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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
DECEMBER 1, 1997
GABLES RESIDENTIAL TRUST
(Exact name of Registrant as specified in its charter)
MARYLAND 1-12590 58-2077868
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
2859 PACES FERRY ROAD, SUITE 1450
ATLANTA, GEORGIA 30339
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
770-436-4600
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ITEM 5. OTHER EVENTS.
On December 1, 1997, Gables Residential Trust (the "Company") completed
the offering of 1,700,000 common shares of beneficial interest, par value $.01
per share ("Common Shares"), at a public offering price of $27.1875 per share,
less an underwriting discount of $1.36 per share. The offering of the Common
Shares was made pursuant to a Prospectus Supplement dated November 24, 1997
relating to the Prospectus dated August 11, 1997 filed with the Company's shelf
registration statement on Form S-3 (File No. 333-30093).
The net proceeds to the Company from the sale of the Common Shares,
after anticipated issuance costs, are estimated to be approximately $43.8
million. The Company will use the net proceeds to reduce borrowings under its
credit facilities, which borrowings were used primarily to fund the acquisition
and development of additional apartment communities.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED:
Not Applicable
(b) PRO FORMA FINANCIAL INFORMATION:
Not Applicable
(c) EXHIBITS:
EXHIBIT NO.
- ----------
1. Underwriting Agreement dated November 24, 1997.
5. Opinion as to the legality of the Common Shares.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 1, 1997 GABLES RESIDENTIAL TRUST
/s/ Marvin R. Banks, Jr.
----------------------------------
By: Marvin R. Banks, Jr.
Chief Financial Officer
and Treasurer
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1,700,000 Shares
GABLES RESIDENTIAL TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
November 24, 1997
PAINEWEBBER INCORPORATED
LEGG MASON WOOD WALKER, INCORPORATED
c/o PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
INTRODUCTORY. Gables Residential Trust, a Maryland real estate
investment trust (the "COMPANY"), proposes to sell an aggregate of 1,700,000
shares (the "FIRM SHARES") of the Company's common shares of beneficial
interest, $.01 par value per share (the "COMMON SHARES"), to you (hereinafter,
the "UNDERWRITERS"). The Company has also agreed to grant to the Underwriters an
option (the "OPTION") to purchase up to an additional 255,000 Common Shares (the
"OPTION SHARES") on the terms and for the purposes set forth in Section 1(b)
hereof. The Firm Shares and the Option Shares are hereinafter collectively
referred to as the "SHARES."
The public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by the Underwriters shall be agreed
upon by the Company and the Underwriters, and such agreement shall be set forth
in a separate written instrument substantially in the form of EXHIBIT A hereto
(the "PRICE DETERMINATION AGREEMENT"). The Price Determination Agreement may
take the form of an exchange of any standard form of written telecommunication
among the Company and the Underwriters, and shall specify such applicable
information as is indicated in EXHIBIT A hereto. The offering of the Shares will
be governed by this Agreement, as supplemented by the Price Determination
Agreement. From and after the date of the execution and delivery of the Price
Determination Agreement, this Agreement shall be deemed to incorporate, and,
unless the context otherwise indicates, all references contained herein to "this
Agreement" and to the phrase "herein" shall be deemed to include, the Price
Determination Agreement.
The Company confirms as follows its agreements with the Underwriters.
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1. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company at the purchase price per share for the Shares to be
agreed upon by the Underwriters and the Company and set forth in the Price
Determination Agreement the number of Shares set forth opposite the name of each
such Underwriter in SCHEDULE 1.
(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the several Underwriters to purchase
up to 255,000 Option Shares from the Company at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement, upon written or
telegraphic notice (the "OPTION SHARES NOTICE") by the Underwriters to the
Company. The date for the closing of the sale of the Option Shares (the "OPTION
CLOSING DATE"), shall be determined by you but shall be no later than 10 days
after delivery of the Option Shares Notice. On the Option Closing Date, the
Company agrees to issue and sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, that
Underwriter's proportionate share (based upon the respective underwriting
obligations of the several Underwriters hereunder as set forth in SCHEDULE 1
hereto except as may be adjusted by you to eliminate fractions) of the number of
Option Shares specified in such notice. The right to purchase the Option Shares
or any portion thereof may be surrendered and terminated at any time upon notice
by the Underwriters to the Company.
(c) The public offering price per share for the Firm Shares
and the purchase price per share for the Firm Shares to be paid by the
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement.
2. DELIVERY AND PAYMENT. Delivery of the Firm Shares shall be made to
the Underwriters against payment of the purchase price by wire transfer of same
day funds at the office of PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019. Such payments shall be made at 10:00 a.m.,
New York City time, on the fourth business day following the date of this
Agreement (or if the NYSE or American Stock Exchange or commercial banks in the
City of New York are not open on such day, the next day on which such exchanges
and banks are open), or at such time on such other date, not later than eight
full
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business days after the date of this Agreement, as may be agreed upon by the
Company and the Underwriters (such date is hereinafter referred to as the
"CLOSING DATE").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above at the time and date (which may be the
Closing Date) specified in the Option Shares Notice.
