Exhibit 1
DEVELOPERS DIVERSIFIED REALTY CORPORATION
(an Ohio corporation)
PREFERRED SHARES, DEPOSITARY SHARES,
COMMON SHARES AND WARRANTS TO PURCHASE COMMON SHARES
UNDERWRITING AGREEMENT BASIC PROVISIONS
________, 2004
[Underwriter(s)]
Ladies and Gentlemen:
1. Introductory. Developers Diversified Realty Corporation, an Ohio
corporation (the "Company"), proposes to issue and sell common shares, without
par value (the "Common Shares") or warrants to purchase a number of Common
Shares (the "Warrants"), or both, or preferred shares, without par value (the
"Preferred Shares"), from time to time, in one or more offerings on terms to be
determined at the time of sale. The Preferred Shares may be offered in the form
of depositary shares (the "Depositary Shares") represented by depositary
receipts (the "Depositary Receipts"). The Warrants will be issued pursuant to a
Warrant Agreement (the "Warrant Agreement") between the Company and a warrant
agent (the "Warrant Agent"). Except as provided under Ohio law and in the
Company's Amended and Restated Articles of Incorporation, and all amendments
thereto (the "Articles of Incorporation"), each series of Preferred Shares may
vary as to the specific number of shares, title, stated value, liquidation
preference, issuance price, ranking, dividend rate or rates (or method of
calculation), dividend
payment dates, any redemption or sinking fund requirements, any conversion
provisions and any other variable terms as set forth in the Articles of
Incorporation relating to such Preferred Shares. As used herein, "Securities"
shall mean the Common Shares and the Warrants, the Preferred Shares, the
Depositary Shares and the Depositary Receipts; and "Warrant Securities" shall
mean the Common Shares issuable upon exercise of Warrants. As used herein, "you"
and "your," unless the context otherwise requires, shall mean the parties to
whom this Agreement is addressed together with the other parties, if any,
identified in the applicable Terms Agreement (as hereinafter defined) as
additional co-managers with respect to Underwritten Securities (as hereinafter
defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten Securities") to, and the purchase and
offering thereof by you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters," which term shall include you whether acting alone in the sale of
the Underwritten Securities or as a member of an underwriting syndicate and any
Underwriter substituted pursuant to Section 11 hereof). The Terms Agreement
relating to the offering of Underwritten Securities shall specify the number of
Underwritten Securities of each class or series to be initially issued,
including the number of Warrants, if any (the "Initial Underwritten
Securities"), whether the Initial Underwritten Securities shall be in the form
of Depositary Shares and the fractional amount of Preferred Shares represented
by each Depositary Share, the names of the Underwriters participating in such
offering (subject to substitution as provided in Section 11 hereof), the number
of Initial Underwritten Securities which each such Underwriter severally agrees
to purchase, the names of such of you or such other Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, the time, date and place of delivery
and payment, any delayed delivery arrangements and any other variable terms of
the Initial Underwritten Securities (including, but not limited to, current
ratings, designations, liquidation preferences, conversion or exchange
provisions and the terms of the Warrant Securities and the terms, prices and
dates upon which such Warrant Securities may be purchased). In addition, each
Terms Agreement shall specify whether the Company has agreed to grant to the
Underwriters an option to purchase additional Underwritten Securities to cover
over-allotments, if any, and the number of Underwritten Securities subject to
such option (the "Option Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and all or any
portion of the Option Securities agreed to be purchased by the Underwriters as
provided herein, if any. The Terms Agreement, which shall be substantially in
the form of Exhibit A hereto, may take the form of an exchange of any standard
form of written telecommunication between you and the Company. Each offering of
Underwritten Securities through you or through an underwriting syndicate managed
by you will be governed by this Agreement, as supplemented by the applicable
Terms Agreement.
2. Representations and Warranties. (a) The Company represents and
warrants to you, as of the date hereof, and to you and each other Underwriter
named in the applicable Terms Agreement, as of the date thereof (such latter
date being referred to herein as a "Representation Date"), that:
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(i) The registration statements on Form S-3 (Nos. 333-108361
and 333-72519) for the registration of the Securities (including the
Underwritten Securities) and Warrant Securities and certain of the
Company's debt securities, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Securities
and Exchange Commission (the "Commission") under the 1933 Act (the
"1933 Act Regulations"), have heretofore been delivered to you, have
been prepared by the Company in conformity with the requirements of the
1933 Act and the 1933 Act Regulations and have been filed with the
Commission under the 1933 Act. Each such registration statement (as
amended, if applicable) has been declared effective by the Commission.
Such registration statements (as amended, if applicable), to the extent
the applicable Terms Agreement relates to Underwritten Securities
registered thereunder in accordance with Rule 429 of the 1933 Act, on
the one hand, and the prospectus constituting a part thereof in each
case as supplemented by a prospectus supplement relating to the
offering of Underwritten Securities provided to the Underwriters for
use (whether or not such prospectus supplement is required to be filed
by the Company pursuant to Rule 424(b) of the 1933 Act Regulations)
(the "Prospectus Supplement"), on the other hand, including in each
case all documents incorporated therein by reference, and the
information, if any, deemed to be a part thereof pursuant to Rule
430A(b) or Rule 434 of the 1933 Act Regulations as from time to time
amended or supplemented pursuant to the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act") or otherwise, are
referred to herein as the "Registration Statement" and the
"Prospectus," respectively; provided, however, that a Prospectus
Supplement shall be deemed to have supplemented the Prospectus only
with respect to the offering of Underwritten Securities to which it
relates. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the Prospectus shall be deemed to
include, without limitation, the form of prospectus and the abbreviated
term sheet, taken together, provided to the Underwriters by the Company
in reliance on Rule 434 under the 1933 Act (the "Rule 434 Prospectus").
If the Company files a registration statement to register a portion of
the Securities and the Warrant Securities and relies on Rule 462(b) for
such registration statement to become effective upon filing with the
Commission (the "Rule 462 Registration Statement") then any reference
to "Registration Statement" herein shall be deemed to be both
registration statements referred to above (Nos. 333-108361 and
333-72519) and the Rule 462 Registration Statement, as each such
registration statement may be amended pursuant to the 1933 Act. All
references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of
like import) shall be deemed to mean and include all such financial
statements and schedules and other information which is or is deemed to
be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include, without limitation, the
filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
(ii) At the time the Registration Statement became effective,
and at each time thereafter at which an Annual Report on Form 10-K was
filed by the Company with the
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Commission, the Registration Statement and the Prospectus conformed,
and as of the applicable Representation Date will conform, in all
material respects to the requirements of the 1933 Act and the 1933 Act
Regulations. At the time the Registration Statement became effective
and at each time thereafter at which an Annual Report on Form 10-K was
filed by the Company with the Commission, the Registration Statement
did not, and as of the applicable Representation Date, 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, as of the date
hereof does not, and as of the applicable Representation Date and at
Closing Time (as hereinafter defined) will not, include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representations and warranties shall not
apply to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of any
Underwriter, directly or through you, specifically for use in
preparation thereof.
(iii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus pursuant to Item 12 of Form S-3 under
the 1933 Act, 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 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when
read together with the other information in the Prospectus, at the time
the Registration Statement became effective and as of the applicable
Representation Date or Closing Time or during the period specified in
Section 4(f), 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 to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has not occurred any material
adverse change or any development that is reasonably likely to involve
a material adverse change in the condition, financial or otherwise, or
in the earnings, business or business prospects of the Company and its
subsidiaries considered as one enterprise from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (B) there have been no
transactions entered into by the Company or its subsidiaries which are
material with respect to the Company and its subsidiaries considered as
one enterprise other than those in the ordinary course of business and
(C) except for regular quarterly distributions on the Company's common
shares, and regular distributions declared, paid or made in accordance
with the terms of any class or series of the Company's preferred
shares, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
shares.
