Exhibit 1.1
-----------
Equity One, Inc.
3,000,000 Shares*
Common Stock
($0.01 par value)
Underwriting Agreement
September 22, 2003
To the Underwriters named on Schedule I:
Ladies and Gentlemen:
Equity One, Inc., a corporation organized under the laws of the State of
Maryland (the "Company"), proposes to sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom the Underwriters named as
Representatives on Schedule I (the "Representatives") are acting as
representatives, 3,000,000 shares of Common Stock, par value $0.01 per share
("Common Stock") of the Company (said shares to be issued and sold by the
Company being hereinafter called the "Underwritten Securities"). The Company
also proposes to grant to the Underwriters an option to purchase up to 450,000
shares of Common Stock to cover over-allotments (the "Option Securities"; the
Option Securities, together with the Underwritten Securities, being hereinafter
called the "Securities"). To the extent there are no additional Underwriters
listed on Schedule I other than the Representatives, the term Representatives as
used herein shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires.
Certain terms used herein are defined in Section 17 hereof.
1. Representations and Warranties. The Company represents and warrants to, and
agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company has filed with the Commission a registration statement on
Form S-3, including a prospectus ("Registration Statement No.
333-81216"), for the registration under the Act of $250,000,000
aggregate amount of the Company's equity and debt securities described
therein. Such registration statement has been declared effective by
the Commission and no stop order suspending such effectiveness has
been issued under the Act and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the Company,
threatened by the Commission. All but $155,027,500 aggregate amount of
securities registered with the Commission under the Act pursuant to
Registration Statement No. 333-81216 have been previously issued. A
joint registration statement on Form S-3, including a prospectus
("Registration Statement
*Plus an option to purchase from Equity One, Inc. up to 450,000 additional
shares to cover over-allotments.
No.333-106909"), has also been filed by the Company together with
certain of its subsidiaries named in such registration statement (the
"Co-Registrants") for registration under the Act of $755,027,500
aggregate amount of (i) the Company's equity and debt securities
described therein and (ii) the Co-Registrant's guarantees relating to
the debt securities registered pursuant to such registration statement
and pursuant to Registration Statement No. 333-81216. References
herein to the term "Registration Statement" as of any given date shall
mean Registration Statement No. 333-81216 and Registration Statement
No. 333-106909 each as amended or supplemented to such date, including
all documents incorporated by reference therein as of such date
pursuant to Item 12 of Form S-3 ("Incorporated Documents"). References
herein to the term "Prospectus" dated as of September 22, 2003 shall
mean the combined prospectus forming a part of Registration Statement
Nos. 333-81216 and 333-106909, as supplemented by a prospectus
supplement relating to the Securities proposed to be filed pursuant to
Rule 424(b) of the general rules and regulations under the Act ("Rule
424"), and as further amended or supplemented as of such date (other
than amendments or supplements relating to (i) securities other than
the Securities or (ii) when referring to the Prospectus relating to a
particular offering of the Securities, Securities other than the
Securities being offered on such date), including all Incorporated
Documents. References herein to the term "Effective Date" shall be
deemed to refer to the later of the time and date that Registration
Statement Nos. 333-81216 and 333-106909 was declared effective and the
time and date of the filing thereafter of the Compan's most recent
Annual Report on Form 10-K, if such filing is made prior to the
Closing Date (as hereinafter defined). References herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act deemed to be
incorporated therein by reference. The Company will next file with the
Commission a Prospectus (supplemented by a prospectus supplement
relating to the Securities) in accordance with Rule 424. The Company
has included in the Registration Statement, as of the Effective Date,
all information required by the Act and the rules thereunder to be
included therein. As filed, the Prospectus (together with any
supplements thereto) shall contain all required information, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes as the Company has advised
you, prior to the Execution Time, will be included or made therein.
The Company and the transactions contemplated by this Agreement meet
the requirements for use of Form S-3 under the Act and also currently
meet the requirements in effect prior to October 21, 1992 for use of
Form S-3.
2
(b) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the Company's knowledge, threatened by the Commission. On the
Effective Date, the Registration Statement did, and when the
Prospectus is filed in accordance with Rule 424 and on the Closing
Date (as defined herein) and on any date on which Option Securities
are purchased, if such date is not the Closing Date (a "Settlement
Date"), the Prospectus will, comply in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; when amended or supplemented, the
Registration Statement and the Prospectus will also so comply with
such acts and rules. On the Effective Date and at the Execution Time,
the Registration Statement did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; nor will it do so on the date of any amendment; and on the
date of any filing pursuant to Rule 424 and on the Closing Date and
any settlement date, the Prospectus (as it may be amended or
supplemented) will not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes
no representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus, or to any statements in or omissions from the Statements
of Eligibility on Form T-1, or amendments thereto, of the trustee
under the indenture filed with the Registration Statement or to any
statements or omissions made in the Prospectus relating to The
Depository Trust Company ("DTC") Book-Entry-Only System that are based
solely on information contained in published reports of DTC.
