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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
April 16, 1998
Date of Report (Date of earliest event reported)
Kimco Realty Corporation
(Exact name of registrant as specified in its charter)
Maryland 1-10899 13-2744380
- ----------------------- ----------------- ------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
3333 New Hyde Park Road
New Hyde Park, New York 11042-0020
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(Address of principal executive (zip code)
offices)
516/869-9000
-----------------------------------
Registrant's telephone,
including area code
Not Applicable
- --------------------------------------------------------------------------------
(former name or former address, if changed since last report.)
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KIMCO REALTY CORPORATION AND SUBSIDIARIES
CURRENT REPORT
ON
FORM 8-K
Item 7 Financial Statements and Exhibits
The items listed below are filed as exhibits and are incorporated by
reference into the registration statements on Form S-3 and all amendments
thereto (Nos. 333-04833 and 333-37285).
Exhibits
1(c) U.S. Underwriting Agreement, dated, Sepetember 25, 1997 between
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Kimco Realty Corporation.
1(d) U.S. Terms Agreement, dated April 16, 1998, between Legg Mason
Wood Walker, Incorporated and Kimco Realty Corporation.
1(e) Underwriting Agreement, dated April 16, 1998, between Edward
Jones & Co. and Kimco Realty Ccorporation.
1(f) Terms Agreement, dated April 16, 1998, between Edward Jones & Co.
and Kimco Realty Corporation.
1(g) Underwriting Agreement, dated April 21, 1998 between A.G. Edwards
& Sons, Inc. and Kimco Realty Corporation.
1(h) Terms Agreement, dated April 21, 1998, between A.G. Edwards &
Sons, Inc. and Kimco Realty Corporation.
1(i) Underwriting Agreement, dated April 23, 1998, between Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Kimco Realty Corporation.
1(j) Terms Agreement, dated April 23, 1998, between Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Kimco Realty Corporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Kimco Realty Corporation
------------------------
Registrant
Date: May 6, 1998
By: /s/ Michael V. Pappagallo
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Michael V. Pappagallo
Chief Financial Officer
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KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
U.S. UNDERWRITING AGREEMENT
September 25, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281-1305
Dear Sirs:
Kimco Realty Corporation, a Maryland corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $.01 par value (the "Common
Stock"), or warrants to purchase a number of shares of Common Stock (the "Common
Stock Warrants"), or both, or shares of Preferred Stock, $1.00 par value (the
"Preferred Shares"), from time to time, in one or more offerings on terms to be
determined at the time of sale. The Preferred Shares may be offered in the form
of depositary shares (the "Depositary Shares") represented by depositary
receipts (the "Depositary Receipts"). The Common Stock Warrants will be issued
pursuant to a Common Stock Warrant Agreement (the "Warrant Agreement") between
the Company and a warrant agent (the "Warrant Agent"). Each series of Preferred
Shares may vary as to the specific number of shares, title, stated value,
liquidation preference, issuance price, ranking, dividend rate or rates (or
method of calculation), dividend payment dates, any redemption or sinking fund
requirements, any conversion provisions and any other variable terms as set
forth in the applicable articles supplementary (each, the "Articles
Supplementary") relating to such Preferred Shares. As used herein, "Securities"
shall mean the Common Stock, the Common Stock Warrants, the Preferred Shares,
the Depositary Shares and the Depositary Receipts; and "Warrant Securities"
shall mean the Common Stock issuable upon exercise of Common Stock Warrants. As
used herein, "you" and "your", unless the context otherwise requires, shall mean
the parties to whom this Agreement is addressed together with the other parties,
if any, identified in the applicable Terms
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Agreement (as hereinafter defined) as additional co-managers with respect to
Underwritten Securities (as hereinafter defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten Securities") to, and the purchase and
offering thereof by, you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the sale of
the Underwritten Securities or as a member of an underwriting syndicate and any
Underwriter substituted pursuant to Section 10 hereof). The Terms Agreement
relating to the offering of Underwritten Securities shall specify the number of
Underwritten Securities of each class or series to be initially issued,
including the number of Common Stock Warrants, if any (the "Initial Underwritten
Securities"), whether the Initial Underwritten Securities shall be in the form
of Depositary Shares and the fractional amount of Preferred Shares represented
by each Depositary Share, the names of the Underwriters participating in such
offering (subject to substitution as provided in Section 10 hereof), the number
of Initial Underwritten Securities which each such Underwriter severally agrees
to purchase, the names of such of you or such other Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from the
Company, any initial public offering price, the time, date and place of delivery
and payment, any delayed delivery arrangements and any other variable terms of
the Initial Underwritten Securities (including, but not limited to, current
ratings (in the case of Preferred Shares and Depositary Shares only),
designations, liquidation preferences, conversion provisions, redemption
provisions and sinking fund requirements and the terms of the Warrant Securities
and the terms, prices and dates upon which such Warrant Securities may be
purchased). In addition, each Terms Agreement shall specify whether the Company
has agreed to grant to the Underwriters an option to purchase additional
Underwritten Securities to cover over-allotments, if any, and the number of
Underwritten Securities subject to such option (the "Option Securities"). As
used herein, the term "Underwritten Securities" shall include the Initial
Underwritten Securities and all or any portion of the Option Securities agreed
to be purchased by the Underwriters as provided herein, if any. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between you and the Company. Each offering of Underwritten Securities through
you or
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through an underwriting syndicate managed by you will be governed by this
Agreement, as supplemented by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-4833) for the
registration of the Securities and Warrant Securities and certain of the
Company's debt securities, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement (including all pre-effective
amendments thereto) has been declared effective by the Commission, and the
Company has filed such post-effective amendments thereto as may have been
required prior to the execution of the applicable Terms Agreement and each such
post-effective amendment has been declared effective by the Commission. Such
registration statement (as so amended, if applicable), including all
information, if any, deemed to be a part thereof pursuant to Rule 434 of the
1933 Act Regulations, is collectively referred to herein as the "Registration
Statement" and the final prospectus and the prospectus supplement relating to
the offering of the Underwritten Securities (the "Prospectus Supplement"), in
the form first used to confirm sales by the Underwriters for use in connection
with the offering of the Underwritten Securities, are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), prior to the execution of the
applicable Terms Agreement. All references in this Agreement to financial
statements and schedules and other information which is "contained," "included"
or "stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the 1934 Act which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be. If the Company elects to rely on Rule 434 under
the 1933 Act Regulations, all references to the "Prospectus" shall be deemed to
include, without limitation, the final or preliminary prospectus and the term
sheet or abbreviated term sheet, taken together, provided to the Underwriters by
the Company in reliance on Rule 434 under the 1933 Act (the "Rule 434
Prospectus"). If the Company files a registration statement with the Commission
to
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register a portion of the Securities and Warrant Securities and relies on
Rule 462(b) for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 333-4833) and the Rule 462 Registration
Statement.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you, as of the date hereof, and
to you and each other Underwriter named in the applicable Terms Agreement, as of
the date thereof, the Closing Time (as hereinafter defined) and each Date of
Delivery, if any (as hereinafter defined)(in each case, a "Representation
Date"), as follows:
(i) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective and at each time thereafter on
which the Company filed an Annual Report on Form 10-K with the Commission,
complied, and as of each Representation Date will comply, in all material
respects with the requirements of the 1933 Act and 1933 Act Regulations;
the Registration Statement, at the time the Registration Statement became
effective and at each time thereafter on which the Company filed an Annual
Report on Form 10-K with the Commission, did not, and at each time
thereafter on which any amendment to the Registration Statement becomes
effective or the Company files an Annual Report on Form 10-K with the
Commission and as of each Representation Date will not, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and the Prospectus, as of the date hereof, does not, and as of
each Representation Date will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through you expressly for use in the Registration Statement or
Prospectus.
(ii) The accountants who certified the financial statements, financial
statement schedules and historical summaries of revenue and certain
operating expenses for the properties related thereto included or
incorporated by
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reference in the Registration Statement and the Prospectus are
independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(iii) The historical financial statements included or incorporated by
reference in the Registration Statement and the Prospectus present fairly
the financial position of the Company and its consolidated subsidiaries as
at the dates indicated and the results of their operations for the periods
specified; except as may otherwise be stated in the Registration Statement
and the Prospectus, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; and the financial statement schedules and other financial
information and data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information
required to be stated therein.
(iv) The historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus, if any, present fairly the revenue and those
operating expenses included in such summaries for the periods specified in
conformity with generally accepted accounting principles; the pro forma
condensed consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, if any, present
fairly the pro forma financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the pro forma results of their
operations for the periods specified; and the pro forma condensed
consolidated financial statements, if any, have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis, the assumptions on which such pro forma financial statements have
been prepared are reasonable and are set forth in the notes thereto, such
pro forma financial statements have been prepared, and the pro forma
adjustments set forth therein have been applied, in accordance with the
applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations, and such pro forma adjustments have been properly applied to
the historical amounts in the compilation of such statements.
(v) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be
stated therein or contemplated thereby, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
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its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, (B) there have been no
transactions or acquisitions entered into by the Company or any of its
subsidiaries other than those arising in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the Company's common stock, or dividends
declared, paid or made in accordance with the terms of any series of
the Company's preferred stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) The Company has been duly incorporated and is validly existing as
a corporation under the laws of Maryland and is in good standing with the
State Department of Assessments and Taxation of Maryland with corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the Articles Supplementary
relating to the Preferred Shares or Depositary Shares, if applicable, will
be in full force and effect as of each Representation Date.
(vii) Each significant subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated under the 1933 Act) of the Company (each, a
"Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise;
and all of the issued and outstanding capital stock of each
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Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except
for security interests granted in respect of indebtedness of the
Company or any of its subsidiaries and referred to in the Prospectus.
(viii) The authorized, issued and outstanding stock of the Company is
as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans, dividend reinvestment plans, employee and director
stock option plans or the exercise of convertible securities referred to in
the Prospectus); and the outstanding capital stock of the Company has been
duly authorized and validly issued and is fully paid and non-assessable and
is not subject to preemptive or other similar rights.
(ix) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and, if applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement (each, a "Deposit
Agreement"), among the Company, the financial institution named in the
Deposit Agreement (the "Depositary") and the holders of the Depositary
Receipts issued thereunder, have, as of each Representation Date, been duly
authorized by the Company and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this Agreement and such
Underwritten Securities, when issued and delivered by the Company pursuant
to this Agreement against payment of the consideration set forth in the
applicable Terms Agreement or any Delayed Delivery Contract (as hereinafter
defined), will be validly issued, fully paid and non-assessable and will
not be subject to preemptive or other similar rights; the Preferred Shares,
if applicable, conform to the provisions of the Articles Supplementary; and
the Underwritten Securities being sold pursuant to the applicable Terms
Agreement conform in all material respects to all statements relating
thereto contained in the Prospectus.
(x) If applicable, the Common Stock Warrants have been duly authorized
and, when issued and delivered pursuant to this Agreement and countersigned
by the Warrant Agent as provided in the Warrant Agreement, will have been
duly executed, countersigned, issued and delivered and will constitute
valid and legally binding obligations of the
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Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued; the issuance of the Warrant
Securities upon exercise of the Common Stock Warrants will not be
subject to preemptive or other similar rights; and the Common Stock
Warrants conform in all material respects to all statements relating
thereto contained in the Prospectus.
(xi) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares, or the
Warrant Securities, will have been duly and validly authorized and reserved
for issuance upon such conversion or exercise by all necessary corporate
action and such shares, when issued upon such conversion or exercise, will
be duly and validly issued and will be fully paid and non-assessable, and
the issuance of such shares upon such conversion or exercise will not be
subject to preemptive or other similar rights; the shares of Common Stock
issuable upon conversion of any of the Preferred Shares or the Depositary
Shares, or the Warrant Securities, conform in all material respects to the
descriptions thereof in the Prospectus.
(xii) The applicable Warrant Agreement, if any, and the applicable
Deposit Agreement, if any, will have been duly authorized, executed and
delivered by the Company prior to the issuance of any applicable
Underwritten Securities, and each constitutes a valid and legally binding
agreement of the Company enforceable in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws relating to or affecting creditors' rights generally and by
general equity principles (regardless of whether enforcement is considered
in a proceeding in equity or at law); and the Warrant Agreement, if any,
and the Deposit Agreement, if any, each conforms in all material respects
to all statements relating thereto contained in the Prospectus.
(xiii) If applicable, upon execution and delivery of the Depositary
Receipts pursuant to the terms of the Deposit Agreement, the persons in
whose names such Depositary Receipts are registered will be entitled to the
rights specified therein and in the Deposit Agreement, except as
enforcement of such rights may be limited by bankruptcy, insolvency or
other similar laws relating to or affecting creditors' rights generally and
by general equity principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
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(xiv) Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject, except for any
such violation or default that would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise; and the execution, delivery and performance of this Agreement,
the applicable Terms Agreement, the applicable Warrant Agreement, if any,
or the applicable Deposit Agreement, if any, and the consummation of the
transactions contemplated herein and therein and compliance by the Company
with its obligations hereunder and thereunder have been duly authorized by
all necessary corporate action, and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of
the charter or by-laws of the Company or any applicable law, administrative
regulation or administrative or court order or decree.
(xv) The Company has operated and intends to continue to operate in
such a manner as to qualify to be taxed as a "real estate investment trust"
under the Internal Revenue Code of 1986, as amended (the "Code"), for the
taxable year in which sales of the Underwritten Securities are to occur.
(xvi) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act").
(xvii) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened against or affecting the Company
or any of its subsidiaries which is required to be disclosed in the
Prospectus (other than as disclosed therein), or which might result in any
material adverse change in the condition,
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financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
or which might materially and adversely affect the properties or assets
thereof or which might materially and adversely affect the consummation of
this Agreement, the applicable Terms Agreement, the applicable Warrant
Agreement, if any, or the applicable Deposit Agreement, if any, or the
transactions contemplated herein or therein; all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is
a party or of which any of its property or assets is the subject which are
not described in the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material;
and there are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been so filed.
(xviii) Neither the Company nor any of its subsidiaries is required to
own or possess any trademarks, service marks, trade names or copyrights in
order to conduct the business now operated by it, other than those the
failure to possess or own would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(xix) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been obtained in
connection with the consummation by the Company of the transactions
contemplated by this Agreement, the applicable Terms Agreement, any Warrant
Agreement or any Deposit Agreement, except such as may be required under
the 1933 Act or the 1933 Act Regulations, state securities laws or real
estate syndication laws.
(xx) The Company and its subsidiaries possess such certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, other than those the failure to possess or own would not
have a material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, and neither the Company nor
any of its subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision,
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ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered
as one enterprise.
(xxi) The Company has full corporate power and authority to enter into
this Agreement, the applicable Terms Agreement and the Delayed Delivery
Contracts, if any, and this Agreement has been, and as of each
Representation Date, the applicable Terms Agreement and the Delayed
Delivery Contracts, if any, will have been, duly authorized, executed and
delivered by the Company.
(xxii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective and as of the applicable
Representation Date or during the period specified in Section 3(f), did not
and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(xxiii) Except as otherwise disclosed in the Prospectus and except as
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise: (i) all
properties and assets described in the Prospectus are owned with good and
marketable title by the Company, KC Holdings, Inc., a Delaware corporation
("KC Holdings"), their respective subsidiaries and/or a joint venture or
partnership in which any such party is a participant (a "Related Entity");
(ii) all of the leases under which any of the Company, KC Holdings, their
respective subsidiaries or, to the knowledge of the Company, Related
Entities holds or uses real properties or assets as a lessee are in full
force and effect, and neither the Company, KC Holdings nor any of their
respective subsidiaries or, to the knowledge of the Company, Related
Entities is in material default in respect of any of the terms or
provisions of any of such leases and no claim has been asserted by anyone
adverse to any such party's rights as lessee under any of such leases, or
affecting or questioning any such party's right to the
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continued possession or use of the leased property or assets under any such
leases; (iii) all liens, charges, encumbrances, claims or restrictions on
or affecting the properties and assets of any of the Company, KC Holdings
or their respective subsidiaries or Related Entities which are required to
be disclosed in the Prospectus are disclosed therein; (iv) neither the
Company, KC Holdings nor any of their respective subsidiaries or, to the
knowledge of the Company, Related Entities nor any lessee of any portion of
any such party's properties is in default under any of the leases pursuant
to which any of the Company, KC Holdings or their respective subsidiaries
or, to the knowledge of the Company, Related Entities leases its properties
and neither the Company, KC Holdings nor any of their respective
subsidiaries or Related Entities knows of any event which, but for the
passage of time or the giving of notice, or both, would constitute a
default under any of such leases; (v) no tenant under any of the leases
pursuant to which any of the Company, KC Holdings or their respective
subsidiaries or, to the knowledge of the Company, Related Entities leases
its properties has an option or right of first refusal to purchase the
premises demised under such lease; (vi) each of the properties of any of
the Company, KC Holdings or, to the knowledge of the Company, their
respective subsidiaries or Related Entities complies with all applicable
codes and zoning laws and regulations; and (vii) neither the Company nor KC
Holdings nor any of their respective subsidiaries has knowledge of any
pending or threatened condemnation, zoning change or other proceeding or
action that will in any manner affect the size of, use of, improvements on,
construction on, or access to the properties of any of the Company, KC
Holdings or their respective subsidiaries or Related Entities.
(xxiv) Title insurance in favor of the mortgagee or the Company, KC
Holdings, their respective subsidiaries and/or their Related Entities is
maintained with respect to each shopping center property owned by any such
entity in an amount at least equal to (a) the cost of acquisition of such
property or (b) the cost of construction of such property (measured at the
time of such construction), except, in each case, where the failure to
maintain such title insurance would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise or of KC Holdings and its subsidiaries considered as one
enterprise.
(xxv) The mortgages and deeds of trust encumbering the properties and
assets described in the Prospectus are not
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convertible nor does any of the Company, KC Holdings or their
respective subsidiaries hold a participating interest therein, and
said mortgages and deeds of trust with respect to property owned by
the Company and its subsidiaries are not cross-defaulted or
cross-collateralized to any property owned by KC Holdings and its
subsidiaries.
(xxvi) Each of the partnership and joint venture agreements to which
the Company or any of its subsidiaries is a party, and which relates to
real property described in the Prospectus, has been duly authorized,
executed and delivered by such applicable party and constitutes the valid
agreement thereof, enforceable in accordance with its terms, except as
limited by (a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights or remedies of creditors or (b) the effect of general
principles of equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which any
proceeding therefor may be brought, and the execution, delivery and
performance of any of such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or default under, the
charter or by-laws of such party or any material contract, lease or other
instrument to which such party is a party or by which its properties may be
bound or any law, administrative regulation or administrative or court
order or decree.
(xxvii) None of the Company, KC Holdings or any of their respective
subsidiaries has any knowledge of (a) the unlawful presence of any
hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, "Hazardous Materials") on any of the properties
owned by it or the Related Entities, or (b) any unlawful spills, releases,
discharges or disposal of Hazardous Materials that have occurred or are
presently occurring off such properties as a result of any construction on
or operation and use of such properties which presence or occurrence would
have a material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise or of KC Holdings and its
subsidiaries considered as one enterprise; and in connection with the
construction on or operation and use of the properties owned by the
Company, KC Holdings, their respective subsidiaries and Related Entities,
each of the Company, KC Holdings and their respective subsidiaries
represents that, as of each Representation Date, it has no knowledge of any
material
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failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials.
(b) Any certificate signed by any officer of the Company and delivered to
you or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by the
Company to each Underwriter participating in such offering as to the matters
covered thereby on the date of such certificate and, unless subsequently amended
or supplemented, at each Representation Date subsequent thereto.
Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at a price per Option Security equal to the
price per Initial Underwritten Security, less an amount equal to any dividends
declared by the Company and paid or payable on the Initial Underwritten
Securities but not on the Option Underwritten Securities. Such option, if
granted, will expire 30 days or such lesser number of days as may be specified
in the applicable Terms Agreement after the Representation Date relating to the
Initial Underwritten Securities, and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
you, but shall not be later than three full business days and not be earlier
than two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or any
portion of the Option
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Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Underwritten Securities each such
Underwriter has severally agreed to purchase as set forth in the applicable
Terms Agreement bears to the total number of Initial Underwritten Securities
(except as otherwise provided in the applicable Terms Agreement), subject to
such adjustments as you in your discretion shall make to eliminate any sales or
purchases of fractional Initial Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the Underwritten
Securities to be purchased by the Underwriters shall be made at the office of
Brown & Wood LLP, 58th Floor, One World Trade Center, New York, New York
10048-0557, or at such other place as shall be agreed upon by you and the
Company, at 10:00 A.M., New York City time, on the third business day (unless
postponed in accordance with the provisions of Section 10) following the date of
the applicable Terms Agreement or, if pricing takes place after 4:30 p.m., New
York City time, on the date of the applicable Terms Agreement, on the fourth
business day (unless postponed in accordance with the provisions of Section 10)
following the date of the applicable Terms Agreement or at such other time as
shall be agreed upon by you and the Company (each such time and date being
referred to as a "Closing Time"). In addition, in the event that any or all of
the Option Securities are purchased by the Underwriters, payment of the purchase
price for, and delivery of certificates representing, such Option Securities,
shall be made at the above-mentioned offices of Brown & Wood LLP, or at such
other place as shall be agreed upon by you and the Company on each Date of
Delivery as specified in the notice from you to the Company. Unless otherwise
specified in the applicable Terms Agreement, payment shall be made to the
Company by wire transfer or certified or official bank check or checks in
Federal or similar same-day funds payable to the order of the Company against
delivery to you for the respective accounts of the Underwriters for the
Underwritten Securities to be purchased by them. The Underwritten Securities or,
if applicable, Depositary Receipts evidencing the Depositary Shares, shall be in
such authorized denominations and registered in such names as you may request in
writing at least one business day prior to the applicable Closing Time or Date
of Delivery, as the case may be. The Underwritten Securities, which may be in
temporary form, will be made available for examination and packaging by you on
or before the first business day prior to the Closing Time or Date of Delivery,
as the case may be.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase
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Underwritten Securities from the Company pursuant to delayed delivery contracts
("Delayed Delivery Contracts") substantially in the form of Exhibit B hereto
with such changes therein as the Company may approve. As compensation for
arranging Delayed Delivery Contracts, the Company will pay to you at Closing
Time, for the respective accounts of the Underwriters, a fee specified in the
applicable Terms Agreement for each of the Underwritten Securities for which
Delayed Delivery Contracts are made at the Closing Time as is specified in the
applicable Terms Agreement. Any Delayed Delivery Contracts are to be with
institutional investors of the types described in the Prospectus. At the Closing
Time, the Company will enter into Delayed Delivery Contracts (for not less than
the minimum number of Underwritten Securities per Delayed Delivery Contract
specified in the applicable Terms Agreement) with all purchasers proposed by the
Underwriters and previously approved by the Company as provided below, but not
for an aggregate number of Underwritten Securities in excess of that specified
in the applicable Terms Agreement. The Underwriters will not have any
responsibility for the validity or performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least two business days prior to the Closing Time,
of the names of the institutions with which the making of Delayed Delivery
Contracts is approved by the Company and the number of Underwritten Securities
to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
Section 3. Covenants of the Company. The Company covenants with you, and
with each Underwriter participating in the offering of Underwritten Securities,
as follows:
(a) If the Company does not elect to rely on Rule 434 under the 1933 Act
Regulations, immediately following the execution of the applicable Terms
Agreement, the Company will prepare a
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Prospectus Supplement setting forth the number of Underwritten Securities
covered thereby and their terms not otherwise specified in the Prospectus
pursuant to which the Underwritten Securities are being issued, the names of the
Underwriters participating in the offering and the number of Underwritten
Securities which each severally has agreed to purchase, the names of the
Underwriters acting as co-managers in connection with the offering, the price at
which the Underwritten Securities are to be purchased by the Underwriters from
the Company, the initial public offering price, if any, the selling concession
and reallowance, if any, any delayed delivery arrangements, and such other
information as you and the Company deem appropriate in connection with the
offering of the Underwritten Securities; and the Company will promptly transmit
copies of the Prospectus Supplement to the Commission for filing pursuant to
Rule 424(b) of the 1933 Act Regulations and will furnish to the Underwriters
named therein as many copies of the Prospectus (including such Prospectus
Supplement) as you shall reasonably request. If the Company elects to rely on
Rule 434 under the 1933 Act Regulations, immediately following the execution of
the applicable Terms Agreement, the Company will prepare an abbreviated term
sheet that complies with the requirements of Rule 434 under the 1933 Act
Regulations and will provide the Underwriters with copies of the form of Rule
434 Prospectus, in such number as you shall reasonably request, and promptly
file or transmit for filing with the Commission the form of Prospectus complying
with Rule 434(c)(2) of the 1933 Act Regulations in accordance with Rule 424(b)
of the 1933 Act Regulations.
