition complements the two properties MAA presently
owns in Austin, and brings its total number of apartments in that
market to 976.
Mid-America Apartment Communities, Inc. is a self-managed
apartment REIT which owns 20,012 units at 75 properties
throughout the southeastern U.S. and Texas.
For further information, contact Simon R. C. Wadsworth: 901-682-
6668, ext. 104.
<PAGE>
Item 7. Financial Statements and Exhibits.
Exhibit
Number Exhibit
- ------- ----------------------------------------------------------
1 Definitive Underwriting Agreement, dated March 10, 1997,
relating to the sale of 2,000,000 shares of Common Stock,
par value $.01 per share.
<PAGE>
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 thereunto duly authorized.
MID-AMERICA APARTMENT COMMUNITIES, INC.
Date: March 19, 1997 By: /s/ Simon R.C. Wadsworth
-------------------- ---------------------------------
Simon R.C. Wadsworth
Executive Vice President
(Principal Financial and Accounting Officer)
2,000,000 Shares
MID-AMERICA APARTMENT COMMUNITIES, INC.
COMMON STOCK, PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
March 10, 1997
<PAGE>
March 10, 1997
Morgan Stanley & Co. Incorporated
J.C. Bradford & Co.
Morgan Keegan & Company, Inc.
Raymond James & Associates, Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
MID-AMERICA APARTMENT COMMUNITIES, INC., a Tennessee
corporation (the "Company"), proposes to issue and sell to the
several Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 2,000,000 shares of the Common
Stock, par value $.01 per share, of the Company (the "Firm
Shares"), all of which shares are to be issued and sold by the
Company.
The Company also proposes to issue and sell to the several
Underwriters not more than an additional 300,000 shares of its
Common Stock, par value $.01 per share (the "Additional Shares")
if and to the extent that you, as managers of the offering
("Managers"), shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 3 hereof. The Firm Shares
and the Additional Shares are hereinafter collectively referred
to as the "Shares." The shares of the Common Stock, par value
$.01 per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred
to as the "Common Stock."
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-
3 (Registration No. 333-3274) and Amendments No. 1, 2, 3 and 4
thereto, including a base prospectus dated May 14, 1996 (the
"Base Prospectus"), relating to the Shares. The registration
statement as amended at the time it became effective, including
the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933, as amended (the "Securities
Act"), is hereinafter referred to as the "Registration
Statement." If it is contemplated, at the time this Agreement is
executed, that a post-effective amendment to the registration
statement must be declared effective before offering of the
Shares may commence, the term "Registration Statement" as this
Agreement means the registration statement as amended by such
amendment. The term "Prospectus" as used in this Agreement means
the Base Prospectus together with the prospectus supplement
relating to the Shares dated the date hereof in the form first
filed with the Commission on or after March 10, 1997, pursuant to
Rule 424(b) under the Securities Act. The term "Preliminary
Prospectus Supplement" as used in this Agreement means the Base
Prospectus together with any prospectus supplement subject to
completion included in the Registration Statement as filed with
the Commission pursuant to Rule 424(b) under the Securities Act,
and as such Preliminary Prospectus Supplement shall have been
amended or supplemented from time to time prior to the date of
the Prospectus. Any reference in this Agreement to the
Registration Statement, the Preliminary Prospectus Supplement or
the Prospectus, shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Securities Act, as of the date of the
Registration Statement, the Preliminary Prospectus Supplement
and the Prospectus, as the case may be, and any reference to any
amendment or supplement to the Registration Statement,
Preliminary Prospectus Supplement or the Prospectus shall be
deemed to refer to and include any documents filed after such
date under the Securities Exchange Act of 1934, as amended and
the rules and regulations of the Commission thereunder (the
"Exchange Act") which upon filing, are incorporated by reference
therein, as required by paragraph (b) of Item 12 of Form S-3. As
used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the
Registration Statement, the Preliminary Prospectus Supplement,
the Prospectus or any amendment or supplement thereto.
Upon consummation of the transactions contemplated hereby
and application of the net proceeds from the sale of the Firm
Shares, the Company and MAC of Delaware, Inc., a wholly owned
subsidiary of the Company ("MAC") will own an approximately
1.0% general partnership interest and an approximately 80.7%
limited partnership interest in Mid-America Apartments, L.P., a
Tennessee limited partnership (the "Partnership"). The Company,
certain of its wholly owned subsidiaries and the Partnership
currently owns 74 apartment communities (individually, a
"Community" and collectively, the "Communities") containing
19,628 apartment units, located in 12 states. The Partnership
has entered into definitive contracts (the "Acquisition
Agreements") to acquire four additional apartment communities
(the "Proposed Acquisitions") containing 1,142 apartment units,
all as described in the Prospectus. Other capitalized terms used
herein and not otherwise defined herein shall have the meaning
set forth in the Registration Statement.
1. Representations and Warranties of the Company. The
Company and the Partnership jointly and severally represent and
warrant to and agree with each of the Underwriters that:
(a) The Registration Statement has become effective;
no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for
such purpose are pending before or threatened by the
Commission.
(b) The Company and the transactions contemplated by
this Agreement meet the requirements and conditions for
using a registration statement on Form S-3 under the Act,
set forth in the General Instructions to Form S-3. When any
Preliminary Prospectus Supplement was filed with the
Commission it (i) contained all statements required to be
stated therein in accordance with, and complied in all
material respects with the requirements of, the Securities
Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of
a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
When the Registration Statement or any amendment thereto was
declared effective, and on the Closing Date (as defined in
Section 4) (or the Option Closing Date (as defined in
Section 4), as the case may be) it (i) contained or will
contain all statements required to be stated therein in
accordance with, and complied or will comply in all material
respects with the requirements of, the Securities Act and
the rules and regulations of the Commission thereunder and
(ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact, necessary
to make the statements therein not misleading. When the
Prospectus or any amendment or supplement thereto is filed
with the Commission pursuant to Rule 424(b) and at the
Closing Date (or the Option Closing Date, as the case may
be), the Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required
to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements
of, the Securities Act and the rules and regulations of the
Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading. The representations and
warranties set forth in this paragraph 1(b) do not apply to
statements in the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(c) The Incorporated Documents heretofore filed, when
they were filed (or, if any amendment with respect to any
such document was filed, when such amendment was filed)
conformed in all material respects with the requirements of
the Exchange Act, any further Incorporated Documents so
filed will, when they are filed conform in all material
respects with the requirements of the Exchange Act, no such
document when it was filed (or, if an amendment with respect
to any such document was filed, when such amendment was
filed), 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; and no such further document, when it is
filed, will contain an untrue statement of a material fact
or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading.
(d) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate
power and authority to own, lease and operate its property
and the properties it proposes to own, lease and operate as
described in the Registration Statement and the Prospectus
and to conduct its business as now conducted and as proposed
to be conducted as described in the Registration Statement
and the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in
which the nature or conduct of its business or its ownership
or leasing of property as now conducted or proposed to be
conducted as described in the Registration Statement and the
Prospectus requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
the Partnership, taken as a whole. Except for the
Subsidiaries (defined below), the Company does not own or
control, directly or indirectly, or own any capital stock or
other beneficial interest in, any corporation, association
or other entity.
