Exhibit 10.1

 

 

 

 

 

GABLES RESIDENTIAL TRUST

GABLES GP, INC.

GABLES REALTY LIMITED PARTNERSHIP

AND

TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

SECURITIES PURCHASE AGREEMENT
September 27, 2002

 

 

 

 

 

 

GABLES RESIDENTIAL TRUST
GABLES GP, INC.
GABLES REALTY LIMITED PARTNERSHIP

SECURITIES PURCHASE AGREEMENT

September 27, 2002

TEACHERS INSURANCE AND ANNUITY 
ASSOCIATION OF AMERICA
730 Third Avenue
New York, NY 10017 

Ladies and Gentlemen:

       Introductory. Gables Realty Limited Partnership, a Delaware limited
partnership (the "Operating Partnership") of which the sole general partner is
Gables GP, Inc. ("Gables GP"), a Texas corporation and a wholly-owned subsidiary
of Gables Residential Trust, a Maryland real estate investment trust (the "REIT"
and, together with the Operating Partnership and Gables GP, the "Company"),
proposes to sell to Teachers Insurance and Annuity Association of America, a New
York corporation ("TIAA"), (i) the Operating Partnership's debt securities
identified in Schedule 1 attached hereto (the "Notes"), to be issued under the
Indenture, dated as of March 23, 1998, which is attached hereto as Exhibit A, as
supplemented by that certain First Supplemental Indenture, dated as of March 23,
1998, a Second Supplemental Indenture, dated as of September 30, 1998, a Third
Supplemental Indenture, dated as of October 8, 1998, a Fourth Supplemental
Indenture, dated as of February 22, 2001, a Fifth Supplemental Indenture, dated
as of July 8, 2002, a Sixth Supplemental Indenture, to be dated as of September
27, 2002, a form of which is attached hereto as Exhibit B, and a Seventh
Supplemental Indenture, to be dated as of September 27, 2002, a form of which is
attached hereto as Exhibit C, each by and between the Operating Partnership and
Wachovia Bank, National Association (formerly known as First Union National
Bank) (the "Trustee"), as trustee (as so supplemented, the "Indenture"), and
(ii) the REIT's equity securities identified in   Schedule 2 attached hereto
(the "Preferred Stock," and together with the Notes, the "Securities"), to be
issued under the Articles Supplementary, to be filed with the State Department
of Assessments and Taxation of the State of Maryland as of September 27, 2002, a
form of which is attached hereto as   Exhibit D.

The REIT, Gables GP and the Operating Partnership confirm their agreements with
TIAA as follows.

1. Agreement to Purchase and Sell.

On the basis of the representations, warranties and agreements contained herein,
but subject to the terms and conditions set forth herein, (a) (i) the Operating
Partnership agrees to issue and sell the Notes to TIAA as hereinafter provided,
(ii) the REIT agrees to issue and sell the Preferred Stock to TIAA as
hereinafter provided, and (iii) the Operating Partnership agrees to pay to TIAA
the Cash Payment referred to below, and (b) TIAA agrees to purchase the Notes
from the Operating Partnership and the Preferred Stock from the REIT for the
Purchase Consideration referred to below (the "Sale"). On the basis of the
representations, warranties and agreements contained herein, but subject to the
terms and conditions set forth herein, the "Purchase Consideration" for the
Securities, the Cash Payment and the other terms and conditions of this
Agreement will consist of the 8.30% Unsecured Note No. 1 due December 31, 2002
issued to TIAA by the Operating Partnership and Gables-Tennessee Properties, a
Tennessee gener al partnership, ("Note No. 1"). The "Cash Payment" will consist
of a payment in cash equal to $3,148,565.27 if the Closing (as defined below)
takes place on September 27, 2002, representing $2,634,167.58 in principal and
$514,397.69 in interest. If the Closing does not occur on September 27, 2002,
the Cash Payment shall be increased by $19,051.77 in interest each day after
September 27, 2002 until the date of the Closing. TIAA hereby waives the
prepayment premium with respect to Note No. 1 in connection with the
transactions contemplated by this Agreement.

2. Delivery and Payment.

Subject to satisfaction or waiver of the conditions set forth herein, the Sale
shall take place at the offices of Goodwin Procter LLP, 599 Lexington Avenue,
New York, NY 10022, on September 27, 2002 or at such place and at such other
time on the same date or such other date as the Company and TIAA may agree in
writing (the "Closing," and the date on which such Closing occurs referred to
herein as the "Closing Date"). At the Closing, (a) TIAA shall deliver to the
Operating Partnership Note No. 1 for cancellation, and (b)(i) the Operating
Partnership shall deliver to TIAA the Notes, (ii) the REIT shall deliver to TIAA
the Preferred Stock, and (iii) the Operating Partnership shall deliver the Cash
Payment to TIAA by wire transfer payable in immediately available funds in
accordance with the wire transfer instructions set forth on Exhibit E. The Notes
and the Preferred Stock will be delivered through the book entry facilities of
The Depository Trust Company ("DTC").

The cost of original issue tax stamps, if any, in connection with the issuance
and delivery of the Securities and the Exchange Securities (as defined below) to
TIAA shall be borne by the Company. The Company will pay and save TIAA harmless
from any and all liabilities with respect to or resulting from any failure or
delay in paying Federal and state stamp and other transfer taxes, if any, which
may be payable or determined to be payable in connection with the original
issuance to TIAA of the Securities or the Exchange Securities.

