Exhibit 1
UNDERWRITING AGREEMENT
PARKWAY PROPERTIES, INC.
600,000 shares of Common Stock
(par value $.001 per share)
March 18, 2003
WACHOVIA SECURITIES, INC.
0 Xx. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Parkway Properties, Inc., a Maryland corporation (the "Company") and
Parkway Properties LP, a Delaware limited partnership (the "Partnership"),
confirm their agreement with Wachovia Securities, Inc. (the "Underwriter"), as
follows:
1. Description of Securities. The Company proposes to issue and sell to the
Underwriter 600,000 shares of common stock (the "Firm Shares") of the Company,
par value $0.001 per share, (the "Common Stock") and proposes to issue and sell
to the Underwriter, at the option of the Underwriter in accordance with SECTION
3 hereof, up to 90,000 additional shares of Common Stock (the "Option Shares").
The Firm Shares and Option Shares to be issued and sold by the Company are
hereinafter referred to as the "Securities."
2. Representations and Warranties of the Company and the Partnership. The
Company and the Partnership jointly and severally represent and warrant to and
agree with the Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-48161), including
pre-effective amendment no. 1 thereto, with respect to the Securities, including
a prospectus, have been carefully prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act") and the rules
and regulations (the "1933 Act Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, have been filed with the
Commission and declared effective. No stop order suspending the effectiveness of
the registration statement has been issued, and no proceeding for that purpose
has been instituted or threatened by the Commission. A prospectus supplement
(the "Prospectus Supplement") setting forth the terms of the offering, sale and
plan of distribution of the Securities and additional information concerning the
Company and its business has been or will be so prepared and will be filed
pursuant to Rule 424(b) of the 1933 Act Rules and Regulations on or before the
second business day after the date hereof (or such earlier time as may be
required by the 1933 Act Rules and Regulations). Copies of such registration
statement and prospectus, any such amendments or supplements and all documents
incorporated by reference
therein that were filed with the Commission on or prior to the date of this
Underwriting Agreement (including one fully executed copy of the registration
statement and of each amendment thereto) have been delivered to the Underwriter
and its counsel. The registration statement, as it may have heretofore been
amended, is referred to herein as the "Registration Statement," and the final
form of prospectus included in the Registration Statement, as supplemented by
the Prospectus Supplement, including all documents incorporated by reference
therein, is referred to herein as the "Prospectus." Any reference herein to the
Registration Statement, the Prospectus or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated by reference
therein, and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or Prospectus shall be
deemed to refer to and include the filing after the execution hereof of any
document with the Commission deemed to be incorporated by reference therein. For
purposes of this Underwriting Agreement, all references to the Registration
Statement and Prospectus or to any amendment or supplement thereto shall be
deemed to include any copy filed with the Commission pursuant to its Electronic
Data Gathering Analysis and Retrieval System ("XXXXX"), and such copy shall be
identical in content to any Prospectus delivered to the Underwriter for use in
connection with the offering of the Securities.
(b) Each part of the Registration Statement, when such part became or
becomes effective and the Prospectus and any amendment or supplement thereto, on
the date of filing thereof with the Commission and at the Closing Date (as
hereinafter defined), and, if later, at an Option Closing Date (as hereinafter
defined), conformed or will conform in all material respects with the
requirements of the Act and the 1933 Act Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, or when such
part was filed with the Commission, did not or will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; the
Prospectus and any amendment or supplement thereto, on the date of filing
thereof with the Commission and at the Closing Date, and, if later, at an Option
Closing Date, did not or will not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in, or omissions from,
any such document in reliance upon, and in conformity with, written information
concerning the Underwriter that was furnished to the Company by the Underwriter
specifically for use in the preparation thereof, it being understood and agreed
that the only such information is that described as such in SECTION 6(a) hereof.
(c) The documents incorporated by reference in the Registration Statement,
the Prospectus, any amendment or supplement thereto, when they became or become
effective under the Act or were or are filed with the Commission under the Act
or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, conformed or will conform in all material respects with the
requirements of the Act, the 1933 Act Rules and Regulations, the Exchange Act
and/or the rules and regulations of the Commission thereunder (the "Exchange Act
Rules and Regulations"), as applicable.
(d) The consolidated financial statements of the Company together with the
related schedules and notes thereto, set forth or included or incorporated by
reference in the Registration Statement and Prospectus fairly present the
financial condition of the Company and its
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consolidated subsidiaries as of the dates indicated and the results of
operations, changes in financial position, stockholders' equity and cash flows
for the periods therein specified, in conformity with accounting principles
generally accepted in the United States consistently applied throughout the
periods involved (except as otherwise stated therein). The summary and selected
financial and statistical data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information shown
therein and, to the extent based upon or derived from the financial statements,
have been compiled on a basis consistent with the financial statements presented
therein. In addition, the pro forma financial statements of the Company, and the
related notes thereto, included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown therein, have
been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled on the
basis described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein. Furthermore, all
financial statements required by Rules 3-05, 3-14 and Article 11 of Regulation
S-X have been included or incorporated by reference in the Registration
Statement and the Prospectus and any such financial statements are in conformity
with such rules. No other financial statements are required to be set forth or
to be incorporated by reference in the Registration Statement or the Prospectus
under the Act or the 1933 Act Rules and Regulations thereunder.
(e) Ernst & Young LLP, whose reports are incorporated by reference in the
Registration Statement, are and, during the periods covered by their reports,
were independent public accountants as required by the Act and the 1933 Act
Rules and Regulations and as required by the applicable rules and regulations of
the New York Stock Exchange, Inc. ("NYSE").
(f) The only subsidiaries (as defined in the 1933 Act Rules and
Regulations) of the Company and the Partnership are the subsidiaries listed on
SCHEDULE A hereto (the "Subsidiaries"). Each of the Company, the Partnership and
the Subsidiaries has been duly incorporated or formed, as the case may be, and
is an existing corporation, general or limited partnership, or other legal
entity, as the case may be, in good standing under the laws of its jurisdiction
of incorporation or formation, as the case may be. Each of the Company, the
Partnership and each of the Subsidiaries has full power and authority (corporate
and other) to conduct its business as described in the Registration Statement
and Prospectus, and is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which the conduct of
its business requires such qualification or registration except where the
failure to be so qualified or registered, considering all such cases in the
aggregate, would not have a material adverse effect on the assets, properties,
business, results of operations, prospects or condition (financial or otherwise)
of the Company, the Partnership and the Subsidiaries, taken as a whole
("Material Adverse Effect"); and, other than the Subsidiaries, the Company owns
no stock or other beneficial interest in any corporation, partnership, joint
venture or other business entity.
