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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): OCTOBER 16, 1997
EASTGROUP PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND
(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-7094 13-2711135
(Commission File Number) (IRS Employer Identification No.)
300 ONE JACKSON PLACE
188 EAST CAPITOL STREET
P.O. BOX 22728
JACKSON, MISSISSIPPI 39225-2728
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (601) 354-3555
(Former name or former address, if changed since last report)
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FORM 8-K
EASTGROUP PROPERTIES, INC.
Item 5. Other Events
On October 16, 1997, EastGroup Properties, Inc. closed its previously announced
sale of 3.5 million shares of its Common Stock under its existing shelf
registration statement at a purchase price of $22 per share. PaineWebber
Incorporated led the underwriting group comprised of J. C. Bradford & Co. and
A.G. Edwards & Sons, Inc. The net proceeds of the offering (approximately $72.5
million net of commissions and expenses) will be used as follows: (i)
approximately $36 million to repay all outstanding indebtedness under the
Company's revolving credit facilities and (ii) the remainder to fund all or a
portion of the purchase price of industrial properties and/or to repay a
portion of the debt incurred in the purchase of the industrial properties.
Following this transaction, the Company had 16,190,984 shares of Common Stock
outstanding.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
(1) Underwriting Agreement between PaineWebber Incorporated,
J.C. Bradford & Co. and A.G. Edwards & Sons, Inc., as representatives
of the several underwriters, and EastGroup Properties, Inc. dated
October 9, 1997. EastGroup agrees to furnish supplementally to the
Securities and Exchange Commission on request a copy of any omitted
schedule or exhibit to this agreement.
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FORM 8-K
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EastGroup Properties, Inc.
(Registrant)
Dated: October 16, 1997 By: /s/ N. Keith McKey
N. Keith McKey
Executive Vice-President,
Chief Financial Officer,
Treasurer and Secretary
/s/ Diane W. Hayman
Diane W. Hayman
Controller
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Exhibit 1
3,500,000 Shares
EASTGROUP PROPERTIES, INC.
Common Stock
($0.0001 Par Value)
UNDERWRITING AGREEMENT
----------------------
October 9, 1997
PAINEWEBBER INCORPORATED
J.C. BRADFORD & CO.
A.G. EDWARDS & SONS, INC.
as representatives of the several underwriters,
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Ladies and Gentlemen:
EastGroup Properties, Inc., a Maryland corporation (the
"Company"), confirms its agreement with the Underwriters named in SCHEDULE A
hereto (the "Underwriters") for whom PaineWebber Incorporated, J.C. Bradford &
Co. and A.G. Edwards & Sons, Inc. are acting as representatives, as follows:
1. DESCRIPTION OF SECURITIES. The Company proposes to issue
and sell to the Underwriters, severally and not jointly, 3,500,000 shares of
Common Stock, $0.0001 par value (the "Common Stock"). The shares of Common Stock
to be issued and sold by the Company are hereinafter referred to as the
"Securities."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with the Underwriters that:
(i) A registration statement on Form S-3
(File No. 333-29193) with respect to the Securities, including a
prospectus, has been carefully prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the
"Act") and the rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder (the "1933 Act Rules and
Regulations"), and has been filed with the Commission and declared
effective. Such
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registration statement and prospectus may have been amended or
supplemented prior to the date of this Underwriting Agreement; any such
amendment or supplement was so prepared and filed, and any such
amendment filed after the effective date of such registration statement
has been declared effective. No stop order suspending the effectiveness
of the registration statement has been issued, and no proceeding for
that purpose has been instituted or threatened by the Commission. A
prospectus supplement (the "Prospectus Supplement") setting forth the
terms of the offering, sale and plan of distribution of the Securities
and additional information concerning the Company and its business has
been or will be so prepared and will be filed pursuant to Rule 424(b)
of the 1933 Act Rules and Regulations on or before the second business
day after the date hereof (or such earlier time as may be required by
the 1933 Act Rules and Regulations). Copies of such registration
statement and prospectus, any such amendments or supplements and all
documents incorporated by reference therein that were filed with the
Commission on or prior to the date of this Underwriting Agreement
(including one fully executed copy of the registration statement and of
each amendment thereto for the Underwriters and their counsel) have
been delivered to the Underwriters and their counsel. The registration
statement, as it may have heretofore been amended, is referred to
herein as the "Registration Statement," and the final form of
prospectus included in the Registration Statement, as supplemented by
the Prospectus Supplement, is referred to herein as the "Prospectus."
Any reference herein to the Registration Statement, the Prospectus, any
preliminary prospectus or any amendment or supplement thereto shall be
deemed to refer to and include the documents incorporated by reference
therein, and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Prospectus
or any preliminary prospectus shall be deemed to refer to and include
the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein. For purposes
of this Underwriting Agreement, all references to the Registration
Statement, the Prospectus, any preliminary prospectus or any amendment
or supplement thereto shall be deemed to include any copy filed with
the Commission pursuant to its Electronic Data Gathering Analysis and
Retrieval System ("EDGAR"), and such copy shall be identical in content
to any Prospectus delivered to the Underwriters for use in connection
with the offering of the Securities.
(ii) Each part of the Registration
Statement, when such part became or becomes effective and the
Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the Closing Date (as
hereinafter defined), and, if later, at an Option Closing Date (as
hereinafter defined), conformed or will conform in all material
respects with the requirements of the Act and the 1933 Act Rules and
Regulations; each part of the Registration Statement, when such part
became or becomes effective, or when such part was filed with the
Commission, did not or will 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; the
Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the Closing Date, and, if
later, at an Option Closing Date, did not or will not include 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
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circumstances under which they were made, not misleading; except that
the foregoing shall not apply to statements in, or omissions from, any
such document in reliance upon, and in conformity with, written
information concerning the Underwriters that was furnished to the
Company by the Underwriters specifically for use in the preparation
thereof.
(iii) The documents incorporated by
reference in the Registration Statement, the Prospectus, any amendment
or supplement thereto, when they became or become effective under the
Act or were or are filed with the Commission under the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
the case may be, conformed or will conform in all material respects
with the requirements of the Act, the 1933 Act Rules and Regulations,
the Exchange Act and/or the rules and regulations of the Commission
thereunder (the "Exchange Act Rules and Regulations"), as applicable.
(iv) The consolidated financial statements
of the Company together with the related schedules and notes thereto,
set forth or included or incorporated by reference in the Registration
Statement and Prospectus fairly present the financial condition of the
Company and its consolidated subsidiaries as of the dates indicated and
the results of operations, changes in financial position, shareholders'
equity and cash flows for the periods therein specified, in conformity
with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein).
