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EXHIBIT 1.1
SUMMIT PROPERTIES PARTNERSHIP, L.P.
DEBT SECURITIES
Underwriting Agreement
August 7, 1997
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
FIRST UNION CAPITAL MARKETS CORP.
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Summit Properties Partnership, L.P., a Delaware limited partnership
(the "Partnership"), proposes to issue and sell to the underwriters named in
Schedule II hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), the principal amount of its debt
securities identified in Schedule I hereto (the "Securities"), to be issued
under the indenture specified in Schedule I hereto (the "Indenture") between the
Partnership and the Trustee identified in such Schedule (the "Trustee"). If the
firm or firms listed in Schedule II hereto include only the firm or firms listed
in Schedule I hereto, then the terms "Underwriters" and "Representatives", as
used herein, shall each be deemed to refer to such firm or firms.
The Partnership and Summit Properties Inc., a Maryland corporation and
the sole general partner and the principal limited partner of the Partnership
(the "Company"), have prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (the file number of which is set forth in Schedule I hereto) on Form
S-3, relating to, among other things, certain debt securities (the "Shelf
Securities") to be issued from time to time by the Partnership. The Partnership
and the Company also have filed with, or propose to file with, the Commission
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pursuant to Rule 424 under the Securities Act a prospectus supplement
specifically relating to the Securities. The registration statement as amended
to the date of this Agreement is hereinafter referred to as the "Registration
Statement" and the related prospectus covering the Shelf Securities in the form
first used to confirm sales of the Securities is hereinafter referred to as the
"Basic Prospectus". The Basic Prospectus as supplemented by the prospectus
supplement specifically relating to the Securities in the form first used to
confirm sales of the Securities is hereinafter referred to as the "Prospectus".
Any reference in this Agreement to the Registration Statement, the Basic
Prospectus, any preliminary form of Prospectus (a "preliminary prospectus")
previously filed with the Commission pursuant to Rule 424 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 which were
filed under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Exchange Act") on
or before the date of this Agreement or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be; and any reference
to "amend", "amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include any documents filed under the Exchange
Act after the date of this Agreement, or the date of the Basic Prospectus, any
preliminary prospectus or the Prospectus, as the case may be, which are deemed
to be incorporated by reference therein. For purposes of this Agreement, each of
the Partnership, Summit Management Company, a Maryland corporation (the
"Management Company"), Summit Apartment Builders, Inc., a Florida corporation
(the "Building Company") and any other subsidiaries (within the meaning of
Regulation S-X under the Securities Act) of the Company is deemed a "Subsidiary"
of the Company.
The Partnership hereby agrees with the Underwriters as follows:
1. The Partnership agrees to issue and sell the Securities to the
several Underwriters as hereinafter provided, and each Underwriter, on the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Partnership the respective principal amount of Securities set forth
opposite such Underwriter's name in Schedule II hereto at the purchase price set
forth in Schedule I hereto plus accrued interest, if any, from the date
specified in Schedule I hereto to the date of payment and delivery.
2. The Partnership understands that the several Underwriters intend
(i) to make a public offering of their respective portions of the Securities and
(ii) initially to offer the Securities upon the terms set forth in the
Prospectus.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Partnership to the
Representatives, no later than noon the
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Business Day (as defined below) prior to the Closing Date (as defined below), on
the date and at the time and place set forth in Schedule I hereto (or at such
other time and place on the same or such other date, not later than the fifth
Business Day (as defined below) thereafter, as you and the Partnership may agree
in writing). As used herein, the term "Business Day" means any day other than a
day on which banks are permitted or required to be closed in New York City. The
time and date of such payment and delivery with respect to the Securities are
referred to herein as the "Closing Date".
Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of the Securities of one or more global notes (the "Global
Note") representing the Securities, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Securities duly paid by
the Company. The Global Note will be made available for inspection by the
Representatives at the office of J.P. Morgan Securities Inc. at the address set
forth above not later than 1:00 P.M., New York City time, on the Business Day
prior to the Closing Date.
4. The Partnership and the Company each jointly and severally
represents and warrants to each Underwriter that:
(a) the Registration Statement has been declared effective by
the Commission under the Securities Act; 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 knowledge of
the Partnership and/or the Company, threatened by the Commission; and
the Registration Statement and Prospectus (as amended or supplemented
if the Partnership and/or the Company shall have furnished any
amendments or supplements thereto) comply, or will comply, as the case
may be, in all material respects with the Securities Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"), and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the date of
the Prospectus and any amendment or supplement thereto, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and the Prospectus, as amended or supplemented at the
Closing Date, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
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statements therein, in light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that the foregoing
representations and warranties shall not apply to (i) that part of the
Registration Statement which constitutes the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the
Trustee, and (ii) statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity
with information relating to any Underwriter furnished to the
Partnership and/or the Company in writing by such Underwriter through
the Representatives expressly for use therein;
(b) the documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, and will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading;
(c) the accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act, and there have been no
disagreements with any accountants or "reportable events" (as defined
in Item 304 of Regulation S-K promulgated by the Commission) required
to be disclosed in the Prospectus or elsewhere pursuant to such Item
304;
(d) the historical financial statements of the Company and the
Partnership included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of
the Company and its consolidated Subsidiaries taken as a whole as of
the dates indicated and the results of operations for the periods
specified; except as otherwise stated in the Registration Statement and
the Prospectus, said financial statements have been prepared in
conformity with generally accepted accounting principles applied
(except, in the case of interim financial results, for the notes
thereto and ordinary year-end adjustments) on a consistent basis and
comply with the
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applicable accounting requirements of the Securities Act (including,
without limitation, Rule 3-14 and Rule 3-15 of Regulation S-X
promulgated by the Commission), and all adjustments necessary for a
fair presentation of the results for such periods have been made; the
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information required to be stated therein; and the selected financial
data (both historical and, if any, pro forma) included or incorpo-
rated by reference in the Registration Statement and the Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with the related financial statements presented
therein;
(e) the historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the revenue and those
operating expenses included in such summaries of the properties related
thereto for the periods specified in conformity with generally accepted
accounting principles; the pro forma consolidated financial statements
included or incorporated by reference in the Registration Statement and
the Prospectus; if any, present fairly the pro forma financial position
of the Company and its Subsidiaries taken as a whole as of the dates
indicated and the results of operations for the periods specified; and
any such pro forma financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
basis consistent with the audited financial statements of the Company
and its Subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus; the assumptions on which
such pro forma financial statements have been prepared were, when such
pro forma financial statements were prepared, reasonable and are
summarized in the notes thereto, and any such pro forma financial
statements have been prepared, and the pro forma adjustments set forth
therein have been applied, in accordance with the applicable accounting
requirements of the Securities Act (including, without limitation,
Regulation S-X promulgated by the Commission), and any such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of such statements;
(f) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not occurred any material adverse change, or any development involving
a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business affairs, business prospects
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or operations of the Company and its Subsidiaries taken as a whole
from that set forth in the Prospectus;
(g) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (1) neither
the Company nor its Subsidiaries have incurred any material liability
or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) neither the
Company nor its Subsidiaries have purchased any of the Company's
outstanding Common Stock, $.01 par value (the "Common Stock"), nor
declared, paid or otherwise made any dividend or distribution of any
kind on the Company's Common Stock other than ordinary and customary
dividends; and (3) there has not been any material change in the
capital, Common Stock, short-term debt or long-term debt of either the
Company or its Subsidiaries, except in each case as described in or
contemplated by the Prospectus;
(h) the Partnership has been duly formed and is validly
existing as a partnership in good standing under the laws of the State
of Delaware, has the partnership power and authority to own its
property and any property proposed to be acquired by it and referred to
in the Prospectus, and conduct its business as described in the
Prospectus and is duly qualified to transact such business, and is in
good standing under the laws of each other jurisdiction in which the
conduct of its business or its ownership, management or leasing of
property 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 its Subsidiaries taken as a
whole, each of which jurisdiction is listed on Schedule III attached
