-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KPP0X/kCQqtxA+37tCMzVsafAIvt9NJ6AqVVR/7RcLKb1I5OJbY8rwEoGG4cBkgg jZCQOa153twV69D/VLBbxA== 0000950144-97-013346.txt : 19971216 0000950144-97-013346.hdr.sgml : 19971216 ACCESSION NUMBER: 0000950144-97-013346 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971212 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971215 SROS: AMEX SROS: CSX FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOGER EQUITY INC CENTRAL INDEX KEY: 0000835664 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 592898045 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-20975 FILM NUMBER: 97738090 BUSINESS ADDRESS: STREET 1: 3986 BLVD CTR DR STE 101 CITY: JACKSONVILLE STATE: FL ZIP: 32207 BUSINESS PHONE: 9043983403 MAIL ADDRESS: STREET 1: 3986 BLVD CTR DR STREET 2: SUITE 101 CITY: JACKSONVILLE STATE: FL ZIP: 32207 8-K 1 KOGER EQUITY 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) December 12, 1997 ----------------- KOGER EQUITY, INC. ----------------------------------------------------------- (Exact name of registrant as specified in its charter) Florida 1-9997 59-2898045 ---------------------------------------------------------- (State of incorporation (Commission (IRS Employer or organization) File Number) Identification No.) 3986 Boulevard Center Drive Jacksonville, Florida 32207 ---------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number: (904) 398-3403 ------------------------------------------------------------ N/A ----------------------------------------------- (Former name or former address, if changed since last report) 1 2 Item 5. Other Events. Reference is made to an Underwriting Agreement dated December 12, 1997, between Koger Equity, Inc. (the "Company") and J.P. Morgan Securities Inc., Bear, Stearns & Co. Inc., and BT Alex. Brown Incorporated, as Representatives of several underwriters, relating to the sale by the Company in an underwritten public offering of 3,000,000 shares of the Company's Common Stock, par value $.01 per share, plus 450,000 shares subject to a thirty-day underwriters' over-allotment option. This agreement is Exhibit 1 to this Report and is incorporated herein by reference. Reference is also made to a Purchase Agreement between the Company and AREIF II Realty Trust, Inc. ("AREIF") relating to the sale by the Company to AREIF of 500,000 shares of the Company's Common Stock, par value $.01 per share. This agreement is Exhibit 10 to this Report and is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) Exhibits Exhibit Number Description of Exhibit 1 Underwriting Agreement dated December 12, 1997, between Koger Equity, Inc. and J.P. Morgan Securities Inc., Bear, Stearns & Co. Inc. and BT Alex. Brown Incorporated, as Representatives of the several underwriters. 10 Purchase Agreement, dated December 12, 1997, between Koger Equity, Inc. and AREIF II Realty Trust, Inc. 2 3 SIGNATURE 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. KOGER EQUITY, INC. Date: December 12, 1997 By: /s/ W. Lawrence Jenkins ---------------------------------- W. Lawrence Jenkins Title: Vice President and Corporate Secretary 3 4 EXHIBIT INDEX The following designated exhibits are filed herewith: Exhibits 1 Underwriting Agreement dated December 12, 1997, between Koger Equity, Inc. and J.P. Morgan Securities Inc., Bear, Stearns & Co. Inc. and BT Alex. Brown Incorporated, as Representatives of the several underwriters. 10 Purchase Agreement, dated December 12, 1997, between Koger Equity, Inc. and AREIF II Realty Trust, Inc. 4 EX-1 2 UNDERWRITING AGREEMENT 1 KOGER EQUITY, INC. 3,500,000 Shares of Common Stock (par value $0.01 per share) UNDERWRITING AGREEMENT December 12, 1997 J.P. MORGAN SECURITIES INC. BEAR, STEARNS & CO. INC. BT ALEX. BROWN INCORPORATED As Representatives of several underwriters listed in Schedule I hereto c/o J.P. Morgan Securities Inc. 60 Wall Street New York, New York 10260 Ladies and Gentlemen: Koger Equity, Inc., a Florida corporation (the "Company"), proposes to issue and sell to the several underwriters listed in Schedule I hereto (collectively, the "Underwriters"), for whom you are acting as representatives (the "Representatives"), an aggregate of 3,500,000 shares of Common Stock, par value $0.01 per share, of the Company (the "Underwritten Shares") and, for the sole purpose of covering over-allotments in connection with the sale of the Underwritten Shares, at the option of the Underwriters, up to an additional 450,000 shares of Common Stock of the Company (the "Option Shares"). The Underwritten Shares and the Option Shares are herein referred to as the "Shares". The shares of Common Stock of the Company to be outstanding after giving effect to the sale of the Shares are herein referred to as the "Stock". 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 "Securities Act"), two registration statements (the file numbers of which are 33-55179 and 333-37919) on Form S-3, including preliminary prospectuses, relating to the registration of Shares (the "Shelf Securities") to be issued from time to time by the Company. The Company also has filed with, or proposes to file with, the Commission pursuant to Rule 424 under the Securities Act a prospectus supplement specifically relating to the Shares. The registration statements as amended to the date of this Agreement are here- 2 -2- inafter referred to as the "Registration Statement" and the related prospectus covering the Shelf Securities in the form first used to confirm sales of the Shares is hereinafter referred to as the "Basic Prospectus". The Basic Prospectus as supplemented by the prospectus supplement specifically relating to the Shares in the form first used to confirm sales of the Shares is hereinafter referred to as the "Prospectus". If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. Any reference in this Agreement to the Registration Statement, the Basic Prospectus, any preliminary form of Prospectus (a "preliminary prospectus") previously filed with the Commission pursuant to Rule 424 or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act which were filed under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Exchange Act") on or before the date of this Agreement or the date of the Basic Prospectus, any preliminary prospectus or the Prospectus, as the case may be; and any reference to "amend", "amendment" or "supplement" with respect to the Registration Statement, the Basic Prospectus, any preliminary prospectus or the Prospectus shall be deemed to refer to and include any documents filed under the Exchange Act after the date of this Agreement, or the date of the Basic Prospectus, any preliminary prospectus or the Prospectus, as the case may be, which are deemed to be incorporated by reference therein. The Company hereby agrees with the Underwriters as follows: 1. The Company agrees to issue and sell the Underwritten Shares to the several Underwriters as hereinafter provided, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees to purchase, severally and not jointly, from the Company the respective number of Underwritten Shares set forth opposite such Underwriter's name in Schedule I hereto at a purchase price per share (the "Purchase Price") of $19.14. In addition, the Company agrees to issue and sell the Option Shares to the several Underwriters as hereinafter provided, and the Underwriters on the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, shall have the option to purchase, severally and not jointly, from the Company up to an aggregate of 450,000 Option Shares at the Purchase Price, for the sole purpose of covering over-allotments (if any) in the sale of Underwritten Shares by the several Underwriters. If any Option Shares are to be purchased, the number of Option Shares to be purchased by each Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number of Option Shares being purchased as the number of Under- 3 -3- written Shares set forth opposite the name of such Underwriter in Schedule I hereto (or such number increased as set forth in Section 9 hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares as the Representatives in their sole discretion shall make. The Underwriters may exercise the option to purchase the Option Shares at any time (but not more than once) on or before the thirtieth day following the date of this Agreement, by written notice from the Representatives to the Company. Such notice shall set forth the aggregate number of Option Shares as to which the option is being exercised and the date and time when the Option Shares are to be delivered and paid for which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date nor later than the tenth full Business Day (as hereinafter defined) after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 9 hereof). Any such notice shall be given at least two Business Days prior to the date and time of delivery specified therein. 2. The Company understands that the Underwriters intend (i) to make a public offering of the Shares and (ii) initially to offer the Shares upon the terms set forth in the Prospectus. 