If requested by the Underwriters no later than the date of this
Agreement, certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the Underwriters
shall request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
Underwriters shall be borne by the Company. The Company will pay and save the
Underwriters and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
the Underwriters of the Firm Shares and Option Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to the Underwriters that:
(a) The Company meets the requirements for use of Form S-3 and a
registration statement (Registration No. 333- 30093) on Form S-3 relating to the
Shares, including a prospectus, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"ACT"), and the rules and regulations (the "RULES AND REGULATIONS") of the
Securities and Exchange Commission (the "COMMISSION") thereunder and has been
filed with the Commission and has become effective. Such registration statement
and prospectus may have been amended or supplemented prior to the date of this
Agreement; any such amendment or supplement was so prepared and filed, and any
such amendment filed after the effective date of such registration statement has
become effective. No stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has been
instituted or, to the Company's knowledge, threatened by the Commission. Copies
of such registration
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statement and prospectus, any such amendments or supplements and all documents
incorporated by reference therein that were filed with the Commission on or
prior to the date of this Agreement have been delivered or made available to the
Underwriters. A prospectus supplement (the "PROSPECTUS SUPPLEMENT") setting
forth the terms of the Common Shares and of their sale and distribution has been
or will be so prepared and will be filed pursuant to Rule 424(b) of the Rules
and Regulations on or before the second business day after the date hereof (or
such earlier time as may be required by the Rules and Regulations). The term
"REGISTRATION STATEMENT" means such registration statement as amended at the
time it became effective (the "Effective Date"), including financial statements
and all exhibits and any information deemed by virtue of Rule 430A of the Rules
and Regulations to be included in such Registration Statement at the Effective
Date and any prospectus supplement filed thereafter with the Commission and
shall include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"). The term "PROSPECTUS" means, collectively, the
Base Prospectus together with any prospectus supplement, in the respective forms
they are filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, and includes the documents incorporated by reference in the Base
Prospectus and in any prospectus supplement. Any reference herein to the terms
"amend," "amendment" or "supplement" with respect to Registration Statement or
Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein.
(b) Each part of the Registration Statement, when such part
became or becomes effective and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the Closing
Date, and if later, the Option Closing Date, including the financial statements
included or to be included or incorporated by reference or to be incorporated by
reference into the Prospectus, conformed or will conform in all material
respects with the requirements of the Act, the Exchange Act, the rules and
regulations thereunder (the "EXCHANGE ACT RULES AND REGULATIONS") and the Rules
and Regulations and will contain all statements required to be stated therein in
accordance with the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations; each part of the Registration
Statement, when such part became or becomes effective, did not or will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at the Closing Date, did not or
will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in
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light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
such Underwriter specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges that
the only information furnished in writing to the Company by the Underwriters
specifically for inclusion in the Registration Statement or Prospectus is the
information set forth in EXHIBIT B hereto. The Company has not distributed any
offering material in connection with the offering or sale of the Shares other
than the Registration Statement, the Prospectus, or any other materials, if any,
permitted by the Act.
(c) The documents incorporated or to be incorporated by
reference in the Registration Statement, the Prospectus or any amendment or
supplement thereto or from which information is so incorporated by reference,
when they became or become effective or were or are filed with the Commission,
as the case may be, complied or will comply in all material respects with the
requirements of the Act or the Exchange Act, as applicable, the Exchange Act
Rules and Regulations and the Rules and Regulations.
(d) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on EXHIBIT C hereto (the
"SUBSIDIARIES"). The Company and each of its subsidiaries is, and at the Closing
Date will be, an entity duly organized or formed, as the case may be, and, in
the case of an entity that is not a general partnership, validly existing and in
good standing under the laws of the jurisdiction of its organization or
incorporation. The Company and each of its subsidiaries has, and at the Closing
Date will have, full power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. The
Company and each of its subsidiaries is, and at the Closing Date will be, duly
licensed or qualified to do business and (except Gables Tennessee Properties,
Pin Oak Park Apartments and Pin Oak Green, which are general partnerships) in
good standing as a foreign trust, limited partnership or corporation, as the
case may be, in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
licensing or qualification necessary except where the failure to be so qualified
does not have a material adverse effect on the business, properties, financial
position or results of the Company and its subsidiaries, taken as a whole.
Except for the stock or partnership interests of the subsidiaries and as
disclosed in the Registration Statement, the Company does not own, and at the
Closing Date will not own, directly or indirectly, any shares of stock or any
other equity or long-term
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debt securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity. Complete and correct
copies of the Amended and Restated Declaration of Trust and the Second Amended
and Restated By-laws of the Company and the charter documents of each of its
subsidiaries and all amendments thereto have been delivered or made available to
the Underwriters and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
(e) The outstanding securities of the Company, including the
outstanding Common Shares, have been, and the Shares to be issued and sold by
the Company upon such issuance and payment pursuant hereto of the purchase price
thereof will be, duly authorized, validly issued, fully paid and nonassessable
and will not be subject to any preemptive or similar right. The description of
the Common Shares in the Registration Statement and the Prospectus is, and at
the Closing Date will be, in all material respects, complete and accurate.
Except as set forth in the Prospectus, the Company does not have outstanding,
and at the Closing Date will not have outstanding, any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any Common
Shares, any preferred shares of the Company, any shares of capital stock of any
subsidiary or any such warrants, convertible securities or obligations other
than (i) pursuant to the Company's dividend reinvestment plan and (ii) the
Company's Second Amended and Restated 1994 Share Option and Incentive Plan, as
amended.
