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
June 25, 1998
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>
Explanation of Filing
This report contains as an exhibit the Underwriting
Agreement between Mid-America Apartment Communities, Inc., Mid-
America Apartments, L.P. Morgan Stanley & Co. Incorporated,
Morgan Keegan & Company, Inc., Raymond James & Associates, Inc.,
and The Robinson-Humphrey Company in connection with the sale of
2,000,000 shares of the Company's 9 3/8% Series C Cumulative
Redeemable Preferred Stock, $.01 par value per share, $25.00
liquidation value per share, pursuant to the Company's Prospectus
Supplement dated June 25, 1998, to a base Prospectus dated
September 9, 1997, included as a part of a Registration Statement
on Form S-3 (No. 333-34775) filed with the Securities and
Exchange Commission on September 2, 1997.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
The following exhibits are filed herewith:
Exhibit Description
- -------- -----------------
1.1 Underwriting Agreement between Mid-America Apartment
Communities, Inc., Mid-America Apartments, L.P. Morgan
Stanley & Co. Incorporated, Morgan Keegan & Company,
Inc., Raymond James & Associates, Inc., and The
Robinson-Humphrey Company, LLC.
<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: June 30, 1998 /S/ Simon R.C. Wadsworth
-------------------- -------------------------------------
Simon R.C. Wadsworth
Executive Vice President
(Principal Financial and Accounting Officer)
EXHIBIT 1.1
2,000,000 Shares
MID-AMERICA APARTMENT COMMUNITIES, INC.
SERIES C CUMULATIVE REDEEMABLE PREFERRED STOCK
UNDERWRITING AGREEMENT
June 25, 1998
<PAGE>
June 25, 1998
Morgan Stanley & Co. Incorporated
Morgan Keegan & Company, Inc.
Raymond James & Associates, Inc.
The Robinson-Humphrey Company, LLC
As Representatives of the Several Underwriters
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 you
and the several Underwriters named in Schedule I hereto
(collectively, the "Underwriters") for whom you are acting as
representatives (the "Representatives") an aggregate of 2,000,000
shares of Series C Cumulative Redeemable Preferred Stock, par
value $.01 per share, of the Company (the "Shares"), all of which
shares are to be issued and sold by the Company.
The shares of the Series C Cumulative Redeemable Preferred
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 "Series C Preferred Stock."
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-
3 (Registration No. 333-34775), including a base prospectus dated
September 9, 1997 (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 preliminary
prospectus supplement relating to the Shares in the form filed
with the Commission on June 17, 1998 pursuant to Rule 424(b)
under the Securities Act and the prospectus supplement relating
to the Shares dated the date hereof in the form filed with the
Commission on or after June 25, 1998, pursuant to Rule 424(b)
under the Securities Act. Any reference in this Agreement to the
Registration Statement 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 and the Prospectus,
as the case may be, and any reference to any amendment or
supplement to the Registration Statement 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 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 Shares,
the Company and MAC II of Delaware, Inc., a wholly owned
subsidiary of the Company ("MAC") will own an approximate
1% general partnership interest and an approximately 83.2%
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 own 119 apartment communities (individually, a
"Community" and collectively, the "Communities") containing
31,589 apartment units, located in 13 states. The Company and
the Partnership have entered into one acquisition agreement dated
June 10, 1998 to acquire four additional apartment communities
(the "Proposed Acquisitions") containing 1,001 apartment units
and related assets, 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. (i) The Registration
Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration
Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations
of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon
information relating to any Representative furnished to the
Company in writing by such Representative expressly for use
therein.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects
with the Securities Act and the applicable rules and regulations
of the Commission thereunder.
(d) 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.
(e) 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.
(f) 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 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
approximate 84.2% interest in the Partnership and will own the
2,000,000 Series A Cumulative Preferred Units of partnership
interest in the Partnership, the 1,938,830 Series B Cumulative
Preferred Units of partnership interest in the Partnership and
the 3,200,000 Series C Cumulative Redeemable Preferred Units of
partnership interest in the Partnership (collectively, the
"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 15.8%
limited partnership interests in the Partnership and the
ownership of the voting common stock of Flournoy Construction
Company, which represents approximately a 5% economic interest in
such entity), 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.
(g) 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.
(h) 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.
(i) The Second 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.
(j) With the exception of the filing of the Designating
Amendment with the Tennessee Secretary of State, 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.