(b) The Company will notify you immediately, and confirm such notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document to
be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the
Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; and the Company will make every reasonable
effort to prevent the issuance of any such stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or prepare
any amendment to the Registration Statement or any amendment or supplement to
the
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Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with an offering of Underwritten Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations), and will furnish you with copies of any such
amendment or supplement or other documents proposed to be filed or used a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file any such amendment or supplement or other documents in a
form to which you or counsel for the Underwriters shall reasonably object.
(d) The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as such Underwriter reasonably requests.
(e) The Company will furnish to each Underwriter, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act in connection with sales of the Underwritten Securities, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
(f) If at any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or counsel for the
Company, to amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of either such counsel, at any such
time to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, then the Company will promptly prepare and file with the Commission
such amendment or supplement, whether by filing documents pursuant to the 1933
Act, the 1934 Act or otherwise, as may be necessary to correct such untrue
statement or omission or
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to make the Registration Statement and Prospectus comply with such requirements.
(g) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities, the Warrant Securities, if any, and the
shares of Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, for offering and sale under the applicable securities
laws and real estate syndication laws of such states and other jurisdictions of
the United States as you may designate. In each jurisdiction in which the
Underwritten Securities, the Warrant Securities, if any, and the shares of
Common Stock issuable upon conversion of the Preferred Shares or the Depositary
Shares, if any, have been so qualified, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required for the distribution of
the Underwritten Securities and the Warrant Securities, if any; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the Company will
make generally available to its security holders as soon as practicable, but not
later than 90 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve month period beginning not later than the first
day of the Company's fiscal quarter next following the "effective date" (as
defined in such Rule 158) of the Registration Statement.
(i) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable year
in which sales of the Underwritten Securities are to occur.
(j) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) The Company will not, during a period of 90 days from the date of the
applicable Terms Agreement, with respect to the Underwritten Securities covered
thereby, without your prior written consent, offer or sell, grant any option for
the sale of, or enter into any agreement to sell, any Securities of the same
class or series or ranking on a parity with such Underwritten Securities (other
than the Underwritten Securities which are to
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be sold pursuant to such Terms Agreement) or, if such Terms Agreement relates to
Underwritten Securities that are convertible into Common Stock, any Common Stock
or any security convertible into Common Stock (except for Common Stock issued
pursuant to reservations, agreements, employee benefit plans, dividend
reinvestment plans, employee and director stock option plans or as partial or
full payment for properties to be acquired by the Company), except as may be
otherwise provided in the applicable Terms Agreement.
(l) If the Preferred Shares or Depositary Shares are convertible into
shares of Common Stock or if Common Stock Warrants are issued, the Company will
reserve and keep available at all times, free of preemptive or other similar
rights, a sufficient number of shares of Common Stock or Preferred Shares, as
the case may be, for the purpose of enabling the Company to satisfy any
obligations to issue such shares upon conversion of the Preferred Shares or the
Depositary Shares, as the case may be, or upon exercise of the Common Stock
Warrants.
(m) If the Preferred Shares or Depository Shares are convertible into
shares of Common Stock, the Company will use its best efforts to list the shares
of Common Stock issuable upon conversion of the Preferred Shares or Depositary
Shares on the New York Stock Exchange or such other national exchange on which
the Company's shares of Common Stock are then listed.
(n) The Company has complied and will comply with the provisions of Florida
H.B. 1771, codified as Section 517.075 of the Florida Statutes, 1987, as
amended, and all regulations thereunder relating to issuers doing business with
Cuba.
Section 4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement or the applicable
Terms Agreement, including (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the printing
and filing of this Agreement and the applicable Terms Agreement, (iii) the
preparation, issuance and delivery of the Underwritten Securities to the
Underwriters and the Warrant Securities, if any, (iv) the fees and disbursements
of the Company's counsel and accountants, (v) the qualification of the
Underwritten Securities, the Warrant Securities, if any, and the shares of
Common Stock issuable upon conversion of the Preferred Shares or the Depositary
Shares, if any, under securities laws and real estate syndication laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey, (vi) the printing
and delivery to the Underwriters of
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copies of the Registration Statement as originally filed and of each amendment
thereto, and of the Prospectus and any amendments or supplements thereto,
including each abbreviated term sheet delivered by the Company pursuant to Rule
434 of the 1933 Act Regulations, (vii) the printing and delivery to the
Underwriters of copies of the applicable Deposit Agreement, if any, and the
applicable Warrant Agreement, if any, (viii) any fees charged by nationally
recognized statistical rating organizations for the rating of the Securities,
(ix) the fees and expenses, if any, incurred with respect to the listing of the
Underwritten Securities, the Warrant Securities, if any, or the shares of Common
Stock issuable upon conversion of the Preferred Shares or the Depositary Shares,
if any, on any national securities exchange, and (x) the fees and expenses, if
any, incurred with respect to any filing with the National Association of
Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance
with the provisions of Section 5 or Section 9(b)(i), the Company shall reimburse
the Underwriters named in such Terms Agreement for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase Underwritten Securities pursuant to the
applicable Terms Agreement are subject to the accuracy of the representations
and warranties of the Company herein contained, to the accuracy of the
statements of the Company's officers made in any certificate pursuant to the
provisions hereof, to the performance by the Company of all of its covenants and
other obligations hereunder, and to the following further conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, (ii) if Preferred Shares or
Depositary Shares are being offered, the rating assigned by any nationally
recognized statistical rating organization to any preferred stock of the Company
as of the date of the applicable Terms Agreement shall not have been lowered
since such date nor shall any such rating organization have publicly announced
that it has placed any preferred stock of the Company on what is commonly termed
a "watch list" for possible downgrading, and (iii) there shall not have come to
your attention any facts that would cause you to believe that the Prospectus,
together with the applicable Prospectus Supplement, at the time it was required
to be delivered to purchasers of the Underwritten Securities, included an untrue
statement of a material fact or omitted to
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state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at such time, not misleading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of Latham &
Watkins, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Maryland and
is in good standing with the State Department of Assessments and
Taxation of Maryland.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which it owns or leases real property, except where the failure to so
qualify would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise.
(iv) The authorized, issued and outstanding stock of the Company
is as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans, dividend reinvestment plans or employee and
director stock option plans referred to in the Prospectus); and the
outstanding capital stock of the Company has been duly authorized,
validly issued, fully paid and non-assessable and is not subject to
preemptive or other similar rights arising by operation of law or, to
the best of such counsel's knowledge otherwise.
(v) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and, if applicable, the deposit of the
Preferred Shares in accordance with the provisions of a Deposit
Agreement, have been duly and validly authorized by all necessary
corporate action and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to
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this Agreement and such Underwritten Securities, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth in the applicable Terms Agreement or any
Delayed Delivery Contract, will be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar
rights arising by operation of law or, to the best of such counsel's
knowledge, otherwise; and the Preferred Shares, if applicable, conform
to the provisions of the Articles Supplementary.
(vi) If applicable, the Common Stock Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement
and countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued.
(vii) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or Depositary Shares, or the
exercise of Warrant Securities, have been duly and validly authorized
and reserved for issuance upon such conversion or exercise by all
necessary corporate action on the part of the Company and such shares,
when issued upon such conversion or exercise in accordance with the
charter of the Company, the Deposit Agreement, the Terms Agreement,
the Delayed Delivery Contract or the Warrant Agreement, as the case
may be, will be duly and validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such conversion
or exercise will not be subject to preemptive or other similar rights
arising by operation of law or, to the best of such counsel's
knowledge, otherwise.
(viii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, have been duly authorized,
executed and delivered by the Company, and (assuming due
authorization, execution and delivery by the Warrant Agent in the case
of the Warrant Agreement, and the Depositary, in the case of the
Deposit Agreement) each constitutes a valid and legally binding
agreement of the Company enforceable in accordance with its terms; and
the Warrant Agreement, if any, and the Deposit Agreement, if any, each
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conforms in all material respects to all statements relating thereto
contained in the Prospectus.
(ix) If applicable, upon execution and delivery of the Depositary
Receipts pursuant to the terms of the Deposit Agreement, the persons
in whose names such Depositary Receipts are registered will be
entitled to the rights specified therein and in the Deposit Agreement.
(x) Each of this Agreement, the applicable Terms Agreement and
the Delayed Delivery Contracts, if any, has been duly authorized,
executed and delivered by the Company.
(xi) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(xii) The Registration Statement and the Prospectus, excluding
the documents incorporated by reference therein, as of their
respective effective or issue dates, comply as to form in all material
respects with the requirements for registration statements on Form S-3
under the 1933 Act and the 1933 Act Regulations; it being understood,
however, that no opinion need be rendered with respect to the
financial statements, schedules and other financial and statistical
data included or incorporated by reference in the Registration
Statement or the Prospectus; it being understood, further, that in
passing upon the compliance as to form of the Registration Statement
and the Prospectus, such counsel may assume that the statements made
therein are correct and complete. If applicable, the Rule 434
Prospectus conforms in all material respects to the requirements of
Rule 434 under the 1933 Act Regulations.
(xiii) Each document filed pursuant to the 1934 Act and
incorporated or deemed to be incorporated by reference in the
Prospectus (other than the financial statements, schedules and other
financial and statistical data included therein, as to which no
opinion need be rendered) complied when so filed as to form in all
material respects with the 1934 Act and the 1934 Act Regulations. In
passing upon compliance as to
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form of such documents, such counsel may assume that the statements
made therein are correct and complete.
(xiv) If applicable, the relative rights, preferences, interests
and powers of the Preferred Shares or Depositary Shares, as the case
may be, are as set forth in the Articles Supplementary relating
thereto, and all such provisions are valid under the Maryland General
Corporation Law ("MGCL"); and, as applicable, the form of certificate
used to evidence the Preferred Shares being represented by the
Depositary Shares and the form of certificate used to evidence the
related Depositary Receipts are in due and proper form under the MGCL
and comply with all applicable statutory requirements under the MGCL.
(xv) The Underwritten Securities, the Warrant Securities, and
the shares of Common Stock issuable upon conversion of the Preferred
shares or Depository shares, if applicable, conform in all material
respects to the statements relating thereto contained in the
Prospectus.
(xvi) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company of the
transactions contemplated by this Agreement, the applicable Terms
Agreement, the applicable Deposit Agreement, if any, or the applicable
Warrant Agreement, if any, except such as may be required under the
1933 Act, 1934 Act and state securities laws or real estate
syndication laws.
(xvii) Neither the Company nor any of its subsidiaries is
required to be registered under the 1940 Act.
(xviii) Commencing with the Company's taxable year beginning
January 1, 1992, the Company has been organized in conformity with the
requirements for qualification as a "real estate investment trust",
and its method of operation will enable it to meet the requirements
for qualification and taxation as a "real estate investment trust"
under the Code, provided that such counsel's opinion as to this matter
shall be conditioned upon certain representations as to factual
matters made by the Company to such counsel as described therein.
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(xix) The statements set forth (a) in the Prospectus under the
caption "Certain Federal Income Tax Considerations to the Company of
its REIT Election" and (b) in the Prospectus Supplement under the
caption "Certain Federal Income Tax Considerations", to the extent
such statements constitute matters of law, summaries of legal matters,
or legal conclusions, have been reviewed by them and are accurate in
all material respects.
The opinions rendered in (vi), (viii) and (ix) of subsection (b)(1)
are subject to the following exceptions, limitations and qualifications:
(i) the effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors; and (ii) the effect of general principles
of equity, whether enforcement is considered in a proceeding in equity or
at law, and the discretion of the court before which any proceeding
therefor may be brought.
(2) The favorable opinion, dated as of Closing Time, of Robert P.
Shulman, Esq., counsel for the Company and KC Holdings, or other counsel
satisfactory to the Underwriters, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) To the best of his knowledge and information, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed in the Prospectus, other than those disclosed
therein, and all pending legal or governmental proceedings to which
the Company or any of its subsidiaries is a party or of which any of
the property of the Company or its subsidiaries is the subject which
are not described in the Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material.
(ii) To the best of his knowledge and information, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement other than those described or referred to
therein or filed as exhibits thereto, the descriptions thereof or
references thereto are correct, and, to the best of his knowledge and
information, no default exists in the due performance or observance of
any material obligation, agreement,
26
<PAGE>
covenant or condition contained in any contract, indenture, mortgage,
(except as otherwise described in the Prospectus) loan agreement,
note, lease or other instrument so described, referred to or filed
which would have a material adverse effect on the condition, financial
or otherwise, or on the earnings, business or business prospects of
the Company and its subsidiaries considered as one enterprise or of KC
Holdings and its subsidiaries considered as one enterprise.
(iii) To the best of his knowledge and information, the execution
and delivery of this Agreement, the applicable Terms Agreement, the
applicable Deposit Agreement, if any, or the applicable Warrant
Agreement, if any, and the consummation of the transactions
contemplated herein and therein and compliance by the Company with its
obligations hereunder and thereunder will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in violation of the provisions of
the charter or by-laws of the Company or any applicable law,
administrative regulation or administrative or court order or decree.
(iv) Each of the partnership and joint venture agreements to
which the Company or any of its subsidiaries is a party, and which
relates to real property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable party and
constitutes the valid agreement thereof, enforceable in accordance
with its terms, except as limited by bankruptcy and general equitable
principles and the execution, delivery and performance of any of such
agreements did not, at the time of execution and delivery, and does
not constitute a breach of, or default under, the charter or by-laws
of such party or any material contract, lease or other instrument to
which such party is a party or by which its properties may be bound or
any law, administrative regulation or administrative or court order or
decree.
(v) The Company, KC Holdings, their respective subsidiaries and
their Related Entities hold title to
27
<PAGE>
the properties and assets described in the Prospectus, subject only to
the liens and encumbrances securing indebtedness reflected in the
Prospectus and such other liens, encumbrances and matters of record
which do not materially and adversely affect the value of such
properties and assets considered in the aggregate.
(vi) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, to the best
of his knowledge and information, is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which it owns or leases real property, except where
the failure to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and all of the issued and outstanding
capital stock of each such Significant Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and,
to the best of their knowledge and information, is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except for security interests granted in respect of
indebtedness of the Company or any of its subsidiaries and described
in the Prospectus.
(3) The favorable opinion, dated as of Closing Time, of Brown & Wood
LLP, counsel for the Underwriters, with respect to the matters set forth in
(i), (v) to (xii), inclusive, and (xv) of subsection (b)(1) of this
Section.
(4) In giving their opinions required by subsections (b)(1), (b)(2)
and (b)(3), respectively, of this Section, Latham & Watkins, Robert P.
Shulman, Esq. (or other counsel satisfactory to the Underwriters) and Brown
& Wood LLP shall each additionally state that nothing has come to their
attention that would lead them to believe that the Registration Statement
or any amendment thereto, at the time it became effective (or, if an
amendment to the Registration Statement or an Annual Report on Form 10-K
has been filed by the Company with the Commission subsequent to the
effectiveness of the Registration Statement, then at the time such
amendment becomes effective or at the time of the
28
<PAGE>
most recent filing of such Annual Report, as the case may be) or at the
date of the applicable Terms Agreement, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading
or that the Prospectus, at the date of the applicable Terms Agreement or at
Closing Time, included or includes an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that no opinion need be rendered
with respect to the financial statements, schedules and other financial and
statistical data included in the Registration Statement or the Prospectus.
In giving their opinions, Latham & Watkins, Robert P. Shulman, Esq. (or
other counsel satisfactory to the Underwriters) and Brown & Wood LLP may
rely, (1) as to matters involving the laws of the State of Maryland the
opinion of Ballard Spahr Andrews & Ingersoll (or other counsel reasonably
satisfactory to counsel for the Underwriters) in form and substance
satisfactory to counsel for the Underwriters, (2) as to all matters of
fact, upon certificates and written statements of officers and employees of
and accountants for the Company, and (3) as to the qualification and good
standing of the Company or any of its subsidiaries to do business in any
state or jurisdiction, upon certificates of appropriate government
officials or opinions of counsel in such jurisdictions.
(c) At Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business; and you shall have
received a certificate of the Chief Executive Officer, the President or Vice
President and the chief financial officer or chief accounting officer of the
Company, dated as of such Closing Time, to the effect that (i) there has been no
such material adverse change and (ii) the representations and warranties in
Section 1 are true and correct with the same force and effect as though made on
such Closing Time. As used in this Section 5(c), the term "Prospectus" means the
Prospectus in the form first used by the Underwriters to confirm sales of the
Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you shall
have received from Coopers & Lybrand L.L.P. a letter dated such date, in form
and substance satisfactory to
29
<PAGE>
you, to the effect that (i) they are independent accountants with respect to the
Company within the meaning of the 1933 Act and the 1933 Act Regulations
thereunder; (ii) it is their opinion that the consolidated financial statements
and financial statement schedules of the Company and the historical summaries of
revenue and certain operating expenses for the properties related thereto
included or incorporated by reference in the Registration Statement and the
Prospectus and audited by them and covered by their opinions therein comply as
to form in all material respects with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations; (iii) they have performed limited
procedures, not constituting an audit, including a reading of the latest
available unaudited interim consolidated financial statements of the Company, a
reading of the minute books of the Company, inquiries of certain officials of
the Company who have responsibility for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter, and on
the basis of such limited review and procedures nothing came to their attention
that caused them to believe that (A) any material modifications should be made
to the unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration Statement and
the Prospectus for them to be in conformity with generally accepted accounting
principles, (B) the unaudited financial statements and financial statement
schedules of the Company included or incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the 1934 Act as
it relates to Form 10-Q and the 1934 Act Regulations, (C) the unaudited
operating data and balance sheet data of the Company in the Registration
Statement and the Prospectus under the caption "Selected Consolidated Financial
Data" were not determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus, or (D) at a specified date not more than three days prior to the
date of the applicable Terms Agreement, there has been any change in the capital
stock of the Company or in the consolidated long term debt of the Company or any
decrease in the net assets of the Company, as compared with the amounts shown in
the most recent consolidated balance sheet included or incorporated by reference
in the Registration Statement and the Prospectus or, during the period from the
date of the most recent consolidated statement of operations included or
incorporated by reference in the Registration Statement and the Prospectus to a
specified date not more that three days prior to the date of the applicable
Terms Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues, or decrease in net
income or net income per share of
30
<PAGE>
the Company, except in all instances for changes, increases or decreases which
the Registration Statement and the Prospectus disclose have occurred or may
occur; and (iv) in addition to the audit referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included or
incorporated by reference in the Registration Statement and the Prospectus and
which are specified by you, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting, financial
and other records of the Company and its subsidiaries identified in such letter.
(e) At Closing Time, you shall have received from Coopers & Lybrand L.L.P.
a letter dated as of Closing Time to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Underwritten
Securities and the Warrant Securities, if any, as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Underwritten Securities and the Warrant Securities,
if any, as herein contemplated shall be satisfactory in form and substance to
you and counsel for the Underwriters.
(g) In the event the Underwriters exercise their option provided in a Terms
Agreement as set forth in Section 2(b) hereof to purchase all or any portion of
the Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the Company
hereunder shall be true and correct as of each Date of Delivery, and, at the
relevant Date of Delivery, you shall have received:
(1) A certificate, dated such Date of Delivery, of the Chief Executive
Officer, the President or the chief financial or chief accounting officer
of the Company, in their capacities as such, confirming that the
certificate delivered at Closing Time pursuant to Section 5(c) hereof
remains true and correct as of such Date of Delivery.
31
<PAGE>
(2) The favorable opinion of Latham & Watkins, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise substantially to the same effect as the opinion
required by Sections 5(b)(1) and 5(b)(4) hereof.
(3) The favorable opinion of Robert P. Shulman, Esq., counsel for the
Company and KC Holdings, or other counsel satisfactory to the Underwriters,
in form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and otherwise
substantially to the same effect as the opinion required by Sections
5(b)(2) and 5(b)(4) hereof.
(4) The favorable opinion of Brown & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Sections 5(b)(3) and 5(b)(4) hereof.
(5) A letter from Coopers & Lybrand L.L.P., in form and substance
satisfactory to you and dated such Date of Delivery, substantially the
same in scope and substance as the letter furnished to you pursuant to
Section 5(d) hereof, except that the "specified date" in the letter
furnished pursuant to this Section 5(h)(5) shall be a date not more
than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, the applicable Terms Agreement may be
terminated by you by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A(b) or Rule 434 of the 1933
Act Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any
32
<PAGE>
untrue statement or alleged untrue statement of a material fact included in
the Prospectus (or any amendment or supplement thereto) or the omission, or
alleged omission therefrom, of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission referred to in
subsection (1) above, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Company; and
(3) against any and all expense whatsoever (including, the fees and
disbursements of counsel chosen by you), as incurred, which was reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) and the Prospectus (or any amendment or supplement thereto);
provided further, that with respect to any preliminary prospectus, such
indemnity shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) if the person asserting any such
losses, liabilities, claims, damages or expenses purchased the Underwritten
Securities which are the subject thereof from such Underwriter and if such
person was not sent or given a copy of the Prospectus (excluding any documents
incorporated therein by reference) at or prior to confirmation of the sale of
such Underwritten Securities to such person in any case where such sending or
giving is required by the 1933 Act and the untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
Prospectus and the Prospectus was delivered to such Underwriter a reasonable
amount of time prior to the date of delivery of such confirmation.
