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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): JUNE 12, 1998
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) N/A
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FORM 8-K
EASTGROUP PROPERTIES, INC.
ITEM 5. Other Events
On June 12, 1998, EastGroup Properties, Inc. priced an offering of 1,500,000
shares of 9.00% Series A Cumulative Redeemable Preferred Stock ("Series A
Preferred Stock") at $25.00 per share in a public offering. Net proceeds of
approximately $35.9 million will be used to repay advances currently outstanding
on the Company's working capital facility.
The Series A Preferred Stock may be redeemed by the Company at $25.00 per
share plus accrued and unpaid dividends on or after June 19, 2003, has no stated
maturity, sinking fund or mandatory redemption and is not convertible into any
other securities of the Company.
The offering was underwritten by PaineWebber Incorporated, A.G. Edwards &
Sons, Inc., J.C. Bradford & Co. and Raymond James & Associates, Inc.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
(1) Underwriting Agreement between EastGroup Properties, Inc., a Maryland
corporation, and PaineWebber Incorporated, A.G. Edwards & Sons, Inc., J.C.
Bradford & Co. and Raymond James & Associates, Inc. dated June 12, 1998.
EastGroup agrees to furnish supplementally to the Securities and Exchange
Commission on request a copy of any omitted schedule or exhibit to this
agreement.
(2) Articles Supplementary of the Company relating to the 9.00% Series A
Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit
1 to the Company's Form 8-A filed June 15, 1998).
(3) Opinion of Jaeckle Fleischmann & Mugel, LLP regarding legality.
(4) Opinion of Jaeckle Fleischmann & Mugel, LLP regarding tax matters.
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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: June 19, 1998 By: /s/ Diane W. Hayman
Diane W. Hayman, CPA
Vice President and Controller
(Principal Accounting Officer)
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Exhibit 1
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1,500,000 Shares
EASTGROUP PROPERTIES, INC.
9.00% Series A Cumulative
Redeemable Preferred Stock
($0.0001 Par Value)
UNDERWRITING AGREEMENT
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June 12, 1998
PAINEWEBBER INCORPORATED
A.G. EDWARDS & SONS, INC.
J.C. BRADFORD & CO.
RAYMOND JAMES & ASSOCIATES, INC.
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 PaineWebber Incorporated, A.G. Edwards & Sons, Inc.,
J.C. Bradford & Co. and Raymond James & Associates, Inc. (collectively, the
"Underwriters"), as follows:
1. Description of Securities. The Company proposes to issue and
sell to the Underwriters, severally and not jointly, 1,500,000 shares of 9.00%
Series A Cumulative Redeemable Preferred Stock, $0.0001 par value (the
"Preferred Stock"). The shares of Preferred 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
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"Commission") thereunder (the "1933 Act Rules and Regulations"), and has
been filed with the Commission and declared effective. Such 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
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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 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
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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 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.
(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, with no personal liability attaching to
holders of the shares of capital stock solely by reason of the ownership of
shares of capital stock, and conform to the description thereof in the
Prospectus. The shareholders 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 Registration Statement, Prospectus and the articles supplementary
determining the terms of the Securities (the "Articles Supplementary") and
will not be subject to any preemptive rights of any shareholder of the
Company.
(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 Preferred Stock, the capital
stock or structure, short-term debt or long-term debt of the Company and
its Subsidiaries; or any
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material adverse change, or any development that is reasonably likely to
involve a 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
regular distributions with respect to the Company's common stock, par value
$0.0001 per share (the "Common Stock"), in amounts per share that are
consistent with past practice or the charter documents of the Company,
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any 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.
During the period of at least the last 36 calendar months preceding the
filing of the Registration Statement, the Company has filed all reports
required to be filed pursuant to Sections 13, 14 and 15(d) under the
Exchange Act. Immediately preceding the filing of the Registration
Statement, the aggregate market value of the Company's voting stock held by
non-affiliates of the Company was equal to or greater than $150 million.
(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 1933 Act Rules and Regulations and the Exchange Act
Rules and Regulations that have not been so filed. All of the contracts to
which any of the Company or its Subsidiaries is a party (i) have been duly
authorized, executed and delivered by such entity, constitute valid and
binding agreements of such entity and are enforceable against such entity
in accordance with the terms thereof, except as such enforcement may be
limited by (A) bankruptcy, insolvency, reorganization or similar other laws
affecting creditors' rights generally and (B) general equity principles and
limitations on the availability of equitable relief or (ii) in the case of
any contract to be executed on or before the Closing Date, will on the
Closing Date be duly authorized, executed and delivered by the Company
and/or a Subsidiary, and constitute valid and binding agreements of such
entity enforceable against each entity in accordance with the terms
thereof, except as such enforcement may be limited by (A) bankruptcy,
insolvency, reorganization or similar other laws affecting creditors'
rights generally and (B) general equity principles and limitations on the
availability of equitable relief.
