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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities and Exchange Act of 1934
(Amendment No. 7)*
First Union Real Estate Equity and Mortgage Investments
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(Name of Issuer)
Shares of Beneficial Interest
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(Title of Class of Securities)
337400-10-5
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(CUSIP Number)
Marc C. Krantz, Kohrman Jackson & Krantz,
1375 East 9th Street, Cleveland, Ohio 44114, 216-736-7204
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 13, 1995
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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<TABLE>
SCHEDULE 13D
CUSIP NO. 337400-10-5
<S> <C>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Turkey Vulture Fund XIII, Ltd.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,690,500
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PERSON 10 SHARED DISPOSITIVE POWER
WITH
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,690,500
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.2%
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14 TYPE OF REPORTING PERSON*
00
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</TABLE>
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CUSIP No. 337400-10-5
This Amendment No. 7 to Schedule 13D Statement is filed on behalf of
TURKEY VULTURE FUND XIII, LTD., an Ohio limited liability company (the "Fund"),
for the purpose of reporting that it and Richard M. Osborne, the Fund's sole
managing member ("RMO"), have entered into a Settlement and Standstill
Agreement (the "Settlement Agreement"), dated as of December 13, 1995, with
First Union Real Estate Equity and Mortgage Investments ("First Union").
Item 4. Purpose of Transaction.
Item 4 is amended and supplemented as follows:
On December 13, 1995, the Fund entered into the Settlement Agreement
pursuant to which the parties agreed, among other matters, to execute
stipulations of dismissal with prejudice of all claims that were asserted by
the parties against each other in the actions First Union v. RMO, the Fund, et
al. (No. 1:95CV0274) in the U.S. District Court for the Northern District of
Ohio (the "First Union Action") and The Fund and RMO v. First Union, et al.
(No. 297673) in Common Pleas Court of Cuyahoga County, Ohio (the "Fund Action"
and, together with the First Union Action, the "Litigation"). Under the
Settlement Agreement, First Union agreed to purchase, or to cause its nominee
to purchase, from the Fund 950,000 shares of beneficial interest, par value
$1.00 per share (the "Stock"), at the average trading price of the Stock from
January 3, 1995 through December 8, 1995, which price has been determined and
agreed by the parties to be $7.50. The purchase will occur no later than
January 10, 1995. First Union will pay to the Fund the dividend declared on
the Stock on December 6, 1995.
The Settlement Agreement has a term of ten years. It provides that
neither RMO, the Fund nor any of their affiliates will, without the prior
written consent of First Union, acquire any additional voting securities of
First Union ("Voting Stock") and that neither RMO, the Fund nor their
affiliates will, without the prior written consent of the Board of Trustees of
First Union, sell, transfer or otherwise dispose of any shares of Voting Stock
except: (1) in the event of merger, consolidation, business combination, tender
or exchange offer, restructuring, recapitalization or similar transaction,
which transaction is approved by the Board of Trustees; (2) in privately
negotiated transactions of not more than 1% of the then-outstanding Voting
Stock in any single transaction or series of transactions; or (3) in open-
market transactions, executed by a registered broker or dealer who receives no
more than the usual and customary broker's commission, that do not involve the
sale of more than 25% of the average trading volume in the Stock over the prior
4 weeks. RMO agreed (a) to deliver to First Union copies of monthly broker
transaction reports reflecting transactions by RMO and the Fund in the Stock,
(b) not to take any action that would result in the distribution of the Stock
to the members of the Fund, and (c) to promptly notify First Union in the event
that RMO or the Fund receive any margin calls with respect to the Stock, and to
the extent RMO and the Fund fail to meet such margin calls, to allow First
Union to purchase, at the then-current market price, any Stock subject to such
margin calls.