3. Registration of the Securities. Pursuant to a Registration Rights Agreement,
dated as of September 27, 2002, between the Operating Partnership and TIAA, in
substantially the form attached hereto as Exhibit F (the "Operating Partnership
Registration Rights Agreement") and a Registration Rights Agreement, dated as of
September 27, 2002, between the REIT and TIAA, in substantially the form
attached hereto as Exhibit G (the "REIT Registration Rights Agreement" and,
together with the Operating Partnership Registration Rights Agreement, the
"Registration Rights Agreements"), each of the Operating Partnership and the
REIT agree, respectively, for the benefit of TIAA, to use its best efforts to
file with the Securities and Exchange Commission (the "Commission") and to cause
to become effective (a) a registration statement (the "Exchange Offer
Registration Statement"), including a prospectus, relating to an offer to
exchange the Securities for notes of the Operating Partnership (the "Exchange
Notes") and preferred stock of the REIT (the "Exchange Stock" and, together with
the Exchange Notes, the "Exchange Securities") with terms identical to the
Securities (except that the Exchange Securities will not b e subject to
restrictions on transfer or to any increase in annual interest rate as described
in this Agreement or the Registration Rights Agreements); and (b) under certain
circumstances specified in the Registration Rights Agreements, a shelf
registration statement pursuant to Rule 415 promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), covering resales of the Securities.
The offer to exchange the Securities for the Exchange Securities shall be
referred to herein as the "A/B Exchange."

4. Representations and Warranties of the Company. The REIT, Gables GP and the
Operating Partnership, jointly and severally, represent, warrant and covenant to
TIAA that:

       (a) The Indenture has been duly authorized by the Operating Partnership
and constitutes a valid and legally binding agreement of the Operating
Partnership enforceable against the Operating Partnership in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability (collectively,
the "Enforceability Exceptions"); and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (together with the rules and regulations
of the Commission thereunder, the "Trust Indenture Act"). 

       (b) Since January 1, 1999, the Operating Partnership has filed each
report or other filing that it was required to file with the Commission (the "OP
Filings"). Since January 1, 1999, the REIT has filed each report or other filing
that it was required to file with the Commission (together with the OP Filings,
and together with any permitted filings by either party on a Current Report on
Form 8-K pursuant to Section 13 or 15(d) of the Exchange Act (as defined below),
the "Commission Filings"). As of their respective dates, each of the Commission
Filings was true and correct in all material respects and complied in all
material respects with the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "Exchange Act"), and did not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading (except to the extent
revised or superseded by a later-filed Commission Filing). The financial
statements of the Operating Partnership and the REIT included in the Commission
Filings comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto, have been prepared in accordance with generally accepted
accounting principles ("GAAP") (except in the case of unaudited statements, as
permitted by the Commission in connection with a Quarterly Report on Form 10-Q
pursuant to Section 13 or 15(d) of the Exchange Act) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the financial position of the Operating Partnership
and the REIT and each of their consolidated subsidiaries as of the dates thereof
and their consolidated results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). The statements included in the Commission Filings with respect to
Arthur Andersen LLP pursuant to Rule 509 of Regulation S-K of the Securities Act
and the rules and regulations promulgated thereunder are true and correct in all
material respects. Additionally, any statements required by the Securities Act
have been added to, or incorporated by reference in, the Commission Filings,
reflecting that the Company terminated its engagement of Arthur Andersen LLP and
engaged Deloitte & Touche LLP, independent public accountants.

       (c) The only subsidiaries (as defined in Rule 405 under the Securities
Act) of each of the Companies are the subsidiaries listed on Schedule 3 hereto
(the "subsidiaries"). Each of the Companies and each of its subsidiaries is, and
at the Closing Date will be, an entity duly incorporated, organized or formed,
as the case may be, and, in the case of an entity that is not a general
partnership, validly existing and in good standing under the laws of the
jurisdiction of its organization or incorporation. Each of the Companies and
each of its subsidiaries has, and at the Closing Date will have, full power and
authority to conduct all the activities conducted by it, to own or lease all the
assets owned or leased by it and to conduct its business as described in the
Commission Filings. Each of the Companies and each of its subsidiaries is, and
at the Closing Date will be, duly licensed or qualified to do business and
(except for subsidiaries that are general partnerships) in good standing as a
foreign trust, limited partnership or corporation, as the case may be, in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary except where the failure to be so qualified would not
have a Material Adverse Effect. For purposes of this Agreement, "Material
Adverse Effect" means any change, effect or circumstance that, individually or
in the aggregate (unless otherwise noted), (i) is materially adverse to the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its subsidiaries, taken as a whole or
(ii) materially impairs the ability of the Company to consummate the
transactions contemplated by this Agreement or any of the Transaction Documents
(as defined below). Except for the stock or partnership interests of the
subsidiaries and as disclosed in the Commission Filings, none of the Companies
own, and at the Closing Date will not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture, association or
other entity. Complete and correct copies of the Amended and Restated
Declaration of Trust and Second Amended and Restated By-laws of the REIT, the
Fifth Amended and Restated Agreement of Limited Partnership of the Operating
Partnership (the "Amended LP Agreement"), the other organizational documents of
the Operating Partnership, and the charter documents of Gables GP, and the
charter documents of each of its subsidiaries and all amendments thereto have
been made available to TIAA, are and will be on the Closing Date in full force
and effect and no changes therein have been proposed or will be made subsequent
to the date hereof and prior to the Closing Date.

       (d) The outstanding securities of the REIT have been duly authorized and
validly issued, are fully paid and nonassessable and will not be subject to any
preemptive or similar right. The description of the REIT's common shares of
beneficial interest, par value $0.01 per share (the "Common Shares") and
preferred stock, par value $0.01 per share in the Commission Filings is, and at
the Closing Date will be, in all material respects, complete and accurate.
Except as set forth in the Commission Filings, the REIT does not have
outstanding, and at the Closing Date will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any Common Shares, any preferred shares of the REIT, any shares of capital stock
of any subsidiary or any such warrants, convertible securities or obligations,
other than pursuant to (i) the REIT's Fourth Amended and Restat ed 1994 Share
Option and Incentive Plan, as amended and (ii) in connection with the redemption
of common units of beneficial interest under the Amended LP Agreement.