(g) All of the issued and outstanding general partnership interests in the
partnership and all of the issued and outstanding capital stock or ownership
interests of each Subsidiary have been duly authorized and are validly issued,
fully paid and nonassessable and are wholly-owned
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by the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. All of the
issued and outstanding limited partnership interests in the Partnership have
been duly authorized and are validly issued, fully paid and nonassessable and
are majority owned by the Company directly or indirectly through its
Subsidiaries.
(h) All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
nonassessable and conform to the description thereof in the Prospectus. The
stockholders of the Company have no preemptive rights with respect to the
Securities. The Company has the authorized capital stock as set forth in the
Prospectus Supplement under the caption "Description of Capital Stock." As of
March 17, 2003, (A) 64,697,143 shares of Common Stock were authorized for
issuance, of which 9,394,562 shares were issued and outstanding, (B) 2,760,000
shares of 8.75% Series A Cumulative Redeemable Preferred Stock, par value $.001
per share (the "Series A Preferred Stock") were authorized for issuance, of
which 2,650,000 shares were issued and outstanding, (C) 2,142,857 shares of
Series B Convertible Cumulative Preferred Stock, par value $.001 per share (the
"Series B Preferred Stock") were authorized for issuance, all of which were
issued and outstanding, (D) 400,000 shares of Series C Preferred Stock, par
value $.001 per share, were authorized for issuance, non of which were
outstanding, and (E) 30,000,000 shares of Excess Stock were authorized for
issuance, none of which were issued or outstanding. The Series A Preferred Stock
and Series B Preferred Stock are collectively referred to herein as the
"Preferred Stock." All of the issued and outstanding shares of capital stock of
the Company, all the issued and outstanding partnership interests in the
Partnership, and all ownership interests in each Subsidiary have been offered,
sold and issued by such entity in compliance with all applicable laws, including
without limitation, federal and state securities laws; except as described in
the Prospectus, there is no outstanding option, warrant or other right requiring
the issuance of, and no commitment, plan or arrangement to issue, any shares of
capital stock of the Company or equity interests in the Partnership or any
Subsidiary or any security convertible into or exchangeable for such shares or
interests.
(i) The Firm Shares will be as of the Closing Date, and the Option Shares
will be as of any Option Closing Date, duly authorized by the Company for
issuance and sale pursuant to this Underwriting Agreement; and when issued and
delivered by the Company pursuant to this Underwriting Agreement against payment
of the consideration therefor specified herein, will be validly issued, fully
paid and nonassessable. The Securities conform to the description thereof in the
Prospectus and will not be subject to any preemptive rights of any
securityholder of the Company. No holder of Common Stock will be subject to
personal liability by reason of being such a holder.
(j) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, the Company, the Partnership and the Subsidiaries have not incurred
any liabilities or obligations, direct or contingent; or entered into any
transactions, not in the ordinary course of business, that are material to the
Company, the Partnership and the Subsidiaries on a consolidated basis; and there
has not been any material change in the capital stock or structure, short-term
debt or long-term debt of the Company, the Partnership and the Subsidiaries; or
any material adverse change, or any development that is reasonably likely to
involve a prospective material adverse change, in
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the condition (financial or other), business, prospects, net worth or results of
operations of the Company, the Partnership and the Subsidiaries on a
consolidated basis; and, except for regular dividends on the Company's Common
Stock, in amounts per share that are consistent with past practice or the
charter documents of the Company and the minimum dividends required by the
Company's Charter, as amended, on the Company's Preferred Stock, there has been
no dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(k) Except as set forth in the Prospectus, there is not pending or, to the
knowledge of the Company, threatened any action, suit or proceeding to which the
Company, the Partnership, any of the Subsidiaries or any of their respective
officers or directors is a party, or of which any of their properties or other
assets is the subject, before or by any court or governmental agency or body,
that is reasonably likely to result in any Material Adverse Effect.
(l) No labor dispute with the employees of the Company, the Partnership or
any of the Subsidiaries exists or, to the knowledge of the Company, is imminent
that might have a Material Adverse Effect.
(m) During the period of at least the last 24 calendar months prior to the
date of this Underwriting Agreement, the Company has timely filed with the
Commission all documents and other materials required to be filed pursuant to
Sections 13, 14 and 15(d) under the Exchange Act.
(n) There are no contracts or documents of the Company that are required to
be filed as exhibits to the Registration Statement or to any of the documents
incorporated by reference therein by the Act or the Exchange Act or by the rules
and regulations of the Commission thereunder that have not been so filed.
(o) This Underwriting Agreement has been duly authorized, executed and
delivered by the Company and the Partnership and constitutes the legal, valid
and binding obligation of the Company and the Partnership enforceable against
the Company and the Partnership in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors rights generally or by general principles of equity.
(p) The execution and performance of this Underwriting Agreement and the
consummation of the transactions contemplated herein will not result in a breach
or violation of any of the terms and provisions of, or constitute a default
under, (i) any statute, agreement or instrument to which the Company, the
Partnership or any of the Subsidiaries is a party or by which they are bound or
to which any of the property or other assets of the Company, the Partnership or
any of the Subsidiaries is subject, (ii) the articles of incorporation, by-laws,
certificate of general or limited partnership, partnership agreement or other
organizational document, as applicable, of the Company, the Partnership or any
of the Subsidiaries, or (iii) any statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company, the
Partnership or any of the Subsidiaries or any of their properties or other
assets; no consent, approval, authorization or order of, filing with, or notice
to any court or governmental agency or body is required for the consummation of
the transactions contemplated by this Underwriting Agreement in connection with
the issuance or sale of the Securities by the
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Company, except such as may be required under the Act and applicable state
securities or blue sky laws, if any; and the Company has full power and
authority to authorize, issue and sell the Securities as contemplated by this
Underwriting Agreement, free of any preemptive rights.
(q) The Company, the Partnership and the Subsidiaries have complied in all
respects with all laws, regulations and orders applicable to them or their
respective businesses, except as would not have a Material Adverse Effect; the
Company, the Partnership and the Subsidiaries are not in default under any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or evidence of indebtedness, lease, contract or
other agreement or instrument to which they are a party or by which they or any
of their properties or other assets are bound, violation of which would
individually or in the aggregate have a Material Adverse Effect, and no other
party under any such agreement or instrument to which the Company, the
Partnership or any of the Subsidiaries are a party is, to the knowledge of the
Company, in default in any material respect thereunder; and the Company, the
Partnership and the Subsidiaries are not in violation of their respective
articles of incorporation, by-laws, certificate of general or limited
partnership, partnership agreement or other organizational documents, as the
case may be.
(r) The Agreement of Limited Partnership of the Partnership, including any
amendments thereto (the "Partnership Agreement"), has been duly and validly
authorized, executed and delivered by all partners of the Partnership and
constitutes a valid and binding agreement, enforceable in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by general
principles of equity.