(e) Each subsidiary of the Company set forth on
Schedule II hereto (each, a "Subsidiary" and collectively,
the "Subsidiaries") has been duly organized and is validly
existing under the laws of its jurisdiction of organization
with all requisite authority to own, lease and operate its
properties and the properties it proposes to own, lease and
operate as described in the Registration Statement and the
Prospectus and to conduct its business as now conducted and
as proposed to be conducted as described in the Registration
Statement and the Prospectus and is duly qualified or
registered to transact business and is in good standing in
each jurisdiction in which the nature or conduct of its
business or its ownership or leasing of property as now
conducted or proposed to be conducted as described in the
Registration Statement and the Prospectus requires such
qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a
material adverse effect on the Company and the Subsidiaries,
taken as a whole. The Company is, and at the Closing Date
will be, the sole general partner of the Partnership, and
the Company and MAC collectively will own an 81.7% interest
in the Partnership and will own the 2,000,000 Series A
Cumulative Preferred Units of partnership interest in the
Partnership ("Preferred Units"), representing all of the
outstanding Preferred Units. Except as described above, the
Company or the Partnership is the sole direct or indirect
owner of all of the equity interests in each of the
Subsidiaries (other than the Partnership), all of the equity
interests of each Subsidiary have been duly and validly
authorized and issued, and all of such equity interests are
fully paid and non-assessable and are owned directly by the
Company or the Partnership, free and clear of all liens,
encumbrances, equities or claims.
(f) The Company has full legal right, power and
authority to enter into and perform this Agreement, to
issue, sell and deliver the Shares as provided herein and to
consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement
of the Company, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of
general applicability relating to or affecting creditors'
rights, or by general equity principles and except to the
extent the indemnification provisions set forth in Section 8
of this Agreement may be limited by federal or state
securities laws or the public policy underlying such laws.
(g) The Partnership has full legal right, power and
authority to enter into and perform this Agreement and to
consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered
by the Partnership and constitutes a valid and binding
agreement of the Partnership enforceable in accordance with
its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization or other
laws of general applicability relating to or affecting
creditors' rights, or by general equity principles and
except to the extent the indemnification provisions set
forth in Section 8 of this Agreement may be limited by
federal or state securities laws or the public policy
underlying such laws.
(h) The Amended and Restated Agreement of Limited
Partnership of the Partnership, including any amendment
thereto (the "Partnership Agreement") has been duly and
validly authorized, executed and delivered by or on behalf
of the partners of the Partnership and constitutes a valid
and binding agreement of the parties thereto, enforceable in
accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency,
reorganization or other laws of general applicability
relating to or affecting creditors' rights or by general
equity principles.
(i) No consent, approval, authorization, order,
license, certificate, permit, registration, designation or
filing by or with any governmental agency or body is
required for the execution, delivery and performance by the
Company and the Partnership of their respective obligations
under this Agreement and the consummation by the Company and
the Partnership of the transactions contemplated hereby,
including the valid authorization, issuance, sale and
delivery of the Shares except such as may be required by the
securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(j) Except as disclosed in the Prospectus and the
Registration Statement, neither the issuance, sale and
delivery by the Company of the Shares, nor the execution,
delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby by the
Company or the Partnership will contravene any of the terms
and provisions of the charter, by-laws, certificate of
limited partnership or partnership agreement, as the case
may be, of the Company or any of the Subsidiaries; or (with
or without the giving of notice or the passage of time or
both) constitute a default under any indenture, mortgage,
deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or to which they, any of them, any
of their respective properties or other assets is subject;
or violate any applicable law statute, judgment, decree,
order, rule or regulation of any court or governmental
agency or body applicable to any of the foregoing or any of
their respective properties; or result in the creation or
imposition of any lien, charge, claim or encumbrance upon
any property or asset of any of the foregoing.
(k) The issuance and sale of the Shares to the
Underwriters hereunder have been duly authorized by the
Company. When issued and delivered against payment therefor
as provided in this Agreement, the Shares will be validly
issued, fully paid and non-assessable and the issuance of
the Shares will not be subject to any preemptive or similar
rights. No person or entity holds a right to require or
participate in the registration under the Securities Act of
the Shares pursuant to the Registration Statement. No
person or entity has a right of participation or first
refusal with respect to the sale of the Shares by the
Company. Except as set forth in the Prospectus, there are
no contracts, agreements or understandings between the
Company and any person or entity granting such person or
entity the right to require the Company to file a
registration statement under the Securities Act with respect
to any securities of the Company or to require the Company
to include such securities with the Shares registered
pursuant to the Registration Statement.The form of
certificates evidencing the Shares complies with all
applicable legal requirements.
(l) The authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus. The Company has an authorized,
issued and outstanding capitalization as set forth in the
Prospectus under the caption "Capitalization." Immediately
after the Closing Date, 13,004,398 shares of Common Stock
will be issued and outstanding, 2,000,000 shares of the
Company's Series A Preferred Stock will be issued and
outstanding and no shares of any other class of capital
stock will be issued and outstanding. All of the issued and
outstanding shares of capital stock of the Company have been
duly authorized and are validly issued, fully paid and non-
assessable, and have been offered, sold and issued by the
Company in compliance with all applicable laws (including,
without limitation, federal and state securities laws).
None of the issued shares of capital stock of the Company
have been issued in violation of any preemptive or similar
rights. Except as disclosed in the Prospectus, there is no
outstanding option, warrant or other right calling for the
issuance of, and no commitment, plan or arrangement to
issue, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock
of the Company.
(m) Immediately after the Closing Date, all of the
issued and outstanding units of partnership interest in the
Partnership ("Common Units") and Preferred Units will be
validly issued, fully paid and non-assessable. None of the
Common Units or Preferred Units has been or will be issued
or is owned or held in violation of any preemptive right.
The Common Units and Preferred Units have been or will be
offered, sold and issued by the Partnership in compliance
with all applicable laws (including, without limitation,
federal and state securities laws).
(n) The financial statements (including the related
notes) included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
financial position of the respective entity or entities
presented therein as of the dates indicated and the results
of operations and cash flows for the respective entity or
entities presented therein for the periods specified, all in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
specified. The financial statement schedules included in
the Registration Statement and the amounts in the Prospectus
under the captions " Prospectus Summary - Recent
Developments", "Prospectus Summary - Summary Financial and
Operating Data" and "Selected Financial and Operating Data"
present fairly the information required to be shown therein
and have been compiled on a basis consistent with the
financial statements included or incorporated by reference
in the Registration Statement and the Prospectus. No other
financial statements or schedules are required by Form S-3
or otherwise to be included in the Registration Statement or
the Prospectus. The unaudited pro forma financial
information (including the related notes and supporting
schedules) included or incorporated by reference in the
Registration Statement and the Prospectus complies as to
form in all material respects to the applicable accounting
requirements of the Securities Act and the rules and
regulations of the Commission thereunder and management of
the Company believes that the assumptions underlying the pro
forma adjustments are reasonable. All necessary pro forma
adjustments have been properly applied to the historical
amounts in the compilation of the information and such
information fairly presents with respect to the respective
entity or entities presented therein the financial position,
results of operations and other information purported to be
shown therein at the respective dates and for the respective
periods specified.
(o) KPMG Peat Marwick LLP, who has examined and is
reporting upon the audited financial statements and
schedules included or incorporated by reference in the
Registration Statement and the Prospectus, are, and were
during the periods covered by their Reports included or
incorporated by reference in the Registration Statement and
the Prospectus, independent public accountants within the
meaning of the Securities Act and the rules and regulations
of the Commission thereunder.