(c) Each of the Company and its Subsidiaries (which term, as used in this
Agreement, includes direct and indirect subsidiaries that directly or
indirectly own interests in real property or are actively engaged in
the management of real property) has been duly incorporated or
organized and is validly existing as a corporation, limited
partnership, general partnership or limited liability company in good
standing under the laws of the jurisdiction in which it is chartered
or organized with full corporate, partnership or limited liability
company power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation, limited partnership, general partnership or limited
liability company and is in good standing under the laws of each
jurisdiction which requires such qualification except in any case in
which
3
the failure to so qualify or be in good standing would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings or business of the Company and its Subsidiaries or
their properties, taken as a whole;
(d) All the outstanding shares of capital stock, partnership interests,
limited liability company interests or other equivalent equity
interest of each Subsidiary has been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Prospectus, all outstanding shares of capital stock,
partnership interests, limited liability company interests or other
equivalent equity interest of the Subsidiaries are owned by the
Company either directly or through wholly owned Subsidiaries free and
clear of any perfected security interest or any other security
interests, claims, liens or encumbrances;
(e) The Company's authorized equity capitalization is as set forth in the
Prospectus as of the date or dates stated therein; the capital stock
of the Company conforms in all material respects to the description
thereof contained in the Prospectus; the outstanding shares of capital
stock have been duly and validly authorized and issued and are fully
paid and nonassessable; the Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the certificates for the Common Stock are in valid and
sufficient form; the holders of outstanding shares of capital stock of
the Company are not entitled to preemptive or other rights to
subscribe for the Securities; and except as set forth in the
Prospectus no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
(f) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit thereto, which is not described or filed
as required; and the statements in the Prospectus under the headings
"Material Federal Income Tax Considerations", "Description of Common
and Preferred Stock" and "Risk Factors" insofar as such statements
summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal
matters, agreements, documents or proceedings.
(g) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms except to the extent that the
indemnification provisions hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof.
4
(h) The Company has operated, for all periods from and after January 1,
1995, and intends to continue to operate in such a manner as to
qualify to be taxed as a "real estate investment trust" under the
Internal Revenue Code of 1986, as amended (the "Code"), including the
taxable year in which sales of the Securities are to occur.
(i) The Company is not and, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(j) No consent, approval, authorization, filing with or order of any court
or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained
under the Act, real estate syndication laws and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus.
(k) Neither the Company nor any of its Subsidiaries is required to own or
possess any trademarks, service marks, trade names or copyrights in
order to conduct the business now operated by it, other than those the
failure to possess or own would not have a material adverse effect on
the condition (financial or otherwise), prospects, earnings or
business of the Company and its Subsidiaries or their properties,
taken as a whole, whether or not arising from transactions in the
ordinary course of business.
(l) Neither the execution or delivery of this Agreement, the issue and
sale of the Securities nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Subsidiaries pursuant to, (i) the
charter or articles or certificate of formation, bylaws, partnership
agreement, limited liability company agreement or other organizational
documents of the Company or any of its Subsidiaries, (ii) except as
set forth in the Prospectus, the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to
which the Company or any of its Subsidiaries is a party or bound or to
which its or their property is subject, or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the Company
or any of its Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
Subsidiaries or any of its or their properties.
5
(m) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement
except for those listed on Schedule 1(m), all of which have been
effectively waived or are inapplicable to the offering hereby.
(n) The consolidated historical financial statements and schedules of the
Company and its consolidated Subsidiaries included in the Prospectus
and the Registration Statement present fairly in all material respects
the financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The financial
information and data included in the Prospectus and Registration
Statement fairly present, on the basis stated in the Prospectus and
the Registration Statement, the information included therein.
(o) The pro forma financial statements included in the Prospectus and the
Registration Statement include assumptions that provide a reasonable
basis for presenting the significant effects directly attributable to
the transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments
to the historical financial statement amounts in the pro forma
financial statements included in the Prospectus and the Registration
Statement. The pro forma financial statements included in the
Prospectus and the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of
Regulation S-X under the Act.