33
<PAGE>
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them which are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriters with respect to the offering of the Underwritten Securities shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity
34
<PAGE>
agreement incurred by the Company and one or more of the Underwriters in respect
of such offering, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus in respect of such
offering bears to the initial public offering price appearing thereon and the
Company is responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Underwritten Securities
purchased by it pursuant to the applicable Terms Agreement and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
the applicable Terms Agreement, or contained in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any termination of this Agreement or the applicable Terms
Agreement, or investigation made by or on behalf of any Underwriter or any
controlling person, or by or on behalf of the Company and shall survive delivery
of and payment for the Underwritten Securities.
Section 9. Termination of Agreement. (a) This Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by you upon the giving of 30 days' written notice of such termination
to the other party hereto.
(b) You may also terminate the applicable Terms Agreement, by notice to the
Company, at any time at or prior to the Closing Time if (i) there has been,
since the date of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business
35
<PAGE>
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) there has occurred any material adverse change in the financial markets in
the United States or any outbreak or escalation of hostilities or other national
or international calamity or crisis, the effect of which is such as to make it,
in your judgment, impracticable to market the Underwritten Securities or enforce
contracts for the sale of the Underwritten Securities, or (iii) trading in any
of the securities of the Company has been suspended by the Commission or the New
York Stock Exchange, or if trading generally on either the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by Federal, New York or Maryland
authorities, or (iv) Preferred Shares or Depositary Shares are being offered and
the rating assigned by any nationally recognized statistical rating organization
to any preferred stock of the Company as of the date of the applicable Terms
Agreement shall have been lowered since such date or if any such rating
organization shall have publicly announced that it has placed any preferred
stock of the Company on what is commonly termed a "watch list" for possible
downgrading. As used in this Section 9(b), the term "Prospectus" means the
Prospectus in the form first used by the Underwriters to confirm sales of the
Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set forth in
Section 3 with respect to any offering of Underwritten Securities shall remain
in effect so long as any Underwriter owns any such Underwritten Securities
purchased from the Company pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(h) hereof, the provisions of Section 4
hereof, the indemnity and contribution agreements set forth in Sections 6 and 7
hereof, and the provisions of Sections 8 and 13 hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then you shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:
36
<PAGE>
(a) if the total number of Defaulted Securities does not exceed 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the non-defaulting Underwriters named in such Terms Agreement shall
be obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of the total
number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination of
the applicable Terms Agreement, either you or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, World Financial Center, North Tower, New York, New
York 10281-1305, attention of Richard B. Saltzman, Managing Director; and
notices to the Company shall be directed to it at 3333 New Hyde Park Road, New
Hyde Park, New York 11042-0020, attention of Milton Cooper, Chairman of the
Board.
Section 12. Parties. This Agreement and the applicable Terms Agreement
shall inure to the benefit of and be binding upon you and the Company and any
Underwriter who becomes a party to such Terms Agreement, and their respective
successors. Nothing expressed or mentioned in this Agreement or the applicable
Terms Agreement is intended or shall be construed to give any person, firm or
corporation, other than those referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or such Terms Agreement or any provision herein
or therein contained. This Agreement and the applicable Terms Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors and
37
<PAGE>
said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the applicable Terms
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
Section 14. Counterparts. This Agreement and the applicable Terms Agreement
may be executed in one or more counterparts, and if executed in more than one
counterpart the executed counterparts shall constitute a single instrument.
38
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
you and the Company in accordance with its terms.
Very truly yours,
KIMCO REALTY CORPORATION
By:
--------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
Name:
Title:
39
<PAGE>
KIMCO REALTY CORPORATION
(a Maryland Corporation)
Common Stock
U.S. TERMS AGREEMENT
Dated: September 25, 1997
To: Kimco Realty Corporation
1044 Northern Boulevard
Roslyn, New York 11576
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Representative") understand that Kimco Realty Corporation, a
Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its common stock, $.01 par value per share (the "Common Stock"), set
forth below (the "Underwritten Securities"). Subject to the terms and conditions
set forth or incorporated by reference herein, the underwriters named below (the
"Underwriters") offer to purchase, severally and not jointly, the respective
numbers of Initial Underwritten Securities (as defined in the Underwriting
Agreement referred to below) set forth below opposite their respective names,
and a proportionate share of Option Securities (as defined in the Underwriting
Agreement) to the extent any are purchased, at the purchase price set forth
below.
40
<PAGE>
Number of Shares
of Initial
Underwritten
Underwriter Securities
- ----------- ----------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................
BT Alex. Brown Incorporated........................................
Morgan Stanley & Co. Incorporated..................................
Smith Barney Inc...................................................
Total
=========
41
<PAGE>
The Underwritten Securities shall have the following terms:
Title of Securities:
Number of Shares:
Public offering price per share: $____________
Purchase price per share: $__________
Number of Option Securities:
Delayed Delivery Contracts: not authorized
Closing date and location:
All the provisions contained in the document attached as Annex A hereto
entitled "Kimco Realty Corporation-Common Stock, Warrants to Purchase Common
Stock, Preferred Stock and Depositary Shares-U.S. Underwriting Agreement" are
hereby incorporated by reference in their entirety herein and shall be deemed to
be a part of this Terms Agreement to the same extent as if such provisions had
been set forth in full herein. Terms defined in such document are used herein as
therein defined.
42
<PAGE>
Please accept this offer no later than 7:00 P.M. (New York City time)
on September 25, 1997 by signing a copy of this U.S. Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BT ALEX. BROWN INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:
-----------------------------------------
Name:
Title:
Acting for themselves and as Representatives
of the other named Underwriters
Accepted:
KIMCO REALTY CORPORATION
By:
------------------------------------
Name:
Title:
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<PAGE>
KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock
U.S. TERMS AGREEMENT
--------------------
Dated: April 16, 1998
To: Kimco Realty Corporation
3333 New Hyde Park Road
New Hyde Park, New York 11042
Attention: Chairman of the Board of Directors
Dear Sirs:
We understand that Kimco Realty Corporation, a Maryland corporation
(the "Company"), proposes to issue and sell the number of shares of its common
stock, $.01 par value per share (the "Common Stock"), set forth below. Subject
to the terms and conditions set forth or incorporated by reference herein, Legg
Mason Wood Walker, Incorporated (the "Underwriter") offers to purchase the
number of Underwritten Securities (as defined in the Underwriting Agreement) set
forth below opposite their respective names, and a proportionate share of Option
Securities (as defined in the Underwriting Agreement) to the extent any are
purchased, at the purchase price set forth below.
Number of Shares
Underwriter of Initial Underwritten Securities
- ----------- ----------------------------------
Legg Mason Wood Walker, Incorporated 415,945
The Underwritten Securities shall have the following terms:
Title of Securities: Common Stock
Number of Shares: 415,945
Public offering price per share: $36.0625
Purchase price per share: $34.259375
Number of Option Securities: None
Delayed Delivery Contracts: not authorized
<PAGE>
Kimco Realty Corporation
April 16, 1998
Page 2
Closing date and location: April 21, 1998, 9:00 AM; Hunton & Williams,
Riverfront Plaza, East Tower, 951 East Byrd Street,
Richmond, Virginia 23219-4074
All the provisions contained in the document attached as Annex A hereto
entitled "Kimco Realty Corporation-Common Stock, Warrants to Purchase Common
Stock, Preferred Stock and Depositary Shares-U.S. Underwriting Agreement" are
hereby incorporated by reference in their entirety herein and shall be deemed
to be a part of this Terms Agreement to the same extent as if such provisions
had been set forth in full herein. Terms defined in such document are used
herein as therein defined. The Underwriter is deemed to have been an original
signatory to the Underwriting Agreement such that the terms and conditions of
the Underwriting Agreement shall inure to the benefit of and be legally binding
on and enforceable by each of the parties hereto. The case of verbs and
pronouns will be appropriately adjusted to reflect a single underwriter.
In addition, for purposes of its incorporation herein, the
Underwriting Agreement is hereby deemed to be amended as follows: (i) by
deleting every reference to "Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated," "Merrill Lynch," "BT Alex Brown Incorporate," "Morgan
Stanley & Co. Incorporated" and "Smith Barney Inc," as the case may be, and by
inserting "Legg Mason Wood Walker, Incorporated" in lieu thereof; (ii) by
deleting the reference in the first sentence of the first paragraph of Section
2(c) to "Brown & Wood LLP, 58th Floor, One World Trade Center, New York, New
York 10048-0557" and by inserting "Hunton & Williams, 951 East Byrd Street,
Richmond, Virginia 23219-4074" in lieu thereof: (iii) by deleting the entire
provision set forth under Section 3(k) and inserting "Intentionally Left Blank"
in lieu thereof, (iv) by deleting every reference to "Brown & Wood LLP" and by
inserting "Hunton & Williams" in lieu thereof; (v) by deleting the text of
Section 5(b)(3) in its entirety and inserting in lieu thereof the following: "At
the Closing Time, the Underwriter shall have received from Hunton & Williams,
counsel for the Underwriter, such opinion or opinions, dated the Closing Time
with respect to the incorporation of the Company, the validity of the
Underwritten Securities, the Registration Statement, the Prospectus and other
related matters as the Underwriter may reasonably require."; and (vi) by
deleting the words in the second sentence of Section 11 "Merrill Lynch at World
Financial Center, North Tower, New York, New York 10281-1305, attention of
Richard B. Saltzman, Managing Director" and by inserting the words "Legg Mason
Wood Walker, Incorporated, 111 Calvert Street, Baltimore, Maryland 21203,
Attention: Tom Robinson, Managing Director, with a copy to Hunton & Williams,
951 East Byrd Street, Richmond, Virginia 23219, Attention: Randall S. Parks" in
lieu thereof.
<PAGE>
Kimco Realty Corporation
April 16, 1998
Page 3
Please accept this offer no later than 7:00 P.M. (New York City time)
on April 16, 1998 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
<PAGE>
Kimco Realty Corporation
April 16, 1998
Page 4
Very truly yours,
LEGG MASON WOOD WALKER, INCORPORATED
By: /s/ Jeff Rogatz
-------------------------------
Name: Jeff Rogatz
Title: Managing Director
Accepted:
KIMCO REALTY CORPORATION
By: /s/ Michael V. Pappagallo
---------------------------
Name: Michael V. Pappagallo
Title: Vice President-Chief Financial Officer
<PAGE>
KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
UNDERWRITING AGREEMENT
April 16, 1998
Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, MO 63131-3729
Ladies and Gentlemen:
Kimco Realty Corporation, a Maryland corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $.01 par value (the "Common
Stock"), or warrants to purchase a number of shares of Common Stock (the
"Common Stock Warrants"), or both, or shares of Preferred Stock, $1.00 par
value (the "Preferred Shares"), from time to time, in one or more offerings on
terms to be determined at the time of sale. The Preferred Shares may be
offered in the form of depositary shares (the "Depositary Shares") represented
by depositary receipts (the "Depositary Receipts"). The Common Stock Warrants
will be issued pursuant to a Common Stock Warrant Agreement (the "Warrant
Agreement") between the Company and a warrant agent (the "Warrant Agent").
Each series of Preferred Shares may vary as to the specific number of shares,
title, stated value, liquidation preference, issuance price, ranking, dividend
rate or rates (or method of calculation), dividend payment dates, any
redemption or sinking fund requirements, any conversion provisions and any
other variable terms as set forth in the applicable articles supplementary
(each, the "Articles Supplementary") relating to such Preferred Shares. As
used herein, "Securities" shall mean the Common Stock, the Common Stock
Warrants, the Preferred Shares, the Depositary Shares and the Depositary
Receipts; and "Warrant Securities" shall mean the Common Stock issuable upon
exercise of Common Stock Warrants. As used herein, "you" and "your," unless
the context otherwise requires, shall mean the parties to whom this Agreement
is addressed together with the other parties, if any, identified in the
applicable Terms Agreement (as hereinafter defined) as additional co-managers
with respect to Underwritten Securities (as hereinafter defined) purchased
pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement
<PAGE>
(the "Terms Agreement") providing for the sale of such Securities (the
"Underwritten Securities") to, and the purchase and offering thereof by, you and
such other underwriters, if any, selected by you as have authorized you to enter
into such Terms Agreement on their behalf (the "Underwriters," which term shall
include you whether acting alone in the sale
of the Underwritten Securities or as a member of an underwriting syndicate and
any Underwriter substituted pursuant to Section 10 hereof). The Terms
Agreement relating to the offering of Underwritten Securities shall specify
the number of Underwritten Securities of each class or series to be initially
issued, including the number of Common Stock Warrants, if any (the "Initial
Underwritten Securities"), whether the Initial Underwritten Securities shall
be in the form of Depositary Shares and the fractional amount of Preferred
Shares represented by each Depositary Share, the names of the Underwriters
participating in such offering (subject to substitution as provided in Section
10 hereof), the number of Initial Underwritten Securities which each such
Underwriter severally agrees to purchase, the names of such of you or such
other Underwriters acting as co-managers, if any, in connection with such
offering, the price at which the Initial Underwritten Securities are to be
purchased by the Underwriters from the Company, any initial public offering
price, the time, date and place of delivery and payment, any delayed delivery
arrangements and any other variable terms of the Initial Underwritten
Securities (including, but not limited to, current ratings (in the case of
Preferred Shares and Depositary Shares only), designations, liquidation
preferences, conversion provisions, redemption provisions and sinking fund
requirements and the terms of the Warrant Securities and the terms, prices and
dates upon which such Warrant Securities may be purchased). In addition, each
Terms Agreement shall specify whether the Company has agreed to grant to the
Underwriters an option to purchase additional Underwritten Securities to cover
over-allotments, if any, and the number of Underwritten Securities subject to
such option (the "Option Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and all or any
portion of the Option Securities agreed to be purchased by the Underwriters as
provided herein, if any. The Terms Agreement, which shall be substantially in
the form of Exhibit A hereto, may take the form of an exchange of any standard
form of written telecommunication between you and the Company. Each offering
of Underwritten Securities through you or through an underwriting syndicate
managed by you will be governed by this Agreement, as supplemented by the
applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (Nos. 333-37285 and
333-4833) for the registration of the Securities and Warrant Securities and
certain of the Company's debt securities, under the Securities Act of 1933, as
amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"). Such registration statement
(including all pre-effective amendments thereto) has been declared effective
by the Commission, and the Company has filed such post-effective amendments
thereto as may have been required prior to the
-2-
<PAGE>
execution of the applicable Terms Agreement and each such post-effective
amendment has been declared effective by the Commission. Such registration
statement (as so amended, if applicable), including all information, if any,
deemed to be a part thereof pursuant to Rule 434 of the 1933 Act Regulations,
is collectively referred to herein as the "Registration Statement" and the
final prospectus and the prospectus supplement relating to the offering of the
Underwritten Securities (the "Prospectus Supplement"), in the form first used
to confirm sales by the Underwriters for use in connection with the offering
of the Underwritten Securities, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Terms Agreement. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
in the Registration Statement or the Prospectus (and all other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be incorporated
by reference in the Registration Statement or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the "Prospectus" shall be deemed to include,
without limitation, the final or preliminary prospectus and the term sheet or
abbreviated term sheet, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the 1933 Act (the "Rule 434
Prospectus"). If the Company files a registration statement with the
Commission to register a portion of the Securities and Warrant Securities and
relies on Rule 462(b) for such registration statement to become effective upon
filing with the Commission (the "Rule 462 Registration Statement"), then any
reference to "Registration Statement" herein shall be deemed to be both the
registration statement referred to above (Nos. 333-37285 and 333-4833) and the
Rule 462 Registration Statement.
Section 1. Representations and Warranties. (a) The Company
represents and warrants to you, as of the date hereof, and to you and each
other Underwriter named in the applicable Terms Agreement, as of the date
thereof, the Closing Time (as hereinafter defined) and each Date of Delivery,
if any (as hereinafter defined) (in each case, a "Representation Date"), as
follows:
(i) The Registration Statement and the Prospectus, at the
time the Registration Statement became effective and at each time
thereafter on which the Company filed an Annual Report on Form 10-K
with the Commission, complied, and as of each Representation Date
will comply, in all material respects with the requirements of
-3-
<PAGE>
the 1933 Act and 1933 Act Regulations; the Registration Statement, at
the time the Registration Statement became effective and at each time
thereafter on which the Company filed an Annual Report on Form 10-K
with the Commission, did not, and at each time thereafter on which
any amendment to the Registration Statement becomes effective or the
Company files an Annual Report on Form 10-K with the Commission and
as of each Representation Date will not, contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Prospectus, as of the date hereof, does not, and
as of each Representation Date will not, include an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter
through you expressly for use in the Registration Statement or
Prospectus.
(ii) The accountants who certified the financial statements,
financial statement schedules and historical summaries of revenue and
certain operating expenses for the properties related thereto
included or incorporated by reference in the Registration Statement
and the Prospectus are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) The historical financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries as at the date indicated and the
results of their operations for the periods specified; except as may
otherwise be stated in the Registration Statement and the Prospectus,
said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis; and the financial statement schedules and other financial
information and dated included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information required to be stated therein.
(iv) The historical summaries of revenue and certain
operating expenses included or incorporated by reference in the
Registration Statement and the Prospectus, if any, present fairly the
revenue and those operating expenses included in such summaries for
the periods specified in conformity with generally accepted
accounting principles; the pro forma condensed consolidated financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, if any, present fairly the pro forma
financial position of the Company and its consolidated subsidiaries
as at the dates indicated and the pro forma results of their
operations for the periods specified; and the
-4-
<PAGE>
pro forma condensed consolidated financial statements, if any, have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, the assumptions on which
such pro forma financial statements have been prepared are reasonable
and are set forth in the notes thereto, such pro forma financial
statements have been prepared, and the pro forma adjustments set
forth therein have been applied, in accordance with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations,
and such pro forma adjustments have been properly applied to the
historical amounts in the compilation of such statements.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may
otherwise be stated therein or contemplated thereby, (A) there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there
have been no transactions or acquisitions entered into by the Company
or any of its subsidiaries other than those arising in the ordinary
course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the Company's common stock, or
dividends declared, paid or made in accordance with the terms of any
series of the Company's preferred stock, there has been no dividend
or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(vi) The Company has been duly incorporated and is validly
existing as a corporation under the laws of Maryland and is in good
standing with the State Department of Assessments and Taxation of
Maryland with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and the
Articles Supplementary relating to the Preferred Shares or Depositary
Shares, if applicable, will be in full force and effect as of each
Representation Date.
(vii) Each significant subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated under the 1933 Act) of the Company (each,
a "Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority
to own,
-5-
<PAGE>
lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and all of
the issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, except for security
interests granted in respect of indebtedness of the Company or any of
its subsidiaries and referred to in the Prospectus.
(viii) The authorized, issued and outstanding stock of the
Company is as set forth in the Prospectus under "Capitalization" or
in the latest balance sheet incorporated by reference therein (except
for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans, dividend reinvestment plans,
employee and director stock option plans or the exercise of
convertible securities referred to in the Prospectus); and the
outstanding capital stock of the Company has been duly authorized and
validly issued and is fully paid and non-assessable and is not
subject to preemptive or other similar rights.
(ix) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and, if applicable, the deposit of the
Preferred Shares in accordance with the provisions of a Deposit
Agreement (each, a "Deposit Agreement"), among the Company, the
financial institution named in the Deposit Agreement (the
"Depositary") and the holders of the Depositary Receipts issued
thereunder, have, as of each Representation Date, been duly
authorized by the Company and such Underwritten Securities have been
duly authorized by the Company and such Underwritten Securities have
been duly authorized for issuance and sale pursuant to this Agreement
and such Underwritten Securities, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth in the applicable Terms Agreement or any
Delayed Delivery Contract (as hereinafter defined), will be validly
issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights; the Preferred Shares, if
applicable, conform to the provisions of the Articles Supplementary;
and the Underwritten Securities being sold pursuant to the applicable
Terms Agreement conform in all material respects to all statements
relating thereto contained in the Prospectus.
(x) If applicable, the Common Stock Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement
and countersigned by the Warrant
-6-
<PAGE>
Agent as provided in the Warrant Agreement, will have been duly
executed, countersigned, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Warrant Agreement under which they are to be
issued; the issuance of the Warrant Securities upon exercise of the
Common Stock Warrants will not be subject to preemptive or other
similar rights; and the Common Stock Warrants conform in all material
respects to all statements relating thereto contained in the
Prospectus.
(xi) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares,
or the Warrant Securities, will have been duly and validly authorized
and reserved for issuance upon such conversion or exercise by all
necessary corporate action and such shares, when issued upon such
conversion or exercise, will be duly and validly issued and will be
fully paid and non-assessable, and the issuance of such shares upon
such conversion or exercise will not be subject to preemptive or
other similar rights; the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares,
or the Warrant Securities, conform in all material respects to the
descriptions thereof in the Prospectus.
(xii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, will have been duly authorized,
executed and delivered by the Company prior to the issuance of any
applicable Underwritten Securities, and each constitutes a valid and
legally binding agreement of the Company enforceable in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Warrant Agreement, if any, and the Deposit
Agreement, if any, each conforms in all material respects to all
statements relating thereto contained in the Prospectus.
(xiii) If applicable, upon execution and delivery of the
Depositary Receipts pursuant to the terms of the Deposit Agreement,
the persons in whose names such Depositary Receipts are registered
will be entitled to the rights specified therein and in the Deposit
Agreement, except as enforcement of such rights may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(xiv) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture,
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<PAGE>
mortgage, loan agreement, note, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets
of the Company or any of its subsidiaries is subject, except for any
such violation or default that would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the execution,
delivery and performance of this Agreement, the applicable Terms
Agreement, the applicable Warrant Agreement, if any, or the
applicable Deposit Agreement, if any, and the consummation of the
transactions contemplated herein and therein and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action, and will not conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant
to any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the charter
or by-laws of the Company or any applicable law, administrative
regulation or administrative or court order or decree.
(xv) The Company has operated and intends to continue to
operate in such a manner as to qualify to be taxed as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended
(the "Code"), for the taxable year in which sales of the Underwritten
Securities are to occur.
(xvi) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act").
(xvii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which is required to
be disclosed in the Prospectus (other than as disclosed therein), or
which might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect the consummation of this Agreement, the applicable Terms
Agreement, the applicable Warrant Agreement, if any, or the
applicable Deposit Agreement, if any, or the transactions
contemplated herein or therein; all pending legal or governmental
-8-
<PAGE>
proceedings to which the Company or any of its subsidiaries is a
party or of which any of its property or assets is the subject which
are not described in the Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material; and there are no contracts or documents of
the Company or any of its subsidiaries which are required to be filed
as exhibits to the Registration Statement by the 1933 Act or by the
1933 Act Regulations which have not been so filed.
(xviii) Neither the Company nor any of its subsidiaries is
required to own or possess any trademarks, service marks, trade names
or copyrights in order to conduct the business now operated by it,
other than those the failure to possess or own would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(xix) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company of the
transactions contemplated by this Agreement, the applicable Terms
Agreement, any Warrant Agreement or any Deposit Agreement, except
such as may be required under the 1933 Act or the 1933 Act
Regulations, state securities laws or real estate syndication laws.
