UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
October 10, 2002
Date of Report (Date of earliest event reported)
MID-AMERICA APARTMENT COMMUNITIES, INC.
(Exact Name of Registrant as Specified in Charter)
TENNESSEE 1-12762 62-1543819
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
6584 POPLAR AVENUE, SUITE 300
MEMPHIS, TENNESSEE 38138
(Address of principal executive offices)
(901) 682-6600
(Registrant's telephone number, including area code)
(Former name or address, if changed since last report)
Item 5. Other Events
On October 10, 2002, Mid-America Apartment Communities, Inc. (the "Company") and
Mid-America Apartments, L.P. (the "Operating Partnership") entered into an
underwriting agreement (the "Underwriting Agreement") with Raymond James &
Associates, Inc., relating to the offer and sale by the Company of 470,000 of
the Company's 9 1/4% Series F Cumulative Redeemable Preferred Stock, Liquidation
Preference $25 per share, par value $0.01 per share ("Series F Preferred
Stock"). Closing on the sale of the Series F Preferred Stock is expected to be
on October 16, 2002. Pursuant to the Underwriting Agreement, the underwriters
have the option to acquire up to an additional 50,000 shares of the Series A
Preferred Stock to cover over-allotments, if any.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibits are filed pursuant to Item 601 of Regulation S-K:
Number Description
1.1 Underwriting Agreement, dated October 10, 2002, by and among the Company,
the Operating Partnership, and Raymond James & Associates, Inc.
3.1 Articles of Amendment to the Amended and Restated Charter Designating and
Fixing the Rights and Preferences of a Series of Preferred Stock, dated
October 11, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MID-AMERICA APARTMENT COMMUNITIES, INC.
Date: October 14, 2002 /s/Simon R.C. Wadsworth
Simon R.C. Wadsworth
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
EXHIBIT 1.1
AS-EXECUTED, FINAL VERSION-CONFORMED
470,000 Shares*
MID-AMERICA APARTMENT COMMUNITIES, INC.
9 1/4% SERIES F CUMULATIVE REDEEMABLE PREFERRED STOCK
UNDERWRITING AGREEMENT
St. Petersburg, Florida
October 10, 2002
Raymond James & Associates, Inc.
As Representative of the Several Underwriters
listed on Schedule I hereto
880 Carillon Parkway
St. Petersburg, Florida 33716
Ladies and Gentlemen:
Mid-America Apartment Communities, Inc., a Tennessee corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), an aggregate of 470,000 shares (the "Firm Shares") of its 9
1/4% Series F Cumulative Redeemable Preferred Stock, par value $.01 per share
(the "Series F Preferred Stock"). In addition, the Company has agreed to sell to
the Underwriters, upon the terms and conditions stated herein, up to an
additional 50,000 shares of Series F Preferred Stock (the "Additional Shares")
to cover over-allotments by the Underwriters, if any. The Firm Shares and the
Additional Shares are collectively referred to in this Agreement as the
"Shares." Raymond James & Associates, Inc. is acting as the representative of
the several Underwriters and in such capacity is referred to in this Agreement
as the "Representative."
The Company wishes to confirm as follows its agreement with you and the
other several Underwriters, on whose behalf you are acting, in connection with
the several purchases of the Shares from the Company.
1. Registration Statement and Prospectus. The Company has 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 "Act"), a
registration statement on Form S-3 (File No. 333-60285), including a base
prospectus dated September 9, 1998 (the "Base Prospectus"), relating to the
Shares. Such registration statement, as amended, including the financial
statements, exhibits and schedules thereto, at the time it became effective and
as thereafter amended by any post-effective amendment, is referred to in this
Agreement as the "Registration Statement." The Base Prospectus in the form
included in the Registration Statement, together with the prospectus supplement
relating to the Shares in the form filed with the Commission pursuant to Rule
424(b) under the Act, including any information omitted in reliance upon Rule
430A under the Act which is thereafter included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Act or as part of a post-effective
amendment to the Registration Statement is referred to in this Agreement as the
"Prospectus." If the Company elects, with the consent of the Representative, to
rely on Rule 434 under the Act, all references to the Prospectus shall be deemed
to include the form of prospectus and the term sheet contemplated by Rule 434,
taken together, provided to the Underwriters by the Company in reliance on Rule
434 under the Act (the "Rule 434 Prospectus"). If the Company files another
registration statement with the Commission to register a portion of the Shares
pursuant to Rule 462(b) under the Act (the "Rule 462 Registration Statement"),
then any reference to "Registration Statement" herein shall be deemed to include
the registration statement on Form S-3 (File No. 333-60285) and the Rule 462
Registration Statement, as each such registration statement may be amended
pursuant to the Act. The preliminary prospectus supplement subject to
completion, together with the Base Prospectus, is referred to in this Agreement
as the "Preliminary Prospectus." All references in this Agreement to the
Registration Statement, the Rule 462 Registration Statement, the Rule 434
Prospectus, a Preliminary Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("EDGAR").
Any reference in this Agreement to the Registration Statement, any
Preliminary Prospectus 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 Act, as of the date of the Registration Statement, such Preliminary
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used
herein, the term "Incorporated Documents" means the documents that at the time
of filing are incorporated by reference in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto
and the phrases "included in" or "disclosed in" when referring to the
Registration Statement, any Preliminary Prospectus or any Prospectus shall be
deemed to include documents incorporated by reference therein.
2. Agreements to Sell and Purchase. The Company hereby agrees to issue and sell
the Firm Shares to the Underwriters and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees, severally and
not jointly, to purchase from the Company at a purchase price of $24.2125 per
Share (the "purchase price per Share"), the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto.
The Company hereby also agrees to sell to the Underwriters, and, upon
the basis of the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right for 30 days from the date of the
Prospectus to purchase from the Company up to 50,000 Additional Shares at the
purchase price per Share for the Firm Shares. The Additional Shares may be
purchased solely for the purpose of covering over-allotments, if any, made in
connection with the offering of the Firm Shares. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
the number of Additional Shares (subject to such adjustments as you may
determine to avoid fractional shares) that bears the same proportion to the
total number of Additional Shares to be purchased by the Underwriters as the
number of Shares set forth opposite the name of such Underwriter in Schedule I
hereto bears to the total number of Shares. The option to purchase Additional
Shares may be exercised at any time within 30 days after the date of the
Prospectus, but no more than once.
3. Terms of Public Offering. The Company has been advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after this Agreement has become effective as in your judgment
is advisable and initially to offer the Shares upon the terms set forth in the
Prospectus. Not later than 2:00 p.m. Eastern Time on the business day following
the date of the Prospectus, the Company shall deliver or cause to be delivered
copies of the Prospectus in such quantities and at such places as you shall
request.
4. Delivery of the Shares and Payment Therefor. Delivery to the Underwriters of
the Firm Shares and payment therefor shall be made at the offices of Raymond
James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida at 10:00
a.m., St. Petersburg, Florida time, on October 16, 2002, or such other place,
time and date not later than 1:30 p.m., St. Petersburg, Florida time, on October
30 as the Representative shall designate by notice to the Company (the time and
date of such closing are called the "Closing Date"). The place of closing for
the Firm Shares and the Closing Date may be varied by agreement between the
Representative and the Company. The Company hereby acknowledges that
circumstances under which you may provide notice to postpone the Closing Date as
originally scheduled include any determination by the Company or the
Representative to recirculate to the public copies of an amended or supplemented
Prospectus or a delay as contemplated by the provisions of Section 11 hereof.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at the offices of Raymond James &
Associates, Inc., 880 Carillon Parkway, St. Petersburg, Florida, at 10:00 a.m.,
St. Petersburg, Florida time, on such date or dates (the "Additional Closing
Date") (which may be the same as the Closing Date, but shall in no event be
earlier than the Closing Date nor earlier than three nor later than ten business
days after the giving of the notice hereinafter referred to) as shall be
specified in a written notice, from the Representative on behalf of the
Underwriters to the Company, of the Underwriters' determination to purchase a
number, specified in such notice, of Additional Shares. Such notice may be given
at any time within 30 days after the date of the Prospectus and must set forth
(i) the aggregate number of Additional Shares as to which the Underwriters are
exercising the option and (ii) the names and denominations in which the
certificates for which the Additional Shares are to be registered. The place of
closing for the Additional Shares and the Additional Closing Date may be varied
by agreement between you and the Company. Certificates for the Firm Shares and
for any Additional Shares to be purchased hereunder shall be registered in such
names and in such denominations as you shall request prior to 1:00 p.m., St.
Petersburg, Florida time, not later than the close of business on the second
full business day preceding the Closing Date or the Additional Closing Date, as
the case may be. Such certificates shall be made available to you in St.
Petersburg, Florida for inspection and packaging not later than 9:30 a.m., St.
Petersburg, Florida time, on the business day immediately preceding the Closing
Date or the Additional Closing Date, as the case may be. The certificates
evidencing the Firm Shares and any Additional Shares to be purchased hereunder
shall be delivered to you on the Closing Date or the Additional Closing Date, as
the case may be, against payment of the purchase price therefore by wire
transfer of immediately available funds to an account specified in writing, not
later than the close of business on the business day next preceding the Closing
Date or the Additional Closing Date, as the case may be, by the Company. Payment
for the Shares sold by the Company hereunder shall be delivered by the
Representative to the Company. It is understood that the Representative has been
authorized, for its own account and the accounts of the several Underwriters, to
accept delivery of and receipt for, and make payment of the purchase price per
Share for the Firm Shares and the Additional Shares, if any, that the
Underwriters have agreed to purchase. Raymond James and Associates, Inc.,
individually and not as Representative of the Underwriters, may, but shall not
be obligated to, make payment for any Shares to be purchased by any Underwriter
whose funds shall not have been received by the Representative by the Closing
Date or the Additional Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
5. Covenants and Agreements of the Company. The Company covenants and agrees
with the several Underwriters as follows:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective, if it has
not already become effective, and will advise you promptly and, if requested by
you, will confirm such advice in writing (i) when the Registration Statement has
become effective and the time and date of any filing of any post-effective
Registration Statement or any amendment or supplement to any Preliminary
Prospectus or the Prospectus and the time and date that any post-effective
amendment to the Registration Statement becomes effective, (ii) if Rule 430A
under the Act is employed, when the Prospectus has been timely filed pursuant to
Rule 424(b) under the Act, (iii) of the receipt of any comments of the
Commission, or any request by the Commission for amendments or supplements to
the Registration Statement, any Preliminary Prospectus or the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purposes and (v) within the period of time
referred to in Section 5(e) below, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of any event that comes to the attention of the Company that
makes any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue in any material respect or that requires
the making of any additions thereto or changes therein in order to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal or lifting of such order at the earliest possible time. If the
Company elects, with the consent of the Representative, to rely on Rule 434
under the Act, the Company will provide the Underwriters with copies of the form
of Rule 434 Prospectus (including copies of a term sheet that complies with the
requirements of Rule 434 under the Act), in such number as the Underwriters may
reasonably request, and file with the Commission in accordance with Rule 424(b)
of the Act the form of Prospectus complying with Rule 434(b)(2) of the Act
before the close of business on the first business day immediately following the
date hereof. If the Company elects not to rely on Rule 434 under the Act, the
Company will provide the Underwriters with copies of the Prospectus, in such
number as the Underwriters may reasonably request, and file with the Commission
such Prospectus in accordance with Rule 424(b) of the Act before the close of
business on the first business day immediately following the date hereof.