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(xiv) The Company has full corporate power and authority to
enter into this Underwriting Agreement. 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 of the New York Stock Exchange, Inc. (the "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. The issuance of the Securities will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement, evidence of indebtedness, contract or
other agreement or instrument to which the Company or its Subsidiaries are
a party.
(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, charter, 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, claims, defects or restrictions, except such as are described
in the Prospectus or are not material in relation to the
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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; all liens, charges, encumbrances, claims or
restrictions on or affecting any of the properties or the assets of the
Company and its Subsidiaries which are required to be disclosed in the
Prospectus are disclosed therein; except as disclosed on Schedule C, no
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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.
(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 Materials (as hereinafter defined) 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.
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As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, oil,
petroleum, petroleum products, hazardous materials, hazardous wastes,
hazardous or toxic substances, asbestos or any material as defined by any
environmental laws, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
(42 U.S.C. Section 9601, et seq.) (CERCLA), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the
-- ---
Resource Conservation and Recovery Act, as amended (42 U.S C. Section 6901,
et seq.), and in the regulations adopted pursuant to each of the foregoing
-- ---
or by any Federal, state or local governmental authority having
jurisdiction over the properties as described in the Prospectus.
All of the properties have been, and it is contemplated that all
future acquisitions will be, subjected to a Phase I or similar
environmental assessment (which generally includes a site inspection,
interviews and a records review, but no subsurface sampling). These
assessments and certain follow-up investigations (including, as
appropriate, asbestos, radon and lead surveys, additional public records
review, subsurface sampling and other testing) of the properties have not
revealed any environmental liability that the Company believes would have a
material adverse effect upon the business, results of operations, prospects
or condition (financial or otherwise) of the Company or any of its
Subsidiaries.
(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) Except as described in the Prospectus, each tenant (a
"Tenant") of a property owned or leased by the Company is in actual
possession of such property under a lease to such Tenant (each, a "Lease").
Except as disclosed in the Prospectus, each 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 would have a
material adverse effect upon the business, results of operations, prospects
or condition (financial or otherwise) of the Company or any of its
Subsidiaries. To the knowledge of the Company, no Tenant of any of the
properties is in default under any of the Leases governing such properties
and there is no event which, but for the passage of time or the giving of
notice, or both, would constitute a material default under any of such
Leases.
(xxiii) Except as specifically disclosed in the Prospectus, there
is no material defect in the condition of any property, the improvements
thereon, the structural elements thereof, or the mechanical systems
therein, nor any material damage from casualty or other cause, nor any soil
condition of any such property that will not support all of the
improvements thereon without the need for unusual or new subsurface
excavations, fill, footings, caissons or other installations, except for
(a) ordinary wear and
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tear and (b) any such defect, damage or condition that has been corrected
or will be corrected in the ordinary course of the business of such
property as part of the Company's scheduled annual maintenance and
improvement program.
(xxiv) As a result of, and in connection with, the merger (the
"Ensign Merger"), effected in March 1998, of a wholly-owned subsidiary of
the Company with and into Ensign Properties, Inc., a Florida corporation
("Ensign"), the Company owns 100% of the issued and outstanding capital
stock of Ensign and commenced the self-management of properties it owns or
may acquire in Orlando and Tampa, Florida. In accordance with the terms of
their respective organizational documents and the applicable laws of their
respective jurisdictions, each of the Company and Ensign received the
necessary approval from their respective security holders and, where
applicable, boards of directors to participate in, and to consummate, the
Ensign Merger and the other transactions related thereto as set forth in,
or incorporated by reference into, the Prospectus. The Ensign Merger has
become effective under the applicable laws of, and the related certificate
of merger has been duly filed in, the State of Florida prior to the Closing
Date.
(xxv) As a result of, and in connection with, the merger (the
"Meridian Merger", together with the Ensign Merger, the "Mergers"),
effective June 1, 1998, of a wholly-owned subsidiary of the Company with
and into Meridian Point Realty Trust VIII Co. ("Meridian VIII"), the
Company owns 100% of the issued and outstanding capital stock of Meridian
VIII. In accordance with the terms of their respective organizational
documents and the applicable laws of their respective jurisdictions, each
of the Company and Meridian VIII received the necessary approval from their
respective security holders and, where applicable, boards of directors or
trustees to participate in, and to consummate, the Meridian Merger and the
other transactions related thereto as set forth in, or incorporated by
reference into, the Prospectus. The Meridian Merger has become effective
under the applicable laws of, and the related certificate of merger has
been duly filed in, the State of Missouri prior to the Closing Date.