hereto;
(i) the Agreement of Limited Partnership of the Partnership
(the "Agreement of Limited Partnership") has been duly and validly
authorized, executed and delivered by the Company, including in its
capacity as sole general partner of the Partnership, and is a valid and
binding agreement of the Company, including the Company in its capacity
as sole general partner of the Partnership, enforceable against the
Company in accordance with its terms;
(j) each of the Company, the Management Company and the
Building Company has been duly incorporated and is validly existing as
a corporation under the laws of its jurisdiction of incorporation, with
corporate power and authority to own its
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property and to conduct its business as described in the Prospectus,
and is duly qualified to transact such business and is in good
standing under the laws of each jurisdiction in which the conduct of
its business or its ownership, management or leasing of property
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 its Subsidiaries taken as a whole,
each of which jurisdiction is listed on Schedule III attached hereto;
the Partnership and the Company have the partnership and corporate
power to enter into and perform their obligations under this
Agreement; and, except as otherwise stated in the Prospectus, all of
the issued and outstanding capital stock or other ownership interests
in the Management Company and the Building Company have been validly
issued and, in the case of the Management Company, are owned by the
Partnership and by William F. Paulsen and, in the case of the Building
Company, by the Management Company, in each case, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except for security interests granted in respect of indebted-
ness of the Company or any of its subsidiaries and described in the
Prospectus;
(k) except as disclosed in the Registration Statement, the
Company has no material subsidiaries;
(l) each of the partnership and joint venture agreements to
which the Company and any of its Subsidiaries is a party, and which
relates to real property, has been duly authorized, executed and
delivered on the part of the Company and any of such Subsidiaries by
any of them that is a party thereto and constitutes the valid agreement
thereof, enforceable in accordance with its terms, except as limited by
(a) the effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting
the rights or remedies of creditors or (b) the effect of general
principles of equity, whether enforcement is considered in a proceeding
in equity or at law, and the discretion of the court before which any
proceeding therefor may be brought; and the execution, delivery and
performance of any of such agreements by the Company and any of its
Subsidiaries, as applicable, did not, at the time of execution and
delivery, and does not constitute a breach of, or default under, the
charter, by-laws, agreement of limited partnership (or other
organizational documents) of such party of any material contract, lease
or other instrument to which such party is a party or by which its
properties may be bound or any law, administrative regulation or
administrative or court decree;
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(m) the authorized capital stock conforms as to legal matters
to the description thereof contained in the Prospectus;
(n) the Securities have been duly authorized, and, when
issued, authenticated and delivered pursuant to this Agreement and the
Indenture, will have been duly and validly executed, authenticated,
issued and delivered and will constitute valid and binding obligations
of the Partnership entitled to the benefits provided by the Indenture
and enforceable against the Partnership in accordance with their terms
except that the enforceability thereof may be limited by or subject to
(a) bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other similar laws now or hereafter existing which affect
the rights and remedies of creditors generally and (b) equitable
principles of general applicability; the Indenture has been duly
authorized and upon effectiveness of the Registration Statement will
have been duly qualified under the Trust Indenture Act and, when
executed and delivered by the Partnership and the Trustee, the
Indenture will constitute a valid and binding obligation of the
Partnership, enforceable against the Partnership in accordance with its
terms except that the enforceability thereof may be limited by or
subject to (a) bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other similar laws now or hereafter existing
which affect the rights and remedies of creditors generally and (b)
equitable principles of general applicability; and the Securities and
the Indenture will conform to the descriptions thereof in the
Prospectus;
(o) neither the Company nor any of its Subsidiaries is, or
with the giving of notice or lapse of time or both would be, in
violation of or in default under, the Articles of Incorporation or
by-laws of the Company or the Agreement of Limited Partnership of the
Partnership or any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Com-
pany and its Subsidiaries taken as a whole or to the holders of the
Securities; the issue and sale of the Securities and the performance by
the Partnership of all its obligations under the Securities and the
Indenture and the performance by each of the Partnership and the
Company of all their respective obligations under this Agreement and
the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
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mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries is bound or to
which any of the property or assets of the Company or any of its
Subsidiaries is subject, except for such conflicts, breaches or
defaults which individually or in the aggregate 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; nor will any such action result
in any violation of the provisions of the Articles of Incorporation or
the by-laws of the Company or the Agreement of Limited Partnership of
the Partnership or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, its Subsidiaries or any of their
respective properties; and no consent, approval, authorization,
order, license, registration or qualification of or with any such
court or governmental agency or body is required for the issue and
sale of the Securities by the Partnership or the consummation of the
transactions contemplated by the Indenture by the Partnership or this
Agreement by the Partnership and the Company, except such consents,
approvals, authorizations, orders, licenses, registrations or
qualifications (i) as have been obtained under the Securities Act or
the Trust Indenture Act, (ii) as may be required under state
securities or Blue Sky Laws in connection with the purchase and
distribution of the Securities by the Underwriters or (iii) the
failure of which to obtain would not individually or in the aggregate
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;
(p) with respect to all tax periods since the Company's first
taxable year ended December 31, 1994, the Company has met the
requirements for qualification as a real estate investment trust
("REIT") under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code"), and the Company's present and
contemplated operations, assets and income continue to meet such
requirements;
(q) none of the Partnership, the Company, the Management
Company or the Building Company is and, after giving effect to the
offering and sale of the Securities, will be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
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(r) there are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or
any Subsidiary of the Company is a party or to which any of their
properties or the Communities (as that term is defined in the
Prospectus) 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 and all such contracts
required to be filed as exhibits to the Registration Statement are set
forth in Schedule IV attached hereto;
(s) the Company and its Subsidiaries own or possess any
trademarks, service marks, trade names or copyrights (collectively, the
"Intellectual Property") required in order to conduct their respective
businesses as described in the Prospectus, other than those which the
failure to possess or own would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries taken
as a whole;
(t) the Company and each Subsidiary has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material
adverse effect on the Company and its subsidiaries taken as a whole;
(u) the Company has full right, power and authority to enter
into this Agreement and this Agreement has been duly authorized,
executed and delivered by the Company;
(v) the Partnership has full right, power and authority to
enter into this Agreement and this Agreement has been duly authorized,
executed and delivered by the Partnership;
(w) (i) the Company and its Subsidiaries have good and marketable
title in fee simple to all of the Communities described in the
Prospectus as owned by them in fee
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simple, free and clear of all liens, in each case except such as are
described in the Prospectus or such as do not materially affect the
value of such Community and do not materially affect the value of such
property and do not materially interfere with the use made and proposed
to be made of such property by the Company and by its Subsidiaries;
(ii) the construction, management and operation of the buildings,
fixtures and other improvements located on the Communities as currently
conducted or existing are not in violation of any applicable building
code, zoning ordinance or other law or regulation except where such
violation of any applicable building code, zoning ordinance or other
law or regulation would not, singly or in the aggregate, have a
material adverse effect on the Company and its Subsidiaries taken as a
whole, (iii) neither the Company, the Partnership nor the Management
Company has received notice of any proposed material special assessment
or any proposed material change in any property tax, zoning or land use
laws or availability of water for irrigation affecting all or any
portion of the Communities; (iv) neither the Company nor the
Partnership is aware of any material delay with respect to the
construction of Communities referred to in the Prospectus as under con-
struction, or any material increase in the estimated cost of such
construction, or any other matter materially detrimental to the
construction, or any factor which may, through passage of time or
otherwise, give rise to such delay, cost increase or detriment; (v)
there do not exist any material violations of any declaration of
covenants, conditions and restriction (the "CC&R's") with respect to
any of the Communities, nor to the Company's knowledge is there any
existing state of facts or circumstances or condition or event which
could, with the giving of notice or passage of time, or both,
constitute such a violation; and (vi) the improvements comprising any
portion of the Communities (the "Improvements") are free of any and all
material physical, mechanical, structural, design and construction
defects and the mechanical, electrical and utility systems servicing
the Improvements (including, without limitation, all water, electric,
sewer, plumbing, heating, ventilation, gas and air conditioning) are in
good condition and proper working order and are free of material
defects;
(x) immediately after any sale of Securities by the
Partnership hereunder, the aggregate amount of Securities which have