(b) The Company will furnish to you, without charge, such
number of conformed copies of the Registration Statement as originally filed and
of each amendment thereto as you may reasonably request.
(c) The Company will not file any Rule 462 Registration
Statement or any amendment to the Registration Statement or make any amendment
or supplement to the Prospectus, including any Incorporated Document, unless (i)
you shall have previously been advised thereof and been given a reasonable
opportunity to review such filing, amendment or supplement and (ii) you have not
reasonably objected to such filing, amendment or supplement after being so
advised and having been given a reasonable opportunity to review such filing,
amendment or supplement.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have requested or may hereafter reasonably request, copies of each form
of the Preliminary Prospectus. Consistent with the provisions of Section 5(e)
hereof, the Company consents to the use, in accordance with the provisions of
the Act and with the securities or Blue Sky laws of the jurisdictions in which
the Shares are offered by the several Underwriters and by dealers, prior to the
date of the Prospectus, of each Preliminary Prospectus so furnished by the
Company.
(e) As soon after the execution and delivery of this Agreement
as is practicable and thereafter from time to time for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or a dealer
(the "Prospectus Delivery Period"), and for so long a period as you may request
for the distribution of the Shares, the Company will deliver to each Underwriter
and each dealer, without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as they may reasonably request. The Company
consents to the use of the Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If at any time prior to the
later of (i) the completion of the distribution of the Shares pursuant to the
offering contemplated by the Prospectus or (ii) the expiration of prospectus
delivery requirements with respect to the Shares under Section 4(3) of the Act
and Rule 174 thereunder, any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with the Act or any other law,
the Company will forthwith prepare and, subject to Sections 5(a) and 5(c)
hereof, file with the Commission and use its best efforts to cause to become
effective as promptly as possible an appropriate supplement or amendment
thereto, and will furnish to each Underwriter who has previously requested
Prospectuses, without charge, a reasonable number of copies thereof. In the
event that the Company and the Underwriters agree that the Prospectus should be
amended or supplemented, the Company, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration
or qualification for so long as required to complete the distribution of the
Shares; provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to general service of process in suits, other than
those arising out of the offering or sale of the Shares, as contemplated by this
Agreement and the Prospectus, in any jurisdiction where it is not now so
subject. In the event that the qualification of the Shares in any jurisdiction
is suspended, the Company shall so advise you promptly in writing. The Company
will use its best efforts to qualify or register the Shares for sale in
non-issuer transactions under (or obtain exemptions from the application of) the
Blue Sky laws of each state where necessary to permit market making transactions
and secondary trading and will comply with such Blue Sky laws and will continue
such qualifications, registrations and exemptions in effect for a period of not
less than five years after the date hereof.
(g) The Company will make generally available to its security
holders a consolidated earnings statement (in form complying with the provisions
of Rule 158), which need not be audited, covering a twelve-month period
commencing after the effective date of the Registration Statement and the Rule
462 Registration Statement, if any, and ending not later than 15 months
thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section 11(a) of
the Act.
(h) During the period ending five years from the date hereof,
the Company will furnish to you and, upon your request, to each of the other
Underwriters, (i) as soon as available, a copy of each proxy statement,
quarterly or annual report or other report of the Company mailed to shareholders
or filed with the Commission, the National Association of Securities Dealers,
Inc. (the "NASD") or the New York Stock Exchange ("NYSE") or any national
securities exchange and (ii) from time to time such other information concerning
the Company as you may reasonably request.
(i) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provision hereof (except pursuant to a
termination under Section 12 hereof, other than clauses (iv) or (v)) or if this
Agreement shall be terminated by the Underwriters because of any inability,
failure or refusal on the part of the Company to perform in all material
respects any agreement herein or to comply in all material respects with any of
the terms or provisions hereof or to fulfill in all material respects any of the
conditions of this Agreement, the Company agrees to reimburse you and the other
Underwriters for all out-of-pocket expenses (including travel expenses and
reasonable fees and expenses of counsel for the Underwriters, but excluding
wages and salaries paid by you) reasonably incurred by you in connection
herewith.
(j) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder in accordance in all material respects
with the statements under the caption "Use of Proceeds" in the Prospectus.
(k) If Rule 430A under the Act is employed, the Company will
timely file the Prospectus or term sheet (as described in Rule 434(b) under the
Act) pursuant to Rule 424(b) under the Act.
(l) Prior to the Closing Date or the Additional Closing Date,
as the case may be, the Company will furnish to you, as promptly as possible,
copies of any unaudited interim consolidated financial statements of the Company
and its subsidiaries for any period subsequent to the periods covered by the
financial statements appearing or incorporated by reference in the Prospectus.
(m) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
(n) The Company will not at any time, directly or indirectly,
take any action designed, or which might reasonably be expected to cause or
result in, or which will constitute, stabilization or manipulation of the price
of the shares of Common Stock to facilitate the sale or resale of any of the
Shares.
(o) The Company will timely file with NYSE all documents and
notices required by the NYSE of companies that have or will issue securities
that are traded on the NYSE.
(p) The Company shall engage and maintain, at its expense, a
transfer agent and, if necessary under the jurisdiction of its incorporation or
the rules of any national securities exchange on which the Series F Preferred
Stock will be listed, a registrar (which, if permitted by applicable laws and
rules may be the same entity as the transfer agent) for the Series F Preferred
Stock.
(q) The Company will use its best efforts to maintain the
listing of the Series F Preferred Stock on the NYSE.
(r) The Company will use its best efforts (i) to meet the
requirements to qualify as a real estate investment trust under the Code and
(ii) to cause each of its subsidiaries that is organized as a partnership to be
treated as a partnership for federal income tax purposes.
(s) During the Prospectus Delivery Period, the Company will
file all documents required to be filed with the Commission pursuant to Sections
13, 14 and 15 of the Exchange Act in the manner and within the time periods
required by the Exchange Act.
(t) For a period of one year after the date of the Prospectus
first filed pursuant to Rule 424(b) under the Act, without your prior written
consent, the Company will not, directly or indirectly, issue, sell, offer or
contract to sell or otherwise dispose of or transfer any shares of Series F
Preferred Stock or securities convertible into or exchangeable or exercisable
for shares of Series F Preferred Stock or any rights to purchase Series F
Preferred Stock, or file any registration statement under the Act with respect
to any of the foregoing.
(u) In the event that the sale of Shares as contemplated by
this Agreement is consummated, for a period of 12 months from the date hereof,
the Company grants the Representative the right to (such right, the "Right of
First Refusal") act as lead managing underwriter for any underwritten public
offering of securities of the Company. The Representative shall notify the
Company of its intention to exercise the Right of First Refusal within 15
business days following notice in writing by the Company. Any decision by the
Representative to act in any such capacity shall be contained in separate
agreements, which agreements would contain, among other matters, provisions for
customary fees for transactions of similar size and nature, as may be mutually
agreed upon, and indemnification of the Representative and its affiliates and
shall be subject to general market conditions. If the Representative declines to
exercise the Right of First Refusal, the Company shall have the right to retain
any other person or persons to provide such services on terms and conditions
that are not materially more favorable to such other person or persons than the
terms declined by the Representative.
6. Representations and Warranties of the Company and the Partnership. The
Company and Mid-America Apartments, L.P. (the "Partnership") hereby represent
and warrant to each Underwriter on the date hereof, and shall be deemed to
represent and warrant to each Underwriter on the Closing Date and the Additional
Closing Date, as the case may be, that:
(a) The Company satisfies all of the requirements of the Act
for use of Form S-3 for the offering of Shares contemplated hereby. Each
Preliminary Prospectus included as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto, or filed
pursuant to Rule 424(a) under the Act, complied as to form when so filed in all
material respects with the provisions of the Act, except that this
representation and warranty does not apply to statements in or omissions from
such Preliminary Prospectus (or any amendment or supplement thereto) made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by or on behalf of any Underwriter through
you expressly for use therein. The Registration Statement has become effective
and the Commission has not issued any order preventing or suspending the use of
any Preliminary Prospectus and no proceeding for that purpose has been
instituted or threatened by the Commission or the securities authority of any
state or other jurisdiction.
(b) The Company has prepared each of the Registration
Statement, any Rule 462 Registration Statement and any post-effective amendment
thereto, and the Prospectus and any amendments or supplements thereto. The
Registration Statement (including any Rule 462 Registration Statement), in the
form in which it became effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, and the Prospectus, and
any supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act, complied or will comply as to form in all material
respects with the provisions of the Act and did not and will not at any such
times contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the Prospectus (or
any amendment or supplement thereto) made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by or on behalf of any Underwriter through you expressly for use therein.
(c) Each Preliminary Prospectus and the Prospectus, if filed
by electronic transmission pursuant to EDGAR (except as may be permitted by
Regulation S-T under the Act), was identical to the copy thereof delivered to
the Underwriters for use in connection with the offer and sale of the Shares.