(s) Each of the Company, the Partnership and the Subsidiaries have good and
marketable title to the properties and assets, as described in the Prospectus,
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
in relation to the business of the Company, the Partnership and the Subsidiaries
on a consolidated basis. The Company, the Partnership and the Subsidiaries have
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by the Company, the Partnership and the Subsidiaries with
such exceptions as are not material and do not interfere with the use made and
proposed to be made of such properties by the Company, the Partnership and the
Subsidiaries. No tenant under any of the leases pursuant to which the Company,
the Partnership or any of the Subsidiaries lease their properties has an option
or right of first refusal to purchase the premises demised under such lease. The
use and occupancy of each of the properties of the Company, the Partnership and
the Subsidiaries complies in all material respects with all applicable codes and
zoning laws and regulations; the Company, the Partnership and the Subsidiaries
have no knowledge of any pending or threatened condemnation or zoning change
that will in any material respect affect the size of, use of, improvement of,
construction on, or access to any of the properties of the Company, the
Partnership and the Subsidiaries; and the Company, the Partnership and the
Subsidiaries have no knowledge of any pending or threatened proceeding or action
that will in any manner materially affect the size of, use of, improvements or
construction on, or access to any of the properties of the Company, the
Partnership or any of the Subsidiaries.
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(t) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company, the Partnership, any of the
Subsidiaries and any person that would give rise to a valid claim against the
Company, the Partnership, any of the Subsidiaries or the Underwriter for a
brokerage commission, finder's fee or other like payment in connection with the
offering, issuance and sale of the Securities.
(u) Title insurance in favor of the Company, the Partnership and the
Subsidiaries is maintained with respect to each of the properties owned by them
in an amount at least equal to the cost of acquisition of such property, except,
in each case, where the failure to maintain such title insurance is not
reasonably likely to have a Material Adverse Effect.
(v) The mortgages and deeds of trust encumbering the properties and assets
described or referred to in the Prospectus are not convertible into the equity
of the Company or any Subsidiary.
(w) Except as otherwise described in the Prospectus, neither the Company,
the Partnership nor any Subsidiary has authorized or conducted or has knowledge
of the generation, transportation, storage, presence, use, treatment, disposal,
release, or other handling of any hazardous substance, hazardous waste,
hazardous material, hazardous constituent, toxic substance, pollutant,
contaminant, asbestos, radon, polychlorinated biphenyls ("PCBs"), petroleum
product or waste (including crude oil or any fraction hereof, natural gas,
liquefied gas, synthetic gas or other material defined, regulated, controlled or
potentially subject to any remediation requirement under any environmental law
(collectively, "Hazardous Materials"), on, in, under or affecting any of the
Company's properties, except in material compliance with applicable laws; except
as disclosed in the Prospectus, the Company's properties are in material
compliance with all federal, state and local laws, ordinances, rules,
regulations and other governmental requirements relating to pollution, control
of chemicals, management of waste, (collectively, "Environmental Laws"), and the
Company, the Partnership and the Subsidiaries are in compliance with all
licenses, permits, registrations and government authorizations necessary to
operate under all applicable Environmental Laws in all material respects; except
as otherwise described in the Prospectus, neither the Company, the Partnership
or any Subsidiary has received any written or oral notice from any governmental
entity or any other person and there is no pending, or, to the knowledge of the
Company, threatened claim, litigation or any administrative agency proceeding
that: alleges a violation of any Environmental Laws by the Company, the
Partnership or any Subsidiary; or that the Company, the Partnership or any
Subsidiary is a liable party or a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
ss. 9601, et. seq., or any state superfund law; has resulted in or could result
in the attachment of an environmental lien on any of the properties; or alleges
that the Company, the Partnership or any Subsidiary is liable for any
contamination of the environment, contamination of the property, damage to
natural resources, property damage, or personal injury based on their activities
or the activities of their predecessors or third parties (whether at the
properties or elsewhere) involving Hazardous Materials, whether arising under
the Environmental Laws, common law principles, or other legal standards. In the
ordinary course of its business, the Company, the Partnership and the
Subsidiaries conduct Phase I environmental assessments on each of their
properties at the time such property is acquired and periodic reviews of the
effect of Environmental Laws on the business, operations and properties of the
Company, the Partnership and the Subsidiaries. None of the entities which
prepared
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appraisals of the properties or Phase I environmental assessment reports with
respect to such properties was employed for such purpose on a contingent basis
or has any substantial interest in the Company, the Partnership or any
Subsidiary, and none of their directors, officers or employees is connected with
the Company, the Partnership or any Subsidiary as a promoter, selling agent,
director, officer or employee.
(x) Each of the Company, the Partnership and the Subsidiaries maintains
insurance (issued by insurers of recognized financial responsibility) of the
types and in the amounts generally deemed adequate, if any, for their respective
businesses and consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company, the
Partnership and the Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(y) Except for Five Arrows Realty Securities III LLC (which has waived all
such rights in writing), no holder of outstanding shares of capital stock of the
Company has any rights to have the shares of capital stock of the Company owned
by such holder to be sold in the offering of the Securities contemplated by this
Agreement.
(z) Since the date of the last audited financial statements included or
incorporated by reference in the Registration Statement and the Prospectus,
except as described therein, (i) there has not been any change in the assets or
properties, business, results of operations, prospects or condition (financial
or otherwise) of the Company, the Partnership or any of the Subsidiaries,
whether or not arising from transactions in the ordinary course of business
reasonably likely to result in a Material Adverse Effect, nor any event or
development involving a prospective Material Adverse Effect; (ii) neither the
Company, the Partnership nor any of the Subsidiaries has sustained any material
loss or interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree; and (iii) neither the Company,
the Partnership nor any of the Subsidiaries has undertaken any liability or
obligation, direct or contingent, except such liabilities or obligations
undertaken in the ordinary course of business.
(aa) Each of the Company, the Partnership and the Subsidiaries have filed
all federal, state, local and foreign income tax returns which have been
required to be filed and has paid all taxes indicated by said returns and all
assessments received by them to the extent that such taxes have become due. No
tax deficiency has been asserted against the Company, the Partnership or any
Subsidiary, nor, does the Company or the Partnership know of any tax deficiency
which is likely to be asserted against the Company or the Partnership; all tax
liabilities, if any, are adequately provided for on the respective books of the
entities in all material respects.
(bb) The Company, the Partnership and the Subsidiaries hold all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses and are in compliance with the
terms and conditions of such licenses, certificates and permits; and the
Company, the Partnership and the Subsidiaries have not received any notice of
proceedings relating to the revocation or modification of any such permits,
licenses or
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certificates that, if determined adversely to the Company, the Partnership or
any Subsidiary, would have a Material Adverse Effect.