(xx) The Company and its subsidiaries possess such
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them, other than those the failure to
possess or own would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, and neither the Company nor any of its
subsidiaries has received any notice of proceeding relating to the
revocation or modification of any such certificate, authority or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(xxi) The Company has full corporate power and authority to
enter into this Agreement, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, and this Agreement has been, and
as of each Representation Date, the applicable Terms Agreement and
the Delayed Delivery Contracts, if any, will have been, duly
authorized, executed and delivered by the Company.
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<PAGE>
(xxii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules
and regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became
effective and as of the applicable Representation Date or during the
period specified in Section 3(f), did not and will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(xxiii) Except as otherwise disclosed in the Prospectus and
except as would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise: (i) all properties and assets described in the
Prospectus are owned with good and marketable title by the Company,
KC Holdings, Inc., a Delaware corporation ("KC Holdings"), their
respective subsidiaries and/or a joint venture or partnership in
which any such party is a participant (a "Related Entity"); (ii) all
of the leases under which any of the Company, KC Holdings, their
respective subsidiaries or, to the knowledge of the Company, Related
Entities holds or uses real properties or assets as a lessee are in
full force and effect, and neither the Company, KC Holdings nor any
of their respective subsidiaries or, to the knowledge of the Company,
Related Entities is in material default in respect of any of the
terms or provisions of any of such leases and no claim has been
asserted by anyone adverse to any such party's rights as lessee under
any of such leases, or affecting or questioning any such party's
right to the continued possession or use of the leased property or
assets under any such leases; (iii) all liens, charges, encumbrances,
claims or restrictions on or affecting the properties and assets of
any of the Company, KC Holdings or their respective subsidiaries or
Related Entities which are required to be disclosed in the Prospectus
are disclosed therein; (iv) neither the Company, KC Holdings nor any
of their respective subsidiaries or, to the knowledge of the Company,
Related Entities nor any lessee of any portion of any such party's
properties is in default under any of the leases pursuant to which
any of the Company, KC Holdings or their respective subsidiaries or,
to the knowledge of the Company, Related Entities leases its
properties and neither the Company, KC Holdings nor any of their
respective subsidiaries or Related Entities knows of any event which,
but for the passage of time or the giving of notice, or both, would
constitute a default under any of such leases; (v) no tenant under
any of the leases pursuant to which any of the Company, KC Holdings
or their respective subsidiaries or, to the knowledge of the Company,
Related Entities leases its properties has an option or right of
first refusal to purchase the premises demised under such lease; (vi)
each of the properties of any of the Company,
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KC Holdings or, to the knowledge of the Company, their respective
subsidiaries or Related Entities complies with all applicable codes
and zoning laws and regulations; and (vii) neither the Company nor KC
Holdings nor any of their respective subsidiaries has knowledge of
any pending or threatened condemnation, zoning change or other
proceeding or action that will in any manner affect the size of, use
of, improvements on, construction on, or access to the properties of
any of the Company, KC Holding or their respective subsidiaries or
Related Entities.
(xxiv) Title insurance in favor of the mortgagee or the
Company, KC Holdings, their respective subsidiaries and/or their
Related Entities is maintained with respect to each shopping center
property owned by any such entity in an amount at least equal to (a)
the cost of acquisition of such property or (b) the cost of
construction of such property (measured at the time of such
construction), except, in each case, where the failure to maintain
such title insurance would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise or of KC Holdings and its subsidiaries
considered as one enterprise.
(xxv) The mortgages and deeds of trust encumbering the
properties and assets described in the Prospectus are not convertible
nor does any of the Company, KC Holdings or their respective
subsidiaries hold a participating interest therein, and said
mortgages and deeds of trust with respect to property owned by the
Company and its subsidiaries are not cross-defaulted or
cross-collateralized to any property owned by KC Holdings and its
subsidiaries.
(xxvi) Each of the partnership and joint venture agreements to
which the Company or any of its subsidiaries is a party, and which
relates to real property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable party and
constitutes the valid agreement thereof, enforceable in accordance
with its terms, except as limited by (a) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or remedies
of creditors or (b) the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at
law, and the discretion of the court before which any proceeding
therefor may be brought, and the execution, delivery and performance
of any of such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or default under, the
charter or by-laws of such party or any material contract, lease or
other instrument to which such party is a party or by which its
properties may be bound or any law, administrative regulation or
administrative or court order or decree.
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(xxvii) None of the Company, KC Holdings or any of their
respective subsidiaries has any knowledge of (a) the unlawful
presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous Materials")
on any of the properties owned by it or the Related Entities, or (b)
any unlawful spills, releases, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring off such
properties as a result of any construction on or operation and use of
such properties which presence or occurrence would have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise or of KC Holdings and
its subsidiaries considered as one enterprise; and in connection with
the construction on or operation and use of the properties owned by
the Company, KC Holdings, their respective subsidiaries and Related
Entities, each of the Company, KC Holdings and their respective
subsidiaries represents that, as of each Representation Date, it has
no knowledge of any material failure to comply with all applicable
local, state and federal environmental laws, regulations, ordinances
and administrative and judicial orders relating to the generation,
recycling, reuse, sale, storage, handling, transport and disposal of
any Hazardous Materials.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters in connection with the
offering of the Underwritten Securities shall be deemed a representation and
warranty by the Company to each Underwriter participating in such offering as
to the matters covered thereby on the date of such certificate and, unless
subsequently amended or supplemented, at each Representation Date subsequent
thereto.
Section 2. Purchase and Sale. (a) The several commitments of
the Underwriters to purchase the Underwritten Securities pursuant to the
applicable Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties herein contained and shall be subject to
the terms and conditions herein set forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the applicable Terms Agreement relating
to the Initial Underwritten Securities, an option to the Underwriters named in
such Terms Agreement, severally and not jointly, to purchase up to the number
of Option Securities set forth therein at a price per Option Security equal to
the price per Initial Underwritten Security, less an amount equal to any
dividends declared by the Company and paid or payable on the Initial
Underwritten Securities but not on the Option Underwritten Securities. Such
option, if granted, will expire 30 days or such lesser number of days as may
be specified in the applicable Terms Agreement after the Representation Date
relating to the Initial Underwritten Securities, and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with
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the offering and distribution of the Initial Underwritten Securities upon
notice by you to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time,
date and place of payment and delivery for such Option Securities. Any such
time and date of delivery (a "Date of Delivery") shall be determined by you,
but shall not be later than three full business days and not be earlier than
two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number
of Option Securities then being purchased which the number of Initial
Underwritten Securities each such Underwriter has severally agreed to purchase
as set forth in the applicable Terms Agreement bears to the total number of
Initial Underwritten Securities (except as otherwise provided in the
applicable Terms Agreement), subject to such adjustments as you in your
discretion shall make to eliminate any sales or purchases of fractional
Initial Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made at
the office of Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603, or at such other place as shall be agreed upon by you and the Company,
at 10:00 A.M., New York City time, on the third business day (unless postponed
in accordance with the provisions of Section 10) following the date of the
applicable Terms Agreement or, if pricing takes place after 4:30 p.m., New
York City time, on the date of the applicable Terms Agreement, on the fourth
business day (unless postponed in accordance with the provisions of Section
10) following the date of the applicable Terms Agreement or at such other time
as shall be agreed upon by you and the Company (each such time and date being
referred to as a "Closing Time"). In addition, in the event that any or all of
the Option Securities are purchased by the Underwriters, payment of the
purchase price for, and delivery of certificates representing, such Option
Securities, shall be made at the above-mentioned offices of Chapman and
Cutler, or at such other place as shall be agreed upon by you and the Company
on each Date of Delivery as specified in the notice from you to the Company.
Unless otherwise specified in the applicable Terms Agreement, payment shall be
made to the Company by wire transfer or certified or official bank check or
checks in Federal or similar same-day funds payable to the order of the
Company against delivery to you for the respective accounts of the
Underwriters for the Underwritten Securities to be purchased by them. The
Underwritten Securities or, if applicable, Depositary Receipts evidencing the
Depositary Shares, shall be in such authorized denominations and registered in
such names as you may request in writing at least one business day prior to
the applicable Closing Time or Date of Delivery, as the case may be. The
Underwritten Securities, which may be in temporary form, will be made
available for examination and packaging by you on or before the first business
day prior to the Closing Time or Date of Delivery, as the case may be.
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If authorized by the applicable Terms Agreement, the Underwriters
named therein may solicit offers to purchase Underwritten Securities from the
Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of
the Underwriters, a fee specified in the applicable Terms Agreement for each
of the Underwritten Securities for which Delayed Delivery Contracts are made
at the Closing Time as is specified in the applicable Terms Agreement. Any
Delayed Delivery Contracts are to be with institutional investors of the types
described in the Prospectus. At the Closing Time, the Company will enter into
Delayed Delivery Contracts (for not less than the minimum number of
Underwritten Securities per Delayed Delivery Contract specified in the
applicable Terms Agreement) with all purchasers proposed by the Underwriters
and previously approved by the Company as provided below, but not for an
aggregate number of Underwritten Securities in excess of that specified in the
applicable Terms Agreement. The Underwriters will not have any responsibility
for the validity or performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least two business days prior to the Closing Time,
of the names of the institutions with which the making of Delayed Delivery
Contracts is approved by the Company and the number of Underwritten Securities
to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be
reduced by the number of Underwritten Securities covered by Delayed Delivery
Contracts, as to each Underwriter as set forth in a written notice delivered
by you to the Company; provided, however, that the total number of
Underwritten Securities to be purchased by all Underwriters shall be the total
number of Underwritten Securities covered by the applicable Terms Agreement,
less the number of Underwritten Securities covered by Delayed Delivery
Contracts.
Section 3. Covenants of the Company. The Company covenants with
you, and with each Underwriter participating in the offering of Underwritten
Securities, as follows:
(a) If the Company does not elect to rely on Rule 434 under the
1933 Act Regulations, immediately following the execution of the applicable
Terms Agreement, the Company will prepare a Prospectus Supplement setting
forth the number of Underwritten Securities covered thereby and their terms
not otherwise specified in the Prospectus pursuant to which the Underwritten
Securities are being issued, the names of the Underwriters participating
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in the offering and the number of Underwritten Securities which each severally
has agreed to purchase, the names of the Underwriters acting as co-managers in
connection with the offerings, the price at which the Underwritten Securities
are to be purchased by the Underwriters from the Company, the initial public
offering price, if any, the selling concession and reallowance, if any, any
delayed delivery arrangements, and such other information as you and the
Company deem appropriate in connection with the offering of the Underwritten
Securities; and the Company will promptly transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424(b) of the 1933
Act Regulations and will furnish to the Underwriters named therein as may
copies of the Prospectus (including such Prospectus Supplement) as you shall
reasonably request. If the Company elects to rely on Rule 434 under the 1933
Act Regulations, immediately following the execution of the applicable Terms
Agreement, the Company will prepare an abbreviated term sheet that complies
with the requirements of Rule 434 under the 1933 Act Regulations and will
provide the Underwriters with copies of the form of Rule 434 Prospectus, in
such number as you shall reasonably request, and promptly file or transmit for
filing with the Commission the form of Prospectus complying with Rule
434(c)(2) of the 1933 Act Regulations in accordance with Rule 424(b) of the
1933 Act Regulations.
(b) The Company will notify you immediately, and confirm such
notice in writing, of (i) the effectiveness of any amendment to the
Registration Statement, (ii) the transmittal to the Commission for filing of
any Prospectus Supplement or other supplement or amendment to the Prospectus
or any document to be filed pursuant to the 1934 Act, (iii) the receipt of any
comments from the Commission, (iv) any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (v) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; and the
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(c) At any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, the Company will give you notice of its intention to
file or prepare any amendment to the Registration Statement or any amendment
or supplement to the Prospectus, whether pursuant to the 1933 Act, 1934 Act or
otherwise (including any revised prospectus which the Company proposes for use
by the Underwriters in connection with an offering of Underwritten Securities
which differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations), and will furnish you with copies of any such
amendment or supplement or other documents proposed to be filed or used a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file any such amendment or
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<PAGE>
supplement or other documents in a form to which you or counsel for the
Underwriters shall reasonably object.
(d) The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as such Underwriter reasonably requests.
(e) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations.
(f) If at any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities any event shall occur or condition exist as a result
of which it is necessary, in the opinion of counsel for the Underwriters or
counsel for the Company, to amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
either such counsel, at any such time to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, then the Company will promptly prepare
and file with the Commission such amendment or supplement, whether by filing
documents pursuant to the 1933 Act, the 1934 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(g) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities, the Warrant Securities,
if any, and the shares of Common Stock issuable upon conversion of the
Preferred Shares or the Depositary Shares, if any, for offering and sale under
the applicable securities laws and real estate syndication laws of such states
and other jurisdictions of the United States as you may designate. In each
jurisdiction in which the Underwritten Securities, the Warrant Securities, if
any, and the shares of Common Stock issuable upon conversion of the Preferred
Shares or the Depositary Shares, if any, have been so qualified, the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as may be
required for the distribution of the Underwritten Securities and the Warrant
Securities, if any; provided, however,
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that the Company shall not be obligated to qualify as a foreign corporation in
any jurisdiction where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the
Company will make generally available to its security holders as soon as
practicable, but not later than 90 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of Rule
158 of the 1933 Act Regulations) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in such Rule 158) of the Registration Statement.
(i) The Company will use its best efforts to meet the requirements
to qualify as a "real estate investment trust" under the Code for the taxable
year in which sales of the Underwritten Securities are to occur.
(j) The Company, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act in connection with sales of
the Underwritten Securities, will file all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the
time period prescribed by the 1934 Act and the 1934 Act Regulations.
(k) [Intentionally Left Blank]
(l) If the Preferred Shares or Depositary Shares are convertible
into shares of Common Stock or if Common Stock Warrants are issued, the
Company will reserve and keep available at all times, free of preemptive or
other similar rights, a sufficient number of shares of Common Stock or
Preferred Shares, as the case may be, for the purpose of enabling the Company
to satisfy any obligations to issue such shares upon conversion of the
Preferred Shares or the Depositary Shares, as the case may be, or upon
exercise of the Common Stock Warrants.
(m) If the Underwritten Securities are Common Stock, the Company
will use its best efforts to list such shares of Common Stock on the New York
Stock Exchange or such other national securities exchange on which the
Company's shares of Common Stock are then listed. If the Preferred Shares or
Depository Shares are convertible into shares of Common Stock, the Company
will use its best efforts to list the shares of Common Stock issuable upon
conversion of the Preferred Shares or Depositary Shares on the New York Stock
Exchange or such other national securities exchange on which the Company's
shares of Common Stock are then listed.
(n) The Company has complied and will comply with the provisions of
Florida H.B. 1771, codified as Section 517.075 of the Florida Statutes, 1987,
as amended, and all regulations thereunder relating to issuers doing business
with Cuba.
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Section 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement
or the applicable Terms Agreement, including (i) the printing and filing of
the Registration Statement as originally filed and of each amendment thereto,
(ii) the printing and filing of this Agreement and the applicable Terms
Agreement, (iii) the preparation, issuance and delivery of the Underwritten
Securities to the Underwriters and the Warrant Securities, if any, (iv) the
fees and disbursements of the Company's counsel and accountants, (v) the
qualification of the Underwritten Securities, the Warrant Securities, if any,
and the shares of Common Stock issuable upon conversion of the Preferred
Shares or the Depositary Shares, if any, under securities laws and real estate
syndication laws in accordance with the provisions of Section 3(g), including
filing fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey, (vi) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto, and
of the Prospectus and any amendments or supplements thereto, including each
abbreviated term sheet delivered by the Company pursuant to Rule 434 of the
1933 Act Regulations, (vii) the printing and delivery to the Underwriters of
copies of the applicable Deposit Agreement, if any, and the applicable Warrant
Agreement, if any, (viii) any fees charged by nationally recognized
statistical rating organizations for the rating of the Securities, (ix) the
fees and expenses, if any, incurred with respect to the listing of the
Underwritten Securities, the Warrant Securities, if any, or the shares of
Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, on any national securities exchange, and (x) the
fees and expenses, if any, incurred with respect to any filing with the
National Association of Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance
with the provisions of Section 5 or Section 9(b)(i), the Company shall
reimburse the Underwriters named in such Terms Agreement for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase Underwritten Securities pursuant
to the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company herein contained, to the
accuracy of the statements of the Company's officers made in any certificate
pursuant to the provisions hereof, to the performance by the Company of all of
its covenants and other obligations hereunder, and to the following further
conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, (ii) if
Preferred Shares or Depositary Shares are being offered, the rating assigned
by any nationally recognized statistical rating organization to any
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preferred stock of the Company as of the date of the applicable Terms
Agreement shall not have been lowered since such date nor shall any such
rating organization have publicly announced that it has placed any preferred
stock of the Company on what is commonly termed a "watch list" for possible
downgrading, (iii) there shall not have come to your attention any facts that
would cause you to believe that the Prospectus, together with the applicable
Prospectus Supplement, at the time it was required to be delivered to
purchasers of the Underwritten Securities, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at such time,
no misleading and (iv) the Underwritten Securities or the Common Stock
issuable upon conversion thereof, as applicable in accordance with Section
3(m) hereof, shall have been duly listed in accordance with such Section 3(m).
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Latham & Watkins, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the
State of Maryland and is in good standing with the State
Department of Assessments and Taxation of Maryland.
(ii) The Company has corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which it owns or leases real property,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(iv) The authorized, issued and outstanding stock
of the Company is as set forth in the Prospectus under
"Capitalization" or in the latest balance sheet incorporated
by reference therein (except for subsequent issuances, if
any, pursuant to reservations, agreements, employee benefit
plans, dividend reinvestment plans or employee and director
stock option plans referred to in the Prospectus); and the
outstanding capital stock of the Company has been duly
authorized, validly issued, fully paid and non-assessable
and is not subject to
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preemptive or other similar rights arising by operation of
law or, to the best of such counsel's knowledge otherwise.
(v) The Underwritten Securities being sold
pursuant to the applicable Terms Agreement and, if
applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement, have
been duly and validly authorized by all necessary corporate
action and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this Agreement
and such Underwritten Securities, when issued and delivered
by the Company pursuant to this Agreement against payment of
the consideration set forth in the applicable Terms
Agreement or any Delayed Delivery Contract, will be validly
issued, fully paid and non-assessable and will not be
subject to preemptive or other similar rights arising by
operation of law or, to the best of such counsel's
knowledge, otherwise; and the Preferred Shares, if
applicable, conform to the provisions of the Articles
Supplementary.
(vi) If applicable, the Common Stock Warrants have
been duly authorized and, when issued and delivered pursuant
to this Agreement and countersigned by the Warrant Agent as
provided in the Warrant Agreement, will have been duly
executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Warrant
Agreement under which they are to be issued.
(vii) If applicable, the shares of Common Stock
issuable upon conversion of any of the Preferred Shares or
Depositary Shares, or the exercise of Warrant Securities,
have been duly and validly authorized and reserved for
issuance upon such conversion or exercise by all necessary
corporate action on the part of the Company and such shares,
when issued upon such conversion or exercise in accordance
with the charter of the Company, the Deposit Agreement, the
Terms Agreement, the Delayed Delivery Contract or the
Warrant Agreement, as the case may be, will be duly and
validly issued and will be fully paid and non-assessable,
and the issuance of such shares upon such conversion or
exercise will not be subject to preemptive or other similar
rights arising by operation of law or, to the best of such
counsel's knowledge, otherwise.
(viii) The applicable Warrant Agreement, if any, and
the applicable Deposit Agreement, if any, have been duly
authorized, executed and delivered by the Company, and
(assuming due authorization, execution and delivery by the
Warrant Agent in the case of the Warrant Agreement, and the
Depositary, in the case of the Deposit Agreement) each
constitutes a valid and legally binding
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agreement of the Company enforceable in accordance with its
terms; and the Warrant Agreement, if any, and the Deposit
Agreement, if any, conforms in all material respects to all
statements relating thereto contained in the Prospectus.
(ix) If applicable, upon execution and delivery of
the Depositary Receipts pursuant to the terms of the Deposit
Agreement, the persons in whose names such Depositary
Receipts are registered will be entitled to the rights
specified therein and in the Deposit Agreement.
(x) Each of this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, has
been duly authorized, executed and delivered by the Company.
(xi) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the
Commission.
(xii) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein,
as of their respective effective or issue dates, comply as
to form in all material respects with the requirements for
registration statements on Form S-3 under the 1933 Act and
the 1933 Act Regulations; it being understood, however, that
no opinion need be rendered with respect to the financial
statements, schedules and other financial and statistical
data included or incorporated by reference in the
Registration Statement or the Prospectus; it being
understood, further, that in passing upon the compliance as
to form of the Registration Statement and the prospectus,
such counsel may assume that the statements made therein are
correct and complete. If applicable, the Rule 434 Prospectus
conforms in all material respects to the requirements of
Rule 434 under the 1933 Act Regulations.
(xiii) Each document filed pursuant to the 1934 Act
and incorporated or deemed to be incorporated by reference
in the Prospectus (other than the financial statements,
schedules and other financial and statistical data included
therein, as to which no opinion need be rendered) complied
when so filed as to form in all material respects with the
1934 Act and the 1934 Act Regulations. In passing upon
compliance as to form of such documents, such counsel may
assume that the statements made therein are correct and
complete.
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(xiv) If applicable, the relative rights
preferences, interests and powers of the Preferred Shares or
Depositary Shares, as the case may be, are as set forth in
the Articles Supplementary relating thereto, and all such
provisions are valid under the Maryland General Corporation
Law ("MGCL"); and, as applicable, the form of certificate
used to evidence Preferred Shares being represented by the
Depositary Shares and the form of certificate used to
evidence the related Depositary Receipts are in due and
proper form under the MGCL and comply with all applicable
statutory requirements under the MGCL.
(xv) The Underwritten Securities, the Warrant
Securities, and the shares of Common Stock issuable upon
conversion of the Preferred Shares or Depositary Shares, if
applicable, conform in all material respects to the
statements relating thereto contained in the Prospectus.
(xvi) No authorization, approval or consent of any
court or governmental authority or agency is required that
has not been obtained in connection with the consummation by
the Company of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the applicable
Deposit Agreement, if any, or the applicable Warrant
Agreement, if any, except such as may be required under the
1933 Act, 1934 Act and state securities laws or real estate
syndication laws.
(xvii) Neither the Company nor any of its
subsidiaries is required to be registered under the 1940
Act.
