SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT, dated as of February
16, 2005 (this “Agreement”), is by and between First Union Real Estate
Equity and Mortgage Investments, an unincorporated association in the form of a
business trust organized in Ohio (the “Company”) and Kimco Realty
Corporation, a Maryland corporation (the “Investor”).
WHEREAS, the Company and
the Investor are executing and delivering this Agreement in reliance upon the
exemptions from registration provided by Regulation D (“Regulation D”)
promulgated by the Securities and Exchange Commission (the “Commission”) under
the Securities Act of 1933, as amended (the “Securities Act”), and/or Section
4(2) of the Securities Act;
WHEREAS, the Investor wishes
to purchase, and the Company wishes to issue and sell, 1,000,000 shares (the “Shares”)
of the Company’s common shares of beneficial interest, par value $1.00 per
share (the “Common Stock”), for an aggregate purchase price of $4,000,000 (the “Purchase
Price”), upon the terms and conditions of this Agreement; and
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
NOW, THEREFORE, in consideration of the foregoing and
of the respective covenants and undertakings hereunder and for other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged,
intending to be legally bound, the parties hereto do hereby agree as follows:
Section 1.01. Definitions. As used in this Agreement, the following
terms have the meanings set forth below.
“Accredited Investor” shall mean a Person that
is an “accredited investor” within the definition contained in Rule 501(a)
under the Securities Act.
“Affiliate” shall mean (a) with respect to an
individual, any member of such individual’s family residing in the same
household; (b) with respect to an entity: (i) any executive officer, director,
partner or Person that owns ten percent (10%) or more of the outstanding
beneficial interest of or in such entity, or (ii) any brother, sister, brother-in-law,
descendant or ancestor of any executive officer, director, partner or
Person that owns ten percent (10%) or more of the outstanding beneficial
interest of or in such entity; and (c) with respect to a Person, any Person
which directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such Person or entity; provided,
however, that for purposes of the definition of “Affiliate,” no Investor shall
be deemed an “Affiliate” of the Company.
“Agreement” shall have the meaning set forth in
“Basket” shall have the meaning set forth in
“Business Day” shall mean any day other than
(i) a Saturday, (ii) a Sunday or (iii) any other day on which banks in the City
of New York are authorized or required to close.
“By-Laws” shall mean, when used with respect to
a specified Person, the by-laws of a Person, as the same may be amended from
time to time.
“Capital Stock” shall mean, with respect to any
Person, any and all shares, shares of beneficial interest, interests,
participations, rights in or other equivalents (however designated and whether
voting or non-voting) of such Person’s capital stock or any form of membership,
ownership or participation interests, as applicable, including partnership
interests, whether now outstanding or hereafter issued and any and all
securities, debt instruments, rights, warrants or options exercisable or
exchangeable for or convertible into such capital stock.
“Certificate of Incorporation” shall mean, when
used with respect to a specified Person, the Declaration of Trust, Articles or
Certificate of Incorporation or other applicable organizational document of
such Person, as currently in effect.
“Closing” shall have the meaning set forth in
“Closing Date” shall have the meaning set forth
in Section 2.02(a).
“Commission Filings” shall have the meaning set
forth in Section 3.08.
“Common Stock” shall mean the common shares of
beneficial interest, $1 par value per share, of the Company.
“Company” shall have the meaning set forth in
“Company Subsidiaries” and “Company
Subsidiary” shall have the meaning set forth in Section 3.03.
“Consents” shall mean all governmental and
third party consents, approvals, authorizations, qualifications and waivers
necessary to be received by a Person for the consummation of the transaction
contemplated by the Agreement.
“Contract” shall mean any legally binding
contract, agreement, mortgage, deed of trust, bond, loan, indenture, lease,
license, note, option, warrant, right, instrument, commitment or other similar
document, arrangement or agreement, whether written or oral.
“Declaration of Trust” shall have the meaning
set forth in Section 3.01.
“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the SEC
“GAAP” shall mean generally accepted accounting
principles applied on a consistent basis as used in the United States of
“Governmental Body” shall mean any government
or governmental or quasi-governmental authority including, without limitation,
any federal, state, territorial, county, municipal or other governmental or
quasi-governmental agency, board, branch, bureau, commission, court, arbitral
body (public or private), department or other instrumentality or political unit
or subdivision, whether located in the United States or abroad, the National
Association of Securities Dealers, Inc., the New York Stock Exchange, the
Nasdaq National Market, the Nasdaq SmallCap Market or the American Stock
“Indemnitee” shall have the meaning set forth
in Section 9.01.
“Indemnitor” shall have the meaning set forth
in Section 9.01.
“Investor” shall have the meaning set forth in
“Law” shall mean any treaty, statute,
ordinance, code, rule, regulation, Order or other legal requirement enacted,
adopted, promulgated, applied or followed by any Governmental Body.
“Legal Proceeding” shall mean any judicial,
administrative or arbitral actions, suits, proceedings (public or private) or
“Legend” shall mean the Legend set forth in
“Lien” shall mean any mortgage, pledge, lien
(statutory or otherwise), security interest, hypothecation, conditional sale
agreement, encumbrance or similar restriction or agreement.
“Loss” shall have the meaning set forth in
“Material Adverse Effect” shall mean any event,
condition or contingency that has had, or is reasonably likely to have, a
material adverse effect on the business, assets, liabilities (including
contingent liabilities), results of operations, financial condition or, to the
knowledge of the Company, prospects of the Company and the Company
Subsidiaries, taken as a whole. For the
purposes of this Agreement, a Material Adverse Effect shall not be deemed to
arise by reason of (i) events of war impacting the economy in general, and (ii)
changes in general economic conditions.