       (e) The outstanding securities of the Operating Partnership have been
duly authorized and validly issued and will not be subject to any preemptive or
similar right. Except as set forth in the Commission Filings, the Operating
Partnership does not have outstanding, and at the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any equity interests of the Operating Partnership.
There are no requirements, restrictions or limitations in the terms of the
preferred units of partnership interest in the Operating Partnership ("Preferred
Units") applicable to the issuance and sale of the Securities.

       (f) The Notes will be, as of the Closing Date, duly authorized by the
Operating Partnership for issuance and sale pursuant to this Agreement and the
Indenture, and when duly authenticated and delivered by the Trustee in
accordance with the terms of the Indenture (assuming the due authorization,
execution and delivery of the Indenture by the Trustee), and delivered to, and
paid for in full by, TIAA pursuant to this Agreement, will be valid and legally
binding obligations of the Operating Partnership entitled to the benefit of the
Indenture and will be enforceable against the Operating Partnership in
accordance with their terms, subject to the Enforceability Exceptions; the
Indenture has been duly qualified under the Trust Indenture Act; and the Notes
will be, in all material respects, in the form contemplated by the Indenture.

       (g) The Preferred Stock will be, as of the Closing Date, duly authorized
by the REIT for issuance and sale, and upon payment therefor in accordance with
the terms of this Agreement, will be validly issued, fully-paid and
nonassessable.

       (h) The Exchange Notes will be, as of the Closing Date, duly authorized
by the Operating Partnership for issuance as contemplated by the Operating
Partnership Registration Rights Agreement, and when duly authenticated and
delivered by the Trustee in accordance with the terms of the Indenture (assuming
due authorization, execution and delivery of the Indenture by the Trustee), and
delivered to TIAA pursuant to the Operating Partnership Registration Rights
Agreement, will be valid and legally binding obligations of the Operating
Partnership entitled to the benefit of the Indenture and will be enforceable
against the Operating Partnership in accordance with their terms, subject to the
Enforceability Exceptions; the Indenture has been duly qualified under the Trust
Indenture Act; and the Exchange Notes will be, in all material respects, in the
form contemplated by the Indenture.

       (i) The Exchange Stock will be, as of the Closing Date, duly authorized
by the REIT for issuance as contemplated by the REIT Registration Rights
Agreement and, when issued and delivered to TIAA pursuant to the REIT
Registration Rights Agreement, will be validly issued, fully-paid and
nonassessable.

       (j) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

       (k) Except as set forth on Schedule 4(k) attached hereto, since the
respective dates as of which information is given in the Commission Filings,
except as otherwise stated therein, (i) there has not been and will not have
been any change in the capitalization of the Company, or in the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, arising for any reason
whatsoever, other than by way of grants of Common Shares or options to purchase
Common Shares or the exercise of such options, in any such case under the REIT's
Fourth Amended and Restated 1994 Share Option and Incentive Plan, as amended,
(ii) neither the Company nor any of its subsidiaries has incurred nor will it
incur any material liabilities or obligations, direct or contingent, nor has it
entered into nor will it enter into any material transactions other than
pursuant to this Agreement and the transactions referred to herein and (iii) the
Company has not and will not have paid or declared any dividends or other
distributions of any kind on any class of its capital stock.

       (l) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.

       (m) Except as set forth in the Commission Filings, there are no actions,
suits or proceedings pending or threatened against or affecting the Company or
any of its subsidiaries or any of their respective officers in their capacity as
such, before or by any Federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding might materially and adversely affect
the Company or any of its subsidiaries or its business, properties, business
prospects, condition (financial or otherwise) or results of operations.

       (n) The Company and each of its subsidiaries has, and at the Closing Date
will have, (i) all governmental licenses, permits, consents, orders, approvals
and other authorizations necessary to carry on its business, except where
failure to obtain any of the foregoing will not have a Material Adverse Effect,
(ii) complied in all material respects with all laws, regulations and orders
applicable to it or its business except where failure to comply with any of the
foregoing would not have a Material Adverse Effect, and (iii) performed all its
obligations required to be performed by it, and is not, and at the Closing Date
will not be, in default, under any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement, lease,
contract or other agreement or instrument (collectively, a "contract or other
agreement") to which it is a party or by which its property is bound or
affected, the violation of which would have a Material Advers e Effect. To the
best knowledge of the Company and each of its subsidiaries, no other party under
any contract or other agreement to which it is a party is in default thereunder
in such a manner that, individually or in the aggregate, would have a reasonable
likelihood of causing a Material Adverse Effect. The Company is not, nor at the
Closing Date will be, in violation of any provision of the Amended and Restated
Declaration of Trust or Second Amended and Restated By-laws of the REIT or
Amended LP Agreement or any other organizational documents of the Operating
Partnership or the charter documents of Gables GP. No subsidiary of the Company
is, nor at the Closing Date will any of them be, in violation of any provision
in their respective charter documents.

       (o) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part herein contemplated,
in connection with the offering, issuance and sale of the Securities under this
Agreement or the consummation of the transactions contemplated by this
Agreement, other than the filings contemplated by the Registration Rights
Agreements.

       (p) The Operating Partnership and the REIT each have full power and
authority to enter into this Agreement, the Indenture and the Registration
Rights Agreements (collectively, the "Transaction Documents"). The Transaction
Documents have been duly authorized, executed and delivered by the REIT and the
Operating Partnership and constitute valid and binding agreements of the REIT
and the Operating Partnership and are enforceable against the REIT and the
Operating Partnership in accordance with the terms hereof and thereof. The
performance of the obligations under the Transaction Documents and the
consummation of the transactions contemplated hereby and thereby will not result
in the creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or any of its subsidiaries pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any other party a ri ght
to terminate any of its obligations under, or result in the acceleration of any
obligation under, the Amended and Restated Declaration of Trust or Second
Amended and Restated By-laws of the REIT or Amended LP Agreement or any other
organizational documents of the Operating Partnership or the charter documents
of Gables GP or any of the Company's subsidiaries, any contract or other
agreement to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company or any of its
subsidiaries.