been issued and sold by the Partnership hereunder and of any securities
of the Partnership (other than the Securities) that shall have been
issued and sold pursuant to the Registration Statement will not exceed
the amount of securities registered under the Registration Statement;
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(y) no relationship, direct or indirect, exists between or
among the Company or any of its Subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company or any of its Subsidiaries on the other hand, which is required
by the Securities Act to be described in the Registration Statement and
the Prospectus which is not so described;
(z) the Company and its Subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be
filed and have paid all taxes shown thereon and all assessments
received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith; and, except as
disclosed in the Registration Statement and the Prospectus, there is no
tax deficiency which has been or might reasonably be expected to be
asserted or threatened against the Company or any Subsidiary;
(aa) there are no existing or, to the best knowledge of the
Partnership and/or the Company, threatened labor disputes with the
employees of the Company or any of its Subsidiaries which are likely to
have a material adverse effect on the Company and its Subsidiaries
taken as a whole;
(bb) the Partnership has an ALTA Extended Coverage Owner's
Policy of Title Insurance on all of the Communities and such title
insurance is in full force and effect;
(cc) the Company and each Subsidiary (i) is in compliance with
any and all applicable federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a material adverse effect on the
Company and its Subsidiaries, taken as a whole;
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(dd) 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) that would, singly or in the aggregate,
have a material adverse effect on the Company and its Subsidiaries
taken as a whole;
(ee) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended, ("ERISA") that is maintained, administered or contributed to
by the Partnership, the Company or any of its affiliates for employees
or former employees of the Partnership, the Company and its affiliates
has been maintained in compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including
but not limited to ERISA and the Code. No prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code
has occurred with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative exemption. For each
such plan which is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA no "accumulated funding deficiency" as
defined in Section 412 of the Code has been incurred, whether or not
waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions)
exceeded the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions;
(ff) the assets of the Partnership do not constitute "plan
assets" under ERISA;
(gg) the Company and its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they
are engaged; neither the Company nor any Subsidiary has been refused
any insurance coverage sought or applied for, and neither the Company
nor any Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company and its Subsidiaries
taken as a whole, except as described in or contemplated by the
Prospectus;
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(hh) the mortgages and deeds of trust encumbering the
Communities are not cross-defaulted or cross-collateralized with any
other property not owned directly or indirectly by the Company or its
Subsidiaries; and
(ii) any certificate signed by any officer of the Company in
such capacity or as general partner of the Partnership and delivered to
you or to counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the
Company or the Partnership, as the case may be, to each Underwriter
participating in such offering as to the matters covered thereby on the
date of such certificate.
5. Each of the Partnership and the Company covenants and agrees with
each of the several Underwriters as follows:
(a) to file the Prospectus in a form approved by you pursuant
to Rule 424 under the Securities Act not later than the Commission's
close of business on the second Business Day following the date of
determination of the offering price of the Securities or, if
applicable, such earlier time as may be required by Rule 424(b);
(b) to furnish to each Representative and counsel for the
Underwriters, at the expense of the Partnership, a conformed copy of
the Registration Statement (as originally filed) and each amendment
thereto, in each case including exhibits and documents incorporated by
reference therein and, during the period mentioned in paragraph (e)
below, to furnish each of the Underwriters as many copies of the
Prospectus (including all amendments and supplements thereto) and
documents incorporated by reference therein as you may reasonably
request;
(c) from the date hereof and prior to the Closing Date, to
furnish to you a copy of any proposed amendment or supplement to the
Registration Statement or the Prospectus, for your review, and not to
file any such proposed amendment or supplement to which you reasonably
object;
(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Partnership and/or
the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the
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15
delivery of a prospectus is required in connection with the offering or
sale of the Securities, and during such same period, to advise you
promptly, and to confirm such advice in writing, (i) when any amendment
to the Registration Statement shall have become effective, (ii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for any
additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the initiation or threatening of any proceeding for that purpose,
and (iv) of the receipt by the Partnership and/or the Company of any
notification with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best
efforts to prevent the issuance of any such stop order or notification
and, if issued, to obtain as soon as possible the withdrawal thereof;
(e) if, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by law
to be delivered in connection with sales by an Underwriter or dealer,
any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement
the Prospectus to comply with law, forthwith to prepare and furnish, at
the expense of the Partnership and the Company, to the Underwriters and
to the dealers (whose names and addresses you will furnish to the
Partnership and the Company) to which Securities may have been sold by
you on behalf of the Underwriters and to any other dealers upon
request, such amendments or supplements to the Prospectus as may be
necessary 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 will comply with law;
(f) to endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and to continue such qualification in effect
so long as reasonably required for distribution of the Securities;
PROVIDED that the Partnership and the Company shall not be required to
file a general consent to service of process in any jurisdiction;
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16
(g) to make generally available to its security holders and to
you as soon as practicable an earnings statement which shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder covering a period of at least
twelve months beginning with the first fiscal quarter of the
Partnership and the Company occurring after the "effective date" (as
defined in Rule 158) of the Registration Statement;
(h) so long as the Securities are outstanding, to furnish to
you copies of all reports or other communications (financial or other)
furnished to holders of Securities, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(i) during the period beginning on the date hereof and
continuing to and including the Business Day following the Closing
Date, not to offer, sell, contract to sell or otherwise dispose of any
debt securities of or guaranteed by the Partnership and/or the Company
which are substantially similar to the Securities;
(j) to use the net proceeds received by the Partnership from
the sale of the Securities pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
its obligations hereunder, including without limiting the generality of
the foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution, authentication and delivery of the Securities,
including any expenses of the Trustee, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the
Securities under the laws of such jurisdictions as the Underwriters
may designate (including fees of counsel for the Underwriters and their
disbursements), (iv) related to any filing with National Association
of Securities Dealers, Inc., (v) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Preliminary and Supplemental Blue Sky
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Memoranda and any Legal Investment Survey and the furnishing to
Underwriters and dealers of copies of the Registration Statement and
the Prospectus, including mailing and shipping, as herein provided,
(vi) payable to rating agencies in connection with the rating of the
Securities, (vii) any expenses incurred by the Partnership and the
Company in connection with a "road show" presentation to potential
investors and (viii) the cost and charges of any transfer agent.
6. The several obligations of the Underwriters hereunder shall be
subject to the following conditions:
(a) the representations and warranties of the Partnership and
the Company contained herein are true and correct on and as of the
Closing Date as if made on and as of the Closing Date and the
Partnership and the Company shall have complied with all agreements and
all conditions on their part to be performed or satisfied hereunder at
or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission
pursuant to Rule 424 within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act; no
stop order suspending the effectiveness of the Registration Statement
shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your satisfaction;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any
downgrading, (ii) any intended or potential downgrading or (ii) any
review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company and/or
the Partnership by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(d) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
Subsidiaries or any material adverse change, or any development
involving a material adverse change, in or affecting the general
affairs, business, pros-
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pects, management, financial position, stockholders' equity or results
of operations of the Company and its Subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the
effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated
in the Prospectus; and neither the Company nor any of its Subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order to decree,
otherwise than as set forth or contemplated in the Prospectus;
(e) the Representatives shall have received on and as of the
Closing Date a certificate of an executive officer of the Company, with
specific knowledge about the Partnership's and the Company's financial
matters, satisfactory to you to the effect set forth in subsections (a)
through (c) (with respect to the respective representations, warran-
ties, agreements and conditions of the Partnership and the Company) of
this Section and to the further effect that there has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders'
equity or results of operations of the Company and its Subsidiaries
taken as a whole from that set forth or contemplated in the
Registration Statement.