(p) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be
stated therein or contemplated thereby or in a supplement filed with
the Commission prior to the Execution Time, (A) there has been no
material adverse change, in the condition (financial or otherwise),
prospects, earnings or business of the Company and its Subsidiaries or
their properties, taken as a whole, whether or not arising from
transactions in the ordinary course of business, (B) there have been
no transactions or acquisitions entered into by the Company or any of
its Subsidiaries other than those arising in the ordinary course of
business, which are material with respect to the Company and its
Subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the Company's common stock, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
6
(q) The documents incorporated or deemed to be incorporated by reference
in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the Exchange Act, and, when read together with the
other information in the Prospectus, at the time the Registration
Statement became effective and as of the Execution Time, the Closing
Date, any settlement date pursuant to Section 3 or during the period
specified in Section 5(b), did not and will not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(r) All pending legal or governmental proceedings to which the Company or
any of its Subsidiaries is a party or of which any of its property or
assets is the subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material.
(s) Neither the Company nor any Subsidiary is in violation or default of
(i) any provision of its charter or articles or certificate of
formation, bylaws, partnership agreement, limited liability company
agreement or other organizational documents, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order
or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or such Subsidiary or any of its properties, as
applicable except in the cases of clause (ii) or (iii) for such
violations or defaults that would not have a material adverse effect
on the condition (financial or otherwise), prospects, earnings or
business of the Company and its Subsidiaries or their properties,
taken as a whole.
(t) Deloitte & Touche LLP, which has certified certain financial
statements of the Company and its consolidated Subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(u) Except as disclosed in the Prospectus, the Company and its
Subsidiaries have good and marketable fee simple title to or leasehold
title in all real properties and all other properties and assets owned
by them, in each case free from liens, encumbrances and defects that
would have a material adverse effect on the condition (financial or
otherwise), prospects,
7
earnings or business of the Company and its Subsidiaries or their
properties, taken as a whole; except as disclosed in the Prospectus,
no tenant under any lease to which the Company or any Subsidiary lease
any portion of its property is in default under such lease, except in
any case where such default would not have a material adverse effect
on the condition (financial or otherwise), prospects, earnings or
business of the Company and its Subsidiaries or their properties,
taken as a whole; each of the properties of any of the Company or its
Subsidiaries complies with all applicable codes and zoning laws and
regulations except in any case where such non-compliance would not
have a material adverse effect on the condition (financial or
otherwise), operations, prospects or earnings of the Company and its
Subsidiaries or their properties, taken as a whole; and neither the
Company nor any of its Subsidiaries has knowledge of any pending or
threatened condemnation, zoning change or other proceeding or action
that will in any manner affect the size of, use of, improvements on,
construction on, or access to the properties of any of the Company or
its Subsidiaries except in any case where such action or proceeding
would not have a material adverse effect on the condition (financial
or otherwise), operations, prospects or earnings of the Company and
its Subsidiaries or their properties, taken as a whole.
(v) Title insurance in favor of the Company and its Subsidiaries is
maintained with respect to each shopping center property owned by any
such entity in an amount at least equal to (a) the cost of acquisition
of such property or (b) the cost of construction of such property
(measured at the time of such construction), except, in each case,
where the failure to maintain such title insurance would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings or business of the Company and its Subsidiaries or
their properties, taken as a whole.
(w) The mortgages and deeds of trust encumbering the properties and assets
described in the Prospectus (i) are not convertible (in the absence of
foreclosure) into an equity interest in the property or asset
described therein or in the Company or any Subsidiary, nor does any of
the Company or its Subsidiaries hold a participating interest therein,
(ii) except as set forth in the Prospectus are not cross-defaulted to
any indebtedness other than indebtedness of the Company or any of the
Subsidiaries and (iii) are not cross-collateralized to any property
not owned by the Company or any of the Subsidiaries.
(x) There are no transfer taxes or other similar fees or charges under
federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance by the Company or sale by
the Company of the Securities.
8
(y) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company
and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement
thereto) and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties
of the Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(z) The Company, each of its Subsidiaries and each of their properties are
insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; all policies of insurance
and fidelity or surety bonds insuring the Company or any of its
Subsidiaries or their respective properties, businesses, assets,
employees, officers and directors are in full force and effect, except
for the failure to insure or lapses in policies which would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
Subsidiaries, taken as a whole.