       (q) The Company and each of its subsidiaries has good and marketable
title to all properties and assets described in the Commission Filings as owned
by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as are not material to the business of the Company or its
subsidiaries, taken as a whole, and except for the mortgages disclosed in the
Commission Filings along with such additional mortgages entered into since the
2001 Annual Report (as defined below) which would not have a Material Adverse
Effect . The Company and each of its subsidiaries has valid, subsisting and
enforceable leases for the properties described in the Commission Filings as
leased by it, with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such properties by the
Company and such subsidiaries; no tenant under any of the leases pursuant to
which the Company leases its properties has an option or right of first refusal
to purchase the premises demised under such lease; the use and occupancy of each
of the properties of the Company complies in all material respects with all
applicable codes and zoning laws and regulations; the Company has no knowledge
of any pending or threatened condemnation or zoning change that will in any
material respect affect the size of, use of, improvements of, construction on,
or access to any of the properties of the Company; and the Company has no
knowledge of any pending or threatened proceeding or action that will in any
manner affect the size of, use of, improvements on, construction on, or access
to any of the properties of the Company.

       (r) Title insurance in favor of the Company (or the subsidiary which
holds title to such property) is maintained with respect to each of the
properties owned by the Company in an amount at least equal to the greater of
(i) the cost of acquisition of such property or (ii) the cost of construction by
the Company of the improvements located on such property (measured at the time
of such construction), except, in each case, where the failure to maintain such
title insurance would not have a Material Adverse Effect. Title insurance in
favor of the mortgagee is maintained in an amount equal to the maximum
commitment of the related loan.

       (s) The mortgages and deeds of trust encumbering the properties and
assets described in the Commission Filings are not convertible nor does the
Company hold a participating interest therein.

       (t) The Company has no knowledge of (i) the unlawful presence of any
hazardous substances, hazardous materials, toxic substances or waste materials
(collectively, "Hazardous Materials") on any of the properties owned by it, or
(ii) any unlawful spills, releases, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring off such properties as a
result of any construction on or operation and use of such properties, which
presence or occurrence would have a Material Adverse Effect. In connection with
the construction or operation and use of the properties owned by the Company,
the Company represents that, as of the date of this Agreement, it has no
knowledge of any failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and judicial
orders relating to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials, which failur e would have a
Material Adverse Effect.

       (u) Property and casualty insurance in favor of the Company is maintained
with respect to each of the properties owned by it in an amount and on such
terms as is reasonable and customary for businesses of this type.

       (v) No statement, representation, warranty or covenant made by the
Company in any Transaction Document or made in any certificate or document
required thereunder was or will be, when made, inaccurate, untrue or incorrect.

       (w) Neither the Company nor any of its subsidiaries is involved in any
material labor dispute nor, to the knowledge of the Company, is any such dispute
threatened. 

       (x) The Company and its subsidiaries own, or are licensed or otherwise
have the full exclusive right to use, all material trademarks and trade names
which are used in or necessary for the conduct of their respective businesses as
described in the Commission Filings, including, without limitation, the name
"Gables" for use in connection with residential communities. No claims have been
asserted by any person to the use of any such trademarks or trade names or
challenging or questioning the validity or effectiveness of any such trademark
or trade name. The use, in connection with the business and operations of the
Company and its subsidiaries of such trademarks and trade names does not, to the
Company's knowledge, infringe on the rights of any person.

       (y) Neither the Company nor any of its subsidiaries nor, to the Company's
knowledge, any employee or agent of the Company or any subsidiary has made any
payment of funds of the Company or any subsidiary or received or retained any
funds in violation of any law, rule or regulation or of a character required to
be disclosed in the Commission Filings.

       (z) The REIT has continuously been organized and operated in conformity
with the requirements for qualification as a real estate investment trust under
the Internal Revenue Code of 1986, as amended (the "Code") for all taxable years
commencing with its taxable year ended December 31, 1994. The REIT has filed an
election to be taxable as a real estate investment trust for its taxable year
ended December 31, 1994, and such election has not been terminated. The REIT's
method of operation will permit it to continue to meet the requirements for
taxation as a real estate investment trust under the Code. The REIT intends to
continue to operate in a manner which would permit it to qualify as a real
estate investment trust under the Code.

       (aa) None of the Companies has incurred or taken any action that would
cause TIAA to be or become liable for any investment banking fees, brokerage
commissions, broker's or finder's fees or similar compensation (exclusive of
professional fees to lawyers and accountants) in connection with the
transactions contemplated by this Agreement.

       (bb) The Companies represent that, in reliance upon and assuming the
accuracy of the representations of TIAA as set forth in Section 5 hereof, the
issue and sale of the Securities in the manner contemplated by this Agreement
will be exempt from the registration requirements of the Securities Act.

5. Representations and Warranties of TIAA. TIAA represents, warrants and
covenants to the REIT and the Operating Partnership that:

       (a) TIAA has full power and authority to enter into this Agreement and
the Registration Rights Agreements referred to in Section 2, and each such
agreement constitutes the valid and legally binding obligation of TIAA,
enforceable in accordance with its terms, subject to the Enforceability
Exceptions.

       (b) This Agreement is made with TIAA in reliance upon TIAA's
representation to the Company, which by TIAA's execution of this Agreement TIAA
hereby confirms, that the Securities to be received by TIAA will be acquired for
investment for TIAA's own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof in violation of
applicable law, and that TIAA has no present intention of selling, granting any
participation in or otherwise distributing the same to any other person. By
executing this Agreement, TIAA further represents that it does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Securities.

       (c) TIAA represents that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Securities and the business, properties, prospects and financial
condition of the Company. 

       (d) TIAA is an "accredited investor" within the meaning of Commission
Rule 501 of Regulation D, as presently in effect. 

       (e) TIAA understands that the Securities are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such Securities may be resold
without registration under the Securities Act only in limited circumstances. In
the absence of any effective registration statement covering the Securities or
an available exemption from registration under the Securities Act, the
Securities must be held indefinitely. In this connection, TIAA represents that
it is familiar with Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and the Securities Act. 