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CUSIP No. 337400-10-5
Under the terms of the Settlement Agreement, each of RMO, the Fund and
their affiliates has agreed that none will, without the prior written consent
of the Board of Trustees: (1) take any action to acquire control or influence
the management, Board of Trustees or policies of First Union; (2) make or
participate in any solicitation of proxies or consents with respect to any
Voting Stock or become a participant in any election contest with respect to
trustees of First Union; (3) call or seek to call a special meeting of
shareholders of First Union; (4) seek, directly or indirectly, any list of
holders of Voting Stock; (5) initiate, propose or otherwise solicit holders of
Voting Stock for the approval of one or more shareholder proposals; (6) form,
join or in any way participate in a "group" as defined in Regulation 13D under
the Securities Exchange Act of 1934, as amended, with respect to Voting Stock;
(7) seek or propose any merger, consolidation, business combination, tender or
exchange offer, sale or purchase of assets or securities, restructuring,
recapitalization, or similar transaction of or involving First Union; or (8)
enter into any arrangements, understanding or agreements with, or advise,
assist or encourage any other person in connection with the foregoing. Each of
RMO, the Fund and their affiliates has agreed that it will, except with the
prior written consent of the Board of Trustees, vote all Voting Stock
beneficially owned by them in the manner recommended by the management of First
Union.
Under the Settlement Agreement, the parties agreed to release the other
parties and such other parties' present and former trustees, officers, members
and affiliates from all manner of claims, actions and causes of action that
each now has or may have by reason of any matter alleged or asserted, or
relating to the matters alleged or asserted, in the Litigation, except for any
actions or causes of action arising by reason of breach of the Settlement
Agreement. The parties indemnified each other for any breaches of such release
by the parties' present and former trustees, officers, members and affiliates.
RMO and First Union have also entered into an agreement under which an
affiliate of RMO may purchase on market terms certain office property owned by
First Union. The purchase is subject to normal contingencies, including
environmental due diligence.
A copy of the Settlement Agreement is filed as Exhibit 7.17 hereto and is
incorporated herein by reference and copy of the joint press release of RMO,
the Fund and First Union is attached as Exhibit 7.18 hereto. The foregoing
description of the Settlement Agreement is qualified in its entirety by
reference to the text of such Agreement.
Item 5. Interest in Securities of the Issuer.
Item 5 is amended and supplemented as follows:
(a) According to the most recently available filing with the Securities
and Exchange Commission by First Union, there are 18,435,057 shares of the
Stock outstanding. The Fund beneficially owns 1,690,500 shares of Stock, or
approximately 9.2% of the outstanding Stock.
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CUSIP No. 337400-10-5
(b) The Fund, and RMO as sole managing member thereof, has the sole power
to dispose, or to direct the disposition of, the 1,690,500 shares of Stock
owned by the Fund. Under the Settlement Agreement, First Union agreed to
purchase, or to cause its nominee to purchase, from the Fund 950,000 shares of
the Stock, and the Fund agreed that it will, except with the prior written
consent of the Board of Trustees of First Union, vote all Stock (and other
voting securities of First Union, if any) beneficially owned by it in the
manner recommended by the management of First Union.
(c) Under the Settlement Agreement, First Union agreed to purchase,
or to cause its nominee to purchase, from the Fund 950,000 shares of the Stock
at the average trading price of the Stock from January 3, 1995 through December
8, 1995, which price has been determined and agreed by the parties to be $7.50.
The purchase will occur no later than January 10, 1995.
The foregoing description of the Settlement Agreement in this Item 5
is qualified in its entirety by reference to the text of such Agreement.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
Item 6 is amended and supplemented as follows:
Reference is made to Item 4 above regarding the Settlement Agreement
entered into by the Fund, RMO and First Union, which is incorporated herein by
reference.
Item 7. Material to be Filed as Exhibits.
Exhibit 7.17 -- Settlement and Standstill Agreement, dated as of
December 13, 1995
Exhibit 7.18 -- Joint Press Release dated December 13, 1995
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CUSIP No. 337400-10-5
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
TURKEY VULTURE FUND XIII, LTD.