(xviii) Commencing with the Company's taxable year
beginning January 1, 1992, the Company has been organized in
conformity with the requirements for qualification as a
"real estate investment trust," and its method of operation
will enable it to meet the requirements for qualification
and taxation as a "real estate investment trust" under the
Code, provided that such counsel's opinion as to this matter
shall be conditioned upon certain representations as to
factual matters made by the Company to such counsel as
described therein.
(xix) The statements set forth (a) in the Prospectus
under the caption "Certain Federal Income Tax Considerations
to the Company of its REIT Election" and (b) in the
Prospectus Supplement under the caption "Certain Federal
Income Tax Considerations," to the extent such statements
constitute matters of law, summaries of legal matters, or
legal conclusions, have been reviewed by them and are
accurate in all material respects.
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The opinions rendered in (vi), (viii) and (ix) of subsection
(b)(1) are subject to the following exceptions, limitations and
qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights and remedies of creditors;
and (ii) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and
the discretion of the court before which any proceeding therefor may
be brought.
(2) The favorable opinion, dated as of Closing Time, of
Robert P. Schulman, Esq., counsel for the Company and KC Holdings, or
other counsel satisfactory to the Underwriters, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) To the best of his knowledge and information,
there are no legal or governmental proceedings pending or
threatened which are required to be disclosed in the
Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which
any of the property of the Company or its subsidiaries is
the subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material.
(ii) To the best of his knowledge and information,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to
be described or referred to in the Registration Statement or
the Prospectus or to be filed as exhibits to the
Registration Statement other than those described or
referred to therein or filed as exhibits thereto, the
descriptions thereof or references thereto are correct, and,
to the best of his knowledge and information, no default
exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage (except as otherwise
described in the Prospectus), loan agreement, note, lease or
other instrument so described, referred to or filed which
would have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business or
business prospects of the Company and its subsidiaries
considered as one enterprise or of KC Holdings and its
subsidiaries considered as one enterprise.
(iii) To the best of his knowledge and information,
the execution and delivery of this Agreement, the applicable
Terms Agreement, the applicable Deposit Agreement, if any,
or the applicable Warrant Agreement, if any, and the
consummation of the transactions contemplated herein and
therein and
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compliance by the Company with its obligations hereunder and
thereunder will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be
bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such
action result in violation of the provisions of the charter
or by-laws of the Company or any applicable law,
administrative regulation or administrative or court order
or decree.
(iv) Each of the partnership and joint venture
agreements to which the Company or any of its subsidiaries
is a party, and which relates to real property described in
the Prospectus, has been duly authorized, executed and
delivered by such applicable party and constitutes the valid
agreement thereof, enforceable in accordance with its terms,
except as limited by bankruptcy and general equitable
principles and the execution, delivery and performance of
any of such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or default
under, the charter or by-laws of such party or any material
contract, lease or other instrument to which such party is a
party or by which its properties may be bound or any law,
administrative regulation or administrative or court order
or decree.
(v) The Company, KC Holdings, their respective
subsidiaries and their Related Entities hold title to the
properties and assets described in the Prospectus, subject
only to the liens and encumbrances securing indebtedness
reflected in the Prospectus and such other liens,
encumbrances and matters of record which do not materially
and adversely affect the value of such properties and assets
considered in the aggregate.
(vi) Each Significant Subsidiary of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, to
the best of his knowledge and information, is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which its owns or leases
real property, except where the failure to so qualify would
not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries
considered as one enterprise; and all of the issued
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and outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, to the best of his
knowledge and information, is owned by the Company, directly
or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity, except for security interests granted in respect of
indebtedness of the Company or any of its subsidiaries and
described in the Prospectus.
(3) The favorable opinion, dated as of Closing Time, of
Chapman and Cutler, counsel for the Underwriters in form and
substance satisfactory to the Underwriters.
(4) In giving their opinions required by subsections
(b)(1), (b)(2) and (b)(3), respectively, of this Section, Latham &
Watkins, Robert P. Schulman, Esq. (or other counsel satisfactory to
the Underwriters) and Chapman and Cutler shall each additionally
state that nothing has come to their attention that would lead them
to believe that the Registration Statement or any amendment thereto,
at the time it became effective (or, if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been
filed by the Company with the Commission subsequent to the
effectiveness of the Registration Statement, then at the time such
amendment becomes effective or at the time of the most recent filing
of such Annual Report, as the case may be) or at the date of the
applicable Terms Agreement, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading or that the Prospectus, at the date of the applicable
Terms Agreement or at Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; it
being understood that no opinion need be rendered with respect to the
financial statements, schedules and other financial and statistical
data included in the Registration Statement or the Prospectus. In
giving their opinions, Latham & Watkins, Robert P. Schulman, Esq. (or
other counsel satisfactory to the Underwriters) and Chapman and
Cutler may rely, (1) as to matters involving the laws of the State of
Maryland the opinion of Ballard Spahr Andrews & Ingersoll (or other
counsel reasonably satisfactory to counsel for the Underwriters) in
form and substance satisfactory to counsel for the Underwriters, (2)
as to all matters of fact, upon certificates and written statements
of officers and employees of and accountants for the Company, and (3)
as to the qualification and good standing of the Company or any of
its subsidiaries to do business in any state or jurisdiction, upon
certificates of appropriate government officials or opinions of
counsel in such jurisdictions.
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(c) At Closing Time, there shall not have been, since the date of
the applicable Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business; and you
shall have received a certificate of the Chief Executive Officer, the
President or Vice President and the chief financial officer or chief
accounting officer of the Company, dated as of such Closing Time, to the
effect that (i) there has been no such material adverse change and (ii) the
representations and warranties in Section 1 are true and correct with the same
force and effect as through made on such Closing Time. As used in this Section
5(c), the term "Prospectus" means the Prospectus in the form first used by the
Underwriters to confirm sales of the Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you
shall have received from Coopers & Lybrand L.L.P. a letter dated such date, in
form and substance satisfactory to you, to the effect that (i) they are
independent accountants with respect to the Company within the meaning of the
1933 Act and the 1933 Act Regulations thereunder; (ii) it is their opinion
that the consolidated financial statements and financial statement schedules
of the Company and the historical summaries of revenue and certain operating
expenses for the properties related thereto included or incorporated by
reference in the Registration Statement and the Prospectus and audited by them
and covered by their opinions therein comply as to form in all material
respects with the applicable accounting requires of the 1933 Act and the 1933
Act Regulations; (iii) they have performed limited procedures, not
constituting an audit, including a reading of the latest available unaudited
interim consolidated financial statements of the Company, a reading of the
minute books of the Company, inquiries of certain officials of the Company who
have responsibility for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, and on the basis
of such limited review and procedures nothing came to their attention that
caused them to believe that (A) any material modifications should be made to
the unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration Statement
and the Prospectus for them to be in conformity with generally accepted
accounting principles, (B) the unaudited financial statements and financial
statement schedules of the Company included or incorporated by reference in
the Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the 1934 Act
as it relates to Form 10-Q and the 1934 Act Regulations, (C) the unaudited
operating data and balance sheet data of the Company in the Registration
Statement and the Prospectus under the caption "Selected Consolidated
Financial Data" were not determined on a basis substantially consistent with
that used in determining the corresponding amounts in the audited financial
statements included or incorporated by reference in the Registration Statement
and the Prospectus, or (D) at a specified date not more than three days prior
to the date of the applicable Terms Agreement, there has been any change in
the capital stock of the Company or in the
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consolidated long-term debt of the Company or any decrease in the net assets
of the Company, as compared with the amounts shown in the most recent
consolidated balance sheet included or incorporated by reference in the
Registration Statement and the Prospectus or, during the period from the date
of the most recent consolidated statement of operations included or
incorporated by reference in the Registration Statement and the Prospectus to
a specified date not more than three days prior to the date of the applicable
Terms Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues, or decrease in net
income or net income per share of the Company, except in all instances for
changes, increases or decreases which the Registration Statement and the
Prospectus disclose have occurred or may occur; and (iv) in addition to the
audit referred to in their opinions and the limited procedures referred to in
clause (iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included or incorporated by reference in the
Registration Statement and the Prospectus and which are specified by you, and
have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of the
Company and its subsidiaries identified in such letter.
(e) At Closing Time, you shall have received from Coopers & Lybrand
L.L.P. a letter dated as of Closing Time to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities and the Warrant Securities, if any, as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Underwritten Securities and the
Warrant Securities, if any, as herein contemplated shall be satisfactory in
form and substance to you and counsel for the Underwriters.
(g) In the event the Underwriters exercise their option provided in
a Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by
the Company hereunder shall be true and correct as of each Date of Delivery,
and, at the relevant Date of Delivery, you shall have received:
(i) A certificate, dated such Date of Delivery, of the
Chief Executive Officer, the President or the chief financial or
chief accounting officer of the Company, in their
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capacities as such, confirming that the certificate delivered at
Closing Time pursuant to Section 5(c) hereof remains true and correct
as of such Date of Delivery.
(ii) The favorable opinion of Latham & Watkins, counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise substantially to the same effect as the
opinion required by Sections 5(b)(i) and 5(b)(iv) hereof.
(iii) The favorable opinion of Robert P. Schulman, Esq.,
counsel for the Company and KC Holdings, or other counsel
satisfactory to the Underwriters, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise substantially to the
same effect as the opinion required by Sections 5(b)(ii) and 5(b)(iv)
hereof.
(iv) The favorable opinion of Chapman and Cutler, counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise to the same effect as the opinion
required by Sections 5(b)(iii) and 5(b)(iv) hereof.
(v) A letter from Coopers & Lybrand L.L.P., in form and
substance satisfactory to you and dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished
to you pursuant to Section 5(d) hereof, except that the "specified
date" in the letter furnished pursuant to this Section 5(h)(v) shall
be a date not more than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to the Company at any time at or prior to
the Closing Time, and such termination shall be without liability of any party
to any other party except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant
to Rule 430A(b) or Rule 434 of the 1933 Act Regulations, if
applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
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statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
the Prospectus (or any amendment or supplement thereto) or the
omission, or alleged omission therefrom, of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission referred to in subsection (i) above, or any
such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever (including, the
fees and disbursements of counsel chosen by you), as incurred, which
was reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by
any Underwriter through you expressly for use in the Registration Statement
(or any amendment thereto) and the Prospectus (or any amendment or supplement
thereto); provided further, that with respect to any preliminary prospectus,
such indemnity shall not inure to the benefit of any Underwriter (or the
benefit of any person controlling such Underwriter) if the person asserting
any such losses, liabilities, claims, damages or expenses purchased the
Underwritten Securities which are the subject thereof from such Underwriter
and if such person was not sent or given a copy of the Prospectus (excluding
any documents incorporated therein by reference) at or prior to confirmation
of the sale of such Underwritten Securities to such person in any case where
such sending or giving is required by the 1933 Act and the untrue statement or
omission of a material fact contained in such preliminary prospects was
corrected in the Prospectus and the Prospectus was delivered to such
Underwriter a reasonable amount of time prior to the date of delivery of such
confirmation.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act, against any and all
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loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through you
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sough hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to
them which are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the
Company and the Underwriters with respect to the offering of the Underwritten
Securities shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and one or more of the Underwriters in respect of such
offering, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus in respect
of such offering bears to the initial public offering price appearing thereon
and the Company is responsible for the balance; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute
any amount in excess of the amount by which the
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total price at which the Underwritten Securities purchased by it pursuant to
the applicable Terms Agreement and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay in respect of such losses, liabilities, claims,
damages and expenses. For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 8. Representation, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or the applicable Terms Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any termination of this Agreement or
the applicable Terms Agreement, or investigation made by or on behalf of any
Underwriter or any controlling person, or by or on behalf of the Company and
shall survive delivery of and payment for the Underwritten Securities.
Section 9. Termination of Agreement. (a) This Agreement,
(excluding the applicable Terms Agreement) may be terminated for any reason at
any time by the Company or by you upon the giving of 30 days' written notice
of such termination to the other party hereto.
(b) You may also terminate the applicable Terms Agreement, by
notice to the Company, at any time at or prior to the Closing Time if (i)
there has been, since the date of such Terms Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or any outbreak or escalation of hostilities or other national
or international calamity or crisis, the effect of which is such as to make
it, in your judgment, impracticable to market the Underwritten Securities or
enforce contracts for the sale of the Underwritten Securities, or (iii)
trading in any of the securities of the Company has been suspended by the
Commission or the New York Stock Exchange, or if trading generally on either
the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market has been suspended, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium has been declared by
Federal, New York or Maryland authorities, or (iv) Preferred Shares or
Depository Shares are being offered and the rating assigned by any nationally
recognized statistical rating organization to any preferred stock of the
Company as of
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the date of the applicable Terms Agreement shall have been lowered since such
date or if any such rating organization shall have publicly announced that it
has placed any preferred stock of the Company on what is commonly termed a
"watch list" for possible downgrading. As used in this Section 9(b), the term
"Prospectus" means the Prospectus in the form first used by the Underwriters
to confirm sales of the Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set
forth in Section 3 with respect to any offering of Underwritten Securities
shall remain in effect in so long as any Underwriter owns any such
Underwritten Securities purchased from the Company pursuant to the applicable
Terms Agreement and (y) the covenant set forth in Section 3(h) hereof, the
provisions of Section 4 hereof, the indemnity and contribution agreements set
forth in Sections 6 and 7 hereof, and the provisions of Sections 8 and 13
hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at the Closing Time to purchase the
Underwritten Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), then you shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if however, you shall not
have completed such arrangements within such 24-hour period, then:
(a) if the total number of Defaulted Securities does not
exceed 10% of the total number of Underwritten Securities to be
purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters named in such Terms Agreement shall be obligated to
purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10%
of the total number of Underwritten Securities to be purchased
pursuant to such Terms Agreement, the applicable Terms Agreement
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a
termination of the applicable Terms Agreement, either you or the Company shall
have the right to postpone the Closing Time
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for a period not exceeding seven days in order to effect any required changes
in the Registration Statement or the Prospectus or in any other documents or
arrangements.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed c/o Edward D. Jones & Co., L.P., 12555
Manchester Road, St. Louis, Missouri 63131, attention T. William Hizar, Jr.
and notices to the Company shall be directed to it at 3333 New Hyde Park Road,
New Hyde Park, New York 11042-0020, attention of Milton Cooper, Chairman of
the Board.
Section 12. Parties. This Agreement and the applicable Terms
Agreement shall inure to the benefit of and be binding upon you and the
Company and any Underwriter who becomes a party of such Terms Agreement, and
their respective successors. Nothing expressed or mentioned in this Agreement
or the applicable Terms Agreement is intended or shall be construed to give
any person, firm or corporation, other than those referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or such Terms Agreement
or any provisions herein or therein contained. This Agreement and the
applicable Terms Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the parties
hereto and thereto and their respective successors and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Underwritten Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the
applicable Terms Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed in said State. Specified times of day refer to New York City time.
Section 14. Counterparts. This Agreement and the applicable Terms
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall constitute a single
instrument.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
KIMCO REALTY CORPORATION
By /s/ Michael V. Pappagallo
-----------------------------------------
Name: Michael V. Pappagallo
Title: Vice President-Chief Financial
Officer
CONFIRMED AND ACCEPTED, as of
the date first above written:
EDWARD D. JONES & CO., L.P.
By /s/ T. William Hizar, Jr.
--------------------------------
Name: T. William Hizar, Jr.
Title: Principal
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KIMCO REALTY CORPORATION
(a Maryland Corporation)
Common Stock
TERMS AGREEMENT
Dated: _______________
To: Kimco Realty Corporation
3333 New Hyde Park Road
Suite 100
New Hyde Park, New York 11042-0020
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Representative") understand that Kimco Realty Corporation, a
Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its common stock, $.01 par value per share (the "Common Stock"), set
forth below (the "Underwritten Securities"). Subject to the terms and
conditions set forth or incorporated by reference herein, the underwriters
named below (the "Underwriters") offer to purchase, severally and not jointly,
the respective numbers of Initial Underwritten Securities (as defined in the
Underwriting Agreement referred to below) set forth below opposite their
respective names, and a proportionate share of Option Securities (as defined
in the Underwriting Agreement) to the extent any are purchased, at the
purchase price set forth below.
NUMBER OF SHARES
OF INITIAL
UNDERWRITTEN
UNDERWRITER SECURITIES
TOTAL
________
-35-
<PAGE>
The Underwritten Securities shall have the following terms:
Title of Securities:
Number of Shares:
Public offering price per share: $__________
Purchase price per share: $__________
Number of Option Securities:
Delayed Delivery Contracts: not authorized
Closing date and location:
All the provisions contained in the document attached as Annex A
hereto entitled "Kimco Realty Corporation--Common Stock, Warrants to Purchase
Common Stock, Preferred Stock and Depositary Shares--UnderwritinG Agreement"
are hereby incorporated by reference in their entirety herein and shall be
deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Terms defined in such document
are used herein as therein defined.
-36-
<PAGE>
Please accept this offer no later than 7:00 P.M. (New York City time)
on __________, 199__ by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
EDWARD D. JONES & CO., L.P.
By
Name:
Title:
Acting for themselves and as
Representatives of the other named
Underwriters
ACCEPTED:
KIMCO REALTY CORPORATION
By_____________________________
Name:
Title:
-37-
<PAGE>
KIMCO REALTY CORPORATION
(a Maryland Corporation)
Common Stock
TERMS AGREEMENT
Dated: April 16, 1998
To: Kimco Realty Corporation
3333 New Hyde Park Road
Suite 100
New Hyde Park, New York 11042-0020
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Underwriter") understand that Kimco Realty Corporation,
a Maryland corporation (the "Company"), proposes to issue and sell the
number of shares of its common stock, $.01 par value per share (the "Common
Stock"), set forth below (the "Underwritten Securities"). Subject to the terms
and conditions set forth or incorporated by reference herein, we offer to
purchase the Initial Underwritten Securities (as defined in the Underwriting
Agreement referred to below) and the Option Securities (as defined in the
Underwriting Agreement) to the extent any are purchased, at the purchase price
set forth below.
The Underwritten Securities shall have the following terms:
Title of Securities: Common Stock, $.01 par value
Number of Shares: 460,000
Public offering price per share: $36.0625
Purchase price per share: $34.2625
Number of Option Securities: None
Delayed Delivery Contracts: not authorized
Closing date and location: April 21, 1998; Chapman and Cutler, 111 West Monroe
Street, Chicago, IL 60603
Additional Closing Conditions Pursuant to Section 5 of the Underwriting
Agreement referred to below: At the Closing Time, the Underwriter shall
have received from Ernst & Young, L.L.P., a letter dated such date, in
form and substance satisfactory to the Underwriter, with respect to The
Price REIT, Inc.
<PAGE>
All the provisions contained in the document attached as Annex A hereto
entitled "Kimco Realty Corporation--Common Stock, Warrants to Purchase Common
Stock, Preferred Stock and Depositary Shares--Underwriting Agreement" are hereby
incorporatad by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions
had been set forth in full herein. Terms defined in such document are used
herein as therein defined.
-2-
<PAGE>
Please accept this offer on April 16, 1998 by signing a copy of this
Terms Agreement in the space set forth below and returning the signed copy to
us.
Very truly yours,
EDWARD D. JONES & CO., L.P.
By /s/ T. William Hizar, Jr.
--------------------------
Name: T. William Hizar, Jr.
Title: Principal
ACCEPTED
KIMCO REALTY CORPORATION
By /s/ Michael V. Pappagallo
---------------------------
Name: Michael V. Pappagallo
Title: Vice President - Chief Financial Officer
-3-
<PAGE>
KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
FORM OF UNDERWRITING AGREEMENT
April 21, 1998
A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63103
Ladies and Gentlemen:
Kimco Realty Corporation, a Maryland corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $.01 par value (the "Common
Stock"), or warrants to purchase a number of shares of Common Stock (the
"Common Stock Warrants"), or both, or shares of Preferred Stock, $1.00 par
value (the "Preferred Shares"), from time to time, in one or more offerings on
terms to be determined at the time of sale. The Preferred Shares may be
offered in the form of depositary shares (the "Depositary Shares") represented
by depositary receipts (the "Depositary Receipts"). The Common Stock Warrants
will be issued pursuant to a Common Stock Warrant Agreement (the "Warrant
Agreement") between the Company and a warrant agent (the "Warrant Agent").
Each series of Preferred Shares may vary as to the specific number of shares,
title, stated value, liquidation preference, issuance price, ranking, dividend
rate or rates (or method of calculation), dividend payment dates, any
redemption or sinking fund requirements, any conversion provisions and any
other variable terms as set forth in the applicable articles supplementary
(each, the "Articles Supplementary") relating to such Preferred Shares. As
used herein, "Securities" shall mean the Common Stock, the Common Stock
Warrants, the Preferred Shares, the Depositary Shares and the Depositary
Receipts; and "Warrant Securities" shall mean the Common Stock issuable upon
exercise of Common Stock Warrants. As used herein, "you" and "your," unless
the context otherwise requires, shall mean the parties to whom this Agreement
is addressed together with the other parties, if any, identified in the
applicable Terms Agreement (as hereinafter defined) as additional co-managers
with respect to Underwritten Securities (as hereinafter defined) purchased
pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten
<PAGE>
Securities") to, and the purchase and offering thereof by, you and such other
underwriters, if any, selected by you as have authorized you to enter into
such Terms Agreement on their behalf (the "Underwriters," which term shall
include you whether acting alone in the sale of the Underwritten Securities or
as a member of an underwriting syndicate and any Underwriter substituted
pursuant to Section 10 hereof). The Terms Agreement relating to the offering
of Underwritten Securities shall specify the number of Underwritten Securities
of each class or series to be initially issued, including the number of Common
Stock Warrants, if any (the "Initial Underwritten Securities"), whether the
Initial Underwritten Securities shall be in the form of Depositary Shares and
the fractional amount of Preferred Shares represented by each Depositary
Share, the names of the Underwriters participating in such offering (subject
to substitution as provided in Section 10 hereof), the number of Initial
Underwritten Securities which each such Underwriter severally agrees to
purchase, the names of such of you or such other Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from
the Company, any initial public offering price, the time, date and place of
delivery and payment, any delayed delivery arrangements and any other variable
terms of the Initial Underwritten Securities (including, but not limited to,
current ratings (in the case of Preferred Shares and Depositary Shares only),
designations, liquidation preferences, conversion provisions, redemption
provisions and sinking fund requirements and the terms of the Warrant
Securities and the terms, prices and dates upon which such Warrant Securities
may be purchased). In addition, each Terms Agreement shall specify whether the
Company has agreed to grant to the Underwriters an option to purchase
additional Underwritten Securities to cover over-allotments, if any, and the
number of Underwritten Securities subject to such option (the "Option
Securities"). As used herein, the term "Underwritten Securities" shall include
the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any. The Terms Agreement, which shall be substantially in the form of
Exhibit A hereto, may take the form of an exchange of any standard form of
written telecommunication between you and the Company. Each offering of
Underwritten Securities through you or through an underwriting syndicate
managed by you will be governed by this Agreement, as supplemented by the
applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (Nos. 333-4833 and
333-37285) for the registration of the Securities and Warrant Securities and
certain of the Company's debt securities, under the Securities Act of 1933,
as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"). Such registration statement
(including all pre-effective amendments thereto) has been declared effective
by the Commission, and the Company has filed such post-effective amendments
thereto as may have been required prior to the execution of the applicable
Terms Agreement and each such post-effective amendment has been
2
<PAGE>
declared effective by the Commission. Such registration statement (as so
amended, if applicable), including all information, if any, deemed to be a
part thereof pursuant to Rule 434 of the 1933 Act Regulations, is collectively
referred to herein as the "Registration Statement" and the final prospectus
and the prospectus supplement relating to the offering of the Underwritten
Securities (the "Prospectus Supplement"), in the form first used to confirm
sales by the Underwriters for use in connection with the offering of the
Underwritten Securities, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the oProspectuso shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Terms Agreement. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
in the Registration Statement or the Prospectus (and all other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be incorporated
by reference in the Registration Statement or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the "Prospectus" shall be deemed to include,
without limitation, the final or preliminary prospectus and the term sheet or
abbreviated term sheet, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the 1933 Act (the "Rule 434
Prospectus"). If the Company files a registration statement with the
Commission to register a portion of the Securities and Warrant Securities and
relies on Rule 462(b) for such registration statement to become effective upon
filing with the Commission (the "Rule 462 Registration Statement"), then any
reference to "Registration Statement" herein shall be deemed to be both the
registration statement referred to above (Nos. 333-4833 and 333-37285) and the
Rule 462 Registration Statement.