(cc) The Company, the Partnership and the Subsidiaries are conducting their
respective businesses in material compliance with all applicable laws, rules and
regulations of the jurisdictions in which they are conducting business,
including, without limitation, the Americans with Disabilities Act of 1990 and
all applicable local, state and federal employment, truth-in-advertising,
franchising and immigration laws and regulations, except where the failure to be
so in compliance would not have a Material Adverse Effect.
(dd) No transaction has occurred between or among the Company, the
Partnership or any Subsidiaries, on one hand, and any of their officers or
directors or any affiliate or affiliates of any such officer or director, on the
other hand, that is required to be described in and is not described or
incorporated by reference in the Registration Statement and the Prospectus.
(ee) Except as otherwise described in the Prospectus, there are no material
outstanding loans or advances or material guarantees of indebtedness by the
Company, the Partnership or any of the Subsidiaries to or for the benefit of any
of the officers or directors of the Company or any of their family members.
(ff) The Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of shares of the
Common Stock, to facilitate the sale or resale of any of the Securities.
(gg) Commencing with the taxable year beginning January 1, 1997, the
Company has been organized and operating in conformity with the requirements for
qualification as a "real estate investment trust" under the Internal Revenue
Code of 1986, as amended (the "Code"). The Company's method of operation will
permit it to meet and to continue to meet the requirements for taxation as a
real estate investment trust under the Code. The Company has no intention of
changing its operations or engaging in activities which would cause it to fail
to qualify, or make economically undesirable its continued qualification as, a
real estate investment trust.
(hh) Neither the Company, the Partnership or any Subsidiary is and, after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not be an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(ii) The Securities have been approved for listing subject to official
notice of issuance on the NYSE.
(jj) The system of internal accounting controls of the Company, the
Partnership and the Subsidiaries, taken as a whole, is sufficient to meet the
broad objectives of internal accounting controls insofar as those that would be
material in relation to the Company's financial statements; and, to the
Company's knowledge, neither the Company, the Partnership nor any Subsidiary,
nor any employee or agent thereof, has made any payment of funds of the Company,
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the Partnership or any of the Subsidiaries, as the case may be, or received or
retained any funds, and no funds of the Company, the Partnership or any of the
Subsidiaries, as the case may be, have been set aside to be used for any
payment, in each case in violation of any law, rule or regulation.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements
contained herein, but subject to the terms and conditions set forth herein, the
Company agrees to issue and sell the Securities to the Underwriter, and the
Underwriter agrees to purchase from the Company, the Firm Shares, at a purchase
price of $35.25 per share (the "Purchase Price"). It is understood and agreed
that the Underwriter proposes to offer the Securities for sale to the public as
set forth in the Prospectus.
(b) The Company will deliver the Firm Shares to the Underwriter against
payment of the purchase price in Federal (same day) funds by wire transfer to an
account at a bank acceptable to the Company drawn to the order of the Company,
at the office of Hunton & Xxxxxxxx, at 10:00 A.M., New York time, on March 24,
2003, or at such other time not later than seven (7) full business days
thereafter as the Underwriter and the Company determine, such time being herein
referred to as the "First Closing Date." The certificates for the Firm Shares so
to be delivered will be in definitive form, in such denominations and registered
in such names as the Underwriter requests and will be made available for
checking and packaging at the above office of the Underwriter at least 24 hours
prior to the First Closing Date.
(c) In addition, upon written notice from the Underwriter given to the
Company from time to time not more than 30 days after the date of the Prospectus
(the "Option Period"), the Underwriter may purchase all or less than all of the
Option Shares at the purchase price per Option Share to be paid for the Firm
Shares less an amount per share equal to any dividends or distributions per
share payable on the Firm Shares during the Option Period (to the extent such
dividends and distributions were not payable on the Option Shares). The Company
agrees to sell to the Underwriter the number of Option Shares specified in such
notice, and the Underwriter agrees to purchase such Option Shares. Such Option
Shares may be purchased by the Underwriter only for the purpose of covering
over-allotments made in connection with the sale of the Firm Shares. No Option
Shares shall be sold or delivered unless the Firm Shares previously have been,
or simultaneously are, sold and delivered. The right to purchase the Option
Shares or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by the Underwriter to the Company.
(d) Each time for the delivery of and payment for the Option Shares, being
herein referred to as an "Option Closing Date," which may be the First Closing
Date (the First Closing Date and each Option Closing Date, if any, being
sometimes referred to as a "Closing Date"), shall be determined by the
Underwriter but shall not be later than five (5) full business days after
written notice of election to purchase Option Shares is given. The Company will
deliver the Option Shares being purchased on each Option Closing Date to the
Underwriter against payment of the purchase price therefor in Federal (same day)
funds by wire transfer to an account at a bank acceptable to the Company drawn
to the order of the Company, at the offices of Hunton &
10
Xxxxxxxx. The certificates for the Optional Shares being purchased on each
Option Closing Date will be in definitive form, in such denominations and
registered in such names as the Underwriter requests upon reasonable notice
prior to such Option Closing Date and will be made available for checking and
packaging at the above office of the Underwriter at a reasonable time in advance
of such Option Closing Date.
4. Covenants. The Company and the Partnership jointly and severally covenant and
agree with the Underwriter that:
(a) The Company will cause the Prospectus Supplement to be filed as
required by SECTION 2(a) hereof (but only if the Underwriter or its counsel have
not reasonably objected thereto by notice to the Company after having been
furnished a copy a reasonable time prior to filing) and will notify the
Underwriter promptly of such filing. During the period in which a prospectus
relating to the Securities is required to be delivered under the Act or such
date which is 90 days after the Closing Date, whichever is later, the Company
will notify the Underwriter promptly of the time when any subsequent amendment
to the Registration Statement has become effective or any subsequent supplement
to the Prospectus has been filed, of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or for
additional information; the Company will prepare and file with the Commission,
promptly upon the Underwriter's request, any amendments or supplements to the
Registration Statement or Prospectus that, in the Underwriter's opinion, may be
necessary or advisable in connection with the Underwriter's distribution of the
Securities; and the Company will file no amendment or supplement to the
Registration Statement or Prospectus (other than any prospectus supplement
relating to the offering of other securities registered under the Registration
Statement or any document required to be filed under the Exchange Act that upon
filing is deemed to be incorporated by reference therein) to which the
Underwriter or its counsel shall reasonably object by notice to the Company
after having been furnished a copy a reasonable time prior to the filing.
(b) The Company will advise the Underwriter, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification or registration of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such a
stop order should be issued.