(d) The Incorporated Documents heretofore filed, when they
were filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder, and
any further Incorporated Documents so filed will, when they are filed, conform
in all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder; no such Incorporated Document when it was filed (or,
if an amendment with respect to any such document was filed, when such amendment
was filed), contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further Incorporated Document,
when it is filed, will contain an untrue statement of a material fact or will
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
(e) The capitalization of the Company is and will be as set
forth in the Prospectus as of the date set forth therein. All the outstanding
shares of capital stock of the Company have been, and as of the Closing Date and
the Additional Closing Date, as the case may be, will be, duly authorized and
validly issued, are fully paid and nonassessable and are free of any preemptive
or similar rights; except as set forth in the Prospectus, the Company is not a
party to or bound by any outstanding options, warrants or similar rights to
subscribe for, or contractual obligations to issue, sell, transfer or acquire,
any of its capital stock or any securities convertible into or exchangeable for
any of such capital stock; the Shares to be issued and sold to the Underwriters
by the Company hereunder have been duly authorized and, when issued and
delivered to the Underwriters against full payment therefor in accordance with
the terms hereof will be validly issued, fully paid and nonassessable and free
of any preemptive or similar rights; the capital stock of the Company conforms
to the description thereof in the Registration Statement and the Prospectus (or
any amendment or supplement thereto); and the delivery of certificates for the
Shares being sold by the Company against payment therefor pursuant to the terms
of this Agreement will pass valid title to the Shares being sold by the Company,
free and clear of any claim, encumbrance or defect in title, to the several
Underwriters purchasing such shares in good faith and without notice of any
lien, claim or encumbrance. The certificates for the Shares being sold by the
Company are in valid and sufficient form.
(f) Immediately after the Closing Date, all of the issued and
outstanding common units of partnership interest in the Partnership ("Common
Units") and Preferred Units will be validly issued, fully paid and
non-assessable. None of the Common Units or Preferred Units has been or will be
issued or is owned or held in violation of any preemptive right. The Common
Units and Preferred Units have been or will be offered, sold and issued by the
Partnership in compliance with all applicable laws (including, without
limitation, federal and state securities laws).
(g) Each of the Company and its subsidiaries is duly organized
and validly existing in good standing under the laws of the state of its
incorporation or organization with full corporate, partnership or entity power
and authority, as the case may be, to own, lease and operate its properties and
to conduct its business as presently conducted and as described in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) and is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature of its properties
or the conduct of its business requires such registration or qualification,
except where the failure to so register or qualify has not had or will not have
a material adverse effect on the condition (financial or other), business,
properties, net worth, results of operations or prospects of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"). The Company is,
and at the Closing Date will be, the sole general partner of the Partnership,
and the Company and MAC II of Delaware, L.P. collectively will own an
approximate 84.1% interest in the Partnership and will own the 2,000,000 Series
A Cumulative Preferred Units of partnership interest in the Partnership, the
1,938,830 Series B Cumulative Preferred Units of partnership interest in the
Partnership, the 3,200,000 Series C Cumulative Redeemable Preferred Units, the
Series E Cumulative Redeemable Preferred Partnership Units and the 9 1/4% Series
F Cumulative Redeemable Preferred Units of partnership interest in the
Partnership (collectively, the "Preferred Units"), representing all of the
outstanding Preferred Units. Except as described above, the Company or the
Partnership is the sole direct or indirect owner of all of the equity interests
in each of the subsidiaries (other than the 15.9% limited partnership interests
in the Partnership), all of the equity interests of each subsidiary have been
duly and validly authorized and issued, and all of such equity interests are
fully paid and non-assessable and are owned directly by the Company or the
Partnership, free and clear of all liens, encumbrances, equities or claims.
(h) The outstanding equity interests of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company, directly or through subsidiaries,
free and clear of any security interests, liens, encumbrances, equities or
claims. The Company does not have any subsidiaries and does not own a material
interest in or control, directly or indirectly, any other corporation,
partnership, joint venture, association, trust or other business organization,
except as set forth in Exhibit 21 to the Company's Annual Report on Form 10-K
for its fiscal year ended December 31, 2001 which is incorporated by reference
into the Registration Statement. As used in this Agreement, subsidiaries shall
mean direct and indirect subsidiaries of the Company.
(i) There are no legal or governmental proceedings pending or,
to the best knowledge of the Company, threatened, against the Company or its
subsidiaries or to which the Company or its subsidiaries or any of their
properties are subject, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) but are not
described as required. Except as described in the Prospectus, there is no
action, suit, inquiry, proceeding or investigation by or before any court or
governmental or other regulatory or administrative agency or commission pending
or, to the best knowledge of the Company, threatened, against or involving the
Company or its subsidiaries, which might individually or in the aggregate
prevent or adversely affect the transactions contemplated by this Agreement or
result in a Material Adverse Effect, nor to the Company's knowledge, is there
any basis for any such action, suit, inquiry, proceeding or investigation. There
are no agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement that are not described, filed or incorporated by
reference in the Registration Statement and the Prospectus as required by the
Act. All such contracts to which the Company or any of its subsidiaries is a
party have been duly authorized, executed and delivered by the Company or the
applicable subsidiary, constitute valid and binding agreements of the Company or
the applicable subsidiary and are enforceable against the Company or the
applicable subsidiary in accordance with the terms thereof, except as
enforceability thereof may be limited by (i) the application of bankruptcy,
reorganization, insolvency and other laws affecting creditors' rights generally
and (ii) equitable principles being applied at the discretion of a court before
which any proceeding may be brought. Neither the Company nor the applicable
subsidiary has received notice or been made aware that any other party is in
breach of or default to the Company or it subsidiaries under any of such
contracts.
(j) Neither the Company nor any of its subsidiaries is (i) in
violation of (A) its charter, articles of incorporation or bylaws, certificate
of limited partnership, partnership agreement, operating agreement or other
organizational documents, (B) any law, ordinance, administrative or governmental
rule or regulation applicable to the Company or any of its subsidiaries, the
violation of which would have a Material Adverse Effect or (C) any decree of any
court or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries; or (ii) in default in any material respect in the
performance of any obligation, agreement or condition contained in (A) any bond,
debenture, note or any other evidence of indebtedness or (B) any agreement,
indenture, lease or other instrument (each of (A) and (B), an "Existing
Instrument") to which the Company or any of its subsidiaries is a party or by
which any of their properties may be bound, which default would have a Material
Adverse Effect; and there does not exist any state of facts that constitutes a
default or an event of default on the part of the Company or any of its
subsidiaries as defined in such documents or that, with notice or lapse of time
or both, would constitute such a default or event of default which would have a
Material Adverse Effect.
(k) The Company and the Partnership have full legal right,
power and authority to enter into and perform this Agreement and to consummate
the transactions contemplated herein, including the issuance, sale and delivery
of the Shares as provided herein. The Company's and the Partnership's execution
and delivery of this Agreement and the performance by the Company and the
Partnership of their obligations under this Agreement have been duly and validly
authorized by the Company and the Partnership and this Agreement has been duly
executed and delivered by the Company and the Partnership, and constitutes a
valid and legally binding agreement of the Company and the Partnership,
enforceable against the Company and the Partnership in accordance with its
terms, except to the extent enforceability may be limited by (i) the application
of bankruptcy, reorganization, insolvency and other laws affecting creditors'
rights generally and (ii) equitable principles being applied at the discretion
of a court before which any proceeding may be brought, and except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws.
(l) The Amended and Restated Agreement of Limited Partnership
of the Partnership, including any amendment thereto (the "Partnership
Agreement") has been duly and validly authorized, executed and delivered by or
on behalf of the partners of the Partnership and constitutes a valid and binding
agreement of the parties thereto, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability relating to or
affecting creditors' rights or by general equity principles.
(m) No consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body is required for the execution, delivery and
performance by the Company and the Partnership of their respective obligations
under this Agreement and the consummation by the Company and the Partnership of
the transactions contemplated hereby, including the valid authorization,
issuance, sale and delivery of the Shares except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Shares.
(n) None of the issuance and sale of the Shares by the
Company, the execution, delivery or performance of this Agreement by the Company
and the Partnership nor the consummation by the Company and the Partnership of
the transactions contemplated hereby (i) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the Shares
under the Act, the listing of the Shares for trading on the NYSE, the
registration of the Series F Preferred Stock under the Exchange Act and
compliance with the securities or Blue Sky laws of various jurisdictions, all of
which will be, or have been, effected in accordance with this Agreement, (ii)
conflicts with or will conflict with or constitutes or will constitute a breach
of, or a default under, the Company's charter or bylaws, the certificate of
limited partnership or the Partnership Agreement, or any agreement, indenture,
lease or other instrument to which the Company or any of its subsidiaries is a
party or by which any of its or their properties may be bound, (iii) violates
any statute, law, regulation, ruling, filing, judgment, injunction, order or
decree applicable to the Company or any of its subsidiaries or any of their
properties, or (iv) results in a breach of, or default or Debt Repayment
Triggering event (as defined below) under, or results in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, or requires the consent of any
other party to, any Existing Instrument, except for such conflicts, breaches,
defaults, liens, charges or encumbrances that will not, individually or in the
aggregate, result in a Material Adverse Effect. As used herein, a "Debt
Repayment Triggering Event" means any event or condition that gives, or with the
giving of notice or lapse of time would give, the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of its subsidiaries.
(o) Except as described in the Prospectus, neither the Company
nor any of its subsidiaries has outstanding and at the Closing Date and the
Additional Closing Date, as the case may be, will have outstanding any options
to purchase, or any warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any shares
of Common Stock or any such warrants or convertible securities or obligations.
No holder of securities of the Company has rights to the registration of any
securities of the Company as a result of or in connection with the filing of the
Registration Statement or the consummation of the transactions contemplated
hereby that have not been satisfied or heretofore waived in writing. No person
or entity has a right of participation or first refusal with respect to the sale
of the shares by the Company.
(p) KPMG LLP, the certified public accountants who have
audited the financial statements (including the related notes thereto and
supporting schedules) incorporated by reference in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), are and were,
during the periods covered by their reports incorporated by reference in the
Registration Statement and the Prospectus, independent public accountants as
required by the Act and the Exchange Act.
(q) The financial statements, together with related schedules
and notes, included or incorporated by reference in the Registration Statement
and the Prospectus (and any amendment or supplement thereto), present fairly the
financial condition, results of operations, cash flows and changes in financial
position of the Company on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Registration Statement and
Prospectus (and any amendment or supplement thereto) is accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company. No other financial statements or schedules are required
by Form S-3 or otherwise to be included in the Registration Statement or the
Prospectus. The Company's ratios of earnings to fixed charges set forth in the
Prospectus have been calculated in compliance with Item 503(d) of Regulation S-K
under the Act.
(r) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i)
neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, indirect, direct or contingent, or entered into any
transaction that is not in the ordinary course of business, (ii) neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance, (iii) neither
the Company nor any of its subsidiaries has paid or declared any dividends or
other distributions with respect to its capital stock and the Company is not in
default under the terms of any class of capital stock of the Company or any
outstanding debt obligations, (iv) there has not been any change in the
authorized or outstanding capital stock of the Company or any material change in
the indebtedness of the Company (other than in the ordinary course of business)
and (v) there has not been any material adverse change, or any development
involving or that may reasonably be expected to result in a Material Adverse
Effect.