(p) Neither the Company nor any of its Subsidiaries
has sustained, since December 31, 1995, any material loss or
interference with its business from fire, explosion, flood,
hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or
arbitrators' or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as otherwise stated in the
Registration Statement and Prospectus, there has not been
(i) any material change in the capital stock or partnership
interests, as applicable, long-term debt, obligations under
capital leases or short-term borrowings of the Company and
its Subsidiaries, taken as a whole, (ii) any material
adverse change, or any development which could reasonably be
seen as involving a prospective material adverse change, in
or affecting the business, prospects, properties, assets,
results of operations or condition (financial or other) of
the Company and its Subsidiaries, taken as a whole, (iii)
any liability or obligation, direct or contingent, incurred
or undertaken by the Company or any of its Subsidiaries,
which is material to the business or condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a
whole, except for liabilities or obligations incurred in the
ordinary course of business, (iv) any declaration or payment
of any dividend or distribution of any kind on or with
respect to the capital stock of the Company or with respect
to the partnership interests of the Partnership, or (v) any
transaction that is material to the Company and its
Subsidiaries, taken as a whole, except transactions in the
ordinary course of business or as otherwise disclosed in the
Registration Statement and the Prospectus.
(q) The Company or its Subsidiaries will have, at the
Closing Date, good and marketable title in fee simple to all
real property and the improvements located thereon owned by
them, free and clear of all liens, encumbrances, claims,
security interests, restrictions and defects except such as
do not have a material adverse effect on the business or
condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole. Neither the Company nor any
of the Subsidiaries owns or leases any real property, except
as described in the Prospectus. No person has an option or
right of first refusal to purchase all or part of any
Community or any interest therein. Each of the Communities
complies with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes,
laws and regulations and laws relating to access to the
Communities), except if and to the extent disclosed in the
Prospectus and except for such failures to comply that would
not individually or in the aggregate have a material adverse
impact on the condition, financial or otherwise, or on the
earnings, assets, business affairs or business prospects of
the Company and its Subsidiaries, taken as a whole. Neither
the Company nor any of its Subsidiaries has knowledge of any
pending or threatened condemnation proceeding, zoning
change, or other proceeding or action that will in any
manner affect the size of, use of, improvements on,
construction on or access to a Community, except such
proceedings or actions that would not have a material
adverse effect on the condition, financial or otherwise, or
on the earnings, assets, business affairs or business
prospects of or with respect to the Company and its
Subsidiaries, taken as a whole. Neither the Company nor any
of its Subsidiaries nor, to the knowledge of the Company and
the Partnership, any of the current owners of the Proposed
Acquisitions is in default under any of the leases governing
the apartment units at any of the Communities or the
Proposed Acquisitions and the Company knows of no event, but
for the passage of time or the giving of notice, or both,
which would constitute a default under any of such leases,
except such default that would not have a material adverse
effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its Subsidiaries, taken as a whole.
The Company or a Subsidiary has obtained an owner's
title insurance policy from a title insurance company to
issue such a policy on each of the Communities and will
obtain such a policy with respect to the Proposed
Acquisitions with coverage in an amount at least equal to
the cost of acquisition of such property, including the
principal amount of any indebtedness assumed with respect to
the property.
(r) Neither the Company nor any of its Subsidiaries is
in violation of its respective charter, by-laws, certificate
of limited partnership or partnership agreement, as the case
may be, and except as disclosed in the Prospectus, no
default exists, and no event has occurred, nor state of
facts exists, which, with notice or after the lapse of time
to cure or both, would constitute a default in the due
performance and observance of any obligation, agreement,
term, covenant, consideration or condition contained in any
material indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which any
such entity is a party or to which any such entity or any of
its properties is subject. Neither the Company nor any of
its Subsidiaries, nor with respect to the Proposed
Acquisitions to the Company's knowledge, the current owners
thereof, is in violation of, or in default with respect to,
any statute, rule, regulation, order, judgment or decree,
except as may be properly described in the Prospectus or
such as in the aggregate do not now have and will not in the
future reasonably be expected to have a material adverse
effect on the financial position, results of operations or
business of the Company and its Subsidiaries, taken as a
whole.
(s) Except as described in the Prospectus, there is
not pending or, to the knowledge of the Company, threatened,
any action, suit, proceeding, inquiry or investigation
against any of the Communities, the Company, any of the
Subsidiaries, any of their respective officers, directors or
partners, or the current owners of the Proposed
Acquisitions, or to which the properties, assets or rights
of such entities (limited with respect to the current owners
of the Proposed Acquisitions to the Proposed Acquisitions
and the related assets and rights) are subject, before or
brought by any court or governmental agency or body or board
of arbitrators, which could reasonably be expected to result
in any material adverse change in the business, prospects,
properties, assets, results of operations or condition,
financial or otherwise, of the Company and its
Subsidiaries, taken as a whole, or any Proposed Acquisition
(limited with respect to the current owners of the Proposed
Acquisitions to the Proposed Acquisitions) or which could
adversely affect the consummation of the transactions
contemplated by this Agreement; provided, however, that the
foregoing representations are limited to the knowledge of
the Company and the Partnership to the extent they relate to
the current owners of the Proposed Acquisitions.
(t) The descriptions in the Registration Statement and
the Prospectus of the contracts, leases and other legal
documents therein described present fairly the information
required to be shown, and there are no contracts, leases, or
other documents of a character required to be described in
the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement which are not
described or filed as required. There are no legal or
governmental proceedings pending or threatened to which the
Company or any Subsidiary is subject that are required to be
described in the Registration Statement or the Prospectus
and are not so described. To the knowledge of the Company
and the Partnership, there are no statutes or regulations
applicable to the Company or any of the Subsidiaries or
certificates, permits or other authorizations from
governmental regulatory officials or bodies required to be
obtained or maintained by the Company or any of the
Subsidiaries of a character required to be disclosed in the
Registration Statement or the Prospectus which have not been
so disclosed and properly described therein. All agreements
between the Company or any of the Subsidiaries and third
parties expressly referenced in the Prospectus are legal,
valid and binding obligations of the Company or one or more
of its Subsidiaries, enforceable in accordance with their
respective terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization or other
laws of general applicability relating to or affecting
creditors' rights and by general equity principles.
(u) No relationship, direct or indirect, exists
between or among the Company or any of its Subsidiaries on
the one hand, and the directors, trustees, officers,
shareholders, customers or suppliers of the Company or any
of its Subsidiaries on the other hand, which is required by
the Act to be described in the Registration Statement and
the Prospectus which is not so described.
(v) Each of the Company and its Subsidiaries owns,
possesses or has obtained all material permits, licenses,
franchises, certificates, consents, orders, approvals and
other authorizations of governmental or regulatory
authorities as are necessary to own or lease, as the case
may be, and to operate its respective properties and to
carry on its business as presently conducted, or as
contemplated in the Prospectus to be conducted, and neither
the Company nor the Partnership has received any notice of
proceedings relating to revocation or modification of any
such licenses, permits, certificates, consents, orders,
approvals or authorizations.