(v) The consolidated financial statements and supporting
schedules of the Company and JDN Realty Corporation ("JDN") included
in, or incorporated by reference into, the Registration Statement and
the Prospectus present fairly the financial position of
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the Company and its consolidated subsidiaries as of the dates indicated
and the results of their operations for the periods specified; except
as otherwise stated in the Registration Statement and the Prospectus,
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis; and the supporting schedules included in, or
incorporated by reference into, the Registration Statement and the
Prospectus present fairly in all material respects the information
required to be stated therein. The selected financial data and the
summary financial information included in, or incorporated by reference
into, the Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in, or
incorporated by reference into, the Registration Statement and the
Prospectus. The statements of certain revenues and expenses of the
properties acquired or proposed to be acquired included in, or
incorporated by reference into, the Registration Statement and the
Prospectus present fairly in all material respects the information set
forth therein, have been prepared in conformity with GAAP applied on a
consistent basis and otherwise have been prepared in accordance with
the applicable financial statement requirements of Rule 3-14 of the
1934 Act with respect to real estate operations acquired or to be
acquired. The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in, or
incorporated by reference into, the Registration Statement and the
Prospectus present fairly in all material respects the information set
forth 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 of such pro forma financial
statements and other pro forma financial information (including the
notes thereto) are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein.
(vi) Each of Ernst & Young LLP and PricewaterhouseCoopers LLP,
who have expressed their opinion on the audited financial statements
and related schedules included in, or incorporated by reference into,
the Registration Statement, are independent public accountants within
the meaning of the 1933 Act and the applicable 1933 Act Regulations.
(vii) The Company has been duly organized and is validly
existing and in good standing as a corporation under the laws of the
State of Ohio, with power and authority (corporate and other) to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus; the Company
is in possession of and operating in compliance with all material
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders required for the conduct of its
business, all of which are valid and in full force and effect; and the
Company is duly qualified to do business and in good standing as a
foreign corporation in all other jurisdictions where its ownership or
leasing of properties or the conduct of its business requires such
qualification, except where failure to qualify and be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise.
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(viii) Each Significant Subsidiary, as defined herein, has
been duly incorporated or formed and is validly existing as a
corporation, partnership or limited liability company in good standing
or in full force and effect under the laws of the jurisdiction of its
incorporation or formation, has corporate, partnership or limited
liability company power and authority to own, lease and operate its
properties and to conduct its business and is duly qualified as a
foreign corporation, partnership or limited liability company to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not 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 considered as
one enterprise.
(ix) If applicable, the capitalization of the Company is as
set forth in the Prospectus under "Capitalization;" the issued and
outstanding capital shares of the Company have been duly authorized and
validly issued and are fully paid and non-assessable and are not
subject to preemptive or other similar rights; and all of the issued
and outstanding capital stock of the Company's subsidiaries has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned directly by the Company, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(x) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and, if applicable, the deposit of the
Preferred Shares in accordance with the provisions of a Deposit
Agreement (each, a "Deposit Agreement"), among the Company, the
financial institution named in the Deposit Agreement (the "Preferred
Shares Depositary") and the holders of the Depositary Receipts issued
thereunder, have, as of each Representation Date, been duly authorized
by the Company and such Underwritten Securities have been duly
authorized by the Company for issuance and sale pursuant to this
Agreement and, when issued and delivered pursuant to this Agreement
against payment of the consideration therefor specified in the
applicable Terms Agreement or any Delayed Delivery Contract (as
hereinafter defined), will be validly issued, fully paid and
non-assessable; the Preferred Shares, if applicable, conform to the
provisions of the Articles of Incorporation; and the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
conform in all material respects to all statements relating thereto
contained in the Prospectus; and the issuance of the Underwritten
Securities is not subject to preemptive or other similar rights.
(xi) If applicable, the Warrants have been duly authorized
and, when issued and delivered pursuant to this Agreement and
countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued; the issuance of the Warrant
Securities upon exercise of the Warrants will not be subject to
preemptive or other similar rights; and the Warrants conform in all
material respects to all statements relating thereto contained in the
Prospectus.
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(xii) If applicable, the Common Shares issuable upon
conversion of any of the Preferred Shares or the Depositary Shares or
the Warrant Securities will have been duly and validly authorized and
reserved for issuance upon such conversion or exercise by all necessary
corporate action and such shares, when issued upon such conversion or
exercise, will be duly and validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such conversion or
exercise will not be subject to preemptive or other similar rights; the
Common Shares so issuable upon conversion of any of the Preferred
Shares or the Depositary Shares or the Warrant Securities will conform
in all material respects, as of the applicable Representation Date, to
all statements relating thereto contained in the Prospectus.
(xiii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, will have been duly authorized,
executed and delivered by the Company prior to the issuance of any
applicable Underwritten Securities, and constitutes a valid and legally
binding agreement of the Company enforceable in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting creditors'
rights generally and by general equity principles (regardless of
whether enforcement is considered in a proceeding in equity or at law);
and the Warrant Agreement, if any, conforms in all material respects to
all statements relating thereto contained in the Prospectus.
(xiv) If applicable, upon execution and delivery thereof
pursuant to the terms of the Deposit Agreement, the persons in whose
names the Depositary Receipts are registered will be entitled to the
rights specified therein and in the Deposit Agreement, except as
enforcement of such rights may be limited by bankruptcy, insolvency or
other similar laws relating to or affecting creditors' rights generally
and by general equity principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xv) The Purchase and Sale Agreement, dated March 31, 2004
(the "Benderson Agreement"), among Great Lakes Holdings LLC, Benderson
Development Company, Inc., The Benderson Trusts, the Assigning
Affiliates named therein and the Company has been duly authorized,
executed and delivered by the Company, and constitutes a valid and
legally binding agreement of the Company enforceable in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting creditors'
rights generally and by general equity principles (regardless of
whether enforcement is considered in a proceeding in equity or at law);
compliance by the Company with its obligations thereunder will not
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which it may be bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the Articles of
Incorporation or Code of Regulations (as defined below) or, to the best
of its knowledge, any law, administrative regulation or administrative
or court order or decree; no consent, approval, authorization or order
of any court or governmental authority or
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agency is required for the consummation by the Company of the
transactions contemplated by the Benderson Agreement, except such as
has been obtained or are contemplated; and statements in the Prospectus
relating to the Benderson Agreement are correct in all material
respects.
(xvi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened against or affecting
the Company or its subsidiaries, which is required to be disclosed in
the Prospectus (other than as disclosed therein), or which might result
in any material adverse change in the condition, financial or
otherwise, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, or might materially and
adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of this Agreement, the
applicable Terms Agreement, the applicable Warrant Agreement, if any,
or the transactions contemplated herein and therein; all pending legal
or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their respective property is
the subject which are not described in the Prospectus, including
routine litigation incidental to the business, are, considered in the
aggregate, not material; and there are no material contracts or
documents of the Company or its subsidiaries which are required to be
filed as exhibits to the Registration Statement by the 1933 Act or by
the 1933 Act Regulations which have not been so filed.