The summary and selected financial and statistical data included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein and, to the
extent based upon or derived from the financial statements, have been
compiled on a basis consistent with the financial statements presented
therein. In addition, the pro forma financial statements of the
Company, and the related notes thereto, included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the basis
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
Furthermore, all financial statements required by Rule 3-14 of
Regulation S-X ("Rule 3-14") have been included or incorporated by
reference in the Registration Statement and the Prospectus and any such
financial statements are in conformity with the requirements of Rule
3-14. No other financial statements are required to be set forth or to
be incorporated by reference in the Registration Statement or the
Prospectus under the Act or the 1933 Act Rules and Regulations
thereunder.
(v) KPMG Peat Marwick LLP, whose reports
are incorporated by reference in the Registration Statement, has
represented to the Company that they are and, during the periods
covered by their reports, were independent public accountants as
required by the Act and the 1933 Act Rules and Regulations.
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(vi) The only subsidiaries (as defined in
the 1933 Act Rules and Regulations) of the Company are the subsidiaries
listed on SCHEDULE B hereto (the "Subsidiaries"). Each of the Company
and its Subsidiaries has been duly incorporated or formed, as the case
may be, and is an existing corporation, general or limited partnership,
or other legal entity, as the case may be, in good standing under the
laws of its jurisdiction of incorporation or formation, as the case may
be. The Company and each of its Subsidiaries has full power and
authority (corporate and other) to conduct its business as described in
the Registration Statement and Prospectus, and is duly qualified or
registered to do business in each jurisdiction in which it owns or
leases real property or in which the conduct of its business requires
such qualification or registration except where the failure to be so
qualified or registered, considering all such cases in the aggregate,
would not have a material adverse effect on the business, properties,
financial position or results of operations of the Company and its
Subsidiaries taken as a whole; and, other than Meridian Point Realty
Trust VIII Co., a real estate investment trust in which the Company
owns approximately 27.5% of all outstanding preferred stock, and the
Subsidiaries, the Company does not own more than 5% of the stock or
other beneficial interest in any corporation, partnership, joint
venture or other business entity.
(vii) All of the issued and outstanding
capital stock or ownership interests of each Subsidiary has been duly
authorized and are validly issued, fully paid and nonassessable and is
wholly-owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(viii) All of the issued and outstanding
shares of capital stock of the Company have been duly authorized and
are validly issued, fully paid and nonassessable and conform to the
description thereof in the Prospectus. The stockholders of the Company
have no preemptive rights with respect to the Securities.
(ix) The Securities will be as of the
Closing Date, and the Optional Securities (as hereinafter defined) will
be as of any Option Closing Date, duly authorized by the Company for
issuance and sale pursuant to this Underwriting Agreement; and when
issued and delivered by the Company pursuant to this Underwriting
Agreement against payment of the consideration therefor specified
herein, will be validly issued, fully paid and nonassessable. The
Securities conform to the description thereof in the Prospectus.
(x) Except as contemplated in the
Prospectus, subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, the Company
and its Subsidiaries have not incurred any liabilities or obligations,
direct or contingent; or entered into any transactions, not in the
ordinary course of business, that are material to the Company and its
Subsidiaries on a consolidated basis; and there has not been any
material change in the capital stock or structure, short-term debt or
long-term debt of the Company and its Subsidiaries; or any material
adverse change, or any development that is reasonably likely to involve
a
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prospective material adverse change, in the condition (financial or
other), business, prospects, net worth or results of operations of the
Company and its Subsidiaries on a consolidated basis; and, except for
(i) regular distributions with respect to the Company's Common Stock,
in amounts per share that are consistent with past practice or the
charter documents of the Company; and (ii) the Company's three-for-two
stock split effected as a dividend of one share for every two shares
outstanding which was paid on April 7, 1997, there has been no dividend
or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(xi) Except as set forth in the Prospectus,
there is not pending or, to the knowledge of the Company, threatened
any action, suit or proceeding to which the Company, any of its
Subsidiaries or any of its officers or directors is a party, or that
any of its properties or other assets is the subject of, before or by
any court or governmental agency or body, that is reasonably likely to
result in any material adverse change in the condition (financial or
other), business, prospects, net worth or results of operations of the
Company and its Subsidiaries, or might materially and adversely affect
their properties or other assets.
(xii) During the period of at least the
last 24 calendar months prior to the date of this Underwriting
Agreement, the Company has timely filed with the Commission all
documents and other material required to be filed pursuant to Sections
13, 14 and 15(d) under the Exchange Act.
(xiii) There are no contracts or documents
of the Company that are required to be filed as exhibits to the
Registration Statement or to any of the documents incorporated by
reference therein by the Act or the Exchange Act or by the rules and
regulations of the Commission thereunder that have not been so filed.
(xiv) This Underwriting Agreement has been
duly authorized, executed and delivered by the Company.
(xv) The execution and performance of this
Underwriting Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, (i) any
statute, agreement or instrument to which the Company or its
Subsidiaries is a party or by which they are bound or to which any of
the property or other assets of the Company or its Subsidiaries is
subject, (ii) the articles of incorporation, by-laws, certificate of
general or limited partnership, partnership agreement or other
organizational document, as applicable, of the Company or its
Subsidiaries, or (iii) any statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or its Subsidiaries or any of their properties or other assets;
no consent, approval, authorization or order of, filing with, or notice
to any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Underwriting
Agreement in connection with the issuance or sale of the Securities by
the Company, except such as may be required under the Act and
applicable state securities, blue sky, or real estate syndication laws,
if any, or pursuant to the listing requirements
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of the New York Stock Exchange ("NYSE"); and the Company has full power
and authority to authorize, issue and sell the Securities as
contemplated by this Underwriting Agreement, free of any preemptive
rights.
(xvi) The Company and its Subsidiaries have
complied in all respects with all laws, regulations and orders
applicable to them or their respective businesses; the Company and its
Subsidiaries are not in default under any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract or other
agreement or instrument to which they are a party or by which they or
any of their properties or other assets are bound, violation of which
would individually or in the aggregate have a material adverse effect
on the Company and its Subsidiaries on a consolidated basis, and no
other party under any such agreement or instrument to which the Company
or its Subsidiaries is a party is, to the knowledge of the Company, in
default in any material respect thereunder; and the Company and its
Subsidiaries are not in violation of their respective articles of
incorporation, by-laws, certificate of general or limited partnership,
partnership agreement or other organizational documents, as the case
may be.