(w) Neither the Company nor any of its Subsidiaries is
required to own or possess any license or other rights to
use any patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights
and know-how (collectively "Intangibles") to entitle any of
them to conduct their respective businesses as such
businesses are now, and as they are proposed to be,
conducted or operated as described in the Prospectus, and
neither the Company nor any of its Subsidiaries has received
notice of infringement upon or of conflict with (and the
Company and the Partnership know of no such infringement
upon or of conflict with) asserted rights of others with
respect to any Intangibles which could materially and
adversely affect the business, prospects, properties,
assets, results of operation or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a
whole.
(x) To the Company's and the Partnership's knowledge,
the system of internal accounting controls of the Company
and its Subsidiaries, taken as a whole, is sufficient to
meet the broad objectives of internal accounting controls
insofar as those objectives pertain to the prevention or
detection of errors or irregularities in amounts that would
be material in relation to the Company's financial
statements; and, to the Company's and the Partnership's
knowledge, neither the Company nor any of its Subsidiaries,
nor any employee or agent thereof, has made any payment of
funds of the Company or any of its Subsidiaries, as the case
may be, or received or retained any funds, and no funds of
the Company or any of its Subsidiaries, as the case may be,
have been set aside to be used for any payment, in each case
in violation of any law, rule or regulation.
(y) Each of the Company and its Subsidiaries (to the
extent not consolidated with the Company) has filed on a
timely basis all necessary federal, state, local and foreign
income and franchise tax returns required to be filed
through the date hereof and has paid all taxes shown as due
thereon; and no tax deficiency has been asserted against any
such entity, nor does the Company or the Partnership know of
any tax deficiency which is likely to be asserted against
any such entity which, if determined adversely to any such
entity, could materially adversely affect the business,
prospects, properties, assets, results of operations or
condition, financial or otherwise, of the Company and the
Subsidiaries, considered as one enterprise. All tax
liabilities are adequately provided for on the respective
books of such entities.
(z) Each of the Company and its Subsidiaries maintains
insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts generally
deemed adequate for their respective businesses and assets
and, to the best of the Company's and the Partnership's
knowledge, consistent with insurance coverage maintained by
similar companies in similar businesses, including, but not
limited to, insurance covering real and personal property
owned or leased by the Company and its Subsidiaries against
theft, damage, destruction, acts of vandalism and all other
risks, including liability for personal injury, customarily
insured against, all of which insurance is in full force and
effect.
(aa) To the best of the Company's and the Partnership's
knowledge, no general labor problem exists or is imminent
with the employees of the Company or any of its
Subsidiaries.
(bb) Each of the Company and its Subsidiaries, and each
of their officers, directors and controlling persons, has
not taken and will not take, directly or indirectly, any
action resulting in a violation of Rule 102 under Regulation
M promulgated under the Exchange Act, or designed to, or
that might reasonably be expected to, cause or result in or
that has constituted or that reasonably might be expected to
constitute the stabilization or manipulation of the price of
any security of the Company or to facilitate the sale or
resale of the Shares.
(cc) The Company has complied with all provisions of
Section 517.075, Florida Statutes relating to doing business
with the Government of Cuba or with any person or affiliate
located in Cuba.
(dd) Except as otherwise disclosed in the Prospectus,
neither the Company, any of the Subsidiaries nor, to the
best of their knowledge, any former owner of any Community
or any current or former owner of the Proposed Acquisitions
has authorized or conducted or has knowledge of the
generation, transportation, storage, presence, use,
treatment, disposal, release, or other handling of any
hazardous substance, hazardous waste, hazardous material,
hazardous constituent, toxic substance, pollutant,
contaminant, asbestos, radon, polychlorinated biphenyls
("PCBs"), petroleum product or waste (including crude oil or
any fraction thereof), natural gas, liquefied gas, synthetic
gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any
environmental law (collectively, "Hazardous Materials"), on,
in, under or affecting any Community, the Proposed
Acquisitions or any real property currently leased or owned
or by any means controlled by the Company or any of its
Subsidiaries (the "Real Property") except in material
compliance with applicable laws; to the knowledge of the
Company and the Partnership, the Real Property and the
Company's and its Subsidiaries' and the current and former
owners of the Proposed Acquisitions' operations with respect
to the Real Property are in compliance with all federal,
state and local laws, ordinances, rules, regulations and
other governmental requirements relating to pollution,
control of chemicals, management of waste, discharges of
materials into the environment, health, safety, natural
resources, and the environment (collectively, "Environmental
Laws"), and the Company, its Subsidiaries and the current
owners of the Proposed Acquisitions have, and are in
compliance with, all licenses, permits, registrations and
government authorizations necessary to operate under all
applicable Environmental Laws. Except as otherwise
disclosed in the Prospectus, neither the Company, its
Subsidiaries nor the current owners of the Proposed
Acquisitions or, any former owner of any of the Real
Property has received any written or oral notice from any
governmental entity or any other person and there is no
pending or threatened claim, litigation or any
administrative agency proceeding that: alleges a violation
of any Environmental Laws by the Company or any of its
Subsidiaries; or, with respect to the Proposed Acquisitions,
the current owners thereof, alleges that the Company, any of
its Subsidiaries or, with respect to the Proposed
Acquisitions, the current owners thereof, is a liable party
or a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601, et seq., or any state superfund law; has
resulted in or could result in the attachment of an
environmental lien on any of the Real Property; or alleges
that the Company, any of its Subsidiaries or any of the
current owners of the Proposed Acquisitions is liable for
any contamination of the environment, contamination of the
Real Property, damage to natural resources, property damage,
or personal injury based on their activities or the
activities of their predecessors or third parties (whether
at the Real Property or elsewhere) involving Hazardous
Materials, whether arising under the Environmental Laws,
common law principles, or other legal standards. In the
ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
Subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures)
required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any
potential liabilities to third parties.
(ee) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any
capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have
a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(ff) The Company is organized in conformity with the
requirements for qualification as a real estate investment
trust under the Internal Revenue Code of 1986, as amended
(the "Code"), and the Company's method of operation will
enable it to meet the requirements for taxation as a real
estate investment trust under the Code. The Subsidiaries of
the Company that are partnerships will be treated as
partnerships for federal income purposes and not as
corporations or associations taxable as corporations.
(gg) None of the entities which prepared appraisals of
the Real Property, nor the entities which prepared Phase I
environmental assessment reports with respect to the Real
Property, was employed for such purpose on a contingent
basis or has any substantial interest in the Company or any
of its Subsidiaries, and none of their directors, officers
or employees is connected with the Company or any of its
Subsidiaries as a promoter, selling agent, voting trustee,
officer, director or employee.
(hh) The Shares have been approved for listing, upon
official notice of issuance, on the New York Stock Exchange
(the "NYSE").
(ii) Neither the Company nor any of the Subsidiaries
is, or solely as a result of transactions contemplated
hereby and the application of the proceeds from the sale of
the Shares, will become an "investment company" or a company
"controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "1940
Act").