(f) Goodwin, Procter & Hoar LLP, counsel for the Company and
the Subsidiaries, shall have furnished to you their written opinion,
dated the Closing Date, in form and substance satisfactory to you, to
the effect that:
(i) the Partnership has been duly formed and is
validly existing as a partnership in good standing under the laws
of the State of Delaware, has the partnership power and authority
to own its property and any property proposed to be acquired by it
and referred to in the Prospectus and is duly qualified to
transact such business and is in good standing in each
jurisdiction listed on Schedule III attached hereto and, to the
knowledge of the attorneys listed on Schedule V which are all of
the attorneys at Goodwin, Procter & Hoar LLP who are currently
working on matters for the Company or any of its Subsidiaries,
without independ-
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19
ent investigation, is duly qualified to transact such business and
is in good standing under the laws of each other jurisdiction in
which the conduct of its business or its ownership, management or
leasing of property requires such qualification except to the
extent that the failure to be so qualified or be in good standing
in each such jurisdiction would not have a material adverse effect
on the Company and its Subsidiaries taken as a whole;
(ii) each of the Company, the Management Company and
the Building 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 its property and to conduct its business as
described in the Prospectus and is duly qualified to transact such
business and is in good standing in each jurisdiction listed on
Schedule III attached hereto and, to the knowledge of the
attorneys listed on Schedule V which are all of the attorneys at
Goodwin, Procter & Hoar LLP who are currently working on matters
for the Company or any of its Subsidiaries, without independent
investigation, is duly qualified to transact such business and is
in good standing under the laws of each other jurisdiction in
which the conduct of its business or its ownership, management or
leasing of property requires such qualification except to the
extent that the failure to be so qualified or be in good standing
in each such jurisdiction would not have a material adverse effect
on the Company and its Subsidiaries taken as a whole;
(iii) based solely on such counsel's review of the
Agreement of Limited Partnership and a report of a reputable
commercial search firm of the Uniform Commercial Code records of
the financing statements on file in the office of the Secretary of
State of the State of North Carolina, being the state in which the
Company's chief executive office is located and in the office of
the Mecklenburg County Recorder, the county in which such office
is located, the interests in the Partnership owned by the Company
are validly issued and owned, directly or indirectly, by the
Company, free and clear of any perfected security interest, or to
such counsel's knowledge, any other mortgage, pledge, lien,
encumbrance, claim or security interest of any kind;
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(iv) this Agreement has been duly authorized, executed
and delivered by the Company;
(v) this Agreement has been duly authorized, executed
and delivered by the Partnership;
(vi) the Securities have been duly authorized, executed
and delivered by the Partnership and, when duly authenticated in
accordance with the terms of the Indenture and delivered to and
paid for by the Underwriters in accordance with the terms of this
Agreement, will constitute valid and binding obligations of the
Partnership entitled to the benefits provided by the Indenture and
the Securities will be enforceable against the Partnership in
accordance with their terms, except that the enforceability
thereof may be limited by or subject to (a) bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or
other similar laws now or hereafter existing which affect the
rights and remedies of creditors generally and (b) equitable
principles of general applicability. The Indenture conforms in all
material respects to all statements and descriptions related
thereto in the Prospectus. The terms of the Securities conform in
all material respects to all statements and descriptions related
thereto in the Prospectus;
(vii) the Indenture has been duly authorized, executed
and delivered by the Partnership and constitutes a valid and
binding instrument of the Partnership enforceable in accordance
with its terms, except that the enforceability thereof may be
limited by or subject to (a) bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other similar
laws now or hereafter existing which affect the rights and
remedies of creditors generally and (b) equitable principles of
general applicability; and the Indenture has been duly qualified
under the Trust Indenture Act;
(viii) the execution and delivery of the Indenture by
the Partnership and this Agreement by each of the Company and the
Partnership, and the performance by the Partnership of its
obligations under the Indenture and by each of the Company and
the Partnership of its obligations under this Agreement, will not
(a) contravene (i) any provision of Applicable Law or, to the
knowledge of the attorneys listed on Schedule V which are all of
the attorneys at Goodwin, Procter
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& Hoar LLP who are currently working on matters for the Company or
any of its Subsidiaries, without independent investigation, any
provision of applicable law or statute or any order, rule or
regulation of any court or governmental agency, body or court
having jurisdiction over the Company, its Subsidiaries or any of
their respective properties except for such contraventions of any
such provision of applicable law or statute or any such order,
rule or regulation of any court or governmental agency, body or
court having jurisdiction over the Company, its Subsidiaries or
any of their respective properties which individually or in the
aggregate 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 (a "Material Adverse Effect") or (ii) the
Articles of Incorporation or by-laws of the Company or the
Agreement of Limited Partnership or, (b) to such counsel's
knowledge after due inquiry, (i) conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument identified on
Schedule IV attached hereto or, to the knowledge of the attorneys
listed on Schedule V which are all of the attorneys at Goodwin,
Procter & Hoar LLP who are currently working on matters for the
Company or its Subsidiaries, without independent investigation,
any agreement or other instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of
the Company or any of its Subsidiaries is subject except for such
conflicts, breaches or defaults with respect to any such un-
scheduled agreements or instruments which individually or in the
aggregate would not have a Material Adverse Effect; provided that
such counsel need not opine as to whether the execution and
delivery of the Indenture by the Partnership and this Agreement by
each of the Company and the Partnership, and the performance by
the Partnership of its obligations under the Indenture and by each
of the Company and the Partnership of its obligations under this
Agreement will constitute a violation of or a default under any
covenant, restriction or provision with respect to financial
ratios or tests or any aspect of the financial ratios or tests or
any aspect of the financial condition or results of operations of
the Company or the Partnership, or (ii) contravene, violate or
conflict with, any judgment, order or decree, known to such
counsel, of any Governmental Authority or, to the knowledge of the
attorneys listed on Schedule V which are all of the attorneys at
Goodwin, Procter & Hoar LLP who are currently working on matters
for the Company or
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any of its Subsidiaries, without independent investigation, any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any Subsidiary
except for such contraventions, violations or conflicts with any
such judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any Subsidiary which
individually or in the aggregate would not have a Material Adverse
Effect; and no consent, approval, authorization or order of, or
qualification or registration with, any Governmental Authority
or, to the knowledge of the attorneys listed on Schedule V which
are all of the attorneys at Goodwin, Procter & Hoar LLP who are
currently working on matters for the Company or any of its
Subsidiaries, without independent investigation, any court or
governmental body or agency except such consents, approvals,
authorizations or orders of, or qualifications or registrations
with any such court or governmental body or agency the failure of
which to obtain would not individually or in the aggregate have a
Material Adverse Effect, is required for the issue and sale of
the Securities or the performance by each of the Company and the
Partnership of its obligations under this Agreement or by the
Partnership of its obligations under the Indenture, except, in
each case, such as have been obtained under the Securities Act and
the Trust Indenture Act and as may be required by the securities
or Blue Sky laws of the various states or the By-laws or Corporate
Financing Rule of the NASD in connection with the offer and sale
of the Securities;
(a) "Governmental Approval" means any consent,
approval, order or decree, license, authorization or validation
of, or filing with, any Governmental Authority pursuant to
Applicable Laws, (b) "Governmental Authority" shall mean any
United States or Commonwealth of Massachusetts court or
legislative, judicial, administrative or regulatory body or agency
and (c) "Applicable Laws" means the Maryland General Corporation
Law and those laws, statutes, rules and regulations of the United
States of America and the Commonwealth of Massachusetts that, in
such counsel's experience, are normally applicable to transactions
of the type contemplated by this Agreement; provided, that such
counsel need express no opinion as to (x) the "blue sky" or state
securities or real estate syndication laws of any jurisdiction or
(y) municipal laws or the laws of any agencies within any state.