(xxvi) The consummation of the Mergers did 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, charter, 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.
(xxvii) 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.
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(xxviii) 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.
(xxix) 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 and the Company has no
knowledge, after due inquiry, of any tax deficiency which has been asserted
or threatened against the Company. To the knowledge of the Company, there
are no tax returns of the Company or any of its Subsidiaries that are
currently being audited by state, local or federal taxing authorities or
agencies which would have a material adverse effect on the financial
position, stockholders' equity, results of operations, business or
prospects of the Company and its Subsidiaries.
(xxx) 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.
(xxxi) 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.
(xxxii) 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.
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(xxxiii) 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.
(xxxiv) 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 any capital stock of the Company or the shares of Preferred Stock to
facilitate the sale or resale of any of the Securities.
(xxxv) 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.
(xxxvi) Neither the Company nor any Subsidiary is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(xxxvii) The Company has applied to list the Securities on the
NYSE. If approved, trading of the Securities on the NYSE is expected to
commence within a 30-day period after the initial delivery of the
Securities.
(xxxviii) The Company and its Subsidiaries maintain a system of
internal accounting controls which the Company believes is sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit the preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
financial 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.
(xxxix) Neither the Company or any of its Subsidiaries nor,
to the knowledge of the Company, any employee or agent of the Company or
any Subsidiary, has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law, rule
or regulation or of a character required to be disclosed in the Prospectus.
(xxxx) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date or (ii) completion of the
distribution of the Securities, will
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not distribute any offering material in connection with the offering and
sale of the Securities other than the Registration Statement, the
Prospectus or other materials, if any, permitted by the Act.
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 $24.125 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
aggregate amount of $36,187,500 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 June 19, 1998 (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
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<PAGE>
file no amendment or supplement to the Registration Statement or Prospectus
(other than any prospectus supplement relating to the offering of other
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
13
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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 its
capital stock.
(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 its capital stock
to facilitate the sale or resale of any of the Securities.
14
<PAGE>
(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.
(k) 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 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,
15
<PAGE>
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 LLP 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 own or hold its
properties and 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, issued and outstanding capital
stock as set forth in the Prospectus Supplement and in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998,
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, with no personal liability attaching to
holders of the shares of capital stock solely by reason of ownership
of the shares of capital stock, 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 of the
Company 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 shares of capital stock of the
Company and the
16
<PAGE>
Securities conform, or will conform, in all material respects to the
descriptions thereof contained in the Registration Statement, the
Prospectus and the Articles Supplementary, as the case may be. 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, the Exchange Act, the 1933 Act Rules and Regulations or the
Exchange Act Rules and Regulations, as applicable; 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;
17
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(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, including the issuance of the
Securities, 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, charter, 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 and the NASD;
(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) 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, charter, 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;
(ix) 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
18
<PAGE>
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
(x) Neither the Company nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(xi) Following the completion of the Ensign Merger, the
Company owned 100% of the issued and outstanding capital stock of
Ensign. In accordance with the terms of their respective
jurisdictions, each of the Company and Ensign received the necessary
approval from their respective security holders, and, where
applicable, boards of directors, to participate in and to consummate
the Ensign Merger. The Ensign Merger has become effective under the
applicable laws of, and the related certificate of merger has been
filed in, the State of Florida;
(xii) Following the completion of the Meridian Merger, the
Company owned 100% of the issued and outstanding capital stock of
Meridian VIII. In accordance with the terms of their respective
jurisdictions, each of the Company and Meridian VIII received the
necessary approval from their respective security holders, and, where
applicable, boards of directors, to participate in and to consummate
the Meridian Merger. The Meridian Merger has become effective under
the applicable laws of, and the related certificate of merger has been
filed in, the State of Missouri; and
(xiii) The consummation of the Mergers did 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, charter,
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.
(e) The Underwriters shall have received from Rogers & Wells
LLP, Underwriters' counsel, such opinion or opinions, dated the Closing
Date, with respect to 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.
19
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(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;
(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.
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(h) Prior to the Closing Date, the Securities shall have been
duly authorized for listing by the NYSE upon official notice of issuance.
(i) 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.
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
21
<PAGE>
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.
(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
22
<PAGE>
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 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
23
<PAGE>
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 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
24
<PAGE>
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, 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 Preferred
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), 4(h) 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 LLP, 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, 800 Fleet Bank Building, Twelve
Fountain Plaza, Buffalo, New York 14202-2292).