3. Payment for the Shares shall be made to the Company by wire transfer in immediately available funds to the account specified by the Company to the Representatives in the case of the Underwritten Shares, on December 17, 1997, or at such other time on the same or such other date, not later than the fifth Business Day thereafter, as the Representatives and the Company may agree upon in writing or, in the case of the Option Shares, on the date and time specified by the Representatives in the written notice of the Underwriters' election to purchase such Option Shares. The time and date of such payment for the Underwritten Shares is referred to herein as the "Closing Date" and the time and date for such payment for the Option Shares, if other than the Closing Date, are herein referred to as the "Additional Closing Date". As used herein, the term "Business Day" means any day other than a day on which banks are permitted or required to be closed in New York City. Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Representatives for the respective accounts of the several Underwriters of the Shares to be purchased on such date registered in such names and in such denominations as the Representatives shall request in writing not later than two full Business Days prior to the Closing Date or the Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the transfer to the Underwriters of the Shares duly paid by the Company. The certificates for 4 -4- the Shares will be made available for inspection and packaging by the Representatives at the office of J.P. Morgan Securities Inc. set forth above not later than 1:00 P.M., New York City time, on the Business Day prior to the Closing Date or the Additional Closing Date, as the case may be. 4. The Company represents and warrants to each Underwriter that: (a) no order preventing or suspending the use of any preliminary prospectus has been issued by the Commission, and each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein; (b) (i) the Registration Statement has been declared effective by the Commission under the Securities Act; (ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or, to the knowledge of the Company, threatened by the Commission; (iii) the Registration Statement and Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) comply, or will comply, as the case may be, in all material respects with the Securities Act and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the date of the Prospectus and any amendment or supplement thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (iv) the Prospectus, as amended or supplemented, if applicable, at the Closing Date or Additional Closing Date, as the case may be, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing representations and warranties shall not apply to statements or omissions in the Registration Statement or the Prospectus made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein; 5 -5- (c) the documents incorporated by reference in the Prospectus, when they were filed with the Commission, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (d) Deloitte & Touche LLP, the accounting firm that certified certain financial statements of the Company and its subsidiaries, are, to the knowledge of the Company, independent public accountants as required by the Securities Act; (e) the financial statements, and the related notes thereto, included or incorporated by reference in the Registration Statement and the Prospectus present fairly in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and changes in their consolidated cash flows for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis, and the supporting schedules included or incorporated by reference in the Registration Statement present fairly in all material respects the information required to be stated therein; (f) since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any change in the capital stock (other than the grant of stock options pursuant to the Company's Stock Option Plans and the Company's Common Stock issued pursuant to the Company's (i) Stock Option Plans, (ii) Stock Investment Plan, (iii) Dividend Reinvestment Plan and (iv) 401(k) Plan) or long-term debt of the Company or any of its subsidiaries, or any material adverse change, or any development that is reasonably likely to result in a material adverse change, in or affecting the business, assets, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, in each case, otherwise than as set forth or contemplated in the Prospectus; and, except as set forth or contemplated in the Prospectus, neither the Company nor any of its subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business) material to the Company and its subsidiaries taken as a whole; 6 -6- (g) the Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (h) the Company has been incorporated and is validly existing as a corporation and its status is active under the laws of the State of Florida, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; (i) each of the Company's subsidiaries has been incorporated and is validly existing as a corporation under the laws of its jurisdiction of incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole; and all the outstanding shares of capital stock of each subsidiary of the Company have been duly authorized and validly issued, are fully-paid and non-assessable, and (except, in the case of foreign subsidiaries, for directors' qualifying shares) are owned by the Company, directly or indirectly, free and clear of all liens, encumbrances, security interests and claims; (j) this Agreement has been duly authorized, executed and delivered by the Company; (k) the Company has an authorized capitalization as set forth in the Prospectus and such authorized capital stock conforms as to legal matters in all material respects to the description thereof set forth in the Prospectus, and all of the outstanding shares of capital stock of the Company have been duly authorized and val- 7 -7- idly issued, are fully-paid and non-assessable and, except as set forth in the Registration Statement or Prospectus, are not subject to any preemptive or similar rights; and, except as described in or expressly contemplated by the Registration Statement or Prospectus, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; (l) the Shares to be issued and sold by the Company hereunder have been duly authorized, and, when issued and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be duly issued and will be fully paid and non-assessable and will conform in all material respects to the descriptions thereof in the Prospectus; and, except with respect to the rights of AREIF II Realty Trust, Inc. ("Apollo"), pursuant to the Stock Purchase Agreement dated October 10, 1996 between Apollo and the Company which have been exercised with respect to the issuance of Shares, the issuance of the Shares is not subject to any preemptive or similar rights; (m) (i) neither the Company nor any of its subsidiaries is, or with the giving of notice or lapse of time or both would be, in violation of or in default under, its Articles of Incorporation or By-Laws or any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them or any of their respective properties is bound, except for violations and defaults which individually and in the aggregate are not material to the Company and its subsidiaries taken as a whole; (ii) the issue and sale of the Shares and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated herein (A) will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, and (B) will not result in any violation of the provisions of the Articles of Incorporation or the By-Laws of the Company or any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its subsidiaries or any of their respective properties; and (iii) no consent, approval, authorization, order, license, registration or qualification 8 -8- of or with any such court or governmental agency or body is required for the issue and sale of the Shares or the consummation by the Company of the transactions contemplated by this Agreement, except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act and under the rules of the American Stock Exchange and as may be required under state securities, real estate syndication or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters; (n) other than as set forth or contemplated in the Prospectus and as set forth on Schedule II hereto, there are no legal or governmental investigations, actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its subsidiaries or any of their respective properties or to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or any of its subsidiaries is or may be the subject which, if determined adversely to the Company or any of its subsidiaries, could individually or in the aggregate have, or reasonably be expected to have, a material adverse effect on the business, assets, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, and to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; and there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required; (o) immediately after any sale of Shares by the Company hereunder, the aggregate amount of Shares which have been issued and sold by the Company hereunder and of any securities of the Company (other than the Shares) that shall have been issued and sold pursuant to the Registration Statement will not exceed the amount of securities registered under the Registration Statement; (p) (i) the Company and its subsidiaries have good and marketable title in fee simple to all items of