(f) The financial statements and schedules of the Company
included or incorporated by reference in the Registration Statement or the
Prospectus present fairly the consolidated financial condition of the Company as
of the respective dates thereof and the consolidated results of operations and
cash flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. No other financial statements or schedules of the Company are
required by the Act, the Exchange Act or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. Arthur Andersen LLP,
independent public accountants (the "ACCOUNTANTS"), who have reported on those
of such financial statements and schedules which are audited, are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations. The statements included in the Registration Statement with respect
to the Accountants pursuant to Rule 509 of Regulation S-K of the Rules and
Regulations are true and correct in all material respects.
(g) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance
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that (i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(h) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company, or in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and its subsidiaries, arising for any reason whatsoever, other
than pursuant to the Company's dividend reinvestment plan or by way of grants of
Common Shares or options to purchase Common Shares or the exercise of such
options, in any such case under the Company's Second Amended and Restated 1994
Share Option and Incentive Plan, as amended, (ii) neither the Company nor any of
its subsidiaries has incurred nor will it incur any material liabilities or
obligations, direct or contingent, nor has it entered into nor will it enter
into any material transactions other than pursuant to this Agreement and the
transactions referred to herein and (iii) the Company has not and will not have
paid or declared any dividends or other distributions of any kind on any class
of its capital stock.
(i) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(j) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any of its subsidiaries or any of their
respective officers in their capacity as such, before or by any Federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
might materially and adversely affect the Company or any of its subsidiaries or
its business, properties, business prospects, condition (financial or otherwise)
or results of operations.
(k) The Company and each of its subsidiaries has, and at the
Closing Date will have, (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, (ii) complied in all respects with all laws,
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regulations and orders applicable to it or its business and (iii) performed all
its obligations required to be performed by it, and is not, and at the Closing
Date will not be, in default, under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement, lease,
contract or other agreement or instrument (collectively, a "CONTRACT OR OTHER
AGREEMENT") to which it is a party or by which its property is bound or
affected, the violation of which would have a material adverse effect on the
business, properties, financial position or results of operations of the Company
and its subsidiaries, taken as a whole. To the best knowledge of the Company and
each of its subsidiaries, no other party under any contract or other agreement
to which it is a party is in default thereunder in such a manner that,
individually or in the aggregate, would have a reasonable likelihood of causing
a material adverse effect on the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
its subsidiaries, taken as a whole. The Company is not, nor at the Closing Date
will be, in violation of any provision of its Amended and Restated Declaration
of Trust and Second Amended and Restated By-laws. No subsidiary of the Company
is, nor at the Closing Date will any of them be, in violation of any provision
in their respective charter documents.
(l) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part herein
contemplated, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state or Canadian securities or
Blue Sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Shares to be sold by the Company.
(m) The Company has full corporate power and corporate authority
to enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company and is enforceable against the Company in accordance with the terms
hereof. The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company or any
of its subsidiaries pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under, the
Amended and Restated Declaration of Trust or Second Amended and Restated By-laws
of the Company or the charter documents of any of its subsidiaries, any contract
or other agreement to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or
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any of its properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company or any of its subsidiaries.
(n) The Company and each of its subsidiaries has good and
marketable title to all properties and assets described in the Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as (i) are described in the Prospectus or (ii) are not material to
the business of the Company or its subsidiaries, taken as a whole. The Company
and each of its subsidiaries has valid, subsisting and enforceable leases for
the properties described in the Prospectus as leased by it, with such exceptions
as are not material and do not materially interfere with the use made and
proposed to be made of such properties by the Company and such subsidiaries; no
tenant under any of the leases pursuant to which the Company leases its
properties has an option or right of first refusal to purchase the premises
demised under such lease; the use and occupancy of each of the properties of the
Company complies in all material respects with all applicable codes and zoning
laws and regulations; the Company has no knowledge of any pending or threatened
condemnation or zoning change that will in any material respect affect the size
of, use of, improvements of, construction on, or access to any of the properties
of the Company; and the Company has no knowledge of any pending or threatened
proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on, or access to any of the properties of the
Company.
(o) Title insurance in favor of the Company (or the subsidiary
which holds title to such property) is maintained with respect to each of the
properties owned by the Company in an amount at least equal to the greater of
(i) the cost of acquisition of such property or (ii) the cost of construction by
the Company of the improvements located on such property (measured at the time
of such construction), except, in each case, where the failure to maintain such
title insurance would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries taken as a whole. Title insurance in favor
of the mortgagee is maintained in an amount equal to the maximum commitment of
the related loan.
(p) The mortgages and deeds of trust encumbering the properties
and assets described in the Prospectus are not convertible nor does the Company
hold a participating interest therein.
(q) The Company has no knowledge of (i) the unlawful presence of
any hazardous substances, hazardous materials, toxic substances or waste
materials (collectively,
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"HAZARDOUS MATERIALS") on any of the properties owned by it, or (ii) any
unlawful spills, releases, discharges or disposal of Hazardous Materials that
have occurred or are presently occurring off such properties as a result of any
construction on or operation and use of such properties, which presence or
occurrence would have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries taken as a whole. In connection with the
construction or operation and use of the properties owned by the Company, the
Company represents that, as of the date of this Agreement, it has no knowledge
of any failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and judicial
orders relating to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials, which failure would have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries taken as a whole.
