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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. 5)*
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)
May 8, 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>
CUSIP NO. 337400-10-5 SCHEDULE 13D
<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*
BK,WC,OO
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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 1,690,500
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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)
9.3%
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14 TYPE OF REPORTING PERSON*
OO
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</TABLE>
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CUSIP No. 337400-10-5
This Amendment No. 5 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 (1) certain changes with respect to the financing
of shares of beneficial interest, $1.00 par value (the "Stock"), of First Union
Real Estate Equity and Mortgage Investments ("First Union") previously reported
as having been acquired by the Fund, (2) events relating to litigation
commenced by First Union, and (3) certain other matters.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
In connection with the purchase by the Fund of certain other securities
(the "Non-First Union Stock"), the Fund transferred to its account at Smith
Barney, Inc. ("Smith Barney") 965,500 shares of beneficial interest of First
Union Real Estate Equity and Mortgage Investments (the "First Union Shares"),
which were subject to a margin debt of approximately $2.8 million. The First
Union Shares had been held in the Fund's account at Kemper Securities, Inc., as
previously reported in the Schedule 13D Statement filed by the Fund on January
17, 1995 and Amendments No. 1 and 2 thereto filed by the Fund on February 13,
1995 and March 2, 1995, respectively ("Amendment No. 1" and "Amendment No. 2").
With respect to the margin debt at Smith Barney, interest thereon is
charged in accordance with Smith Barney's policy. Interest charges, if not
paid, are added to the debit balance for the next interest period. Smith
Barney has a lien on the First Union Shares. Smith Barney may impose margin
requirements more stringent than those required by law or exchange regulations.
A copy of the agreement setting forth the terms of the margin debt is attached
hereto as Exhibit 7.13.
On April 26, 1995, the Fund, Smith Barney and Richard M. Osborne, the sole
managing member of the Fund ("RMO"), entered into an agreement regarding the
margin debt. The Fund agreed that while the First Union Shares are held as
collateral for the Smith Barney margin debt neither RMO nor the Fund would
cause the First Union Shares to become subject to Rule 144 under the Securities
Act of 1933, as amended ("Securities Act"). In the event the First Union
Shares cease to be freely saleable under the Securities Act, RMO and the Fund
are required to pay to Smith Barney the margin debt in the Smith Barney account
no later than three business days after the occurrence of such event. Smith
Barney will not call for additional maintenance margin (except to the extent
required by law or in the event the Fund purchases additional securities on
margin) if the Fund meets the following equity requirements in the margin
account: (1) 35% on the First Union Shares and 40% on the shares of the Non-
First Union Stock for the six month period commencing April 11, 1995; (2) 45%
for the entire account for the following six months thereafter; and (3) 50% for
the entire account by April 11, 1996. As of April 27, 1995, the aggregate
equity percentage in the account was approximately 41%. On or after May 11,
1996, Smith Barney has the right to set new margin maintenance requirements in
accordance with Smith Barney's margin maintenance policy. All dividends and
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CUSIP No. 337400-10-5
distributions relating to securities in the Smith Barney account will be
deposited into and credited to the account. A copy of the agreement is
attached hereto as Exhibit 7.14.
RMO has irrevocably guaranteed the prompt and complete payment and
performance, when due, of all obligations and liabilities of the Fund in
connection with all transactions and positions now or hereafter existing in the
Smith Barney account. A copy of the guarantee is attached hereto as Exhibit
7.15.
In addition, in connection with the purchase by the Fund of the Non-First
Union Stock, RMO contributed working capital to the Fund, the source of which
was, in part, a line of credit from American National Bank of Parma, Ohio,
dated June 24, 1994, in the principal amount of $300,000 (the "American Loan").
Initially, the American Loan had been used by RMO as the source of working
capital for the Fund to purchase certain shares of Stock reported as having
been acquired by the Fund in Amendments No. 3 and 4 to the Schedule 13D
Statement filed by the Fund on March 13, 1995 and March 28, 1995, respectively
("Amendment No. 3" and "Amendment No. 4"). Following such initial use of the
proceeds of the American Loan, RMO repaid the American Loan from personal
funds.
Item 4. PURPOSE OF TRANSACTION.