real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described or referred to in the Prospectus or such as do not materially affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Company and its subsidiaries; (ii) any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, existing and enforceable leases with such exceptions as are not material and do not interfere with the use made or proposed to be made of such property and buildings by the Company or its subsidiaries; (iii) each of the Company's properties is in compliance with all applicable codes and zoning 9 -9- laws and regulations, except for such failures to comply that, individually or in the aggregate, could not, individually or in the aggregate, have a material adverse effect on the general affairs, business, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole; and (iv) the Company has no knowledge of any pending or threatened condemnation, zoning change or other proceeding or action that will in any manner affect the size of, use of, improvements on, construction on or access to the Company's properties, except such proceedings or actions that, individually or in the aggregate, would not have a material adverse effect on the general affairs, business, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole; (q) no relationship, direct or indirect, exists between or among the Company or any or its subsidiaries on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries on the other hand, which is required by the Securities Act to be described in the Registration Statement and the Prospectus which is not so described; (r) except as described in the Registration Statement and Prospectus and pursuant to a Registration Rights Agreement dated August 9, 1993 between the Company and T.C.W. Special Credits, no person has the right to require the Company to register any securities for offering and sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issue and sale of the Shares; (s) the Company is not and, after giving effect to the offering and sale of the Shares, will not be an "investment company" or, to the knowledge of the Company, an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); (t) the Company and its subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and have paid all taxes shown thereon and all assessments received by them or any of them to the extent that such taxes have become due and are not being contested in good faith except for the failure to file such tax returns or pay such taxes which would not, individually or in the aggregate, be reasonably likely to have a material adverse effect on the Company and its subsidiaries taken as whole; and, except as disclosed in the Registration Statement and the Prospectus, there is no tax deficiency which has been or might reasonably be expected to be asserted or threatened against the Company or any subsidiary; 10 -10- (u) the Company has met the requirements for qualification as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), and the Company's present and contemplated operations, assets and income continue to meet such requirements; (v) the Company has not taken nor will it take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Common Stock; (w) except as would not, individually or in aggregate, reasonably be likely to have a material adverse effect on the Company and its subsidiaries taken as a whole, (i) each of the Company and its subsidiaries owns, possesses or has obtained all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self-regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, and neither the Company nor any such subsidiary has received any actual notice of any proceeding relating to revocation or modification of any such license, permit, certificate, consent, order, approval or other authorization, except as described in the Registration Statement and the Prospectus, and (ii) each of the Company and its subsidiaries is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date hereof; (x) there are no existing or, to the best knowledge of the Company, threatened labor disputes with the employees of the Company or any of its subsidiaries which are likely to have a material adverse effect on the Company and its subsidiaries taken as a whole; (y) the Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) 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 in each case, where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggre- 11 -11- gate, have a material adverse effect on the Company and its subsidiaries, taken as a whole; (z) other than as disclosed in the Prospectus, the Company has no knowledge of (a) the unlawful presence of any hazardous substances, hazardous materials, toxic substances or waste materials (collectively, "Hazardous Materials") on any of the properties of the Company or of (b) any unlawful spills, release, discharges or disposal of Hazardous Materials that have occurred or are presently occurring from the properties of the Company as a result of any construction on or operation and use of the properties of the Company, which presence or occurrence would individually or in the aggregate have a material adverse effect on the Company and its subsidiaries, taken as a whole; (aa) except as disclosed in the Prospectus, each entity identified in the Prospectus as a tenant of any of the Company's properties, or a subtenant thereof, is in actual possession of such property under a lease to such tenant or, if applicable, a sublease to such subtenant; except as disclosed in the Prospectus, each such lease is in full force and effect and neither the Company nor any of its subsidiaries has notice of any defense to the obligations of the tenant thereunder or any claim asserted or threatened by any person or entity, which claim, if sustained, would have a material adverse effect on the Company and its subsidiaries, taken as a whole; and except as disclosed in the Prospectus, the lessor under each lease has complied with its obligations under such lease in all material respects and neither the Company nor any of its subsidiaries has notice of any default by the tenant under such lease which, individually or in the aggregate with other such defaults, would have a material adverse effect on the Company and its subsidiaries, taken as a whole; (bb) the mortgages and deeds of trust encumbering the properties of the Company are not (i) cross-defaulted to any indebtedness other than indebtedness of the Company or any of its subsidiaries or (ii) cross-collateralized to any property not owned by the Company or any of its subsidiaries; (cc) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and its affiliates has been maintained in all material respects in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended ("Code"). No prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code has occurred with respect to any such plan excluding transactions effected pur- 12 -12- suant to a statutory or administrative exemption. For each such plan which is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA no "accumulated funding deficiency" as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeded the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions; (dd) the statements set forth in the Prospectus under the caption "Description of Common Stock", insofar as they purport to constitute a summary of the terms of the Shares, and under the captions "Federal Income Tax Considerations" and "Provisions of Florida Law", to the extent such statements purport to describe factual matters of law or regulation or constitute summaries of documents described therein, are accurate and complete in all material respects; (ee) the Company has and will maintain property and casualty insurance in favor of the Company and its subsidiaries (as the case may be) with respect to each of the Company's properties, in an amount and on such terms as is reasonable and customary for businesses of the type proposed to be conducted by the Company and its subsidiaries; the Company has not received from any insurance company written notice of any material defects or deficiencies affecting the insurability of any of its properties; 5. The Company covenants and agrees with each of the several Underwriters as follows: (a) to file the Prospectus in a form approved by you pursuant to Rule 424 under the Securities Act not later than the Commission's close of business on the second Business Day following the date of determination of the offering price of the Shares or, if applicable, such earlier time as may be required by Rule 424(b); (b) to furnish to each Representative and counsel for the Underwriters, at the expense of the Company, a signed copy of the Registration Statement (as originally filed) and each amendment thereto, in each case including exhibits and documents incorporated by reference therein and, during the period mentioned in paragraph (e) below, to furnish each of the Underwriters as many copies of the Prospectus (including all amendments and supplements thereto) and documents incorporated by reference therein as you may reasonably request; (c) from the date hereof and prior to the Closing Date, to furnish to you a copy of any proposed amendment or supplement to the Registration Statement or the 13 -13- Prospectus, for your review, and not to file any such proposed amendment or supplement to which you