(xvii) The Company and each of its
Subsidiaries have good and marketable title to all properties and
assets, as described in the Prospectus, owned by them, free and clear
of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material in relation to the
business of the Company and its Subsidiaries, and the Company and its
Subsidiaries have valid, subsisting and enforceable leases for the
properties described in the Prospectus as leased by the Company and its
Subsidiaries with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such properties
by the Company and its Subsidiaries; except as disclosed on SCHEDULE C,
no tenant under any of the leases pursuant to which the Company or its
Subsidiaries lease their properties has an option or right of first
refusal to purchase the premises demised under such lease; the use and
occupancy of each of the properties of the Company and its Subsidiaries
complies in all material respects with all applicable codes and zoning
laws and regulations; the Company and its Subsidiaries have no
knowledge of any pending or threatened condemnation or zoning change
that will in any material respect affect the size of, use of,
improvement of, construction on, or access to any of the properties of
the Company and its Subsidiaries; and the Company and its Subsidiaries
have no knowledge of any pending or threatened proceeding or action
that will in any manner materially affect the size of, use of,
improvements or construction on, or access to any of the properties of
the Company or its Subsidiaries.
(xviii) Title insurance in favor of the
Company and its Subsidiaries is maintained with respect to each of the
properties described in the Prospectus in an amount at least equal to
the cost of acquisition of such property, except, in each case, where
the failure to maintain such title insurance is not reasonably likely
to have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its Subsidiaries taken as a whole.
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(xix) The mortgages and deeds of trust
encumbering the properties and assets described or referred to in the
Prospectus are not convertible into the equity of the Company or any
Subsidiary.
(xx) Except as set forth in the Prospectus
Supplement, (i) there does not exist on any of the properties described
in the Prospectus any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous Materials") in
unlawful quantities, (ii) there has not occurred on or off such
properties any unlawful spills, releases, discharges or disposal of
Hazardous Materials, which presence or occurrence would have a material
adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
Subsidiaries taken as a whole, and (iii) the Company and its
Subsidiaries have not failed to comply with all applicable local, state
and federal environmental laws, regulations, ordinances and
administrative and judicial orders relating to the generation,
recycling, sale, storage, handling, transport and disposal of any
Hazardous Materials, except for such failures which are not reasonably
likely to have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its Subsidiaries taken as a whole.
(xxi) Property and casualty insurance in
favor of each of the Company and its Subsidiaries is maintained with
respect to each of the properties owned by each of them in an amount
and on such items as is reasonable and customary for businesses of this
type.
(xxii) No holder of outstanding shares of
capital stock of the Company has any rights to the registration of
shares of capital stock of the Company which would or could require
such securities to be included in the Registration Statement.
(xxiii) Subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as described therein, (i) there has not been any
material adverse change in the assets or properties, business, results
of operations, prospects or condition (financial or otherwise) of the
Company or any of its Subsidiaries, whether or not arising from
transactions in the ordinary course of business; (ii) neither the
Company nor any of its Subsidiaries has sustained any material loss or
interference with its assets, businesses or properties (whether owned
or leased) from fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree; and
(iii) neither the Company nor any of its Subsidiaries has undertaken
any liability or obligation, direct or contingent, except such
liabilities or obligations undertaken in the ordinary course of
business.
(xxiv) The Company has filed all federal,
state, local and foreign income tax returns which have been required to
be filed and has paid all taxes indicated by said returns and all
assessments received by it to the extent that such taxes have become
due.
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(xxv) Each approval, consent, order,
authorization, designation, declaration or filing by or with any
regulatory, administrative or other governmental body necessary in
connection with the execution and delivery by the Company of this
Underwriting Agreement and the consummation of the transactions herein
contemplated has been obtained or made and is in full force and effect.
(xxvi) The Company and its Subsidiaries
hold all material licenses, certificates and permits from governmental
authorities which are necessary to the conduct of their businesses and
are in compliance with the terms and conditions of such licenses,
certificates and permits; and the Company and its Subsidiaries have not
infringed on any patents, patent rights, trade names, trademarks or
copyrights, which infringement is material to the business of the
Company and its Subsidiaries taken as a whole.
(xxvii) The Company and its Subsidiaries
are conducting their respective businesses in material compliance with
all applicable laws, rules and regulations of the jurisdictions in
which they are conducting business, including, without limitation, the
Americans with Disabilities Act of 1990 and all applicable local, state
and federal employment, truth-in-advertising, franchising and
immigration laws and regulations, except where the failure to be so in
compliance would not have a material adverse effect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a
whole.
(xxviii) No transaction has occurred
between or among the Company and any of its officers or directors or
any affiliate or affiliates of any such officer or director that is
required to be described in and is not described or incorporated by
reference in the Registration Statement and the Prospectus.
(xxix) The Company has not taken, nor will
it take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has constituted
or which might reasonably be expected to constitute, the stabilization
or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of any of the Securities.
(xxx) Commencing with the taxable year
ending December 31, 1988, the Company has been organized and operating
in conformity with the requirements for qualification as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended
(the "Code"). The Company's method of operation permits it to meet and
to continue to meet the requirements for taxation as a real estate
investment trust under the Code. The Company has no intention of
changing its operations or engaging in activities which would cause it
to fail to qualify, or make economically undesirable its continued
qualification as, a real estate investment trust.
(xxxi) Neither the Company nor any
Subsidiary is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
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(xxxii) The Securities have been approved
for listing subject to official notice of issuance on the NYSE.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES. On the basis of
the representations, warranties and agreements contained herein, but subject to
the terms and conditions set forth herein, the Company agrees to issue and sell
the Securities, severally and not jointly, to the several Underwriters, and each
of the Underwriters, severally and not jointly, agrees to purchase from the
Company, the number of Securities set forth opposite that Underwriter's name in
SCHEDULE A hereto, at a purchase price of $20.85 per share (the "Purchase
Price").
The Securities to be purchased by the Underwriters will be
delivered by the Company to the office of PaineWebber Incorporated at 1285
Avenue of the Americas, New York, New York 10019, in accordance with the terms
of this Underwriting Agreement and against payment of the Purchase Price
therefor by wire transfer of same day funds payable to the order of the Company
in the amount of $72,975,000 at the bank account designated in writing by the
Company at least one business day prior to the Closing Date, at 10:00 a.m., New
York time, on October 16, 1997 (or if the NYSE or American Stock Exchange or
commercial banks in the City of New York are not open on such day, the next day
on which such exchanges and banks are open), or at such other time not later
than eight full business days thereafter as the Underwriters and the Company
mutually agree, such time being herein referred to as the "Closing Date." If
requested by the Underwriters, the Securities will be prepared in definitive
form and in such authorized denominations and registered in such names as the
Underwriters may request upon at least two business days' prior notice to the
Company and will be made available for checking and packaging at the office of
PaineWebber Incorporated at least one business day prior to the Closing Date.