Dated: December 13, 1995 /s/ Richard M. Osborne
-------------------------------
Richard M. Osborne
Managing Member
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EXHIBIT INDEX
Exhibit 7.17 -- Settlement and Standstill Agreement, dated as of
December 13, 1995
Exhibit 7.18 -- Joint Press Release dated December 13, 1995
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EXHIBIT 7.17
SETTLEMENT AND STANDSTILL AGREEMENT
AGREEMENT, effective as of December 13, 1995, among First Union Real
Estate Equity and Mortgage Investments, an Ohio business trust (the "Trust"),
Richard M. Osborne ("Osborne") and Turkey Vulture Fund XIII, Ltd., an Ohio
limited liability company (the "Fund") (Osborne and the Fund collectively, the
"Osborne Investors").
WHEREAS, on February 3, 1995, the Trust commenced an action against
Osborne, et al., in the United States District Court for the Northern District
of Ohio, Eastern Division (Civil Action No. 95CV0274) (the "Federal Court
Action");
WHEREAS, on November 1, 1995, Osborne, et al., commenced an action against
James C. Mastandrea ("Mastandrea"), et al., in the Common Pleas Court for
Cuyahoga County, State of Ohio (Civil Action No. 297673) (the "State Court
Action"); and
WHEREAS, each of the Federal Court Action and the State Court Action
(together, the "Litigation") is presently pending and being prosecuted and has
resulted in substantial distraction of the time and resources of the parties
and their representatives from their other business activities; and
WHEREAS, the parties believe that it would be in each of their best
interests to resolve all issues between them pursuant to the terms of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual and
independent covenants hereinafter set forth and other good and valuable
consideration, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS.
(a) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as in effect on the date
hereof; provided that the term "Affiliate" shall not include any member of
the Fund, other than Osborne.
(b) The term "control" when used with respect to any person means
the power to direct the management and policies of such person, either
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
(c) The term "party" means the signatories to this Agreement and
each of their heirs, successors and administrators.
(d) The term "person" includes, without limitation, any individual,
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corporation, company, limited liability company, partnership, joint
venture, group, organization, employee pension, profit sharing or other
benefit plan or trust, or any other entity.
(e) "Shares" shall mean the shares of beneficial interest $1.00 par
value of the Trust.
(f) The term "Voting Securities" means all securities of the Trust
entitled to vote generally for the election of trustees and all securities
or rights convertible into, or exchangeable or exercisable for, any such
securities.
2. DISMISSAL OF THE LITIGATION; RELEASE OF CLAIMS.
(a) As soon as practicable after execution of this Agreement, the
Trust, Mastandrea, Osborne and the Fund shall cause to be signed and filed
stipulations of dismissal in the Federal Court Action and in the State
Court Action in substantially the forms attached hereto as Exhibits 1 and
2, respectively, and such other documents or pleadings as may be necessary
to cause the dismissal with prejudice of all claims and counterclaims
asserted against the parties or their trustees, officers, members or
Affiliates by each or any of them in the Litigation. The parties
acknowledge and agree that nothing contained in this Agreement or in any
such stipulations, documents or pleadings shall be deemed an admission by
any person of any of the allegations contained in the Litigation.
(b) The parties covenant and agree that they shall not attempt
to institute litigation or commence any action or proceeding in any
court asserting any of the claims or allegations which were or which
could have been asserted against the parties or their trustees,
officers, members or Affiliates in the Litigation, including any
claim for sanctions levied in the Federal Court Action. The
enforceability and effectiveness of the covenants contained in this
Section 2(b) shall be expressly conditioned upon there being no
breach of the provisions of this Agreement by the party or parties
against whom any such future action may be brought or maintained.
(c) Each of the parties, on behalf of itself or himself and his or
its present and former trustees, officers, members and Affiliates, hereby
releases and discharges the other parties hereto and such other parties'
present and former trustees, officers, representatives, employees,
attorneys, advisors, members and Affiliates from any harm, damage, loss,
expense, cost, or other liability arising from or relating to any claims,
counterclaims, actions, or causes of action, at law or in equity, known or
unknown, direct or indirect, suspected or unsuspected, which each now has
or hereafter may have by reason of any matter alleged or asserted, or
relating to the matters alleged or asserted in the Litigation, except for
any actions or causes of action arising by reason of breach of this
Agreement.