reasonably object, provided, that any such objection shall not be unreasonably withheld or delayed; (d) to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of the Shares and during such same period, to advise you promptly, and to confirm such advice in writing, (i) when any amendment to the Registration Statement shall have become effective, (ii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for any additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceeding for that purpose, and (iv) of the receipt by the Company of any notification with respect to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and to use its best efforts to prevent the issuance of any such stop order or notification and, if issued, to obtain as soon as possible the withdrawal thereof; (e) if, during such period after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish, at the expense of the Company, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Shares may have been sold by you on behalf of the Underwriters and to any other dealers upon request, such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; (f) to use its best efforts to qualify the Shares for offer and sale under the securities or Blue Sky and real estate syndication laws of such jurisdictions as the Representatives shall reasonably request and to continue such qualification in effect so long as reasonably required for distribution of the Shares; provided that the Company shall not be required to file a general consent to service of process in any jurisdiction or to file for a qualification to do business in any jurisdiction; 14 -14- (g) to make generally available to its security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the effective date of the Registration Statement, which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder; (h) so long as the Shares are outstanding, to furnish to the Representatives (but after five years from the date of this Agreement, only upon request) copies of all reports or other communications (financial or other) furnished to holders of the Shares, and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange; (i) for a period of 90 days after the date of the public offering of the Shares not to (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to sell, grant any options, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock, whether any such transaction described in clause (i) or (ii) is to be settled by delivery of Stock or such other securities, in cash or otherwise without the prior written consent of the Representatives, other than the Shares to be sold by the Company hereunder and any shares of Stock of the Company issued upon the exercise of options granted under the Company's existing Stock Option Plans or Shares issued pursuant to the Stock Investment Plan, Dividend Reinvestment Plan and 401(k) Plan; (j) to use the net proceeds received by the Company from the sale of the Shares pursuant to this Agreement in the manner specified in the Prospectus under the caption "Use of Proceeds"; (k) whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limiting the generality of the foregoing, all costs and expenses of the Company (i) incident to the preparation, issuance, execution and delivery of the Shares, (ii) incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Prospectus and any preliminary prospectus (including in each case all exhibits, amendments and supplements thereto), (iii) incurred in connection with the registration or qualification of the Shares under the laws of such jurisdictions as the Representatives may designate (including fees of counsel for the 15 -15- Underwriters and its disbursements), (iv) in connection with the listing of the Shares on the American Stock Exchange, (v) in connection with the printing (including word processing and duplication costs) and delivery of this Agreement, the Preliminary and Supplemental Blue Sky Memoranda and the furnishing to the Underwriters and dealers of copies of the Registration Statement and the Prospectus, including mailing and shipping, as herein provided, (vi) any expenses incurred by the Company, but not those expenses incurred by the Representatives, in connection with a "road show" presentation to potential investors, (vii) the cost of preparing stock certificates and (viii) the cost and charges of any transfer agent and any registrar; and (l) the Company will meet the requirements to qualify, effective for the fiscal year ending December 31, 1997, as a "real estate investment trust" under the Code. 6. The several obligations of the Underwriters hereunder to purchase the Shares on the Closing Date or the Additional Closing Date, as the case may be, are subject to the performance by the Company of its obligations hereunder and to the following additional conditions: (a) the Prospectus shall have been filed with the Commission pursuant to Rule 424 within the applicable time period prescribed for such filing by the rules and regulations under the Securities Act; no stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your satisfaction; (b) the representations and warranties of the Company contained herein are true and correct on and as of the Closing Date or the Additional Closing Date, as the case may be, as if made on and as of the Closing Date or the Additional Closing Date, as the case may be, and the Company shall have complied with all agreements and all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be; (c) since the respective dates as of which information is given in the Prospectus there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development that is reasonably likely to result in a material adverse change, in or affecting the business, assets, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, in each case, otherwise than as set forth or contemplated in the Prospectus, the effect of 16 -16- which in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated in the Prospectus; and neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree which would, individually or in the aggregate, be reasonably likely to have a material adverse effect on the Company and its subsidiaries taken as a whole, and otherwise than as set forth or contemplated in the Prospectus; (d) the Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate of two executive officers of the Company, with specific knowledge about the Company's financial matters, satisfactory to the Representatives to the effect set forth in subsections (a) through (c) with respect to the respective representations, warranties, agreements and conditions of the Company) of this Section and to the further effect that there has not occurred any material adverse change, or any development that is reasonably likely to result in a material adverse change, in or affecting the business, management, assets, financial position, stockholders' equity or results of operations of the Company and its subsidiaries taken as a whole in each case, from that set forth or contemplated in the Registration Statement; (e) Boling & McCart, counsel for the Company, shall have furnished to the Representatives its written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, in form and substance satisfactory to the Representatives, to the effect that: (i) the Company has been incorporated and is validly existing as a corporation and its status is active under the laws of its jurisdiction of incorporation, with corporate power and authority to own its properties and conduct its business as described in the Prospectus, as amended or supplemented; (ii) the Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified or in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole; 17 -17- (iii) each of the Company's subsidiaries has been duly incorporated and is validly existing as a corporation under the laws of its jurisdiction of incorporation with corporate power and authority to own its properties and conduct its business as described in the Prospectus and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, other than where the failure to be so qualified and in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole; and all of the outstanding shares of capital stock of each subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable, and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims; (iv) to the best of such counsel's knowledge, other than as set forth or contemplated in the Prospectus, and as disclosed in Schedule I to such counsel's opinion, there are no legal or governmental investigations, actions, suits or proceedings pending or, to the best of such counsel's knowledge, threatened against or affecting the Company or any of its subsidiaries or any of their respective properties or to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or its subsidiaries is or may be the subject which, if determined adversely to the Company or any of its subsidiaries, could individually or in the aggregate have, or reasonably be expected to have, a material adverse effect on the general affairs, business, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries taken as a whole; to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; and such counsel does not know of any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required; (v) this Agreement has been duly authorized, executed and delivered