4. COVENANTS. The Company covenants and agrees with the
Underwriters that:
(a) The Company will cause the Prospectus
Supplement to be filed as required by Section 2(a) hereof (but only if
the Underwriters or their counsel have not reasonably objected thereto
by notice to the Company after having been furnished a copy a
reasonable time prior to filing) and will notify the Underwriters
promptly of such filing. During the period in which a prospectus
relating to the Securities is required to be delivered under the Act or
such date which is 90 days after the Closing Date, whichever is later,
the Company will notify the Underwriters promptly of the time when any
subsequent amendment to the Registration Statement has become effective
or any subsequent supplement to the Prospectus has been filed, of any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for additional information; the
Company will prepare and file with the Commission, promptly upon the
Underwriters' request, any amendments or supplements to the
Registration Statement or Prospectus that, in the Underwriters'
opinion, may be necessary or advisable in connection with the
Underwriters' distribution of the Securities; and the Company will file
no amendment or supplement to the Registration Statement or Prospectus
(other than any prospectus supplement relating to the offering of other
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securities registered under the Registration Statement or any document
required to be filed under the Exchange Act that upon filing is deemed
to be incorporated by reference therein) to which the Underwriters or
their counsel shall reasonably object by notice to the Company after
having been furnished a copy a reasonable time prior to the filing.
(b) The Company will advise the
Underwriters, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, of the
suspension of the qualification or registration of the Securities for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; and it will
promptly use its best efforts to prevent the issuance of any stop order
or to obtain its withdrawal if such a stop order should be issued.
(c) The Company will comply with all
requirements imposed upon it by the Act, the 1933 Act Rules and
Regulations, the Exchange Act and the Exchange Act Rules and
Regulations as from time to time in force, so far as necessary to
permit the continuance of sales of, or dealings in, the Securities as
contemplated by the provisions hereof and the Prospectus. If during
such period where a prospectus relating to the Securities is required
to be delivered under the Act or such date which is 90 days after the
Closing Date, whichever is later, any event occurs as a result of
which, in the opinion of Underwriters' counsel, the Registration
Statement contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or the Prospectus as then
amended or supplemented contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the
Act, the Company will promptly notify the Underwriters and will amend
or supplement the Registration Statement or Prospectus (at the expense
of the Company) so as to correct such statement or omission or effect
such compliance.
(d) The Company will furnish to the
Underwriters copies of the Registration Statement, the Prospectus
(including all documents incorporated by reference therein), each
preliminary prospectus and all amendments and supplements to the
Registration Statement and Prospectus that are filed with the
Commission during the period in which a prospectus relating to the
Securities is required to be delivered under the Act or such date which
is 90 days after the Closing Date, whichever is later (including all
documents filed with the Commission during such period that are deemed
to be incorporated by reference therein), in each case as soon as
available and in such quantities as the Underwriters may from time to
time reasonably request.
(e) During the period of one year
commencing on the date upon which the Prospectus Supplement is filed
pursuant to Rule 424(b) under the Act, the Company will furnish the
Underwriters with copies of filings of the Company under the Act and
Exchange Act and with all other financial statements and periodic and
special reports it distributes generally to the holders of any class of
its capital stock.
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(f) The Company will make generally
available to its security holders as soon as practicable, and in the
manner contemplated by Rule 158 of the 1933 Act Rules and Regulations
but in any event not later than 15 months after the end of the
Company's current fiscal quarter, an earning statement (which need not
be audited) covering a 12-month period beginning after the date upon
which the Prospectus Supplement is filed pursuant to Rule 424(b) under
the Act that shall satisfy the provisions of Section 11(a) of the Act
and Rule 158 of the 1933 Act Rules and Regulations and will advise the
Underwriters in writing when such statement has been made available.
(g) Whether or not the transactions
contemplated by this Underwriting Agreement are consummated or this
Underwriting Agreement is terminated, the Company will pay, or
reimburse if paid by the Underwriters, all costs and expenses incident
to the performance of the obligations of the Company under this
Underwriting Agreement, including but not limited to costs and expenses
of or relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits thereto, each preliminary
prospectus, the Prospectus and any amendment or supplement to the
Registration Statement or the Prospectus, (ii) the preparation and
delivery of certificates representing the Securities, (iii) the word
processing, printing and reproduction of this Underwriting Agreement,
(iv) the costs incurred by the Company in furnishing (including costs
of shipping, mailing and courier) such copies of the Registration
Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in
connection with the offering and sale of the Securities by the
Underwriters or by dealers to whom Securities may be sold, (v) the
listing of the Securities on the NYSE, (vi) the registration or
qualification of the Securities for offer and sale under the securities
or blue sky laws of such jurisdictions designated by the Underwriters,
including the fees, disbursements and other charges of Underwriters'
counsel in connection therewith, and the preparation and printing of a
blue sky memoranda, (vii) counsel to the Company, (viii) the transfer
agent for the Securities and (ix) the accountants of the Company.
(h) If this Underwriting Agreement shall be
terminated pursuant to any of the provisions hereof or if for any
reason the Company shall be unable to perform its obligations
hereunder, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the fees, disbursements and other
charges of Underwriters' counsel) reasonably incurred by the
Underwriters in connection herewith.
(i) The Company will not at any time,
directly or indirectly, take any action designed to, or which might
reasonably be expected to, cause or result in, or which has constituted
or which might reasonably be expected to constitute, the stabilization
of the price of the Common Stock to facilitate the sale or resale of
any of the Securities.
(j) The Company will apply the net proceeds
from the sale of the Securities as set forth under the caption "Use of
Proceeds" in the Prospectus Supplement.
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<PAGE> 12
(k) The Company, its executive officers and
the members of its Board of Directors will not, directly or indirectly,
offer, sell, contract to sell, grant any option to sell, or otherwise
dispose of any shares of capital stock or securities convertible into
or exchangeable for, or any rights to purchase or acquire, shares of
capital stock, except for the exercise of options outstanding on the
date hereof or pursuant to the Company's Dividend Reinvestment Plan
(the "Dividend Reinvestment Plan") prior to the expiration of 90 days
from the date of this Underwriting Agreement without the Underwriters'
prior written consent.
(l) Commencing with its taxable year ending
December 31, 1988, the Company has elected to, and continues to,
qualify as a "real estate investment trust" under the Code, and will
use its best efforts to continue to meet the requirements to qualify as
a "real estate investment trust."