Section 1. Representations and Warranties. (a) The Company
represents and warrants to you, as of the date hereof, and to you and each
other Underwriter named in the applicable Terms Agreement, as of the date
thereof, the Closing Time (as hereinafter defined) and each Date of Delivery,
if any (as hereinafter defined) (in each case, a "Representation Date"), as
follows:
(i) The Registration Statement and the Prospectus, at the
time the Registration Statement became effective and at each time
thereafter on which the Company filed an Annual Report on Form 10-K
with the Commission, complied, and as of each Representation Date
will comply, in all material respects with the requirements of the
1933 Act and 1933 Act Regulations; the Registration Statement, at the
time the
3
<PAGE>
Registration Statement became effective and at each time thereafter
on which the Company filed an Annual Report on Form 10-K with the
Commission, did not, and at each time thereafter on which any
amendment to the Registration Statement becomes effective or the
Company files an Annual Report on Form 10-K with the Commission and
as of each Representation Date will not, contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Prospectus, as of the date hereof, does not, and
as of each Representation Date will not, include an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter
through you expressly for use in the Registration Statement or
Prospectus.
(ii) The accountants who certified the financial statements,
financial statement schedules and historical summaries of revenue and
certain operating expenses for the properties related thereto
included or incorporated by reference in the Registration Statement
and the Prospectus are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iii) The historical financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries as at the date indicated and the
results of their operations for the periods specified; except as may
otherwise be stated in the Registration Statement and the Prospectus,
said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis; and the financial statement schedules and other financial
information and dated included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information required to be stated therein.
(iv) The historical summaries of revenue and certain
operating expenses included or incorporated by reference in the
Registration Statement and the Prospectus, if any, present fairly the
revenue and those operating expenses included in such summaries for
the periods specified in conformity with generally accepted
accounting principles; the pro forma condensed consolidated financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, if any, present fairly the pro forma
financial position of the Company and its consolidated subsidiaries
as at the dates indicated and the pro forma results of their
operations for the periods specified; and the pro forma condensed
consolidated financial statements, if any, have been prepared in
4
<PAGE>
conformity with generally accepted accounting principles applied on a
consistent basis, the assumptions on which such pro forma financial
statements have been prepared are reasonable and are set forth in the
notes thereto, such pro forma financial statements have been
prepared, and the pro forma adjustments set forth therein have been
applied, in accordance with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations, and such pro forma
adjustments have been properly applied to the historical amounts in
the compilation of such statements.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may
otherwise be stated therein or contemplated thereby, (A) there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there
have been no transactions or acquisitions entered into by the Company
or any of its subsidiaries other than those arising in the ordinary
course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the Company's common stock, or
dividends declared, paid or made in accordance with the terms of any
series of the Company's preferred stock, there has been no dividend
or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(vi) The Company has been duly incorporated and is validly
existing as a corporation under the laws of Maryland and is in good
standing with the State Department of Assessments and Taxation of
Maryland with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and the
Articles Supplementary relating to the Preferred Shares or Depositary
Shares, if applicable, will be in full force and effect as of each
Representation Date.
(vii) Each significant subsidiary (as defined in Rule 1-02 of
RegulationaS-X promulgated under the 1933 Act) of the Company (each,
a "Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business
as described in the Prospectus
5
<PAGE>
and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and all of the issued and outstanding
capital stock of each Significant Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except for security interests granted in respect of
indebtedness of the Company or any of its subsidiaries and referred
to in the Prospectus.
(viii) The authorized, issued and outstanding stock of the
Company is as set forth in the Prospectus under "Capitalization" or
in the latest balance sheet incorporated by reference therein (except
for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans, dividend reinvestment plans,
employee and director stock option plans or the exercise of
convertible securities referred to in the Prospectus); and the
outstanding capital stock of the Company has been duly authorized and
validly issued and is fully paid and non-assessable and is not
subject to preemptive or other similar rights.
(ix) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and, if applicable, the deposit of the
Preferred Shares in accordance with the provisions of a Deposit
Agreement (each, a "Deposit Agreement"), among the Company, the
financial institution named in the Deposit Agreement (the
"Depositary") and the holders of the Depositary Receipts issued
thereunder, have, as of each Representation Date, been duly
authorized by the Company and such Underwritten Securities have been
duly authorized by the Company and such Underwritten Securities have
been duly authorized for issuance and sale pursuant to this Agreement
and such Underwritten Securities, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth in the applicable Terms Agreement or any
Delayed Delivery Contract (as hereinafter defined), will be validly
issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights; the Preferred Shares, if
applicable, conform to the provisions of the Articles Supplementary;
and the Underwritten Securities being sold pursuant to the applicable
Terms Agreement conform in all material respects to all statements
relating thereto contained in the Prospectus.
(x) If applicable, the Common Stock Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement
and countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed,
6
<PAGE>
countersigned, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Warrant Agreement under which they are to be issued;
the issuance of the Warrant Securities upon exercise of the Common
Stock Warrants will not be subject to preemptive or other similar
rights; and the Common Stock Warrants conform in all material
respects to all statements relating thereto contained in the
Prospectus.
(xi) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares,
or the Warrant Securities, will have been duly and validly authorized
and reserved for issuance upon such conversion or exercise by all
necessary corporate action and such shares, when issued upon such
conversion or exercise, will be duly and validly issued and will be
fully paid and non-assessable, and the issuance of such shares upon
such conversion or exercise will not be subject to preemptive or
other similar rights; the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares,
or the Warrant Securities, conform in all material respects to the
descriptions thereof in the Prospectus.
(xii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, will have been duly authorized,
executed and delivered by the Company prior to the issuance of any
applicable Underwritten Securities, and each constitutes a valid and
legally binding agreement of the Company enforceable in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Warrant Agreement, if any, and the Deposit
Agreement, if any, each conforms in all material respects to all
statements relating thereto contained in the Prospectus.
(xiii) If applicable, upon execution and delivery of the
Depositary Receipts pursuant to the terms of the Deposit Agreement,
the persons in whose names such Depositary Receipts are registered
will be entitled to the rights specified therein and in the Deposit
Agreement, except as enforcement of such rights may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(xiv) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or
any
7
<PAGE>
of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or
any of its subsidiaries is subject, except for any such violation or
default that would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and the execution, delivery and
performance of this Agreement, the applicable Terms Agreement, the
applicable Warrant Agreement, if any, or the applicable Deposit
Agreement, if any, and the consummation of the transactions
contemplated herein and therein and compliance by the Company with
its obligations hereunder and thereunder have been duly authorized by
all necessary corporate action, and will not conflict with or
constitute a breach of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the charter
or by-laws of the Company or any applicable law, administrative
regulation or administrative or court order or decree.
(xv) The Company has operated and intends to continue to
operate in such a manner as to qualify to be taxed as a oreal estate
investment trusto under the Internal Revenue Code of 1986, as amended
(the "Code"), for the taxable year in which sales of the Underwritten
Securities are to occur.
(xvi) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act").
(xvii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which is required to
be disclosed in the Prospectus (other than as disclosed therein), or
which might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect the consummation of this Agreement, the applicable Terms
Agreement, the applicable Warrant Agreement, if any, or the
applicable Deposit Agreement, if any, or the transactions
contemplated herein or therein; all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a
party or of which any of
8
<PAGE>
its property or assets is the subject which are not described in the
Prospectus, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and there
are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations
which have not been so filed.
(xviii) Neither the Company nor any of its subsidiaries is
required to own or possess any trademarks, service marks, trade names
or copyrights in order to conduct the business now operated by it,
other than those the failure to possess or own would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(xix) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company of the
transactions contemplated by this Agreement, the applicable Terms
Agreement, any Warrant Agreement or any Deposit Agreement, except
such as may be required under the 1933 Act or the 1933 Act
Regulations, state securities laws or real estate syndication laws.
(xx) The Company and its subsidiaries possess such
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them, other than those the failure to
possess or own would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, and neither the Company nor any of its
subsidiaries has received any notice of proceeding relating to the
revocation or modification of any such certificate, authority or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(xxi) The Company has full corporate power and authority to
enter into this Agreement, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, and this Agreement has been, and
as of each Representation Date, the applicable Terms Agreement and
the Delayed Delivery Contracts, if any, will have been, duly
authorized, executed and delivered by the Company.
(xxii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission,
9
<PAGE>
complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when
read together with the other information in the Prospectus, at the
time the Registration Statement became effective and as of the
applicable Representation Date or during the period specified in
Section 3(f), did not and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(xxiii) Except as otherwise disclosed in the Prospectus and
except as would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise: (i) all properties and assets described in the
Prospectus are owned with good and marketable title by the Company,
KC Holdings, Inc., a Delaware corporation ("KC Holdings"), their
respective subsidiaries and/or a joint venture or partnership in
which any such party is a participant (a "Related Entity"); (ii) all
of the leases under which any of the Company, KC Holdings, their
respective subsidiaries or, to the knowledge of the Company, Related
Entities holds or uses real properties or assets as a lessee are in
full force and effect, and neither the Company, KC Holdings nor any
of their respective subsidiaries or, to the knowledge of the Company,
Related Entities is in material default in respect of any of the
terms or provisions of any of such leases and no claim has been
asserted by anyone adverse to any such party's rights as lessee
under any of such leases, or affecting or questioning any such
party's right to the continued possession or use of the leased
property or assets under any such leases; (iii) all liens, charges,
encumbrances, claims or restrictions on or affecting the properties
and assets of any of the Company, KC Holdings or their respective
subsidiaries or Related Entities which are required to be disclosed
in the Prospectus are disclosed therein; (iv) neither the Company, KC
Holdings nor any of their respective subsidiaries or, to the
knowledge of the Company, Related Entities nor any lessee of any
portion of any such party's properties is in default under any of
the leases pursuant to which any of the Company, KC Holdings or their
respective subsidiaries or, to the knowledge of the Company, Related
Entities leases its properties and neither the Company, KC Holdings
nor any of their respective subsidiaries or Related Entities knows of
any event which, but for the passage of time or the giving of notice,
or both, would constitute a default under any of such leases; (v) no
tenant under any of the leases pursuant to which any of the Company,
KC Holdings or their respective subsidiaries or, to the knowledge of
the Company, Related Entities leases its properties has an option or
right of first refusal to purchase the premises demised under such
lease; (vi) each of the properties of any of the Company, KC Holdings
or, to the knowledge of the Company, their respective subsidiaries or
Related Entities complies with all applicable codes and zoning laws
and regulations; and
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(vii) neither the Company nor KC Holdings nor any of their respective
subsidiaries has knowledge of any pending or threatened condemnation,
zoning change or other proceeding or action that will in any manner
affect the size of, use of, improvements on, construction on, or
access to the properties of any of the Company, KC Holding or their
respective subsidiaries or Related Entities.
(xxiv) Title insurance in favor of the mortgagee or the
Company, KC Holdings, their respective subsidiaries and/or their
Related Entities is maintained with respect to each shopping center
property owned by any such entity in an amount at least equal to (a)
the cost of acquisition of such property or (b) the cost of
construction of such property (measured at the time of such
construction), except, in each case, where the failure to maintain
such title insurance would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise or of KC Holdings and its subsidiaries
considered as one enterprise.
(xxv) The mortgages and deeds of trust encumbering the
properties and assets described in the Prospectus are not convertible
nor does any of the Company, KC Holdings or their respective
subsidiaries hold a participating interest therein, and said
mortgages and deeds of trust with respect to property owned by the
Company and its subsidiaries are not cross-defaulted or
cross-collateralized to any property owned by KC Holdings and its
subsidiaries.
(xxvi) Each of the partnership and joint venture agreements to
which the Company or any of its subsidiaries is a party, and which
relates to real property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable party and
constitutes the valid agreement thereof, enforceable in accordance
with its terms, except as limited by (a) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or remedies
of creditors or (b) the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at
law, and the discretion of the court before which any proceeding
therefor may be brought, and the execution, delivery and performance
of any of such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or default under, the
charter or by-laws of such party or any material contract, lease or
other instrument to which such party is a party or by which its
properties may be bound or any law, administrative regulation or
administrative or court order or decree.
(xxvii) None of the Company, KC Holdings or any of their
respective subsidiaries has any knowledge of (a) the unlawful
presence of any hazardous substances, hazardous
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materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the properties owned by it or the
Related Entities, or (b) any unlawful spills, releases, discharges or
disposal of Hazardous Materials that have occurred or are presently
occurring off such properties as a result of any construction on or
operation and use of such properties which presence or occurrence
would have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise or
of KC Holdings and its subsidiaries considered as one enterprise; and
in connection with the construction on or operation and use of the
properties owned by the Company, KC Holdings, their respective
subsidiaries and Related Entities, each of the Company, KC Holdings
and their respective subsidiaries represents that, as of each
Representation Date, it has no knowledge of any material failure to
comply with all applicable local, state and federal environmental
laws, regulations, ordinances and administrative and judicial orders
relating to the generation, recycling, reuse, sale, storage,
handling, transport and disposal of any Hazardous Materials.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters in connection with the
offering of the Underwritten Securities shall be deemed a representation and
warranty by the Company to each Underwriter participating in such offering as
to the matters covered thereby on the date of such certificate and, unless
subsequently amended or supplemented, at each Representation Date subsequent
thereto.
Section 2. Purchase and Sale. (a) The several commitments of
the Underwriters to purchase the Underwritten Securities pursuant to the
applicable Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties herein contained and shall be subject to
the terms and conditions herein set forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the applicable Terms Agreement relating
to the Initial Underwritten Securities, an option to the Underwriters named in
such Terms Agreement, severally and not jointly, to purchase up to the number
of Option Securities set forth therein at a price per Option Security equal to
the price per Initial Underwritten Security, less an amount equal to any
dividends declared by the Company and paid or payable on the Initial
Underwritten Securities but not on the Option Underwritten Securities. Such
option, if granted, will expire 30 days or such lesser number of days as may
be specified in the applicable Terms Agreement after the Representation Date
relating to the Initial Underwritten Securities, and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Underwritten Securities upon notice by you to the Company setting
forth the number of Option Securities as to which the several Underwriters are
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<PAGE>
then exercising the option and the time, date and place of payment and
delivery for such Option Securities. Any such time and date of delivery (a
"Date of Delivery") shall be determined by you, but shall not be later than
three full business days and not be earlier than two full business days after
the exercise of said option, unless otherwise agreed upon by you and the
Company. If the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Underwritten Securities each such
Underwriter has severally agreed to purchase as set forth in the applicable
Terms Agreement bears to the total number of Initial Underwritten Securities
(except as otherwise provided in the applicable Terms Agreement), subject to
such adjustments as you in your discretion shall make to eliminate any sales
or purchases of fractional Initial Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made at
the office of Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603, or at such other place as shall be agreed upon by you and the Company,
at 10:00 A.M., New York City time, on the third business day (unless postponed
in accordance with the provisions of Section 10) following the date of the
applicable Terms Agreement or, if pricing takes place after 4:30 p.m., New
York City time, on the date of the applicable Terms Agreement, on the fourth
business day (unless postponed in accordance with the provisions of
Section 10) following the date of the applicable Terms Agreement or at such
other time as shall be agreed upon by you and the Company (each such time and
date being referred to as a "Closing Time"). In addition, in the event that
any or all of the Option Securities are purchased by the Underwriters, payment
of the purchase price for, and delivery of certificates representing, such
Option Securities, shall be made at the above-mentioned offices of Chapman and
Cutler, or at such other place as shall be agreed upon by you and the Company
on each Date of Delivery as specified in the notice from you to the Company.
Unless otherwise specified in the applicable Terms Agreement, payment shall be
made to the Company by wire transfer or certified or official bank check or
checks in Federal or similar same-day funds payable to the order of the
Company against delivery to you for the respective accounts of the
Underwriters for the Underwritten Securities to be purchased by them. The
Underwritten Securities or, if applicable, Depositary Receipts evidencing the
Depositary Shares, shall be in such authorized denominations and registered in
such names as you may request in writing at least one business day prior to
the applicable Closing Time or Date of Delivery, as the case may be. The
Underwritten Securities, which may be in temporary form, will be made
available for examination and packaging by you on or before the first business
day prior to the Closing Time or Date of Delivery, as the case may be.
If authorized by the applicable Terms Agreement, the Underwriters
named therein may solicit offers to purchase Underwritten Securities from the
Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such
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<PAGE>
changes therein as the Company may approve. As compensation for arranging
Delayed Delivery Contracts, the Company will pay to you at Closing Time, for
the respective accounts of the Underwriters, a fee specified in the applicable
Terms Agreement for each of the Underwritten Securities for which Delayed
Delivery Contracts are made at the Closing Time as is specified in the
applicable Terms Agreement. Any Delayed Delivery Contracts are to be with
institutional investors of the types described in the Prospectus. At the
Closing Time, the Company will enter into Delayed Delivery Contracts (for not
less than the minimum number of Underwritten Securities per Delayed Delivery
Contract specified in the applicable Terms Agreement) with all purchasers
proposed by the Underwriters and previously approved by the Company as
provided below, but not for an aggregate number of Underwritten Securities in
excess of that specified in the applicable Terms Agreement. The Underwriters
will not have any responsibility for the validity or performance of Delayed
Delivery Contracts.
You shall submit to the Company, at least two business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least two business days prior to the Closing Time,
of the names of the institutions with which the making of Delayed Delivery
Contracts is approved by the Company and the number of Underwritten Securities
to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be
reduced by the number of Underwritten Securities covered by Delayed Delivery
Contracts, as to each Underwriter as set forth in a written notice delivered
by you to the Company; provided, however, that the total number of
Underwritten Securities to be purchased by all Underwriters shall be the total
number of Underwritten Securities covered by the applicable Terms Agreement,
less the number of Underwritten Securities covered by Delayed Delivery
Contracts.
Section 3. Covenants of the Company. The Company covenants with
you, and with each Underwriter participating in the offering of Underwritten
Securities, as follows:
(a) If the Company does not elect to rely on Rule 434 under the
1933 Act Regulations, immediately following the execution of the applicable
Terms Agreement, the Company will prepare a Prospectus Supplement setting
forth the number of Underwritten Securities covered thereby and their terms
not otherwise specified in the Prospectus pursuant to which the Underwritten
Securities are being issued, the names of the Underwriters participating in
the offering and the number of Underwritten Securities which each severally
has agreed to purchase, the names of the Underwriters acting as co-managers in
connection with the offerings, the price at which the Underwritten Securities
are to be purchased by the Underwriters from the
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<PAGE>
Company, the initial public offering price, if any, the selling concession and
reallowance, if any, any delayed delivery arrangements, and such other
information as you and the Company deem appropriate in connection with the
offering of the Underwritten Securities; and the Company will promptly
transmit copies of the Prospectus Supplement to the Commission for filing
pursuant to Rule 424(b) of the 1933 Act Regulations and will furnish to the
Underwriters named therein as may copies of the Prospectus (including such
Prospectus Supplement) as you shall reasonably request. If the Company elects
to rely on Rule 434 under the 1933 Act Regulations, immediately following the
execution of the applicable Terms Agreement, the Company will prepare an
abbreviated term sheet that complies with the requirements of Rule 434 under
the 1933 Act Regulations and will provide the Underwriters with copies of the
form of Rule 434 Prospectus, in such number as you shall reasonably request,
and promptly file or transmit for filing with the Commission the form of
Prospectus complying with Rule 434(c)(2) of the 1933 Act Regulations in
accordance with Rule 424(b) of the 1933 Act Regulations.
(b) The Company will notify you immediately, and confirm such
notice in writing, of (i) the effectiveness of any amendment to the
Registration Statement, (ii) the transmittal to the Commission for filing of
any Prospectus Supplement or other supplement or amendment to the Prospectus
or any document to be filed pursuant to the 1934 Act, (iii) the receipt of any
comments from the Commission, (iv) any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (v) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; and the
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(c) At any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, the Company will give you notice of its intention to
file or prepare any amendment to the Registration Statement or any amendment
or supplement to the Prospectus, whether pursuant to the 1933 Act, 1934 Act or
otherwise (including any revised prospectus which the Company proposes for use
by the Underwriters in connection with an offering of Underwritten Securities
which differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations), and will furnish you with copies of any such
amendment or supplement or other documents proposed to be filed or used a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file any such amendment or supplement or other documents
in a form to which you or counsel for the Underwriters shall reasonably
object.
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<PAGE>
(d) The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as such Underwriter reasonably requests.
(e) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations.
(f) If at any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities any event shall occur or condition exist as a result
of which it is necessary, in the opinion of counsel for the Underwriters or
counsel for the Company, to amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
either such counsel, at any such time to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, then the Company will promptly prepare
and file with the Commission such amendment or supplement, whether by filing
documents pursuant to the 1933 Act, the 1934 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(g) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities, the Warrant Securities,
if any, and the shares of Common Stock issuable upon conversion of the
Preferred Shares or the Depositary Shares, if any, for offering and sale under
the applicable securities laws and real estate syndication laws of such states
and other jurisdictions of the United States as you may designate. In each
jurisdiction in which the Underwritten Securities, the Warrant Securities, if
any, and the shares of Common Stock issuable upon conversion of the Preferred
Shares or the Depositary Shares, if any, have been so qualified, the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as may be
required for the distribution of the Underwritten Securities and the Warrant
Securities, if any; provided, however, that the Company shall not be obligated
to qualify as a foreign corporation in any jurisdiction where it is not so
qualified.