25
<PAGE>
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.
(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
225,000 additional shares of Preferred 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 12, 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
26
<PAGE>
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 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.
27
<PAGE>
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:
----------------------------------
Name:
Title:
ACCEPTED as of the date first above
written:
PAINEWEBBER INCORPORATED
By:
---------------------------------
Name:
Title:
For itself and as representative
of the several Underwriters named
in Schedule A hereto
28
<PAGE>
SCHEDULE A
Underwriter Number of
- ----------- Shares
---------
PaineWebber Incorporated............................ 375,000
A.G. Edwards & Sons, Inc............................ 375,000
J.C. Bradford & Co.................................. 375,000
Raymond James & Associates, Inc..................... 375,000
Total................................ 1,500,000
A-1
<PAGE>
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 Tampa, Inc.
- ------------------------------------------------------------
EastGroup Texas, Inc.
- ------------------------------------------------------------
EastGroup Virginia, Inc.
- ------------------------------------------------------------
EGP Managers, Inc.
- ------------------------------------------------------------
EastGroup Alabama, Inc.
- ------------------------------------------------------------
CPI Holdings, Inc.
- ------------------------------------------------------------
EastGroup-LNH Corporation
- ------------------------------------------------------------
EastGroup Properties General
Partners, Inc.
- ------------------------------------------------------------
EGP Houston Partners Ltd.
- ------------------------------------------------------------
EGP-Orlando, Inc.
- ------------------------------------------------------------
EGP San Antonio Partners Ltd.
- ------------------------------------------------------------
EGP Texas Partners Ltd.
- ------------------------------------------------------------
Meridian Point Realty Trust
VIII Co.
- ------------------------------------------------------------
EastGroup Properties Holdings,
Inc.
- ------------------------------------------------------------
EastGroup Properties, L.P.
- ------------------------------------------------------------
EastGroup Property Services,
Inc.
- ------------------------------------------------------------
B-1
<PAGE>
- ------------------------------------------------------------
EastGroup South Bay, LLC
- ------------------------------------------------------------
IBG Wiegman Road Associates
- ------------------------------------------------------------
- ------------------------------------------------------------
EastGroup-LNH Corp. LNH Florida, Inc.
- ------------------------------------------------------------
LNH KC, Inc.
- ------------------------------------------------------------
LNH RI, Inc.
- ------------------------------------------------------------
============================================================
B-2
<PAGE>
SCHEDULE C
----------
Tenant Rights of First Refusal/First Offer
<TABLE>
<CAPTION>
================================================================================
Property: Tenant: Right:
- -------- ------ -----
- --------------------------------------------------------------------------------
<S> <C> <C>
Exchange Distribution Central Garden and Right of first negotiation
Pet Company to 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 Warehouses DRB Holdings Right of first refusal to
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
<PAGE>
- --------------------------------------------------------------------------------
55th Street Distribution Iron Mountain Records Right of first refusal to
Center Management, Inc. purchase property or
building
- --------------------------------------------------------------------------------
Ethan Allen Distribution Ethan Allen Inc. Right of first refusal to
Center purchase the premises
- --------------------------------------------------------------------------------
Auburn Facility GKN Automotive, Inc. Option to purchase leased
property and right of
first refusal
- --------------------------------------------------------------------------------
C-2
<PAGE>
Exhibit 3
---------
Jaeckle Fleischmann & Mugel, LLP
A T T O R N E Y S A T L A W
FLEET BANK BUILDING TWELVE FOUNTAIN PLAZA BUFFALO, NEW YORK 14202-2292
TEL (716) 856-0600 FAX (716) 856-0432
June 19, 1998
EastGroup Properties, Inc.
300 One Jackson Place
188 East Capitol Street
Jackson, Mississippi 39201
Ladies and Gentlemen:
Re: Registration Statement on Form S-3 under the Securities Act
of 1933, No. 333-29193, as amended (the "Registration
Statement"); Issuance and Sale of up to 1,725,000 shares of
9.00% Series A Cumulative Redeemable Preferred Stock, par
value $0.0001 per share ("Series A Preferred Stock")
------------------------------------------------------------
As your counsel we have examined the Registration Statement and
Prospectus Supplement dated June 12, 1998 and we are familiar with the documents
referred to therein and incorporated therein by reference, as well as
EastGroup's Articles of Incorporation, as amended, and Bylaws, such records of
proceedings of EastGroup as we deemed material, and such other proceedings of
EastGroup as we deemed necessary for the purpose of this opinion.