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The Underwriters'
obligation to purchase and pay for the Securities as provided herein shall be
subject to the accuracy, as of the date hereof and the Closing Date (as if made
at the Closing Date), of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) The Registration Statement shall have
been declared effective under the Act; the Prospectus shall have been
filed as required by Section 2(a) hereof; and no stop order suspending
the effectiveness of the Registration Statement shall have been issued
and no proceeding for that purpose shall have been instituted or, to
the Underwriters' knowledge or the knowledge of the Company, threatened
by the Commission, nor has any state securities authority suspended the
qualification or registration of the Securities for offering or sale in
any jurisdiction and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of the Underwriters and Underwriters' counsel.
(b) The Underwriters shall not have advised
the Company that the Registration Statement or any amendment thereto
contains an untrue statement of fact that in the opinion of the
Underwriters or Underwriters' counsel is material or omits to state a
fact that in the opinion of the Underwriters or Underwriters' counsel
is material, and is required to be stated therein or is necessary to
make the statements therein not misleading, or that the Prospectus, or
any amendment or supplement thereto, contains an untrue statement of
fact that in the opinion of the Underwriters or Underwriters' counsel
is material or omits to state a fact that in the opinion of the
Underwriters or Underwriters' counsel is material and is necessary, in
the light of the circumstances under which they were made, to make the
statements therein not misleading.
(c) Except as contemplated in the
Prospectus Supplement, subsequent to the respective dates as of which
information is included or incorporated by reference in the
Registration Statement and the Prospectus, there shall
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<PAGE> 13
not have been any change, on a consolidated basis, in the equity
capitalization, short-term debt or long-term debt of the Company, or
any adverse change, or any development involving a prospective adverse
change, in the condition (financial or other), business, prospects, net
worth or results of operations of the Company or its Subsidiaries or
any adverse change in the rating assigned to any securities of the
Company, that, in the Underwriters' judgment, makes it impractical or
inadvisable to offer or deliver the Securities on the terms and in the
manner contemplated in the Prospectus.
(d) The Underwriters shall have received
the opinions of Jaeckle Fleischmann & Mugel, LLP, counsel for the
Company, and Piper & Marbury LLP, special Maryland counsel to the
Company (as to which, Jaeckle Fleischmann & Mugel, LLP and Rogers &
Wells may rely on), each dated the Closing Date, in form and substance
satisfactory to Underwriters' counsel to the effect that:
(i) Each of the Company and its
Subsidiaries has been duly incorporated or formed, as the case
may be, and is validly existing as a corporation, general or
limited partnership, or other legal entity, as the case may
be, in good standing under the laws of its jurisdiction of
incorporation or formation, as the case may be, and has full
power (corporate or other) and authority to conduct its
business as described in the Registration Statement and
Prospectus, and is duly qualified or registered to do business
in each jurisdiction in which it owns or leases real property
or in which the conduct of its business requires such
qualification or registration, except where the failure to be
so qualified or registered, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, financial position or results of operations of the
Company and its Subsidiaries taken as a whole;
(ii) The Company has authorized and issued
capital stock as set forth in the Prospectus Supplement, all
of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued; and
all of the issued and outstanding shares of capital stock of
the Company are fully paid and nonassessable and none of them
was issued in violation of any preemptive or other similar
right. The Securities have been duly authorized by the Company
for issuance and sale and when issued and sold pursuant to
this Underwriting Agreement will be duly and validly issued,
fully paid and nonassessable and none of them will have been
issued in violation of any preemptive or other similar right.
Except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and, to the knowledge of
such counsel, no commitment, plan or arrangement to issue, any
shares of capital stock of the Company or any security
convertible into, exercisable for, or exchangeable for shares
of capital stock of the Company. No holder of any security of
the Company has the right to have any security owned by such
holder included for registration in the Registration Statement
or to demand registration of any security owned by such holder
during the 180 days after the date of this Underwriting
Agreement. The issued and outstanding capital stock of the
Company and the
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<PAGE> 14
Securities conform, or will conform, in all material respects
to the descriptions thereof contained in the Registration
Statement and the Prospectus. The form of certificate used to
evidence the Securities is in due and proper form and complies
with all applicable statutory requirements, with any
applicable requirements of the Company's organizational
documents and with the requirements of the NYSE;
(iii) The Registration Statement has become
effective under the Act, the Prospectus Supplement has been
filed as required by Section 2(a) hereof and, to the best
knowledge of such counsel, after due inquiry, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been
instituted or threatened by the Commission;
(iv) Each part of the Registration
Statement, when such part became effective, and the Prospectus
and any amendment or supplement thereto, on the date of filing
thereof with the Commission and at the Closing Date, complied
as to form in all material respects with the requirements of
the Act and the 1933 Act Rules and Regulations, and such
counsel has no reason to believe that either (i) any part of
the Registration Statement, when such part became effective or
was filed under the Act or Exchange Act, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Prospectus and
any amendment or supplement thereto, on the date of filing
thereof with the Commission or at the Closing Date, included
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 the documents incorporated by reference in the
Registration Statement or Prospectus or any amendment or
supplement thereto, when they became effective under the Act
or were filed with the Commission under the Act or Exchange
Act, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; it being understood that such counsel need express
no opinion as to the financial statements or other financial
data included in any other documents mentioned in this clause;
(v) The descriptions in the Registration
Statement and Prospectus of statutes, legal and governmental
proceedings, contracts and other documents are accurate and
fairly present the information required to be shown; and such
counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that
are not described as required, or of any contracts or
documents of a character required to be described in the
Registration Statement or Prospectus (or required to be filed
under the Exchange Act if upon such filing they would be
incorporated by reference therein) or to be filed as exhibits
to the Registration Statement that are not described and filed
as required;
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<PAGE> 15
(vi) This Underwriting Agreement has been
duly authorized, executed and delivered by the Company; the
execution, delivery and performance of this Underwriting
Agreement and the consummation of the transactions
contemplated herein will not result in a breach or violation
of any of the terms and provisions of, or constitute a default
under, (a) any statute, indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract or
other agreement or instrument known to such counsel to which
the Company or its Subsidiaries are a party or by which they
are bound or to which any of the property or other assets of
the Company or its Subsidiaries is subject, (b) the articles
of incorporation, by-laws, certificate of general or limited
partnership, partnership agreement, or other organizational
document of the Company or any of its Subsidiaries, as
applicable, or (c) any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or its Subsidiaries or any of
their properties or other assets; and no consent, approval,
authorization, notice to, order of, or filing with, any court
or governmental agency or body is required for the
consummation of the transactions contemplated by this
Underwriting Agreement in connection with the issuance or sale
of the Securities by the Company, except such as have been
obtained under the Act or from the NYSE;