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23
(ix) each of the Company and its Subsidiaries owns,
possesses or has obtained all Governmental Approvals and has made
all declarations and filings with all Governmental Authorities
and, to the knowledge of the attorneys listed on Schedule V which
are all of the attorneys at Goodwin, Procter & Hoar LLP who are
currently working on matters for the Company or any of its
Subsidiaries, without independent investigation, each of the
Company and its Subsidiaries owns, possesses or has obtained all
licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and
filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals except for such licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and
declarations and filings with, all such federal, state, local and
other governmental authorities, all such self-regulatory
organizations and all such courts and other tribunals the failure
of which to own, possess or obtain, and make, as specified above,
would not individually or in the aggregate have a Material Adverse
Effect, in each case, necessary to own or lease, as the case may
be, and to operate its properties and to carry on its business as
conducted as of the date hereof, and neither the Company nor any
such Subsidiary has received any actual notice of any proceeding
relating to revocation or modification of any Governmental Ap-
proval or, to the knowledge of the attorneys listed on Schedule V
which are all of the attorneys at Goodwin, Procter & Hoar LLP who
are currently working on matters for the Company or any of its
Subsidiaries, without independent investigation, any license,
permit, certificate, consent, order, approval or other authori-
zation except for such revocations or modifications of any such
licenses, permits, certificates, consents, orders, approvals or
other authorizations which individually or in the aggregate would
not have a Material Adverse Effect, in each case, except as
described in the Registration Statement and the Prospectus; and
each of the Company and its Subsidiaries is in compliance with all
Applicable Laws and, to the knowledge of the attorneys listed on
Schedule V which are all of the attorneys at Goodwin, Procter &
Hoar LLP who are currently working on matters for the Company or
any of its Subsidiaries, without independent investigation, all
laws and regulations except to the extent that the failure to so
comply with all such laws and regulations would not have a
Material Adverse Effect, in each case, relating to the conduct of
its business as conducted as of the date of the Prospectus;
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24
(x) each document incorporated by reference in the
Registration Statement and the Prospectus as amended or
supplemented (other than the financial statements and related
schedules therein and other financial and statistical data
included or incorporated therein, as to which such counsel need
express no opinion) complied as to form when filed with the
Commission in all material respects with the Exchange Act, and the
rules and regulations of the Commission thereunder, and that the
Registration Statement and the Prospectus and any amendments and
supplements thereto (except for the financial statements and
related schedules therein and other financial and statistical data
included or incorporated therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Securities Act;
(xi) the Registration Statement is effective under the
Securities Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and to
such counsel's knowledge based solely on a telephone conversation
with the staff of the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the Securities Act and no proceedings therefor have been initiated
or threatened by the Commission;
(xii) none of the Company, the Partnership, the
Management Company, or the Building Company is an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended;
(xiii) based, in part, on representations from the
Company relating to its asset composition, source of income,
shareholder diversification, distributions, record keeping and
other requirements and assumptions relating to the Company's
continued compliance with such representations, for its taxable
years ended December 31, 1994, through December 31, 1996, the
Company has been organized in conformity with the requirements
for qualification as a "real estate investment trust" under the
Code and its method of operation has enabled it to and will enable
it to continue to meet the requirements for qualification and
taxation as a real estate investment trust under the Code;
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25
(xiv) the statements set forth in the Prospectus under
the caption "Federal Income Tax Considerations" insofar as such
statements constitute summaries of the legal matters referred to
therein, are accurate in all material respects; and
(xv) the statements set forth in the Prospectus under
the captions "Description of Debt Securities", "Description of
Common Stock", "Description of Preferred Stock", and "Restrictions
on Transfer of Capital Stock", in each case insofar as such
statements constitute summaries of the legal matters or documents
referred to therein, fairly present the information called for
with respect to such legal matters and documents and fairly
summarize the matters referred to therein.
Such counsel shall also include a statement in such
opinion to the following effect: we have participated in conferences
with officers and other representatives of the Company and the
Partnership, counsel for the Company and the Partnership, represen-
tatives of the independent accountants of the Company and the
Partnership and you at which the contents of the Registration Statement
and related matters were discussed and on the basis of the foregoing:
(i) No facts have come to such counsel's
attention which cause it to believe that the Registration
Statement (excluding the financial statements and
schedules and other financial and statistical data
included or incorporated therein, as to which such counsel
need express no belief), at the time it became effective,
contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; and
(ii) No facts have come to such counsel's
attention which cause it to believe that the Prospectus
(excluding the financial statements and schedules and
other financial and statistical data included or
incorporated therein, as to which such counsel need
express no belief), as of its date and the Closing Date,
contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to
make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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26
(g) The favorable opinion, dated as of Closing Time, of
Kennedy Covington Lobdell & Hickman, special counsel for the Company
and the Subsidiaries, in form and substance satisfactory to counsel for
the Underwriters, to the effect that:
(i) the Partnership is duly qualified to transact
such business and is in good standing in each jurisdiction listed
on Schedule III attached hereto and, to the knowledge of the
attorneys listed on Schedule VI which are all of the attorneys at
Kennedy Covington Lobdell & Hickman who are currently working on
matters for the Company or its Subsidiaries, without independent
investigation, is duly qualified to transact such business and is
in good standing under the laws of each other jurisdiction in
which the conduct of its business or its ownership, management or
leasing of property requires such qualification except to the
extent that the failure to be so qualified or be in good standing
in each such jurisdiction would not have a material adverse effect
on the Company and its Subsidiaries taken as a whole;
(ii) each of the Company, the Management Company and
the Building Company is duly qualified to transact such business
and is in good standing in each jurisdiction listed on Schedule
III attached hereto and, to the knowledge of the attorneys listed
on Schedule VI which are all of the attorneys at Kennedy Covington
Lobdell & Hickman who are currently working on matters for the
Company or its Subsidiaries, without independent investigation, is
duly qualified to transact such business and is in good standing
under the laws of each other jurisdiction in which the conduct of
its business or its ownership, management or leasing of property
requires such qualification except to the extent that the failure
to be so qualified or be in good standing in each such
jurisdiction would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole;
(iii) the execution and delivery of the Indenture by
the Partnership and this Agreement by each of the Company and the
Partnership, and the performance by the Partnership of its
obligations under the Indenture and by each of the Company and
the Partnership of its obligations under this Agreement, will not
(a) contravene (i) any provision of Applicable Law or, to the
knowledge of the attorneys listed on Schedule VI which are all of
the attorneys at Kennedy Covington Lobdell & Hickman who are
currently working on matters for the
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Company or its Subsidiaries, without independent investigation,
any provision of applicable law or statute or any order, rule or
regulation of any court or governmental agency, body or court
having jurisdiction over the Company, its Subsidiaries or any of
their respective properties, except for such contraventions of any
such provision of applicable law or statute or any such order,
rule or regulation of any court or governmental agency, body or
court having jurisdiction over the Company, its Subsidiaries or
any of their respective properties which individually or in the
aggregate 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 (a "Material Adverse Effect") or (ii) the
Articles of Incorporation or by-laws of the Company or the
Agreement of Limited Partnership or, (b) to such counsel's
knowledge after due inquiry, (i) conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument identified on
Schedule IV attached hereto or, to the knowledge of the attorneys
listed on Schedule VI which are all of the attorneys at Kennedy
Covington Lobdell & Hickman who are currently working on matters
for the Company or its Subsidiaries, without independent
investigation, any agreement or other instrument to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Subsidiaries is
subject except for such conflicts, breaches or defaults with
respect to any such unscheduled agreements or instruments which
individually or in the aggregate would not have a Material Adverse
Effect; provided that such counsel need not opine as to whether
the execution and delivery of the Indenture by the Partnership and
this Agreement by each of the Company and the Partnership, and the
performance by the Partnership of its obligations under the
Indenture and by each of the Company and the Partnership of its
obligations under this Agreement will constitute a violation of or
a default under any covenant, restriction or provision with
respect to financial ratios or tests or any aspect of the
financial ratios or tests or any aspect of the financial condition
or results of operations of the Company or the Partnership, or
(ii) contravene, violate or conflict with, any judgment, order or
decree, known to such counsel, of any Governmental Authority or,
to the knowledge of the attorneys listed on Schedule VI which are
all of the attorneys at Kennedy Covington Lobdell & Hickman who
are currently working on matters for the Company or its Subsidiar-
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28
ies, without independent investigation, any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any Subsidiary except for such
contraventions, violations or conflicts with any such judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any Subsidiary which individually
or in the aggregate would not have a Material Adverse Effect;
(a) "Governmental Approval" means any consent,
approval, order or decree, license, authorization or validation
of, or filing with, any Governmental Authority pursuant to
Applicable Laws, (b) "Governmental Authority" shall mean any
United States or State of North Carolina court or legislative,
judicial, administrative or regulatory body or agency and (c)
"Applicable Laws" means the Maryland General Corporation Law and
those laws, statutes, rules and regulations of the United States
of America and the State of North Carolina that, in such counsel's
experience, are normally applicable to transactions of the type
contemplated by this Agreement; provided, that such counsel need
express no opinion as to (x) the "blue sky" or state securities or
real estate syndication laws of any jurisdiction or (y) municipal
laws or the laws of any agencies within any state.