2. Agreements to Sell and Purchase. The Company hereby
agrees to sell to the several Underwriters, and each Underwriter,
upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from the Company
at $27.24 a share (the "Purchase Price") the number of Firm
Shares set forth in Schedule I hereto opposite the name of such
Underwriter.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the
Company agrees to sell to the Underwriters the Additional Shares,
and the Underwriters shall have a one-time right to purchase,
severally and not jointly, up to a total of 300,000 Additional
Shares at the Purchase Price. If you, on behalf of the
Underwriters, elect to exercise such option, you shall so notify
the Company in writing not later than 30 days after the date of
this Agreement, which notice shall specify the number of
Additional Shares to be purchased by the Underwriters and the
date on which such shares are to be purchased. Such date may be
the same as the Closing Date (as defined below) but not earlier
than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as
provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be
purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
The Company hereby agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 120 days
after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities,
in cash or otherwise. The foregoing sentence shall not apply to
(A) the Shares to be sold hereunder, (B) the issuance by the
Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the
date hereof of which the Underwriters have been advised in
writing, (C) shares of Common Stock issuable under the Company's
employee stock ownership plan, stock purchase plan, or dividend
reinvestment and stock purchase plan, (D) shares issuable upon
redemption of Common Units outstanding at the date hereof, or
(E) Common Units issued in connection with any property
acquisition.
3. Terms of Public Offering. The Company is advised by
you that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon after this
Agreement has been executed and delivered as in your judgment is
advisable. The Company is further advised by you that the Shares
are to be offered to the public initially at $28.75 a share (the
"Public Offering Price") and to certain dealers selected by you
at a price that represents a concession not in excess of $.89 a
share under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in
excess of $.10 a share, to any Underwriter or to certain other
dealers.
4. Payment and Delivery. Payment for the Firm Shares to
be sold by the Company shall be made to the Company in Federal or
other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 A.M., New York City time, on March
14, 1997, or at such other time on the same or such other date,
not later than March 21, 1997, as shall be designated in writing
by you. The time and date of such payment are hereinafter
referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the
Company in Federal or other funds immediately available in New
York City against delivery of such Additional Shares for the
respective accounts of the several Underwriters at 10:00 A.M.,
New York City time, on the date specified in the notice described
in Section 2 or at such other time on the same or on such other
date, in any event not later than April 23, 1997, as shall be
designated in writing by you. The time and date of such payment
are hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such
denominations as you shall request in writing not later than one
full business day prior to the Closing Date or the Option Closing
Date, as the case may be. The certificates evidencing the Firm
Shares and Additional Shares shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, for
the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the
Shares to the Underwriters duly paid, against payment of the
Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The
obligations of the Company to sell the Shares to the Underwriters
and the several obligations of the Underwriters to purchase and
pay for the Shares on the Closing Date are subject to the
following further conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for a post-effective amendment to
the Registration Statement to be declared effective before
the offering of the Shares may commence, such post-effective
amendment shall have become effective not later than
5:30 p.m., New York City time, on the date hereof, or at
such later date and time as shall be consented to in writing
by you.
(b) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any
downgrading, nor shall any notice have been given of
any intended or potential downgrading or of any review
for a possible change that does not indicate the
direction of the possible change, in the rating
accorded any of the Company's securities by any
"nationally recognized statistical rating
organization," as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any
change, or any development involving a prospective
change, in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and
its Subsidiaries, taken as a whole, from that set forth
in the Prospectus that, in your judgment, is material
and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus.
(iii) there shall not have occurred any
event or development relating to or involving the
Company or any Subsidiary or any officer or director of
the Company which makes any statement made in the
Prospectus untrue or which, in the reasonable opinion
of the Company and its counsel or the Underwriters and
their counsel, requires the making of any addition to
or change in the Prospectus in order to state a
material fact required by the Securities Act or any
other law to be stated therein or necessary in order to
make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event
or development would, in your reasonable opinion, as
Managers of the offering, materially adversely affect
the market for the Shares.
(c) The Underwriters shall have received on the
Closing Date a certificate, dated the Closing Date and
signed by an executive officer of the Company, to the effect
set forth in clauses (b)(i) and (b)(iii) above and to the
effect that the representations and warranties of the
Company contained in this Agreement are true and correct as
of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may
rely upon the best of his or her knowledge as to proceedings
threatened.
(d) All filings with the Commission required by Rule
424 under the Securities Act shall have been made within the
applicable time prior prescribed for such filing by such
Rule.
(e) At the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the Securities Act and no proceedings for that
purpose shall have been instituted or shall be pending or,
to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part
of the Commission for additional information shall have been
complied with to the satisfaction of counsel for the
Underwriters.
(f) The Underwriters shall have received on the
Closing Date an opinion of Baker, Donelson, Bearman &
Caldwell, outside counsel for the Company, dated the Closing
Date, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Tennessee with
all requisite corporate power and authority to own,
lease and operate its properties and the properties it
proposes to own, lease and operate as described in the
Registration Statement and the Prospectus and to
conduct its business as now conducted and as proposed
to be conducted as described in the Registration
Statement and the Prospectus. The Company has been
duly qualified or registered to do business and is in
good standing as a foreign corporation in the states of
Arkansas, Florida, Georgia, Kentucky, Mississippi,
Missouri, North Carolina, Ohio, South Carolina and
Virginia. There are no other jurisdictions in which
the ownership or leasing of the Company's properties or
the nature or conduct of its business as now conducted
or proposed to be conducted as described in the
Registration Statement and the Prospectus requires such
qualification, except where the failure to do so would
not have a material adverse effect on the Company and
its Subsidiaries, taken as a whole. To such counsel's
knowledge, except for the Subsidiaries, the Company
does not own or control, directly or indirectly, any
corporation, association or other entity.
(ii) The Partnership has been duly organized
and is validly existing as a limited partnership under
the Tennessee Revised Uniform Limited Partnership Act,
as amended, with all requisite partnership power and
authority to own, lease and operate its properties and
to conduct its business as now conducted and as
proposed to be conducted as described in the
Registration Statement and the Prospectus. The
Partnership has been duly qualified or registered to do
business and is in good standing as a foreign
partnership in the states of Arkansas, Florida,
Georgia, Kentucky, Mississippi, Missouri, North
Carolina, Ohio, South Carolina and Virginia. There are
no other jurisdictions in which the ownership or
leasing of the Partnership's properties or the nature
or conduct of its business as now conducted or proposed
to be conducted as described in the Registration
Statement and the Prospectus requires such
qualification, except where the failure to do so would
not have a material adverse effect on the Company and
its Subsidiaries, taken as a whole. The Company is the
sole general partner of the Partnership, and at the
Closing Date, will be the sole general partner of the
Partnership and, together with MAC, will own an
approximately 81.7% interest in the Partnership and
will own all of the outstanding Preferred Units.
(iii) Each Subsidiary of the Company
(other than the Partnership) has been duly organized
and is validly existing under the laws of its
jurisdiction of organization with all requisite power
and authority to conduct its business as now conducted
and as proposed to be conducted in the Registration
Statement and the Prospectus and is in good standing as
a foreign entity in each jurisdiction in which the
ownership of its properties or the nature or conduct of
its business as now conducted or proposed to be
conducted requires such qualification, except where the
failure to do so would not have a material adverse
effect on the Company and the Subsidiaries taken as a
whole. All of the equity interests in each of the
Subsidiaries have been duly authorized and are validly
issued, fully paid and non-assessable. The Company is
the sole direct or indirect owner of all of the equity
interests in the Subsidiaries (other than the
Partnership) and such interests are owned by the
Company or one of its Subsidiaries free and clear of
all liens, encumbrances, equities or claims.