(c) The Company will comply with all requirements imposed upon it by the
Act, the 1933 Act Rules and Regulations, the Exchange Act and the Exchange Act
Rules and Regulations as from time to time in force, so far as necessary to
permit the continuance of sales of, or dealings in, the Securities as
contemplated by the provisions hereof and the Prospectus. If during such period
where a prospectus relating to the Securities is required to be delivered under
the Act or such date which is 90 days after the Closing Date, whichever is
later, any event occurs as a result of which, in the opinion of Underwriter's
counsel, the Registration Statement contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omits to state a material
11
fact necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary to amend
or supplement the Registration Statement or Prospectus to comply with the Act,
the Company will promptly notify the Underwriter and will amend or supplement
the Registration Statement or Prospectus (at the expense of the Company) so as
to correct such statement or omission or effect such compliance.
(d) Upon request, the Company will furnish to the Underwriter copies of the
Registration Statement, the Prospectus (including all documents incorporated by
reference therein) and all amendments and supplements to the Registration
Statement and Prospectus that are filed with the Commission during the period in
which a prospectus relating to the Securities is required to be delivered under
the Act or such date which is 90 days after the Closing Date, whichever is later
(including all documents filed with the Commission during such period that are
deemed to be incorporated by reference therein), in each case as soon as
available and in such quantities as the Underwriter may from time to time
reasonably request.
(e) During the period of two years commencing on the date upon which the
Prospectus Supplement is filed pursuant to Rule 424(b) under the Act, the
Company will furnish the Underwriter with copies of filings of the Company under
the Act and Exchange Act and with all other financial statements and periodic
and special reports it distributes generally to the holders of any class of its
capital stock.
(f) The Company will make generally available to its security holders as
soon as practicable, and in the manner contemplated by Rule 158 of the 1933 Act
Rules and Regulations but in any event not later than 15 months after the end of
the Company's current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period beginning after the date upon which the
Prospectus Supplement is filed pursuant to Rule 424(b) under the Act that shall
satisfy the provisions of Section 11(a) of the Act and Rule 158 of the 1933 Act
Rules and Regulations and will advise the Underwriter in writing when such
statement has been made available.
(g) Whether or not the transactions contemplated by this Underwriting
Agreement are consummated or this Underwriting Agreement is terminated, the
Company will pay, or reimburse if paid by the Underwriter, all costs and
expenses incident to the performance of the obligations of the Company under
this Underwriting Agreement, including but not limited to costs and expenses of
or relating to (i) the preparation, printing and filing of the Registration
Statement and exhibits thereto, each preliminary prospectus, the Prospectus and
any amendment or supplement to the Registration Statement or the Prospectus,
(ii) the preparation and delivery of certificates representing the Securities,
(iii) the word processing, printing and reproduction of this Underwriting
Agreement, (iv) the costs incurred by the Company in furnishing (including costs
of shipping, mailing and courier) such copies of the Registration Statement, the
Prospectus and any preliminary prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Securities by the Underwriter or by dealers to whom Securities may be sold,
(v) the listing of the Securities on the NYSE, (vi) any filings required to be
made by the Underwriter with the NASD, and the fees, disbursements and other
charges of Underwriter's counsel in connection therewith, (vii) the registration
or qualification of the Securities for offer and sale under the securities or
blue sky laws of such jurisdictions designated by the Underwriter, including the
fees, disbursements and other charges
12
of Underwriter's counsel in connection therewith, and the preparation and
printing of a blue sky memoranda, (viii) counsel to the Company, (ix) the
transfer agent for the Securities and (x) the Accountants.
(h) If this Underwriting Agreement shall be terminated pursuant to any of
the provisions hereof or if for any reason the Company shall be unable to
perform their obligations hereunder, the Company will reimburse the Underwriter
for all out-of-pocket expenses (including the fees, disbursements and other
charges of Underwriter's counsel) reasonably incurred by the Underwriter in
connection herewith.
(i) The Company will not at any time, directly or indirectly, take any
action designed to, or which might reasonably be expected, to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the Common Stock
to facilitate the sale or resale of any of the Securities.
(j) The Company will apply the net proceeds from the sale of the Securities
as set forth under the caption "Use of Proceeds" in the Prospectus Supplement.
(k) The Company will continue to qualify as (and elect to qualify as) a
"real estate investment trust" under the Code, and will use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust."
(l) On or before completion of this offering, the Company shall make all
filings required under applicable securities laws and by the New York Stock
Exchange.
(m) For a period of 60 days after the date of the Prospectus Supplement
(the "Lock-Up Period"), the Company will not, directly or indirectly, (1) offer,
pledge, sell, or contract to sell any shares of Common Stock, (2) sell any
option or contract to sell any shares of Common Stock, (3) purchase any option
or contract to sell any shares of Common Stock, (4) grant any option, right or
warrant to purchase any shares of Common Stock, (5) enter into any swap or other
agreement that transfers, in whole or in part, the economic consequence of
ownership of any shares of Common Stock whether any such swap or transaction is
to be settled by delivery of shares or other securities, in cash or otherwise,
(6) take any of the foregoing actions with respect to any securities convertible
into or exchangeable or exercisable for or repayable with shares of Common
Stock, (7) file with the Commission a registration statement under the Act
relating to any shares of Common Stock or securities convertible into or
exchangeable or exercisable for its shares of Common Stock, or (8) publicly
disclose the intention to take any of the foregoing actions, without the prior
written consent of the Underwriter, except issuances of shares of Common Stock
(A) in connection with any acquisitions, joint ventures or similar arrangements,
so long as the recipients of those shares agree not to sell or transfer those
shares in a public market transaction during the Lock-Up Period; (B) upon the
exercise of outstanding employee stock options, (C) pursuant to employee benefit
plans, (D) pursuant to non-employee director stock plans, (E) pursuant to the
Company's dividend reinvestment plan, or (F) pursuant to the conversion or
exchange of convertible or exchangeable securities outstanding as of the date
hereof.
13
5. Conditions of Underwriter's Obligations. The Underwriter's obligation to
purchase and pay for the Securities as provided herein shall be subject to the
accuracy, as of the date hereof and each Closing Date (as if made at such
Closing Date), of the representations and warranties of the Company and the
Partnership herein, to the performance by the Company and the Partnership of
their obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have been declared effective under the
Act; the Prospectus shall have been filed as required by SECTION 2(a) hereof;
and no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceeding for that purpose shall have been
instituted or, to the Underwriter's knowledge or the knowledge of the Company,
threatened by the Commission, nor has any state securities authority suspended
the qualification or registration of the Securities for offering or sale in any
jurisdiction and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with the satisfaction of the Underwriter and Underwriter's
counsel.