(d) Each of Osborne and the Fund agrees to reimburse, indemnify and
hold the Trust harmless from, against and in respect of all losses,
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claims, damages, liabilities, costs and expenses, including, without
limitation, fines, penalties, court costs and reasonable attorneys' fees
(collectively, "Loss"), which the Trust may suffer or incur in connection with
a breach of Section 2(c) by any present and former officers, members and
Affiliates of Osborne or the Fund. The Trust agrees to reimburse, indemnify
and hold each of Osborne and the Fund harmless from, against and in respect of
all Loss which Osborne and the Fund may suffer or incur in connection with a
breach of Section 2(c) by any present and former trustees, officers, and
Affiliates of the Trust.
(e) In the event that any legal proceedings shall be instituted or
any claim or demand shall be given by any person, in respect of which
payment may be sought by any party or parties from any other party or
parties under the provisions of Section 2(d), the party or parties seeking
indemnification (collectively, the "Indemnitee") shall cause written
notice of any claim of which it has knowledge which is covered by this
Agreement to be forwarded promptly to the party or parties from which
indemnification is sought (collectively, the "Indemnitor"). Such notice
shall specify the amount and nature of the claim and the reason why it
constitutes an indemnified liability, it being understood that failure to
so provide notice shall not relieve the other party from liability except
to the extent material damages or prejudice results from such failure.
(f) In case any action is brought by a third party against any
Indemnitee with respect to which such Indemnitee is entitled to
indemnification hereunder and notice of such action to the Indemnitor has
been given pursuant to Section 2(e), the Indemnitor will be entitled to
participate therein, and to the extent it may elect by written notice
delivered to the Indemnitee within thirty (30) days after receiving the
aforesaid notice from such Indemnitee, to assume the defense thereof with
counsel reasonably satisfactory to such Indemnitee. Such Indemnitee shall
cooperate with respect to any such participation or defense.
Notwithstanding the foregoing, the Indemnitee shall have the right to
employ its own counsel in any such case but the fees and expenses of such
counsel shall be at the expense of such Indemnitee, unless (i) the
employment of such counsel shall have been authorized in writing by the
Indemnitor, (ii) the Indemnitor shall not have employed counsel reasonably
satisfactory to such Indemnitee to have charge of the defense of such
action within thirty (30) days after notice of commencement of the action,
or (iii) such Indemnitee shall have reasonably concluded, based upon
written advice of counsel that there may be defenses available to it which
are different from or additional 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 with respect to such different
defenses) in any of which events such fees and expenses of one additional
counsel shall be borne by the Indemnitor. Notwithstanding anything in
this Section 2 to the contrary, an Indemnitor shall not be liable for any
settlement of any claim or action effected without its written consent,
provided, however, that such consent is not unreasonably withheld.
3. PURCHASE OF SHARES. The Trust or its nominee shall purchase from the
Fund nine hundred fifty thousand (950,000) Shares (the "Purchased Shares").
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The purchase price for such Shares shall be the average of the composite
closing trading prices for the Shares on the New York Stock Exchange during the
period from January 3, 1995 through December 8, 1995, which price has been
determined and agreed by the parties to be $7.50 per Share. The purchase shall
occur on a date set by the Trust and noticed in writing mailed or faxed to
Osborne at least forty-eight (48) hours in advance, but in no event shall such
purchase occur later than January 10, 1996. At the time of purchase, the Fund
shall deliver the Purchased Shares in exchange for the Trust's or its nominee's
bank or certified check, or at the Fund's option, according to wire transfer
instructions provided to the Trust or its nominee in writing, in the amount of
Seven Million One Hundred Twenty-Five Thousand Dollars ($7,125,000). It is
understood by the parties that the Trust shall also pay to the Fund the
dividend declared on the Shares on December 6, 1995. Such payment shall be
made at the same time all other Trust shareholders are paid such dividend.