(xvii) Neither the Company nor any of its subsidiaries is in
violation of its respective Articles of Incorporation or other
organizational document, or its Code of Regulations or bylaws, as the
case may be (the "Code of Regulations"), or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or its properties may be bound, where such defaults in
the aggregate would have a material adverse effect on the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise; and the execution and delivery of this Agreement, the
applicable Terms Agreement, and the applicable Warrant Agreement, if
any, or the applicable Deposit Agreement, if any, and the consummation
of the transactions contemplated herein and therein have been duly
authorized by all necessary corporate action, and compliance by the
Company with its obligations hereunder and thereunder will not conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which it may be bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the Articles of
Incorporation or Code of Regulations or, to the best of its knowledge,
any law, administrative regulation or administrative or court order or
decree; and no consent, approval, authorization or order of any court
or governmental authority or agency is required for the consummation by
the Company of the transactions contemplated by this Agreement, the
applicable Terms Agreement or the applicable Warrant Agreement, if any,
or the applicable Deposit Agreement, if any,
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except such as has been obtained or as may be required under the 1933
Act, the 1934 Act, state securities or Blue Sky laws or real estate
syndication laws in connection with the purchase and distribution of
the Underwritten Securities by the Underwriters.
(xviii) The Company has full right, power and authority to
enter into this Agreement, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, and this Agreement has been, and as
of the applicable Representation Date, the applicable Terms Agreement
and the Delayed Delivery Contracts, if any, will have been duly
authorized, executed and delivered by the Company.
(xix) Starting with its taxable year ended December 31, 1993,
the Company has elected under Section 856(c) of the Internal Revenue
Code of 1986, as amended (the "Code"), to be taxed as a real estate
investment trust ("REIT"), and such election has not been revoked or
terminated. The Company has qualified as a REIT for its taxable years
ended December 31, 1993 through December 31, 2003 and the Company has
operated and intends to continue to operate so as to qualify as a REIT
thereafter.
(xx) Starting with its taxable year ended December 31, 1996,
JDN has elected under Section 856(c) of the Code to be taxed as a REIT,
and such election has not been revoked or terminated. JDN has qualified
as a REIT for its taxable years ended December 31, 1996 through
December 31, 2003 and JDN has operated and intends to continue to
operate so as to qualify as a REIT thereafter.
(xxi) Neither the Company nor any of its subsidiaries is
required to be registered as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act").
(xxii) 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 them.
(xxiii) There are no persons with registration or other
similar rights to have any securities registered pursuant to the
Registration Statement.
(xxiv) None of the Company or any of its subsidiaries or any
of the officers, directors, trustees or partners thereof has taken nor
will any of them take, directly or indirectly, any action resulting in
a violation of Regulation M under the 1934 Act or designed to cause or
result in, or which has constituted or which reasonably might be
expected to constitute, the stabilization or manipulation of the price
of the Underwritten Securities, Common Shares issuable upon conversion
of any of the Preferred Shares or facilitation of the sale or resale of
the Underwritten Securities.
(xxv) If applicable and unless otherwise provided in Exhibit A
hereto, the Underwritten Securities will be approved for listing on the
New York Stock Exchange ("NYSE") as of the Closing Time.
(xxvi) (A) The Company or its subsidiaries have good and
marketable title or leasehold interest, as the case may be, to the
portfolio properties (the "Portfolio
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Properties") described in the Prospectus (or documents incorporated by
reference therein) as being owned by the Company or its subsidiaries
(except with respect to properties described in the Prospectus or
documents incorporated by reference therein as being held by the
Company through joint ventures), in each case free and clear of all
liens, encumbrances, claims, security interests and defects
(collectively, "Defects"), except such as do not materially adversely
affect the value of such property or interests and do not materially
interfere with the use made and proposed to be made of such property or
interests by the Company or such subsidiaries, as the case may be; (B)
the joint venture interest in each property described in the Prospectus
(or documents incorporated by reference therein), as being held by the
Company through a joint venture, is owned free and clear of all Defects
except for such Defects that will not have a material adverse effect on
the business, earnings or business prospects of the Company and its
subsidiaries considered as one enterprise; (C) all liens, charges,
encumbrances, claims or restrictions on or affecting the properties and
assets of the Company or its subsidiaries which are required to be
disclosed in the Prospectus are disclosed therein; (D) none of the
Company, its subsidiaries or, to the best of the Company's knowledge,
any lessee of any of the Portfolio Properties is in default under any
of the leases governing the Portfolio Properties and the Company does
not know of any event which, but for the passage of time or the giving
of notice, or both, would constitute a default under any of such
leases, except such defaults that would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; (E) no tenant under any of
the leases pursuant to which the Company or its subsidiaries leases any
of the Portfolio Properties has an option or right of first refusal to
purchase the premises demised under such lease except for (i) Kmart
Corporation, (ii) the tenants at the Portfolio Property located in
Solon, Ohio, (iii) as otherwise described in the Prospectus (or
documents incorporated by reference therein) and (iv) such other
options or rights of first refusal that, if exercised, would not have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise; (F) each of the
Portfolio Properties complies with all applicable codes and zoning laws
and regulations, except for such failures to comply which would not
individually or in the aggregate have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise; and (G) the Company does not have 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 Portfolio Properties,
except such proceedings or actions that would not have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xxvii) The Company or its subsidiaries have title insurance
on each of the Portfolio Properties (except with respect to each
property described in the Prospectus (or documents incorporated by
reference therein) as held by the Company through a joint venture) in
an amount at least equal to the greater of (A) the cost of acquisition
of such Portfolio Property and (B) the cost of construction of the
improvements located on such Portfolio Property except, in each case,
where the failure to maintain such title insurance
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would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise; the
joint venture owning each property described in the Prospectus (or
documents incorporated by reference therein) as held by the Company
through a joint venture has title insurance on such property in an
amount at least equal to the greater of (A) the cost of acquisition of
such Portfolio Property by such joint venture and (B) the cost of
construction of the improvements located on such Portfolio Property,
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, or on the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise. It is
understood that the Company does not currently have title insurance
with respect to fifteen (15) of the properties acquired in connection
with its merger with JDN.
(xxviii) The mortgages and deeds of trust encumbering the
Portfolio Properties are not convertible and neither the Company nor
any of its subsidiaries hold a participating interest therein and said
mortgages and deeds of trust are not cross-defaulted or
cross-collateralized to any property not owned by the Company or its
subsidiaries.
(xxix) The Company has no knowledge of (a) the unlawful
presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous Materials") on
any of the Portfolio Properties or of (b) any unlawful spills,
releases, discharges or disposals of Hazardous Materials that have
occurred or are presently occurring from the Portfolio Properties as a
result of any construction on or operation and use of the Portfolio
Properties, which presence or occurrence would materially adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise. In connection with the construction on or
operation and use of the Portfolio Properties, the Company represents
that, as of the date of this Agreement, the Company has no knowledge of
any material failure to comply with all applicable local, state and
federal environmental laws, regulations, ordinances and administrative
and judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials
that would have a material adverse effect on the condition, financial
or otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(xxx) No relationship, direct or indirect, exists between or
among any of the Company or its subsidiaries, on the one hand, and any
director, officer, shareholder, customer or supplier of the Company or
its subsidiaries, on the other hand, which is required by the 1933 Act,
the 1934 Act, the 1933 Act Regulations or the 1934 Act Regulations to
be described in the Registration Statement or the Prospectus which is
not so described or is not described as required. There are no
outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any of their respective family
members, except as disclosed in the Registration Statement and the
Prospectus.
11
(xxxi) The Company and its subsidiaries maintain a system of
internal accounting and other controls sufficient to provide reasonable
assurances 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 GAAP and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded accounting for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(b) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter participating in such offering as to
the matters covered thereby on the date of such certificate and, unless
subsequently amended or supplemented, at the applicable Representation Date
subsequent thereto.