(b) The Underwriter shall not have advised the Company that the
Registration Statement or any amendment thereto contains an untrue statement of
fact that in the opinion of the Underwriter or Underwriter's counsel is material
or omits to state a fact that in the opinion of the Underwriter or Underwriter's
counsel is material, and is required to be stated therein or is necessary to
make the statements therein not misleading, or that the Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact that in
the opinion of the Underwriter or Underwriter's counsel is material or omits to
state a fact that in the opinion of the Underwriter or Underwriter's counsel is
material, and is necessary in light of the circumstance under which they were
made, to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus Supplement, subsequent to the
respective dates as of which information is included or incorporated by
reference in the Registration Statement and the Prospectus, there shall not have
been any change, on a consolidated basis, in the equity capitalization or
long-term debt, or material change in short-term debt, of the Company or the
Partnership, or any adverse change, or any development involving a prospective
adverse change, in the condition (financial or other), business, prospects, net
worth or results of operations of the Company, the Partnership or the
Subsidiaries or any adverse change in the rating assigned to any securities of
the Company, that, in the Underwriter's judgment, makes it impractical or
inadvisable to offer or deliver the Securities on the terms and in the manner
contemplated in the Prospectus.
(d) The Underwriter shall have received the opinions of Xxxxxxx Xxxxxxxxxxx
& Mugel, LLP, counsel for the Company, and Xxxxx Xxxxxxx LLP., special Maryland
counsel to the Company (as to which, Xxxxxxx Xxxxxxxxxxx & Mugel, LLP and Hunton
& Xxxxxxxx may rely on), each dated the Closing Date, in form and substance
satisfactory to Underwriter's counsel to the effect that:
(i) Each of the Company, the Partnership and the Subsidiaries has been
duly incorporated or formed, as the case may be, and is validly existing as a
corporation, general or limited partnership, or other legal entity, as the case
may be, in good standing under the laws of its jurisdiction of incorporation or
formation, as the case may be, and has full power (corporate
14
or other) and authority to conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform this Underwriting
Agreement, and is duly qualified or registered to do business in each
jurisdiction in which it owns or leases real property or in which the conduct of
its business requires such qualification or registration, except where the
failure to be so qualified or registered, considering all such cases in the
aggregate, does not involve a material risk to the business, properties,
financial position or results of operations of the Company, the Partnership and
the Subsidiaries taken as a whole; and at the Closing Date, the Company's
wholly-owned subsidiary, Parkway Properties General Partners, Inc., will be the
sole general partner of the Partnership and will own an approximately 1% general
partnership interest and the Company will own an approximately 99% limited
partnership interest in the Partnership;
(ii) The Company's authorized equity capitalization is as set forth in
the Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus and meets the
requirements of Item 9 of Form S-3 under the Act; the Company has authorized and
issued capital stock as set forth in Section 2(h) hereof; all of the issued and
outstanding shares of capital stock of the Company and Partnership interests of
the Partnership have been duly and validly authorized and issued; and all of the
issued and outstanding shares of capital stock of the Company and Partnership
interests of the Partnership are fully paid and nonassessable and none of them
was issued in violation of any preemptive or other similar right. The Securities
have been duly authorized by the Company for issuance and sale and when issued
and sold pursuant to this Underwriting Agreement will be duly and validly
issued, fully paid and nonassessable and none of them will have been issued in
violation of any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and, to the knowledge of
such counsel, no commitment, plan or arrangement to issue, any share of capital
stock of the Company or any security convertible into, exercisable for, or
exchangeable for capital stock of the Company. No holder of outstanding shares
of capital stock of the Company has any rights to have shares of capital stock
of the Company owned by such holder to be sold in the offering of shares
contemplated by this Agreement. The issued and outstanding capital stock of the
Company and the Securities conform, or will conform, in all material respects to
the descriptions thereof contained in the Registration Statement and the
Prospectus. The form of certificate used to evidence the Securities is in due
and proper form and complies with all applicable statutory requirements, with
any applicable requirements of the Company's Charter and Bylaws and with the
requirements of the NYSE;
(iii) The Registration Statement has become effective under the Act,
the Prospectus Supplement has been filed as required by SECTION 2(a) hereof and,
to the best knowledge of such counsel, after due inquiry, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or threatened by the
Commission;
(iv) Each part of the Registration Statement, when such part became
effective, and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at the Closing Date, complied as
to form in all material respects with the requirements of the Act and the 1933
Act Rules and Regulations, and such counsel has no reason to believe that either
(i) any part of the Registration Statement, when such part became effective or
was filed under the Act or Exchange Act, contained an untrue statement of a
material fact or
15
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the
Commission or at the Closing Date, included an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and the documents incorporated by reference in the Registration
Statement or Prospectus or any amendment or supplement thereto, when they became
effective under the Act or were filed with the Commission under the Act or
Exchange Act, as the case may be, complied as to form in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; it being understood that
such counsel need express no opinion as to the financial statements or other
financial data included in any other documents mentioned in this clause;
(v) The descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings, contracts and other documents are
accurate and fairly present the information required to be shown; and such
counsel does not know of any statutes or legal or governmental proceedings
required to be described in the Prospectus that are not described as required,
or of any contracts or documents of a character required to be described in the
Registration Statement or Prospectus (or required to be filed under the Exchange
Act if upon such filing they would be incorporated by reference therein) or to
be filed as exhibits to the Registration Statement that are not described and
filed as required;
(vi) This Underwriting Agreement has been duly authorized, executed
and delivered by the Company and the Partnership; the execution, delivery and
performance of this Underwriting Agreement and the consummation of the
transactions contemplated herein will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, (a) any statute,
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or evidence of indebtedness, lease, contract or
other agreement or instrument known to such counsel to which the Company, the
Partnership or any of the Subsidiaries are a party or by which they are bound or
to which any of the property or other assets of the Company, the Partnership or
any of the Subsidiaries is subject, (b) the articles of incorporation, by-laws,
certificate of general or limited partnership, partnership agreement, or other
organizational document of the Company, the Partnership or any of the
Subsidiaries, as applicable, or (c) any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over the
Company, the Partnership or any of the Subsidiaries or any of their properties
or other assets; and no consent, approval, authorization, notice to, order of,
or filing with, any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Underwriting Agreement in
connection with the issuance or sale of the Securities by the Company, except
such as have been obtained under the Act or from the NYSE and the NASD;
(vii) Commencing with the taxable year beginning January 1, 1997, the
Company has continuously been organized and operated in conformity with the
requirements for qualification as a "real estate investment trust" under the
Code. The Company's method of operation will permit it to continue to meet the
requirements for taxation as a "real estate investment trust" under the Code.