(r) Property and casualty insurance in favor of the Company is
maintained with respect to each of the properties owned by it in an amount and
on such terms as is reasonable and customary for businesses of this type.
(s) There is no document or contract of a character required to
be described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. All such contracts and all contracts relating to any tax exempt
financings to which the Company or any subsidiary is a party have been duly
authorized, executed and delivered by the Company or such subsidiary, constitute
valid and binding agreements of the Company or such subsidiary and are
enforceable against the Company or such subsidiary in accordance with the terms
thereof.
(t) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Underwriters was or will be, when made,
inaccurate, untrue or incorrect.
(u) Neither the Company nor any of its trustees, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
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(v) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(w) The Company has applied to have the Shares duly authorized
for listing on the New York Stock Exchange.
(x) Neither the Company nor any of its subsidiaries is involved
in any material labor dispute nor, to the knowledge of the Company, is any such
dispute threatened.
(y) The Company and its subsidiaries own, or are licensed or
otherwise have the full exclusive right to use, all material trademarks and
trade names which are used in or necessary for the conduct of their respective
businesses as described in the Prospectus. No claims have been asserted by any
person to the use of any such trademarks or trade names or challenging or
questioning the validity or effectiveness of any such trademark or trade name.
The use, in connection with the business and operations of the Company and its
subsidiaries of such trademarks and trade names does not, to the Company's
knowledge, infringe on the rights of any person.
(z) Neither the Company nor any of its subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any subsidiary has
made any payment of funds of the Company or any subsidiary or received or
retained any funds in violation of any law, rule or regulation or of a character
required to be disclosed in the Prospectus.
(aa) The Company has continuously been organized and operated in
conformity with the requirements for qualification as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the "CODE") for all
taxable years commencing with its taxable year ended December 31, 1994. The
Company has filed an election to be taxable as a real estate investment trust
for its taxable year ended December 31, 1994, and such election has not been
terminated. The Company's method of operation will permit it to continue to meet
the requirements for taxation as a real estate investment trust under the Code.
The Company intends to continue to operate in a manner which would permit it to
qualify as a real estate investment trust under the Code.
(bb) The Company caused its existing loan with the Teachers
Insurance and Annuity Association to become an unsecured facility in accordance
with the terms of the loan agreement.
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4. AGREEMENTS OF THE COMPANY. The Company agrees with the
Underwriters as follows:
(a) The Company will cause the Prospectus Supplement to be filed
as required by Section 3(a) hereof (but only if you have not reasonably objected
thereto by notice to the Company after having been furnished a copy a reasonable
time prior to filing) and will notify you promptly of such filing. The Company
will not during such period as the Prospectus is required by law to be delivered
in connection with sales of the Shares by any Underwriters or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to the Underwriters within a
reasonable period of time prior to the filing thereof and the Underwriters shall
not have objected thereto in good faith.
(b) The Company will notify the Underwriters promptly, and will
confirm such advice in writing, (1) when any post-effective amendment to the
Registration Statement becomes effective, (2) of any request by the Commission
for amendments or supplements to the Registration Statement or the Prospectus or
for additional information, (3) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose or the threat thereof, (4) of the
happening of any event during the period mentioned in the second sentence of
Section 4(e) that in the judgment of the Company makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in which they are made, not
misleading and (5) of receipt by the Company or any representative or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment.
(c) The Company will furnish to the Underwriters, upon request
and without charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto (including any document filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus).
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
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(e) The Company will deliver to each Underwriter, without
charge, as many copies of the Prospectus containing the Prospectus Supplement or
any amendment or supplement thereto as such Underwriter may reasonably request.
The Company consents to the use of the Prospectus or any amendment or supplement
thereto by the Underwriters and by all dealers to whom the Shares may be sold,
both in connection with the offering or sale of the Shares and for any period of
time thereafter during which the Prospectus is required by law to be delivered
in connection therewith. If during such period of time any event shall occur
which in the judgment of the Company or counsel to the Underwriters should be
set forth in the Prospectus in order to make any statement therein, in the light
of the circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with law, the Company
will forthwith prepare and duly file with the Commission an appropriate
supplement or amendment thereto, and will deliver to each Underwriter, without
charge, such number of copies of such supplement or amendment to the Prospectus
as such Underwriter may reasonably request. The Company shall not file any
document under the Exchange Act before the termination of the offering of the
Shares by the Underwriters if such document would be deemed to be incorporated
by reference into the Prospectus which is not approved by the Underwriters after
reasonable notice thereof.