(s) All offers and sales of the Company's capital stock and
other securities prior to the date hereof were made in compliance with or were
the subject of an available exemption from the Act and all other applicable
state and federal laws or regulations, or any actions under the Act or any state
or federal laws or regulations in respect of any such offers or sales are
effectively barred by effective waivers or statutes of limitation.
(t) The Shares have been approved for listing on the NYSE
under the symbol "MAAPrF", subject to official notice of issuance of the Shares
being sold by the Company, and upon consummation of the offering contemplated
hereby the Company will be in compliance with the designation and maintenance
criteria applicable to NYSE issuers. The Company's Common Stock, Series A
Cumulative Redeemable Preferred Stock, Series B Cumulative Redeemable Preferred
Stock, Series C Cumulative Redeemable Preferred Stock and the Series F Preferred
Stock are registered pursuant to Section 12(b) of the Exchange Act and are
listed on the NYSE, and the Company has taken no action designed to, or likely
to have the effect of, terminating the registration of such securities under the
Exchange Act or delisting any such securities from the NYSE, nor has the Company
received any notification that the Commission or the NYSE is contemplating
terminating such registration or listing.
(u) The Company has not distributed and will not distribute,
and has not authorized the Underwriters to distribute, any offering material in
connection with the offering and sale of the Shares other than the Preliminary
Prospectus, the Prospectus or other offering material, if any, as permitted by
the Act.
(v) Other than excepted activity pursuant to Regulation M
under the Exchange Act, the Company has not taken and will not take, directly or
indirectly, any action that constituted, or any action designed to, or that
might reasonably be expected to cause or result in or constitute, under the Act
or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or for any other purpose.
(w) The Company and each of its subsidiaries have filed all
tax returns required to be filed (other than certain state or local tax returns,
as to which the failure to file, individually or in the aggregate, would not
have a Material Adverse Effect), which returns are complete and correct in all
material respects, and neither the Company nor any subsidiary is in default in
the payment of any taxes that were payable pursuant to said returns or any
assessments with respect thereto. Except as disclosed in the Prospectus, all
deficiencies asserted as a result of any federal, state, local or foreign tax
audits have been paid or finally settled and no issue has been raised in any
such audit that, by application of the same or similar principles, reasonably
could be expected to result in a proposed deficiency for any other period not so
audited. There are no outstanding agreements or waivers extending the statutory
period of limitation applicable to any federal, state, local or foreign tax
return for any period. On the Closing Date and the Additional Closing Date, as
the case may be, all stock transfer and other taxes that are required to be paid
in connection with the sale of the shares to be sold by the Company to the
Underwriters will have been fully paid by the Company and all laws imposing such
taxes will have been complied with.
(x) Except as set forth in the Prospectus, there are no
transactions with "affiliates" (as defined in Rule 405 promulgated under the
Act) or any officer, director or security holder of the Company (whether or not
an affiliate) that are required by the Act to be disclosed in the Registration
Statement. Additionally, no relationship, direct or indirect, exists between the
Company or any of its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any subsidiary on the
other hand that is required by the Act to be disclosed in the Registration
Statement and the Prospectus that is not so disclosed.
(y) None of the Company nor any of its subsidiaries is an
"investment company", a company "controlled" by an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
investment company within the meaning of the Investment Company Act of 1940, as
amended.
(z) Each of the Company and its subsidiaries has good and
valid title to all property (real and personal) described in the Prospectus as
being owned by it, free and clear of all liens, claims, security interests or
other encumbrances except (i) such as are described in the Prospectus or (ii)
such as are not materially burdensome and do not have or will not adversely
affect the Company's or subsidiaries' use of the property or the conduct of the
business of the Company. All property (real and personal) leased by the Company
and its subsidiaries is held under valid, subsisting and enforceable leases with
only such exceptions as in the aggregate are not materially burdensome and do
not or will not adversely affect the use of the property or the conduct of the
business of the Company.
(aa) The Company and its subsidiaries have all permits,
licenses, franchises, approvals, consents and authorizations of governmental or
regulatory authorities (hereinafter "permit" or "permits") as are necessary to
own their properties and to conduct their business in the manner described in
the Prospectus, subject to such qualifications as may be set forth in the
Prospectus, except where the failure to have obtained any such permit has not
had and will not have a Material Adverse Effect; each of the Company and its
subsidiaries has operated and is operating its business in material compliance
with and not in material violation of all of its obligations with respect to
each such permit and no event has occurred that allows, or after notice or lapse
of time would allow, revocation or termination of any such permit or result in
any other material impairment of the rights of any such permit, subject in each
case to such qualification as may be set forth in the Prospectus; and, except as
described in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its subsidiaries.
(bb) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(cc) Neither the Company nor any of its subsidiaries, since
each has been a subsidiary of the Company, nor, to the Company's knowledge, any
employee or agent of the Company or any of its subsidiaries, has, directly or
indirectly, (i) made any unlawful contribution to any candidate for political
office, or failed to disclose fully any contribution in violation of law or (ii)
made any payment to any federal, state, local or foreign governmental official,
or other person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof or applicable foreign jurisdictions.
(dd) The Company and its subsidiaries are (i) in compliance
with any and all applicable federal, state, local and foreign 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) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are 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 other approvals would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any of its
subsidiaries has been named as a "potentially responsible party" under the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended. Neither the Company nor any of its subsidiaries owns, leases or
occupies any property that appears on any list of hazardous sites compiled by
any state or local governmental agency.
(ee) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a Material Adverse Effect.
(ff) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code"), and the Company's method
of operation will enable it to meet the requirements for taxation as a real
estate investment trust under the Code. The subsidiaries of the Company that are
partnerships will be treated as partnerships for federal income purposes and not
as corporations or associations taxable as corporations.
(gg) The Company and its subsidiaries own and have full right,
title and interest in and to, or has valid licenses to use, each material trade
name, trademark, service mark, patent, copyright, approval, trade secret and
other similar rights (collectively "Intellectual Property") under which the
Company and its subsidiaries conduct all or any material part of its business,
and the Company has not created any lien or encumbrance on, or granted any right
or license with respect to, any such Intellectual Property except where the
failure to own or obtain a license or right to use any such Intellectual
Property has not and will not have a Material Adverse Effect; there is no claim
pending against the Company or its subsidiaries with respect to any Intellectual
Property, and the Company and its subsidiaries have not received notice or
otherwise become aware that any Intellectual Property that it uses or has used
in the conduct of its business infringes upon or conflicts with the rights of
any third party. Neither the Company nor any of its subsidiaries has become
aware that any material Intellectual Property that it uses or has used in the
conduct of its business infringes upon or conflicts with the rights of any third
party.
(ii) Except as set forth in the Company's proxy statement for
the 2002 annual meeting of shareholders, no officer, director or nominee for
director of the Company has a direct or indirect affiliation or association with
any member of the NASD.
(jj) The Company and its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and neither the Company nor any of its subsidiaries has 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 comparable cost.
(kk) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including
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). On the basis of such review and amount of its
established reserves, the Company has reasonably concluded that such associated
costs and liabilities would not, individually or in the aggregate, result in a
Material Adverse Effect.
(ll) The Company and its subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA and all other applicable state and federal
laws. "ERISA Affiliate" means, with respect to the Company or a subsidiary, any
member of any group or organization described in Sections 414(b), (c), (m) or
(o) of the Code of which the Company or such subsidiary is a member. No
"reportable event" (as defined in ERISA) has occurred or is reasonably expected
to occur with respect to any "employee benefit plan" established or maintained
by the Company, its subsidiaries or any of their ERISA Affiliates. No "employee
benefit plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates, if such "employee benefit plan" were terminated,
would have any "amount of unfunded benefit liabilities" (as defined in ERISA).
Neither the Company, its subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee benefit
plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee
benefit plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or
failure to act, that would cause the loss of such qualification.
(mm) The Company and its subsidiaries have complied and will
comply in all material respects with wage and hour determinations issued by the
U.S. Department of Labor under the Service Contract Act of 1965 and the Fair
Labor Standards Act in paying its employees' salaries, fringe benefits and other
compensation for the performance of work or other duties in connection with
contracts with the U.S. government, and have complied and will comply in all
material respects with the requirements of the Americans with Disabilities Act
of 1990, the Family and Medical Leave Act of 1993, the Civil Rights Act of 1964
(Title VII), the National Labor Relations Act, the Vietnam Era Veteran's
Readjustment Act, the Age Discrimination in Employment Act, as amended by the
Older Workers' Benefit Protection Act, and federal, state and local labor laws,
each as amended except where the failure to comply with any such requirements
has not, and will not, have a Material Adverse Effect.
7. Expenses. Whether or not the transactions contemplated hereby are consummated
or this Agreement becomes effective or is terminated, the Company agrees to pay
or cause to be paid the following: (i) the fees, disbursements and expenses of
the Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof and of any Preliminary Prospectus to the Underwriters and dealers; (ii)
the printing and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Prospectus, each Preliminary Prospectus, the Blue Sky memoranda, the Master
Agreement Among Underwriters, this Agreement, the Selected Dealers Agreement and
all amendments or supplements to any of them as may be reasonably requested for
use in connection with the offering and sale of the Shares; (iii) consistent
with the provisions of Section 5.1(f), all expenses in connection with the
qualification of the Shares for offering and sale under state securities laws or
Blue Sky laws, including reasonable attorneys' fees and out-of-pocket expenses
of the counsel for the Underwriters in connection therewith; (iv) the fees and
expenses associated with listing the Shares on the NYSE; (v) the cost of
preparing stock certificates; (vi) the costs and charges of any transfer agent
or registrar; (vii) the cost of the tax stamps, if any, in connection with the
issuance and delivery of the Shares to the respective Underwriters; (viii) all
other fees, costs and expenses referred to in Item 13 of the Registration
Statement; and (ix) the transportation, lodging, graphics and other expenses
incidental to the Company's preparation for and participation in the "roadshow"
for the offering contemplated hereby. Except as provided in this Section 7 and
in Section 8 hereof, the Underwriters shall pay their own expenses, including
the fees and disbursements of their counsel. In addition, in the event that the
proposed offering is terminated for the reasons set forth in Section 5.1(i)
hereof, the Company agrees to reimburse the Underwriters as provided in Section
5.1(i).