“Notice” shall have the meaning set forth in
“NYSE” shall mean the New York Stock Exchange.
“Order” shall mean any order, injunction,
judgment, decree, ruling, writ, assessment or
shall mean any individual, corporation, partnership, firm, limited liability
company, joint venture, trust, association, unincorporated
organization, group, joint-stock company, Governmental Body or other
“Purchase Price” shall mean $4,000,000 in the
aggregate, payable as set forth in Section 2.02.
shall mean the U.S. Securities and Exchange Commission.
“Securities Act” shall mean the Securities Act
of 1933, as amended, and the rules and regulations of the SEC promulgated
“Subsidiary” shall mean, as to any Person, any
other Person more than 50% of the shares of the voting stock, voting interests,
membership interests or partnership interests of which are owned or controlled,
or the ability to select or elect more than 50% of the directors or similar managers
is held, directly or indirectly, by such first Person or one or more of its
Subsidiaries or by such first Person and one or more of its Subsidiaries;
provided, however, that First Union Management, Inc. shall not be deemed to be
a Subsidiary of the Company.
“Unaudited Financial Statements” shall have the
meaning specified in Section 3.07.
Section 1.02. Rules of
Construction. Unless the
context otherwise requires:
(a) an accounting term defined by GAAP that is not otherwise
defined herein has the meaning assigned to it in accordance with GAAP;
(b) “or” is not exclusive;
(c) words in the singular include the plural, and words in the
plural include the singular;
(d) the words “include” and “including” shall be deemed to mean “include,
without limitation,” and “including, without limitation”;
(e) “herein,” “hereof,” “hereto,” “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
article, section, paragraph or clause where such terms may appear;
(f) references to sections mean references to such section in
this Agreement, unless stated otherwise; and
(g) the use of any gender shall be applicable to all genders.
ISSUANCE, SALE AND PURCHASE OF THE SHARES.
Section 2.01. Sale and Purchase
of the Shares. Upon the terms
and subject to the conditions of this Agreement, the Company will sell to the
Investor, and the Investor will purchase from the Company, the Shares for a
purchase price of $4,000,000 (the “Purchase Price”).
to the satisfaction or waiver of the conditions set forth in this Agreement,
the closing of the transaction contemplated by Section 2.01 (the “Closing”)
shall take place at 10:00 AM on the first business day following receipt by the
Company of notice that the Shares have been duly listed on the NYSE, pending
notice of issuance, but not later than Wednesday, February 23, 2005, or at such
other time as may be mutually agreed upon by the Investor and the Company (the “Closing
Date”). The Closing shall occur on
the Closing Date at the offices of Xxxxxx Xxxxxx Xxxxx Xxxxxxxx, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx.
the Closing: (i) the Company will deliver to the Investor (x) a certificate for
the Shares registered in the name of the Investor and (y) legal opinions of
counsel to the Company addressed to the Investor, satisfactory to counsel to
the Investor and in substantially the form of Annex A and Annex B (the “Company
Counsel Opinions”); (ii) the Investor, in full payment for the Shares, will
deliver to the Company the Purchase Price in immediately available funds, by
wire transfer to such account as the Company shall specify, and (iii) each
party shall take or cause to happen such other actions, and shall execute and
deliver such other instruments or documents, as shall be required under Article
Section 2.03. Use of Proceeds. The Company shall use the proceeds from the
sale of the Shares for general corporate purposes.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor as
Section 3.01. Organization and
Good Standing. The Company is
an unincorporated association in the form of a business trust organized,
validly existing and in good standing under the Laws of the State of Ohio and
has trust power and authority to own, lease and operate its properties and
carry on its business as presently conducted.
The Company is duly qualified, registered or licensed as a foreign business
entity to do business and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the character of its present
operations makes such qualification, registration or licensing necessary,
except where the failure to so qualify or be in good standing could not
reasonably have a Material Adverse Effect. The
Company has heretofore
delivered or made available to the Investor complete and correct copies of the declaration
of trust of the Company, as amended to date (the “Declaration of Trust”).
Section 3.02. Authority; Binding
Effect. The Company has trust
power and authority to execute and deliver this Agreement and to consummate the
transaction contemplated hereby. The
execution and delivery of this Agreement and the consummation by the Company of
the transaction contemplated hereby have been duly and validly approved by all
necessary action on the part of the Company.
This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms, except as such enforceability may be subject to
the effects of any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar Laws affecting creditors’ rights
generally and subject to the effects of general equitable principles.
Section 3.03. Organization and
Good Standing of Company Subsidiaries. Schedule 3.03 lists all Subsidiaries
of the Company and their respective jurisdictions of formation (collectively,
the “Company Subsidiaries” and each, a “Company Subsidiary”). Except as set forth in Schedule 3.03,
the Company owns, directly or indirectly, all the shares of outstanding Capital
Stock of each Company Subsidiary. There
are no outstanding securities or rights convertible into or exchangeable for
shares of any Capital Stock of any Company Subsidiary and there are no
Contracts by which any Company Subsidiary is bound to issue additional shares
of Capital Stock. All of the shares of
Capital Stock of each of the Company Subsidiaries are duly and validly
authorized, fully paid and non-assessable and, except for the Liens set forth
in Schedule 3.03, are owned by the Company free and clear of any Lien with
respect thereto. Each Company Subsidiary
is duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, and has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as it is now being conducted, and is duly licensed or qualified to do business
in each other jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, except where the failure to
be so licensed or qualified in any such jurisdiction could not reasonably have
a Material Adverse Effect.