4. REPRESENTATIONS AND WARRANTIES OF THE OSBORNE INVESTORS. Each of the
Osborne Investors hereby jointly and severally represent and warrant to the
Trust as follows:
(a) This Agreement has been duly authorized, executed and delivered
by a duly authorized representative of the Fund and by Osborne and
constitutes a legal, valid and binding obligation of each of the Osborne
Investors. The Fund has taken all necessary action to authorize the
execution, delivery and performance of this Agreement; and the Agreement
does not conflict with or violate the Fund's charter documents, operating
agreement or other agreements or instruments by which the Fund or its
properties are bound.
(b) The Purchased Shares are owned by the Fund. When delivered to
the Trust or its nominee, the Purchased Shares will be free and clear from
any liens, claims, pledges and encumbrances of any kind.
5. REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust hereby
represents and warrants to each of the Osborne Investors that this Agreement
has been duly authorized, executed and delivered by a duly authorized officer
of the Trust and constitutes a legal, valid and binding obligation of the
Trust. The Trust has taken all necessary action to authorize the execution,
delivery and performance of this Agreement; and the Agreement does not conflict
with or violate the Trust's Declaration of Trust, By-Laws or other agreements
or instruments by which the Trust or its properties are bound.
6. RESTRICTIONS ON CERTAIN ACTIONS BY THE OSBORNE INVESTORS. Each of
the Osborne Investors jointly and severally agrees that, during the term of
this Agreement, none of the Osborne Investors, nor any Affiliate of the Osborne
Investors will, without the prior written consent of the Trust (specifically
expressed in a resolution duly adopted by the Board of Trustees of the Trust):
(a) except as otherwise expressly permitted by this Agreement,
acquire, offer to acquire, or agree to acquire, directly or indirectly, by
purchase or otherwise (except pursuant to a stock split, stock dividend,
or other pro rata distribution by the Trust to holders of any class of its
outstanding Voting Securities), any Voting Securities;
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(b) take any action alone or in concert with another person to seek
to acquire control of or influence the management, Board of Trustees or
policies of the Trust;
(c) (i) make or participate in any "solicitation" as defined in
Regulation 14A under the Exchange Act of proxies or consents with respect
to any Voting Securities or make any public or private statements to third
parties in connection with the solicitation of such proxies or consents by
others including actions described in Rule 14a-1(l)(2)(iv) under the
Exchange Act, (ii) become a participant in any "election contest" relating
to the election of trustees of the Trust described in Rule 14a-11 under
the Exchange Act, (iii) call or seek to call, directly or indirectly, any
special meeting of shareholders of the Trust for any reason whatsoever,
(iv) seek, request, or take any action to obtain or retain, directly or
indirectly, any list of holders of any Voting Securities, (v) assist or
encourage any attempt by any other person to do or seek the foregoing,
(vi) initiate, propose or otherwise solicit holders of Voting Securities
for the approval of one or more shareholder proposals at any time, (vii)
induce or attempt to induce any other person to initiate any shareholder
proposal relating to the Trust, or (viii) execute any written consent in
lieu of a meeting;
(d) form, join or in any way participate in a "group," as such term
is defined in Regulation 13D under the Exchange Act, with respect to any
Voting Securities of the Trust;
(e) seek or propose any merger, consolidation, business combination,
tender or exchange offer, sale or purchase or transfer of assets or
securities, restructuring, recapitalization or similar transaction of or
involving the Trust;
(f) enter into any arrangements, understandings or agreements
(whether written or oral) with, or advise, assist or encourage, any other
person in connection with any of the foregoing;
(g) sell, transfer or otherwise dispose of any Voting Securities
except as follows:
(i) sales in privately negotiated transactions of not more than
one percent (1%) of the then-outstanding Voting Securities to any
person (including Affiliates of such person) in any single
transaction or series of transactions; or
(ii) sales in normal open-market transactions, executed by or
through a registered broker or dealer who receives no more than the
usual and customary broker's commission, which do not involve the
sale of more than twenty-five percent (25%) of the average trading
volume in the Shares over the prior four (4) weeks;
provided, that any Osborne Investor or any Affiliate may sell more than 1%
of the then-outstanding Voting Securities in the event of a merger,
consolidation, business combination, tender or exchange offer,
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<PAGE> 6
restructuring, recapitalization or similar transaction of or involving the
Trust that is approved by the Trustees.