       (f) TIAA has not incurred or taken any action that would cause the
Company to be or become liable for any investment banking fees, brokerage
commissions, broker's or finder's fees or similar compensation (exclusive of
professional fees to lawyers and accountants) in connection with the
transactions contemplated by this Agreement. 

6. Conditions of the Obligations of TIAA. The obligations of TIAA hereunder are
subject to the following conditions:

       (a) Since the respective dates as of which information was given in the
Commission Filings, (i) there shall not have been a material adverse change in
the general affairs, business, business prospects, properties, management,
condition (financial or otherwise) or results of operations of the Company and
its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, in each case other than as set forth in or
contemplated by the Commission Filings and (ii) neither the Company nor any of
its subsidiaries shall have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not set forth in the
Commission Filings and which would have a reasonable likelihood of causing a
Material Adverse Effect.
       
       (b) Since the respective dates as of which information was given in the
Commission Filings, there shall have been no litigation or other proceeding
instituted or, to the best of the Company's knowledge, threatened against the
Company or any of its subsidiaries or any of their respective officers or
directors or trustees, as the case may be, in their capacities as such, before
or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding it is reasonably probable that an unfavorable ruling,
decision or finding would be rendered and would have a Material Adverse Effect.

       (c) Each of the representations and warranties of Gables GP, the REIT,
the Operating Partnership contained herein shall be true and correct in all
material respects at the Closing Date, as if made at the Closing Date, and all
covenants and agreements contained herein to be performed on the part of the
Company and all conditions contained herein to be fulfilled or complied with by
the Company at or prior to the Closing Date, shall have been duly performed,
fulfilled or complied with.

       (d) The REIT shall have obtained a letter from Standard & Poor's
assigning a rating of "BBB-" or better to the Preferred Stock, and the Operating
Partnership shall have obtained a letter from Standard & Poor's assigning a
rating of "BBB" or better to the Notes. 

       (e) There shall not have occurred any downgrading in the rating accorded
the Notes or the Preferred Stock or any other debt securities of the Company by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) (a "Rating Agency") nor shall
any notice have been given to the Company of (i) any intended or potential
downgrading by any Rating Agency in such securities, or (ii) any review or
possible change by any Rating Agency that does not indicate a stable, positive
or improving rating accorded such securities.

       (f) TIAA shall have received an opinion, dated the Closing Date and
satisfactory in form and substance to TIAA, from Goodwin Procter LLP, counsel to
the Company, to the effect set forth in   Exhibit H.

       (g) At the Closing Date, there shall be furnished to TIAA an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of each of (a) Gables GP on
behalf of the Operating Partnership and (b) the REIT, in form and substance
satisfactory to TIAA, to the effect that:

               (i) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the time
such certificate is delivered, true and correct in all material respects.

               (ii) Each of the covenants required to be performed by the
Company herein on or prior to the delivery of such certificate has been duly,
timely and fully performed and each condition herein required to be complied
with by the Company on or prior to the date of such certificate has been duly,
timely and fully complied with.

               (iii) All of the statements made in the Company's audited
financial statements and notes thereto set forth in the Company's Annual Report
on 10-K pursuant to Section 13 or 15(d) of the Exchange Act, for the year ended
December 31, 2001 (the "2001 Annual Report") are true, correct and complete, in
all material respects, as of the date appearing on such statements and, since
the date of the filing of the 2001 Annual Report, no event has occurred or
condition exists which would cause the undersigned to doubt the accuracy or
completeness, in all material respects, of such financial statements, in each
case in accordance with GAAP, except to the extent that Statement of Financial
Accounting Standards No. 144 requires the Company to reclassify operating
results of real estate assets sold as discontinued operations.

               (iv) As of the date hereof, there has not occurred any
downgrading in the rating accorded the Notes or the Preferred Stock or any other
debt securities of the Company by any Rating Agency nor has any notice been
given to the Company of (A) any intended or potential downgrading by any Rating
Agency in such securities, or (B) any review or possible change by any Rating
Agency that does not indicate a stable, positive or improving rating accorded
such securities.

       (h) TIAA shall have received counterparts of the Registration Rights
Agreements that shall have been executed and delivered by a duly authorized
officer of the Company. 

       (i) The Articles Supplementary attached as Exhibit D shall have been duly
filed by the REIT with the State Department of Assessments and Taxation of
Maryland (the "SDAT") and shall be effective. TIAA shall have received a
certified copy of the Articles Supplementary relating to the designation of the
Preferred Stock, as filed with the SDAT. Except for the aforementioned Articles
Supplementary, as of the Closing Date, none of the REIT's charter documents
shall have been modified or amended since the date such documents were delivered
to TIAA by the REIT.

       (j) The Amended LP Agreement shall have been amended substantially in the
form attached hereto as Exhibit I so as to create a series of preferred
partnership units designated the Series C Preferred Units.

       (k) TIAA shall have received on and as of the Closing Date satisfactory
evidence of the good standing of the Company and its subsidiaries in their
respective jurisdictions of organization and their good standing in such other
jurisdictions as TIAA may reasonably request, in each case in writing or any
standard form of telecommunication, from the appropriate governmental
authorities of such jurisdictions.

       (l) The Securities will be DTC-eligible and displayed on the Bloomberg
System.

7. Conditions of the Obligations of the REIT and the Operating Partnership. The
obligations of the REIT, Gables GP and the Operating Partnership hereunder are
subject to the following conditions:

       (a) Each of the representations and warranties of TIAA contained herein
shall be true and correct in all material respects at the Closing Date, as if
made at the Closing Date.

       (b) TIAA shall have performed and complied with all agreements and
conditions contained herein to be performed or complied with by TIAA at or prior
to the Closing Date.