The federal income tax treatment described in the Prospectus
16
Supplement under the caption "Material United States Federal Income Tax
Consequences" is accurate;
(viii) To such counsel's knowledge, neither the Company, the
Partnership nor any of the Subsidiaries is in violation of any term or provision
of their respective articles of incorporation, by-laws, certificate of general
or limited partnership, partnership agreement or other organizational document,
as applicable, or in violation of or default under any indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or evidence of indebtedness, lease, contract, permit, judgment,
decree, order, statute, rule or regulation;
(ix) To such counsel's knowledge, there is no litigation or
governmental or other proceeding or investigation, before any court or before or
by any public body or board pending or threatened against, or involving the
assets, properties or businesses of, the Company, the Partnership or any of the
Subsidiaries, involving the Company's, the Partnership's or any of the
Subsidiaries' officers or directors or to which any of the Company's, the
Partnership's or any of the Subsidiaries' properties or other assets is subject
which would have a Material Adverse Effect;
(x) Neither the Company, the Partnership or any Subsidiary is and,
after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Prospectus, will not be
an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(xi) Each of the Company, the Partnership and the Subsidiaries have
good and marketable title to the properties and assets, as described in the
Prospectus, owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
in relation to the business of the Company, the Partnership and the
Subsidiaries. The Company, the Partnership and the Subsidiaries have valid,
subsisting and enforceable leases for the properties described in the Prospectus
as leased by the Company, the Partnership and the Subsidiaries with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such properties by the Company, the Partnership and the
Subsidiaries. No tenant under any of the leases pursuant to which the Company,
the Partnership or any of the Subsidiaries lease their properties has an option
or right of first refusal to purchase the premises demised under such lease. The
use and occupancy of each of the properties of the Company, the Partnership and
the Subsidiaries complies in all material respects with all applicable codes and
zoning laws and regulations; such counsel does not have knowledge of any pending
or threatened condemnation or zoning change that will in any material respect
affect the size of, use of, improvement of, construction on, or access to any of
the properties of the Company, the Partnership and the Subsidiaries;
(xii) The Company, the Partnership and the Subsidiaries hold all
material licenses, certificates and permits from governmental authorities which
are necessary to the conduct of their businesses and are in compliance with the
terms and conditions of such licenses, certificates and permits; and such
counsel does not have knowledge of any notice of proceedings relating to the
revocation or modification of any such permits, licenses or certificates that,
if
17
determined adversely to the Company, the Partnership or any Subsidiary, would
have a Material Adverse Effect; and
(xiii) The Partnership Agreement has been duly and validly authorized,
executed and delivered by the general partner and constitutes a valid and
binding agreement, enforceable against the general partner in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by general
principles of equity.
(e) The Underwriter shall have received from Hunton & Xxxxxxxx,
Underwriter's counsel, such opinion or opinions, dated the Closing Date, with
respect to the organization of the Company, the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as the
Underwriter reasonably may request, and such counsel shall have received such
papers and information as they request to enable them to pass upon such matters.
(f) At the time of execution of this Underwriting Agreement and at the
Closing Date, the Underwriter shall have received a letter, dated the date of
delivery thereof, from Ernst & Young LLP, the independent public accountants of
the Company, in the form previously agreed to by the Underwriter.
(g) The Underwriter shall have received from the Company a certificate,
signed by the President or a Vice President and by the principal financial or
accounting officer of the Company, dated the Closing Date, to the effect that,
to the best of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in this
Underwriting Agreement are true and correct, as if made at and as of the Closing
Date, and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing
Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
instituted or is threatened by the Commission nor has any state securities
authority suspended the qualification or registration of the Securities for
offering or sale in any jurisdiction;
(iii) Since the effective date of the Registration Statement, there
has occurred no event required to be set forth in an amendment or supplement to
the Registration Statement or Prospectus that has not been so set forth, and
there has been no document required to be filed under the Exchange Act and the
Exchange Act Rules and Regulations of the Commission thereunder that upon such
filing would be deemed to be incorporated by reference in the Prospectus that
has not been so filed;
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (a) there has not been, and no
development has occurred which could reasonably be expected to result in, a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company, the Partnership and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, in each case
18
other than as set forth in or contemplated by the Registration Statement and the
Prospectus and (b) neither the Company, the Partnership nor any of the
Subsidiaries has sustained any material loss or interference with its business
or properties from fire, explosion, flood or other casualty, whether or not
covered by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree, which is not set forth in the
Registration Statement and the Prospectus; and
(v) such other matters as the Underwriter or Underwriter's counsel may
reasonably request.
(h) On or prior to the Closing Date, the Underwriter shall have received
the executed lock up agreements in form and substance reasonably acceptable to
the Underwriter from each of the Company's directors, each executive officer of
the Company and Five Arrows Realty Securities III, L.L.C. agreeing to
restrictions substantially similar to those set forth in SECTION 4(m) hereof.
(i) Prior to the Closing Date, the Securities shall have been duly
authorized for listing by the NYSE upon official notice of issuance.
(j) All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Underwriter and Underwriter's counsel. The Company will furnish
the Underwriter with such conformed copies of such opinions, certificates,
letters and other documents as the Underwriter shall reasonably request and the
Company shall furnish to the Underwriter such further certificates and documents
as the Underwriter shall have reasonably requested.
6. Indemnification and Contribution.
(a) The Company and the Partnership jointly and severally agree to
indemnify and hold the Underwriter harmless, their directors, officers,
employees and agents and each person, if any, who controls them within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all investigative, legal and other
expenses reasonably incurred in connection with, and any and all amounts paid in
settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), as and when incurred to which
the Underwriter, or any such person, may become subject under the Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, liabilities, expenses or
damages arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, or
in any application or other document executed by or on behalf of the Company or
the Partnership based on written information furnished by or on behalf of the
Company or the Partnership filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with the
Commission, (ii) the omission or alleged omission to state in such document a
material fact
19
required to be stated in it or necessary to make the statements in it not
misleading or (iii) any act or failure to act or any alleged act or failure to
act by the Underwriter in connection with, or relating in any manner to, the
Securities or the offering contemplated hereby, and which is included as part of
or referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above, PROVIDED, THAT the
Company shall not be liable under this clause (iii) to the extent it is finally
judicially determined by a court of competent jurisdiction that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by the Underwriter through
their gross negligence or willful misconduct), and PROVIDED, FURTHER, THAT the
Company will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Securities in the public offering
to any person and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to the Underwriter furnished in writing to the Company by the
Underwriter expressly for inclusion in the Registration Statement or the
Prospectus. The Underwriter confirm to the Company and the Company acknowledges
that only the following information appearing in the Prospectus with respect to
the public offering of the Securities has been furnished to the Company by the
Underwriter for use in the Prospectus: the information in the third and eighth
paragraphs and the second sentence of the seventh paragraph under the caption
"Underwriting" in the Prospectus Supplement. This indemnity agreement will be in
addition to any liability that the Company or the Partnership might otherwise
have.