Section 3.04. Capitalization. Schedule 3.04(a) sets forth, in each
case as of the date hereof, (i) the authorized capitalization of the Company,
the number of shares of each class issued and outstanding and the number of
shares reserved for issuance in connection with the Company’s stock option
plans, and (ii) all options, warrants, convertible securities, rights to subscribe
to, calls, contracts, undertakings, arrangements and commitments to issue which
may result in the issuance of stock of the Company. All of the issued and outstanding shares of
the Company’s Capital Stock have been duly and validly authorized and issued
and are fully paid and non-assessable and are not subject to any preemptive
rights. No securities of the Company are
entitled to preemptive or similar rights, and no person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transaction contemplated by this Agreement.
Section 3.05. No Violations; Consents. Neither
the execution, delivery or performance by the Company of this Agreement nor the
consummation of the transaction contemplated hereby, will (a) conflict with, or
result in the breach of, any provision of the organizational documents of
the Company or any
Company Subsidiary, (b) conflict with, violate, result in the breach or termination
of, or constitute a default or give rise to any right of termination,
amendment, cancellation or acceleration or right to increase the obligations or
otherwise modify the terms thereof under any Contract or Order to which the
Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary or any of the properties or assets of the Company or any
Company Subsidiary is bound, (c) constitute a violation of any Law applicable
to the Company or any Company Subsidiary; or (d) result in the creation of any
Lien upon the properties or assets of the Company or any Company Subsidiary. Except for the approval of the NYSE referred
to in Section 7.01(c), no Consent is required on the part of the Company or the
Company Subsidiaries in connection with the execution and delivery of this
Agreement and the consummation of the transaction contemplated hereby.
Section 3.06. Listing. The Company is not in violation of the
listing requirements of the NYSE in any material respect. The Company has not received any written
notice from the NYSE that the Common Stock is to be delisted by the NYSE.
Section 3.07. Financial
Statements. The Company has
previously delivered to the Investor copies of the unaudited combined balance
sheet of the Company and the Company Subsidiaries as of September 30, 2004 and
the related unaudited combined statements of operations and cash flows for the three
months and nine months ended September 30, 2004, as reported in the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004,
filed with the SEC under the Exchange Act (the “Unaudited Financial
Statements”). The Unaudited
Financial Statements accurately reflect the books and records of the Company
and present fairly, in all material respects, the combined financial position
of the Company and the Company Subsidiaries and the combined results of their
operations and their cash flows for the period and date covered thereby, in
conformity with GAAP, except for changes resulting from year-end adjustments
(none of which will be material in amount) and the absence of footnote
Section 3.08. Commission Filings. The Company has filed all reports,
registration statements, proxy statements and other materials, together with
any amendments required to be made with respect thereto, that were required to
be filed with the SEC under the Securities Act or the Exchange Act from and
after December 31, 2003 (all such reports and statements are collectively
referred to herein as the “Commission Filings”). As of their respective dates, the Commission
Filings, including the financial statements contained therein, complied in all
material respects with all of the statutes and published rules and regulations
enforced or promulgated by the regulatory authority with which the Commission
Filings were filed, and, except to the extent the information in any Commission
Filing has been revised or superseded by a later filed Commission Filing, did
not and do not as of the date hereof contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The financial statements of the Company
included in the Commission Filings comply in all material respects with
applicable accounting requirements and the rules and regulations of the SEC
with respect thereto as in effect at the time of filing. Such financial statements have been prepared
in accordance with GAAP, except as may be otherwise specified in such financial
statements or the notes thereto, and fairly present in all material respects
the financial position of the Company
and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, year-end audit adjustments.
Section 3.09. Absence of Certain
Developments. Except as specifically
disclosed in the Commission Filings, since September 30, 2004 and through the
date hereof, no event or series of events occurred which
could reasonably have a Material Adverse Effect.
Section 3.10. Litigation. There are no Legal Proceedings pending or, to
the knowledge of the Company, threatened, that question the validity of this
Agreement or the transaction contemplated hereby or any action taken or to be
taken by the Company or any Company Subsidiary in connection with the
consummation of the transaction contemplated hereby. Except as otherwise specifically disclosed
herein or in the Commission Filings, there are no Legal Proceedings pending or,
to the knowledge of the Company, threatened, against or involving the Company
or any Company Subsidiary or any of their respective properties or assets, at
Law or in equity, involving, individual claims of more than $1,000,000 or
claims in the aggregate of more than $3,000,000. There is no outstanding or, to the knowledge
of the Company, threatened, Order of any Governmental Body against the Company
or any Company Subsidiary or any of their respective properties or assets,
which Order could reasonably have a Material Adverse Effect.
Section 3.11. Compliance with Laws. The Company and the Company Subsidiaries are
in compliance in all respects with all Laws and Orders promulgated by any
Governmental Body applicable to the Company and the Company Subsidiaries or to
the conduct of the business or operations of the Company and the Company
Subsidiaries or the use of their properties (including any leased properties)
and assets, except where failure to comply would not have a Material Adverse
Effect. Since January 1, 2004, neither
the Company nor any Company Subsidiary has received any written notice of
violation or alleged material violation of any such Law or Order by any
Governmental Body in any material respect that has not been resolved. Since
January 1, 2004, neither the Company nor any Company Subsidiary has received
written notice that it is the subject of an investigation by any Governmental
Body which could reasonably have a Material Adverse Effect.