7. VOTING. Unless the Trust otherwise agrees in writing, during the
Term of this Agreement, the Osborne Investors and any of their Affiliates which
beneficially own any Voting Securities entitled to vote at a meeting of the
Trust's shareholders, shall (i) vote, and shall cause their Affiliates to vote,
all Voting Securities beneficially owned by them in the election of trustees of
the Trust and on all other matters to be voted on by the holders of Voting
Securities in the manner recommended by management of the Trust and (ii) be
present or be represented by proxy at each such meeting so that all such Voting
Securities may be counted for the purpose of determining the presence of a
quorum. Each of the Osborne Investors hereby grants, during the term of this
Agreement, to the Chief Executive Officer of the Trust, a limited power of
attorney to vote any and all Shares owned by the Osborne Investors to the
extent such Shares have not been voted in accordance with this Section 7.
8. COVENANTS OF OSBORNE. Osborne agrees: (a) that he will deliver
copies to the Trust of monthly broker transaction reports that reflect any and
all transactions by the Osborne Investors in Shares; (b) that he will not take
any action that would result in distribution of Shares to members of the Fund;
and (c) that in the event the Osborne Investors receive any margin calls with
respect to such Shares, that Osborne will promptly notify the Trust and if the
Osborne Investors fail to meet the margin call, the Osborne Investors will take
the necessary action to allow the Trust to purchase any Shares subject to such
margin calls at the then-current market price, to the extent that the Osborne
Investors do not meet such margin calls.
9. SPECIFIC ENFORCEMENT. Each of the Trust, on the one hand, and each
of the Osborne Investors, on the other, acknowledges and agrees that the other
would not have an adequate remedy at law and would be irreparably harmed in the
event that any of the material provisions of this Agreement were not performed
in accordance with their specific terms or this Agreement were otherwise
materially breached. It is accordingly agreed that the Trust, on the one hand,
and the Osborne Investors, on the other, shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to specifically enforce
this Agreement and the material terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
subject matter jurisdiction, in addition to any other remedy to which such
party may be entitled, at law or in equity. Each party hereby consents to
personal jurisdiction in any such action brought in the United States District
Court for the Northern District of Ohio, or in any court of the State of Ohio
having subject matter jurisdiction, to service of process upon them in the
manner set forth in Section 14(c) hereof, to reasonable expedited proceedings
for injunctive and other relief, and hereby waives any venue objections
therein.
10. TERM. This Agreement shall commence on the date hereof and shall
terminate on the tenth anniversary of the date hereof.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof.
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12. LIMITATION OF LIABILITY. Notwithstanding anything set forth herein
to the contrary, this Agreement is made and executed on behalf of the Trust, by
its officers on behalf of the Trustees thereof, and none of the Trustees or
officers or any additional or successor officers or Trustees or any
beneficiary, employee or agent of the Trust shall have any liability in their
personal or individual capacity, but instead the Osborne Investors shall look
solely to the real property or assets of the Trust for satisfaction of claims
of any nature arising under or in connection with this Agreement.
13. LIMITATION OF LIABILITY. Notwithstanding anything set forth herein
to the contrary, this Agreement is made and executed on behalf of the Fund, by
its officers, and Osborne, and none of the members of the Fund or any
additional or successor members of the Fund, except Osborne, shall have any
liability in their personal or individual capacity, but instead the Trust shall
look solely to the real property or assets of the Fund and Osborne for
satisfaction of claims of any nature arising under or in connection with this
Agreement.
14. MISCELLANEOUS.
(a) This Agreement shall be binding upon and shall inure to the
benefit of and be enforceable by the successors and permitted assigns of
the parties hereto (it being understood that no person who acquires any
Voting Securities from any of the Osborne Investors in a transaction
permitted by Section 6(g) hereof shall be bound by any provision of this
Agreement). Except as otherwise expressly provided herein, this Agreement
shall not be assignable.
(b) This Agreement may not be modified, amended, altered or
supplemented, except by a written instrument duly executed by each of the
parties hereto.