(iv) The Company has full legal right, power
and authority to enter into, deliver and perform this
Agreement, to issue, sell and deliver the Shares as
provided herein and to consummate the transactions
contemplated herein. This Agreement has been duly
authorized, executed and delivered by the Company.
(v) The Partnership has full legal right,
power and authority to enter into, deliver and perform
this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly
authorized, executed and delivered by the Partnership.
(vi) No consent, approval, authorization,
order, license, certificate, permit, registration,
designation or filing by or with any governmental
agency or body is required for the execution, delivery
and performance by the Company and the Partnership of
their respective obligations under this Agreement, and
the consummation of the transactions contemplated
hereby including the valid authorization, issuance,
sale and delivery of the Shares, except such as may be
required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of
the Shares by the Underwriters, as to which such
counsel need express no opinion.
(vii) Neither the issuance, sale and
delivery by the Company of the Shares, nor the
execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated
hereby by the Company and the Partnership will
contravene any of the terms and provisions of the
charter, by-laws, certificate of limited partnership or
partnership agreement, as the case may be, of the
Company or any Subsidiary; or, to such counsel's
knowledge, and except as disclosed in the Prospectus,
constitute a default under any material indenture,
mortgage, deed of trust, loan agreement, note, lease or
other agreement or instrument to which the Company or
any Subsidiary is a party or to which either of them,
any of their respective properties or other assets or
any Community is subject; or, to such counsel's
knowledge, violate any applicable law, statute,
judgment, decree, order, rule or regulation of any
court or governmental agency or body; or, to such
counsel's knowledge, result in the creation or
imposition of any lien, charge, claim or encumbrance
upon any property or asset of any of the foregoing.
(viii) The authorized capital stock of the
Company conforms as to legal matters to the description
thereof contained in the Prospectus and meets the
requirements of Item 9 of Form S-3 under the Securities
Act.
(ix) The issuance and sale of the Shares to
the Underwriters hereunder have been duly authorized by
the Company. When issued and delivered against payment
therefor as provided in this Agreement, the Shares will
be validly issued, fully paid and nonassessable. No
preemptive or similar rights exist with respect to any
of the Shares. To such counsel's knowledge, no person
or entity holds a right to participate in the
registration under the Securities Act of the Shares
pursuant to the Registration Statement. To such
counsel's knowledge, no person or entity has a right of
participation or first refusal with respect to the sale
of the Shares by the Company. To such counsel's
knowledge, except as disclosed in the Prospectus, there
is no outstanding option, warrant or other right
calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of capital stock of
the Company or any security convertible into or
exchangeable for capital stock of the Company except
pursuant to the Company's Employee Stock Purchase Plan
and its 1994 Restricted Stock and Stock Option Plan and
Dividend Reinvestment and Stock Purchase Plan and
except for the issuance of Common Stock upon redemption
of Common Units. The shares of Common Stock
outstanding prior to the issuance of the Shares have
been duly authorized and are validly issued, fully paid
and non-assessable. The form of certificate evidencing
the Shares complies with all applicable legal
requirements.
(x) All of the issued and outstanding Common
Units and Preferred Units have been duly and validly
authorized by the Partnership. None of the outstanding
Common Units or Preferred Units has been issued or is
owned or held in violation of any preemptive rights.
The Common Units to be issued to the Company at the
Closing Date have been duly and validly authorized by
the Partnership and will be issued, offered and sold in
compliance with all applicable laws (including, without
limitation, federal and state securities laws). When
issued and delivered against payment therefor as
provided in the Partnership Agreement, such Common
Units will be duly and validly issued, fully paid and
non-assessable. The outstanding Common Units and
Preferred Units have been issued, offered and sold at
or prior to the Closing Date in compliance with all
applicable laws (including, without limitation, federal
and state securities laws). Immediately after the
Closing Date, 2,000,000 Preferred Units will be issued
and outstanding and the Company will own a 81.7%
interest in the Partnership.
(xi) To the knowledge of such counsel,
neither the Company nor any of its Subsidiaries is in
violation of its respective charter, by-laws,
certificate of limited partnership or partnership
agreement, as the case may be, and to the knowledge of
such counsel, no material default exists and no event
has occurred which, with notice or after the lapse of
time to cure or both, would constitute a material
default in the due performance and observance of any
obligation, agreement, term, covenant, or condition
contained in any indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or
instrument known to such counsel. To the knowledge of
such counsel, neither the Company nor any of its
Subsidiaries is in violation of, or in default with
respect to, any statute, rule, regulation, order,
judgment or decree, except as may be properly described
in the Prospectus or such as in the aggregate do not
now have and will not in the future have a material
adverse effect on the financial position, results of
operations or business of the Company and its
Subsidiaries, taken as a whole.
(xii) To the knowledge of such counsel after
due inquiry, there is not pending or threatened any
legal or governmental action, suit, proceeding, inquiry
or investigation against the Company or any of its
Subsidiaries or any of their respective partners,
officers or directors or to which the properties,
assets or rights of any such entity are subject, which,
if determined adversely to any such entity, would
individually or in the aggregate have a material
adverse effect on the financial position, results of
operations or business of the Company and it
Subsidiaries, taken as a whole, or which is required to
be disclosed in the Registration Statement and
Prospectus.
(xiii) The descriptions in the Registration
Statement and the Prospectus of the contracts, leases
and other legal documents therein described present
fairly the information required to be shown and there
are no contracts, leases or other documents known to
such counsel of a character required to be described in
the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement which
are not described or filed as required. To such
counsel's knowledge, all agreements between the Company
or any of its Subsidiaries, respectively, and third
parties expressly referenced in the Prospectus are
legal, valid and binding obligations, enforceable in
accordance with their respective terms, except to the
extent enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general
applicability relating to or affecting creditors'
rights and to general equitable principles.
(xiv) After due inquiry, such counsel does
not know of any statutes, regulations, contracts or
other documents that are required to be described in
the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that
are not described or filed as required.
(xv) The Shares have been approved for
listing on the NYSE upon official notice of issuance.
(xvi) The Company is organized in conformity
with the requirements for qualification as a real
estate investment trust pursuant to Sections 856
through 860 of the Code, and the Company's proposed
method of operation will enable it to meet the
requirements for qualification and taxation as a real
estate investment trust under the Code. Each of the
Subsidiaries that is organized as a partnership will be
treated as a partnership for federal income purposes
and not as a corporation or an association taxable as a
corporation.
(xvii) The Registration Statement has become
effective under the Securities Act and, to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been
instituted or is pending or contemplated under the
Securities Act. Other than financial statements and
other financial and operating data and schedules
contained therein, as to which counsel need express no
opinion (i) the Registration Statement, all Preliminary
Prospectus Supplements, the Prospectus and any
amendment or supplement thereto, at the time they
became effective or were filed, complied as to form in
all material respects with the Securities Act and the
rules and regulations thereunder and (ii) the documents
incorporated by reference in the Registration
Statement, all Preliminary Prospectus Supplements, the
Prospectus and any amendment or supplement thereto, at
the time they became effective or were filed, complied
as to form in all material respects with the Exchange
Act and the rules and regulations of the Commission
thereunder.
(xviii) Neither the Company nor any of the
Subsidiaries is, or solely as a result of the
consummation of the transactions contemplated hereby
and the application of the proceeds from the sale of
the Shares will become, an "investment company," or a
company "controlled" by an "investment company," within
the meaning of the 1940 Act.