(b) The Underwriter will indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each director of the Company and each
officer of the Company who signs the Registration Statement to the same extent
as the foregoing indemnity from the Company to the Underwriter, but only insofar
as losses, claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with the information relating to the Underwriter
furnished in writing to the Company by the Underwriter expressly for use in the
Registration Statement, the preliminary prospectus or the Prospectus as set
forth in the second to last sentence of SECTION 6(a) above. This indemnity will
be in addition to any liability that the Underwriter might otherwise have;
PROVIDED, HOWEVER, that in no case shall the Underwriter be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by the Underwriter.
(c) Any party that proposes to assert the right to be indemnified under
this SECTION 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this SECTION 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this SECTION 6 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly
20
notified, to assume the defense of the action, with counsel satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one additional
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld); PROVIDED HOWEVER, no indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this SECTION 6 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding. Notwithstanding any other provision of this SECTION 6(c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this SECTION 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company and the Partnership or the
Underwriter, the Company, the Partnership and the Underwriter will contribute to
the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company
from persons other than the Underwriter, such as
21
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) to which the Company and the Underwriter
may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and the Partnership on the one hand
and the Underwriter on the other. The relative benefits received by the Company
and the Partnership on the one hand and the Underwriter on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriter, in each case
as set forth in the table on the cover page of the Prospectus Supplement. If,
but only if, the allocation provided by the foregoing sentence is not permitted
by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault of the Company and the
Partnership on the one hand, and the Underwriter, on the other, with respect to
the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriter, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Partnership and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this SECTION 6(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this SECTION 6(d)
shall be deemed to include, for purpose of this SECTION 6(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this SECTION 6(d), the Underwriter shall not be required to
contribute any amount in excess of the underwriting discounts and commissions
received by the Underwriter and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this SECTION 6(d), any person who controls a
party to this Underwriting Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this SECTION 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this SECTION 6(d). Except for a settlement entered
into pursuant to the last sentence of SECTION 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this SECTION 6
and the representations and warranties of the Company and the Partnership
contained in this Underwriting Agreement shall remain operative and in full
force and effect regardless of (i) any
22
investigation made by or on behalf of the Underwriter, (ii) acceptance of the
Securities and payment therefor or (iii) any termination of this Underwriting
Agreement.
7. Representations and Agreements to Survive Delivery. All representations,
warranties and agreements of the Company and the Partnership contained herein or
in certificates delivered pursuant hereto, and the Underwriter's agreements
contained in SECTION 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Underwriter
or any controlling persons, or the Company or any of its officers, directors or
any controlling persons, and shall survive delivery of and payment for the
Securities hereunder.
8. Termination. The Underwriter shall have the right by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Underwriting Agreement if (i) the Company shall have failed, refused or
been unable, at or prior to the Closing Date, to perform any agreement on its
part to be performed hereunder, (ii) any other condition of the Underwriter's
obligations hereunder is not fulfilled when due, (iii) trading on the NYSE shall
have been wholly suspended, (iv) minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for the Common Stock shall have
been required on the NYSE by the NYSE or by order of the Commission or any other
governmental authority having jurisdiction, (v) a banking moratorium shall have
been declared by federal or New York authorities, or (vi) an outbreak or
escalation of hostilities in which the United States is involved, a declaration
of war by Congress, any other substantial national or international calamity or
crisis or any other event or occurrence of a similar character shall have
occurred since the execution of this Underwriting Agreement that, in the
Underwriter's sole judgment, makes it impractical or inadvisable to proceed with
the completion of the sale of and payment for the Securities. Any such
termination shall be without liability of any party to any other party with
respect to Securities not purchased by reason of such termination except that
the provisions of SECTION 4(g) and SECTION 6 hereof shall at all times be
effective. If the Underwriter elects to terminate this Underwriting Agreement as
provided in this Section, the Company shall be notified promptly by the
Underwriter by telephone, telex or telecopy, confirmed by letter.
9. Notices. All notices or communications hereunder shall be in writing and if
sent to the Underwriter shall be mailed, delivered, telexed or telecopied and
confirmed to the Underwriter at Wachovia Securities, Inc., 0 Xx. Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, attention: Xxxxxxx Xxxxxx (with copy to Hunton &
Xxxxxxxx, Riverfront Plaza, East Tower, 000 X. Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000-0000, attention: Xxxxxxx X. Xxxxx, Esq.,), or if sent to the Company,
shall be mailed, delivered, telexed or telecopied and confirmed to Parkway
Properties, Inc., 300 One Xxxxxxx Place, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxx 00000, attention: Xxxxxx X. Xxxxxx (with copy to Xxxxxxx Xxxxxxxxxxx
& Mugel, LLP, Fleet Bank Building, Twelve Xxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx
00000-0000, attention: Xxxxxx X. Xxxxxxx, Esq.). Any party to this Underwriting
Agreement may change such address for notices by sending to the other party to
this Underwriting Agreement written notice of a new address for such purpose.
10. Parties. This Underwriting Agreement shall inure to the benefit of, and be
binding upon, the Company, the Partnership and the Underwriter and their
respective successors and the controlling persons, officers, directors,
employees and representatives referred to in SECTION 6 hereof, and no other
person will have any right or obligation hereunder.
23
11. Applicable Law. This Underwriting Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
If the foregoing correctly sets forth the understanding between the
Company, the Partnership and the Underwriter, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company, the Partnership and the Underwriter.
[Signature page follows]
24
Very truly yours,
PARKWAY PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
PARKWAY PROPERTIES LP
By: Parkway Properties General Partners,
Inc., its sole general partner
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
ACCEPTED as of the date first above written
WACHOVIA SECURITIES, INC.
By: /s/ J. Xxxx Xxxxxxxx
--------------------------------
Name: J. Xxxx Xxxxxxxx
Title: Managing Director
25
SCHEDULE A
Subsidiaries
Parkway Properties One Park Ten, L.P.
Parkway Properties One Park Ten General Partner, Inc.
Parkway 000 Xxxxx Xxxxxxxx, XXX
Xxxxxxx 000 Xxxxx Xxxxxxxx Manager, Inc.
Parkway Properties General Partners, Inc.
Parkway Realty Services LLC
Parkway Mississippi LLC
Parkway Xxxxxxx LLC
Wink/Parkway Partnership (50% interest)
Parkway Properties Tax Administration LLC
Golf Properties, Inc. (95% non-voting interest)
Parkway Xxxxx LLC
111 Capitol Building XX
Xxxxx Building Assoc. XX
Xxxxx Garage, LLC
Parkway Xxxxx LLC
Parkway Capitol Center, LLC
Parkway Orlando, LLC
Parkway Orlando Manager, Inc.
Phoenix OfficeInvest, LLC
Phoenix Viad Manager, Inc.
