Exhibit 10.5

 

VOTING AGREEMENT

 

THOMAS H. LOWDER

 

THIS VOTING AGREEMENT (this “Agreement”) is entered into as of October 25, 2004
by and among Cornerstone Realty Income Trust, Inc., a Virginia corporation
(“Cornerstone”) and Thomas H. Lowder (such person, together with the other
signatories hereto (other than Cornerstone), individually and collectively, the
“Colonial Securityholder”).

 

WHEREAS, Cornerstone and Colonial Properties Trust, an Alabama real estate
investment trust (“Colonial”) are entering into an Agreement and Plan of Merger
dated as of the date hereof (the “Merger Agreement”), pursuant to which
Cornerstone will be merged with and into a wholly owned subsidiary of Colonial
(“Colonial Merger Sub”) (the “Merger”), with Colonial Merger Sub as the survivor
of the Merger (all capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement);

 

WHEREAS, the Colonial Securityholder is the beneficial and record owner of
issued and outstanding shares of beneficial interest, $0.01 par value per share,
of Colonial (such shares, together with any shares acquired hereafter, the
“Colonial Common Shares”) as more particularly described on Schedule 1 hereto;

 

WHEREAS, the Colonial Securityholder is the beneficial and record owner of
options to purchase Colonial Common Shares (such options, together with any
options acquired hereafter, the “Colonial Options”), as more particularly
described on Schedule 1 hereto; and

 

WHEREAS, in accordance with the Recitals of the Merger Agreement, the Colonial
Securityholder desires to execute and deliver this Agreement solely in its
capacity as a holder of Colonial Common Shares.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree, intending to be legally bound hereby, as
follows:

 

SECTION 1.   Disposition of Colonial Common Shares

 

During the period from the date hereof through the earlier of (i) the date on
which the Merger is consummated or (ii) the date on which the Merger Agreement
is terminated according to its terms (such period hereinafter referred to

 

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as the “Term”), the Colonial Securityholder shall not, directly or indirectly,
and shall cause each record holder not to, directly or indirectly, (a) sell,
transfer, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other agreement or understanding with respect to the sale,
transfer, pledge, encumbrance, assignment or other disposition of, any Colonial
Common Shares or Colonial Options, (b) grant any proxies for any Colonial Common
Shares with respect to any matters described in paragraph (a) of Section 2
hereof (other than a proxy directing the holder thereof to vote the Colonial
Common Shares in a manner required by paragraph (a) of Section 2 hereof), (c)
deposit any Colonial Common Shares into a voting trust or enter into a voting
agreement with respect to any Colonial Common Shares with respect to any of the
matters described in paragraph (a) of Section 2 hereof, or tender any Colonial
Common Shares in a transaction other than a transaction contemplated by the
Merger Agreement, or (d) take any action which is intended to have the effect of
preventing or disabling the Colonial Securityholder from performing its
obligations under this Agreement; provided, however, that nothing herein shall
prevent the sale, transfer, pledge, encumbrance, assignment or other disposition
of any of such Colonial Common Shares, provided that the purchaser, transferee,
pledgee or assignee thereof agrees in writing, prior to such sale, transfer,
pledge, encumbrance, assignment or other disposition, to be bound by the terms
of this Agreement.

 

SECTION 2.   Voting

 

(a) During the Term, the Colonial Securityholder shall cast or cause to be cast
all votes attributable to the Colonial Common Shares, at any annual or special
meeting of shareholders of Colonial, including any adjournments or postponements
thereof, or in connection with any written consent or other vote of Colonial
shareholders, (i) in favor of the matters constituting the Colonial Shareholder
Approval and (ii) against approval or adoption of any action or agreement (other
than the Merger Agreement or the transactions contemplated thereby) made or
taken in opposition to or in competition with the Merger.

 

(b) The Colonial Securityholder will retain the right to vote its Colonial
Common Shares, in its sole discretion, on all matters other than those described
in paragraph (a) of this Section 2, and the Colonial Securityholder may grant
proxies and enter into voting agreements or voting trusts for its Colonial
Common Shares in respect of such other matters.

 

SECTION 3.   Representations and Warranties of the Colonial Securityholder

 

The Colonial Securityholder represents and warrants to Cornerstone and
Cornerstone Partnership as follows:

 

(a) The Colonial Securityholder has the legal capacity, power, authority and
right (contractual or otherwise) to execute and deliver this Agreement and to
perform its obligations hereunder.

 

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(b) This Agreement has been duly executed and delivered by the Colonial
Securityholder and constitutes a valid and binding obligation of the Colonial
Securityholder enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors’
rights and general principles of equity.

 

(c) The execution and delivery of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or violate any court
order, judgment or decree applicable to the Colonial Securityholder, or conflict
with or result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under any contract or
agreement to which the Colonial Securityholder is a party or by which the
Colonial Securityholder is bound or affected, which conflict, violation, breach
or default would materially and adversely affect the Colonial Securityholder’s
ability to perform any of its obligations under this Agreement.