8. Indemnification and Expenses.

       (a) The REIT, Gables GP and the Operating Partnership agree to indemnify
and hold harmless TIAA, its affiliates, directors, officers and trustees and
each person, if any, who controls TIAA within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, for this Section
8, "TIAA"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, legal fees and other reasonable expenses
incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), joint or several, incurred or
suffered by TIAA in connection with or arising out of any breach by the Company
of this Agreement.

       (b) TIAA agrees to indemnify and hold harmless the Company, its
affiliates, directors and officers, the partners of the Company, and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, for this Section
8, the "Company") to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities
incurred or suffered by the Company in connection with or arising out of any
breach by TIAA of this Agreement.

       (c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnification may be sought pursuant to either
paragraph (a) or (b) above, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnification may be sought (the
"Indemnifying Person") in writing; provided that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have
under this Section 8 except to the extent that it has been materially prejudiced
by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under this Section 8. If any such
proceeding shall be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying Per son
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others entitled to indemnification
pursuant to this Section 8 that the Indemnifying Person may designate in such
proceeding and shall pay the fees and expenses of such counsel related to such
proceeding, as incurred. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary; (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them (based on the advice of counsel to the Indemnified
Party). It is understood and agreed that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed as they are incurred. Any such separate firm for
TIAA, its affiliates, directors and officers and any control persons of TIAA
shall be designated in writing by TIAA and for the Company, its affiliates,
directors and officers and any control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written consent
(which consent will not be unreasonably withheld), but if settled with such
consent or if there be a final judg ment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. The Indemnified Person shall
notify the Indemnifying Person promptly upon any settlement or final judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person
shall have requested that an Indemnifying Person reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by this paragraph, the
Indemnifying Person shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by the Indemnifying Person of such request and (ii)
the Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threate ned proceeding in
respect of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional release of such Indemnified
Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.

       (d) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to any
Indemnified Person at law or in equity.

9. Survival of Representations and Warranties. All representations, warranties,
agreements and covenants of the Company and TIAA herein or in certificates
delivered pursuant hereto shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of TIAA, or the Company or
any of its officers, trustees, or any controlling persons, and shall survive (i)
termination of this Agreement and (ii) delivery of and payment for the
Securities hereunder.

10. Notices. Notice given pursuant to any of the provisions of this Agreement
shall be in writing and, unless otherwise specified, shall be mailed or
delivered (a) if to the Company, at the office of the Company, 6551 Park of
Commerce Blvd., Suite 100, Boca Raton, Florida 33487, Attention: President, or
(b) if to TIAA, to 730 Third Avenue, New York, New York 10017, Attention: Andrew
J. Duffy and with copies to (i) 730 Third Avenue, New York, New York 10017,
Attention: Chief Counsel, Mortgage and Real Estate Law and (ii) Dechert, 4000
Bell Atlantic Tower, 1717 Arch Street, Philadelphia, Pennsylvania 19103,
Attention: Christopher G. Karras, Esq. Any such notice shall be effective only
upon receipt. Any notice under Section 10 hereof may be made by telex, facsimile
or telephone, but if so made shall be subsequently confirmed in writing.

11. Parties. This Agreement has been and is made solely for the benefit of TIAA,
the Operating Partnership and the REIT and of the controlling persons,
directors, trustees, and officers referred to in Section 8, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of
Securities from TIAA. 

12. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

13. Counterparts. This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.

14. Severability. In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

15. Waiver of Trial by Jury. The Operating Partnership, the REIT and TIAA each
hereby irrevocably waive any right they may have to a trial by jury in respect
of any claim based upon or arising out of this Agreement or the transactions
contemplated hereby.

16. Expenses. Each of the parties hereto will bear its own expenses in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the documents and instruments contemplated hereby, including all
fees and disbursements of counsel; provided, however, that the Company shall
bear the legal expenses of TIAA in connection with the negotiation and execution
of this Agreement, such legal expenses borne by the Company not to exceed
$30,000, and all fees and expenses of any Rating Agency in connection herewith.

17. Ratings Letters. On or before December 31, 2002, the REIT shall obtain a
letter from Moody's assigning a rating of "Baa3" or better to the Preferred
Stock, and the Operating Partnership shall obtain a letter from Moody's
assigning a rating of "Baa2" or better to the Notes.

[Signature page follows.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please confirm that the foregoing correctly sets forth the agreement among the
REIT, the Operating Partnership and TIAA.

Very truly yours,

GABLES REALTY LIMITED PARTNERSHIP
By:  GABLES GP, INC.
General Partner
By:    /s/ Marvin R. Banks,  Jr.                      GABLES RESIDENTIAL TRUST

By:    /s/ Marvin R. Banks, Jr.                       GABLES GP, INC.

By:    /s/ Marvin R. Banks, Jr.                       

 

 

 

 

 

 

Confirmed as of the date first above mentioned:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA

By:                                                                             
Authorized Signatory

 

 

 

 

 

 

 

 

 

 

SCHEDULE 1

Description of Notes and
Pricing Information

Title of Securities:

Aggregate Principal Amount:

Maturity Date:

Interest Rate:

Coupon Payment Dates:

Proceeds to be Paid to the Operating Partnership:

Delivery Date and Time:

5.86% Senior Notes due 2009

$30,000,000

September 30, 2009

5.86% per annum from September 28, 2002

October 15 and April 15 (commencing October 15, 2002)

$30,000,000 (non-cash consideration)

Friday, September 27, 2002, approximately 10:00 a.m. (New York City time)
_____________________________________
______________________________________________________________ Title of
Securities:

Aggregate Principal Amount:

Maturity Date:

Interest Rate:

Coupon Payment Dates:

Proceeds to be Paid to the Operating Partnership:

Delivery Date and Time: 6.10% Senior Notes due 2010

$10,000,000

September 30, 2010

6.10% per annum from September 28, 2002

October 15 and April 15 (commencing October 15, 2002)

$10,000,000 (non-cash consideration)

Friday, September 27, 2002, approximately 10:00 a.m. (New York City time)

 

 

 

 

 