As previously reported, on February 3, 1995, First Union commenced an
action (the "First Union Action") in the U.S. District Court for the Northern
District of Ohio, Eastern Division, against RMO, the Fund, The Wolstein Group,
Inc., Bert Wolstein, Scott Wolstein, Heritage Capital Corporation, Developers
Diversified Realty Corporation, 2000 OCC Corp., 1600 CNB Corp., Mark P. Escaja,
Gerald E. Wedren and Craig Capital Co. (No. 1:95CV 0274) alleging that the
named defendants were conspiring to take control of First Union, violated
federal and state securities laws and breached certain obligations to other
First Union shareholders. The allegations set forth in the First Union
complaint are included in Amendment No. 1, the First Union complaint is
attached as Exhibit 7.2 to Amendment No. 2 and the First Union amended
complaint is attached as Exhibit 7.12 to Amendment No 4.
On April 27, 1995, the Fund and RMO filed its answer and counterclaims to
First Union's amended complaint. RMO and the Fund denied all charges made by
First Union. In their counterclaims, RMO and the Fund allege that (1) First
Union and its trustees failed to comply with the requirements of Section 14(a)
of the Securities Exchange Act of 1934 and the corresponding rules adopted by
the Securities and Exchange Commission, including by making false and
misleading statements in violation of Rule 14a-9, in connection with various
proxy solicitation materials distributed by First Union in connection with the
April 11, 1995 annual meeting of First Union shareholders, (2) the trustees
violated their fiduciary obligation to exercise reasonable prudence in
investing the Trust's assets by paying an excessive amount for a property in
Buffalo Grove, Illinois, known as "Woodland Commons," (3) the trustees have
wasted First Union's assets by authorizing the prosecution of the First Union
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CUSIP No. 337400-10-5
action against the Fund, RMO and others, and (4) First Union and its trustees
have by commencing the First Union Action committed abuse of process. The Fund
and RMO are seeking (1) an order nullifying the results of the vote from the
April 11, 1995 annual meeting of First Union shareholders and requiring First
Union to conduct a new election, (2) an order requiring First Union and its
trustees to provide the Fund with a list of its shareholders, (3) an award of
damages to First Union in the amount of $4.5 million, jointly and severally
from each trustee for the alleged overpayment for Woodland Commons, (4) an
award of damages to First Union in the amount of $950,000, jointly and
severally from each trustee for the alleged abuse of process, (5) an award to
the Fund and RMO of compensatory damages in the amount of $500,000 and punitive
damages in the amount $1.0 million, jointly and severally from First Union and
each trustee, and (6) an order declaring invalid the provisions in First
Union's By-Laws that prohibit any person from owning more than 9.8% of the
outstanding shares of Stock and First Union's Rights Agreement, dated March 7,
1990, which Rights Agreement is commonly known as a poison pill.
The trial date for the First Union Action is October 31, 1995.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
In connection with the First Union Action, RMO and the Fund have
previously provided First Union with the names of the members of the Fund and
the names of such members were reported in Amendments No. 2 and No. 4. In
addition to the members previously reported, new members of the Fund are as
follows: Maureen E. Osborne and Jerome T. Osborne, Jr. Trust "B." RMO is one
of the trustees of the Jerome T. Osborne, Jr. Trust "B." As previously
reported, RMO, as sole managing member of the Fund, may be deemed to
beneficially own the shares of Stock owned directly by the Fund, and under
Section 13d(3), RMO and the Fund may be deemed members of a group. RMO and the
Fund disclaim that they are members of a group, and nothing in this Amendment
No. 5 to Schedule 13D Statement shall be deemed an admission that they are
members of a group. In addition, RMO and the Fund disclaim that they or either
of them are members of a group with the members of the Fund, and nothing in
this Amendment No. 5 to Schedule 13D Statement shall be deemed an admission
that they or either of them are members of a group.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
Exhibit 7.13 -- Client Agreement between Smith Barney and the Fund
Exhibit 7.14 -- Agreement between Smith Barney, the Fund and RMO
Exhibit 7.15 -- RMO Guarantee
</TABLE>
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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: May 8, 1995 /s/ Richard M. Osborne
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Richard M. Osborne
Managing Member
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EXHIBIT INDEX
<TABLE>
<S> <C> <C>
Exhibit 7.13 -- Client Agreement between Smith Barney and the Fund
Exhibit 7.14 -- Agreement between Smith Barney, the Fund and RMO
Exhibit 7.15 -- RMO Guarantee
</TABLE>
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EXHIBIT 7.13
SMITH BARNEY
CLIENT AGREEMENT
Account Number 224-43061-1-0-005
Before you sign this Agreement, please read it carefully. Instructions for the
completion of this Agreement are contained in the accompanying booklet entitled
"Important New Account Information." After you have completed and signed this
Agreement, please return it in the enclosed postage-paid envelope. Note:
Signatures are MANDATORY in either Sections A and C OR Section B and C.