8. Indemnification and Contribution. Subject to the limitations in this
paragraph below, the Company and the Partnership agree to indemnify and hold
harmless you and each other Underwriter, the directors, officers, employees and
agents of each Underwriter, and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses, including reasonable costs of investigation and attorneys' fees
and expenses (collectively, "Damages") arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or in the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, except to the extent
that any such Damages arise out of or are based upon an untrue statement or
omission or alleged untrue statement or omission that has been made therein or
omitted therefrom in reliance upon and in conformity with the information
furnished in writing to the Company by or on behalf of any Underwriter through
you, expressly for use in connection therewith. This indemnification shall be in
addition to any liability that the Company and the Partnership may otherwise
have.
In addition to their other obligations under this Section 8, the
Company and the Partnership agree that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission as set forth in this
Section 8, the party against whom indemnification is being sought will reimburse
each Underwriter on a monthly basis for all reasonable legal or other
out-of-pocket expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding (to the
extent documented by reasonably itemized invoices therefor), notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligation of the Company and the Partnership to reimburse each Underwriter
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, each
Underwriter shall promptly return it to the person(s) from whom it was received.
Any such interim reimbursement payments that are not made to the Underwriters
within 30 days of a request for reimbursement shall bear simple interest at a
rate determined on the basis of the base lending rate announced from time to
time by The Wall Street Journal from the date of such request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company and the Partnership, such Underwriter or such controlling
person shall promptly notify in writing the party(s) against whom
indemnification is being sought (the "indemnifying party" or "indemnifying
parties"), and such indemnifying party(s) shall assume the defense thereof,
including the employment of counsel reasonably acceptable to such Underwriter or
such controlling person and the payment of all reasonable fees of and expenses
incurred by such counsel. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person, unless (i) the
indemnifying party(s) has (have) agreed in writing to pay such fees and
expenses, (ii) the indemnifying party(s) has (have) failed to assume the defense
and employ counsel reasonably acceptable to the Underwriter or such controlling
person or (iii) the named parties to any such action (including any impleaded
parties) include both such Underwriter or such controlling person and the
indemnifying party(s), and such Underwriter or such controlling person shall
have been advised by its counsel that one or more legal defenses may be
available to the Underwriter that may not be available to the Company, or that
representation of such indemnified party and any indemnifying party(s) by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the indemnifying party(s) shall not have the right to assume the defense of
such action on behalf of such Underwriter or such controlling person (but the
Company and the Partnership shall not be liable for the fees and expenses of
more than one counsel for the Underwriters and such controlling persons)). The
indemnifying party(s) shall not be liable for any settlement of any such action
effected without its (their several) written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, the indemnifying party(s) agree(s) to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment, but in
the case of a judgment only to the extent stated in the first and second
paragraph of this Section 8.
Each Underwriter agrees, severally and jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing several indemnity from the Company to each Underwriter, but only with
respect to information furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement, the Prospectus or
any Preliminary Prospectus, or any amendment or supplement thereto. If any
action or claim shall be brought or asserted against the Company, any of its
directors, any of its officers or any such controlling person based on the
Registration Statement, the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph, such Underwriter shall have
the rights and duties given to the Company by the immediately preceding
paragraph (except that if the Company shall have assumed the defense thereof
such Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company its
directors, any such officers and any such controlling persons, shall have the
rights and duties given to the Underwriters by the immediately preceding
paragraph.
In any event, the Company will not, without the prior written consent
of the Representative, settle or compromise or consent to the entry of any
judgment in any proceeding or threatened claim, action, suit or proceeding in
respect of which the indemnification may be sought hereunder (whether or not the
Representative or any person who controls the Representative within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act is a party to such
claim, action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of all Underwriters and such controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
If the indemnification provided for in this Section 8 is unavailable or
insufficient for any reason whatsoever to an indemnified party in respect of any
Damages referred to herein, then an indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Damages (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Partnership on the one hand, and the Underwriters on the other hand, from the
offering and sale of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative and several fault of the Company and the Partnership on the
one hand, and the Underwriters on the other hand, in connection with the
statements or omissions that resulted in such Damages as well as any other
relevant equitable considerations. The relative and several benefits received by
the Company and the Partnership on the one hand, and the Underwriters on the
other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus; provided that, in the event that the Underwriters shall have
purchased any Additional Shares hereunder, any determination of the relative
benefits received by the Company or the Underwriters from the offering of the
Shares shall include the net proceeds (before deducting expenses) received by
the Company and the underwriting discounts and commissions received by the
Underwriters, from the sale of such Additional Shares, in each case computed on
the basis of the respective amounts set forth in the notes to the table on the
cover page of the Prospectus. The relative fault of the Company and the
Partnership on the one hand, and the Underwriters on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the
Partnership on the one hand, or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Partnership and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 was
determined by a 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 into account the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the Damages referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount of the underwriting commissions received by such
underwriter in connection with the Shares underwritten by it and distributed to
the public. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 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 8 are several in proportion
to the respective numbers of Firm Shares set forth opposite their names in
Schedule I hereto (or such numbers of Firm Shares increased as set forth in
Section 10 hereof) and not joint.
Notwithstanding the second paragraph of this Section 8, any Damages for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as Damages are incurred after receipt of reasonably itemized invoices therefor.
The indemnity, contribution and reimbursement agreements contained in this
Section 8 and the representations and warranties of the Company and the
Partnership set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, its
directors or officers or any person controlling the Company, (ii) acceptance of
any Shares and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Company, its directors or officers or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second paragraph of this
Section 8, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
pursuant to the Code of Arbitration Procedure of the NASD. Any such arbitration
must be commenced by service of a written demand for arbitration or written
notice of intention to arbitrate, therein electing the arbitration tribunal. In
the event the party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Such an arbitration would be limited to
the operation of the interim reimbursement provisions contained in this Section
8, and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses that is created by the provisions of the second
paragraph of this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) All filings required by Rules 424(b), 430A and 462 under
the Act shall have been timely made.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration Statement
and Prospectus, (i) there shall not have been any change in the capital stock of
the Company or any material change in the indebtedness (other than in the
ordinary course of business) of the Company, (ii) except as set forth or
contemplated by the Registration Statement or the Prospectus, no material oral
or written agreement or other transaction shall have been entered into by the
Company that is not in the ordinary course of business or that could reasonably
be expected to result in a material reduction in the future earnings of the
Company, (iii) no loss or damage (whether or not insured) to the property of the
Company and its subsidiaries shall have been sustained that had or could
reasonably be expected to have a Material Adverse Effect, (iv) no legal or
governmental action, suit or proceeding affecting the Company or any of its
properties that is material to the Company or that affects or could reasonably
be expected to affect the transactions contemplated by this Agreement shall have
been instituted or threatened and (v) there shall not have been any material
change in the condition (financial or otherwise), business, management, results
of operations or prospects of the Company or its subsidiaries that makes it
impractical or inadvisable in your judgment to proceed with the public offering
or purchase of the Shares as contemplated hereby.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Bass, Berry & Sims PLC, counsel
to the Company, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing under the
laws of the State of Tennessee, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), and is duly registered or otherwise qualified to conduct its business
as a foreign corporation and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to so register or
qualify does not have a Material Adverse Effect. The Company is the sole general
partner of the Partnership.
(ii) Each of the Company's subsidiaries described
on Schedule I is a corporation, limited partnership
or limited liability company duly organized and validly existing in good
standing under the laws of the jurisdiction of its organization, with full
corporate partnership or entity power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), and is
duly registered or otherwise qualified to conduct its business as a foreign
corporation, partnership or entity and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure to so
register or qualify does not have a Material Adverse Effect; and all of the
outstanding equity interests of each of the subsidiaries have been duly
authorized and validly issued, and are fully paid and nonassessable, and are
owned by the Company directly, or indirectly through one of the other
subsidiaries, free and clear of any perfected security interest, or any other
security interest, lien, adverse claim, equity or other encumbrance.
(iii) The authorized capitalization of the Company
conforms in all material respects to the description
thereof contained in the Prospectus under the caption "Capitalization" and the
Shares conform in all material respects to the description thereof contained in
the Prospectus. Except as set forth in the Prospectus, the Company is not a
party to or bound by any outstanding options, warrants or similar rights to
subscribe for, or contractual obligations to issue, sell, transfer or acquire,
any of its capital stock or any securities convertible into or exchangeable for
any of such capital stock.
(iv) All shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be
issued and sold by the Company hereunder, have been duly authorized and validly
issued, are fully paid and nonassessable and are free of any preemptive or
similar rights that entitle or will entitle any person to acquire any Shares
upon the issuance thereof by the Company, and no such rights will exist as of
the Closing Date.
(v) All offers and sales of the Company's and
the Partnership's securities have been made in
compliance in all material respects with the registration requirements of the
Act and other applicable state securities laws or regulations or applicable
exemptions therefrom.
(vi) To the knowledge of such counsel, neither
the Company nor any of its subsidiaries is in violation
of its charter, bylaws, certificate of limited partnership, partnership
agreement or operating agreement and is not in default in the performance of any
obligation, agreement or condition contained in any bond, indenture, note or
other evidence of indebtedness or any other agreement or obligation, where the
default or defaults would have, individually or in the aggregate, a Material
Adverse Effect.
(vii) Neither the offer, sale or delivery of the
Shares by the Company, the execution, delivery or
performance by the Company and the Partnership of this Agreement, compliance by
the Company and the Partnership with all provisions hereof nor consummation by
the Company of the transactions contemplated hereby (A) conflicts or will
conflict with or constitutes or will constitute a breach of, or a default under,
the charter or bylaws of the Company, the Partnership Agreement, certificate of
limited partnership, partnership agreement or operating agreement of any
subsidiary or any material agreement, indenture, lease or other instrument to
which the Company or any subsidiary is a party or by which any of its properties
is bound or (B) creates or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
subsidiary or (C) violates or will result in any violation of any existing law,
statute, regulation, ruling (assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction, order or decree that is
known to such counsel and is applicable to the Company or any subsidiary or any
of their properties.
(viii) Except as described in the Registration
Statement or Prospectus, there is no action, suit,
inquiry, proceeding, or investigation by or before any court or governmental or
other regulatory or administrative agency or commission pending or, to the
knowledge of such counsel, threatened, against or involving the Company or its
subsidiaries, or the properties of either the Company or any of its
subsidiaries: (A) which might individually or in the aggregate prevent or
adversely affect the transactions contemplated by this Agreement or result in a
Material Adverse Effect, nor, to the knowledge of such counsel, is there any
basis for any such action, suit, inquiry, proceeding or investigation; or (B)
that are required to be described in the Registration Statement or Prospectus
(or any amendment or supplement thereto) that are not described as required
therein.