Section 3.12. Financial Advisors. No agent, broker, investment banker, finder,
financial advisor or other Person is or will be entitled to any broker’s or
finder’s fee or any other commission or similar fee from the Company, directly
or indirectly, in connection with the transaction contemplated hereby.
Section 3.13. No General Solicitation. None of the Company or any of its “affiliates”
(as defined in Rule 501(b) of Regulation D under the Securities Act (“Regulation
D”)), has, directly or through an agent, engaged in any form of general
solicitation or general advertising in connection with the offering of the Shares
(as those terms are used in Regulation D) under the Securities Act or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act; and the Company has not entered into any contractual
arrangement with respect to the distribution of the Shares except for this
Agreement, and the Company will not enter into any such arrangement.
Section 3.14. No Default. The Company is not in default in the payment
or performance of any of its Contracts, except where such default would not
have a Material Adverse Effect.
Section 3.15. Registration of
Shares. The Company has not
entered into any agreement to register its debt or equity securities under the
Section 3.16. Disclosure Controls. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the Company and designed such disclosure controls and procedures to ensure
that material information relating to the Company, including its subsidiaries,
is timely made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s Form 10-K or
10-Q, as the case may be, is being prepared.
The Company’s certifying officers have evaluated the effectiveness of
the Company’s controls and procedures as of September 30, 2004 (such date, the “Evaluation
Date”). The Company presented in its
Form 10-Q for the quarter ended September 30, 2004 the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no
significant changes in the Company’s internal controls (as such term is defined
in Item 307(b) of Regulation S-K under the Exchange Act) or, to the knowledge
of the Company, in any factors that could significantly affect the Company’s
Section 3.17 Private Placement. Assuming the accuracy of the representations
and warranties of the Investor contained in Article IV and its compliance
with the agreements set forth therein, no registration under the Securities Act
is required for the offer and sale of the Shares by the Company to the Investor
as contemplated hereby.
3.18 Taxes. There have been properly completed and filed
on a timely basis all material tax returns required to be filed by the Company
or any Company Subsidiary on or prior to the date hereof. All such tax returns are true, correct and
complete in all material respects. All
taxes of the Company or any Company Subsidiary due and payable have been timely
paid, except where the failure to pay such taxes would not reasonably be
expected to have a Material Adverse Effect.
The most recent audited financial statements of the Company contained in
the Commission Filings reflect an adequate accrual in accordance with GAAP for
all material taxes payable by the Company and any Company Subsidiaries for all
taxable periods and portions thereof through the date of such financial
statements. The Company (i) for all
taxable years for which the Internal Revenue Service could assert a tax
liability, has elected and been subject to taxation as a real estate investment
trust (a “REIT”) within the meaning of Section 856 of the Internal Revenue Code
of 1986, as amended (the “Code”) and has satisfied all requirements to qualify
as a REIT for all such years and (ii) has not taken or omitted to take any
action which would reasonably be expected to result in a challenge to its
status as a REIT.
Section 3.19 Investment
Company. The Company is not, and is
not an affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
3.20 Disclosure. The representations and warranties of the
Company and the Company Subsidiaries contained in this Agreement (including all
schedules attached hereto) and
the information contained
in the other documents, certificates and written statements furnished to the
Investor by or on behalf of the Company or any the Company Subsidiaries for use
in connection with the transaction contemplated by this Agreement, when taken
together, do not contain any untrue statement of a material fact or omit to
state a material fact (known to the Company or the applicable Company
Subsidiary, in the case of any document not furnished by it) necessary in order
to make the statements contained herein or therein not materially misleading in
light of the circumstances in which the same were made. There is no fact known to the Company that
has had, or could reasonably be expected to have, a Material Adverse Effect and
that has not been disclosed herein or in such other documents and statements
furnished to the Investor for use in connection with the transaction
REPRESENTATIONS AND WARRANTIES OF THE
Section 4.01. Investor
Representations. The Investor
represents and warrants to the Company as follows:
(a) Authorization. The Investor is a corporation duly organized
and validly existing under the Laws of the State of Maryland. The Investor has the full power and authority
to enter into this Agreement and to consummate the transaction contemplated
hereby. The execution and delivery of
this Agreement and the consummation by the Investor of the transaction
contemplated hereby have been duly and authorized by all necessary action on
the part of the Investor. This Agreement
has been duly executed and delivered by the Investor and constitutes the legal,
valid and binding obligations of the Investor, enforceable in accordance with its
respective terms, except as such enforceability may be subject to the effects
of any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar Laws affecting creditors’ rights
generally and subject to the effects of general equitable principles.
Representations. The Investor is an
Accredited Investor and is acquiring the Shares for the Investor’s own account,
for investment, and not with a view to, or for sale in connection with, the
distribution thereof or of any interest therein. The Investor understands that the Shares have
not been registered under the Securities Act by reason of its issuance in a
transaction exempt from the registration requirements of the Securities Act
pursuant to the exemption provided in Section 4(2) and/or Regulation D
promulgated under the Securities Act, and that the Shares may not be sold
or otherwise disposed of unless registered under the Securities Act or exempted
from such registration.
(c) Investor’s Acknowledgment. The Investor has had the
opportunity, directly or through its representatives, to ask questions of and
receive answers from Persons acting on behalf of the Company concerning the
transactions contemplated by this Agreement.