(aa) The Company and its Subsidiaries possess all licenses, certificates,
permits and other authorizations issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(bb) The Company and each of its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally
9
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(cc) The Company has not taken, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(dd) The Company and its Subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
and Hazardous Materials (as defined herein), including, but not
limited to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of Hazardous Materials (collectively,
"Environmental Laws"), (ii) have received and are in compliance with
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or
release of Hazardous Materials, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability would not, individually or in the
aggregate, have a material adverse change in the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto). Except as set forth in the Prospectus, neither
the Company nor any of the Subsidiaries has been named as a
"potentially responsible party" under any Environmental Laws,
including, but not limited to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(ee) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations
and properties of the Company and its Subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would
not, singly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
10
business or properties of the Company and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(ff) The Company (i) does not have any material lending or other
relationship with any banking or lending affiliate of an Underwriter
except as set forth on Schedule I and (ii) does not intend to use any
of the proceeds from the sale of the Securities hereunder to repay any
outstanding debt owed to any such affiliate except as set forth in the
Prospectus.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of
$17.05, the amount of the Underwritten Securities set forth opposite
such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby
grants an option to the several Underwriters to purchase, severally
and not jointly, up to 450,000 Option Securities at the same purchase
price per share as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Securities by the Underwriters. Said
option may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of the Prospectus
upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Securities as
to which the several Underwriters are exercising the option and the
settlement date. The number of shares of the Option Securities to be
purchased by each Underwriter shall be the same percentage of the
total number of shares of the Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised at least one Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on September 26, 2003, or at such time on such later date
as the Representatives shall designate, which date and time may be
postponed by agreement between the Representatives and the Company or
as provided in Section 9 hereof (such date and time of delivery and
payment for the
11
Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Company by wire transfer payable in
same-day funds. Delivery of the Underwritten Securities and the Option
Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct. If
the option provided for in Section 2(b) hereof is exercised after one
Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the
Representatives on the date specified by the Representatives (which
shall be between one and ten Business Days after exercise of said
option or at such other time as agreed upon by the Representatives and
the Company) for the respective accounts of the several Underwriters,
against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of
the Company by wire transfer payable in same-day funds. If settlement
for the Option Securities occurs after the Closing Date, the Company
will deliver to the Representatives on the settlement date for the
Option Securities, and the obligation of the Underwriters to purchase
the Option Securities shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming as of such
date the opinions, certificates and letters delivered on the Closing
Date pursuant to Section 6 hereof.
4. Offering By Underwriters. The Company understands that the several
Underwriters propose to offer the Securities for sale to the public as set
forth in the Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to file any amendment to the
Registration Statement necessary in connection with the offer and sale
of the Securities. Prior to the termination of the offering of the
Securities, the Company will not file any amendment of the
Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (1) when the Prospectus, and
any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (2)
when, prior to termination of the offering of the Securities, any
12
amendment to the Registration Statement shall have been filed or
become effective, (3) of any request by the Commission or its staff
for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or for
any additional information, (4) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (5) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any
such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (1) notify the
Representatives of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (3) supply any
supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally available to
its security holders and to the Representatives an earnings statement
or statements of the Company and its Subsidiaries which will satisfy
the provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of the Prospectus and any
supplement thereto as the Representatives may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in
effect
13
so long as required for the distribution of the Securities and will
pay any fee of the National Association of Securities Dealers, Inc.,
in connection with its review of the offering; provided that in no
event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of the
Representatives, offer, sell, contract to sell, pledge, or otherwise
dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of
the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act, any other shares of
Common Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an
intention to effect any such transaction, for a period of 30 days
after the date of the Agreement, provided, however, that the Company
may issue and sell Common Stock pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the Execution Time and the Company may issue
shares of its capital stock issuable upon the conversion of securities
or the exercise of warrants outstanding at the Execution Time.
(g) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the
taxable year in which sales of the Securities are to occur.
(h) The Company, during the period when the Prospectus is required to be
delivered under the Act or the Exchange Act in connection with sales
of the Securities, will file all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15 of the Exchange Act
within the time period prescribed by the Exchange Act.
(i) The Company will use its best efforts to list the Securities on the
New York Stock Exchange.
(j) The Company will not take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization
or
14
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(k) The Company will use the net proceeds from the sale of Securities in
the manner specified in the form of the prospectus supplement
previously furnished to the Representatives.
(l) The Company has furnished or will furnish to you "lock-up" letters
signed by Chaim Katzman, Doron Valero, Howard Sipzner, M.G.N. (USA),
Inc., Gazit (1995), Inc., Gazit-Globe (1982) Ltd., Silver Maple
(2001), Inc., Ficus, Inc. and AH Investments US, L.P. in forms
mutually satisfactory to such persons and the Representatives.