Account Title Turkey Vulture Fund XIII Ltd
Street Address 7001 Center Street
City Mentor
State Ohio
ZIP Code 44060
In consideration of Smith Barney Inc. accepting an account for me, (us), I
(we), hereby acknowledge that I (we) have read, understand and agree to the
terms of this Agreement contained in the sections numbered 1 through 11. If
this is a margin account, I (we) further acknowledge that I (we) have read,
understand and agree to the terms of this Agreement contained in the sections
numbered 15 through 17. If this is a joint account, we further acknowledge
that we have read, understand and agree to the terms of this Agreement
contained in the sections numbered 12 through 14. Note: Texas residents with
joint accounts must also execute a Texas Joint Account Supplement agreement
(form 3882).
A. Cash Accounts.
I (we) acknowledge that I (we) have received a copy of this Agreement which
contains a pre-dispute arbitration clause at section 6.
If this is a joint account, all parties must sign.
Account Owner's Signature /s/ Richard M. Osborne
B. Margin Accounts.
By signing this Agreement, I (we) acknowledge that my (our) securities may be
loaned to you or loaned out to others. I (We) acknowledge that I (we) have
received a copy of this Agreement which contains a pre-dispute arbitration
clause at section 5.
If this is a joint account, all parties must sign.
Account Owner's Signature /s/ Richard M. Osborne
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C. Tax Certification (See Instructions on the last page of this form). Under
penalties of perjury, I certify that the number shown below is my correct
taxpayer identification number or if not, then the number I have entered below
is my correct tax identification number, and that I am not subject to backup
withholding because: (a) I have not been notified by the Internal Revenue
Service (IRS) that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (b) the IRS has notified me that I am
no longer subject to backup withholding (see below), or, (c) I am exempt from
backup withholding (see below). Note: you must cross out (b) above if you are
currently subject to backup withholding because of underreporting interest or
dividends on your tax return.
For those exempt from backup withholding, write the word "EXEMPT" here:
The Social Security Number or Tax Identification Number on Smith Barney's
records is: 341786314
The Social Security Number or Tax Identification Number shown to the left is
incorrect. The CORRECT number is:
Note for joint accounts: The Social Security Number of this account is the
number of the client whose name appears first in the account title. Do not
enter the number of any other account owner.
Account Owner's Signature /s/ Richard M. Osborne
D. Name Disclosure.
Please indicate your choice as to the release or withholding of your name,
address and securities positions to issuing corporations.
[X] NO, I do not want
[ ] YES, I do want
My name, address and securities positions disclosed to any companies, upon
their request, in which I own securities that we are being held for me at Smith
Barney Inc.
E. Money Market Fund Agreement.
Available cash in your account will automatically be invested or "swept" into
the money market fund of your choice. If you do not elect to have the
automatic money market fund sweep, please check the "NO" box below. If you
wish to change your choice of money market fund, please contact your Financial
Consultant.
Note to Wisconsin residents: You must indicate below specifically whether or
not you wish to have a money market sweep for your account.
[ ] NO, I do not want cash balances in my account to be automatically spent
into a money market fund
[X] YES, I would like the cash balances in my account to be automatically swept
into the fund of my choice
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F. Tenancy In Common. DO NOT Complete This Section If You Wish To Establish
A Joint Account With Rights of Survivorship. In the event of the death of
either or any of the undersigned, the interest in the account as of the close
of business on the date of the death of the decedent, or on the following
business day if the date of death is not a business day shall be as follows:
Note: Texas residents with joint account must also execute a Texas Joint
Account Supplement agreement (form 3882).