We have examined the proceedings heretofore taken and we are informed
as to the procedures proposed to be followed by EastGroup in connection with the
authorization, issuance and sale of the shares of Series A Preferred Stock. In
our opinion the shares of Series A Preferred Stock to be issued by EastGroup
will be, when issued and paid for pursuant to the Registration Statement and
Prospectus Supplement dated June 12, 1998 and the exhibits thereto, duly
authorized for issuance by all necessary corporate action and, upon the issuance
thereof in accordance with their terms, the shares of Series A Preferred Stock
will be legally issued, fully paid and non-assessable.
We consent to the incorporation by reference of this opinion letter as
an exhibit to the Registration Statement.
Very truly yours,
JAECKLE FLEISCHMANN & MUGEL, LLP
<PAGE>
Exhibit 4
---------
Jaeckle Fleischmann & Mugel, LLP
A T T O R N E Y S A T L A W
FLEET BANK BUILDING TWELVE FOUNTAIN PLAZA BUFFALO, NEW YORK 14202-2292 USA
TEL (716) 856-0600 FAX (716) 856-0432
June 19, 1998
EastGroup Properties, Inc.
300 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
Re: EastGroup Properties, Inc.; Sale and Issuance of
1,725,000 Shares of 9.00% Series A Cumulative
Redeemable Preferred Stock
------------------------------------------------
Ladies and Gentlemen:
We are legal counsel to EastGroup Properties, Inc., a Maryland
corporation (the "Company"), and have represented the Company in connection with
the preparation of its Registration Statement on Form S-3 (No. 333-29193), a
Prospectus dated June 23, 1997 included in the Registration Statement (the
"Prospectus") and a Prospectus Supplement dated June 12, 1998 (the "Prospectus
Supplement"), in connection with the offering of the Company's 9.00% Series A
Cumulative Redeemable Preferred Stock, $0.0001 par value.
In rendering this opinion, we have reviewed (i) the Prospectus; (ii)
the Prospectus Supplement; (iii) the Registration Statement; (iv) the Company's
Charter and the Certificates of Incorporation or other organizational documents
of each subsidiary, as amended; (v) the Company's Bylaws and the Bylaws of each
subsidiary of the Company, as amended; (vi) the partnership agreements for
partnerships in which the Company or a subsidiary is a partner; (vii) the
operating agreements for limited liability companies in which the Company or a
subsidiary is a member; and (viii) the Company's Federal Income Tax Returns for
the years ended December 31, 1995 and December 31, 1996.
We have reviewed with management of the Company the investments and
operations of the Company and its subsidiaries. We have also reviewed certain
documents of the Company and its subsidiaries relating to the ownership and
operation of selected real estate properties and other investments, including
management agreements and partnership agreements relating to such properties and
forms of leases relating to the Company's or its subsidiaries' interest in such
properties, and we rely upon representations made to us by management of the
Company that such documents are representative of those existing and in effect
with respect to other properties of the Company and its subsidiaries. Our
discussions with management focused on, among other things, the number and
holdings of stockholders of the Company; the actual and proposed distribution
policy of the Company; various record keeping requirements; the composition of
the assets of the Company; the magnitude of
<PAGE>
EastGroup Properties, Inc.
300 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
June 19, 1998
Page 2
personal property included in its or its subsidiaries' real property leases; the
income generated from subleases of its real property; and other matters which we
deemed relevant and upon which we rely for purposes of rendering this opinion.
Furthermore, in rendering this opinion we have relied upon a
certificate of an officer of the Company. Although we have not independently
verified the truth, accuracy or completeness of the factual representations
contained in the certificate and the underlying assumptions upon which they are
based, after reasonable inquiry and investigation, nothing has come to our
attention that would cause us to question them.
Based upon the foregoing, we are of the opinion that, 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 Internal Revenue Code of 1986, as
amended (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 Consequences" and (ii) the
Prospectus Supplement under the caption "Certain Federal Income Tax
Considerations" is accurate.
We note, however, that the ability of the Company to qualify as a real
estate investment trust for any year will depend upon future events, some of
which are not within the Company's control, and it is not possible to predict
whether the facts set forth in the Prospectus, the Prospectus Supplement or the
Registration Statement and this letter will continue to be accurate in the
future. In addition, our opinions are based on the Code and the regulations
thereunder, and the status of the Company as a real estate investment trust for
federal income tax purposes may be affected by changes in the Code and the
regulations thereunder.
<PAGE>
EastGroup Properties, Inc.
300 One Jackson Place
188 East Capitol Street
Jackson, MS 39201
June 19, 1998
Page 3
We consent to the incorporation by reference of this opinion letter as
an exhibit to the Registration Statement.
Very truly yours,
JAECKLE FLEISCHMANN & MUGEL, LLP