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(h) With respect to each sale of Underwritten Securities, the
Company will make generally available to its security holders as soon as
practicable, but not later than 90 days after the close of the period covered
thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the 1933 Act Regulations) covering a twelve-month period beginning
not later than the first day of the Company's fiscal quarter next following
the "effective date" (as defined in such Rule 158) of the Registration
Statement.
(i) The Company will use its best efforts to meet the requirements
to qualify as a oreal estate investment trusto under the Code for the taxable
year in which sales of the Underwritten Securities are to occur.
(j) The Company, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act in connection with sales of
the Underwritten Securities, will file all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the
time period prescribed by the 1934 Act and the 1934 Act Regulations.
(k) [Intentionally Left Blank]
(l) If the Preferred Shares or Depositary Shares are convertible
into shares of Common Stock or if Common Stock Warrants are issued, the
Company will reserve and keep available at all times, free of preemptive or
other similar rights, a sufficient number of shares of Common Stock or
Preferred Shares, as the case may be, for the purpose of enabling the Company
to satisfy any obligations to issue such shares upon conversion of the
Preferred Shares or the Depositary Shares, as the case may be, or upon
exercise of the Common Stock Warrants.
(m) If the Underwritten Securities are Common Stock, the Company
will use its best efforts to list such shares of Common Stock on the New York
Stock Exchange or such other national securities exchange on which the
Company's shares of Common Stock are then listed. If the Preferred Shares or
Depository Shares are convertible into shares of Common Stock, the Company
will use its best efforts to list the shares of Common Stock issuable upon
conversion of the Preferred Shares or Depositary Shares on the New York Stock
Exchange or such other national securities exchange on which the Company's
shares of Common Stock are then listed.
(n) The Company has complied and will comply with the provisions of
Florida H.B. 1771, codified as Section 517.075 of the Florida Statutes, 1987,
as amended, and all regulations thereunder relating to issuers doing business
with Cuba.
Section 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement
or the applicable Terms Agreement, including (i) the printing and filing of
the Registration Statement as originally filed and of each
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amendment thereto, (ii) the printing and filing of this Agreement and the
applicable Terms Agreement, (iii) the preparation, issuance and delivery of
the Underwritten Securities to the Underwriters and the Warrant Securities, if
any, (iv) the fees and disbursements of the Company's counsel and accountants,
(v) the qualification of the Underwritten Securities, the Warrant Securities,
if any, and the shares of Common Stock issuable upon conversion of the
Preferred Shares or the Depositary Shares, if any, under securities laws and
real estate syndication laws in accordance with the provisions of Section
3(g), including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey, (vi) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, and of the Prospectus and any amendments or supplements thereto,
including each abbreviated term sheet delivered by the Company pursuant to
Rule 434 of the 1933 Act Regulations, (vii) the printing and delivery to the
Underwriters of copies of the applicable Deposit Agreement, if any, and the
applicable Warrant Agreement, if any, (viii) any fees charged by nationally
recognized statistical rating organizations for the rating of the Securities,
(ix) the fees and expenses, if any, incurred with respect to the listing of
the Underwritten Securities, the Warrant Securities, if any, or the shares of
Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, on any national securities exchange, and (x) the
fees and expenses, if any, incurred with respect to any filing with the
National Association of Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance
with the provisions of Section 5 or Section 9(b)(i), the Company shall
reimburse the Underwriters named in such Terms Agreement for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters to purchase Underwritten Securities
pursuant to the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company herein contained, to the
accuracy of the statements of the Company's officers made in any certificate
pursuant to the provisions hereof, to the performance by the Company of all of
its covenants and other obligations hereunder, and to the following further
conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, (ii) if
Preferred Shares or Depositary Shares are being offered, the rating assigned
by any nationally recognized statistical rating organization to any preferred
stock of the Company as of the date of the applicable Terms Agreement shall
not have been lowered since such date nor shall any such rating organization
have publicly announced that it has placed any preferred stock of the Company
on what is commonly termed a "watch list" for
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possible downgrading, (iii) there shall not have come to your attention any
facts that would cause you to believe that the Prospectus, together with the
applicable Prospectus Supplement, at the time it was required to be delivered
to purchasers of the Underwritten Securities, included an untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at such time,
no misleading and (iv) the Underwritten Securities or the Common Stock
issuable upon conversion thereof, as applicable in accordance with Section
3(m) hereof, shall have been duly listed in accordance with such Section 3(m).
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Latham & Watkins, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the
State of Maryland and is in good standing with the State
Department of Assessments and Taxation of Maryland.
(ii) The Company has corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Prospectus.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which it owns or leases real property,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(iv) The authorized, issued and outstanding stock
of the Company is as set forth in the Prospectus under
"Capitalization" or in the latest balance sheet incorporated
by reference therein (except for subsequent issuances, if
any, pursuant to reservations, agreements, employee benefit
plans, dividend reinvestment plans or employee and director
stock option plans referred to in the Prospectus); and the
outstanding capital stock of the Company has been duly
authorized, validly issued, fully paid and non-assessable
and is not subject to preemptive or other similar rights
arising by operation of law or, to the best of such
counsel's knowledge otherwise.
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(v) The Underwritten Securities being sold
pursuant to the applicable Terms Agreement and, if
applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement, have
been duly and validly authorized by all necessary corporate
action and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this Agreement
and such Underwritten Securities, when issued and delivered
by the Company pursuant to this Agreement against payment of
the consideration set forth in the applicable Terms
Agreement or any Delayed Delivery Contract, will be validly
issued, fully paid and non-assessable and will not be
subject to preemptive or other similar rights arising by
operation of law or, to the best of such counsel's
knowledge, otherwise; and the Preferred Shares, if
applicable, conform to the provisions of the Articles
Supplementary.
(vi) If applicable, the Common Stock Warrants have
been duly authorized and, when issued and delivered pursuant
to this Agreement and countersigned by the Warrant Agent as
provided in the Warrant Agreement, will have been duly
executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Warrant
Agreement under which they are to be issued.
(vii) If applicable, the shares of Common Stock
issuable upon conversion of any of the Preferred Shares or
Depositary Shares, or the exercise of Warrant Securities,
have been duly and validly authorized and reserved for
issuance upon such conversion or exercise by all necessary
corporate action on the part of the Company and such shares,
when issued upon such conversion or exercise in accordance
with the charter of the Company, the Deposit Agreement, the
Terms Agreement, the Delayed Delivery Contract or the
Warrant Agreement, as the case may be, will be duly and
validly issued and will be fully paid and non-assessable,
and the issuance of such shares upon such conversion or
exercise will not be subject to preemptive or other similar
rights arising by operation of law or, to the best of such
counsel's knowledge, otherwise.
(viii) The applicable Warrant Agreement, if any, and
the applicable Deposit Agreement, if any, have been duly
authorized, executed and delivered by the Company, and
(assuming due authorization, execution and delivery by the
Warrant Agent in the case of the Warrant Agreement, and the
Depositary, in the case of the Deposit Agreement) each
constitutes a valid and legally binding agreement of the
Company enforceable in accordance with its terms; and the
Warrant Agreement, if any, and the Deposit Agreement, if
any, conforms in all material respects to all statements
relating thereto contained in the Prospectus.
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(ix) If applicable, upon execution and delivery of
the Depositary Receipts pursuant to the terms of the Deposit
Agreement, the persons in whose names such Depositary
Receipts are registered will be entitled to the rights
specified therein and in the Deposit Agreement.
(x) Each of this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, has
been duly authorized, executed and delivered by the Company.
(xi) The Registration Statement is effective under
the 1933 Act and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the
Commission.
(xii) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein,
as of their respective effective or issue dates, comply as
to form in all material respects with the requirements for
registration statements on Form S-3 under the 1933 Act and
the 1933 Act Regulations; it being understood, however, that
no opinion need be rendered with respect to the financial
statements, schedules and other financial and statistical
data included or incorporated by reference in the
Registration Statement or the Prospectus; it being
understood, further, that in passing upon the compliance as
to form of the Registration Statement and the prospectus,
such counsel may assume that the statements made therein are
correct and complete. If applicable, the Rule 434 Prospectus
conforms in all material respects to the requirements of
Rule 434 under the 1933 Act Regulations.
(xiii) Each document filed pursuant to the 1934 Act
and incorporated or deemed to be incorporated by reference
in the Prospectus (other than the financial statements,
schedules and other financial and statistical data included
therein, as to which no opinion need be rendered) complied
when so filed as to form in all material respects with the
1934 Act and the 1934 Act Regulations. In passing upon
compliance as to form of such documents, such counsel may
assume that the statements made therein are correct and
complete.
(xiv) If applicable, the relative rights
preferences, interests and powers of the Preferred Shares or
Depositary Shares, as the case may be, are as set forth in
the Articles Supplementary relating thereto, and all such
provisions are valid under the Maryland General Corporation
Law ("MGCL"); and, as applicable, the form of certificate
used to evidence Preferred Shares being represented by the
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Depositary Shares and the form of certificate used to
evidence the related Depositary Receipts are in due and
proper form under the MGCL and comply with all applicable
statutory requirements under the MGCL.
(xv) The Underwritten Securities, the Warrant
Securities, and the shares of Common Stock issuable upon
conversion of the Preferred Shares or Depositary Shares, if
applicable, conform in all material respects to the
statements relating thereto contained in the Prospectus.
(xvi) No authorization, approval or consent of any
court or governmental authority or agency is required that
has not been obtained in connection with the consummation by
the Company of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the applicable
Deposit Agreement, if any, or the applicable Warrant
Agreement, if any, except such as may be required under the
1933 Act, 1934 Act and state securities laws or real estate
syndication laws.
(xvii) Neither the Company nor any of its
subsidiaries is required to be registered under the 1940
Act.
(xviii) Commencing with the Company's taxable year
beginning January 1, 1992, the Company has been organized in
conformity with the requirements for qualification as a
"real estate investment trust," and its method of operation
will enable it to meet the requirements for qualification
and taxation as a "real estate investment trust" under the
Code, provided that such counsel's opinion as to this
matter shall be conditioned upon certain representations as
to factual matters made by the Company to such counsel as
described therein.
(xix) The statements set forth (a) in the Prospectus
under the caption "Certain Federal Income Tax Considerations
to the Company of its REIT Election" and (b) in the
Prospectus Supplement under the caption "Certain Federal
Income Tax Considerations," to the extent such statements
constitute matters of law, summaries of legal matters, or
legal conclusions, have been reviewed by them and are
accurate in all material respects.
The opinions rendered in (vi), (viii) and (ix) of
subsectiona(b)(1) are subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies
of creditors; and (ii) the effect of general
22
<PAGE>
principles of equity, whether enforcement is considered in a
proceeding in equity or at law, and the discretion of the court
before which any proceeding therefor may be brought.
(2) The favorable opinion, dated as of Closing Time, of
RobertaP. Schulman, Esq., counsel for the Company and KC Holdings, or
other counsel satisfactory to the Underwriters, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) To the best of his knowledge and information,
there are no legal or governmental proceedings pending or
threatened which are required to be disclosed in the
Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which
any of the property of the Company or its subsidiaries is
the subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material.
(ii) To the best of his knowledge and information,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to
be described or referred to in the Registration Statement or
the Prospectus or to be filed as exhibits to the
Registration Statement other than those described or
referred to therein or filed as exhibits thereto, the
descriptions thereof or references thereto are correct, and,
to the best of his knowledge and information, no default
exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage (except as otherwise
described in the Prospectus), loan agreement, note, lease or
other instrument so described, referred to or filed which
would have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business or
business prospects of the Company and its subsidiaries
considered as one enterprise or of KC Holdings and its
subsidiaries considered as one enterprise.
(iii) To the best of his knowledge and information,
the execution and delivery of this Agreement, the applicable
Terms Agreement, the applicable Deposit Agreement, if any,
or the applicable Warrant Agreement, if any, and the
consummation of the transactions contemplated herein and
therein and compliance by the Company with its obligations
hereunder and thereunder will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its
subsidiaries pursuant to any contract,
23
<PAGE>
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such action result in
violation of the provisions of the charter or by-laws of the
Company or any applicable law, administrative regulation or
administrative or court order or decree.
(iv) Each of the partnership and joint venture
agreements to which the Company or any of its subsidiaries
is a party, and which relates to real property described in
the Prospectus, has been duly authorized, executed and
delivered by such applicable party and constitutes the valid
agreement thereof, enforceable in accordance with its terms,
except as limited by bankruptcy and general equitable
principles and the execution, delivery and performance of
any of such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or default
under, the charter or by-laws of such party or any material
contract, lease or other instrument to which such party is a
party or by which its properties may be bound or any law,
administrative regulation or administrative or court order
or decree.
(v) The Company, KC Holdings, their respective
subsidiaries and their Related Entities hold title to the
properties and assets described in the Prospectus, subject
only to the liens and encumbrances securing indebtedness
reflected in the Prospectus and such other liens,
encumbrances and matters of record which do not materially
and adversely affect the value of such properties and assets
considered in the aggregate.
(vi) Each Significant Subsidiary of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, to
the best of his knowledge and information, is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which its owns or leases
real property, except where the failure to so qualify would
not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries
considered as one enterprise; and all of the issued and
outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, to the best of his
knowledge and information, is owned by the Company, directly
or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien,
24
<PAGE>
encumbrance, claim or equity, except for security interests
granted in respect of indebtedness of the Company or any of
its subsidiaries and described in the Prospectus.
(3) The favorable opinion, dated as of Closing Time, of
Chapman and Cutler, counsel for the Underwriters in form and
substance satisfactory to the Underwriters.
(4) In giving their opinions required by
subsectionsa(b)(1), (b)(2) and (b)(3), respectively, of this Section,
Latham & Watkins, RobertaP. Schulman, Esq. (or other counsel
satisfactory to the Underwriters) and Chapman and Cutler shall each
additionally state that nothing has come to their attention that
would lead them to believe that the Registration Statement or any
amendment thereto, at the time it became effective (or, if an
amendment to the Registration Statement or an Annual Report on
Form 10-K has been filed by the Company with the Commission
subsequent to the effectiveness of the Registration Statement, then
at the time such amendment becomes effective or at the time of the
most recent filing of such Annual Report, as the case may be) or at
the date of the applicable Terms Agreement, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus, at the date
of the applicable Terms Agreement or at Closing Time, included or
includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; it being understood that no opinion need be
rendered with respect to the financial statements, schedules and
other financial and statistical data included in the Registration
Statement or the Prospectus. In giving their opinions, Latham &
Watkins, Robert P. Schulman, Esq. (or other counsel satisfactory to
the Underwriters) and Chapman and Cutler may rely, (1) as to matters
involving the laws of the State of Maryland the opinion of Ballard
Spahr Andrews & Ingersoll (or other counsel reasonably satisfactory
to counsel for the Underwriters) in form and substance satisfactory
to counsel for the Underwriters, (2) as to all matters of fact, upon
certificates and written statements of officers and employees of and
accountants for the Company, and (3) as to the qualification and good
standing of the Company or any of its subsidiaries to do business in
any state or jurisdiction, upon certificates of appropriate
government officials or opinions of counsel in such jurisdictions.
(c) At Closing Time, there shall not have been, since the date of
the applicable Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business; and you
shall have received a
25
<PAGE>
certificate of the Chief Executive Officer, the President or Vice President
and the chief financial officer or chief accounting officer of the Company,
dated as of such Closing Time, to the effect that (i) there has been no such
material adverse change and (ii) the representations and warranties in Section
1 are true and correct with the same force and effect as through made on such
Closing Time. As used in this Section 5(c), the term "Prospectus" means the
Prospectus in the form first used by the Underwriters to confirm sales of the
Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you
shall have received from Coopers & Lybrand L.L.P. a letter dated such date, in
form and substance satisfactory to you, to the effect that (i) they are
independent accountants with respect to the Company within the meaning of the
1933 Act and the 1933 Act Regulations thereunder; (ii) it is their opinion
that the consolidated financial statements and financial statement schedules
of the Company and the historical summaries of revenue and certain operating
expenses for the properties related thereto included or incorporated by
reference in the Registration Statement and the Prospectus and audited by them
and covered by their opinions therein comply as to form in all material
respects with the applicable accounting requires of the 1933 Act and the 1933
Act Regulations; (iii) they have performed limited procedures, not
constituting an audit, including a reading of the latest available unaudited
interim consolidated financial statements of the Company, a reading of the
minute books of the Company, inquiries of certain officials of the Company who
have responsibility for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, and on the basis
of such limited review and procedures nothing came to their attention that
caused them to believe that (A) any material modifications should be made to
the unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration Statement
and the Prospectus for them to be in conformity with generally accepted
accounting principles, (B) the unaudited financial statements and financial
statement schedules of the Company included or incorporated by reference in
the Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the 1934 Act
as it relates to Form 10-Q and the 1934 Act Regulations, (C) the unaudited
operating data and balance sheet data of the Company in the Registration
Statement and the Prospectus under the caption "Selected Consolidated
Financial Data" were not determined on a basis substantially consistent with
that used in determining the corresponding amounts in the audited financial
statements included or incorporated by reference in the Registration Statement
and the Prospectus, or (D) at a specified date not more than three
26
<PAGE>
days prior to the date of the applicable Terms Agreement, there has been any
change in the capital stock of the Company or in the consolidated long-term
debt of the Company or any decrease in the net assets of the Company, as
compared with the amounts shown in the most recent consolidated balance sheet
included or incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of the most recent consolidated
statement of operations included or incorporated by reference in the
Registration Statement and the Prospectus to a specified date not more than
three days prior to the date of the applicable Terms Agreement, there were any
decreases, as compared with the corresponding period in the preceding year, in
consolidated revenues, or decrease in net income or net income per share of
the Company, except in all instances for changes, increases or decreases which
the Registration Statement and the Prospectus disclose have occurred or may
occur; and (iv) in addition to the audit referred to in their opinions and the
limited procedures referred to in clausea(iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information which are included or
incorporated by reference in the Registration Statement and the Prospectus and
which are specified by you, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting,
financial and other records of the Company and its subsidiaries identified in
such letter.
(e) At Closing Time, you shall have received from Coopers & Lybrand
L.L.P. a letter dated as of Closing Time to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities and the Warrant Securities, if any, as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Underwritten Securities and the
Warrant Securities, if any, as herein contemplated shall be satisfactory in
form and substance to you and counsel for the Underwriters.
(g) In the event the Underwriters exercise their option provided in
a Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by
the Company hereunder shall be true and correct as of each Date of Delivery,
and, at the relevant Date of Delivery, you shall have received:
(i) A certificate, dated such Date of Delivery, of the
Chief Executive Officer, the President or the chief financial or
chief accounting officer of the Company, in their capacities as such,
confirming that the certificate delivered at Closing Time pursuant to
Section 5(c) hereof remains true and correct as of such Date of
Delivery.
(ii) The favorable opinion of Latham & Watkins, counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of
27
<PAGE>
Delivery, relating to the Option Securities and otherwise
substantially to the same effect as the opinion required by Sections
5(b)(i) and 5(b)(iv) hereof.
(iii) The favorable opinion of Robert P. Schulman, Esq.,
counsel for the Company and KC Holdings, or other counsel
satisfactory to the Underwriters, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise substantially to the
same effect as the opinion required by Sections 5(b)(ii) and 5(b)(iv)
hereof.
(iv) The favorable opinion of Chapman and Cutler, counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise to the same effect as the opinion
required by Sections 5(b)(iii) and 5(b)(iv) hereof.
(v) A letter from Coopers & Lybrand L.L.P., in form and
substance satisfactory to you and dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished
to you pursuant to Section 5(d) hereof, except that the "specified
date" in the letter furnished pursuant to this Section 5(h)(v) shall
be a date not more than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to the Company at any time at or prior to
the Closing Time, and such termination shall be without liability of any party
to any other party except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 5 of the 1933 Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant
to Rule 430A(b) or Rule 434 of the 1933 Act Regulations, if
applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
the Prospectus (or any amendment or supplement thereto) or the
omission, or alleged omission therefrom, of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
28
<PAGE>
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission referred to in subsectiona(i) above, or any
such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever (including, the
fees and disbursements of counsel chosen by you), as incurred, which
was reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) and the Prospectus (or any amendment or supplement thereto);
provided further, that with respect to any preliminary prospectus, such
indemnity shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) if the person asserting any such
losses, liabilities, claims, damages or expenses purchased the Underwritten
Securities which are the subject thereof from such Underwriter and if such
person was not sent or given a copy of the Prospectus (excluding any documents
incorporated therein by reference) at or prior to confirmation of the sale of
such Underwritten Securities to such person in any case where such sending or
giving is required by the 1933 Act and the untrue statement or omission of a
material fact contained in such preliminary prospects was corrected in the
Prospectus and the Prospectus was delivered to such Underwriter a reasonable
amount of time prior to the date of delivery of such confirmation.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsectiona(a) of this Section, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you expressly
for
29
<PAGE>
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sough hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to
them which are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its terms, the
Company and the Underwriters with respect to the offering of the Underwritten
Securities shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and one or more of the Underwriters in respect of such
offering, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus in respect
of such offering bears to the initial public offering price appearing thereon
and the Company is responsible for the balance; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities purchased by it pursuant to the
applicable Terms Agreement and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay in respect of such losses, liabilities, claims, damages
and expenses. For purposes of this Section, each person, if any, who controls
an Underwriter within the meaning of Section 15 of the 1933 Act shall have the
same
30
<PAGE>
rights to contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as the Company.
Section 8. Representation, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or the applicable Terms Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any termination of this Agreement or
the applicable Terms Agreement, or investigation made by or on behalf of any
Underwriter or any controlling person, or by or on behalf of the Company and
shall survive delivery of and payment for the Underwritten Securities.
Section 9. Termination of Agreement. (a) This Agreement,
(excluding the applicable Terms Agreement) may be terminated for any reason at
any time by the Company or by you upon the giving of 30 days' written notice
of such termination to the other party hereto.
(b) You may also terminate the applicable Terms Agreement, by
notice to the Company, at any time at or prior to the Closing Time if
(i) there has been, since the date of such Terms Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) there has occurred any material adverse change in the
financial markets in the United States or any outbreak or escalation of
hostilities or other national or international calamity or crisis, the effect
of which is such as to make it, in your judgment, impracticable to market the
Underwritten Securities or enforce contracts for the sale of the Underwritten
Securities, or (iii) trading in any of the securities of the Company has been
suspended by the Commission or the New York Stock Exchange, or if trading
generally on either the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market has been suspended, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by either of said exchanges or by order of the Commission or
any other governmental authority, or if a banking moratorium has been declared
by Federal, New York or Maryland authorities, or (iv) Preferred Shares or
Depository Shares are being offered and the rating assigned by any nationally
recognized statistical rating organization to any preferred stock of the
Company as of the date of the applicable Terms Agreement shall have been
lowered since such date or if any such rating organization shall have publicly
announced that it has placed any preferred stock of the Company on what is
commonly termed a "watch list" for possible downgrading. As used in this
Section 9(b), the term "Prospectus" means the Prospectus in the form first
used by the Underwriters to confirm sales of the Underwritten Securities.