 

(d) Subject to any required filings under the Securities Exchange Act of 1934,
as amended (the “1934 Act”), the Colonial Securityholder is not required to give
any notice or make any report or other filing with any governmental authority in
connection with the execution or delivery of this Agreement or the performance
of the Colonial Securityholder’s obligations hereunder and no waiver, consent,
approval or authorization of any governmental or regulatory authority or any
other person or entity is required to be obtained by the Colonial Securityholder
for the performance of the Colonial Securityholder’s obligations hereunder,
other than where the failure to make such filings, give such notices or obtain
such waivers, consents, approvals or authorizations would not materially and
adversely affect the Colonial Securityholder’s ability to perform its
obligations under this Agreement.

 

(e) Colonial Common Shares and Colonial Options set forth opposite the name of
the Colonial Securityholder on Schedule 1 hereto are the only Colonial Common
Shares and Colonial Options owned beneficially or of record by the Colonial
Securityholder or over which it exercises voting control.

 

SECTION 4.   Further Assurances

 

During the Term, the Colonial Securityholder shall, upon the request of
Cornerstone, execute and deliver such documents and take such actions as

 

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Cornerstone may reasonably deem necessary to effectuate the purposes of this
Agreement.

 

SECTION 5.   Descriptive Headings

 

The descriptive headings herein are inserted for convenience only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.

 

SECTION 6.   Counterparts

 

This Agreement may be executed in counterparts, each of which when so executed
and delivered shall be an original, but all of such counterparts shall together
constitute one and the same instrument.

 

SECTION 7.   Entire Agreement; Assignment

 

This Agreement (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties hereto
with respect to the subject matter hereof and (ii) shall not be assigned by the
Colonial Securityholder, by operation of law or otherwise.

 

SECTION 8.   Governing Law; Consent to Jurisdiction; Waiver of Jury Trial

 

(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of Alabama without regard to the principles of conflicts of
laws thereof.

 

(b) The Colonial Securityholder hereby submits and consents to non-exclusive
personal jurisdiction in any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in a federal court located in
the State of Alabama or in an Alabama state court. Any process, summons, notice
or document delivered by mail to the address set forth on Schedule 1 hereto
shall be effective service of process for any action, suit or proceeding in any
Alabama state court or any federal court located in the State of Alabama with
respect to any matters to which the Colonial Securityholder has submitted to
jurisdiction in this Section 8. The Colonial Securityholder irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in any Alabama state court or any federal court located in the State of
Alabama, and hereby irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court

 

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has been brought in an inconvenient forum. THE COLONIAL SECURITYHOLDER
IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT.

 

SECTION 9.   Specific Performance

 

The parties hereto agree that if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist
and damages would be difficult to determine, and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.

 

SECTION 10.   Parties in Interest

 

This Agreement shall be binding upon and inure solely to the benefit of each
party hereto, and nothing in this Agreement, express or implied, is intended to
or shall confer upon any other person or persons any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.

 

SECTION 11.   Amendment; Waivers

 

This Agreement shall not be amended, altered or modified except by an instrument
in writing duly executed by each of the parties hereto. No delay or failure on
the part of any party hereto in exercising any right, power or privilege under
this Agreement shall impair any such right, power or privilege or be construed
as a waiver of any default or any acquiescence thereto. No single or partial
exercise of any such right, power or privilege shall preclude the further
exercise of such right, power or privilege, or the exercise of any other right,
power or privilege. No waiver shall be valid against any party hereto, unless
made in writing and signed by the party against whom enforcement of such waiver
is sought, and then only to the extent expressly specified therein.

 

SECTION 12.   Capacity of Colonial Securityholder

 

The Colonial Securityholder has executed this Agreement solely in its capacity
as a securityholder of Colonial and not in its capacity as an officer, trustee
or employee of Colonial. Without limiting the foregoing, nothing in this
Agreement shall limit or affect any actions taken by the Colonial Securityholder
in its capacity as an officer, trustee or employee of Colonial in connection
with the exercise of Colonial rights under the Merger Agreement.

 

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SECTION 13.   Termination

 

This Agreement shall terminate immediately upon the earlier of (i) the date on
which the Merger Agreement is terminated in accordance with its terms or (ii)
the consummation of the Merger. None of the representations, warranties,
covenants or agreements in this Agreement shall survive the termination of this
Agreement; provided, however, that nothing contained herein shall release the
Colonial Securityholder from any liability arising from any breach of any of its
representations, warranties, covenants or agreements in this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Voting Agreement, or have caused this Voting Agreement to be duly executed and
delivered in their names and on their behalf, as of the date first written
above.

 

CORNERSTONE REALTY INCOME TRUST, INC. By:  

/s/ Glade M. Knight

Name:

 

Glade M. Knight

Title:

 

Chairman & CEO

/s/ Thomas H. Lowder

Thomas H. Lowder

Equity Partners Joint Venture By:  

/s/ Thomas H. Lowder

Name:

 

Thomas H. Lowder

Title:

 

Managing Agent

Thomas H. Lowder Irrevocable Children’s Trust By:  

/s/ Thomas H. Lowder

Name:

 

Thomas H. Lowder

Title:

 

Trustee

Colonial Commercial Investments, Inc. By:  

/s/ James K. Lowder

Name:

 

James K. Lowder

Title:

 

Chairman

 

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