In consideration of your opening one or more accounts for me ("we", "us" and
"our", are each substituted for "I", "me" and "my", respectively, in the case
of multiple account holders, corporations and other entities), and your
agreeing to act as broker/dealer for me for the extension of credit and in the
purchase or sale of securities, commodities, options and other property, it is
agreed in respect to any and all accounts, whether upon margin or otherwise,
which I now have or may at any future time have with Smith Barney Inc. or your
successors (hereinafter referred to as "you" or "your", or "SB"), that;
1. All transactions entered into under this Agreement shall be subject to any
applicable constitution, rules, regulations, customs and usages of the exchange
or market and its clearinghouse, if any, where such transactions are executed
by SB or its agents and to all applicable laws, rules and regulations of
governmental authorities and self-regulatory agencies. Such reference to the
"constitution, rules, regulations, customs and usages of the exchange" shall in
no way be construed to create a cause of action arising from any violation of
such constitution, rules, regulations, customs and usages. If any provision is
enacted that would be inconsistent with any of the provisions of this
Agreement, the provision so affected shall be deemed modified or superseded by
the enactment, but the remaining provisions of this Agreement shall remain in
effect. Except as herein provided, no provision of this Agreement may be
waived, altered, modified or amended unless the same is in writing and signed
by an authorized official of SB.
2. I agree that all property of mine, whether owned individually, jointly or
in the name of another, which at any time may be in your possession or control
for any purpose, including safekeeping, shall be subject to a continuing
security interest, lien and right of set-off for the discharge of all of my
indebtedness and other obligations to SB, and will be held by SB as security
for the payment of any of my indebtedness or obligations to SB. In enforcing
your security interest, you shall have the discretion to determine which
property is to be sold and the order in which it is to be sold and shall have
all the rights and remedies available to a secured party under the New York
Uniform Commercial Code. Without your prior written consent, I will not cause
or allow any of the collateral held in my account(s), whether now consent, I
will not cause or allow any of the collateral held in my account(s), whether
now owned or hereafter acquired, to be or become subject to any liens, security
interests, mortgages or encumbrances of any nature other than your security
interest.
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Without limiting the generality of the foregoing, I hereby authorize SB to
automatically liquidate any money market funds available in my account(s) from
time to time to cover any of my indebtedness or obligations to SB including
non-trade related debts. You are further authorized to liquidate any other
property held in my account(s) to satisfy any such indebtedness or obligations
whenever in your discretion you consider it necessary for your protection.
"Property" as used anywhere in this Agreement shall include, but not be limited
to, securities of all kinds, money, certificates of deposit, bankers'
acceptances, commercial paper, options, commodities, and contracts for the
future delivery of commodities or relating to commodities or securities, and
the distributions, proceeds, products and accessions of any of the above.
3. In case of the sale of any security, commodity, or other property at my
direction and the inability of SB to deliver the same to the purchaser by
reason of my failure to supply them to SB, I authorize SB to borrow any
security, commodity, or other property necessary to make delivery thereof, and
I hereby agree to be responsible for any loss which SB may sustain thereby and
any premiums, interest or other costs which SB may be required to pay as a
result of such borrowing, and for any loss or cost which SB may sustain by
reason of its inability to borrow the security, commodity, or other property
sold.
You may charge my account(s) with such usual and customary charges as you may
determine to cover your services and facilities, including, but not limited to,
custody and transaction fees. I will promptly pay SB any deficiency that might
arise in my account(s). I understand and agree that a finance charge may be
charged on any debit balance in any cash account I have with SB in accordance
with the SB policy described in the accompanying literature regarding new
accounts. You may transfer excess funds between any of my accounts (including
commodity accounts) for any reason not in conflict with the Commodity Exchange
Act or any other applicable law. If any transactions are effected on an
exchange in which a foreign currency is used, any profit or loss as a result of
a fluctuation in the exchange rate will be charged or credited to my
account(s).
4. Communications may be sent to the mailing address on file with you, or at
such other address as I may hereafter give in writing, and all communications
so sent, whether by mail, telegraph, messenger or otherwise, shall be deemed
given to me personally, whether actually received or not. Transactions entered
into for my account(s) shall be confirmed in writing to me where required by
applicable law or regulation. In addition, SB shall provide me with periodic
statements reflecting activity in such account(s). I agree the transactions
reflected on such confirmations and statements shall be conclusively deemed
accurate as stated unless I notify SB in writing within three (3) days and ten
(10) days of receipt, respectively, that the information contained in such
confirmation or statement is inaccurate. Such notice must be sent by me to SB
by telegram or letter directed to the attention of the Branch Office Manager of
the office servicing the account. Failure to so notify SB shall also preclude
me from asserting at any later date that such transaction was unauthorized.