by the Company; (vi) the authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus; 18 -18- (vii) the shares of capital stock of the Company outstanding prior to the issuance of the Shares to be sold by the Company have been duly authorized and are validly issued, fully paid and non-assessable; (viii) the Shares to be issued and sold by the Company hereunder have been duly authorized, and when delivered to and paid for the Underwriters in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and except as described in the Prospectus, the issuance of the Shares is not subject to any preemptive or similar rights; (ix) the statements in the Prospectus under "Provisions of Florida Law" and "Description of Common Stock", in the Prospectus and in the Registration Statement, insofar as such statements constitute a summary of the terms of the Stock, legal matters, documents or proceedings referred to therein, fairly present in all material respects the information called for with respect to such terms, legal matters, documents or proceedings; (x) such counsel does not know of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement, required to be described in the Prospectus or incorporated by reference therein which are not so filed, described or incorporated, as required; (xi) the Registration Statement has been declared effective under the Securities Act, the Prospectus was filed with the Commission pursuant to Rule 424 within the applicable time period prescribed by Rule 424 and, to such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose is pending or threatened by the Commission; (xii) neither the Company nor any of its subsidiaries is, or with the giving of notice or lapse of time or both would be, in violation of or in default under, its Articles of Incorporation or By-Laws or any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company or any of its subsidiaries is a party or by which it or any of them or any of their respective properties is bound, except for violations and defaults which individually and in the aggregate are not material to the Company and its subsidiaries taken as a whole; the issue and sale of the Shares being delivered on the Closing Date or the Additional Closing Date, as the case may be, and the performance by the Company of its obligations under this Agreement and the consummation of the transactions contemplated herein will not conflict with or result in a breach of any of 19 -19- the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will any such action result in any violation of the provisions of the Articles of Incorporation or the By-Laws of the Company or any applicable law or statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, its subsidiaries or any of their respective properties; (xiii) no consent, approval, authorization, order, license, registration or qualification of or with any court or governmental agency or body is required for the issue and sale of the Shares or the consummation of the other transactions contemplated by this Agreement, except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act and under the rules of the American Stock Exchange and as may be required under applicable state securities, real estate syndication or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters; and (xiv) the Company is not and, after giving effect to the offering and sale of the Shares, will not be an "investment company" or, to the knowledge of such counsel, an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act; and (xv) such counsel (A) is of the opinion that each document incorporated by reference in the Registration Statement and the Prospectus as amended or supplemented (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) complied as to form when filed with the Commission in all material respects with the Exchange Act, and the rules and regulations of the Commission thereunder, (B) believes that (except for the financial statements included therein as to which such counsel need express no belief) each part of the Registration Statement (including the documents incorporated by reference therein) filed with the Commission pursuant to the Securities Act relating to the Securities, when such part became effective, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (C) is of the opinion that the Registration Statement and the Prospectus and any amendments and supplements thereto (except for the financial statements included therein as to 20 -20- which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Securities Act and (D) believes that (except for the financial statements included therein as to which such counsel need express no belief) the Registration Statement and the Prospectus, on the date of this Agreement, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that the Prospectus as amended or supplemented, if applicable, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The opinion of Boling & McCart and described above shall be rendered to the Underwriters at the request of the Company and shall so state therein. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws other than the laws of the United States and the State of Florida, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to Underwriters' counsel) of other counsel reasonably acceptable to the Underwriters' counsel, familiar with the applicable laws; (B) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and certificates or other written statements of officials of jurisdictions having custody of documents respecting the corporate existence or good standing of the Company. The opinion of such counsel for the Company shall state that the opinion of any such other counsel upon which they relied is in form satisfactory to such counsel and, in such counsel's opinion, the Underwriters and they are justified in relying thereon. With respect to the matters to be covered in subparagraph (x) above counsel may state their opinion and belief is based upon their participation in the preparation of the Registration Statement and the Prospectus and any amendment or supplement thereto and review and discussion of the contents thereof but is without independent check or verification except as specified. (f) Ropes & Gray, special counsel to the Company, shall have furnished to the Representatives its written opinion dated the Closing Date or the Additional Closing Date, as the case may be, in form and substance satisfactory to the Representatives, to the effect that: (i) this Agreement has been duly authorized, executed and delivered by the Company; 21 -21- (ii) the Shares to be issued and sold by the Company hereunder have been duly authorized, and when delivered to and paid for the Underwriters in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and except as described in the Prospectus, the issuance of the Shares is not subject to any preemptive or similar rights; (iii) the statements in the Prospectus under "Description of Common Stock" and "Federal Income Tax Considerations", insofar as such statements constitute a summary of the terms of the Stock, legal matters, documents or proceedings referred to therein, fairly present in all material respects the information called for with respect to such terms, legal matters, documents or proceedings; (iv) to such counsel's knowledge, the Company (a) has qualified to be taxed as a REIT pursuant to the Internal Revenue Code for the taxable years ended December 31, 1994 through December 31, 1996 and (b) is in a position under present law to so qualify for the fiscal year ending December 31, 1997; (v) the Registration Statement has been declared effective under the Securities Act, the Prospectus was filed with the Commission pursuant to Rule 424 within the applicable time period prescribed by Rule 424 and, to such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose is pending or threatened by the Commission; (vi) no consent, approval, authorization, order, license, registration or qualification of or with any federal or Massachusetts court or governmental agency or body is required for the issue and sale of the Shares or the consummation of the other transactions contemplated by this Agreement, except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act and under the rules of the American Stock Exchange and as may be required under applicable state securities, real estate syndication or Blue Sky laws in connection with the purchase and distribution of the Shares by the Underwriters; (vii) the Company is not and, after giving effect to the offering and sale of the Shares, will not be an "investment company" or, to the knowledge of such Counsel, an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act; and 22 -22- (viii) such counsel (A) believes that (except for the financial statements therein as to which such counsel need express no belief) the registration statement (file number 333-37919) (including the documents incorporated by reference therein) filed with the Commission pursuant to the Securities Act relating to the Securities, when such registration statement became effective, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) is of the opinion that the Registration Statement and the Prospectus (in each case, excluding the documents incorporated by reference therein) and any amendments and supplements thereto (except for the financial statements included therein as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Securities Act and (C) believes that (except for the financial statements included therein as to which such counsel need express no belief) the registration statement (file number 333-37919) and the Prospectus, on the date of this Agreement, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that the Prospectus as amended or supplemented, if applicable, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The opinion of Ropes & Gray described above shall be rendered to the Underwriters at the request of the Company and shall so state therein. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of the State of Florida, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to Underwriters' counsel) of other counsel reasonably acceptable to the Underwriters' counsel, familiar with the applicable laws; (B) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and certificates or other written statements of officials of jurisdictions having custody of documents respecting the corporate existence or good standing of the Company. The opinion of such counsel for the Company shall state that the opinion of any such other counsel upon which they relied is in form satisfactory to such counsel and, in such counsel's opinion, the Underwriters and they are justified in relying thereon. (g) on the effective date of the Registration Statement and the effective date of the most recently filed post-effective amendment to the Registration State- 23 -23- ment and also on the Closing Date or Additional Closing Date, as the case may be, Deloitte & Touche LLP shall have furnished to you letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, containing statements and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus; (h) the Representatives shall have received on and as of the Closing Date or Additional Closing Date, as the case may be, an opinion of Cahill Gordon & Reindel, counsel to the Underwriters, with respect to the due authorization and valid issuance of the Shares, the Registration Statement, the Prospectus and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters. In rendering such opinion, such counsel may rely as to matters involving the application of the laws of the State of Florida on an opinion of Boling & McCart; (i) separate "lock-up" agreements, each substantially in the form of Exhibit A hereto, between you and (i) the directors and executive officers of the Company and (ii) AREIF II Realty Trust, Inc., each relating to sales and certain other dispositions of the Common Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date or Additional Closing Date, as the case may be; and (j) on or prior to the Closing Date or Additional Closing Date, as the case may be, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives shall reasonably request. The several obligations of the Underwriters to purchase Option Shares hereunder are subject to satisfaction of the conditions set forth in paragraphs (a)-(j) above on and as of the Additional Closing Date (references therein to the Closing Date shall be deemed references to the Additional Closing Date for this purpose), except that the certificate called for by paragraph (e) above, the opinions called for by paragraphs (e), (f) and (h) above shall be dated the Additional Closing Date. 7. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, the reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted) caused by any untrue statement or alleged untrue statement of a material 24 -24- fact contained in the Registration Statement or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except (i) insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein or (ii) if such untrue statement or omission was made in a preliminary prospectus and was corrected in the final Prospectus. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person who controls the Company within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any preliminary prospectus. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnity may be sought pursuant to the preceding paragraphs, such person (the "Indemnified Person") shall promptly notify the person against whom such indemnity may be sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Person may designate in such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. 25 -25- Any such separate firm for the Underwriters and such control persons of Underwriters shall be designated in writing by J.P. Morgan Securities Inc. and any such separate firm for the Company, its directors, its officers who sign the Registration Statement and such 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, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the first and second paragraphs of this Section 7 is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering 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 fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the total underwriting discounts and the commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Shares. The relative fault of the Company on the one hand and the Un- 26 -26- derwriters 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 or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purposes) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section ll(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 7 are several in proportion to the respective number of Shares set forth opposite their names in Schedule I hereto, and not joint. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its officers or directors or any other person controlling the Company and (iii) acceptance of and payment for any of the Shares. 8. Notwithstanding anything herein contained, this Agreement (or the obligations of the several Underwriters with respect to the Option Shares) may be terminated in the absolute discretion of the Representatives, by notice given to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (or, in the case of the Option Shares, prior to the Additional Closing Date) (i) trading generally shall 27 -27- have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange or the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities, or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Representatives, is material and adverse and which, in the reasonable judgment of the Representatives, makes it impracticable to market the Shares being delivered at the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated in the Prospectus. 9. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto. If on the Closing Date or the Additional Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Shares which it or they have agreed to purchase hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of Shares to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Shares set forth opposite their respective names in Schedule I bears to the aggregate number of Underwritten Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Representatives may specify, to purchase the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Shares that any Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant to this Section 9 by an amount in excess of one-tenth of such number of Shares without the written consent of such Underwriter. If on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter or Underwriters shall fail or refuse to purchase Shares which it or they have agreed to purchase hereunder on such date, and the aggregate number of Shares with respect to which such default occurs is more than one-tenth of the aggregate number of Shares to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Shares are not made within 36 hours after such default, this Agreement (or the obligations of the several Underwriters to purchase the Option Shares, as the case may be) shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either you or the Company shall have the right to postpone the Closing Date (or, in the case of the Option Shares, the Additional Closing Date) but in no event for longer than seven days, in order that the required 28 -28- changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. 10. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement or any condition of the Underwriters' obligations cannot be fulfilled, the Company agrees to reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and expenses of its counsel) reasonably incurred by the Underwriter in connection with this Agreement or the offering contemplated hereunder. 11. This Agreement shall inure to the benefit of and be binding upon the Company, the Underwriters, any controlling persons referred to herein and their respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of Shares from any Underwriter shall be deemed to be a successor by reason merely of such purchase. 12. Any action by the Underwriters hereunder may be taken by the Representatives jointly or by J.P. Morgan Securities Inc. on behalf of the Underwriters, and any such action taken by the Representatives jointly or by J.P. Morgan Securities Inc. shall be binding upon the Underwriters. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives, c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New York 10260 (telefax: (212) 648-5705); Attention: Syndicate Department. Notices to the Company shall be given to it at Koger Equity, Inc., 3986 Boulevard Center Drive, Suite 101, Jacksonville, Florida 32207 (telefax: (904) 346-1435); Attention: Chief Executive Officer. 13. This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF. 29 -29- If the foregoing is in accordance with your understanding, please sign and return four counterparts hereof. Very truly yours, KOGER EQUITY, INC. By: /s/ Victor A. Hughes, Jr. ----------------------------- Name: Victor A. Hughes, Jr. Title: Chairman of the Board Accepted by: J.P. Morgan Securities Inc. Bear, Stearns & Co. Inc. BT Alex. Brown Incorporated By: J.P. Morgan Securities Inc. Acting on behalf of itself and the several Underwriters listed in Schedule I hereto. By: J.P. Morgan Securities Inc. ------------------------------------ Name: Title: 30 SCHEDULE I