(k) 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 other instrument binding on 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.
(l) 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.
(m) 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,
18,610,912 shares of Common Stock, 2,000,000 shares of the
Company's Series A Preferred Stock, 1,938,830 shares of the
Company's Series B Preferred Stock and 2,000,000 shares of the
Company's Series C 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.
(n) 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).
(o) 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 or incorporated by reference in the Registration
Statement 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.
(p) 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.
(q) Neither the Company nor any of its Subsidiaries has
sustained, since December 31, 1997, 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.
(r) 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 Registration
Statement or the Prospectus. No person has an option or right of
first refusal to purchase all or part of any Community, any
Proposed Acquisition 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.
(s) 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.
(t) 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.
(u) There are no legal or governmental proceedings pending
or,to the knowledge of the Company, threatened to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement
or the Prospectus and are not so described or 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.
(v) 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.
(w) 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.
(x) 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.
(y) 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.
(z) 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.
(aa) 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.
(bb) 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.
(cc) 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.
(dd) 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.
(ee) 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.
(ff) Except as otherwise disclosed in the Registration Statement
or 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; the Company and the Partnership, the Real
Property and the Company's and its Subsidiaries' and, to the
knowledge of the Company and the Partnership, 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.
(gg) 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.
(hh) 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.
(ii) 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.
(jj) The Shares have been approved for listing, upon official
notice of issuance, on the New York Stock Exchange (the "NYSE").
(kk) 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 the
respective number of Shares set forth in Schedule I hereto
opposite its name at $24.2125 a share (the "Purchase Price").
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 30 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, lease or otherwise transfer or dispose of, directly or
indirectly, any shares of Preferred Stock or any securities
convertible into or exercisable or exchangeable for Preferred
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 Preferred Stock, whether any
such transaction described in clause (i) or (ii) above is to be
settled by delivery of Preferred Stock or such other securities,
in cash or otherwise.
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 the Registration
Statement and this Agreement have become effective 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
$25.00 a share (the "Public Offering Price") plus accrued
dividends, if any, to the Closing Date, and to certain dealers
selected by you at a price that represents a concession not in
excess of $0.50 a share under the Public Offering Price, and that
any Underwriter may allow, and such dealers may reallow, a
concession, not in excess of $0.40 a share, to any Underwriter or
to certain other dealers.
4. Payment and Delivery. Payment for the Shares shall be made
to the Company in Federal or other funds immediately available in
New York City against delivery of such Shares for the respective
accounts of the several Underwriters at 10:00 A.M., New York City
time, on June 30, 1998, or at such other time on the same or such
other date, not later than July 1, 1998, as shall be designated
in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Certificates for the 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. The certificates evidencing the Shares shall
be delivered to you on the Closing Date 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 (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement)
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; and
(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
84.2% 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 Flournoy Construction Company)
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
(with the exception of the filing of the Designating Amendment),
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
real estate syndication laws of the various states or by the
National Association of Securities Dealers, Inc. 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 applicable law or 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, 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 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 Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable. 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,
its Leadership Employee Stock Ownership 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 Series C Preferred 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
Series C Preferred 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). Imediately after the Closing Date, 2,000,000 Series A
Preferred Units, 1,938,830 Series B Preferred Units and 3,200,000
Series C Units will be issued and outstanding and the Company,
together with MAC, will own an approximate 84.2% interest in the
Partnership.
(xi) To the knowledge of such counsel, neither the Company nor
any 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 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,
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, 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 Subsidiary 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 (viii), (x) (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 (xx) 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.
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 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) six 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 (e) 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 June 30, 1999 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 Series C Preferred 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, 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) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A
relating to the Shares and all costs and expenses incident to
listing the Shares on the NYSE securities exchanges and foreign
stock exchanges, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) 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 (ix)
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 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 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, 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.
(Signatures Appear on the Following Page)
Very truly yours,
MID-AMERICA APARTMENT
COMMUNITIES, INC.
By: /s/ Mark S. Martini
Name: Mark S. Martini
Title: Secretary and Treasurer
MID-AMERICA APARTMENTS, L.P.
By: MID-AMERICA APARTMENT
COMMUNITIES, INC.,
Its General Partner
By: /s/ Simon R.C. Wadsworth
Name: Simon R.C. Wadsworth
Title: EVP and CFO
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
Morgan Keegan & Company, Inc.