Advisors. No agent, broker,
investment banker, finder, financial advisor or other Person is or will be
entitled to any broker’s or finder’s fee or any other
or similar fee from the Investor, directly or indirectly, in connection with
the transaction contemplated by this Agreement.
certificate evidencing the Shares will bear a legend (the “Legend”)
substantially similar to the following:
REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO INTEREST IN THESE SECURITIES MAY BE
PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT WHILE
A REGISTRATION STATEMENT IS IN EFFECT UNDER SAID ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT.
THE BY-LAWS OF THE TRUST
PROVIDE, AMONG OTHER THINGS, THAT NO PERSON MAY ACQUIRE TRUST SECURITIES
(INCLUDING THESE SECURITIES) IF, THEREAFTER, HE WOULD BENEFICIALLY OWN MORE
THAN 9.8% OF THE TRUST’S SHARES OF BENEFICIAL INTEREST. IN APPLYING THIS RESTRICTION, CONVERTIBLE
SECURITIES OF THE TRUST BENEFICIALLY OWNED BY SUCH PERSON (INCLUDING
CONVERTIBLE SECURITIES) ARE TO BE TREATED AS IF ALREADY CONVERTED INTO SHARES
OF BENEFICIAL INTEREST. A COPY OF THE
BY-LAWS AND INFORMATION ABOUT THE LIMIT ON OWNERSHIP MAY BE OBTAINED FROM THE
SECRETARY OF THE TRUST.
legend endorsed on the certificate pursuant to Section 4.01 (e) hereof shall be
removed and the Company shall issue a certificate without such portion of the legend
to the holder thereof at such time as the securities evidenced thereby cease to
be restricted securities upon the earliest to occur of (i) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (ii) the securities shall
have been sold to the public pursuant to Rule 144 (or any successor provision)
under the Securities Act, and (iii) such securities may be sold by the holder
without restriction or registration under Rule 144(k) under the Securities Act
(or any successor provision).
and Transfer Limitations. The
Investor has received a copy of the By-Laws of the Company, and understands,
and will be in compliance with, the restrictions on transfer and ownership of the
Company’s Capital Stock included therein at the Closing and at all times
in the Company. The Investor does
not own, directly or indirectly, any Capital Stock of the Company.
COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
Section 5.01. .Maintain Listing. The Company will use commercially reasonable
efforts to (x) maintain the listing and trading of its Common Stock on the
NYSE, for so long as the Company qualifies for such listing under the rules and
regulations of the NYSE and (y) comply in all material respects with the
Company’s reporting, filing, and other obligations, under the rules and
regulations of the NYSE. In the event
that the Common Stock is no longer eligible for listing and trading on the
NYSE, the Company will use commercially reasonable efforts to secure the
listing or quotation of the Common Stock on the Nasdaq National Market, the
Nasdaq SmallCap Market or the American Stock Exchange (if such listing is
permitted by the bylaws, rules or regulations of any of the foregoing) and to
comply in all material respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of such exchanges or the National
Association of Securities Dealers, Inc., as applicable. The Company will promptly provide to the Investor
copies of any notices it receives from the NYSE and any other exchange or
quotation system on which the Common Stock is then listed regarding the
continued eligibility of the Common Stock for listing on such exchanges or
Section 5.02. Secure Listing. Following the execution of this Agreement,
the Company shall promptly file with the NYSE an application to list the Shares
on the NYSE.
Section 5.03. As long as the Investor owns the Shares,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed
by the Company after the date hereof pursuant to the Exchange Act and to
deliver, upon reasonable request from the Investor, a written certification of
a duly authorized officer as to whether it has complied with its filing
obligations under the Exchange Act. As
long as the Investor owns Shares, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Investor and
make publicly available in accordance with Rule 144(c) under the Securities Act
such information as is required for the Investor to sell the Shares under Rule
144 under the Securities Act. The
Company further covenants that it will take such further action as the Investor
may reasonably request, to the extent required from time to time to enable the
Investor to sell Shares without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 under the Securities Act.
ACTIONS PRIOR TO CLOSING
Section 6.01. Consent. Each of the Company and the Investor will use
its reasonable best efforts and shall fully cooperate with each other to make
promptly all registrations, filings and applications, give all notices and
obtain all Consents in connection with the transaction contemplated hereby.
Section 6.02. Publicity. The parties agree not to issue any
announcement, press release, public statement or other information to the press
or any third party with respect to this Agreement or the transaction contemplated
hereby without obtaining the prior written approval of the other party hereto
(which approval shall not be unreasonably withheld); provided, however, that
nothing contained herein shall prevent either party, at any time, from
furnishing any required information to any Governmental Body or from issuing
any announcement, press release, public statement or other information to the
press or any third party with respect to this Agreement or the transaction contemplated
hereby if required by Law, although, the parties agree to consult with each
other as to the content of any release so required and consider in good faith
the comments of the other thereon.
CONDITIONS TO CLOSING
Section 7.01. Conditions to
Obligations of the Investor.
The obligation of the Investor to consummate the transaction
contemplated hereby shall be subject to the fulfillment on or prior to the
Closing Date of the following conditions:
(a) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in
effect that restrains or prohibits the issuance of the Shares.
(b) Stock Certificates.
The Company shall have delivered to the Investor (i) a certificate
representing the Shares, duly registered in the name of the Investor and (ii)
the Company Counsel Opinions.
(c) NYSE Listing. The Shares
have been duly listed on the NYSE, pending notice of issuance.
(d) Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though made on and as of
such date (except for representations and warranties that speak of a specific
date, which need only be true and correct as of such date).
(e) Absence of Material Developments. Since September 30,
2004, no event or series of events shall have occurred that reasonably would be
expected to have a Material Adverse Effect.