3. Purchase by, and Sale and Delivery to, Underwriters. (a) The several
commitments of the Underwriters to purchase the Underwritten Securities pursuant
to the applicable Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties herein contained and shall be subject to
the terms and conditions herein set forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the applicable Terms Agreement relating to
the Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities less an amount equal to any
dividend paid or payable on the Initial Underwritten Securities and not payable
on the Option Securities. Such option, if granted, will expire 30 days (or such
lesser number of days as may be specified in the applicable Terms Agreement)
after the Representation Date relating to the Initial Underwritten Securities,
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial Underwritten Securities upon notice by you to
the Company setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time, date and place
of delivery (a "Date of Delivery") shall be determined by you, but shall not be
later than ten full business days after the Closing Time and not be earlier than
two full business days after the exercise of said option, nor in any event prior
to Closing Time, unless otherwise agreed upon by you and the Company. If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Underwritten Securities each such Underwriter has
severally agreed to purchase as set forth in the applicable Terms Agreement
bears to the total number of Initial Underwritten Securities (except as
otherwise provided in the applicable Terms Agreement).
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made at the
office of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
12
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ by wire transfer in same-day funds,
or at such other place as shall be agreed upon by you and the Company, at 10:00
A.M., Eastern time, on the date specified in the Terms Agreement (such time and
date of payment and delivery being referred to herein as the "Closing Time"). In
addition, in the event that any or all of the Option Securities are purchased by
the Underwriters, payment of the purchase price for, and delivery of
certificates representing, such Option Securities, shall be made at the
above-mentioned offices of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, or at such other
place as shall be agreed upon by you and the Company on each Date of Delivery as
specified in the notice from you to the Company. Unless otherwise specified in
the applicable Terms Agreement, payment shall be made to the Company by wire
transfer in same-day funds payable against delivery to you for the respective
accounts of the Underwriters for the Underwritten Securities to be purchased by
them. The Underwritten Securities or, if applicable, the Depositary Receipts
evidencing the Depositary Shares, shall be in such authorized denominations and
registered in such names as you may request in writing at least one business day
prior to the Closing Time or Date of Delivery, as the case may be. The
Underwritten Securities, which may be in temporary form, will be made available
for examination and packaging by you on or before the first business day prior
to the Closing Time or the Date of Delivery, as the case may be.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase Underwritten Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types described
in the Prospectus. At the Closing Time, the Company will enter into Delayed
Delivery Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate number of
Underwritten Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least one business day prior to the Closing Time, of
the names of the institutions with which the making of Delayed Delivery
Contracts is approved by the Company and the number of Underwritten Securities
to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number
13
of Underwritten Securities covered by the applicable Terms Agreement, less the
number of Underwritten Securities covered by Delayed Delivery Contracts.
4. Covenants and Agreements of the Company. The Company covenants with
the several Underwriters participating in the offering of Underwritten
Securities that:
(a) Immediately following the execution of the applicable Terms
Agreement, the Company will prepare a Prospectus Supplement setting forth the
number of Underwritten Securities covered thereby and their terms not otherwise
specified in the Prospectus or the applicable Warrant Agreement, if any, as the
case may be, pursuant to which the Underwritten Securities are being issued, the
names of the Underwriters participating in the offering and the number of
Underwritten Securities which each severally has agreed to purchase, the names
of the Underwriters acting as co-managers in connection with the offering, the
price at which the Underwritten Securities are to be purchased by the
Underwriters from the Company, the initial public offering price, if any, the
selling concession and reallowance, if any, any delayed delivery arrangements,
and such other information as you and the Company deem appropriate in connection
with the offering of the Underwritten Securities; and the Company will promptly
transmit copies of the Prospectus Supplement to the Commission for filing
pursuant to Rule 424(b) of the 1933 Act Regulations.
(b) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of the institution of any proceedings for that purpose, and will
use its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible the lifting thereof, if issued. The Company will
advise you promptly of the transmittal to the Commission for filing of any
Prospectus Supplement or other supplement or amendment to the Prospectus or any
document to be filed pursuant to the ▇▇▇▇ ▇▇▇. The Company will advise you
promptly of any request by the Commission for any amendment of or supplement to
the Registration Statement or the Prospectus or for additional information.
(c) If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, the Company will prepare an abbreviated term sheet that complies
with the requirements of Rule 434 under the 1933 Act Regulations and the Company
will provide the Underwriters with copies of the form of Rule 434 Prospectus, in
such number as the Underwriters may reasonably request, and file or transmit for
filing with the Commission the form of Prospectus complying with Rule 434(c)(2)
of the 1933 Act in accordance with Rule 424(b) of the 1933 Act by the close of
business in New York on the business day immediately succeeding the date of the
Terms Agreement.
(d) At any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, and
will furnish you with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing, and will not file any such
amendment or supplement or other documents in a form to which you or counsel for
the Underwriters shall reasonably object in
14
writing or which is not in material compliance with the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations, as applicable.
(e) The Company will deliver to each Underwriter a signed copy of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith and documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the ▇▇▇▇ ▇▇▇) and will also
deliver to such Underwriter a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (including documents incorporated
by reference but without exhibits).
(f) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act in connection with sales of the Underwritten Securities,
such number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(g) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Underwritten Securities is required
to be delivered under the 1933 Act or the 1934 Act any event relating to or
affecting the Company occurs as a result of which the Prospectus or any other
prospectus as then in effect would include an 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 is necessary at any time to amend the Registration
Statement or the Prospectus to comply with the 1933 Act or the 1934 Act, the
Company will promptly notify you thereof and will amend or supplement the
Registration Statement or the Prospectus to correct such statement or omission
whether by filing documents pursuant to the 1933 Act, the 1934 Act or otherwise,
as may be necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements, and the
Company will furnish to the Underwriters a reasonable number of copies of such
amendment or supplement.
(h) The Company will cooperate with the Underwriters to enable the
Underwritten Securities, the Warrant Securities, if any, and the Common Shares
issuable upon conversion of the Preferred Shares or the Depositary Shares, if
any, to be qualified for sale under the securities laws and real estate
syndication laws of such jurisdictions as you may designate and at the request
of the Underwriters will make such applications and furnish such information as
may be required of it as the issuer of the Underwritten Securities, the Warrant
Securities, if any, and the Common Shares issuable upon conversion of the
Preferred Shares or the Depositary Shares, if any, for that purpose; provided,
however, that the Company shall not be required to qualify to do business or to
file a general consent to service of process in any such jurisdiction. The
Company will, from time to time, prepare and file such statements and reports as
are or may be required of it as the issuer of the Underwritten Securities, the
Warrant Securities, if any, and the Common Shares issuable upon conversion of
the Preferred Shares or the Depositary Shares, if any, to continue such
qualifications in effect for so long a period as the Underwriters may reasonably
request for the distribution of the Underwritten Securities; and in each
jurisdiction in which the Underwritten Securities, the Warrant Securities, if
any, and the Common Shares issuable upon conversion of the Preferred Shares or
the Depositary Shares, if any, have been so qualified, the
15
Company will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for so long as may be
required for the distribution of the Underwritten Securities, the Warrant
Securities, if any, and the Common Shares issuable upon conversion of the
Preferred Shares or the Depositary Shares, if any; provided, however, that the
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction where it is not so qualified.