(iv) To their knowledge after due inquiry, there are no
legal or governmental proceedings pending or threatened to which
the Company or any Subsidiary or any Affiliate of the Company is a
party or to which any of their properties or the Communities 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 that are
not described or filed as required;
(v) The Company and each Subsidiary has all necessary
consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or
file would not have a Material Adverse Effect; and neither the
Company nor any such Subsidiary has received any actual notice of
any proceed-
28
29
ing relating to revocation or modification of any Governmental
Approval or, to the knowledge of the attorneys listed on Schedule
VI which are all of the attorneys at Kennedy Covington Lobdell &
Hickman who are currently working on matters for the Company or
its Subsidiaries, without independent investigation, any such
license, permit, certificate, consent, order, approval or other
authorization except for such revocations or modifications of any
such licenses, permits, certificates, consents, orders, approvals
or other authorizations which individually or in the aggregate
would not have a Material Adverse Effect, in each case, except as
described in the Registration Statement and the Prospectus; and
each of the Company or its Subsidiaries is in compliance with all
Applicable Laws and, to the knowledge of the attorneys listed on
Schedule VI which are all of the attorneys at Kennedy Covington
Lobdell & Hickman who are currently working on matters for the
Company or its Subsidiaries, without independent investigation,
all laws and regulations except to the extent that failure to so
comply with all such laws and regulations would not have a
Material Adverse Effect, in each case, relating to the conduct of
its business as conducted as of the date of the Prospectus; and
(vi) The Company and each Subsidiary (1) is in
compliance with any and all applicable federal, state and local
laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (2) has
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their businesses
and (3) is in compliance with all terms and conditions of any such
permit, license or approval, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals are otherwise
disclosed in the Prospectus or would not, singly or in the
aggregate, have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
Such counsel shall also include a statement in such opinion to the
following effect: we have reviewed the Registration Statement and the Prospectus
and participated in conferences with officers and other representatives of the
Company and the Partnership and counsel for the Company and the Partnership at
which the contents of the Registration Statement and related matters were
discussed and on the basis of the foregoing:
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(i) No facts have come to such counsel's attention
which cause it to believe that the Registration Statement
(excluding the financial statements and schedules and other
financial and statistical data included or incorporated therein,
as to which such counsel need express no belief), at the time it
became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and
(ii) No facts have come to such counsel's attention
which cause it to believe that the Prospectus (excluding the
financial statements and schedules and other financial and
statistical data included or incorporated therein, as to which
such counsel need express no belief), as of its date and the
Closing Date contained an untrue statement of a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the State of Maryland, to the extent such counsel deems proper and to the extent
specified in such opinion, if at all, upon an opinion or opinions (in form and
substance reasonably satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to the Underwriters' counsel, familiar with the applicable
laws; (B) as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Partnership and the Company and
certificates or other written statements of officials of jurisdictions having
custody of documents respecting the corporate existence or good standing of the
Partnership and the Company. The opinion of such counsel for the Partnership and
the Company shall state that the opinion of any such other counsel upon which
they relied is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying thereon. With
respect to the matters to be covered in the last paragraph of subparagraph (f)
and subparagraph (h)(iv) above counsel may state their opinion and belief is
based upon their participation in the preparation of the Registration Statement
and the Prospectus and any amendment or supplement thereto but is without
independent check or verification except as specified.
The opinion of Goodwin, Procter & Hoar LLP described above shall be
rendered to the Underwriters at the request of the Partnership and the Company
and shall so state therein.
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31
(h) on the date hereof and on the Closing Date, Deloitte & Touche LLP,
Arthur Andersen LLP and Reznick Fedder & Silverman shall have furnished to you
letters, dated such date, in form and substance satisfactory to you, containing
statements and information of the type customarily included in accountants
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus;
(i) you shall have received on and as of the Closing Date an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Underwriters, with
respect to the validity of the Indenture and the Securities, the Registration
Statement, the Prospectus and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(j) on or prior to the Closing Date, the Company shall have furnished
to the Representatives such further certificates and documents as the
Representatives shall reasonably request; and
(k) on or prior to the Closing Date, the Partnership shall have
delivered to the Representatives an amendment to the Credit Agreement, dated
November 18, 1996, by and among the Partnership, as borrower, and First Union
National Bank of North Carolina, as agent and lender, and Wachovia Bank of North
Carolina, N.A., as lender, (the "Credit Agreement"), amending the provisions of
Section 7.12 of the Credit Agreement, duly executed and delivered by the parties
thereto in form and substance satisfactory to the Representatives and their
counsel.
7. The Partnership and the Company, jointly and severally, hereby
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of 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 the legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Partnership and the Company
shall have furnished any amendments or supplements thereto) or any preliminary
prospectus, 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
31
32
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Partnership and/or the Company in writing by
such Underwriter through the Representatives expressly for use therein;
provided, however, that the foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of the person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased Securities if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary prospectus is eliminated or remedied in the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) and, if required by law, a copy of the Prospectus (as so
amended or supplemented) shall not have been furnished to such person at or
prior to the written confirmation of the sale of such Securities to such person.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Partnership, the Company and its directors, each of the
officers who sign the Registration Statement and each person who controls the
Company or the Partnership within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Partnership and the Company to each Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Partnership or the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person 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 Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii)
32
33
the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person 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 Person
shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters and such control persons of Underwriters
shall be designated in writing by the first of the named Representatives on
Schedule I hereto and any such separate firm for the Partnership or the Company,
its directors, its officers who sign the Registration Statement and such control
persons of the Partnership or the Company or authorized representatives shall be
designated in writing by the Partnership or the Company. The Indemnifying
Person 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 Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as contemplated by the
third sentence of this paragraph, the Indemnifying Person 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 Person of the aforesaid request and (ii) such Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. However, if it is ultimately
determined that an Indemnified Person was not entitled to indemnification
hereunder, such Indemnified Person shall be responsible for repaying or
reimbursing the Indemnifying Person for all amounts so paid or incurred by such
Indemnifying Person pursuant to this paragraph. No Indemnifying Person shall,
without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or
33
34
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person 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 Partnership and the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities 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 Partnership and the Company on the one hand and the Underwriters on
the other 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 Partnership and the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same respective proportions as the net proceeds from the offering of such
Securities (before deducting expenses) received by the Partnership and the total
underwriting discounts and the commissions received by the Underwriters bear to
the aggregate public offering price of the Securities. The relative fault of the
Partnership and the Company on the one hand and the Underwriters on the other
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 Partnership or
the Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Partnership, the Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 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 the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person 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 incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities 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
34
35
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 Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective principal amount of the Securities set forth opposite their
names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 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.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Partnership and the Company set
forth 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 by or on behalf of the Partnership, the Company, its officers or
directors or any other person controlling the Company and (iii) acceptance of
and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representatives, by notice given to
the Partnership and the Company, if 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 Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company or the Partnership 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 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 the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives, makes
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities which it or they have agreed to purchase
under this Agreement, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters
35
36
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Securities, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; PROVIDED that in no event shall the principal amount of Securities that
any Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by an amount in excess of one-tenth of such principal
amount of Securities without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased, and arrangements satisfactory to you and
the Partnership and the Company for the purchase of such Securities 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 Partnership and
the Company. In any such case either you or the Partnership 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. 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.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Partnership or the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Partnership or the Company shall be unable
to perform their obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled, the Partnership and the Company
agree to 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 expenses of their counsel) reasonably incurred
by such Underwriters in connection with this Agreement or the offering of
Securities.