(f) Performance. The
Company shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by it at or prior to the Closing Date.
(g) No New Information. The Investor shall not have become aware of
any information or other matter with respect to legal matters affecting the
Company that is inconsistent with the financial and other information disclosed
to the Investor prior to the date hereof, in a manner that constitutes or would
reasonably be expected to have a Material Adverse Effect.
Section 7.02. Conditions to
Obligations of the Company.
The obligation of the Company to consummate the transaction contemplated
hereby shall be subject to the fulfillment on or prior to the Closing Date of
the following conditions:
(a) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in
effect that restrains or prohibits the issuance of the Shares.
(b) Purchase Price. The
Investor shall have delivered to the Company the Purchase Price.
Section 8.01. Survival. The representations, warranties and covenants
to be performed at or prior to Closing of the parties set forth in this
Agreement shall survive for a period of 12 months following the execution and
delivery of this Agreement and thereafter shall be of no further force or
effect, provided that the representations and warranties set forth in Sections
3.01 (Organization), 3.02 (Authorization), 3.04 (Capitalization) and 3.18
(Taxes) shall survive indefinitely (or if indefinite survival is not permitted
by Law, then for the maximum period permitted by applicable Law). Except as set forth herein,
all of the covenants, agreements and obligations of the parties hereto shall
survive the Closing indefinitely (or if indefinite survival is not permitted by
Law, then for the maximum period permitted by applicable Law). Anything herein to the contrary
notwithstanding, any claim for indemnification that is asserted by written
notice which notice specifies in reasonable detail the facts upon which such
claim is made as provided in this Section 8.01 within the survival period shall
survive until resolved pursuant to a final non-appealable judicial
determination or otherwise.
Section 9.01. Generally. Subject to the limitations and other
provisions of this Article IX, the Company covenants and agrees to indemnify,
defend and hold harmless the Investor and its directors, officers,
shareholders, employees and agents (each, an “Investor Party”) from and against
any and all Losses resulting from, incurred in connection with or arising out
of (a) any breach of any representation, warranty or covenant of the Company
contained herein, (b) the failure of the Company to perform any of the
agreements, covenants or obligations contained herein (other than if any such
claim was a result of a breach by the Investor under this Agreement). Subject to the limitations and other provisions
of this Article IX, the Investor covenants and agrees to indemnify, defend and
hold harmless the Company from and against (but only to the extent of) any and
all Losses resulting from, incurred in connection with or arising out of (but
only to the extent of) (a) any breach of any representation, warranty, covenant
or agreement of the Investor contained herein, or (b) the failure of the
Investor to perform any of the agreements, covenants or obligations of the Investor
contained herein. The term “Loss”
or any similar term shall mean any and all damages, reduction in value of the
original investment in the Shares, deficiencies, costs, claims, fines,
judgments, amounts paid in settlement, expenses of investigation, interest,
penalties, assessments, out-of-pocket expenses (including reasonable
and auditors’ fees and disbursements, witness fees and court costs). The party or parties being indemnified are
referred to herein as the “Indemnitee” and the indemnifying party is
referred to herein as the “Indemnitor.”
9.02. Indemnification Procedure.
party who receives notice of a potential claim that may, in the judgment of
such party, result in a Loss shall use all reasonable efforts to provide the
parties hereto notice thereof, provided that failure or delay or alleged delay
in providing such notice shall not adversely affect such party’s right to
indemnification hereunder, unless and then only to the extent that such failure
or delay or alleged delay has resulted in actual prejudice to the Indemnitor,
including, without limitation, by the expiration of a statute of
limitations. In the event that any party
shall incur or suffer any Losses in respect of which indemnification may be
sought by such party hereunder, the Indemnitee shall assert a claim for
indemnification by written notice (a “Notice”) to the Indemnitor stating
the nature and basis of such claim. In
the case of Losses arising by reason of any third party claim, the Notice shall
be given within thirty (30) days of the filing or other written assertion of
any such claim against the Indemnitee, but the failure of the Indemnitee to
give the Notice within such time period shall not relieve the Indemnitor of any
liability that the Indemnitor may have to the Indemnitee, except to the extent
that the Indemnitor demonstrates that the defense of such action has been
materially prejudiced by the Indemnitee’s failure to timely give such Notice.
the case of third party claims for which indemnification is sought, the
Indemnitor shall, if necessary, retain counsel reasonably satisfactory to the
Indemnitee, and have the option (i) to conduct any proceedings or negotiations
in connection therewith, (ii) to take all other steps to settle or defend any
such claim (provided that the Indemnitor shall not settle any such claim
without the consent of the Indemnitee which consent shall not be unreasonably
withheld) and (iii) to employ counsel to contest any such claim or liability in
the name of the Indemnitee or otherwise.
In any event, the Indemnitee shall be entitled to participate at its own
expense and by its own counsel in any proceedings relating to any third party
claim. The Indemnitor shall, within 15
Business Days of receipt of the Notice, notify the Indemnitee of its intention
to assume the defense of such claim. If
(i) the Indemnitor shall decline to assume the defense of any such claim, (ii)
the Indemnitor shall fail to notify the Indemnitee within 15 Business Days
after receipt of the Notice of the Indemnitor’s election to defend such claim,
(iii) the Indemnitee shall have reasonably concluded that there may be defenses
available to it which are different from or in addition to those available to
the Indemnitor (in which case the Indemnitor shall not have the right to direct
the defense of such action on behalf of the Indemnitee), or (iv) a conflict
exists between the Indemnitor and the Indemnitee which the Indemnitee has
reasonably concluded would prejudice the Indemnitor’s defense of such action,
then in each such case the Indemnitor shall not have the right to direct the
defense of such action on behalf of the Indemnitee and the Indemnitee shall, at
the sole expense of the Indemnitor, defend against such claim and (x) in the
event of a circumstance described in clause (i) and (ii), the Indemnitee may
settle such claim without the consent of the Indemnitor (and the Indemnitor may
not challenge the reasonableness of any such settlement) and (y) in the event
of a circumstance described in clause (iii) and (iv), the Indemnitee may not
settle such claim without the consent of the Indemnitor (which consent will not
be unreasonably withheld or delayed).