(c) Except as otherwise expressly provided herein, all notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given if
so given) by personal delivery, cable, telegram or fax, or by mail
(registered or certified mail, postage prepaid, return receipt requested)
to the respective parties as follows:
If to any of the Osborne Investors, to:
Richard M. Osborne
7001 Center Street
Mentor, OH 44060
with a copy to:
Byron Krantz
Kohrman, Jackson & Krantz
20th Floor
One Cleveland Center
Cleveland, OH 44114
<PAGE>
<PAGE> 8
If to the Trust, to:
First Union Real Estate Equity & Mortgage Investments
55 Public Square
Suite 1900
Cleveland, OH 44113
Attention: James C. Mastandrea
Paul Levin
with a copy to:
Mary Ann Jorgenson
Squire, Sanders & Dempsey
4900 Society Center
127 Public Square
Cleveland, OH 44114
or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
(d) This Agreement shall be governed by and construed in accordance
with the law of the State of Ohio.
<PAGE>
<PAGE> 9
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto or their duly authorized officer or representative as of the
date and year first above written.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By: /s/ James C. Mastandrea
------------------------------------
James C. Mastandrea
Chief Executive Officer and Chairman
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
I, Paul F. Levin, a duly licensed Notary Public on and for said
county and state, do hereby attest that on the 13th day of December, 1995,
personally appeared before me the above-named James C. Mastandrea, Chief
Executive Officer and Chairman of First Union Real Estate Equity and Mortgage
Investments, who acknowledged to me that he is duly authorized to enter into
the foregoing Settlement and Standstill Agreement on behalf of First Union Real
Estate Equity and Mortgage Investments; that he had read the foregoing
Settlement and Standstill Agreement; and that he was signing it as his own free
will and act; and who signed the said Settlement and Standstill Agreement in my
presence.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal as
of the date set forth above.
/s/ Paul F. Levin
-------------------
NOTARY PUBLIC
My Commission Expires: PAUL F. LEVIN, Attorney at Law
NOTARY PUBLIC-State of Ohio
My Commission Has No Expiration Date.
Section 147.03 R.C.
<PAGE>
<PAGE> 10
/s/ Richard M. Osborne
-----------------------
RICHARD M. OSBORNE
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
I, Robert A. Fuerst, a duly licensed Notary Public on and for said
county and state, do hereby attest that on the 13th day of December, 1995,
personally appeared before me the above-named Richard M. Osborne; who
acknowledged to me that he had read the foregoing Settlement and Standstill
Agreement; and that he was signing it as his own free will and act; and who
signed the said Settlement and Standstill Agreement in my presence.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal as
of the date set forth above.
/s/ Robert A. Fuerst
---------------------
NOTARY PUBLIC
My Commission Expires: Robert A. Fuerst, Attorney
NOTARY PUBLIC-STATE OF OHIO
My commission has no expiration date.
Section 147.03 R.C.
TURKEY VULTURE FUND XIII, LTD.
By: /s/ Richard M. Osborne
------------------------------
Richard M. Osborne,
Managing Member
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
<PAGE>
<PAGE> 11
I, Robert A. Fuerst, a duly licensed Notary Public on and for said
county and state, do hereby attest that on the 13th day of December, 1995,
personally appeared before me the above-named Richard M. Osborne, Managing
Member of Turkey Vulture Fund XIII, Ltd., who acknowledged to me that he is
duly authorized to enter into the foregoing Settlement and Standstill Agreement
on behalf of Turkey Vulture Fund XIII, Ltd.; that he had read the foregoing
Settlement and Standstill Agreement; and that he was signing it as his own free
will and act; and who signed the said Settlement and Standstill Agreement in my
presence.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal as
of the date set forth above.
/s/ Robert A. Fuerst
---------------------
NOTARY PUBLIC
My Commission Expires: Robert A. Fuerst, Attorney
NOTARY PUBLIC-STATE OF OHIO
My commission has no expiration date.
Section 147.03 R.C.