11. This Agreement shall inure to the benefit of and be binding upon
the Partnership, the Company, the Underwriters, any controlling persons referred
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall
36
37
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by you
jointly or by the first of the named Representatives set forth in Schedule I
hereto alone on behalf of the Underwriters, and any such action taken by you
jointly or by the first of the named Representatives set forth in Schedule I
hereto alone shall be binding upon the Underwriters. All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be given at the address set forth in Schedule
II hereto. Notices to the Partnership and the Company shall be given to it at
212 South Tryon Street, Suite 500, Charlotte, North Carolina 28211, (telex:
(704) 333-8340); Attention: Mr. William F. Paulsen, President and Chief
Executive Officer.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
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14. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
conflicts of laws provisions thereof.
Very truly yours,
SUMMIT PROPERTIES PARTNERSHIP, L.P.
By: Summit Properties Inc., its general partner
By: /s/ Michael L. Schwarz
-------------------------------
Name: Michael L. Schwarz
Title: Executive Vice President
SUMMIT PROPERTIES INC.
By: /s/ Michael L. Schwarz
-------------------------------
Name: Michael L. Schwarz
Title: Executive Vice President
Accepted: August 7, 1997
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
FIRST UNION CAPITAL MARKETS CORP.
Acting severally on behalf of themselves and the several
Underwriters listed in Schedule II hereto.
By: J.P. MORGAN SECURITIES INC.
By: /s/ Keysha Bailey
------------------------------
Name: Keysha Bailey
Title: Vice President
39
SCHEDULE I
Representatives: J.P. Morgan Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, First Union Capital Markets Corp.
Underwriting Agreement
dated: August 7, 1997
Registration Statement
No.: 333-25575
Title of Securities: 6.80% Notes Due 2002 (the "2002 Notes"), 6.95%
Notes due 2004 (the "2004 Notes") and 7.20% Notes
Due 2007 (the "2007 Notes" and, together with the
2002 Notes and the 2004 Notes, the "Securities")
Aggregate principal
amount: $25,000,000 of 2002 Notes, $50,000,000 of 2004 Notes
and $50,000,000 of 2007 Notes
Price to Public: 99.940% of the principal amount of the 2002 Notes,
99.764% of the principal amount of the 2004 Notes
and 99.830% principal amount of the 2007 Notes, plus
accrued interest, if any, from August 12, 1997
Indenture: Indenture dated as of August 7, 1997 and the
Supplemental Indenture to be dated as of August 12,
1997, both between the Partnership and First Union
National Bank as Trustee
I-1
40
Maturity: August 15, 2002 with respect to the 2002 Notes,
August 15, 2004 with respect to the 2004 Notes and
August 15, 2007 with respect to the 2007 Notes
Interest Rate: 6.80% with respect to the 2002 Notes, 6.95% with
respect to the 2004 Notes and 7.20% with respect to
the 2007 Notes
Interest Payment Dates: February 15 and August 15, commencing
February 15, 1998
Optional Redemption
Provisions: The Securities are redeemable at any time at the
option of the Partnership, in whole or in part, at a
redemption price equal to the sum of (i) the
principal amount of the Securities being redeemed
plus accrued interest thereon to the redemption date
and (ii) the Make-Whole Amount (as defined in the
Prospectus Supplement relating to the Securities
dated August 7, 1998), if any
Sinking Fund Provisions: None
Closing Date and
Time of Delivery: The Closing will be held at 10:00 a.m. (E.S.T.) on
August 12, 1997, with the Securities being delivered
through the book-entry facilities of The Depository
Trust Company ("DTC") and made available for
checking by DTC and the Trustee at least 24 hours
prior to the Closing Date
Closing Location: Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
I-2
41
Address for Notices
to Underwriters: c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
I-3
42
SCHEDULE II
Principal Amount
of Securities to be Purchased
-----------------------------
Underwriter 2002 2004 2007
- ----------- ---- ---- ----
J.P. Morgan Securities Inc. .......... $16,250,000 $32,500,000 $32,500,000
Merrill Lynch & Co. Inc. ............. 3,750,000 7,500,000 7,500,000
Morgan Stanley & Co. Incorporated .... 3,750,000 7,500,000 7,500,000
First Union Capital Markets .......... 1,250,000 2,500,000 2,500,000
----------- ----------- -----------
Total .............. $25,000,000 $50,000,000 $50,000,000
=========== =========== ===========
43
SCHEDULE III
Foreign Qualifications
COMPANY STATE OF ORGANIZATION STATES OF FOREIGN
QUALIFICATION
- --------------------------------------------------------------------------------
Summit Properties Inc. - Maryland - Alabama
- Florida
- Georgia
- Indiana
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- Tennessee
- Virginia
- --------------------------------------------------------------------------------
Summit Properties - Delaware - Alabama
Partnership, L.P. - Florida
- Georgia
- Indiana
- Maryland
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- Tennessee
- Virginia
- --------------------------------------------------------------------------------
III-1
44
COMPANY STATE OF ORGANIZATION STATES OF FOREIGN
QUALIFICATION
- --------------------------------------------------------------------------------
Summit Management - Maryland - Alabama
Company - Delaware
- Florida
- Georgia
- Indiana
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- Tennessee
- Virginia
- --------------------------------------------------------------------------------
Summit Apartment - Florida - North Carolina
Builders, Inc.
- --------------------------------------------------------------------------------
III-2
45
SCHEDULE IV
Material Contracts
1. Articles of Incorporation of Summit Management Company. (Incorporated
by reference to Exhibit 10.3 to the Annual Report on Form 10-K of
Summit Properties Inc. for the fiscal year ended December 31, 1993,
File No. 001-12792.)
2. Bylaws of Summit Management Company. (Incorporated by reference to
Exhibit 10.4 to the Annual Report on Form 10-K of Summit Properties
Inc. for the fiscal year ended December 31, 1993, File No. 001-12792.)
3. Indemnification Agreement, dated January 29, 1994, among Summit
Properties Inc., Summit Properties Partnership, L.P. and the
individuals named therein. (Incorporated by reference to Exhibit 10.16
to the Annual Report on Form 10-K of Summit Properties Inc. for the
fiscal year ended December 31, 1993, File No. 001-12792.)
4. Lock-Up Agreement, dated February 8, 1994, between Summit Properties
Inc., Morgan Stanley & Co. Incorporated, Prudential Securities
Incorporated, The Robinson-Humphrey Company, Inc., Interstate/Johnson
Lane Corporation, Morgan Stanley International, Prudential-Bache
Securities, The Robinson-Humphrey Company, Inc. and Interstate/Johnson
Lane Corporation and the shareholders named therein. (Incorporated by
reference to Exhibit 10.20 to the Annual Report on Form 10-K of Summit
Properties Inc. for the fiscal year ended December 31, 1993, File No.
001-12792.)
5. Waiver of Rescission Rights and Contribution Agreement, dated January
18, 1994, between Summit Properties Inc. and Street Real Estate
Company. (Incorporated by reference to Exhibit 10.23 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
6. Omnibus Option Agreement, dated as of December 1, 1993, among Summit
Properties and the Grantors named therein. (Incorporated by reference
to Exhibit 10.14 to the Annual Report on Form 10-K of Summit Properties
Inc. for the fiscal year ended December 31, 1993, File No. 001-12792.)
IV-1
46
7. Assignment, Assumption and Option Agreement for Henderson Place/McGuire
Partners Limited Partnership, dated February 8, 1994, between Summit
Properties Partnership, L.P. and the grantors named therein.
(Incorporated by reference to Exhibit 10.21 to the Annual Report on
Form 10-K of Summit Properties Inc. for the fiscal year ended December
31, 1993, File No. 001-12792.)
8. Option Agreement, dated January 19, 1994, between Summit Properties
Partner ship, L.P. and LMES Limited Partnership. (Incorporated by
reference to Exhibit 10.22 to the Annual Report on Form 10-K of Summit
Properties Inc. for the fiscal year ended December 31, 1993, File No.
001-12792.)
9. Form of Option and Transfer Agreement, among Summit Management Company,
William F. Paulsen and Summit Properties Partnership, L.P.