(ix) Such counsel has reviewed all agreements,
contracts, indentures, leases or other documents or
instruments described or referred to in the Registration Statement and the
Prospectus, and such agreements, contracts (and forms of contracts), indentures,
leases or other documents or instruments are fairly summarized or disclosed in
all material respects therein, and filed as exhibits thereto as required, and
such counsel does not know of any agreements, contracts, indentures, leases or
other documents or instruments required to be so summarized or disclosed or
filed that have not been so summarized or disclosed or filed.
(x) No consent, approval, authorization or other
order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official is required on the part of the Company (except such as have been
obtained under the Act or such as may be required under state securities or Blue
Sky laws governing the purchase and distribution of the Shares) for the
performance of their respective obligations under this Agreement, including the
valid issuance and sale of the Shares to the Underwriters.
(xi) All of the issued and outstanding Common
Units and Preferred Units have been duly and validly
authorized by the Partnership. None of the outstanding Common Units or Preferred
Units has been issued or is owned or held in violation of any preemptive rights.
The Series F Preferred Units to be issued to the Company at the Closing Date
have been duly and validly authorized by the Partnership.
(xii) The Company satisfies all of the
requirements of the Act for use of Form S-3 for the offering of
the Shares contemplated by this Agreement.
(xiii) The form of certificate used to evidence the
Series F Preferred Stock is in due and proper form
and complies with all applicable requirements of the charter and bylaws of the
Company, the Tennessee Business Corporation Act, as amended, and the rules of
the NYSE.
(xiv) The description of the Company's stock
option, stock bonus and other stock plans or arrangements,
and the options or other rights granted and exercised thereunder, set forth in
the Prospectus accurately and fairly presents the information required to be
shown with respect to such plans, arrangements, options and rights.
(xv) The Company has all requisite power and
authority to enter into this Agreement and to issue, sell
and deliver the Shares to be sold by it to the Underwriters as provided herein.
The Partnership has all requisite power and authority to enter into this
Agreement. The Agreement has been duly authorized, executed and delivered by,
and is a valid and binding agreement of each of the Company and the Partnership,
enforceable against each of the Company in accordance with its terms, except as
to the extent enforceability may be limited by (i) the application of
bankruptcy, reorganization, insolvency or other laws affecting creditors' rights
generally and (ii) equitable principles being applied at the discretion of a
court before which any proceeding may be brought, and except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws.
(xvi) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, (A) such Shares will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights that entitle or will entitle any person to acquire any Shares upon the
issuance thereof by the Company and (B) good and valid title to such Shares,
free and clear of any claim, encumbrance or defect in title of any nature (other
than any arising by or through the Underwriters), will pass to each Underwriter
that has purchased any portion of such Shares in good faith and without
knowledge of any such claim, encumbrance or defect.
(xvii) The Registration Statement has been declared
effective by the Commission under the Act. To the
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Act and no proceedings for such
purpose have been instituted or are pending or are contemplated or threatened by
the Commission. Any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the Act has been made in the manner and within the
time period required by such Rule 424(b).
(xviii) The Registration Statement, including any
Rule 462 Registration Statement, the Prospectus,
including any document incorporated by reference therein, and each amendment or
supplement to the Registration Statement and the Prospectus, as of their
respective effective or issue dates (other than the financial statements and
supporting schedules included therein or incorporated by reference or in
exhibits to or excluded from the Registration Statement, as to which no opinion
need be given) comply as to form in all material respects with the requirements
of the Act.
(xix) The descriptions in the Prospectus of
statutes, regulations or legal or governmental proceedings,
insofar as they purport to summarize certain of the provisions thereof, are
accurate in all material respects and fairly present the information required to
be presented by the Act and the rules and regulations thereunder.
(xx) The Company is organized in conformity with
the requirements for qualification as a real estate
investment trust pursuant to Sections 856 through 860 of the Code, and the
Company's proposed method of operation will enable it to meet the requirements
for qualification and taxation as a real estate investment trust under the Code.
Each of the Subsidiaries that is organized as a partnership will be treated as a
partnership for federal income purposes and not as a corporation or an
association taxable as a corporation.
(xxi) The Shares have been approved for listing on
the NYSE upon official notice of issuance.
(xxii) The statements (i) in the Prospectus under
the captions "The Offering," "Risk
Factors--Consequences Of The Failure to Qualify As A REIT," "-Non-Compliance
With Government Regulations May Affect Operating Results," "-Possible Adverse
Consequences of Limits On Ownership of Shares," "-Possible Adverse Consequences
of Limits on Ownership of Shares," and "-Provisions of Our Charter and Tennessee
Law May Limit The Ability of A Third Party To Acquire Control of the Company,"
"Description of Capital Stock," "Description of the Series F Preferred Stock,"
"Federal United States Income Tax Considerations" and "Underwriting" and (ii)
Item 15 of the Registration Statement, insofar as such statements constitute
matters of law, summaries of legal matters, the Company's charter or bylaw
provisions, documents or legal proceedings, or legal conclusions, have been
reviewed by such counsel and fairly present and summarize, in all material
respects, the matters referred to therein.
Neither the Company nor any of the Subsidiaries is, or solely as a result of the
consummation of the transactions contemplated hereby and the application of the
proceeds from the sale of the Shares will become, an "investment company," or a
company "controlled" by an "investment company," within the meaning of the 1940
Act.
In rendering such opinion, counsel may rely, to the extent they deem such
reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials, provided that counsel shall state their
belief that they and you are justified in relying thereon. Copies of all such
certificates shall be furnished to you and your counsel on the Closing Date and
the Additional Closing Date, as the case may be. Such counsel may state that
such counsel is licensed to practice law only in the State of Tennessee and that
its opinion, as it related to the laws of any state other than the State of
Tennessee or the United States of America, assumes that the law of such state is
identical to the law of the State of Tennessee.
In addition to the opinion set forth above, such counsel shall state
that during the course of its participation in the preparation of the
Registration Statement and the Prospectus and the amendments thereto, nothing
has come to the attention of such counsel that has caused such counsel to
believe or given such counsel reason to believe that the Registration Statement
or the Prospectus or any amendment thereto (except for the financial statements
and other financial and accounting information contained therein or omitted
therefrom as to which no belief need be expressed), at the date thereof,
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 or that the Registration Statement or the Prospectus as of the
date of the opinion (except as aforesaid), contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) You shall have received on the Closing Date or Additional
Closing Date, as the case may be, an opinion of Hunton & Williams as counsel for
the Underwriters, dated the Closing Date or Additional Closing Date, as the case
may be, with respect to the issuance and sale of the Shares, the Registration
Statement and other related matters as you may reasonably request, and the
Company and its counsel shall have furnished to your counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(e) You shall have received letters addressed to you and dated
the date hereof and the Closing Date or the Additional Closing Date, as the case
may be, from the firm of KPMG LLP, independent certified public accountants,
substantially in the form heretofore approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and no
proceedings for that purpose shall be pending or, to the knowledge of the
Company, shall be threatened or contemplated by the Commission at or prior to
the Closing Date or Additional Closing Date, as the case may be; (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending or, to the knowledge of the Company, threatened or contemplated by the
authorities of any jurisdiction; (iii) any request for additional information on
the part of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or such
authorities; (iv) after the date hereof, no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not object thereto in good faith;
and (v) all of the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects (except for
such representations and warranties qualified by materiality, which
representations and warranties shall be true and correct in all respects) on and
as of the date hereof and on and as of the Closing Date or Additional Closing
Date, as the case may be, as if made on and as of the Closing Date or Additional
Closing Date, as the case may be, and you shall have received a certificate,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you) to the effect set forth in this Section 9(f) and in Sections 9(b) and 9(h)
hereof.
(g) The Company and the Partnership shall not have failed in
any material respect at or prior to the Closing Date or the Additional Closing
Date, as the case may be, to have performed or complied with any of their
agreements herein contained and required to be performed or complied with by
them hereunder at or prior to the Closing Date or Additional Closing Date, as
the case may be.
(h) The Company and the Partnership shall have furnished or
caused to have been furnished to you such further certificates and documents as
you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraphs (c) and (d)
shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such termination
in writing or by telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective upon the
later of (a) the execution and delivery hereof by the parties hereto and (b)
release of notification of the effectiveness of the Registration Statement by
the Commission; provided, however, that the provisions of Sections 7 and 8 shall
at all times be effective.
11. Defaulting Underwriters. If any one or more of the Underwriters shall fail
or refuse to purchase Firm Shares that it or they have agreed to purchase
hereunder, and the aggregate number of Firm Shares that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion in which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares that such
defaulting Underwriter or Underwriters agreed, but failed or refused to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case that does not result in termination of this Agreement,
either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven (7) days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or 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 such default
of any such Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to termination in
your absolute discretion, without liability on the part of any Underwriter to
the Company by notice to the Company, if prior to the Closing Date or the
Additional Closing Date (if different from the Closing Date and then only as to
the Additional Shares), as the case may be, in your sole judgment, (i) trading
in the Company's Common Stock or any series of preferred stock shall have been
suspended by the Commission or the NYSE, (ii) trading in securities generally on
the NYSE or The NASDAQ Stock Market shall have been suspended or materially
limited, or minimum or maximum prices shall have been generally established on
such exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by any such exchange or by order of the Commission or any court or
other governmental authority, (iii) a general moratorium on commercial banking
activities shall have been declared by either federal or New York State
authorities (iv) any downgrading shall have occurred in the rating accorded the
Company's debt securities or preferred stock by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act and (v) any such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's securities or (vi)
there shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in political, financial or
economic conditions or other material event the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to market the Shares or to enforce contracts for
the sale of the Shares. Notice of such cancellation shall be promptly given to
the Company and its counsel by telegraph, telecopy or telephone and shall be
subsequently confirmed by letter.
13. Information Furnished by the Underwriters. The Company acknowledges that (i)
the last paragraph on the cover page of the Prospectus and (ii) the seventh
paragraph, the second, third, fourth and fifth sentences of the eighth paragraph
and the ninth paragraph under the caption "Underwriting" in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you or on your behalf as such information is referred to in Sections
6.1(a), 6.1(b) and 8 hereof.
14. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of
this Agreement shall be in writing and shall be delivered
(i) to the Company
Mid-America Apartment Communities, Inc.
6584 Poplar Avenue, Suite 300
Memphis, TN 38138
Attention: President
with a copy to
Bass, Berry & Sims PLC
The Tower of Peabody Place
100 Peabody Place, Suite 900
Memphis, TN 38103
Attention: John A. Good
(ii) to the Underwriters
Raymond James & Associates, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716
Attention: Brad Butcher
with a copy to
Hunton & Williams
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, VA 23219
Attention: David C. Wright
This Agreement has been and is made solely for the benefit of the Underwriters,
the Company and its directors and officers.
15. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Florida without reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto. The
Company and the Underwriters each hereby irrevocably waive any right they may
have to a trial by jury in respect to any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
--------
* Plus an additional 50,000 shares subject to Underwriter's over-allotment
option.
Please confirm that the foregoing correctly sets forth the agreement among the
Company, the Partnership and the several Underwriters.
Very truly yours,
MID-AMERICA APARTMENT COMMUNITIES, INC.
By: /s/ Simon R.C. Wadsworth
Name: Simon R.C. Wadsworth
Title: CFO
MID-AMERICA APARTMENTS, L.P.
By: Mid-America Apartment Communities, Inc.,
general partner
By: /s/ Simon R.C. Wadsworth
Name: Simon R.C. Wadsworth
Title: CFO
CONFIRMED as of the date first above mentioned, on behalf of the Representative
and the other several Underwriters named in Schedule I hereto.
RAYMOND JAMES & ASSOCIATES, INC.
By:/s/ Brad Butcher
Authorized Representative
Brad Butcher
Vice President
SCHEDULE I
Number of
Name Firm Shares
Raymond James & Associates, Inc. 370,000
Advest, Inc. 25,000
BB&T Capital Markets, a division of Scott & Stringfellow 25,000
Morgan Keegan & Company, Inc. 25,000
Wunderlich Securities, Inc. 25,000
-------
Total: 470,000
EXHIBIT 3.1
MID-AMERICA APARTMENT COMMUNITIES, INC.
ARTICLES OF AMENDMENT TO THE AMENDED AND RESTATED CHARTER
DESIGNATING AND FIXING THE RIGHTS AND
PREFERENCES OF A SERIES OF SHARES OF PREFERRED STOCK
Mid-America Apartment Communities, Inc., a Tennessee corporation (the
"Company"), certifies to the Tennessee Secretary of State that:
FIRST: Pursuant to the authority expressly vested in the Board of
Directors of the Company by Section 6 of the Company's Amended and Restated
Charter, as amended by Articles of Amendment dated January 28, 1994, Articles of
Merger of the Cates Company with and into the Company dated February 2, 1994,
Articles of Merger of America First REIT Advisory Company with and into the
Company dated June 29, 1995, Articles of Amendment to the Amended and Restated
Charter Designating and Fixing the Rights and Preferences of a Series of Shares
of Preferred Stock dated October 9, 1996, Articles of Amendment to the Amendment
and Restated Charter dated November 17, 1997, Articles of Amendment to the
Amended and Restated Charter Designating and Fixing the Rights and Preferences
of a Series of Shares of Preferred Stock dated November 17, 1997, Articles of
Merger of Flournoy Development Company with and into the Company dated November
21, 1997, Articles of Amendment to the Amended and Restated Charter dated
December 15, 1997, Articles of Amendment to the Amended and Restated Charter
Designating and Fixing the Rights and Preferences of a Series of Shares of
Preferred Stock dated June 25, 1998, and Articles of Amendment to the Amended
and Restated Charter Designating and Fixing the Rights and Preferences of a
Series of Shares of Preferred Stock dated December 24, 1998 (the "Charter"), and
Section 48-16-102 of the Tennessee Code Annotated, as amended, the Board of
Directors has, by resolution, duly divided and classified 3,000,000 shares of
the preferred stock of the Company into a series designated 9 1/4 % Series F
Cumulative Redeemable Preferred Stock (the "Series F Preferred Stock") and has
provided for the issuance of the Series F Preferred Stock.
SECOND: Section 6 is hereby amended by adding the following:
1. Designation and Number. A series of Preferred Stock, designated
the "9 1/4% Series F Cumulative Redeemable Preferred Stock" (the
"Series F Preferred"), is hereby established. The number of
shares of the Series F Preferred shall be 3,000,000.
2. Maturity. The Series F Preferred Stock has no stated maturity and
will not be subject to any sinking fund or mandatory redemption.
3. Rank. The Series F Preferred Stock, with respect to dividend rights
and rights upon liquidation, dissolution or winding up of the Company, will rank
(i) senior to all classes or series of common stock, $.01 par value per share,
of the Company (the "Common Stock"), and to all equity securities ranking junior
to the Series F Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company; (ii) on a parity with all
equity securities issued by the Company, including the Company's 9.5% Series A
Cumulative Preferred Stock (the "Series A Preferred Stock"), 8 7/8% Series B
Cumulative Preferred Stock (the "Series B Preferred Stock") and the 9 3/8%
Series C Cumulative Preferred Stock (the "Series C Preferred Stock"), and the 9
1/2% Series E Cumulative Preferred Stock (the "Series E Preferred Stock"), the
terms of which specifically provide that such series of equity securities rank
on a parity with the Series F Preferred Stock with respect to dividend rights or
rights upon liquidation, dissolution or winding up of the Company (the "Parity
Preferred Stock"); and (iii) junior to all existing and future indebtedness of
the Company. The term "equity securities" does not include convertible debt
securities, which will rank senior to the Series F Preferred Stock prior to
conversion.
4. Dividends.
(a) Holders of shares of the Series F Preferred Stock are entitled to
receive, when and as declared by the Board of Directors (or a duly authorized
committee thereof), out of funds legally available for the payment of dividends,
preferential cumulative cash dividends at the rate of 9 1/4 % per annum of the
$25 liquidation preference (the "Liquidation Preference") per share (equivalent
to a fixed annual amount of $2.3125 per share). Dividends on the Series F
Preferred Stock shall be cumulative from (but excluding) the date of original
issue and shall be payable monthly in arrears on the 15th day of each calendar
month, or, if not a business day, on the next succeeding business day (each, a
"Dividend Payment Date"). The first dividend, which will be payable on November
15, 2002, will be for less than a full month. Such dividend and any dividend
payable on the Series F Preferred Stock for any partial dividend period will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
Dividends will be payable to holders of record as they appear in the stock
records of the Company at the close of business on the applicable record date,
which shall be the first day of the calendar month in which the applicable
Dividend Payment Date falls or on such other date designated by the Board of
Directors of the Company for the payment of dividends that is not more than 30
nor less than 10 days prior to such Dividend Payment Date (each, a "Dividend
Record Date").
(b) No dividends on shares of Series F Preferred Stock shall be
declared by the Board of Directors or paid or set apart for payment by the
Company at any time that the terms and provisions of any agreement of the
Company, including any agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment of such dividends would
constitute a breach thereof or a default thereunder, or if such declaration or
payment shall be restricted or prohibited by law.
(c) Notwithstanding the foregoing, dividends on the Series F Preferred
Stock will accumulate whether or not the Company has earnings, whether or not
there are funds legally available for the payment of such dividends and whether
or not such dividends are declared. Accumulated but unpaid dividends on the
Series F Preferred Stock will not bear interest, and holders of the Series F
Preferred Stock will not be entitled to any distributions in excess of full
cumulative distributions described above. Except as set forth in the next
sentence, no dividends will be declared or paid or set apart for payment on any
common stock of the Company or any other series of Parity Preferred Stock or any
series or class of equity securities ranking junior to the Series F Preferred
Stock (other than a dividend in shares of the Common Stock or in shares of any
other class of stock ranking junior to the Series F Preferred Stock as to
dividends and upon liquidation) for any period unless full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for such payment on the Series F
Preferred Stock for all past dividend periods and the then current dividend
period. When dividends are not declared and paid in full (or a sum sufficient
for such full payment is not so set apart) upon the Series F Preferred Stock and
the shares of any other series of Parity Preferred Stock, all dividends declared
upon the Series F Preferred Stock and any other series of Parity Preferred
Stock, shall be allocated pro rata so that the amount of dividends declared per
share of Series F Preferred Stock and such other series of Parity Preferred
Stock shall in all cases bear to each other the same ratio that accrued and
unpaid dividends per share on the Series F Preferred Stock and such other series
of Parity Preferred Stock (which shall not include any accrual in respect of
unpaid dividends for prior dividend periods if such Parity Preferred Stock does
not have a cumulative dividend) bear to each other.
(d) Except as provided in the immediately preceding paragraph, unless
full cumulative dividends on the Series F Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period, no dividends (other than in shares of Common Stock
or other shares of capital stock ranking junior to the Series F Preferred Stock
as to dividends and upon liquidation) shall be declared or paid or set aside for
payment nor shall any other distribution be declared or made upon the Common
Stock, or any other capital stock of the Company ranking junior to or on a
parity with the Series F Preferred Stock as to dividends or upon liquidation,
nor shall any shares of Common Stock, or any other shares of capital stock of
the Company ranking junior to or on a parity with the Series F Preferred Stock
as to dividends or upon liquidation be redeemed, purchased or otherwise acquired
for any consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any such shares) by the Company (except by conversion
into or exchange for other capital stock of the Company ranking junior to the
Series F Preferred Stock as to dividends and upon liquidation or redemptions for
the purpose of preserving the Company's qualification as a real estate
investment trust ("REIT")). Holders of shares of the Series F Preferred Stock
shall not be entitled to any dividend, whether payable in cash, property or
stock, in excess of full cumulative dividends on the Series F Preferred Stock as
provided above. Any dividend payment made on shares of the Series F Preferred
Stock shall first be credited against the earliest accumulated but unpaid
dividend due with respect to such shares which remains payable.
5. Liquidation Preference. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, the
holders of shares of Series F Preferred Stock are entitled to be paid out of the
assets of the Company legally available for distribution to its shareholders a
liquidation preference of $25 per share, plus an amount equal to any
accumulated, accrued and unpaid dividends to and including the date of payment,
but without interest, before any distribution of assets is made to holders of
Common Stock or any other class or series of capital stock of the Company that
ranks junior to the Series F Preferred Stock as to liquidation rights. If the
assets of the Company legally available for distribution to shareholders are
insufficient to pay in full the Liquidation Preference on the Series F Preferred
Stock and the Liquidation Preference on any shares of Parity Preferred Stock,
all assets distributed to the holders of the Series F Preferred Stock and any
other series of Parity Preferred Stock shall be distributed pro rata so that the
amount of assets distributed per share of Series F Preferred Stock and such
other series of Parity Preferred Stock shall in all cases bear to each other the
same ratio that the Liquidation Preference per share on the Series F Preferred
Stock and such other series of Parity Preferred Stock bear to each other.