The reasonable expenses
of all proceedings, contests or lawsuits in respect of such claims shall be
borne and paid by the Indemnitor if the Indemnitee is entitled to
indemnification hereunder and the Indemnitor shall pay the Indemnitee, in
immediately available funds, the amount of any Losses, within a reasonable time
of the incurrence of such Losses.
Regardless of which party shall assume the defense or negotiation of the
settlement of the claim, the parties agree to cooperate fully with one another
in connection therewith. In the event
that any Losses incurred by the Indemnitee do not involve payment by the
Indemnitee of a third party claim, then, the Indemnitor shall, within 20 days
after written notice from the Indemnitee specifying the amount of Losses, pay
to the Indemnitee, in immediately available funds, the amount of such Losses. Anything in this Article IX to the contrary
notwithstanding, the Indemnitor shall not, without the Indemnitee’s prior
written consent, settle or compromise any claim or consent to entry of any
judgment in respect thereof which imposes any future obligation on the
Indemnitee or which does not include, as an unconditional term thereof, the
giving by the claimant or plaintiff to the Indemnitee, a release from all
liability in respect of such claim.
9.03. Limitations on Indemnification.
party shall be entitled to be indemnified hereunder unless and until the
aggregate of all Losses incurred by such party shall exceed $20,000 (the “Basket”);
provided, however, that the Basket shall not apply to any Losses incurred by such
party with respect to any third party claim against such party for which such
party is entitled to indemnity pursuant to Section 9.01. Notwithstanding anything to the contrary
contained herein, the liability of (i) the Company under this Article IX shall
be limited to an amount equal to the Purchase Price; and (ii) the Investor
under this Article IX shall be limited to an amount equal to the Purchase Price.
Section 10.01. Termination. This Agreement may be terminated on or any
time prior to the Closing by the mutual written consent of each of the Investor
and the Company.
Section 10.02. Effect Of
Termination. In the event of the
termination of this Agreement as provided in Section 10.01, all obligations and
agreements of the parties set forth in this Agreement shall forthwith become
void except for the obligations set forth in:
(i) Section 6.02 (Publicity) and (ii) Article IX (Indemnification), and
there shall be no liability or obligation on the part of the parties hereto
except as otherwise provided in this Agreement.
Notwithstanding the foregoing, the termination of this Agreement under
Section 10.01 shall not relieve either party of any liability for breach of
this Agreement prior to the date of termination.
Section 11.01 If during the
period commencing on the first anniversary of the date of this Agreement and
ending on the second anniversary of this Agreement, whenever the Company
proposes to register (other than on Forms S-4 or S-8) any shares of Common
Stock (or securities convertible into or exchangeable for, or options to
acquire, Common Stock) with the SEC under
the Securities Act and the registration form to be used may be used for
the registration of the Shares (a “Piggyback Registration”), the Company will
give written notice to the Investor, at least 30 days prior to the anticipated
filing date, of its intention to effect such a registration, which notice will
specify the proposed offering price, the kind and number of securities proposed
to be registered, the distribution arrangements and such other information that
at the time would be appropriate to include in such notice, and will include in
such Piggyback Registration all Shares with respect to which the Company has
received written requests for inclusion therein within 20 business days after
the effectiveness of the Company’s notice.
Shares with respect to which such request for registration has been
received will be registered by the Company and offered to the public in a
Piggyback Registration pursuant to this Article XI on the same terms and
conditions as any similar securities of the Company (whether sold by the
Company or a security holder other than the Investor) included therein.
11.02 If any
Piggyback Registration is an underwritten offering, the Company will select a
managing underwriter or underwriters to administer the offering. In
such event, the right of the Investor to registration pursuant to Section 11.01
hereof shall be conditioned upon such Investor’s participation in such
underwriting and the inclusion of the Shares in the underwriting to the extent
provided herein. In the event of such
underwriting the Investor shall (together with the Company) enter into an
underwriting agreement in customary form for selling shareholders with the
managing underwriter selected for such underwriting by the Company. The Company shall use its commercially
reasonable efforts to cause the managing underwriter to permit the Shares
requested to be included in a Piggyback Registration to be included on the same
terms and conditions as any similar securities of the Company (whether sold by
the Company or a security holder other than the Investor) included therein and
to permit the sale or other disposition of such the Shares in accordance with
the intended method of distribution thereof.
Notwithstanding anything to the contrary contained herein, if the
managing underwriter advises the Company in writing that in its reasonable
opinion the number of equity securities requested to be included in such Piggyback
Registration exceeds the number which can be sold in such offering, the Company
will include in such Piggyback Registration: (i) first, the number of shares to
be offered by the Company; (ii) second,
the number of shares of Common Stock requested to be included by the security
holders of the Company exercising their demand registration rights; and (iii)
third, that number of other shares of Common Stock proposed to be included in
such Piggy-Back Registration, pro rata among all other security holders of the
Company (including the Investor)
exercising their respective piggy-back registration rights thereof based upon
the aggregate number which such holders (including the Investors) propose to
include in such Piggyback Registration; and the Company shall so advise the
Investor of such limitation (or exclusion, if applicable). The Investor shall be responsible for any
underwriting fees, discounts or commissions attributable to the sale of the
Shares and any other expenses of any underwritten public offering by the
Investor of Shares.