Number of Shares Underwriter To Be Purchased - ----------- --------------- J.P. Morgan Securities Inc........................................734,000 Bear, Stearns & Co. Inc...........................................734,000 BT Alex. Brown Incorporated.......................................734,000 Cowen & Company....................................................84,000 Merrill Lynch, Pierce, Fenner & Smith Incorporated.................84,000 Prudential Securities Incorporated.................................84,000 Smith Barney Inc...................................................84,000 Charles Schwab & Co., Inc..........................................84,000 Anderson & Strudwick, Inc..........................................42,000 J.C. Bradford & Co.................................................42,000 Davenport & Co. of Virginia, Inc...................................42,000 Allen C. Ewing & Co................................................42,000 Johnston, Lemon & Co. Incorporated.................................42,000 Legg Mason Wood Walker, Incorporated...............................42,000 The Robinson-Humphrey Company, Inc.................................42,000 Scott & Stringfellow, Inc..........................................42,000 Wheat, First Securities, Inc.......................................42,000 Total 3,000,000 ===============
31 SCHEDULE II 32 EXHIBIT A [FORM LOCK-UP AGREEMENT] ___________ __, 1997 J.P. MORGAN SECURITIES INC. BEAR, STEARNS & CO. INC. BT ALEX. BROWN INCORPORATED As Representatives of the Underwriters named in Schedule I to the Underwriting Agreement referred to below c/o J.P. Morgan Securities Inc. 60 Wall Street New York, NY 10260 Re: Koger Equity, Inc.--- Public Offering Ladies and Gentlemen: The undersigned owns and/or has the right to acquire and/or has the right to direct the disposition of shares of common stock, par value $0.01 per share (the "Common Stock"), of Koger Equity, Inc., a Florida corporation (the "Company"). The undersigned understands that the Company has filed registration statements on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), with respect to shares of Common Stock (the "Shares") proposed to be issued and sold by the Company to the several underwriters to be named on Schedule I (collectively, the "Underwriters") to the underwriting agreement (the "Underwriting Agreement") proposed to be entered into by and between the Company, on the one hand, and J.P. Morgan Securities Inc., Bear, Stearns & Co. Inc. and BT Alex. Brown Incorporated, for themselves and as representatives of the several Underwriters. In order to induce the Company and the Underwriters to conduct a public offering of the Shares and to enter into the Underwriting Agreement, the undersigned agrees for the equal benefit of the Company and each of the Underwriters, for a period of 90 days after the date of the public offering of the Shares, not to (x) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indi- 33 -2- rectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or (y) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (x) or (y) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, or (z) request or demand the registration under the Act of any shares of capital stock of the Company, in each case, without the prior written consent of J.P. Morgan Securities Inc., provided, however, that nothing contained herein shall prevent an officer or director of the Company from exercising an option to purchase shares of Common Stock granted to such officer or director by the Company or an issuance of Common Stock to an officer or director by the Company pursuant to its Stock Option Plans, Stock Investment Plan, Dividend Reinvestment Plan or 401(k) Plan. In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs, legatees or personal representatives of the undersigned. The undersigned understands that, if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock to be sold thereunder, the undersigned shall be released form all obligations under this Letter Agreement. This lock-up agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. 34 -3- The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement. Very truly yours, Name Of Stockholder By: ------------------------ Name: Title: Accepted as of the date first set forth above: J.P. MORGAN SECURITIES INC. BEAR, STEARNS & CO. INC. BT. ALEX. BROWN INCORPORATED Acting severally on behalf of themselves and the several Underwriters named in Schedule I to the Underwriting Agreement By: J.P. MORGAN SECURITIES INC. By: ------------------------------ Name: Title: EX-10 3 PURCHASE AGREEMENT 1 KOGER EQUITY, INC. 500,000 Shares of Common Stock Par Value $.01 per share Purchase Agreement December 12, 1997 AREIF II Realty Trust, Inc. Two Manhattanville Road Purchase, NY 10577 Attn: Ronald Solotruk John R.S. Jacobsson Gentlemen: Koger Equity, Inc., a Florida corporation (the "Company"), proposes to issue and sell shares of its common stock, par value $.01 per share (the "Common Stock") in an underwritten public offering (such offering being, the "Underwritten Offering"; and such shares issued and sold in the Underwritten Offering being, the "Underwritten Shares"). Pursuant to Section 4.4 of the Stock Purchase Agreement dated as of October 10, 1996 (the "Stock Purchase Agreement") between the Company and AREIF II Realty Trust, Inc., a Maryland corporation ("Apollo"), and the successor-in-interest to AP-KEI Holdings, LLC, Apollo was granted certain subscription rights with respect such offerings of Common Stock made by the Company. In lieu of exercising its rights under Section 4.4 with respect to the Underwritten Offering (including with respect to any shares sold as a result of the exercise by the underwriters of their over-allotment option, as described in the prospectus for the Underwritten Offering), it is our understanding that Apollo wishes to purchase 500,000 shares of Common Stock (the "Offered Shares" and together with the Underwritten Shares, the "Shares") in a non-underwritten offering (the "Apollo Offering") made by the same prospectus as the Underwritten Offering. In connection with the foregoing, 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 "Securities Act"), two registration statements (the file numbers of which are 33-55179 and 333-37919) on Form S-3, including preliminary prospectuses, relating to the registration of certain shares of Common Stock (the "Shelf Securities") to be issued from time to time by the Company. The Company has also filed with, or proposes to file with, the Commission pursuant to Rule 424 under the Securities Act, a prospectus supplement specifically relating to the 1 2 Shares. The registration statements as amended to the date of this Agreement are hereinafter referred to as the "Registration Statement" and the related prospectus covering the Shelf Securities is hereinafter referred to as the "Base Prospectus." The Base Prospectus as supplemented by the prospectus specifically relating to the Shares in the form first used to confirm sales of the Shares is hereinafter referred to as the "Prospectus." If the Company has filed an abbreviated registration statement to register additional shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. In consideration of Apollo's waiver of its rights under Section 4.4 of the Stock Purchase Agreement with respect to the Underwritten Offering (including with respect to any shares sold as a result of the exercise by the underwriters of their over-allotment option, as described in the Prospectus), the parties agree as follows: 1. Sale and Delivery to Apollo; Closing. Subject to the terms and conditions set forth herein, the Company agrees to sell to Apollo, and Apollo agrees to purchase from the Company, the Offered Shares at a price per share (the "Purchase Price") equal to the net price per share of Common Stock received by the Company for the Underwritten Shares. Payment of the Purchase Price for, and delivery of the Offered Shares, shall be made on the same date (the "Closing Date") and at the same place and time as the closing of the sale of the Underwritten Shares (the "Closing") pursuant to an Underwriting Agreement dated as of December 12, 1997 (the "Underwriting Agreement") among the Company and J.P. Morgan Securities Inc., Bear, Stearns & Co. Inc., and BT Alex Brown Incorporated, as representatives of the several underwriters party thereto. The Company shall give Apollo reasonable notice of the date, time and place of the Closing. The sale and purchase of the Offered Shares shall be effected by the Company delivering to Apollo, duly registered in its name (or in the name of the nominee designated by Apollo no later than two business days prior to the Closing), a duly executed stock certificate evidencing the Offered Shares, against delivery by Apollo to the Company of the Purchase Price by wire transfer of immediately available funds to such account as the Company shall designate prior to Closing. 