(f) Prior to any public offering of the Shares the Company will
cooperate with the Underwriters and counsel to the Underwriters in connection
with the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Underwriters may
request including, without limitation, jurisdictions outside of the United
States; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) During the period of five years commencing on the date
hereof, the Company will, upon request for such item by an Underwriter, furnish
to such Underwriter such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will, upon request for such item by such
Underwriter, furnish to such Underwriter a copy of each annual or other report
it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the end of the Company's current
fiscal quarter, an earnings statement (which need not be audited but shall be in
reasonable detail) for a period of 12 months beginning after the date upon which
the Prospectus Supplement is filed pursuant to
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<PAGE> 14
Rule 424 under the Act, and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Underwriters, all fees, costs and expenses incident
to the performance of the obligations of the Company under this Agreement,
including but not limited to fees, costs and expenses of or relating to (1) the
preparation, printing and filing of the Registration Statement and exhibits to
it, the Prospectus and any amendment or supplement to the Registration Statement
or the Prospectus, (2) the preparation and delivery of certificates representing
the Shares, (3) the printing of this Agreement and any Dealer Agreements, (4)
furnishing (including costs of shipping and mailing) such copies of the
Registration Statement, the Prospectus and any Preliminary Prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (5) the listing of the Shares on the New York Stock
Exchange, (6) filings required to be made by or on behalf of the Company or the
Underwriters, including without limitation filings to be made by the
Underwriters with the NASD, and the fees and disbursements and other charges
(other than counsel for the Underwriters) in connection therewith and filings to
be made by the Company with the Commission, and the fees, disbursements and
other charges of counsel for the Company in connection therewith, (7) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
4(f), including the fees, disbursements and other reasonable charges of counsel
to the Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (8) counsel to the
Company and any surveyors, engineers, appraisers, photographers, accountants and
other professionals engaged by or on behalf of the Company, (9) the transfer
agent and registrar for the Shares, and (10) preparation of slides, overheads
and other presentation material to be used in any "road show" or other
presentation to potential investors and the hotel, travel and other expenses of
the Company's employees in connection with any such "road show" or presentation;
provided, however, that with respect to any fees, disbursements and other
charges of counsel for the Underwriters in connection with the registration and
qualification of the Shares under Blue Sky laws and the preparation of Blue Sky
memorandum, the Company shall not be responsible for counsel fees, disbursements
and other charges in excess of $15,000. The filing fee paid to the NASD shall
not be considered to be "fees, disbursements or other charges" for the purposes
of this Section 4(i) and shall be paid by the Company.
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<PAGE> 15
(j) If this Agreement shall be terminated by the Company
pursuant to any of the provisions hereof (otherwise than pursuant to Section 8
hereof) or if for any reason the Company shall be unable to perform its
obligations hereunder, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the fees, disbursements and other charges of
counsel to the Underwriters) reasonably incurred by it in connection herewith.
(k) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the Firm
Shares to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds."
(m) The Company will not, and will cause each of its executive
officers to enter into agreements with the Underwriters in the form set forth in
EXHIBIT E to the effect that they will not, for a period of 60 days after the
commencement of the public offering of the Shares, without the prior written
consent of PaineWebber Incorporated, sell, contract to sell or otherwise dispose
of any Common Shares or rights to acquire Common Shares (other than in the case
of the Company pursuant to employee and director stock options or stock option
or purchase plans, the Company's dividend reinvestment plan, the acquisitions of
units of Gables Realty Limited Partnership presented for redemption, and in
exchange for property acquired from third-parties and pursuant to the exercise
by the Underwriters of the Option, or in the case of an individual, the pledge
of Common Shares as collateral for any loan from an institutional lender,
provided the loan-to-value ratio does not exceed 50%).
(n) The Company will not, with respect to the Shares, invoke the
authority granted under Section 5.7 of the Amended and Restated Declaration of
Trust (the "DECLARATION OF TRUST") of the Company to revoke the exception
contained in Section 5.6.2 of the Declaration of Trust under which shares
transferred to an Underwriter in a public offering will not be deemed to be
Excess Shares (as defined in the Declaration of Trust), notwithstanding the fact
that the shares owned beneficially by the Underwriter may exceed the Ownership
Limit (as defined in the Declaration of Trust).
(o) The Company will continue to elect to qualify as a "real
estate investment trust" under the Code, and will use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust."
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<PAGE> 16
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. In addition to
the execution and delivery of the Price Determination Agreement, the obligations
of the Underwriters hereunder are subject to the following conditions:
(a) The Prospectus shall have been filed as required by
Section 3(a) and (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Underwriters and the Underwriters did not
object thereto in good faith, and the Underwriters shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer or the Chairman of the Board of Trustees of the
Company and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii).
(b) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) there shall not have been
a material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) neither the Company nor any of its subsidiaries shall have
sustained any material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration Statement
and the Prospectus, if in the judgment of the Underwriters any such development
makes it impracticable or inadvisable to consummate the sale and delivery of the
Shares by the Underwriters and at the public offering price.
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<PAGE> 17
(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
subsidiaries or any of their respective officers or directors or trustees, as
the case may be, in their capacities as such, before or by any Federal, state or
local court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, in which litigation or proceeding it is
reasonably probable that an unfavorable ruling, decision or finding would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
its subsidiaries taken as a whole.
(d) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the
Closing Date and, with respect to the Option Shares, at the Option Closing Date,
as if made at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, and all covenants and agreements contained herein to be
performed on the part of the Company and all conditions contained herein to be
fulfilled or complied with by the Company at or prior to the Closing Date and,
with respect to the Option Shares, at or prior to the Option Closing Date, shall
have been duly performed, fulfilled or complied with.