(vii) Commencing with the taxable year
ending December 31, 1988 the Company has continuously been
organized and operated in conformity with the requirements for
qualification as a "real estate investment trust" under the
Code. The Company's method of operation will permit it to
continue to meet the requirements for taxation as a "real
estate investment trust" under the Code. The federal income
tax treatment described in (i) the Prospectus under the
caption "Federal Income Tax Considerations" and (ii) the
Prospectus Supplement under the caption "Certain Federal
Income Tax Considerations," is accurate;
(viii) The agreement of the Company that for
a period of 90 days from the date of this Underwriting
Agreement it will not, except for the exercise of options
outstanding on the date hereof or pursuant to the Dividend
Reinvestment Plan, without the Underwriters' prior written
consent, offer, sell, contract to sell, grant any option to
sell, or otherwise dispose of, directly or indirectly, any
shares of capital stock or securities convertible into or
exchangeable for, or any rights to purchase or acquire, shares
of capital stock owned by it, has been duly and validly
executed and delivered by it and constitutes the legal, valid
and binding obligation of the Company enforceable against it
in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles;
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<PAGE> 16
(ix) To the best of such counsel's
knowledge, neither the Company nor any of its Subsidiaries is
in violation of any term or provision of their respective
articles of incorporation, by-laws, certificate of general or
limited partnership, partnership agreement or other
organizational document, as applicable, or in violation of or
default under any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract,
permit, judgment, decree, order, statute, rule or regulation;
(x) To the best of such counsel's
knowledge, there is no litigation or governmental or other
proceeding or investigation, before any court or before or by
any public body or board pending or threatened against, or
involving the assets, properties or businesses of, the Company
or any of its Subsidiaries, involving the Company's or any of
its Subsidiaries' officers or directors or to which any of the
Company's or any of its Subsidiaries' properties or other
assets are subject which would have a material adverse effect
upon the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of
the Company and its Subsidiaries taken as a whole; and
(xi) Neither the Company nor any of its
Subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(e) The Underwriters shall have received
from Rogers & Wells, Underwriters' counsel, such opinion or opinions,
dated the Closing Date, with respect to the organization of the
Company, the validity of the Securities, the Registration Statement,
the Prospectus and other related matters as the Underwriters reasonably
may request, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters.
(f) At the time of execution of this
Underwriting Agreement and at the Closing Date, the Underwriters shall
have received a letter, dated the date of delivery thereof, from KPMG
Peat Marwick LLP, the independent public accountants of the Company, in
the form previously agreed to by the Underwriters.
(g) The Underwriters shall have received
from the Company a certificate, signed by the President or a Vice
President and by the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that, to the best of
their knowledge based upon reasonable investigation:
(i) The representations and warranties of
the Company in this Underwriting Agreement are true and
correct, as if made at and as of the Closing Date, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
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<PAGE> 17
(ii) No stop order suspending the
effectiveness of the Registration Statement has been issued,
and no proceeding for that purpose has been instituted or is
threatened by the Commission nor has any state securities
authority suspended the qualification or registration of the
Securities for offering or sale in any jurisdiction;
(iii) Since the effective date of the
Registration Statement, there has occurred no event required
to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set
forth, and there has been no document required to be filed
under the Exchange Act and the Exchange Act Rules and
Regulations of the Commission thereunder that upon such filing
would be deemed to be incorporated by reference in the
Prospectus that has not been so filed;
(iv) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, (a) there has not been, and no development has
occurred which could reasonably be expected to result in, a
material adverse change in the general affairs, business,
business prospects, properties, management, condition
(financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (b) neither the
Company nor any of its Subsidiaries has sustained any material
loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not
covered by insurance, or from any labor dispute or any court
or legislative or other governmental action, order or decree,
which is not set forth in the Registration Statement and the
Prospectus; and
(v) such other matters as the Underwriters
or Underwriters' counsel may reasonably request.
(h) On or prior to the Closing Date, the
Underwriters shall have received the executed agreements referred to in
Section 4(k).
(i) Prior to the Closing Date, the
Securities shall have been duly authorized for listing by the NYSE upon
official notice of issuance.
(j) All such opinions, certificates,
letters and other documents will be in compliance with the provisions
hereof only if they are satisfactory in form and substance to the
Underwriters or Underwriters' counsel. The Company will furnish the
Underwriters with such conformed copies of such opinions, certificates,
letters and other documents as the Underwriters shall reasonably
request and the Company shall furnish to the Underwriters such further
certificates and documents as the Underwriters shall have reasonably
requested.
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<PAGE> 18
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and
hold the Underwriters harmless, their directors, officers, employees
and agents and each person, if any, who controls them within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from
and against any and all losses, claims, liabilities, expenses and
damages (including, but not limited to, any and all investigative,
legal and other expenses reasonably incurred in connection with, and
any and all amounts paid in settlement of, any action, suit or
proceeding between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred to which the
Underwriters, or any such person, may become subject under the Act, the
Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based on (i) any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement
or the Prospectus or in any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Prospectus, or in any
application or other document executed by or on behalf of the Company
or based on written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Securities
under the securities or blue sky laws thereof or filed with the
Commission, (ii) the omission or alleged omission to state in such
document a material fact required to be stated in it or necessary to
make the statements in it, in the light of the circumstances under
which they were made, not misleading or (iii) any act or failure to act
or any alleged act or failure to act by the Underwriters in connection
with, or relating in any manner to, the Securities or the offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based
upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable under this clause (iii) to the extent it is
finally judicially determined by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from
any such acts or failures to act undertaken or omitted to be taken by
the Underwriters through their gross negligence or willful misconduct);
provided that the Company will not be liable to the extent that such
loss, claim, liability, expense or damage arises from the sale of the
Securities in the public offering to any person and is based on an
untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to the
Underwriters furnished in writing to the Company by the Underwriters
expressly for inclusion in the Registration Statement or the
Prospectus. The Underwriters confirm to the Company and the Company
acknowledges that only the following information appearing in the
Prospectus with respect to the public offering of the Securities has
been furnished to the Company by the Underwriters for use in the
Prospectus: (i) the names of the Underwriters contained on the cover
page and back cover page of the Prospectus Supplement; (ii) the
stabilization legend on the inside front cover page of the Prospectus
Supplement; and (iii) the information in the first, second and sixth
paragraphs under the caption "Underwriting" in the Prospectus
Supplement. This indemnity agreement will be in addition to any
liability that the Company might otherwise have.