SCHEDULE 2
Description of Preferred Stock and
Pricing Information

Title of Securities:

Number of Shares:

Price Per Share:

Aggregate Purchase Price:

Dividend Rate:

Dividend Payment Dates:

Redemption:

Liquidation Preference: 

Delivery Date and Time: 7.875% Series C Cumulative Redeemable Preferred Shares

1,600,000

$25.00

$40,000,000 (non-cash consideration)

7.875% per annum from September 28, 2002

Payable quarterly in arrears on or before March 15, June 15, September 15 and
December 15 of each year (commencing on December 15, 2002)

Optional redemption on or after September 30, 2006

$25.00 per share of Preferred Stock

Friday, September 27, 2002, approximately 10:00 a.m. (New York City time)

 

 

 

 

 

 

 

 

 

SCHEDULE 3
Subsidiaries* 

Gables Realty Limited Partnership, a Delaware limited partnership
Gables-Tennessee Properties, LLC, a Tennessee limited liability company
Gables GP, Inc., a Texas corporation
Gables East Construction, Inc., a Georgia corporation
GBP Services, Inc., a Florida corporation
Gables Central Construction, Inc., a Texas corporation
Gables Residential Services, Inc., a Texas corporation
Pin Oak Green, a Texas general partnership
Pin Oak Park Apartments, a Texas general partnership
Candlewood Gen Par, Inc., a Georgia corporation
Candlewood-Indian Creek Limited Partnership, a Georgia limited partnership
GRT Villas Limited Partnership, a Texas limited partnership
Boca Place Associates, Ltd., a Florida limited partnership
Boynton Beach I Limited Partnership, a Florida limited partnership
CM Bay Associates, a Florida general partnership
Hampton Lakes Associates, a Florida general partnership
Hampton Lakes II Associates, a Florida general partnership
Hampton Place Joint Venture, a Florida general partnership
Kings Colony Associates, Ltd., a Florida limited partnership
Mizner I Limited Partnership, a Florida limited partnership
San Michele Joint Venture, a Florida general partnership
San Remo Limited Partnership, a Florida limited partnership
TCRDAD Vinings at Boynton Beach II Limited Partnership, a Florida limited
partnership
TCRDAD Wellington Limited Partnership, a Florida limited partnership
Town Colony Associates, a Florida general partnership
Town Colony II Associates, a Florida general partnership
Gables Lions Head Limited Partnership, a Texas limited partnership
Gables Rivercrest II Limited Partnership, a Texas limited partnership
Vinings Realty Partners L.L.C., a Florida limited liability company
Metropolitan Apartments Venture, a Texas joint venture
SQ 157-AB LP, a District of Columbia limited partnership
Gables Ambassador House, LLC, a District of Columbia limited liability company
HG Smithy Company, a Delaware corporation
Palma Vista, LLC, a Delaware limited liability company
San Michelle II, LLC, a Delaware limited liability company
State Thomas GP, LLC, a Delaware limited liability company
State Thomas LP, a Texas limited partnership
IPX Northside, LLC, a Georgia limited liability company
Gables Realty GP, LLC, a Texas limited liability company

* Excludes the following entities:

* Gables Residential Apartment Portfolio JV LLC (in which the Operating
Partnership has a 20% Class B Membership Interest)
* Gables Residential Apartment Portfolio JV Two LLC (in which the Operating
Partnership has a 20% Class B Membership Interest)
* Arbors of Harbor Town Joint Venture (Gables-Tennessee Properties, LLC has a
50% general partner interest in Harbor Town Partners, which has a 50% general
partner interest in Arbors of Harbor Town Joint Venture)
* CMS Tennessee Multifamily Joint Venture, LP (in which Gables GP, Inc. has a
.92% general partner interest and the Operating Partnership has a 7.34% limited
partner interest)

 

 

 

EXHIBIT A
INDENTURE

EXHIBIT B
SUPPLEMENTAL INDENTURE NO. 6

EXHIBIT C
SUPPLEMENTAL INDENTURE NO. 7

EXHIBIT D
ARTICLES SUPPLEMENTARY

EXHIBIT E
WIRE INSTRUCTIONS

EXHIBIT F
OPERATING PARTNERSHIP
REGISTRATION RIGHTS AGREEMENT

EXHIBIT G
REIT REGISTRATION RIGHTS AGREEMENT

 

EXHIBIT H
OPINION OF COMPANY COUNSEL

 

1. Neither the REIT nor the Operating Partnership (after giving effect to the
sale of the Securities) is required to be registered under the Investment
Company Act of 1940, as amended.

2. The REIT has been duly organized and is validly existing as a real estate
investment trust in good standing under the laws of the State of Maryland. Each
of the REIT and the Operating Partnership has full power and authority to
conduct its business as described in the Commission Filings.

3. The Operating Partnership has been duly formed and is validly existing as a
limited partnership in good standing under the laws of the State of Delaware.

4. Each Significant Subsidiary has been duly organized and is validly existing
as a limited partnership or corporation, as the case may be, in good standing
under the laws of its state of organization or formation as set forth on Exhibit
1 hereto.

5. Except as set forth in Exhibit 2 hereto, the REIT, directly or through
Significant Subsidiaries, is the sole record owner of all of the capital stock
or partnership interests, as the case may be, of each Significant Subsidiary.

6. Each of the Significant Subsidiaries has corporate or partnership power, as
the case may be, and authority to conduct its business as described in the
Commission Filings.

7. Each of the Operating Partnership and the Significant Subsidiaries,
respectively, is duly qualified or registered as a foreign corporation or
foreign partnership, as the case may be, to transact business and is in good
standing in each jurisdiction listed in Exhibit 1 hereto.

8. All of the outstanding shares of the REIT identified in the Commission
Filings have been duly authorized and are validly issued, fully paid and
nonassessable and conform to the description thereof in the Commission Filings.