(e) The Underwriters shall have received one or more opinions,
dated the Closing Date and, with respect to the Option Shares, the Option
Closing Date, and satisfactory in form and substance to the Underwriters'
counsel from Goodwin, Procter & Hoar LLP, counsel to the Company, (i) to the
effect set forth in EXHIBIT D and (ii) concerning the qualification of the
Company as a real estate investment trust under the Code.
(f) The Underwriters shall have received an opinion, dated the
Closing Date and the Option Closing Date, from O'Melveny & Myers LLP,
Underwriters' counsel, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to the Underwriters.
(g) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Underwriters a letter,
dated the date of its delivery, addressed to the Underwriters and in form and
substance satisfactory to the Underwriters, confirming that they are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations and with respect to the financial and other statistical and
numerical information contained in the Registration Statement or incorporated by
reference therein. At the Closing Date and, as to the Option Shares, the Option
Closing Date, the Accountants shall have furnished to the Underwriters a letter,
dated the date of its delivery, which shall confirm, on
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<PAGE> 18
the basis of a review in accordance with the procedures set forth in the letter
from the Accountants, that nothing has come to their attention during the period
from the date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than three days prior to the Closing Date and
the Option Closing Date which would require any change in their letter dated the
date hereof if it were required to be dated and delivered at the Closing Date
and the Option Closing Date.
(h) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Underwriters an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) Each signer of such certificate has carefully examined
the Registration Statement and the Prospectus (including any documents
filed under the Exchange Act and deemed to be incorporated by reference
into the Prospectus) and (A) as of the date of such certificate, such
documents are true and correct in all material respects and do not omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein not untrue or misleading and (B)
no event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect and there has been no
document required to be filed under the Exchange Act and the Exchange
Act Rules and Regulations that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so
filed.
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and
are, at the time such certificate is delivered, true and correct in all
material respects.
(iii) Each of the covenants required to be performed by the
Company herein on or prior to the delivery of such certificate has been
duly, timely and fully performed and each condition herein required to
be complied with by the Company on or prior to the date of such
certificate has been duly, timely and fully complied with.
(i) The Shares shall be qualified for sale in such states as the
Underwriters may reasonably request, each such qualification shall be in effect
and not subject to any stop order or other proceeding on the Closing Date and
the Option Closing Date.
(j) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the New York Stock Exchange upon official notice of
issuance.
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<PAGE> 19
(k) The Company shall have furnished to the Underwriters such
certificates, in addition to those specifically mentioned herein, as the
Underwriters may have reasonably requested as to the accuracy and completeness
at the Closing Date and the Option Closing Date of any statement in the
Registration Statement or the Prospectus or any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, as
to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Company herein as to the performance by
the Company of its obligations hereunder or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Underwriters.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act from and against any and
all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred, to which any
Underwriter, or any such person may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, or
in any application or other document executed by or on behalf of the Company or
based on written information furnished by or on behalf of the Company and filed
in any jurisdiction in either case in order to qualify the Shares under the
securities laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in such document a material fact required to be stated
in it or necessary to make the statements in it not misleading or (iii) any act
or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, liability, expense or damage arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent it is finally judicially determined
by a court of competent jurisdiction that such loss, claim, liability, expense
or damage
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<PAGE> 20
resulted directly from any such acts or failures to act undertaken or omitted to
be taken by such Underwriter through its gross negligence or willful
misconduct); provided that the Company will not be liable to the extent that
such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by any Underwriter and is based on
an untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to the Underwriter
furnished in writing to the Company by such Underwriter expressly for inclusion
in the Registration Statement, any preliminary prospectus or the Prospectus.
This indemnity agreement will be in addition to any liability that the Company
might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each trustee of the
Company and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information relating to
any Underwriter furnished in writing to the Company by such Underwriter
expressly for use in the Registration Statement or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting discounts and
commissions received by such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense,
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<PAGE> 21
the indemnifying party will not be liable to the indemnified party for any legal
or other expenses except as provided below and except for the reasonable costs
of investigation subsequently incurred by the indemnified party in connection
with the defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing by
the indemnifying party, (2) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld). No indemnifying party shall,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
6 (whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriter, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons
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<PAGE> 22
other than the Underwriters, such as persons who control the Company within the
meaning of the Act, officers of the Company who signed the Registration
Statement and trustees of the Company, who also may be liable for contribution)
to which the Company and any one or more of the Underwriters may be subject in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other, with respect to
the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purposes) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 6(d) shall be deemed to
include, for purpose of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions received by it and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 6(d) are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 6(d), any person who controls a party to this Agreement
within the meaning of the Act will have the same rights to contribution as that
party, and each officer of the Company who signed the Registration Statement
will
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<PAGE> 23
have the same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 6(d), will notify any such
party or parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 6(d). No
party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be unreasonably
withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of the Shares and payment therefor or (iii) any termination of this Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, agreements and covenants of the Company herein or
in certificates delivered pursuant hereto, and the agreements of the
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or the Company or any of its officers,
trustees, or any controlling persons, and shall survive (i) termination of this
Agreement and (ii) delivery of and payment for the Shares hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Shares in accordance with the terms
hereof, and the amount of Shares not purchased does not aggregate more than 10%
of the total amount of Shares that the Underwriters are obligated to purchase
hereunder at the Closing Date, the remaining Underwriters shall be obligated to
take up and pay for (in proportion to their respective underwriting obligations
hereunder as set forth in SCHEDULE 1 hereto except as may otherwise be
determined by you) the Shares that the withdrawing or defaulting Underwriter or
Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and
pay for the amount of Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Shares in accordance with the terms
hereof, and the amount of Shares not purchased aggregates more than 10% of
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<PAGE> 24
the total amount of Shares that the Underwriters are obligated to purchase
hereunder at the Closing Date, and arrangements satisfactory to you and the
Company for the purchase of such Shares by other persons are not made within 36
hours thereafter, this Agreement shall terminate. In the event of any such
termination the Company shall not be under any liability to any Underwriter with
respect to Shares not purchased by reason of such termination (except to the
extent provided in Section 4(i) and Section 6 hereof) nor shall any Underwriter
(other than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the amount of Shares agreed by such
Underwriter to be purchased hereunder) be under any liability to the Company
with respect to such Shares (except to the extent provided in Section 6 hereof).