6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein
as of the Execution Time, the Closing Date and any settlement date pursuant
to Section 3 hereof, to the accuracy of the statements of the Company made
in any certificates pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) The Prospectus, and any supplement thereto, shall have been filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Greenberg Traurig, P.A.,
Venable LLP and Holland & Knight LLP, each counsel for the Company, to
have furnished to the Representatives the opinions, dated the Closing
Date and addressed to the Representatives and reasonably satisfactory
in form and substance to counsel for the Underwriters, to the effect
that:
(i) each of the Company and the Subsidiaries which directly or
indirectly holds real property (whether by fee ownership or
lease) for the purpose of leasing to third parties is validly
existing as a corporation, limited partnership or limited
liability company in good standing under the laws of the
jurisdiction in which it is chartered or formed, with full
corporate, partnership or limited liability company power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation, partnership or limited liability company and is in
good standing under the laws of each jurisdiction which requires
such qualification wherein it owns or leases material
15
properties or conducts material business and where the failure to
be so qualified would, individually or in the aggregate, have a
material adverse effect on the financial condition, earnings,
business or properties of the Company and its Subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus; notwithstanding the foregoing,
the Company is duly qualified to do business as a foreign
corporation and is in good standing under the laws of Florida,
Georgia and Texas;
(ii) all the outstanding shares of capital stock, partnership
interests, limited liability company interests or other
equivalent equity interest of each Subsidiary which directly or
indirectly holds real property (whether by fee ownership or
lease) for the purpose of leasing to third parties have been duly
authorized and validly issued and are fully paid and
nonassessable, as applicable, and except as described in the
Prospectus, all outstanding shares of capital stock, partnership
interests, limited liability company interests or other
equivalent equity interest of such Subsidiaries are owned by the
Company either directly or through wholly owned Subsidiaries;
(iii)the Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of the Company's capital stock
have been duly authorized and validly issued and are fully paid
and nonassessable; the Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued,
fully paid and nonassessable; the certificates for the Securities
are in valid and sufficient form; the holders of outstanding
shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Securities except
for such rights as have been effectively waived;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any of its Subsidiaries or its or their
property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document
of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required;
16
(v) the statements included or incorporated by reference in the
Prospectus under the captions "Material Federal Income Tax
Considerations", "Description of Common and Preferred Stock" and
"Risk Factors" insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein,
are accurate in all material respects;
(vi) the Registration Statement has become effective under the Act;
any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by
Rule 424(b); to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been instituted
or threatened by the Commission and the Registration Statement as
of its filing date and effective date and the Prospectus as of
its filing date and as of its date (other than the financial
statements and other financial information contained therein, as
to which such counsel need express no opinion) complied as to
form in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder
and the Company satisfies all conditions and requirements for the
filing of the Registration Statement on Form S-3 under the Act;
and such counsel has no reason to believe that on the Effective
Date or the date the Registration Statement was last deemed
amended the Registration Statement contained any untrue statement
of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus as of its date, the
Execution Time and on the Closing Date contained or contains any
untrue statement of a material fact or omitted 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 (in each case, other than the financial statements and
other financial information contained therein, those parts of the
Registration Statement that constitutes the statements of
Eligibility on Form T-1, and statements with respect to the DTC
Book-Entry-Only System that are based solely on information
contained in published reports of DTC, as to which such counsel
need express no opinion);
(vii)this Agreement has been duly authorized, executed and delivered
by the Company;
(viii) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds
thereof as
17
described in the Prospectus, will not be an "investment company"
as defined in the Investment Company Act of 1940, as amended;
(ix) commencing with the Company's taxable year beginning January 1,
1995, the Company has been organized in conformity with the
requirements of the Code for qualification as a "real estate
investment trust" for United States federal income tax purposes
and its method of operation will enable it to continue to satisfy
the requirements for qualification and taxation as a "real estate
investment trust" under the Code;
(x) the Securities are approved for listing, subject to official
notice of issuance, on the New York Stock Exchange;
(xi) no consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection
with the performance by the Company of the transactions
contemplated herein, except such as have been obtained under the
Act, real estate syndication laws and such as may be required
under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and in
the Prospectus and such other approvals (specified in such
opinion) as have been obtained; provided, however, that no
opinion shall be required with respect to real estate syndication
or blue sky laws;
(xii)except as set forth in the Prospectus, neither the execution or
delivery of this Agreement by the Company, the issue and sale of
the Securities by the Company, the consummation by the Company of
any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a
breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
Subsidiaries pursuant to, (i) the charter or by-laws of the
Company or its Subsidiaries, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument known to such counsel to which the Company or its
Subsidiaries is a party or bound or to which its or their
property is subject, or (iii) any statute, law, rule, regulation,
or any judgment, order or decree known to such counsel applicable
to the Company or its Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or its
Subsidiaries or any of its or their properties; and
18
(xiii) to such counsel's knowledge, no holders of securities of the
Company have rights to the registration of such securities under
the Registration Statement except for those which have been
effectively waived.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States
of Maryland, Florida, Texas, Georgia, Arizona and Delaware or the federal
laws of the United States, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and public
officials. References to the Prospectus in this paragraph (b) include any
supplements thereto at the Closing Date.