9.      (i) The Notes have been duly authorized, executed and delivered by the
Operating Partnership and, when duly authenticated in accordance with the terms
of the Indenture and delivered to and paid for by TIAA in accordance with the
terms of the Securities Purchase Agreement, will constitute valid and binding
obligations of the Operating Partnership entitled to the benefits provided by
the Indenture and enforceable against the Operating Partnership in accordance
with their terms;
         (ii) The Preferred Stock has been duly authorized by the REIT for
issuance and sale, and upon payment therefor in accordance with the terms of the
Securities Purchase Agreement, will be validly issued, fully-paid and
nonassessable;

         (iii) the Indenture has been duly authorized, executed and delivered by
the Operating Partnership and constitutes a valid and binding agreement of the
Operating Partnership enforceable against the Operating Partnership in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles;

         (iv) the Indenture has been duly qualified under the Trust Indenture
Act;

         (v) the Operating Partnership Registration Rights Agreement has been
duly authorized, executed and delivered by the Operating Partnership and
constitutes a valid and binding agreement of the Operating Partnership
enforceable against the Operating Partnership in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles, and except as
applicable federal and state securities laws and public policy limit the
application of provisions relating to indemnification and contribution with
respect to securities law matters; and

         (vi) the REIT Registration Rights Agreement has been duly authorized,
executed and delivered by the REIT and constitutes a valid and binding agreement
of the REIT enforceable against the REIT in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles, and except as
applicable federal and state securities laws and public policy limit the
application of provisions relating to indemnification and contribution with
respect to securities law matters.

10. The REIT and the Operating Partnership have full power and authority to
enter into the Securities Purchase Agreement, and the Securities Purchase
Agreement has been duly authorized, executed and delivered by each of the REIT
and the Operating Partnership. To our knowledge, the issuance and sale of the
Securities to TIAA on the terms contemplated in the Securities Purchase
Agreement will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the REIT, the Operating Partnership, or
any of the Significant Subsidiaries, pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default or result in the acceleration of any obligation under, (i)
the Declaration of Trust or Bylaws of the REIT, (ii) the articles or certificate
of incorporation, partnership agreement or by-laws of any of the Significant
Subsidiaries, (iii) the limited partnership agreement of the Operating
Partnership, (iv) any ag reement or instrument filed as an exhibit to the latest
Annual Report on Form 10-K pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, to which the REIT, the Operating Partnership
or any of the Significant Subsidiaries is a party or by or pursuant to which any
of them or their respective properties is bound, affected or financed, or (v)
any statute, rule or regulation or judgment, ruling, decree or order, known to
us, of any court or other governmental agency or body applicable to the business
or properties of the REIT, the Operating Partnership or any of the Significant
Subsidiaries (except that (i) we express no opinion as to the securities or blue
sky laws of any jurisdiction other than the United States and (ii) insofar as
compliance with the federal securities laws of the United States is concerned,
our opinions are limited to numbered paragraph (11) and (iii) our opinion in
this paragraph (10) should not be interpreted to address the disclosure
requirements of the securi ties laws, for which we make reference to our
statements following numbered paragraph (11) below), where such violation or
default, individually or in the aggregate, might have a material adverse effect
on the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the REIT, the Operating Partnership and
the Significant Subsidiaries taken as a whole. 

11. To our knowledge, no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required in connection with
the issuance or sale of the Securities by the Company.

 

 

 

 

Exhibit 1 to Opinion of Company Counsel

Significant Subsidiaries of the Company

Name
Jurisdiction of Organization or Formation
Foreign Qualifications
Gables Realty Limited Partnership
Delaware
GA, TX, FL
Gables GP, Inc.
Texas
GA, FL
Gables Residential Services, Inc.
Texas
AZ, CA, CO, OH, MI, NC, SC, FL, LA, TN, KY, MD, PA, VA, GA, DC

Exhibit 2 to Opinion of Company Counsel
Capitalization of Significant Subsidiaries

GABLES GP, INC.

Common Stock:
Company
100%

GABLES REALTY LIMITED PARTNERSHIP (as of September 26, 2002) 

Limited Partnership Units:
5,948,058 Units owned by persons other than the Company or Gables GP, Inc.

(19.43%)
Limited Partnership Units:
24,357,206 Units owned by the Company

(79.57%)
General Partnership Units:
306,114 Units owned by Gables GP, Inc. 

(1%)
Series Z Preferred Units:
178,200 Series Z Preferred Units owned by the Company 

1,800 Series Z Preferred Units owned by Gables GP, Inc. 

(99%)

(1%)
Series B Preferred Units
2,000,000 Series B Preferred Units owned by persons other than the Company or
Gables GP, Inc.
(100%)

GABLES RESIDENTIAL SERVICES, INC.

Class A Common Stock (voting)
Operating Partnership

200 Shares

Class B Common Stock (nonvoting):
Operating Partnership
19,600 Shares

EXHIBIT I
FIFTH AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF THE OPERATING PARTNERSHIP

SCHEDULE 4(K)

On August 9, 2002, the REIT consummated the redemption of 4,600,000 shares of
8.30% Series A Cumulative Redeemable Preferred Stock, for an aggregate amount of
$116,431,750.00.

On August 13, 2002, (i) the REIT declared its regular quarterly dividend on its
common shares of beneficial interest, par value $.01 per share, in the amount of
$.6025 per share, (ii) the Operating Partnership declared its regular quarterly
dividend on its common units of general or limited partnership interest, in the
amount of $.6025 per unit, and (iii) the Operating Partnership declared its
regular quarterly dividend on its Series B Preferred Units of partnership
interest, in the amount of $.5390625 per unit.

On August 19, 2002, the REIT consummated repurchases of the REIT's common shares
of beneficial interest, par value $.01 per share, in the aggregate amount of
$5,535,540.00, pursuant to a board approved share repurchase program.

On August 26, 2002, the REIT issued 10,000 common shares of beneficial interest,
par value $.01 per share, in connection with a redemption of 10,000 common units
of benenficial interest of the Operating Partnership.