(i) With respect to each sale of Underwritten Securities, the Company
will make generally available to its security holders as soon as practicable,
but in any event no later than 60 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule
158 of the 1933 Act Regulations) which will be in reasonable detail (but which
need not be audited) and which will comply with Section 11(a) of the 1933 Act
covering a period of at least twelve months beginning not later than the first
day of the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
(j) The Company will furnish to its shareholders annual reports
containing financial statements certified by independent public accountants and
with quarterly summary financial information in reasonable detail which may be
unaudited. During the period of five years from the date hereof, the Company
will deliver to you and, upon request, to each of the other Underwriters, (i)
copies of each annual report of the Company and each other report furnished by
the Company to its shareholders; and will deliver to you, (ii) as soon as they
are available, copies of any other reports (financial or other) which the
Company shall publish or otherwise make available to any of its security holders
as such, and (iii) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange. In the event the Company has active subsidiaries, such
financial statements will be on a consolidated basis to the extent the accounts
of the Company and its subsidiaries are consolidated in reports furnished to its
shareholders generally. Separate financial statements shall be furnished for all
subsidiaries whose accounts are not consolidated but which at the time are
significant subsidiaries as defined in the 1933 Act Regulations.
(k) The Company will use the net proceeds received by it from the sale
of Underwritten Securities in the manner specified in the Prospectus under "Use
of Proceeds."
(l) The Company will use its best efforts to continue to meet the
requirements to qualify as a REIT under the Code for the taxable year in which
sales of the Underwritten Securities are to occur, unless otherwise specified in
the Prospectus.
(m) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file promptly all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the
time periods prescribed by the 1934 Act and the 1934 Act Regulations.
(n) If the Preferred Shares or Depositary Shares are convertible into
Common Shares or if Warrants are issued, the Company will reserve and keep
available at all times, free of preemptive rights or other similar rights, a
sufficient number of Common Shares or Preferred
16
Shares, as the case may be, for the purpose of enabling the Company to satisfy
any obligations to issue such shares upon conversion of the Preferred Shares or
the Depositary Shares, as the case may be, or upon exercise of the Warrants.
(o) If the Preferred Shares or Depositary Shares are convertible into
Common Shares or if Warrants are exercised, the Company will use its best
efforts to list the Common Shares issuable upon conversion of the Preferred
Shares or Depositary Shares or upon exercise of the Warrants on the NYSE or such
other national exchange on which the Company's Common Shares are then listed.
5. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
agrees to pay or cause to be paid all expenses incident to the performance of
its obligations under this Agreement or the applicable Terms Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Securities and the Warrant Securities, if any, under the 1933 Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Securities and
the Warrant Securities, if any, to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Securities and the Warrant Securities, if any, under state securities laws and
all expenses in connection with the qualification of the Securities and the
Warrant Securities, if any, for offer and sale under state securities laws and
real estate syndication laws as provided in Section 4(h) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky or Legal Investment memorandum, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Securities and the
Warrant Securities, if any, by the National Association of Securities Dealers,
Inc., (v) all fees and expenses in connection with the preparation and filing of
the registration statement on Form 8-A relating to the Securities and the
Warrant Securities, if any, and all costs and expenses incident to listing the
Securities and the Warrant Securities, if any, on the NYSE, (vi) the cost of
printing certificates representing the Securities and the Warrant Securities, if
any, (vii) the costs and charges of any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company relating to investor presentations
on any "road show" undertaken in connection with the marketing of the offering
of the Securities and the Warrant Securities, if any, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show and (ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. It is understood, however, that except as provided in this
Section, Section 6 entitled "Indemnity and Contribution," and Section 10 below,
the Underwriters will pay all of their costs and expenses,
17
including fees and disbursements of their counsel, stock transfer taxes payable
on resale of any of the Underwritten Securities by them and any advertising
expenses connected with any offers they may make.
6. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the 1933 Act or Section
20 of the 1934 Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act
to the same extent as the foregoing indemnity from the Company to such
Underwriter, but only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 6(a) or 6(b), such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
indemnifying party does not promptly retain counsel reasonably satisfactory to
the indemnified party or (iii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and the indemnified party reasonably concludes that the
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be
18
reimbursed as they are incurred. Such firm shall be designated in writing by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Wachovia Capital Markets, LLC, in the case
of parties indemnified pursuant to Section 6(a), and by the Company, in the case
of parties indemnified pursuant to Section 6(b). The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 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 the indemnified party in accordance with such request prior to
the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless (i) such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) To the extent the indemnification provided for in Section 6(a) or
6(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Underwritten Securities or (ii) if the
allocation provided by clause 6(d)(i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 6(d)(i) above but also the relative fault of the Company
on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Underwritten Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Price to Public of the
Underwritten Securities. The relative fault of the Company on the one hand and
the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
19
contribute pursuant to this Section 6 are several in proportion to the
respective number of Underwritten Securities they have purchased hereunder, and
not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 6(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Underwritten Securities, underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section
6 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Underwritten Securities.
7. Survival of Indemnities, Representation, Warranties, etc. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company, and the several Underwriters, as set forth in
this Agreement or the applicable Terms Agreement or made by them respectively,
pursuant to this Agreement or the applicable Terms Agreement, shall remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of their officers or directors or any
controlling person, and shall survive delivery of and payment for the
Underwritten Securities.
8. Conditions of Underwriters' Obligations. The respective obligations
of the several Underwriters to purchase Underwritten Securities pursuant to the
applicable Terms Agreement are subject to the accuracy, at and (except as
otherwise stated herein) as of the date hereof, the Representation Date, Closing
Time and at each Date of Delivery, of the representations and warranties made
herein by the Company, to the accuracy of the statements of the Company's
officers or directors in any certificate furnished pursuant to the provisions
hereof, to compliance at and as of such Closing Time and at each Date of
Delivery by the Company, with its covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to such Closing Time, or
Date of Delivery, as the case may be, and to the following additional
conditions:
20
(a) At Closing Time, (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been initiated or, to the
knowledge of the Company or you, threatened by the Commission, (ii) if
Preferred Shares or Depositary Shares are being offered, the rating
assigned by any nationally recognized statistical rating organization
to any preferred shares of the Company as of the date of the applicable
Terms Agreement shall not have been lowered since such date nor shall
any such rating organization have publicly announced that it has placed
any preferred shares of the Company on what is commonly termed a "watch
list" for possible downgrading, and (iii) there shall not have come to
your attention any facts that would cause you to believe that the
Prospectus, together with the applicable Prospectus Supplement, at the
time it was required to be delivered to purchasers of the Underwritten
Securities, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing at such
time, not misleading.
(b) At the time of execution of the applicable Terms
Agreement, you shall have received from PricewaterhouseCoopers LLP a
letter, dated the date of such execution, in form and substance
satisfactory to you, to the effect that:
(i) they are independent accountants with respect to
the Company and its subsidiaries within the meaning of the
1933 Act and the 1933 Act Regulations; (ii) it is their
opinion that the consolidated financial statements and
supporting schedules of the Company included or incorporated
by reference in the Registration Statement and the Prospectus
and covered by their opinions therein comply in form in all
material respects with the applicable accounting requirements
of the 1933 Act and the 1934 Act, and the related published
rules and regulations; (iii) it is their opinion that the
financial statements of the properties acquired or proposed to
be acquired by the Company included in or incorporated by
reference in the Company's Registration Statement and covered
by their opinions therein comply as to form with the
applicable financial statement requirements of Rule 3-14 of
the 1934 Act with respect to real estate operations acquired
or to be acquired; (iv) they have performed limited
procedures, not constituting an audit, including a reading of
the latest available unaudited interim consolidated financial
statements of the Company and its subsidiaries, a reading of
the minute books of the Company and its subsidiaries,
inquiries of certain officials of the Company and its
subsidiaries who have responsibility for financial and
accounting matters and such other inquiries and procedures as
may be specified in such letter, and on the basis of such
limited review and procedures nothing came to their attention
that caused them to believe that (A) the unaudited interim
consolidated financial statements and financial statement
schedules, if any, of the Company included or incorporated by
reference in the Registration Statement and the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the
related published rules and regulations thereunder or that any
material modification should be made to the unaudited
condensed interim financial statements included in or
incorporated by reference in the Registration Statement and
the Prospectus for them to be in conformity with GAAP, (B) the
21
unaudited pro forma condensed financial statements included in
or incorporated by reference in the Company's Registration
Statement do not comply as to form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X under the 1933 Act or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such statements, (C) the
information included or incorporated by reference in the
Registration Statement and the applicable Prospectus under the
caption "Selected Consolidated Financial Data" did not conform
in all material respects with the disclosure requirements of
item 301 of Regulation S-K, or (D) at a specified date not
more than three days prior to the date of the applicable Terms
Agreement, there has been any change in the capital shares of
the Company or increase in the consolidated total debt of the
Company or any decrease in total consolidated shareholders'
equity of the Company, as compared with the amounts shown in
the most recent consolidated balance sheet included or
incorporated by reference in the Registration Statement and
the Prospectus or, during the period from the date of the most
recent consolidated statement of operations of the Company
included or incorporated by reference in the Registration
Statement and the Prospectus to a specified date not more than
three days prior to the date of the applicable Terms
Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in total
consolidated revenues, or in consolidated net income of the
Company, except in all instances for changes, increases or
decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur; and (v) in addition to
the audit referred to in their opinions and the limited
procedures referred to in clause (iv) above, they have carried
out certain specified procedures, not constituting an audit,
with respect to certain amounts, percentages and financial
information which are included or incorporated by reference in
the Registration Statement and the Prospectus and which are
specified by you, and have found such amounts, percentages and
financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its
subsidiaries identified in such letter.