(xix) The statements in the Prospectus
under the captions "Risk Factors", "Description of the
Capital Stock of the Company" and "Underwriters"
insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to
therein, fairly present the information called for with
respect to such legal matters, documents and
proceedings and fairly summarize the matters referred
to therein. The information in the Prospectus under the
caption "Federal Income Tax Considerations" to the
extent that such information constitutes matters of law
or legal conclusions, has been reviewed by such
counsel, is correct in all material respects and the
discussion thereunder does not omit any material
provisions with respect to the matters covered and
presents fairly the information required to be
disclosed therein under the Securities Act and the
Securities Act Regulations.
(xx) Such counsel (A) is of the opinion that
the Registration Statement and Prospectus (except for
financial statements and schedules and other financial
and statistical data as to which such counsel need not
express any opinion) comply as to form in all material
respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (B)
has no reason to believe that (except for financial
statements and schedules and other financial and
operating data included therein, as to which counsel
need make no statement), the Registration Statement or
any documents incorporated by reference therein at the
time such Registration Statement became effective, and
as of the date of such opinion, contained or contains
any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated
therein or necessary to make statements therein not
misleading, and (C) has no reason to believe that
(except for financial statements and schedules and
other financial and operating data included therein, as
to which counsel need not express any belief), the
Prospectus or any amendment or supplement thereto made
prior to the Closing Date, as of its date, and as of
the date of such opinion, 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, in light
of the circumstances under which they are made, not
misleading.
(g) The Underwriters shall have received on the
Closing Date an opinion of Hunton & Williams, counsel for
the Underwriters, dated the Closing Date, covering the
matters referred to in subparagraphs (vii), (ix) (but only
as to the first three sentences thereof), (xix) (but only as
to the statements in the Prospectus under "Description of
the Capital Stock of the Company" and "Underwriters"), and
(xx) of paragraph (f) above.
With respect to subparagraph (xxi) of paragraph (f)
above, Baker, Donelson, Bearman & Caldwell and Hunton &
Williams may state that their opinion and belief are based
upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or
supplements thereto and review and discussion of the
contents thereof, but are without independent check or
verification, except as specified.
The opinion of Baker, Donelson, Bearman & Caldwell
described in paragraph (f) above shall be rendered to the
Underwriters at the request of the Company and shall so
state therein.
(h) The Underwriters shall have received, on each of
the date hereof and the Closing Date, a letter dated the
date hereof or the Closing Date, as the case may be, in form
and substance satisfactory to the Underwriters, from KPMG
Peat Marwick LLP, independent public accountants, containing
statements and information of the type normally found in
accountants' "comfort letters" to underwriters with respect
to the financial statements and certain financial
information contained in or incorporated by reference into
the Registration Statement and the Prospectus; provided that
the letter delivered on the Closing Date shall use a "cut
off" date not earlier than the date hereof.
(i) The "lock-up" agreements, each substantially in
the form of Exhibit A hereto, between you and certain
executive officers of the Company identified by you relating
to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on
the Closing Date.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on
the Option Closing Date of such documents as you may reasonably
request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
6. Covenants of the Company and the Partnership. In
further consideration of the agreements of the Underwriters
herein contained, the Company and the Partnership covenant with
each Underwriter as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for a post-effective amendment to
the Registration Statement to be declared effective before
the offering of the Shares may commence, the Company will
endeavor to cause such post-effective amendment to become
effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in
writing, when such post-effective amendment has become
effective.
(b) To advise you promptly and, if requested by you,
confirm such advice in writing: (i) of any request by the
Commission for amendment of or a supplement to the
Registration Statement, any Preliminary Prospectus
Supplement or the Prospectus or for additional information;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement
or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of
any proceeding for such purpose; and (iii) within the period
of time referred to in paragraph (e) below, of any change in
the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations,
or of the happening of any event, which makes any statement
of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which
requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by
the Securities Act or the regulations thereunder to be
stated therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented)
to comply with the Securities Act or any other law. If at
any time the Commission shall issue any stop 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 time.
(c) To furnish to you, without charge, (i) five signed
or conformed copies of the Registration Statement (including
exhibits thereto) and for delivery to each other Underwriter
a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City,
without charge, prior to 10:00 A.M. New York City time on
the business day next succeeding the date of this Agreement
and during the period mentioned in paragraph (c) below, as
many copies of the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you
may reasonably request, and (ii) such number of copies of
the Incorporated Documents, including exhibits, as you may
reasonably request.
(d) Before amending or supplementing the Registration
Statement or the Prospectus, or, prior to the end of the
period of time referred to in the first sentence in
subsection (e) below, prior to filing any document which
upon filing becomes an Incorporated Document, to furnish to
you a copy of each such proposed amendment or supplement or
document and not to file any such proposed amendment or
supplement or document to which you reasonably object, and
to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(e) If, during such period after the first date of the
public offering of the Shares as in the opinion of counsel
for the Underwriters the Prospectus is required by law to be
delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply
with law. In the event that the Company and you agree that
the Prospectus should be amended or supplemented, the
Company, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered
by the proposed amendment or supplement.
(f) To endeavor to qualify the Shares for offer and
sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request.
(g) To make generally available to the Company's
security holders and to you as soon as practicable an
earning statement covering the twelve-month period ending
March 31, 1998 that satisfies the provisions of Section
11(a) of the Securities Act and the rules and regulations of
the Commission thereunder.
(h) The Company and the Partnership will use the net
proceeds received from the sale of the Shares in the manner
specified in the Prospectus under the caption "Use of
Proceeds."
(i) The Company and its Subsidiaries have not taken,
and will not take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
(j) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the
Company, a registrar (which may be the same entity as the
transfer agent) for its Common Stock.
(k) The Company will use its best efforts to maintain
the listing of the Shares on the NYSE.
(l) The Company will use its best efforts (i) to meet
the requirements to qualify as a real estate investment
trust under the Code and (ii) to cause each of its
Subsidiaries that is organized as a partnership to be
treated as a partnership for federal income tax purposes.
(m) The Company will comply with all of the provisions
of any undertakings in the Registration Statement.
(n) The Company and its Subsidiaries will conduct
their affairs in such a manner so as to ensure that neither
the Company nor any Subsidiary will be an "investment
company" or an entity "controlled" by an investment company
within the meaning of the 1940 Act.
7. Expenses. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is
terminated, the Company agrees to pay or cause to be paid all
expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants
in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any Preliminary Prospectus Supplement, the Prospectus
and amendments and supplements to any of the foregoing, including
all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in
the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or
Legal Investment memorandum in connection with the offer and sale
of the Shares under state securities laws and all expenses in
connection with the filing of any state notice required in
connection with the offer and sale of the Shares in any state as
provided herein, including reasonable fees and disbursements of
counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal
Investment memorandum, (iv) all filing fees and disbursements of
counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Shares by the
National Association of Securities Dealers, Inc., (v) the cost of
printing certificates representing the Shares, (vi) the costs and
charges of any transfer agent, registrar or depositary, (vii) the
costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with
the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection
with the road show, and (viii) all other costs and expenses
incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in
this Section, Section 8 entitled "Indemnity and Contribution",
and the last paragraph of Section 10 below, the Underwriters will
pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on
resale of any of the Shares by them and any advertising expenses
connected with any offers they may make.