2. Representations and Warranties of Apollo. Apollo represents and warrants on behalf of itself and its affiliates as follows: 2.1. Accredited Investor. Apollo is an "accredited investor" (as such term is defined in Rule 501 under the Securities Act). 2.2. Authorization; No Conflict. 2.2.1. Apollo is a company duly organized, validly existing and in good standing under the laws of the State of Maryland and has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. 2 3 2.2.2. This Agreement has been duly authorized, executed and delivered by Apollo and this Agreement is valid, binding and enforceable against Apollo in accordance with its terms except: (i) as may be limited by or subject to any bankruptcy insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) the remedies of specific performance, injunction and other forms of equitable relief may not be available because they are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefor may be brought. 2.2.3. The execution and delivery of this Agreement by Apollo and the performance of its obligations hereunder do not and will not conflict with, or result in breach of or (with or without giving notice, lapse of time or both) constitute default under, the organizational documents of Apollo or any material agreement to which Apollo is a party or by which any of its properties are bound. 2.3. Waiver of Subscription Rights under the Stock Purchase Agreement. Apollo and its affiliates have waived all of their rights under Section 4.4 of the Stock Purchase Agreement with respect to the Underwritten Offering (including with respect to any shares of Common Stock sold by the Company as a result of the exercise by the underwriters of their over-allotment option pursuant to the Prospectus). 3. Representations and Warranties of the Company. The Company represents and warrants as follows: 3.1. Authorization; No Conflict. 3.1.1. The Company is a corporation duly organized and in good standing under the laws of the state of Florida and has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. 3.1.2. This Agreement has been duly authorized, executed and delivered by the Company and this Agreement is valid, binding and enforceable against the Company in accordance with its terms except: (i) as may be limited by or subject to any bankruptcy insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) the remedies of specific performance, injunction and other forms of equitable relief may not be available because they are subject to certain tests of equity jurisdiction, equitable 3 4 defenses and the discretion of the court before which any proceeding therefor may be brought. 3.1.3. The execution and delivery of this Agreement by the Company and the performance of its obligations hereunder do not and will not conflict with, or result in breach of or (with or without giving notice, lapse of time or both) constitute default under the Company's Amended and Restated Articles of Incorporation or Amended and Restated By-laws or any material agreement to which the Company is a party or by which any of its properties are bound. 3.2. Registration Statement and Prospectus. The Company has caused to be delivered to Apollo copies of the Registration Statement and Prospectus. 3.3. Issued Shares. The Offered Shares to be issued and sold by the Company hereunder have been duly authorized, and when issued and delivered to and paid for by Apollo in accordance with the terms of this Agreement, will be duly issued and will be fully paid and non-assessable and will conform to the descriptions thereof in the Prospectus. 4. Covenant of the Company. The Company covenants and agrees with Apollo that from the date hereof and prior to the Closing, it will furnish Apollo with a copy of any amendment or supplement to the Registration Statement or Prospectus. 5. Conditions to the Obligations to Close. The obligations of the Company to sell the Offered Shares to Apollo and the obligations of Apollo to purchase and pay for the Offered Shares at the Closing are subject only to the closing of the Underwritten Offering pursuant to the Underwriting Agreement. 6. Specific Performance. The parties recognize that their respective rights under this Agreement are unique, and, accordingly, each party shall, in addition to such other remedies as may be available to it at law or in equity, have the right to enforce its rights hereunder by actions for injunctive relief and specific performance to the extent permitted by law. This Agreement is not intended to limit or abridge any rights of either party which may exist apart from this Agreement. 7. Notices. All notices, demands and other communications required to be given pursuant to this Agreement shall be in writing and shall be deemed to have been received if given in writing (including telex, telecopy or similar teletransmission) addressed as provided below (or to the addressee at such other address as the addressee shall have specified by notice actually received by the addressor), and if either (a) actually delivered in fully legible form to such address (evidenced in the case of a telex by receipt of the correct answer back) or (b) in the case of a letter, three days shall have elapsed after the same shall have been deposited in the 4 5 mails (i) with first-class (air mail if to or from outside the United States of America) postage prepaid and registered or certified, with return receipt requested, or (ii) with express delivery postage prepaid, with receipt required for delivery. If to the Company, to it at 3986 Boulevard Center Drive, Jacksonville, Florida 32207, telecopy number (904) 398-3403, to the attention of Victor A. Hughes, Jr., with a copy to each of (a) Ropes & Gray, One International Place, Boston, Massachusetts 02110, telecopy number (617) 951-7050, to the attention of William F. McCarthy, Esq., and (b) Boling & McCart, 76 South Laura Street, Suite 700, Jacksonville, Florida 32202, to the attention of Harold F. McCart, Jr., Esq. If to Apollo, to it at 1301 Avenue of the Americas, 38th Floor, New York, New York 10019, telecopy number (212) 261-4060, to the attention of John Jacobsson, with a copy to Battle Fowler LLP, 75 East 55th Street, New York, New York 10022, to the attention of Martin L. Edelman, Esq. 8. Binding Effect; Assignment. This Agreement shall be binding upon, and inure to the benefit of, the parties and their respective personal representatives, successors and permitted assigns. 9. Course of Dealing; Amendments, Waivers and Consents. No course of dealing between the parties shall operate as a waiver of any party's rights under this Agreement. Each party acknowledges that if any party, without being required to do so by this Agreement, gives any notice or information to, or obtains any consent from, the other party, such party shall not by implication have amended, waived or modified any provision of this Agreement, or created any duty to give any such notice or information or to obtain any such consent on any future occasion. No delay or omission on the part of any party in exercising any right under this Agreement shall operate as a waiver of such right or any other right hereunder or thereunder. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. No amendment, waiver or consent with respect to this Agreement shall be binding unless it is in writing and signed by each of the Company and Apollo. 10. General. If any provision of this Agreement shall be found by any court of competent jurisdiction to be invalid or unenforceable, the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable. Such provision shall, to the maximum extent allowable by law, be modified by such court so that it becomes enforceable, and, as modified, shall be enforced as any other provision hereof, all the other provisions hereof continuing in full force and effect. The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation hereof. This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof and supersedes any and all prior understandings and agreements, whether written or oral, with respect to such subject matter. This Agreement may be executed in counterparts, 5 6 which together shall constitute one and the same instrument. This Agreement shall be governed by and construed in accordance with the laws (other than the conflict of laws rules) of the State of New York. 6 7 If you are in agreement with the foregoing, please execute the enclosed copy of this letter and return the same to the undersigned. Very truly yours, KOGER EQUITY, INC. By /s/ Victor A. Hughes, Jr. ------------------------------- Victor A. Hughes, Jr. Chairman of the Board Accepted and agreed: AREIF II REALTY TRUST, INC. By /s/ John R.S. Jacobsson ------------------------------- John R.S. Jacobsson Vice President cc: Apollo Real Estate Management II, Inc. Attn: John R.S. Jacobsson Battle Fowler LLP Attn: Martin L. Edelman, Esq. 7 -----END PRIVACY-ENHANCED MESSAGE-----