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I authorize you at your discretion to obtain reports and to provide information
to others concerning my credit standing and my business conduct. You may ask
credit reporting agencies for consumer reports of my credit history. Upon my
request you will inform me whether you have obtained any such consumer reports
and if you have, you will inform me of the name and address of the consumer
reporting agency that furnished the reports to you.
5. I hereby represent that I am of the age of majority. Unless I advise you
to the contrary, in writing, and provide you with a letter of approval from my
employer, where required, I represent that I am not an employee of any
exchange, or of any corporation of which any exchange owns a majority of the
capital stock, or of a member of any exchange, or of a member firm or member
corporation registered on any exchange, or of any corporation, firm or
individual engaged in the business of dealing, either as a broker or as
principal, in securities, bills of exchange, acceptances or other forms of
commercial paper. I further represent that no one except those signing this
agreement has an interest in my account.
If my account has been introduced to you and is carried by you only as a
clearing broker, I agree that you are not responsible for the conduct of the
introducing broker and your only responsibilities to me relate to the
execution, clearing and bookkeeping of transactions in my accounts.
6. ARBITRATION.
Arbitration is final and binding on the parties.
The parties are waiving their right to seek remedies in court, including the
right to jury trial.
Pre-arbitration discovery is generally more limited than and different from
court proceedings.
The arbitrators' award is not required to include factual findings or legal
reasoning, and any party's right to appeal or to seek modification of rulings
by the arbitrators is strictly limited.
The panel of arbitrators will typically include a minority of arbitrators who
were or are affiliated with the securities industry.
I agree that all claims or controversies, whether such claims or controversies
arose prior, on or subsequent to the date hereof, between me and SB and/or any
of its present or former officers, directors, or employees concerning or
arising from (i) any account maintained by me with SB individually or jointly
with others in any capacity; (ii) any transaction involving SB or any
predecessor firms by merger, acquisition or other business combination and me,
whether or not such transaction occurred in such account or accounts; or (iii)
the construction, performance or breach of this or any other agreement between
us, any duty arising from the business of SB or otherwise, shall be determined
by arbitration before, and only before, any self-regulatory organization or
exchange of which SB is a member. I may elect which of these arbitration
forums shall hear the matter by sending a registered letter or telegram
addressed to Smith Barney Inc. at 388 Greenwich Street, New York, N.Y. 10013-
2396, Attn: Law Department. If I fail to make such election before the
expiration of five (5) days after receipt of a written request from SB to make
such election, SB shall have the right to choose the forum.
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<PAGE> 6
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who
has initiated in court a putative class action; or who is a member of a
putative class who has not opted out of the class with respect to any claims
encompassed by the putative class action until: (i) the class certification is
denied; (ii) the class is decertified; or (iii) the customer is excluded from
the class by court.
Such forbearance to enforce an agreement to arbitrate shall not constitute a
waiver of any rights under this agreement except to the extent stated herein.
The foregoing agreement to arbitrate does not entitle me to obtain arbitration
of claims that would be barred by the relevant statutes of limitations if such
claims were brought in a court of competent jurisdiction. If, at the time that
a demand for arbitration is made or an election or notice of intention to
arbitrate is served, the claims sought to be arbitrated would have been barred
by the relevant statute of limitations or other time bar, any party to this
Agreement may assert the limitations as a bar to the arbitration by applying to
any court of competent jurisdiction, and I expressly agree that any issues
relating to the application of a statute of limitations or other time bar, are
referable to such court. The failure to assert such bar by application to a
court, however, shall not preclude its assertion before the arbitrators.
7. The provisions of this Agreement shall be continuous, shall cover
individually and collectively all accounts which I may open or reopen with SB,
and shall inure to the benefit of SB's present organization, and any successor
organization or assigns. Should any term or provision of this Agreement be
deemed or held to be invalid or unenforceable, the remaining terms and
provisions shall continue in full force and effect. This Agreement, all the
terms herein, and all controversies described in Paragraph 6 shall be governed
and construed in accordance with the laws of the State of New York, including,
but not limited to, the law of New York regarding the permissible rates of
interest that may be charged and the law of New York regarding damages
recoverable in arbitration, without giving effect to principles of conflicts of
law. This choice of law clause shall not govern the choice of statues of
limitations applicable to claims and controversies described in Paragraph 6,
and the statute of limitations applicable to claims and controversies described
in Paragraph 6, and the statute of limitations applicable to any such claim or
controversy shall be that which would be applied by the federal district court
for the district in which I reside.