(c) The Representatives shall have received from Alston & Bird LLP,
counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect
to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them
to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board
or the President and the principal financial or accounting
officer of the Company, dated the Closing Date, or any settlement
date pursuant to Section 3, to the effect that the signers of
such certificate have carefully examined the Registration
Statement, the Prospectus, any supplements to the Prospectus and
this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date
or settlement date with the same effect as if made on the
Closing Date or settlement 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 or settlement date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii)since the date of the most recent financial statements
included or incorporated by reference in the Prospectus
(exclusive of any
19
supplement thereto), there has been no material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(e) The Company shall have requested and caused Deloitte & Touche LLP
to have furnished to the Representatives, at the Execution Time
and at the Closing Date, letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable rules and regulations
adopted by the Commission thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules of the Company and those of
IRT Property Company included or incorporated by reference
in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material
respects with the applicable accounting requirements of the
Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of carrying out certain specified procedures
(but not an examination in accordance with generally
accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and each of the
compensation committee, executive committee and audit and
review committee of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and its Subsidiaries as to transactions and events
subsequent to December 31, 2002, nothing came to their
attention which caused them to believe that:
(1) (x) any material modifications should be made to the
unaudited condensed consolidated balance sheet of the
Company as of June 30, 2003 and the unaudited condensed
consolidated statements of income and cash flows for
the six-month periods ended June 30, 2003 and June 30,
2002 included in the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2003, incorporated
by reference in the Registration Statement, for them to
be in conformity with generally accepted accounting
principles
20
or (y) such unaudited financial statements do not
comply as to form in all material respects with
the applicable accounting requirements of the
Exchange Act and regulations thereunder;
(2) there were any changes, at a specified date not more
than five days prior to the date of the letter, in the
long-term debt of the Company and its Subsidiaries or
capital stock of the Company or decreases in the net
assets or stockholders' equity of the Company as
compared with the amounts shown on the December 31,
2002 consolidated balance sheet included or
incorporated by reference in the Registration Statement
and the Prospectus, or for the period from January 1,
2003 to such specified date there were any decreases,
as compared with the corresponding period in the
preceding quarter or the corresponding period in the
prior year in net revenues or income before income
taxes or in total or per share amounts of net income of
the Company and its Subsidiaries, except in all
instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied
by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary
by the Representatives;
(3) the information included or incorporated by reference
in the Registration Statement and Prospectus in
response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial
Information), Item 402 (Executive Compensation) and
Item 503(d) (Ratio of Earnings to Fixed Charges) is not
in conformity with the applicable disclosure
requirements of Regulation S-K;
(iii)they have performed certain other specified procedures as a
result of which they determined that certain information of
an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information
derived from the general accounting records of the Company
and its Subsidiaries) set forth or incorporated by reference
in the Registration Statement and the Prospectus and in
Exhibit 12 to the Registration Statement agrees with the
accounting records of the Company and its Subsidiaries,
excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference
in the Registration Statement and the Prospectus (the "pro
forma financial statements"); carrying out certain specified
procedures;
21
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters; and
proving the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the pro
forma financial statements, nothing came to their attention
which caused them to believe that the pro forma financial
statements do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of such statements. References to the Prospectus
in this paragraph (e) include any supplement thereto at the
date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto), there shall not have been
(i any change or decrease specified in the letter or letters
referred to in paragraph (e)(ii)(2) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings,
business or properties of the Company and its Subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration
Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(g) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(h) The Securities shall have been listed and admitted and authorized
for trading on the New York Stock Exchange, and satisfactory
evidence of such actions shall have been provided to the
Representatives.