9. TERMINATION. The obligations of the Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date), by
notice to the Company from the Underwriters, without liability on the part of
the Underwriters to the Company, if, prior to delivery and payment for the
Shares (or the Option Shares, as the case may be), in the sole judgment of the
Underwriters, (i) trading in any of the equity securities of the Company shall
have been suspended by the Commission, by an exchange that lists such equity
securities or by the National Association of Securities Dealers Automated
Quotation National Market System, (ii) trading in securities generally on the
New York Stock Exchange shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by either
Federal or New York State authorities or (iv) any material adverse change in the
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred the effect of
any of which is such as to make it impracticable or inadvisable to market the
Shares on the terms and in the manner contemplated by the Prospectus.
10. NOTICES. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, 2859 Paces
Ferry Road, Atlanta, Georgia 30339, Attention: Marcus E. Bromley, or (b) if to
the Underwriters, to the offices of PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, Attention: Corporate Real Estate Department.
Any such notice shall be
24
<PAGE> 25
effective only upon receipt. Any notice under Section 10 hereof may be made by
telex, facsimile or telephone, but if so made shall be subsequently confirmed in
writing.
11. PARTIES. This Agreement has been and is made solely for the
benefit of the Underwriters and the Company and of the controlling persons,
directors, trustees, and officers referred to in Section 6, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of Shares
from the Underwriters.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. COUNTERPARTS. This Agreement may be signed in two or more
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
14. SEVERABILITY. In case any provision in this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
15. WAIVER OF TRIAL BY JURY. The Company and each of the Underwriters
each hereby irrevocably waive any right they may have to a trial by jury in
respect of any claim based upon or arising out of this Agreement or the
transactions contemplated hereby.
25
<PAGE> 26
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Underwriters.
Very truly yours,
GABLES RESIDENTIAL TRUST
By: _______________________
Marvin R. Banks, Jr.
Chief Financial Officer
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
LEGG MASON WOOD WALKER
By: PAINEWEBBER INCORPORATED
By: _________________________
Name: Frederick T. Caven, Jr.
Title: Managing Director
S-1
<PAGE> 27
SCHEDULE 1
<TABLE>
<CAPTION>
Amount of
Shares
Underwriters To Be Purchased
------------ ---------------
<S> <C>
PaineWebber Incorporated 1,000,000
Legg Mason Wood Walker, Inc. 700,000
Total 1,700,000
</TABLE>
<PAGE> 28
EXHIBIT A
GABLES RESIDENTIAL TRUST
---------------------
PRICE DETERMINATION AGREEMENT
November 24, 1997
PAINEWEBBER INCORPORATED
LEGG MASON WOOD WALKER, INC.
c/o PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated concurrently
herewith (the "UNDERWRITING AGREEMENT"), between Gables Residential Trust, a
Maryland real estate investment trust (the "COMPANY"), and you (hereinafter the
"UNDERWRITERS") for whom you are acting as representatives (in such capacity,
the "UNDERWRITERS"). The Underwriting Agreement provides for the purchase by the
Underwriters from the Company, subject to the terms and conditions set forth
therein, of an aggregate of 1,700,000 shares (the "FIRM SHARES") of the
Company's Common Shares of Beneficial Interest, $0.01 par value per share. This
Agreement is the Price Determination Agreement referred to in the Underwriting
Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Underwriters as follows:
1. The public offering price per share for the Firm Shares shall
be $27 3/16.
2. The purchase price per share for the Firm Shares to be paid
by the Underwriters shall be $25.8275 representing an amount equal to the public
offering price set forth above, less $ 1.36 per share.
The Company represents and warrants to the Underwriters that the
representations and warranties of the Company set forth
A-1
<PAGE> 29
in Section 3 of the Underwriting Agreement are accurate as though expressly made
at and as of the date hereof.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of the
agreement between the Underwriters and the Company, please sign and return to
the Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement between the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
GABLES RESIDENTIAL TRUST
By: _______________________
Marvin R. Banks, Jr.
Chief Financial Officer
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
LEGG MASON WOOD WALKER
By: PAINEWEBBER INCORPORATED
By: _________________________
Name: Frederick T. Caven, Jr.