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<PAGE> 19
(b) The Underwriters will indemnify and
hold harmless the Company, each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, each director of the Company and each officer of the
Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company to the Underwriters, but only
insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with
information relating to the Underwriters furnished in writing to the
Company by the Underwriters expressly for use in the Registration
Statement, the preliminary prospectus or the Prospectus. This indemnity
will be in addition to any liability that the Underwriters might
otherwise have; provided, however, that in no case shall the
Underwriters be liable or responsible for any amount in excess of the
underwriting discounts and commissions received by the Underwriters.
(c) Any party that proposes to assert the
right to be indemnified under this Section 6 will, promptly after
receipt of notice of commencement of any action against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section 6, notify each such indemnifying party of
the commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve
it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the
extent that, such omission results in the forfeiture of substantive
rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying
party of its commencement, the indemnifying party will be entitled to
participate in and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except
as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the
defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such indemnified party unless
(i) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there
may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the
indemnifying party, (iii) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of
such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice
of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying
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<PAGE> 20
party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one additional firm
admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they
are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld); provided however, no
indemnifying party shall, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 6 (whether or not
any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of
such claim, action or proceeding. Notwithstanding any other provision
of this Section 6(c), if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement.
(d) In order to provide for just and
equitable contribution in circumstances in which the indemnification
provided for in the foregoing paragraphs of this Section 6 is
applicable in accordance with its terms but for any reason is held to
be unavailable from the Company or the Underwriters, the Company and
the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal
and other expenses reasonably incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the
Company from persons other than the Underwriters, such as persons who
control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the
Company, who also may be liable for contribution) to which the Company
and the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other. The relative benefits
received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on
the cover page of the Prospectus Supplement. If, but only if, the
allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of
the Company on the one hand, and the
20
<PAGE> 21
Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall
be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative 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 contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in
this Section 6(d) shall be deemed to include, for purpose of this
Section 6(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
6(d), the Underwriters shall not be required to contribute any amount
in excess of the underwriting discounts and commissions received by the
Underwriters and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6(d), any person who
controls a party to this Underwriting Agreement within the meaning of
the Act will have the same rights to contribution as that party, and
each officer of the Company who signed the Registration Statement will
have the same rights to contribution as the Company, subject in each
case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action against
such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from
whom contribution may be sought, but the omission so to notify will not
relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 6(d).
Except for a settlement entered into pursuant to the last sentence of
Section 6(c) hereof, no party will be liable for contribution with
respect to any action or claim settled without its written consent
(which consent will not be unreasonably withheld).
(e) The indemnity and contribution
agreements contained in this Section 6 and the representations and
warranties of the Company contained in this Underwriting Agreement
shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii)
acceptance of the Securities and payment therefor or (iii) any
termination of this Underwriting Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company contained herein or in
certificates delivered pursuant hereto, and the Underwriters' agreements
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Underwriters
or any controlling persons, or the Company or any of its officers,
21
<PAGE> 22
directors or any controlling persons, and shall survive delivery of and payment
for the Securities hereunder.
8. TERMINATION. The Underwriters shall have the right by
giving notice as hereinafter specified at any time at or prior to the Closing
Date, to terminate this Underwriting Agreement if (i) the Company shall have
failed, refused or been unable, at or prior to the Closing Date, to perform any
agreement on its part to be performed hereunder, (ii) any other condition of the
Underwriters' obligations hereunder is not fulfilled when due, (iii) trading on
the NYSE shall have been wholly suspended, (iv) minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for the Common Stock
shall have been required on the NYSE by the NYSE or by order of the Commission
or any other governmental authority having jurisdiction, (v) a banking
moratorium shall have been declared by federal or New York authorities, or (vi)
an outbreak of major hostilities in which the United States is involved, a
declaration of war by Congress, any other substantial national or international
calamity or any other event or occurrence of a similar character shall have
occurred since the execution of this Underwriting Agreement that, in the
Underwriters' judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party with respect to
Securities not purchased by reason of such termination except that the
provisions of Section 4(g) and Section 6 hereof shall at all times be effective.
If the Underwriters elect to terminate this Underwriting Agreement as provided
in this Section, the Company shall be notified promptly by the Underwriters by
telephone, telex or telecopy, confirmed by letter.
9. NOTICES. All notices or communications hereunder shall be
in writing and if sent to the Underwriters shall be mailed, delivered, telexed
or telecopied and confirmed to the Underwriters in care of PaineWebber
Incorporated at 1285 Avenue of the Americas, New York, New York 10019, c/o Real
Estate Investment Banking, attention: David R. Jarvis (with copy to Jay L.
Bernstein, Esq., c/o Rogers & Wells, 200 Park Avenue, New York, New York 10166),
or if sent to the Company, shall be mailed, delivered, telexed or telecopied and
confirmed to David H. Hoster II, c/o the Company at 300 One Jackson Place, 188
East Capitol Street, Jackson, Mississippi 39201 (with copy to Joseph P. Kubarek,
Esq., c/o Jaeckle Fleischmann & Mugel, LLP, Fleet Bank Building, Twelve Fountain
Plaza, Buffalo, New York 14202-2292). Any party to this Underwriting Agreement
may change such address for notices by sending to the other party to this
Underwriting Agreement written notice of a new address for such purpose.
10. PARTIES. This Underwriting Agreement shall inure to the
benefit of, and be binding upon, the Company and the Underwriters and their
respective successors and the controlling persons, officers, directors,
employees and representatives referred to in Section 6 hereof, and no other
person will have any right or obligation hereunder.
11. APPLICABLE LAW. This Underwriting Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
12. OVER-ALLOTMENT OPTION.
22
<PAGE> 23
(a) In addition to the Securities being
sold by the Company and described in Section 1 hereof (which are
referred to herein as the "Firm Securities"), the Underwriters, at the
Underwriters' option, shall have the right to purchase from the Company
up to an aggregate 525,000 additional shares of Common Stock ("Optional
Securities"). The first two paragraphs of Section 3 hereof shall be
deemed to apply only to the purchase, sale and delivery of the Firm
Securities. References in those two paragraphs to the "Securities"
shall be deemed to be references to the Firm Securities; except as
otherwise provided in this Section 13, other references in this
Underwriting Agreement to the "Securities" shall be deemed to include
the Firm Securities and the Optional Securities.