8. I understand that you may in your sole discretion prohibit or restrict
trading of securities or substitution of securities in any of my accounts. You
have the right to terminate any of my accounts (including multiple owner
accounts) at any time by notice to me. The provisions of this agreement shall
survive the termination of any account.
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<PAGE> 7
9. Your failure to insist at any time upon strict compliance with any term of
this Agreement, or any delay or failure on your part to exercise any power or
right given to you in this Agreement, or a continued course of such conduct on
your part shall at no time operate as a waiver of such power or right, nor
shall any single or partial exercise preclude any other further exercise. All
rights and remedies given to you in this Agreement are cumulative and not
exclusive of any other rights or remedies which you otherwise have.
10. I understand that SB shall not be liable for loss caused directly or
indirectly by government restrictions, exchange or market rulings, suspension
of trading, war, strikes or other conditions, commonly known as "acts of God,"
beyond SB's control.
11. From time to time you may at your discretion, make loans to me for a
purpose other than purchasing, carrying or trading in securities ("Express
Credit Loans"). Express Credit Loans will be made in a nonsecurities credit
account ("Express Credit Account"). The minimum and maximum amount of any
particular loan may be established by you in your discretion regardless of the
amount of collateral delivered to you and you may change such minimum and
maximum amounts from time to time.
I agree not to use the proceeds of any Express Credit Loan to purchase, carry
or trade in securities, I also agree not to use Express Credit Loan proceeds
directly or indirectly to repay other debt that I incur for the purpose of
purchasing, carrying or trading in securities.
JOINT ACCOUNT AGREEMENT
PARAGRAPHS 12 THROUGH 14 APPLY ONLY TO JOINT ACCOUNT AGREEMENTS
12. If this is a joint account, in consideration of you and your successors
carrying a joint account on margin or otherwise for the undersigned, each of
us agrees to be jointly and severally liable for said account and to pay on
demand any debit balance of losses at any time due in this account. Any of us
has full power and authority to make purchases and sales, including short
sales, to withdraw monies and securities from, or to do anything less with
reference to our account, either individually or in our joint names, and you
and your successors are authorized and directed to act upon instructions
received from any of us and to accept payment and securities from any of us for
the credit of this account. Any and all notices, communications, or any
demands for margin sent to any of us shall be binding upon all, and may be
given by mail or other means of communication.
13. Each of us agrees to hold SB harmless from and indemnify SB against any
losses, causes of action, damages and expenses arising from or as the result of
SB following the instructions of either or any of us. SB, in its sole
discretion, may at any time suspend all activity in the joint account pending
instructions from a court of competent jurisdiction or require that
instructions pertaining to the joint account or the property therein be in
writing signed by both or all of us. SB shall be entitled to recover from the
account or from any of us prior to distribution of the funds or property
therein such costs as it may incur, including reasonable attorney's fees, as
the result of any dispute between or among us relating to or arising from the
account.
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14. Each of us agrees that, in the event of the death of either or any of us,
the survivor or survivors shall immediately give you written notice thereof,
and you may, before or after receiving such notice, take such actions, require
such papers, inheritance or estate tax waivers, retain such portion of the
account as you may deem advisable to protect you against any tax, liability,
penalty or loss under any present or future laws or otherwise. The estate of
either or any of us who shall have died shall be liable and each survivor shall
continue liable, jointly and severally, to you for any net debit balance or
loss in said account in any way resulting from the completion of transactions
initiated prior to the receipt by you of the written notice of the death of the
decedent, or incurred in the liquidation of the account or the adjustment of
the interests of the respective parties.
If this account is a joint tenancy account with rights of survivorship, and not
a tenancy in common, in the event of the death of either or any of us, the
entire interest in the joint tenancy account shall be vested in the survivor or
survivors on the same terms and conditions as previously held, without in any
manner releasing the decedent's estate from the liability provided for herein.
If this account is a tenancy in common, in the event of the death of either or
any of us, the interests in the account shall be determined as specified on the
signature section of this Agreement and shall be held upon the same terms and
conditions as previously held, without in any manner releasing the decedent's
estate from the liability provided for herein.