(i) At the Execution Time, the Company shall have furnished to the
Representatives "lock-up" letters signed by Chaim Katzman, Doron
Valero, Howard Sipzner, M.G.N. (USA), Inc., Gazit (1995), Inc.,
Gazit-Globe (1982) Ltd., Silver Maple (2001), Inc., Ficus, Inc.
and AH Investments US, L.P. in forms mutually satisfactory to
such persons and the Representatives.
22
(j) The Company shall have caused Deloitte & Touche LLP, as the case
may be, to have delivered to the Representatives at the Closing
Date all accounting information specified in Section 6(e) above
to the extent not delivered at Execution Time.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at
the office of Alston & Bird LLP, counsel for the Underwriters, at 3201 Beechleaf
Court, Suite 600, Raleigh, North Carolina 27604-1062, on the Closing Date.
7. Expenses.
(a) If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the
Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters
severally through the Representatives on demand for all
out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them
in connection with the proposed purchase and sale of the
Securities.
(b) The Company agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by it of
its obligations hereunder:
(i) the preparation, printing or reproduction, and filing with
the Commission of the Registration Statement (including
financial statements and exhibits thereto), any preliminary
prospectus, the Prospectus and each amendment or supplement
to any of them;
(ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, any
preliminary prospectus, the Prospectus and all amendments or
supplements to any of them
23
as may be reasonably requested for use in connection with
the offering and sale of the Securities;
(iii)the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any
stamp taxes in connection with the original issuance and
sale of the Securities;
(iv) the printing (or reproduction) and delivery of this
Agreement and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of
the Securities;
(v) the listing of the Securities on the New York Stock
Exchange;
(vi) the registration or qualification of the Securities for
offer and sale under the laws of any jurisdiction as
provided in Section 5(e) hereof (including the reasonable
fees, expenses and disbursements of counsel for the
Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and
qualification);
(vii)the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to
be made with the National Association of Securities Dealers,
Inc.;
(viii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities;
(ix) the fees and expenses of the Company's accountants and the
fees and expenses of counsel (including local and special
counsel) for the Company.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of
each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them 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, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Securities as
originally filed or in any amendment thereof, or in any
preliminary prospectus or the Prospectus, or in any amendment
thereof or
24
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for
inclusion therein; provided further, that with respect to any
untrue statement or omission of material fact made in any
Prospectus, the indemnity agreement contained in this Section
8(a) shall not inure to the benefit of any Underwriter from whom
the person asserting any such loss, claim, damage or liability
purchased the Securities concerned, to the extent that any such
loss, claim, damage or liability of such Underwriter occurs under
the circumstance where (w) the Company had previously furnished
copies of a later Prospectus to the Representatives, (x) delivery
of such later Prospectus was required by the Act to be made to
such person, (y) the untrue statement or omission of a material
fact contained in such later Prospectus was corrected in the
Prospectus and (z) there was not sent or given to such person, at
or prior to the written confirmation of sale of such securities
to such person, a copy of such later Prospectus. This indemnity
agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person
who controls the Company within the meaning of either the Act or
the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof; but
the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and
such failure
25
results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter
be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth
below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the
Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and
one or more of the Underwriters may be subject in such proportion
as is appropriate to reflect the relative benefits received by
the Company on the one hand and by the Underwriters on the other
from the
26
offering of the Securities; provided, however, that in no case
shall any Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as well as
any other relevant equitable considerations. Benefits received by
the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by it, and
benefits received by the Underwriters shall be deemed to be equal
to the total underwriting discounts and commissions, in each case
as set forth on the cover page of the Prospectus. Relative fault
shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates
to information provided by the Company on the one hand or the
Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company
and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding
the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls an Underwriter within
the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall
have the same rights to contribution as such Underwriter, and
each person who controls the Company within the meaning of either
the Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to
purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under
this Agreement, the remaining Underwriters shall be obligated severally to
take up and pay for (in the respective proportions which the amount of
Securities set forth opposite their names in
27
Schedule I hereto bears to the aggregate amount of Securities set forth
opposite the names of all the remaining Underwriters) the Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities
set forth in Schedule I hereto, the remaining Underwriters shall have the
right to purchase all, but shall not be under any obligation to purchase
any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without
liability to any nondefaulting Underwriter or the Company. In the event of
a default by any Underwriter as set forth in this Section 9, the Closing
Date shall be postponed for such period, not exceeding five Business Days,
as the Representatives shall determine in order that the required changes
in the Registration Statement and the Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company
and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company prior to
delivery of and payment for the Securities, if at any time prior to such
time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities
generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange,
(ii) a banking moratorium shall have been declared either by federal or New
York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war, or other calamity or crisis the effect of which on
financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of
any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Company
or any of the officers, directors, employees, agents or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment
for the Securities. The provisions of Sections 7 and 8 hereof shall survive
the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only
on receipt, and, if sent to the Representatives, will be mailed, delivered
or telefaxed to the Representatives at the address set forth on Schedule I
and confirmed to the
28
Representatives at the address set forth on Schedule I; or, if sent to the
Company, will be mailed, delivered or telefaxed to Equity One, Inc., 1696
N.E. Miami Gardens Drive, North Miami Beach, FL 33179, (fax no. (305)
947-1734) and confirmed to it at Equity One, Inc., 1696 N.E. Miami Gardens
Drive, North Miami Beach, FL 33179, attention: Howard Sipzner, Chief
Financial Officer.
13. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section
8 hereof, and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in counterparts, each of which
shall constitute an original and all of which together shall constitute one
and the same agreement.
16. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Agreement" shall mean this Underwriting Agreement between the Company and
the Underwriters dated September 22, 2003.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
29
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Underwriters.
Very truly yours,
Equity One, Inc.
By: /s/ Chaim Katzman
------------------------------
Chaim Katzman
Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
30
Legg Mason Wood Walker, Incorporated
By: /s/ Edwin J. Bradley, Jr.
------------------------------
Name: Edwin J. Bradley, Jr.
Title: Managing Director
McDonald Investments Inc.
By: /s/ Victor F. Faris
------------------------------
Name: Victor F. Faris
Title: Managing Director
For themselves and the other several Underwriters named in Schedule I to the
foregoing Agreement.
31
SCHEDULE I
Number of Nature of Lending
Name of Underwriter Underwritten Securities Relationship
- ------------------- ----------------------- -----------------
Legg Mason Wood Walker,
Incorporated 1,500,000
A participant in the
Company's unsecured
McDonald Investments Inc. 1,500,000 revolving credit facility
Representatives of the Underwriters:
Legg Mason Wood Walker, Incorporated
100 Light Street
Baltimore, MD 21202
Telephone: (410) 454-4173
Facsimile: (410) 454-5342
Attention: Thomas E. Robinson
McDonald Investments Inc.
800 Superior Avenue
Cleveland, OH 44114
Telephone: (216) 443-2604
Facsimile: (216) 563-221
Attention: Vic Faris
32
SCHEDULE 1(m)
Registration Rights Agreements
LIST OF REGISTRATION RIGHTS AGREEMENTS
1. Registration Rights Agreement dated October 28, 2002 among Equity One,
Inc., Silver Maple (2001), Inc., M.G.N. (USA), Inc. and A-H Investments US,
L.P.
2. Amended and Restated Employment Agreement effective as of January 1, 2002,
between Equity One, Inc. and Chaim Katzman.
3. Amended and Restated Employment Agreement effective as of January 1, 2002,
between Equity One, Inc. and Doron Valero.
4. Stock Exchange Agreement dated May 18, 2001 among Equity One, Inc., First
Capital Realty, Inc. (formerly Centrefund Realty Corporation) and First
Capital America Holding Corp, as amended by the consent dated July 26, 2001
to the Assignment and Assumption Agreement dated July 26, 2001 among First
Capital, First Capital Holding, Ficus, Inc. and Silver Maple (2001), Inc.
5. Subscription Agreement dated October 4, 2000 between Equity One, Inc. and
Alony Hetz Properties & Investments, Ltd.
6. Registration Rights Agreement dated January 1, 1996 among Equity One, Inc.,
Chaim Katzman, Gazit Holdings, Inc., Dan Overseas Limited, M.G.N. Oil & Gas
Resources, Ltd., Eli Macaby, Doron Valero and David Voolkan.
7. Settlement Agreement dated March 6, 1998 among Gazit, Inc., Danbar
Resources Ltd. and Dan Overseas.
8. Investment Contract dated May 21, 1996 between Gazit-Globe (1982) Ltd., Dan
Overseas, Gazit (1995), Inc., Equity One, Inc. and M.G.N. (USA), Inc.
9. Registration Rights Agreement dated December 1998 by and between Mack
Affiliates and Robert A. Elkins, doing business as Frankline Development
Co., L.L.C., and Equity One, Inc.
33