Holders of Series F Preferred Stock will be entitled to written notice of any
event triggering the right to receive such Liquidation Preference. After payment
of the full amount of the Liquidation Preference, plus any accumulated and
unpaid dividends to which they are entitled, the holders of Series F Preferred
Stock will have no right or claim to any of the remaining assets of the Company.
The consolidation or merger of the Company with or into any other corporation,
trust or entity or of any other corporation with or into the Company, or the
sale, lease or conveyance of all or substantially all of the property or
business of the Company, shall not be deemed to constitute a liquidation,
dissolution or winding up of the Company.
6. Redemption.
(a) The Series F Preferred Stock is not redeemable prior to October 16,
2007. However, in order to ensure that the Company will continue to meet the
requirements for qualification as a REIT, the Series F Preferred Stock will be
subject to provisions in the Company's Charter (the "Charter") pursuant to which
shares of capital stock of the Company owned by a shareholder in excess of 9.9%
in value of the outstanding shares of capital stock of the Company (the
"Ownership Limit") will be deemed "Excess Shares," and the Company will have the
right to purchase such Excess Shares from the holder. On and after October 16,
2007, the Company, at its sole option upon not less than 30 nor more than 60
days' written notice, may redeem shares of the Series F Preferred Stock, in
whole or in part, at any time or from time to time, for cash at a redemption
price of $25 per share, plus all accumulated and unpaid dividends thereon to the
date fixed for redemption (except with respect to Excess Shares), without
interest. Holders of Series F Preferred Stock to be redeemed shall surrender
such Series F Preferred Stock at the place designated in such notice and upon
such surrender shall be entitled to the redemption price and any accumulated and
unpaid dividends payable upon such redemption. If notice of redemption of any
shares of Series F Preferred Stock has been given and if the Company has set
aside the funds necessary for such redemption in trust for the benefit of the
holders of any shares of Series F Preferred Stock to be redeemed, then from and
after the redemption date dividends will cease to accumulate on such shares of
Series F Preferred Stock, such shares of Series F Preferred Stock shall no
longer be deemed outstanding and all rights of the holders of such shares will
terminate, except the right to receive the redemption price. If less than all of
the outstanding Series F Preferred Stock is to be redeemed, the Series F
Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be
practicable without creating fractional shares) or by any other equitable method
determined by the Company.
(b) Unless full cumulative dividends on all shares of Series F
Preferred Stock shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
all past dividend periods and the then current dividend period, no shares of
Series F Preferred Stock shall be redeemed unless all outstanding shares of
Series F Preferred Stock are simultaneously redeemed and in such event, the
Company shall not purchase or otherwise acquire directly or indirectly any
shares of Series F Preferred Stock (except by exchange for capital stock of the
Company ranking junior to the Series F Preferred Stock as to dividends and upon
liquidation); provided, however, that the foregoing shall not prevent the
purchase by the Company of Excess Shares in order to ensure that the Company
continues to meet the requirements for qualification as a REIT, or the purchase
or acquisition of shares of Series F Preferred Stock pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
Series F Preferred Stock. So long as no dividends are in arrears, the Company
shall be entitled at any time and from time to time to repurchase shares of
Series F Preferred Stock in open-market transactions duly authorized by the
Board of Directors and effected in compliance with applicable laws.
(c) Notice of redemption will be given by publication in a newspaper of
general circulation in the City of New York, such publication to be made once a
week for two successive weeks commencing not less than 30 nor more than 60 days
prior to the redemption date. A similar notice will be mailed by the Company,
postage prepaid, not less than 30 nor more than 60 days prior to the redemption
date, addressed to the respective holders of record of the Series F Preferred
Stock to be redeemed at their respective addresses as they appear on the stock
transfer records of the Company. No failure to give such notice or any defect
therein or in the mailing thereof shall affect the validity of the proceedings
for the redemption of any shares of Series F Preferred Stock except as to the
holder to whom notice was defective or not given. Each notice shall state: (i)
the redemption date; (ii) the redemption price, (iii) the number of shares of
Series F Preferred Stock to be redeemed; (iv) the place or places where the
Series F Preferred Stock is to be surrendered for payment of the redemption
price; and (v) that dividends on the shares to be redeemed will cease to accrue
on such redemption date. If less than all of the Series F Preferred Stock held
by any holder is to be redeemed, the notice mailed to such holder shall also
specify the number of shares of Series F Preferred Stock held by such holder to
be redeemed.
(d) Immediately prior to any redemption of Series F Preferred Stock,
the Company shall pay, in cash, any accumulated and unpaid dividends through the
redemption date, unless a redemption date falls after a Dividend Record Date and
prior to the corresponding Dividend Payment Date, in which case each holder of
Series F Preferred Stock at the close of business on such Dividend Record Date
shall be entitled to the dividend payable on such shares on the corresponding
Dividend Payment Date notwithstanding the redemption of such shares before such
Dividend Payment Date.
(e) The Series F Preferred Stock has no stated maturity and will not be
subject to any sinking fund or mandatory redemption. However, in order to ensure
that the Company continues to meet the requirements for qualification as a REIT,
Series F Preferred Stock acquired by a shareholder in excess of the Ownership
Limit will automatically become Excess Shares, and the Company will have the
right to purchase such Excess Shares from the holder. In addition, Excess Shares
may be redeemed, in whole or in part, at any time when outstanding shares of
Series F Preferred Stock are being redeemed, for cash at a redemption price of
$25 per share, but excluding accumulated and unpaid dividends on such Excess
Shares, without interest. Such Excess Shares shall be redeemed in the same
proportion and in accordance with the same procedures as shares of Series F
Preferred Stock are being redeemed.
7. Voting Rights.
(a) Holders of the Series F Preferred Stock will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law.
(b) Whenever dividends on any shares of Series F Preferred Stock shall
be in arrears for eighteen or more months (a "Preferred Dividend Default"), the
holders of such shares of Series F Preferred Stock voting separately as a class
together with the holders of the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock, the Series E Preferred Stock and
all other series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable will be entitled to vote separately as a
class for the election of a total of two additional directors of the Company
(the "Preferred Stock Directors") at a special meeting called by the holders of
record of at least 20% of the Series F Preferred Stock or the holders of record
of at least 20% of any series of Parity Preferred so in arrears (unless such
request is received less than 90 days before the date fixed for the next annual
or special meeting of the shareholders) or at the next annual meeting of
shareholders, and at each subsequent annual meeting until all dividends
accumulated on such shares of Series F Preferred Stock for the past dividend
periods and the dividend for the then current dividend period shall have been
fully paid or declared and a sum sufficient for the payment thereof set aside
for payment. A quorum for any such meeting shall exist if at least a majority of
the total outstanding shares of Series F Preferred Stock and shares of Parity
Preferred Stock upon which like voting rights have been conferred and are
exercisable are represented in person or by proxy at such meeting. The Preferred
Stock Directors shall be elected upon the affirmative vote of a plurality of the
shares of Series F Preferred Stock and such Parity Preferred Stock present and
voting in person or by proxy at a duly called and held meeting at which a quorum
is present, voting separately as a single class. If and when all accumulated
dividends and the dividend for the then current dividend period on the Series F
Preferred Stock shall have been paid in full or declared and set aside for
payment in full, the holders thereof shall be divested of the foregoing voting
rights (subject to revesting in the event of each and every Preferred Dividend
Default) and, if all accumulated dividends and the dividend for the then current
dividend period have been paid in full or declared and set aside for payment in
full on all series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable, the term of office of each Preferred Stock
Director so elected shall terminate. Any Preferred Stock Director may be removed
at any time with or without cause by, and shall not be removed otherwise than by
the vote of, the holders of record of a majority of the outstanding shares of
the Series F Preferred Stock when they have the voting rights described above
(voting separately as a class with all series of Parity Preferred Stock upon
which like voting rights have been conferred and are exercisable). So long as a
Preferred Dividend Default shall continue, any vacancy in the office of a
Preferred Stock Director may be filled by written consent of the Preferred Stock
Director remaining in office, or if none remains in office, by a vote of the
holders of record of a majority of the outstanding shares of Series F Preferred
Stock when they have the voting rights described above (voting separately as a
class with all series of Parity Preferred Stock upon which like voting rights
have been conferred and are exercisable). The Preferred Stock Directors shall be
entitled to one vote per director on any matter.
(c) So long as any shares of Series F Preferred Stock remain
outstanding, the Company will not, without the affirmative vote or consent of
the holders of at least two-thirds of the shares of the Series F Preferred Stock
outstanding at the time, given in person or by proxy, either in writing or at a
meeting (voting separately as a class), amend, alter or repeal the provisions of
the Charter or the Designating Amendment, whether by merger, consolidation or
otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series F Preferred Stock of the
holders thereof; provided, however, that with respect to the occurrence of any
Event set forth above, so long as the Series F Preferred Stock remains
outstanding with the terms thereof materially unchanged, the occurrence of any
such Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of the Series F Preferred
Stock and provided, further that (i) any increase in the amount of the
authorized Preferred Stock or the creation or issuance of any other series of
Preferred Stock, or (ii) any increase in the amount of authorized shares of such
series, in each case ranking on a parity with or junior to the Series F
Preferred Stock with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers. When exercising the voting rights described above, each share of Series
F Preferred Stock shall have one vote per share.
(d) The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series F Preferred Stock
shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
8. Conversion. The Series F Preferred Stock is not convertible into
or exchangeable for any other property or securities of the Company.
THIRD: This Designating Amendment shall be effective at the time
Tennessee Secretary of State accepts this Designating Amendment for filing.
FOURTH: The foregoing amendment was duly adopted by unanimous consent
of the board of directors without shareholder action, such shareholder action
not being required, on October 10, 2002.
IN WITNESS WHEREOF, MID-AMERICA APARTMENT COMMUNITIES, INC. has caused
these presents to be signed in its name and on its behalf by its Chief Financial
Officer on this the 11th day of October 2002.
MID-AMERICA APARTMENT COMMUNITIES, INC.
By: /s/ Simon R.C. Wadsworth
Title: Chief Financial Officer