Title: Managing Director
A-2
<PAGE> 30
EXHIBIT B
INFORMATION IN REGISTRATION STATEMENT AND PROSPECTUS
FURNISHED BY THE UNDERWRITERS
The following information appearing in the Prospectus has been
furnished by the Underwriters expressly for use in the preparation of the
Prospectus:
1. The following information contained in the Prospectus Supplement
under the heading "Underwriting":
a. The allocation of shares between the Underwriters in the
first paragraph; and
b. The information in the second paragraph.
B-1
<PAGE> 31
EXHIBIT C
SUBSIDIARIES OF THE COMPANY
Gables GP, Inc.
Gables Realty Limited Partnership
Central Apartment Management, Inc.
East Apartment Management, Inc.
Alpha Insurance Agency, Inc.
Gables Central Construction, Inc.
Gables East Construction, Inc.
Gables - Tennessee Properties
Pin Oak Park Apartments
Pin Oak Green
Candlewood Gen Par, Inc.
Candlewood - Indian Creek Limited Partnership
GRT Villas Gen Par, Inc. (f.k.a. Candle Creek, Inc.)
GRT Villas Limited Partnership
C-1
<PAGE> 32
EXHIBIT D
Form of Opinion of
COUNSEL TO THE COMPANY
D-1
<PAGE> 33
APPENDIX TO OPINION
D-2
<PAGE> 34
EXHIBIT E
PAINEWEBBER INCORPORATED
LEGG MASON WOOD WALKER, INCORPORATED
c/o PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
In consideration of the agreement of PaineWebber Incorporated and Legg
Mason Wood Walker, Incorporated (hereinafter, the "UNDERWRITERS") to underwrite
a proposed public offering of 1,700,000 common shares of beneficial interest,
par value $.01 per share (the "COMMON SHARES"), of Gables Residential Trust, a
Maryland real estate investment trust (the "COMPANY"), as contemplated by a
registrations statement with respect to such filed with the Securities and
Exchange Commission on Form S-3 (Registration No. 333-30093), each of the
undersigned hereby agrees that the undersigned will not, for a period of 60 days
after the commencement of the public offering of such, without the prior written
consent of PaineWebber Incorporated, offer to sell, sell, contract to sell or
otherwise dispose of any Common Shares or rights to acquire Common shares (other
than in the case of the Company pursuant to employee and director stock options
and stock option and purchase plans, the dividend reinvestment plan of the
Company, the acquisition of units of Gables Realty Limited Partnership presented
for redemption, in exchange for property acquired from third parties and upon
exercise by the Underwriters of the Option, or in the case of an individual, the
pledge of Common Shares as collateral for any loan from an institutional
E-1
<PAGE> 35
lender, provided the loan-to-value ratio does not exceed 50%).
Very truly yours,
---------------------------
Marcus E. Bromley
---------------------------
John T. Rippel
---------------------------
William M. Hammond
---------------------------
Marvin R. Banks, Jr.
---------------------------
C. Jordan Clark
E-2
<PAGE> 1
GOODWIN, PROCTER & HOAR LLP
EXHIBIT 5
COUNSELLORS AT LAW
599 LEXINGTON AVENUE
NEW YORK, NY 10022
TELEPHONE (212) 813-8800
TELECOPIER (212) 355-3333
December 1, 1997
Gables Residential Trust
2859 Paces Ferry Road
Overlook III, Suite 1450
Atlanta, Georgia 30339
Ladies and Gentlemen:
We have acted as counsel to Gables Residential Trust, a Maryland real
estate investment trust (the "Company"), in connection with the offer and sale
by the Company of up to 1,955,000 common shares of beneficial interest, par
value $.01 per share ("Common Shares"), of the Company (including 255,000 Common
Shares if the Underwriters' over-allotment option is exercised in full) (the
"Shares"). This opinion is being delivered in connection with (i) the Company's
Registration Statement on Form S-3 (No. 333-30093) (the "Registration
Statement") relating to the registration of the offering and sale under the
Securities Act of 1933, as amended, of up to $300,000,000 of securities of the
Company, and (ii) a prospectus supplement dated November 24, 1997 (the
"Prospectus Supplement") which supplements the prospectus included in such
Registration Statement, relating to the offering of the Shares by the Company.
The Shares will be offered by the Underwriters (as defined below) pursuant to
that certain Underwriting Agreement dated November 24, 1997 between the Company
and PaineWebber Incorporated and Legg Mason Wood Walker Incorporated (the
"Underwriters").
As the basis for the opinion hereinafter expressed, we have examined
such statutes, regulations, corporate records and documents, certificates of
public officials and other instruments as we have deemed necessary or advisable
for the purposes of this opinion. In such examination, we have assumed the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies.
Based on the foregoing and on such legal considerations as we deem
relevant, we are of the opinion that the Shares sold or to be sold by the
Company to the Underwriters as described in the Registration Statement and the
Prospectus Supplement have been duly authorized and have been, or upon delivery
of such Shares and payment therefor in accordance with the Underwriting
Agreement will be, validly issued, fully paid and non-assessable.
<PAGE> 2
GOODWIN, PROCTER & HOAR LLP
Gables Residential Trust
December 1, 1997
Page 2
We hereby consent to the use of this opinion as an exhibit to the
Company's Current Report on Form 8-K dated December 1, 1997.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