(c) At the time of execution of the applicable Terms
Agreement, you shall have received from Ernst & Young LLP a letter,
dated the date of such execution, in form and substance satisfactory to
you, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect
to the audited financial statements of JDN included in the Company's
Current Report on Form 8-K, as filed with the Commission on January 20,
2004 and such other information included or incorporated by reference
in the Prospectus as may reasonably be requested.
(d) At Closing Time, you shall have received from
PricewaterhouseCoopers LLP a letter, dated Closing Time, to the effect
that such accountants reaffirm, as of Closing Time, and as though made
on such Closing Time, the statements made in the letter furnished by
such accountants pursuant to paragraph (b) of this Section 8, except
that the specified date will be a date not more than three days prior
to the Closing Time.
(e) At Closing Time, you shall have received from Ernst &
Young LLP a letter, dated Closing Time, to the effect that such
accountants reaffirm, as of Closing
22
Time, and as though made on such Closing Time, the statements made in
the letter furnished by such accountants pursuant to paragraph (c) of
this Section 8.
(f) At Closing Time, you shall have received from ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ LLP, counsel for the Company, an opinion, dated as of Closing
Time, to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Ohio.
(ii) The Company has all requisite corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus.
(iii) The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which
it owns real property except where the failure to qualify and
be in good standing would not have a material adverse effect
on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(iv) If the Company has one or more significant
subsidiaries, as defined in Rule 405 of the 1933 Act (each a
"Significant Subsidiary"), each Significant Subsidiary has
been duly incorporated or formed and is validly existing as a
corporation, partnership, limited liability company or real
estate investment trust in good standing or in full force and
effect under the laws of the jurisdiction of its incorporation
or formation, has corporate, partnership, limited liability
company or real estate investment trust power and authority to
own, lease and operate its properties and to conduct its
business, and is duly qualified as a foreign corporation,
partnership, limited liability company or real estate
investment trust to transact business and is in good standing
or full force and effect in each jurisdiction in which it owns
real property, except where the failure to so qualify and be
in good standing would not have a material adverse effect on
the condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise.
(v) The number of issued and outstanding capital
shares of the Company is as set forth in the Prospectus under
"Capitalization" and the outstanding capital shares have been
duly authorized, validly issued, fully paid and
non-assessable. All of the issued and outstanding capital
stock of the Company's subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and, to
the best of such counsel's knowledge, are owned by the Company
free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(vi) The Underwritten Securities being sold pursuant
to the applicable Terms Agreement and, if applicable, the
deposit of the Preferred Shares in accordance with the
provisions of a Deposit Agreement, have been duly and
23
validly authorized by all necessary corporate action and such
Underwritten Securities have been duly authorized for issuance
and sale pursuant to this Agreement and such Underwritten
Securities, when issued and delivered pursuant to this
Agreement against payment of the consideration therefor
specified in the applicable Terms Agreement or the Delayed
Delivery Contracts, the Underwritten Securities will be
validly issued, fully paid and non-assessable.
(vii) The issuance of the Underwritten Securities is
not subject to preemptive or other similar rights arising by
operation of law or under the Company's Articles of
Incorporation or Code of Regulations or, to the best of their
knowledge, otherwise.
(viii) If applicable, the Warrants have been duly
authorized and, when issued and delivered pursuant to this
Agreement and countersigned by the Warrant Agent as provided
in the Warrant Agreement, will have been duly executed,
countersigned, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the
benefits provided by the Warrant Agreement under which they
are to be issued except as enforcement thereof may be limited
by bankruptcy, insolvency or other similar laws relating to or
affecting enforcement of creditors' rights generally or by
general equity principles (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(ix) If applicable, the Common Shares issuable upon
conversion of any of the Preferred Shares or Depositary Shares
or upon the exercise of the Warrant Securities, have been duly
and validly authorized and reserved for issuance upon such
exercise by all necessary corporate action and such shares,
when issued upon such exercise, will be duly and validly
issued and will be fully paid and non-assessable, and the
issuance of such shares upon such exercise will not be subject
to preemptive or other similar rights arising by operation of
law or, to the best of such counsel's knowledge, otherwise.
(x) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, have been duly
authorized, executed and delivered by the Company, and
(assuming due authorization, execution and delivery by the
Warrant Agent in the case of the Warrant Agreement, and the
Preferred Shares Depositary, in the case of the Deposit
Agreement) constitutes a valid and legally binding agreement
of the Company enforceable in accordance with its terms except
as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting
enforcement of creditors' rights generally or by general
equity principles (regardless of whether enforcement is
considered in a proceeding in equity or at law); and the
Warrant Agreement, if any, and the Deposit Agreement, if any,
each conforms in all material respects to all statements
relating thereto contained in the Prospectus.
(xi) If applicable, upon execution and delivery
thereof pursuant to the terms of the Deposit Agreement, the
persons in whose names the Depositary
24
Receipts are registered will be entitled to the rights
specified therein and in the Deposit Agreement.
(xii) Each of this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, has been
duly authorized, executed and delivered by the Company.
(xiii) The Registration Statement is effective under
the 1933 Act and, to the best of their knowledge, no stop
order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(xiv) The Registration Statement and the Prospectus
(other than the financial statements, related schedules and
other financial and statistical data included or incorporated
by reference in the Registration Statement or the Prospectus,
as to which no opinion need be rendered) as of their
respective effective or issue dates, comply as to form in all
material respects with the requirements for registration
statements on Form S-3 under the 1933 Act and the 1933 Act
Regulations. If applicable, the Rule 434 Prospectus conforms
to the requirements of Rule 434 of the 1933 Act Regulations in
all material respects.
(xv) Each document filed pursuant to the 1934 Act
(other than the financial statements, related schedules and
other financial and statistical data included therein, as to
which no opinion need be rendered) and incorporated or deemed
to be incorporated by reference in the Prospectus complied
when so filed as to form in all material respects with the
1934 Act and the 1934 Act Regulations.
(xvi) If applicable, the relative rights,
preferences, interests and powers of the Preferred Shares or
Depositary Shares, as the case may be, are as set forth in the
Articles of Incorporation relating thereto, and all such
provisions are valid under Ohio Law; and, as applicable, the
form of certificate used to evidence the Preferred Shares
being represented by the Depositary Shares and the form of
certificate used to evidence the related Depositary Receipts
are in due and proper form under Ohio Law and comply with all
applicable statutory requirements.