(b) Upon written notice from the
Underwriters given to the Company not more than 30 days subsequent to
the date of the public offering of the Securities, the Underwriters may
purchase all or less than all of the Optional Securities at the
purchase price per share to be paid for the Firm Securities. Such
Optional Securities may be purchased by the Underwriters only for the
purpose of covering over-allotments made in connection with the sale of
the Firm Securities. No Optional Securities shall be sold or delivered
unless the Firm Securities previously have been, or simultaneously are,
sold and delivered. The right to purchase the Optional Securities or
any portion thereof may be surrendered and terminated at any time upon
notice by the Underwriters to the Company. The "Closing Date" as
defined in Section 3 hereof, shall be deemed to be the "Closing Date,"
and the time for the delivery of, and payment for, the Optional
Securities, is herein referred to as the "Option Closing Date" (which
may be the Closing Date). The Option Closing Date shall be determined
by the Underwriters but shall be not later than 10 days after the
Underwriters give to the Company written notice of election to purchase
Optional Securities. The preparation, registration, checking and
delivery of, and payment for, the Optional Securities shall occur or be
made in the same manner as provided in Section 3 hereof for the Firm
Securities, except as the Underwriters and the Company may otherwise
agree.
(c) The conditions to the Underwriters'
obligations set forth in Section 5 shall be deemed to be conditions to
the Underwriters' obligation to purchase and pay for the Securities to
be purchased on each of the Closing Date and the Option Closing Date,
as the case may be; references in that Section and in Sections 2, 8 and
13 hereof to the "Closing Date" shall be deemed to be references to the
Closing Date or the Option Closing Date, as the case may be, and
references to the "Securities" in Section 5 hereof shall be deemed to
be references to the Securities to be purchased at such Closing Date. A
termination of this Underwriting Agreement as to the Optional
Securities after the Closing Date will not terminate this Underwriting
Agreement as to the Firm Securities.
13. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If, on either
the Closing Date or the Option Closing Date, any Underwriter defaults in the
performance of its obligations under this Underwriting Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Securities which
the defaulting Underwriter agreed but failed to purchase on such Closing Date in
the respective proportions which the number of Firm
23
<PAGE> 24
Securities set forth opposite the name of each remaining non-defaulting
Underwriter in SCHEDULE A hereto bears to the total number of Firm Securities
set forth opposite the names of all the remaining non-defaulting Underwriters in
SCHEDULE A hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Securities on such
Closing Date if the total number of Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of Securities to be purchased on such Closing Date, and any
remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of Securities which it agreed to purchase on such
Closing Date. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Underwriters who so agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all the
Securities to be purchased on such Closing Date. If the remaining non-defaulting
Underwriters or other underwriters satisfactory to the Underwriters do not elect
to purchase the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Closing Date, this Underwriting Agreement
(or, with respect to the Option Closing Date, the obligation of the Underwriters
to purchase, and of the Company to sell, the Option Securities) shall terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except that the Company will continue to be liable for the payment of expenses
to the extent set forth in Sections 4(g) and 4(h). As used in this Underwriting
Agreement, the term "Underwriter" includes, for all purposes of this
Underwriting Agreement unless the context requires otherwise, any party not
listed in SCHEDULE A hereto who, pursuant to this Section 13, purchases Firm
Securities which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the
Securities of a defaulting or withdrawing Underwriter, either the Underwriters
or the Company may postpone the Closing Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
24
<PAGE> 25
If the foregoing correctly sets forth the understanding
between the Company and the Underwriters, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and the Underwriters.
Very truly yours,
EASTGROUP PROPERTIES, INC.
By:/s/ David H. Hoster
--------------------------------------
Name: David H. Hoster
Title: President
ACCEPTED as of the date first above
written:
PAINEWEBBER INCORPORATED
By: /s/ David R. Jarvis
-------------------------------
Name: David R. Jarvis
Title: Managing Director
For itself and as representative
of the several Underwriters named
in Schedule A hereto
25
<PAGE> 26
SCHEDULE A
<TABLE>
<CAPTION>
Underwriter Number of
- ----------- Shares
------
<S> <C>
PaineWebber Incorporated........................................ 1,100,000
J.C. Bradford & Co.............................................. 825,000
A.G. Edwards & Sons, Inc........................................ 825,000
Prudential Securities Incorporated.............................. 150,000
Harris Webb & Garrison, Inc..................................... 100,000
Morgan Keegan & Company, Inc.................................... 100,000
Raymond James & Associates, Inc................................. 100,000
Sterne, Agee & Leach, Inc....................................... 100,000
Unterberg Harris................................................ 100,000
Wheat, First Securities, Inc.................................... 100,000
Total............................... 3,500,000
</TABLE>
A-1
<PAGE> 27
SCHEDULE B
EASTGROUP PROPERTIES, INC.
SUBSIDIARIES
PARENT: 100% OWNED SUBSIDIARIES:
- ------- ------------------------
EastGroup Properties, Inc. EastGroup California, Inc.
EastGroup Florida, Inc.
EastGroup Houston, Inc.
EastGroup Jackson, Inc.
EastGroup Jacksonville, Inc.
EastGroup San Antonio, Inc.
EastGroup Sunbelt, Inc.
EastGroup Tallahassee, Inc.
EastGroup Tampa, Inc.
EastGroup Texas, Inc.
EastGroup Virginia, Inc.
EGP Managers, Inc.
EastGroup Alabama, Inc.
CPI Holdings, Inc.
EastGroup-LNH Corp.
EastGroup Properties General Partners,
Inc.
EastGroup-LNH Corp. LNH Florida, Inc.
LNH KC, Inc.
LNH RI, Inc.
B-1
<PAGE> 28
SCHEDULE C
TENANT RIGHTS OF FIRST REFUSAL/FIRST OFFER
<TABLE>
<CAPTION>
PROPERTY: TENANT: RIGHT:
- --------- ------- ------
<S> <C> <C>
Exchange Distribution Central Garden and Pet Right of first negotiation to
Company purchase entire property
Northwest Point Commerce Fresh Option to purchase entire
Distribution Center Marketing, Inc. property at any time during
lease term or extension
thereof
Columbia Place Ceridian Corporation Option to purchase any real
property interest being sold
by landlord (excluding any
sale, transfer or assignment
by landlord to entity
affiliated with landlord)
Exchange Drive DRB Holdings Right of first refusal to
Warehouses purchase leased premises if
the Company receives a
bona fide contract to
purchase and sell during
lease term
San Clemente Distribution Sunclipse, Inc. Right of first refusal to
Center purchase leased premises if
the Company enters into a
contract or agreement which
could transfer the ownership
of the leased premises or
the Company receives a written
offer to purchase all or any
portion of the leased premises
during the lease term
</TABLE>
C-1