11.03 (i) The Company shall have the right to terminate
or withdraw any registration initiated by it under this Article XI prior to the
effectiveness of the related registration statement and shall have no
obligation to register any Shares in connection with such registration, except
to the extent provided herein.
(ii) The Investor shall have the
right to withdraw its request for inclusion of its Shares in any Piggyback
Registration by giving written notice to the Company of its request to withdraw
prior to the planned effective date of the related Registration Statement.
and Addresses. Any notice, demand,
request, waiver, or other communication under this Agreement shall be in
writing and shall be deemed to have been duly given on the date of service, if
personally served or sent by facsimile; on the Business Day after notice is
delivered to a courier or mailed by express mail, if sent by courier delivery
service or express mail for next day delivery; and on the third day after
mailing, if mailed to the party to whom notice is to be given, by first class
mail, registered, return receipt requested, postage prepaid and addressed as
If to the Company:
First Union Real Estate
Equity and Mortgage Investments
0 Xxxxxxxx Xxxxx, Xxxxx 000,
X.X. Xxx 0000,
Xxxxxx, Xxxxxxxxxxxxx 00000
with a copy to:
Xxxxxx Xxxxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Investor:
Xxx Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxxxxx and Xxxxxxx X. Xxxxxxxxxx
With a copy to:
& Xxxxxxx LLP
Xxxx, XX 00000
Xxxxxxx X. Xxx
Section 12.02 Captions. The captions in this Agreement are for
convenience of reference only and shall not be given any effect in the
interpretation of this Agreement.
Waiver. The failure of a party to
insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. Any of the covenants or agreements contained
in this Agreement may be waived only by the written consent of the Investor.
12.04 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable Law, such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms so long as the economic or legal substance of the
transactions contemplated by this Agreement are not affected in any manner
materially adverse to any party.
Agreement; Amendment. This Agreement
supersedes all prior agreements among the parties with respect to its subject
matter, is intended (with the documents referred to herein) as a complete and
exclusive statement of the terms of the agreement among the parties with
respect thereto and cannot be changed or terminated except by a written
instrument executed by the party or parties against whom enforcement thereof is
sought, except that, with respect to the Investor, this Agreement may be
amended by a written instrument executed by the Investor.
on Assignment; Parties in Interest.
assignment of this Agreement or of any rights or obligations hereunder may be
made by the Company or the Investor (by operation of Law or otherwise) without
the prior written consent of the other party hereto and any attempted
assignment without the required consent shall be void except that the Investor
may transfer its rights or obligations hereunder, including the Shares, to a
wholly-owned subsidiary without the Company’s consent.
Agreement shall be binding upon, and shall inure to the benefit of, and be
enforceable by, the parties and their respective successors, transferees and
Law. This Agreement and (unless
otherwise provided) all amendments hereof and waivers and consents hereunder
shall be governed by the internal Laws of the State of New York, without regard
to the conflicts of Law principles thereof which would specify the application
of the Law of another jurisdiction.
12.08 Jurisdiction. Each of the Investor and the Company (a)
hereby irrevocably and unconditionally submits to the exclusive jurisdiction of
any state or federal court sitting in New York County, New York for the
purposes of any suit, action or other proceeding arising out of this Agreement
or the subject matter hereof brought by the Company, or the Investor and (b)
hereby waives and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
Third Party Beneficiary. The terms
and provisions of this Agreement are intended solely for the benefit of each
party hereto and their respective successors or permitted assigns, and it is
not the intention of the parties to confer third-party beneficiary rights upon
any other Person other than any Person entitled to indemnity under Article IX.
Relief. In the event that any party
threatens to take any action prohibited by this Agreement, the parties agree
that there may not be an adequate remedy at law. Accordingly, in such an event, a party may
seek and obtain preliminary and permanent injunctive relief (without the
necessity of posting any bond or undertaking).
Such remedies shall, however, be cumulative and not exclusive and shall
be in addition to any other remedies which any party may have under this
Agreement or otherwise.
This Agreement may be executed via
facsimile and in any number of counterparts, each of which shall be deemed to
be an original instrument and all of which together shall constitute one and
the same instrument.
Simultaneous. All actions to be
taken and all documents to be executed and delivered by all parties at the
Closing shall be deemed to have been taken and executed and delivered
simultaneously and no actions shall be deemed to have been taken nor shall any
documents be deemed to have been executed and delivered until all actions have
been taken and all documents have been executed and delivered.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
/s/ Xxxxx Xxxxxxxxx
KIMCO REALTY CORPORATION
/s/ Xxxxxxx X.
Xxxxxxx X. Xxxxxxxxxx
Vice President and CFO
OF COMPANY OHIO COUNSEL OPINION
Shares have been duly and validly authorized and issued and are fully paid and
non-assessable and free of preemptive rights; and
(ii) The Company has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Securities Purchase Agreement and to issue the Shares pursuant to the Securities
FORM OF COMPANY COUNSEL OPINION
Securities Purchase Agreement has been duly executed and delivered by the
Company and constitutes a valid and legally binding agreement of the Company, enforceable
against it in accordance with its terms.