(xvii) The Underwritten Securities, the Warrant
Securities, and the Common Shares issuable upon conversion of
the Preferred Shares or Depositary Shares, if applicable,
conform in all material respects to the statements relating
thereto contained in the Prospectus.
(xviii) Nothing has come to such counsel's attention
that would lead it to believe that the Registration Statement
or any amendment thereto (other than the financial statements,
related schedules and other financial and statistical data
included or incorporated by reference therein, as to which
such counsel need express no belief), at the time it became
effective or at the time an Annual Report on Form 10-K was
filed by the Company with the Commission (whichever is
25
later), or at the Representation Date, contained or contains
an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto
(other than the financial statements, related schedules and
other financial and statistical data included or incorporated
by reference therein, as to which such counsel need express no
belief), at the Representation Date or at Closing Time,
included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(xix) To the best of their knowledge, there are no
legal or governmental proceedings pending or threatened which
are required to be disclosed in the Prospectus, other than
those disclosed therein, and, to the best of their knowledge,
all pending legal or governmental proceedings to which the
Company or its Significant Subsidiaries is a party or of which
any of the property of the Company or its subsidiaries is the
subject that are not described in the Registration Statement,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material to
the business of the Company and its subsidiaries considered as
one enterprise.
(xx) To the best of their knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto, the descriptions thereof
or references thereto are correct in all material respects.
(xxi) No authorization, approval or consent of any
court or governmental authority or agency is required that has
not been obtained in connection with the consummation by the
Company of the transactions contemplated by this Agreement,
the applicable Terms Agreement, the applicable Deposit
Agreement, if any, or the applicable Warrant Agreement, if
any, except such as may be required under the 1933 Act, the
1934 Act, and state securities laws or Blue Sky laws or real
estate syndication laws; to the best of their knowledge, the
execution and delivery of this Agreement and the Terms
Agreement, and the Deposit Agreement, and the consummation of
the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and
thereunder will not (A) constitute a breach of, or default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any Significant Subsidiary pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any Significant
Subsidiary is a party or by which they may be bound or to
which any of the property or assets of the Company or any
Significant Subsidiary is subject, except where such breach,
default, creation or imposition would not have a material
adverse effect on the condition, financial or otherwise, nor
will such action (B) result in violation of the provisions of
the Articles of Incorporation, Partnership Agreement, Code of
26
Regulations or Operating Agreement of the Company or any
Significant Subsidiary or any applicable law, administrative
regulation or administrative or court order or decree.
(xxii) Neither the Company nor any Significant
Subsidiary is required to be registered under the 1940 Act.
(xxiii) The information in the Prospectus, if
applicable, under the captions "Description of Common Shares,"
"Description of Common Share Warrants," "Description of
Preferred Shares," "Description of Depositary Shares,"
"Certain Anti-Takeover Provisions of Ohio Law" and "Certain
Federal Income Tax Considerations," and, if applicable, any
similar matters set forth in the Prospectus Supplement under a
caption or captions to be set forth in such opinion, to the
extent that it constitutes matters of law or legal
conclusions, has been reviewed by them and is correct in all
material respects.
(xxiv) The Company has qualified as a REIT for its
taxable years ended December 31, 1993, 1994, 1995, 1996, 1997,
1998, 1999, 2000, 2001, 2002 and 2003 and the Company is
organized and operates in a manner that will enable it to
qualify to be taxed as a REIT under the Code for the taxable
year ending December 31, 2004 and thereafter provided the
Company continues to meet the asset composition, source of
income, shareholder diversification, distributions, record
keeping, and other requirements of the Code which are
necessary for the Company to qualify as a REIT.
(xxv) The Benderson Agreement has been duly
authorized, executed and delivered by the Company, and
constitutes a valid and legally binding agreement of the
Company enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency
or other similar laws relating to or affecting creditors'
rights generally and by general equity principles (regardless
of whether enforcement is considered in a proceeding in equity
or at law); to the best of their knowledge, compliance by the
Company with its obligations thereunder will not conflict with
or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or its subsidiaries
pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it
may be bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the
Articles of Incorporation or Code of Regulations or, to the
best of such counsel's knowledge, any law, administrative
regulation or administrative or court order or decree; no
consent, approval, authorization or order of any court or
governmental authority or agency is required for the
consummation by the Company of the transactions contemplated
by the Benderson Agreement, except such as has been obtained
or are contemplated; and statements in the Prospectus relating
to the Benderson Agreement are correct in all material
respects.
27
(g) At Closing Time, you shall have received from Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, their opinion or
opinions dated Closing Time with respect to the matters set forth in
(i), (vi), (vii) (only as to operation of law), (viii) to (xiv) and
(xvi) to (xviii) of subsection (f) of this Section, and the Company
shall have furnished to such counsel such documents as they may request
for the purpose of enabling them to pass upon such matters.
In giving their opinions, Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP may
rely as to matters involving the laws of the State of Ohio upon the
opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, and ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP may rely as
to matters involving the laws of the State of New York upon the opinion
of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP. ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP and Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP may rely (i) as to the qualification of the
Company or its subsidiaries to do business in any state or
jurisdiction, upon certificates of appropriate government officials,
telephonic confirmation by representatives of such states or
confirmation from information contained on the websites of such states
and (ii) as to matters of fact, upon certificates and written
statements of officers and employees of and accountants for the Company
or its subsidiaries.
(h) Subsequent to the execution and delivery of this Agreement
and the Terms Agreement and prior to the Closing Time:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
1933 Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Underwritten Securities on the terms and in the
manner contemplated in the Prospectus.
(i) At the Closing Time (i) the Registration Statement and the
Prospectus shall contain all statements which are required to be stated
therein in accordance with the 1933 Act and the 1933 Act Regulations
and in all material respects shall conform to the requirements of the
1933 Act and the 1933 Act Regulations and neither the Registration
Statement nor the Prospectus shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and
no action, suit or proceeding at law or in equity shall be pending or,
to the knowledge of the Company, threatened against the Company or its
subsidiaries which would be required to be set forth in the
Registration Statement and the Prospectus other than as set forth
therein, (ii) there shall not have been, since the date of
28
the applicable Terms Agreement or since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, any material adverse change in the condition, financial or
otherwise, of the Company and its subsidiaries considered as one
enterprise or in its earnings, business affairs or business prospects,
whether or not arising in the ordinary course of business, from that
set forth in the Registration Statement and the Prospectus, (iii) no
proceeding shall be pending or, to the knowledge of the Company,
threatened against the Company or its subsidiaries before or by any
Federal, state or other commission, board or administrative agency
wherein an unfavorable decision, ruling or finding would materially and
adversely affect the business, property, financial condition or income
of the Company and its subsidiaries considered as one enterprise other
than as set forth in the Registration Statement and the Prospectus,
(iv) neither the Company nor any of its subsidiaries shall be in
default in the performance or observance of any contract to which it is
a party, except such defaults that would not have a material adverse
effect on the condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, (v) no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act and no proceeding therefor shall have been
instituted or threatened by the Commission and (vi) you shall have
received at Closing Time a certificate of the Chairman and Chief
Executive Officer or the President and Chief Operating Officer and the
Chief Financial Officer of the Company, dated as of Closing Time,
evidencing compliance with the provisions of this subsection (i). As
used in this subsection (i), the term "Prospectus" means the Prospectus
in the form first used to confirm sales of the Underwritten Securities.