SB will assume that our account is a joint account with right of survivorship
unless we elect a tenancy in common by completing Section F on Page 1 of this
Agreement
MARGIN AGREEMENT
PARAGRAPHS 15 THROUGH 17 APPLY ONLY TO MARGIN ACCOUNTS
15. You are hereby authorized, without notice to me, and without regard as to
whether or not you have in your possession or under your control at the time
thereof other property of the same kind and amount, to pledge, repledge,
hypothecate or rehypothecate my property or any part thereof, either separately
or together with other property of other clients, either for the amount due you
from me or for a greater sum.
16. I agree to pay ON DEMAND any balance owing with respect to any of my
accounts including interest and commissions and any costs of collection
(including attorneys' fees if incurred by you). I understand that you may
demand full payment of the balance due my account plus any interest charges
accrued thereon, at your sole option, at any time without cause and whether or
not such demand is made for your protection. I understand that all loans made
are not for any specific term or duration but are due and payable at your
discretion upon a demand for payment made to me. I agree that all payments
received from my account(s) including interest, dividends, premiums, principal
or other payments may be applied by you to any balances due in my account(s).
If I maintain both a cash and a margin account with you, you are authorized in
your discretion to utilize the equity in either type of account in satisfaction
of any maintenance margin requirement without the actual transference of funds
or securities between such accounts.
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<PAGE> 9
Whenever you deem it necessary or appropriate for your protection, you are
authorized in your sole discretion, to sell, assign, transfer and deliver all
or any part of my property which may be in your possession or control in any
manner you deem appropriate, make any necessary purchases to cover short sales
and/or any open commodity contract position and/or to cancel any outstanding
orders in order to close out the account. Without limiting the generality of
the foregoing, such sale, purchase or cancellation may be made, in your sole
discretion, on the exchange or other market where such business is then usually
transacted, at public auction or at private sale without advertising the same.
All of the above may be done without demand for margin or notice of purchase,
sale or cancellation to me. No demand for margin, or notice given to me of
intent to purchase or sell property or to cancel orders in my account, shall
impose on you any obligation to make such demand or provide such notice to me.
Any such notice or demand is hereby expressly waived, and no specific demand or
notice shall invalidate this waiver. After deducting all costs and expenses of
the purchase and/or sale and deliveries, including, but not limited to,
commissions and transfer and stamp taxes, you shall apply the residue of the
proceeds to the payment of any and all of my liabilities to you, and I shall
remain liable for an deficiency. Upon any such sale, you may purchase the
whole or any part thereof free from any right of redemption. In the event of
my death or incompetency, the authority given by this Paragraph shall continue
effective and shall be binding upon my personal representatives and heirs.
17. I will at all times maintain such margin for my account maintained by SB,
as SB may require from time to time, and any debit balances arising in such
account shall be charged interest in accordance with the SB policy described in
the accompanying literature regarding new accounts provided by you under Rule
10b-16 of the Securities Exchange Act of 1934, as amended from time to time. I
am aware that interest charges, if not paid, will be added to the debit balance
in my account for the next interest period. I am aware and agree that you may
impose, for my account(s), margin requirements more stringent than those
required by law or exchange regulations. I further understand and agree that
such margin requirements may be changed and modified by you from time to time
without prior notice to me. I further agree that any waiver by your or failure
to promptly enforce, as to my account or that of others, such margin
requirements shall not in any way prevent you from subsequently enforcing said
margin requirements with regard to my account.
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EXHIBIT 7.14
AGREEMENT
This Agreement, dated April 26, 1995, is entered into among Richard
Osborne ("Osborne"), Turkey Vulture Fund XIII, Ltd.("TVF") and Smith Barney,
Inc. ("Smith Barney") with respect to margin maintenance requirements for the
securities brokerage account maintained at Smith Barney by TVF (the "Account").
1) Osborne will wire transfer to Smith Barney $1.3 million in Federal
Funds no later than 5:00 p.m. on April 26, 1995. These funds shall be
deposited in the Account.
2) TVF and Osborne represent that(a) Osborne is a Managing Member of TVF
with authority to bind TVF, and (b) TVF is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Ohio, and that the execution and delivery of this Agreement by TVF are duly
authorized under the Operating Agreement and will not violate or conflict with
any judgment, order, document or instrument to which TVF is a party or by which
it is bound.