<PAGE>
<PAGE> 12
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
FIRST UNION REAL ESTATE EQUITY ) CIVIL ACTION NO. 1:95CV0274
AND MORTGAGE INVESTMENTS, )
) JUDGE LESLEY BROOKS WELLS
Plaintiff, ) (Magistrate Judge Streepy)
)
v. )
)
RICHARD M. OSBORNE, et al., )
)
Defendants. ) STIPULATION OF SETTLEMENT
By and through their undersigned counsel, the parties hereto
stipulate and agree that all claims and counterclaims by each of them against
any or all of the others of them herein are hereby settled and dismissed with
prejudice, each party to bear its own costs.
Respectfully submitted,
______________________________________
Frances Floriano Goins (#0018631)
SQUIRE, SANDERS & DEMPSEY
4900 Society Center, 127 Public Square
Cleveland, Ohio 44114-1304
(216/479-8500)
Attorney for Plaintiff and
Counterclaim Defendants First Union Real
Estate Equity and Mortgage Investments and
J. C. Mastandrea
EXHIBIT 1<PAGE>
<PAGE> 13
_______________________________
Byron S. Krantz (#00031431)
KOHRMAN, JACKSON & KRANTZ
One Cleveland Center, 20th Fl.
Cleveland, Ohio 44114
(216)696-8700
Attorney for Defendants Richard M.
Osborne and Turkey Vulture Fund XIII,
Ltd.
IT IS SO ORDERED.
DATE:________________ _________________________________________
UNITED STATES DISTRICT COURT JUDGE
<PAGE>
<PAGE> 14
IN THE COURT OF COMMON PLEAS
CUYAHOGA COUNTY, OHIO
RICHARD M. OSBORNE, et ano., ) CASE NO. 297673
)
Plaintiffs, ) JUDGE RICHARD J. McMONAGLE
)
v. )
)
JAMES C. MASTANDREA, et al., )
) STIPULATION OF SETTLEMENT
)
Defendants. )
By and through their undersigned counsel, the parties hereto
stipulate and agree that all claims herein are hereby settled and dismissed
with prejudice, each party to bear its own costs.
Respectfully submitted,
_____________________________
Byron S. Krantz (#00031431)
KOHRMAN, JACKSON & KRANTZ
One Cleveland Center, 20th Fl.
Cleveland, Ohio 44114
(216)696-8700
Attorney for Plaintiffs
EXHIBIT 2<PAGE>
<PAGE> 15
______________________________________
Frances Floriano Goins (0018631)
SQUIRE, SANDERS & DEMPSEY
4900 Society Center, 127 Public Square
Cleveland, Ohio 44114-1304
(216/479-8500)
Attorney for Defendants
IT IS SO ORDERED.
DATE:____________________ ____________________________________
JUDGE
<PAGE>
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact: Thomas T. Kmiecik, (216) 781-4030
Richard M. Osborne (216) 951-1111
FIRST UNION AND OSBORNE SETTLE DISPUTES
CLEVELAND, OHIO, December 14, 1995 -- First Union Real Estate Equity and
Mortgage Investments and Richard M. Osborne and Turkey Vulture Fund XIII, Ltd.
today announced that they have entered into an agreement settling all claims
between them and providing for the dismissal of the parties' pending
litigation.
The settlement agreement provides for First Union's purchase from Mr.
Osborne and the Fund of 950,000 shares of beneficial interest of First Union at
the average 1995 trading price through December 8 of $7.50 per share. Under
the Agreement, Mr. Osborne and the Fund have also agreed not to acquire
additional shares of First Union and, in the future, to vote their remaining
shares as recommended by First Union management.
Mr. Osborne stated, "I have met with First Union's management and I agree
with their philosophy and the direction of First Union's strategic plan."
James C. Mastandrea, Chairman and Chief Executive Officer of First Union,
stated, "We are pleased to put this litigation behind us and to focus 100% of
our energies and resources on repositioning our company and enhancing and
creating value for our shareholders."
First Union and Mr. Osborne also announced that Mr. Osborne may, subject
to normal contingencies, purchase on market terms certain office property owned
by First Union. Details will be provided if a transaction is finalized.
First Union is an equity real estate investment trust specializing in
retail and apartment properties with ownership interests in commercial office
buildings.
###