Raymond James & Associates, Inc.
The Robinson-Humphrey Company, LLC
Acting severally on behalf of
themselves and the several
Underwriters listed on the
attached Schedule I
By: Morgan Stanley & Co.
Incorporated
By: /s/ Robert N. Weaver
Name: Robert N. Weaver
Title: Vice President
SCHEDULE I
Number of
Shares to
Underwriter be Purchased
- -------------------------------------------------------------------
409,375
Morgan Stanley & Co., Incorporated 409,375
J.C. Bradford & Co. 409,375
Morgan Keegan & Company, Inc. 409,375
Raymond James & Associates, Inc. 25,000
The Robinson-Humphrey Company, LLC 25,000
A. G. Edwards & Sons 25,000
J.C. Bradford & Co. 25,000
BT Alex Brown Incorporated 25,000
CIBC Oppenheimer 25,000
Equitable Securities Corporation 25,000
EVEREN Securities, Inc. 25,000
Cowen & Company 12,500
Cromwell Weedon & Co. 12,500
Dain Rauscher Incorporated 12,500
Fahnestock & Co Inc. 12,500
Gibraltar Securities Co. 12,500
Interstate/Johnson Lane Corporation 12,500
Janney Montgomery Scott Inc. 12,500
Legacy Securities Corp. 12,500
Legg Mason Wood Walker, Incorporated 12,500
McDonald & Company Securities, Inc. 12,500
McGinn, Smith & Co., Inc. 12,500
Fifth Third/The Ohio Company 12,500
Piper Jaffray Inc. 12,500
Rooney & Co., L.L.C. 12,500
Scott & Stringfellow, Inc. 12,500
Tucker Anthony Incorporated 12,500
-------------
Total 2,000,000
=============
SCHEDULE II
Subsidiaries of the Company
MAC II of Delaware, Inc.
MAC of Delaware, Inc.
America First Austin Reit, Inc.
America First Florida Reit Inc.
America First South Carolina Reit Inc.
America First Tennessee Reit Inc.
America First Texas Reit Inc.
MAC of Austin Inc.
MAC Capital Partners, Inc.
Mid-America Holdings LLC
Mid-America Apartments, LP
Mid-America Capital Partners, L.P.
Mid-America Apartments of Texas LP
Mid-America Apartments of Duval LP
Mid-America Apartments of Austin LP
Mid-America Apartments Stassney Woods LP
Mid-America Apartments Runaway Bay LP
Mid-America Apartments Travis Station LP
MAAC, Tanglewood LP
Fairways-Columbia LP
Flournoy Construction Company
Pine Trails Joint Venture LP
Woodridge Joint Venture LP
River Hills Partnership
Madison LP
Jackson LP
Wood Post House LP
Hidden Lake Ltd.
Hidden Oaks Associates
Paddock Park Apartments Ltd.
Park Walk Apartments Ltd.
River Trace Apartments Ltd.
River Trace Apartments Phase II Ltd.
The Vistas Ltd.
Westbury Springs Ltd.
Copper Field Apartments, A Limited Partnership
Fountain Lakes Apartments Ltd.
Paddock Club Brandon, A Limited Partnership
Paddock Club Wildewood, A Limited Partnership
Paddock Club Columbia Phase II, A Limited Partnership
Paddock Club Florence, A Limited Partnership
Paddock Club Greenville, A Limited Partnership
Paddock Club Huntsville, A Limited Partnership
Paddock Club Jacksonville, A Limited Partnership
Paddock Club Jacksonville, Phase II, A Limited Partnership
Paddock Club Lakeland, A Limited Partnership
Paddock Club Lakeland Phase II, A Limited Partnership
Paddock Club Tallahassee, A Limited Partnership
Paddock Club Tallahassee Phase II, A Limited Partnership
Paddock Park Ocala II, A Limited Partnership
Southland Station Phase II, A Limited Partnership
Three Oaks Ltd.
Three Oaks Apartments Phase II Ltd.
Towne Lake Hills Apartments, A Limited Partnership
Westbury Creek Ltd.
Whispering Pines Ltd.
Whispering Pines Phase II, Ltd.
Whisperwood Associates, A Limited Partnership
Whisperwood Spa and Club, A Limited Partnership
Wildwood Apartments Ltd.
Wildwood Apartments Phase II Ltd.
Windridge Apartments Ltd.