(j) You shall have received certificates, dated Closing Time,
of the Chairman and Chief Executive Officer or the President and Chief
Operating Officer and the Chief Financial Officer of the Company to the
effect that the representations and warranties of the Company contained
in Section 2(a) are true and correct with the same force and effect as
though expressly made at and as of Closing Time.
(k) The Company shall have furnished to you such additional
certificates as you may have reasonably requested as to the accuracy,
at and as of Closing Time, of the representations and warranties made
herein by them, as to compliance, at and as of Closing Time, by them
with their covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to Closing Time, and as
to other conditions to the obligations of the Underwriters hereunder.
(l) In the event the Underwriters exercise their option
provided in a Terms Agreement as set forth in Section 3 hereof to
purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall
be true and correct as of each Date of Delivery, and you shall have
received:
(i) A letter from PricewaterhouseCoopers LLP in form
and substance satisfactory to you and dated such Date of
Delivery, substantially the same in scope and substance as the
letter furnished to you pursuant to Section 8(b), except
29
that the specified date in the letter furnished pursuant to
this Section 8(l)(i) shall be a date not more than three days
prior to such Date of Delivery.
(ii) A letter from Ernst & Young LLP in form and
substance satisfactory to you and dated such Date of Delivery,
substantially the same in scope and substance as the letter
furnished to you pursuant to Section 8(c).
(iii) The opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel
for the Company, in form and substance satisfactory to Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, dated such Date of Delivery, relating
to the Option Securities and otherwise to the same effect as
the opinion required by Section 8(f).
(iv) The opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Underwriters, dated such Date of Delivery,
relating to the Options Securities and otherwise to the same
effect as the opinion required by Section 8(g).
(v) A certificate, dated such Date of Delivery, of
the Chairman and Chief Executive Officer or the President and
Chief Operating Officer and the Chief Financial Officer of the
Company confirming that the certificate or certificates
delivered at Closing Time pursuant to Section 8(i)(vi) and
Section 8(h) remains or remain true as of such Date of
Delivery.
(vi) Such additional certificates, dated such Date of
Delivery, as you may have reasonably requested pursuant to
Section 8(k).
If any of the conditions hereinabove provided for in this Section shall
not have been satisfied when and as required to be satisfied, the applicable
Terms Agreement may be terminated by you by notifying the Company of such
termination in writing or by telegram at or prior to Closing Time, but you shall
be entitled to waive any of such conditions.
9. Termination. (a) This Agreement (excluding the applicable Terms
Agreement) may be terminated for any reason at any time by the Company or by you
upon the giving of 30 days' written notice of such termination to the other
party hereto.
(b) This Agreement and the Terms Agreement shall be subject to
termination by notice given by you to the Company, if after the execution and
delivery of this Agreement and the Terms Agreement and prior to the Closing Time
(i) trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the NYSE, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of
any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or a material disruption in commercial banking or securities
settlement or clearance services has occurred in the United States, or (iv)
there shall have occurred any outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable or inadvisable to market the
30
Underwritten Securities on the terms and in the manner contemplated in the
Prospectus. As used in this Section 9(b), the term "Prospectus" means the
Prospectus in the form first used to confirm sales of the Underwritten
Securities.
(c) In the event of any such termination, the covenants set forth in
Section 4 with respect to any offering of Underwritten Securities shall remain
in effect so long as any Underwriter owns any such Underwritten Securities
purchased from the Company pursuant to the applicable Terms Agreement.
10. Reimbursement of Underwriters. Notwithstanding any other provisions
hereof, if this Agreement or the applicable Terms Agreement shall be terminated
by you under Section 8, Section 9 or Section 12, the Company will bear and pay
the expenses specified in Section 5 hereof and, in addition to their obligations
pursuant to Section 6 hereof, the Company will reimburse the reasonable
out-of-pocket expenses of the several Underwriters (including reasonable fees
and disbursements of counsel for the Underwriters) incurred in connection with
this Agreement or the applicable Terms Agreement and the proposed purchase of
the Underwritten Securities, and promptly upon demand, the Company will pay such
amounts to you for and on behalf of such Underwriter. In addition, the
provisions of Section 6 shall survive any such termination.
11. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Time or the relevant Date of Delivery, as
the case may be, to purchase the Underwritten Securities which it or they are
obligated to purchase under the applicable Terms Agreement (the "Defaulted
Securities"), then you shall have the right, within 36 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, you shall not have completed such arrangements within such
36-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of Underwritten Securities to be
purchased on such date pursuant to such Terms Agreement, the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations under such Terms
Agreement bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Underwritten Securities to be purchased on such date pursuant to
such Terms Agreement, such Terms Agreement (or, with respect to
the Underwriters' exercise of any applicable over-allotment option
for the purchase of Option Securities on a Date of Delivery after
the Closing Time, the obligations of the Underwriters to purchase,
and the Company to sell, such Option Securities on such Date of
Delivery) shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 11 shall relieve any
defaulting Underwriter from liability in respect of its default.
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In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Company with respect to the related Option Securities, as
the case may be, either you or the Company shall have the right to postpone the
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements.
12. Default by the Company. If the Company shall fail at Closing Time
to sell and deliver the total number of Underwritten Securities which it is
obligated to sell pursuant to the applicable Terms Agreement, then such
agreement shall terminate without any liability on the part of any
non-defaulting party, other than obligations under Section 10 hereof. No action
taken pursuant to this Section 12 shall relieve the Company from liability, if
any, in respect of such default.
13. Notices. All communications hereunder shall be in writing and, if
sent to the Underwriters shall be mailed, delivered or telecopied and confirmed
to you, c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Debt Syndicate Department and ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Corporate Syndicate Desk, except that notices given to an
Underwriter pursuant to Section 6 hereof shall be sent to such Underwriter at
the address furnished by you or if sent to the Company shall be mailed,
delivered or telegraphed and confirmed at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman and Chief Executive Officer.
14. Successors. This Agreement and the applicable Terms Agreement shall
inure to the benefit of and be binding upon you and the Company and any
Underwriter who becomes a party to such Terms Agreement, the Company and their
respective successors and legal representatives. Nothing expressed or mentioned
in this Agreement or the applicable Terms Agreement is intended or shall be
construed to give any person other than the persons mentioned in the preceding
sentence any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provisions herein contained, this Agreement or such Terms
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person; except that the representations, warranties, covenants,
agreements and indemnities of the Company contained in this Agreement shall also
be for the benefit of the person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the 1933 Act, and the indemnities given by
the several Underwriters shall also be for the benefit of each director of the
Company, each of the Company's officers who has signed the Registration
Statement and the person or persons, if any, who control the Company within the
meaning of Section 15 of the 1933 Act.
15. Applicable Law. This Agreement and the applicable Terms Agreement
shall be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed in said state.
Specified times of day refer to Eastern time.
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16. Counterparts. This Agreement and the applicable Terms Agreement may
be executed in one or more counterparts, and if executed in more than one
counterpart the executed counterparts shall constitute a single instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
DEVELOPERS DIVERSIFIED REALTY CORPORATION
By:
--------------------------------------
Name:
Title:
Accepted and delivered,
as of the date first above written:
[UNDERWRITERS]
By:
By:
--------------------------------
Name:
Title:
Acting on behalf of themselves and the other named Underwriters
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Exhibit A
DEVELOPERS DIVERSIFIED REALTY CORPORATION
(an Ohio corporation)
TERMS AGREEMENT
A-1
Exhibit B
DEVELOPERS DIVERSIFIED REALTY CORPORATION
(an Ohio corporation)
[Title of Securities]
DELAYED DELIVERY CONTRACT