8. Indemnity and Contribution. (a) The Company and the
Partnership, jointly and severally, agree to indemnify and hold
harmless each Underwriter and each person, if any, who controls
any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any Preliminary
Prospectus Supplement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission
or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company or the
Partnership in writing by such Underwriter through you expressly
for use therein.
(b) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Partnership, the
Company, the directors of the Company, the officers of the
Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof,
any Preliminary Prospectus Supplement or the Prospectus (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration
Statement, any Preliminary Prospectus Supplement, the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to paragraph
(a) or (b) of this Section 8, such person (the "indemnified
party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay
the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for (i) the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Underwriters and
all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act and (ii) the fees and expenses of more than
one separate firm (in addition to any local counsel) for the
Partnership, the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls
the Company within the meaning of either such Section. In the
case of any such separate firm for the Underwriters and such
control persons of any Underwriters, such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated. In
the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm
shall be designated in writing by the Company. The indemnifying
party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 8 is unavailable to an
indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified
party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the
indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with
the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company
and the Partnership on the one hand and the Underwriters on the
other hand in connection with the offering of the Shares shall be
deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting
expenses) received by the Company and the Partnership and the
total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover
of the Prospectus, bear to the aggregate Public Offering Price of
the Shares. The relative fault of the Company on the one hand
and the underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company or the Partnership or by the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant
to this Section 8 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(e) The Company and the Partnership, on the one hand,
and the Underwriters, on the other, agree that it would not be
just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable
considerations referred to in paragraph (d) of this Section 8.
The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The remedies provided for in
this Section 8 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified
party at law or in equity.
(f) The indemnity and contribution provisions
contained in this Section 8 and the representations, warranties
and other statements of the Company and the Partnership contained
in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, or the Partnership, the
Company, its officers or directors or any person controlling the
Company or the Partnership and (iii) acceptance of and payment
for any of the Shares.
9. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after
the execution and delivery of this Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange or the Chicago
Board of Trade, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-
counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal
or New York State or Tennessee authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in
your judgment, is material and adverse and (b) in the case of any
of the events specified in clauses (a) (i) through (iv), such
event, singly or together with any other such event, makes it, in
your judgment, impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the execution and delivery hereof by
the parties hereto.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or
refuse to purchase Shares that it has or they have agreed to
purchase hereunder on such date, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of
the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite
their respective names in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall
the number of Shares that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section
10 by an amount in excess of one-ninth of such number of Shares
without the written consent of such Underwriter. If, on the
closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Firm Shares and the aggregate number of Firm
Shares with respect to which such default occurs is more than one-
tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase
of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Additional Shares
to be purchased, the non-defaulting Underwriters shall have the
option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would
have been obligated to purchase in the absence of such default.
Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of
the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company
shall be unable to perform its obligations under this Agreement,
the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering
contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the
same instrument.
12. Applicable Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State
of New York.
13. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only
and shall not be deemed a part of this Agreement.
Very truly yours,
MID-AMERICA APARTMENT COMMUNITIES, INC.
By: /s/ George Cates
--------------------------
Name: George Cates
Title: Chairman and CEO
MID-AMERICA APARTMENTS, L.P.
By: MID-AMERICA APARTMENT COMMUNITIES, INC.,
Its General Partner
By: /s/ George Cates
---------------------------
Name: George Cates
Title: Chairman and CEO
<PAGE>
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
J.C. Bradford & Co.
Morgan Keegan & Company, Inc.
Raymond James & Associates, Inc.
Acting severally on behalf
of themselves and the
several Underwriters named
herein.
By Morgan Stanley & Co.
Incorporated
By: /s/ Robert N. Weaver
------------------------------
Name: Robert N. Weaver
Title: Vice President
<PAGE>
SCHEDULE I
Number of
Firm Shares
Underwriter To Be Purchased
------------------------------------ ---------------
Morgan Stanley & Co., Incorporated 380,000
J.C. Bradford & Co. 380,000
Morgan Keegan & Company, Inc. 380,000
Raymond James & Associates, Inc. 380,000
Alex. Brown & Sons Incorporated 60,000
Dean Witter Reynolds, Inc. 60,000
EVEREN Securities, Inc. 40,000
Interstate/Johnson Lane Corporation 40,000
Legg Mason Wood Walker, Incorporated 40,000
McDonald & Company Securities, Inc. 40,000
Montgomery Securities 60,000
PaineWebber Incorporated 60,000
The Robinson-Humphrey Company, Inc. 40,000
Scott & Stringfellow, Inc. 40,000
---------
Total ......... 2,000,000
<PAGE>
SCHEDULE II
Subsidiaries of the Company
Mid-America Apartments, LP
MAC of Delaware, Inc.
MAAC, Inc.
Mid-America Apartment Communities of Texas, L.P.
America First Austin REIT, Inc.
America First Florida REIT, Inc.
America First Tennessee REIT, Inc.
America First Texas REIT, Inc.
America First Arizona REIT, Inc.
Madison, LP
Jackson, LP
River Hills Partnership
Pine Trails JV, LP
Fairways - Columbia LP
MAAC, Tanglewood LP
Woodridge JV, LP
Woods of Post House, LP
<PAGE>
EXHIBIT A
[Form of Lock-up Letter]
________________, 1997
Morgan Stanley & Co. Incorporated
J.C. Bradford & Co.
Morgan Keegan & Company, Inc.
Raymond James & Associates, Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs:
The undersigned understands that Morgan Stanley & Co.
Incorporated ("Morgan Stanley"), as Representative of the several
Underwriters, proposes to enter into an Underwriting Agreement
(the "Underwriting Agreement") with Mid-America Apartment
Communities, Inc., a Tennessee corporation (the "Company")
providing for the public offering (the "Public Offering") by the
several Underwriters, including Morgan Stanley (the
"Underwriters"), of 2,000,000 shares of Common Stock, par value
$.01 per share, of the Company (the "Common Stock").
To induce the Underwriters that may participate in the
Public Offering to continue their efforts in connection with the
Public Offering, the undersigned hereby agrees that, without the
prior written consent of Morgan Stanley on behalf of the
Underwriters, the undersigned will not, during the period
commencing on the date hereof and ending 120 days after the date
of the final prospectus supplement relating to the Public
Offering (the "Prospectus"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of the Company's Series A Preferred Stock
(the "Series A Preferred Stock") or Common Stock or any
securities convertible into or exercisable or exchangeable for
Series A Preferred Stock or Common Stock, or (2) enter into any
swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of such
shares of Series A Preferred Stock or Common Stock, whether any
such transaction described in clause (1) or (2) above is to be
settled by delivery of Series A Preferred Stock or Common Stock
or such other securities, in cash or otherwise. In addition, the
undersigned agrees that, without the prior written consent of
Morgan Stanley on behalf of the Underwriters, the undersigned
will not, during the period commencing on the date hereof and
ending 120 days after the date of the Prospectus, make any demand
for or exercise any right with respect to, the registration of
any shares of Series A Preferred Stock or Common Stock or any
security convertible into or exercisable or exchangeable for
Series A Preferred Stock or Common Stock.
Whether or not the Public Offering actually occurs
depends on a number of factors, including market conditions. Any
Public Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to agreement between
the Company and the Underwriters.
Very truly yours,
(Name)
(Address)