(Incorporated by reference to Exhibit 10.6 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
10. Summit Properties Inc. 1994 Stock Option and Incentive Plan.
(Incorporated by reference to Exhibit 10.6 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
11. Summit Properties Inc. 1996 Non-Qualified Employee Stock Purchase Plan.
(Incorporated by reference to Exhibit 10.5 to the Registration
Statement of Form S-8, of Summit Properties Inc., Registration No.
333-00078.)
12. Employment Agreement between Summit Properties Inc. and William F.
Paulsen. (Incorporated by reference to Exhibit 10.7 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
13. Employment Agreement between Summit Properties Inc. and William B.
McGuire, Jr. (Incorporated by reference to Exhibit 10.8 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
14. Employment Agreement between Summit Properties Inc. and Raymond V.
Jones. (Incorporated by reference to Exhibit 10.9 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
IV-2
47
15. Employment Agreement between Summit Properties Inc. and David F.
Tufaro. (Incorporated by reference to Exhibit 10.11 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
16. Employment Agreement between Summit Properties Inc. and John C. Moore.
(Incorporated by reference to Exhibit 10.12 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
17. Employment Agreement between Summit Properties Inc. and Michael G.
Malone. (Incorporated by reference to Exhibit 10.12.1 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
18. Employment Agreement between Summit Properties Inc. and Keith L.
Downey. (Incorporated by reference to Exhibit 10.12.3 to the Annual
Report on Form 10-K of Summit Properties Inc. for the fiscal year ended
December 31, 1993, File No. 001-12792.)
19. Employment Agreement between Summit Properties Inc. and Christopher A.
Hughes. (Incorporated by reference to Exhibit 10.12.4 to the Annual
Report on Form 10-K of Summit Properties Inc. for the fiscal year ended
December 31, 1993, File No. 001-12792.)
20. Employment Agreement between Summit Properties Inc. and William B.
Hamilton. (Incorporated by reference to Exhibit 10.36 to the Annual
Report on Form 10-K of Summit Properties Inc. for the fiscal year ended
December 31, 1996, file No. 001-12792.)
21. Noncompetition Agreement between Summit Properties Inc. and William F.
Paulsen. (Incorporated by reference to Exhibit 10.24 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
22. Noncompetition Agreement between Summit Properties Inc. and William B.
McGuire, Jr. (Incorporated by reference to Exhibit 10.25 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
23. Noncompetition Agreement between Summit Properties Inc. and Raymond V.
Jones. (Incorporated by reference to Exhibit 10.26 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
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48
24. Noncompetition Agreement between Summit Properties Inc. and Keith H.
Kuhlman. (Incorporated by reference to Exhibit 10.27 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
25. Noncompetition Agreement between summit Properties Inc. and David F.
Tufaro. (Incorporated by reference to Exhibit 10.28 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
26. Noncompetition Agreement between Summit Properties Inc. and John T.
Gray. (Incorporated by reference to Exhibit 10.29 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
27. Noncompetition Agreement between Summit Properties Inc. and John C.
Moore. (Incorporated by reference to Exhibit 10.30 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
28. Noncompetition Agreement between Summit Properties Inc. and Michael G.
Malone. (Incorporated by reference to Exhibit 10.31 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
29. Noncompetition Agreement between Summit Properties Inc. and William B.
Hamilton. (Incorporated by reference to Exhibit 10.37 to the Annual
Report on Form 10-K of Summit Properties Inc. for the fiscal year ended
December 31, 1996, file No. 001-12792.)
30. Form of Agreement to Purchase Partnership Interests. (Incorporated by
reference to Exhibit 10.13 to the Registration Statement on Form S-11
of Summit Properties Inc., Registration No. 33-90706.)
31. Acquisition Agreement, dated December 29, 1993, between Stony Point
Limited Partnership and Summit Management Company. (Incorporated by
reference to Exhibit 10.15 to the Registration Statement on Form S-11
of Summit Properties Inc., Registration No. 33-90706.)
32. $2,500,000 Promissory Note, dated February 15, 1994 and maturing on
February 15, 2004, from Summit Management Company to Old Summit
Management Company. (Incorporated by reference to Exhibit 10.17 to the
Annual Report on
IV-4
49
Form 10-K of Summit Properties Inc. for the fiscal year ended
December 31, 1993, File No. 001-12792.)
33. $125,000,000 Promissory Note, dated February 15, 1994 and maturing on
February 15, 2001, from Summit Properties Inc. to Northwestern Mutual
Life Insurance Company. (Incorporated by reference to Exhibit 10.18.1
to the Annual Report on Form 10-K of Summit Properties Inc. for the
fiscal year ended December 31, 1993, File No. 001-12792.)
34. Mortgage and Security Agreement and Financing Statement, dated February
15, 1994, between Summit Properties Inc. and Northwestern Mutual Life
Insurance Company. (Incorporated by reference to Exhibit 10.18.2 to the
Annual Report on Form 10-K of Summit Properties Inc. for the fiscal
year ended December 31, 1993, File No. 001-12792.)
35. $31,000,000 Loan Agreement, dated July 31, 1996, between Summit
Properties Partnership, L.P. and Wachovia Bank of North Carolina, N.A.
(Incorporated by reference to Exhibit 10.34 to the Quarterly Report on
Form 10-Q of Summit Properties Inc. for the fiscal quarter ended
September 30, 1996, File No. 001-12792.)
36. $150,000,000 Credit Agreement, dated November 18, 1996, among Summit
Properties Partnership, L.P., First Union National Bank of North
Carolina and Wachovia Bank of North Carolina, N.A. (Incorporated by
reference to Exhibit 10.35 to the Annual Report on Form 10-K of Summit
Properties Inc. for the fiscal year ended December 31, 1996, file No.
001-12792.)
37. Registration Rights Agreement, dated December 11, 1995, between Summit
Properties Inc. and Bissell Ballantyne, LLC. (Incorporated by reference
to Exhibit 10.2 to the Registration Statement on Form S-3 of Summit
Properties Inc., Registration No. 333-24669.)
38. Registration Rights Agreement, dated January 10, 1996, among Summit
Properties Inc., Joseph H. Call and Gary S. Cangelosi. (Incorporated by
reference to Exhibit 10.2 to the Registration Statement on Form S-3 of
Summit Properties Inc., Registration No. 333-24669.)
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50
39. Registration Rights Agreement, dated February 20, 1997, among Summit
Properties Inc., The Northwestern Mutual Life Insurance Company, J.
Ronald Terwelleger, J. Ronald Terwilliger Grantor Trust, Crow
Residential Realty Investors, L.P., Douglas A. Hoeksema, Randy J. Pace,
Clifford A. Breining, TCF Residential Partnership, Ltd. and Trammell S.
Crow. (Incorporated by reference to Exhibit 10.2 to the Registration
Statement on Form S-3 of Summit Properties Inc., Registration No.
333-24669.)
40. Registration Rights Agreement, dated February 8, 1994, between Summit
Properties Inc. and the Continuing Investors named therein.
(Incorporated by reference to Exhibit 10.2 to the Annual Report on Form
10-K of Summit Properties Inc. for the fiscal year ended December 31,
1993, File No. 001-12792.)
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51
SCHEDULE V
List of all of the attorneys at Goodwin, Procter & Hoar LLP who are
currently working on matters for the Company or any of its Subsidiaries.
Stephen W. Carr, P.C.
Edward L. Glazer, P.C.
Gilbert G. Menna, P.C.
David W. Watson
Stephen G. Charkoudian
Diana T. McKearney
Linda Ratnik-Tamm
Jennifer H. Weiss
52
SCHEDULE VI
List of all of the attorneys at Kennedy Covington Lobdell & Hickman
which are currently working on matters for the Company or any of its
Subsidiaries.
David H. Jones
William C. Livingston
Maynard E. Tipps
Raymond E. Owens
Alice C. Richey
Joseph W. Moss
John Nicholas Suhr, Jr.
John H. Culver, III
Felicia A. Washington
Alan H. Peterson
Michael R. Thornton