3) TVF will direct the transfer to Smith Barney on April 26, 1995 of
TVF's securities brokerage account at Kemper Securities. Such account contains
965,500 shares ("Shares") of the common stock of First Union Real Estate Equity
and Mortgage Investment, which is subject to a margin debit of approximately
$2.8 million. Osborne and TVF represent and warrant that (a) the Shares are
freely saleable under the Securities Act of 1933 ("Act") and neither Osborne
nor TVF will take any action while the Shares are held as collateral for the
margin debit to cause the Shares to become subject to Rule 144 under the Act or
otherwise not to be freely saleable under the Act, and in the event the Shares
cease to be freely saleable under the Act, Osborne and TVF shall be required,
jointly and severally, to pay to Smith Barney the remaining margin debit in the
Account no later than three (3) business days after the occurrence of any such
action, and (b) the Shares are free of any liens and encumbrances, except the
margin debit referred to above.
4) Smith Barney will not call for additional maintenance margin with
respect to securities in the Account (except to the extent required by law or
in the event TVF purchases additional securities on margin) if TVF meets for
the duration of this Agreement the following minimum equity requirements in the
account:
a) 35% on the First Union Real Estate and Mortgage Investment and
40% on the Prudential Realty Trust for the six month period
commencing April 11, 1995;
b) 45% for the entire account for the following six months
thereafter; and
c) 50% for the entire account by April 11, 1996.
5) On or after May 11, 1996, Smith Barney may review the circumstances
concerning the Account and shall have the right to set new margin maintenance
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requirements in accordance with Smith Barney's margin maintenance policy. No
change of policy shall occur without fourteen (14) calendar days written
notice.
6) Osborne will execute a personal guaranty, in the form attached
hereto, no later than April 26, 1995 pursuant to which Osborne unconditionally
guarantees payment of the margin debit in the Account.
7) All dividends (including a dividend relating to the Shares payable in
April or May of 1995) and distributions relating to all securities in the
Account, will be deposited into and credited to the Account.
8) Any assets deposited into the Account after April 26, 1995, will be
in the form of cash, cash equivalents or securities that have been approved by
Smith Barney. TVF shall not have the right to withdraw assets from the Account
to the extent such withdrawals would cause the margin debit in the Account to
increase. In the event TVF sells securities in the Account, the net proceeds
of such sale must be applied to eliminate the margin debit in the Account prior
to withdrawal of such proceeds from the Account. TVF may not transfer any
securities out of the Account without written authorization from Smith Barney
unless the debit in the Account has been eliminated.
9) In the event of a conflict between the provisions of this Agreement
and the provisions of the Client Agreement governing the Account, the
provisions of this Agreement shall prevail. In all other respects, the
provisions of the Client Agreement shall govern the operation of the Account.
10) This Agreement may not be assigned by Osborne or TVF without Smith
Barney's prior written consent.
11) This Agreement may be amended from time to time by mutual agreement
in writing among the parties. There shall be no oral modification of this
Agreement.
12) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to the conflict of laws
provisions thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
set forth above.
SMITH BARNEY, INC. TURKEY VULTURE FUND XIII, LTD.
By:/s/ Don S. Schechter By: /s/ Richard M. Osborne
- ----------------------------- ---------------------------------
Managing Member
RICHARD M. OSBORNE
/s/ Richard M. Osborne
-----------------------------
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EXHIBIT 7.15
April 25, 1995
Smith Barney, Inc.
388 Greenwich Street
New York, N.Y. 10012
Re: Turkey Vulture Fund XIII, Ltd.
Dear Sirs:
The undersigned, Richard M. Osborne, hereby irrevocably and in accordance
with the terms of the letter agreement dated April 25, 1995, guarantees the
prompt and complete payment and performance when due, of all obligations and
liabilities of The Turkey Vulture Fund XIII, Ltd. account number 224-43061-1-0-
005 at Smith Barney, Inc. in connection with all transactions and positions now
or hereafter existing in said account.
This is a continuing guarantee of payment and shall remain in full force
and effect until all obligations of Turkey Vulture Fund XIII, Ltd. under the
Client Agreement and letter agreement dated April 25, 1995 have been satisfied.
This guaranty shall bind the heirs, successors and assigns of Guarantor.
Guarantor shall not assign this guaranty without the prior written consent of
Smith Barney, Inc.
This guaranty, shall be governed by and construed in accordance with the
laws of the State of New York.
Very truly yours,
/s/ Richard M. Osborne
Richard M. Osborne