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<PAGE>
(c) In the event of any such termination, (x) the covenants set
forth in Section 3 with respect to any offering of Underwritten Securities
shall remain in effect in so long as any Underwriter owns any such
Underwritten Securities purchased from the Company pursuant to the applicable
Terms Agreement and (y) the covenant set forth in Section 3(h) hereof, the
provisions of Section 4 hereof, the indemnity and contribution agreements set
forth in Sections 6 and 7 hereof, and the provisions of Sections 8 and 13
hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at the Closing Time to purchase the
Underwritten Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), then you shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if however, you shall not
have completed such arrangements within such 24-hour period, then:
(a) if the total number of Defaulted Securities does not
exceed 10% of the total number of Underwritten Securities to be
purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters named in such Terms Agreement shall be obligated to
purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10%
of the total number of Underwritten Securities to be purchased
pursuant to such Terms Agreement, the applicable Terms Agreement
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a
termination of the applicable Terms Agreement, either you or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed c/o A.G. Edwards & Sons, Inc., One North
Jefferson Avenue, St. Louis, Missouri 63103, attention Richard E.
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<PAGE>
McDonnell, and notices to the Company shall be directed to it at 3333 New Hyde
Park Road, New Hyde Park, New York 11042-0020, attention of Milton Cooper,
Chairman of the Board.
Section 12. Parties. This Agreement and the applicable Terms
Agreement shall inure to the benefit of and be binding upon you and the
Company and any Underwriter who becomes a party of such Terms Agreement, and
their respective successors. Nothing expressed or mentioned in this Agreement
or the applicable Terms Agreement is intended or shall be construed to give
any person, firm or corporation, other than those referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or such Terms Agreement
or any provisions herein or therein contained. This Agreement and the
applicable Terms Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the parties
hereto and thereto and their respective successors and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Underwritten Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the
applicable Terms Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed in said State. Specified times of day refer to New York City time.
Section 14. Counterparts. This Agreement and the applicable
Terms Agreement may be executed in one or more counterparts, and if executed
in more than one counterpart the executed counterparts shall constitute a
single instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
KIMCO REALTY CORPORATION
By /s/ Michael V. Pappagallo
------------------------------
Name: Michael V. Pappagallo
Title: Vice President -- Chief Financial
Officer
33
<PAGE>
CONFIRMED AND ACCEPTED, as of
the date first above written:
A.G. EDWARDS & SONS, INC.
By /s/ Richard E. McDonnell
--------------------------
Name: Richard E. McDonnell
Title: Managing Director
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<PAGE>
KIMCO REALTY CORPORATION
(a Maryland Corporation)
Common Stock
TERMS AGREEMENT
Dated: _______________
To: Kimco Realty Corporation
3333 New Hyde Park Road
Suite 100
New Hyde Park, New York 11042-0020
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Representative") understand that Kimco Realty Corporation, a
Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its common stock, $.01 par value per share (the "Common Stock"), set
forth below (the "Underwritten Securities"). Subject to the terms and
conditions set forth or incorporated by reference herein, the underwriters
named below (the "Underwriters") offer to purchase, severally and not jointly,
the respective numbers of Initial Underwritten Securities (as defined in the
Underwriting Agreement referred to below) set forth below opposite their
respective names, and a proportionate share of Option Securities (as defined
in the Underwriting Agreement) to the extent any are purchased, at the
purchase price set forth below.
NUMBER OF SHARES
OF INITIAL
UNDERWRITTEN
UNDERWRITER SECURITIES
TOTAL ---------
The Underwritten Securities shall
have the following terms:
35
<PAGE>
Title of Securities:
Number of Shares:
Public offering price per share: $__________
Purchase price per share: $__________
Number of Option Securities:
Delayed Delivery Contracts: not authorized
Closing date and location:
All the provisions contained in the document attached as Annex A
hereto entitled "Kimco Realty Corporation--Common Stock, Warrants to Purchase
Common Stock, Preferred Stock and Depositary Shares--Underwriting Agreement"
are hereby incorporated by reference in their entirety herein and shall be
deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Terms defined in such document
are used herein as therein defined.
Please accept this offer no later than 7:00 P.M. (New York City time)
on __________, 199__ by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
A.G. EDWARDS & SONS, INC.
By
Name:
Title:
Acting for themselves and as
Representatives of the other
named Underwriters
ACCEPTED:
KIMCO REALTY CORPORATION
By
-----------------------------
Name:
Title:
36
<PAGE>
KIMCO REALTY CORPORATION
(a Maryland Corporation)
Common Stock
TERMS AGREEMENT
Dated: April 2l, 1998
To: Kimco Realty Corporation
3333 New Hyde Park Road
Suite 100
New Hyde Park, New York 11042-0020
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Underwriter") understand that Kimco Realty Corporation, a
Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its common stock, $.01 par value per share (the "Common Stock"), set
forth below (the "Underwritten Securities"). Subject to the terms and conditions
set forth or incorporated by reference herein, we offer to purchase the Initial
Underwritten Securities (as defined in the Underwriting Agreement referred to
below) to the extent any are purchased, at the purchase price set forth below.
The Underwritten Securities shall have the following terms:
Title of Securities: Common Stock, $.01 par value
Number of Shares: 546,075
Public offering price per share: $35.1613
Purchase price per share: $34.7950
Number of Option Securities: None
Delayed Delivery Contracts: not authorized
Closing date and location: April 24, 1998; Chapman and Cutler, 111 West Monroe
Street, Chicigo, IL 60603
Additional Closing Conditions Pursuant to Section 5 of the Underwriting
Agreement referred to below: Concurrently with the execution hereof, the
Underwriter shall have received from
<PAGE>
Ernst & Young, L.L.P., a letter dated such date, in form and substance
satisfactory to the Underwriter, with respect to The Price REIT, Inc.
All the provisions contained in the document attached as Annex A hereto
entitled "Kimco Realty Corporation--Common Stock, Warrants to Purchase Common
Stock, Preferred Stock and Depositary Shares--Underwriting Agreement" are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. Terms defined in such document are used herein as
therein defined.
Please accept this offer on April 21, 1998 by signing a copy of this
Terms Agreement in the space set forth below and returning the signed copy to
us.
Very truly yours,
A.G. EDWARDS & SONS, INC.
By /s/ Richard E. McDonnell
------------------------------
Name: Richard E. McDonnell
Title: Managing Director
ACCEPTED:
KIMCO REALTY CORPORATION
By /s/ Michael V. Pappagallo
-----------------------------
Name: Michael V. Pappagallo
Title: Vice President -- Chief Financial Officer
-2-
<PAGE>
KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
UNDERWRITING AGREEMENT
April 23, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281-1305
Ladies and Gentlemen:
Kimco Realty Corporation, a Maryland corporation (the
"Company"), proposes to issue and sell shares of Common Stock, $.01 par
value (the "Common Stock"), or warrants to purchase a number of shares of
Common Stock (the "Common Stock Warrants"), or both, or shares of
Preferred Stock, $1.00 par value (the "Preferred Shares"), from time to
time, in one or more offerings on terms to be determined at the time of
sale. The Preferred Shares may be offered in the form of depositary
shares (the "Depositary Shares") represented by depositary receipts (the
"Depositary Receipts"). The Common Stock Warrants will be issued pursuant
to a Common Stock Warrant Agreement (the "Warrant Agreement") between the
Company and a warrant agent (the "Warrant Agent"). Each series of
Preferred Shares may vary as to the specific number of shares, title,
stated value, liquidation preference, issuance price, ranking, dividend
rate or rates (or method of calculation), dividend payment dates, any
redemption or sinking fund requirements, any conversion provisions and
any other variable terms as set forth in the applicable articles
supplementary (each, the "Articles Supplementary") relating to such
Preferred Shares. As used herein, "Securities" shall mean the Common
Stock, the Common Stock Warrants, the Preferred Shares, the Depositary
Shares and the Depositary Receipts; and "Warrant Securities" shall mean
the Common Stock issuable upon exercise of Common Stock Warrants. As used
herein, "you" and "your", unless the context otherwise requires, shall
mean the parties to whom this Agreement is addressed together with the
other parties, if any, identified in the applicable Terms Agreement (as
hereinafter defined) as additional co-managers with respect to
Underwritten Securities (as hereinafter defined) purchased pursuant
thereto.
Whenever the Company determines to make an offering of
Securities through you or through an underwriting syndicate managed by
you, the Company will enter into an agreement
<PAGE>
(the "Terms Agreement") providing for the sale of such Securities (the
"Underwritten Securities") to, and the purchase and offering thereof by,
you and such other underwriters, if any, selected by you as have
authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the
sale of the Underwritten Securities or as a member of an underwriting
syndicate and any Underwriter substituted pursuant to Section 10 hereof).
The Terms Agreement relating to the offering of Underwritten Securities
shall specify the number of Underwritten Securities of each class or
series to be initially issued, including the number of Common Stock
Warrants, if any (the "Initial Underwritten Securities"), whether the
Initial Underwritten Securities shall be in the form of Depositary Shares
and the fractional amount of Preferred Shares represented by each
Depositary Share, the names of the Underwriters participating in such
offering (subject to substitution as provided in Section 10 hereof), the
number of Initial Underwritten Securities which each such Underwriter
severally agrees to purchase, the names of such of you or such other
Underwriters acting as co-managers, if any, in connection with such
offering, the price at which the Initial Underwritten Securities are to
be purchased by the Underwriters from the Company, any initial public
offering price, the time, date and place of delivery and payment, any
delayed delivery arrangements and any other variable terms of the Initial
Underwritten Securities (including, but not limited to, current ratings
(in the case of Preferred Shares and Depositary Shares only),
designations, liquidation preferences, conversion provisions, redemption
provisions and sinking fund requirements and the terms of the Warrant
Securities and the terms, prices and dates upon which such Warrant
Securities may be purchased). In addition, each Terms Agreement shall
specify whether the Company has agreed to grant to the Underwriters an
option to purchase additional Underwritten Securities to cover
over-allotments, if any, and the number of Underwritten Securities
subject to such option (the "Option Securities"). As used herein, the
term "Underwritten Securities" shall include the Initial Underwritten
Securities and all or any portion of the Option Securities agreed to be
purchased by the Underwriters as provided herein, if any. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto,
may take the form of an exchange of any standard form of written
telecommunication between you and the Company. Each offering of
Underwritten Securities through you or through an underwriting syndicate
managed by you will be governed by this Agreement, as supplemented by the
applicable Terms Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-37285) for the registration of the Securities and Warrant Securities
and certain of the Company's debt securities, under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"). Such
registration statement (including all pre-effective amendments thereto)
has been declared effective by the Commission, and the Company has filed
such post-effective amendments thereto as may have been required prior to
the execution of the applicable Terms Agreement and each such
post-effective amendment has been declared effective by the Commission.
Such registration statement (as so amended, if applicable), including all
information, if any, deemed to be a part thereof pursuant to Rule 434 of
the 1933 Act Regulations, is collectively referred to herein as the
"Registration Statement" and the final prospectus and the prospectus
supplement relating to the offering of the Underwritten Securities
2
<PAGE>
(the "Prospectus Supplement"), in the form first used to confirm sales by
the Underwriters for use in connection with the offering of the
Underwritten Securities, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), prior to the execution of the
applicable Terms Agreement. All references in this Agreement to financial
statements and schedules and other information which is "contained,"
"included" or "stated" in the Registration Statement or the Prospectus
(and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration Statement
or the Prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case
may be. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the "Prospectus" shall be deemed to
include, without limitation, the final or preliminary prospectus and the
term sheet or abbreviated term sheet, taken together, provided to the
Underwriters by the Company in reliance on Rule 434 under the 1933 Act
(the "Rule 434 Prospectus"). If the Company files a registration
statement with the Commission to register a portion of the Securities and
Warrant Securities and relies on Rule 462(b) for such registration
statement to become effective upon filing with the Commission (the "Rule
462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 333-37285) and the Rule 462 Registration
Statement.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you, as of the date
hereof, and to you and each other Underwriter named in the applicable
Terms Agreement, as of the date thereof, the Closing Time (as hereinafter
defined) and each Date of Delivery, if any (as hereinafter defined)(in
each case, a "Representation Date"), as follows:
(i) The Registration Statement and the Prospectus,
at the time the Registration Statement became effective and at
each time thereafter on which the Company filed an Annual Report
on Form 10-K with the Commission, complied, and as of each
Representation Date will comply, in all material respects with
the requirements of the 1933 Act and 1933 Act Regulations; the
Registration Statement, at the time the Registration Statement
became effective and at each time thereafter on which the
Company filed an Annual Report on Form 10-K with the Commission,
did not, and at each time thereafter on which any amendment to
the Registration Statement becomes effective or the Company
files an Annual Report on Form 10-K with the Commission and as
of each Representation Date will not, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus, as of the
date hereof, does not, and as of each Representation Date will
not, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light
3
<PAGE>
of the circumstances under which they were made, not
misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement or Prospectus made
in reliance upon and in conformity with information furnished
to the Company in writing by any Underwriter through you
expressly for use in the Registration Statement or Prospectus.
(ii) The accountants who certified the financial
statements, financial statement schedules and historical
summaries of revenue and certain operating expenses for the
properties related thereto included or incorporated by reference
in the Registration Statement and the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The historical financial statements included
or incorporated by reference in the Registration Statement and
the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as at the dates
indicated and the results of their operations for the periods
specified; except as may otherwise be stated in the Registration
Statement and the Prospectus, said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the financial
statement schedules and other financial information and data
included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information
required to be stated therein.
(iv) The historical summaries of revenue and certain
operating expenses included or incorporated by reference in the
Registration Statement and the Prospectus, if any, present
fairly the revenue and those operating expenses included in such
summaries for the periods specified in conformity with generally
accepted accounting principles; the pro forma condensed
consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, if
any, present fairly the pro forma financial position of the
Company and its consolidated subsidiaries as at the dates
indicated and the pro forma results of their operations for the
periods specified; and the pro forma condensed consolidated
financial statements, if any, have been prepared in conformity
with generally accepted accounting principles applied on a
consistent basis, the assumptions on which such pro forma
financial statements have been prepared are reasonable and are
set forth in the notes thereto, such pro forma financial
statements have been prepared, and the pro forma adjustments set
forth therein have been applied, in accordance with the
applicable accounting requirements of the 1933 Act and the 1933
Act Regulations, and such pro forma adjustments have been
properly applied to the historical amounts in the compilation of
such statements.
(v) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as may otherwise be stated therein or
contemplated thereby, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, (B) there have
been no transactions or acquisitions entered
4
<PAGE>
into by the Company or any of its subsidiaries other than those
arising in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as
one enterprise, and (C) except for regular quarterly dividends
on the Company's common stock, or dividends declared, paid or
made in accordance with the terms of any series of the
Company's preferred stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vi) The Company has been duly incorporated and is
validly existing as a corporation under the laws of Maryland and
is in good standing with the State Department of Assessments and
Taxation of Maryland with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus; and the Company is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the Articles
Supplementary relating to the Preferred Shares or Depositary
Shares, if applicable, will be in full force and effect as of
each Representation Date.
(vii) Each significant subsidiary (as defined in
Rule 1-02 of Regulation S-X promulgated under the 1933 Act) of
the Company (each, a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have
a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise; and all of the issued and outstanding capital stock
of each Significant Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, except for security interests granted in
respect of indebtedness of the Company or any of its
subsidiaries and referred to in the Prospectus.
(viii) The authorized, issued and outstanding stock
of the Company is as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements, employee benefit plans,
dividend reinvestment plans, employee and director stock option
plans or the exercise of convertible securities referred to in
the Prospectus); and the outstanding capital stock of the
Company has been duly authorized and validly issued and is fully
paid and non-assessable and is not subject to preemptive or
other similar rights.
5
<PAGE>
(ix) The Underwritten Securities being sold pursuant
to the applicable Terms Agreement and, if applicable, the
deposit of the Preferred Shares in accordance with the
provisions of a Deposit Agreement (each, a "Deposit Agreement"),
among the Company, the financial institution named in the
Deposit Agreement (the "Depositary") and the holders of the
Depositary Receipts issued thereunder, have, as of each
Representation Date, been duly authorized by the Company and
such Underwritten Securities have been duly authorized for
issuance and sale pursuant to this Agreement and such
Underwritten Securities, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth in the applicable Terms Agreement or any
Delayed Delivery Contract (as hereinafter defined), will be
validly issued, fully paid and non-assessable and will not be
subject to preemptive or other similar rights; the Preferred
Shares, if applicable, conform to the provisions of the Articles
Supplementary; and the Underwritten Securities being sold
pursuant to the applicable Terms Agreement conform in all
material respects to all statements relating thereto contained
in the Prospectus.
(x) If applicable, the Common Stock Warrants have
been duly authorized and, when issued and delivered pursuant to
this Agreement and countersigned by the Warrant Agent as
provided in the Warrant Agreement, will have been duly executed,
countersigned, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the
benefits provided by the Warrant Agreement under which they are
to be issued; the issuance of the Warrant Securities upon
exercise of the Common Stock Warrants will not be subject to
preemptive or other similar rights; and the Common Stock
Warrants conform in all material respects to all statements
relating thereto contained in the Prospectus.
(xi) If applicable, the shares of Common Stock
issuable upon conversion of any of the Preferred Shares or the
Depositary Shares, or the Warrant Securities, will have been
duly and validly authorized and reserved for issuance upon such
conversion or exercise by all necessary corporate action and
such shares, when issued upon such conversion or exercise, will
be duly and validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such
conversion or exercise will not be subject to preemptive or
other similar rights; the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary
Shares, or the Warrant Securities, conform in all material
respects to the descriptions thereof in the Prospectus.
(xii) The applicable Warrant Agreement, if any, and
the applicable Deposit Agreement, if any, will have been duly
authorized, executed and delivered by the Company prior to the
issuance of any applicable Underwritten Securities, and each
constitutes a valid and legally binding agreement of the Company
enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other
similar laws relating to or affecting creditors' rights
generally and by general equity principles (regardless of
whether enforcement is considered in a proceeding in equity or
at law); and the Warrant Agreement, if any, and the Deposit
Agreement, if any, each conforms in all material respects to all
statements relating thereto contained in the Prospectus.
6
<PAGE>
(xiii) If applicable, upon execution and delivery of
the Depositary Receipts pursuant to the terms of the Deposit
Agreement, the persons in whose names such Depositary Receipts
are registered will be entitled to the rights specified therein
and in the Deposit Agreement, except as enforcement of such
rights may be limited by bankruptcy, insolvency or other similar
laws relating to or affecting creditors' rights generally and by
general equity principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xiv) Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except for any such violation or
default that would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the execution,
delivery and performance of this Agreement, the applicable Terms
Agreement, the applicable Warrant Agreement, if any, or the
applicable Deposit Agreement, if any, and the consummation of
the transactions contemplated herein and therein and compliance
by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action, and
will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the
charter or by-laws of the Company or any applicable law,
administrative regulation or administrative or court order or
decree.
(xv) The Company has operated and intends to
continue to operate in such a manner as to qualify to be taxed
as a "real estate investment trust" under the Internal Revenue
Code of 1986, as amended (the "Code"), for the taxable year in
which sales of the Underwritten Securities are to occur.
(xvi) Neither the Company nor any of its
subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(xvii) There is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company,
threatened against or affecting the Company or any of its
subsidiaries which is required to be disclosed in the Prospectus
(other than as disclosed therein), or which might result in any
material adverse change in the condition, financial or
7
<PAGE>
otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and
adversely affect the consummation of this Agreement, the
applicable Terms Agreement, the applicable Warrant Agreement, if
any, or the applicable Deposit Agreement, if any, or the
transactions contemplated herein or therein; all pending legal
or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of its property or
assets is the subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and
there are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been so filed.
(xviii) Neither the Company nor any of its
subsidiaries is required to own or possess any trademarks,
service marks, trade names or copyrights in order to conduct the
business now operated by it, other than those the failure to
possess or own would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xix) No authorization, approval or consent of any
court or governmental authority or agency is required that has
not been obtained in connection with the consummation by the
Company of the transactions contemplated by this Agreement, the
applicable Terms Agreement, any Warrant Agreement or any Deposit
Agreement, except such as may be required under the 1933 Act or
the 1933 Act Regulations, state securities laws or real estate
syndication laws.
(xx) The Company and its subsidiaries possess such
certificates, authorities or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, other
than those the failure to possess or own would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, and neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(xxi) The Company has full corporate power and
authority to enter into this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, and this
Agreement has been, and as of each Representation Date, the
applicable Terms Agreement and the Delayed Delivery Contracts,
if any, will have been, duly authorized, executed and delivered
by the Company.
8
<PAGE>
(xxii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of
the 1934 Act and the rules and regulations of the Commission
under the 1934 Act (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the
time the Registration Statement became effective and as of the
applicable Representation Date or during the period specified in
Section 3(f), did not and will not include an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(xxiii) Except as otherwise disclosed in the
Prospectus and except as would not have a material adverse
effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise: (i) all
properties and assets described in the Prospectus are owned with
good and marketable title by the Company, KC Holdings, Inc., a
Delaware corporation ("KC Holdings"), their respective
subsidiaries and/or a joint venture or partnership in which any
such party is a participant (a "Related Entity"); (ii) all of
the leases under which any of the Company, KC Holdings, their
respective subsidiaries or, to the knowledge of the Company,
Related Entities holds or uses real properties or assets as a
lessee are in full force and effect, and neither the Company, KC
Holdings nor any of their respective subsidiaries or, to the
knowledge of the Company, Related Entities is in material
default in respect of any of the terms or provisions of any of
such leases and no claim has been asserted by anyone adverse to
any such party's rights as lessee under any of such leases, or
affecting or questioning any such party's right to the continued
possession or use of the leased property or assets under any
such leases; (iii) all liens, charges, encumbrances, claims or
restrictions on or affecting the properties and assets of any of
the Company, KC Holdings or their respective subsidiaries or
Related Entities which are required to be disclosed in the
Prospectus are disclosed therein; (iv) neither the Company, KC
Holdings nor any of their respective subsidiaries or, to the
knowledge of the Company, Related Entities nor any lessee of any
portion of any such party's properties is in default under any
of the leases pursuant to which any of the Company, KC Holdings
or their respective subsidiaries or, to the knowledge of the
Company, Related Entities leases its properties and neither the
Company, KC Holdings nor any of their respective subsidiaries or
Related Entities knows of any event which, but for the passage
of time or the giving of notice, or both, would constitute a
default under any of such leases; (v) no tenant under any of the
leases pursuant to which any of the Company, KC Holdings or
their respective subsidiaries or, to the knowledge of the
Company, Related Entities leases its properties has an option or
right of first refusal to purchase the premises demised under
such lease; (vi) each of the properties of any of the Company,
KC Holdings or, to the knowledge of the Company, their
respective subsidiaries or Related Entities complies with all
applicable codes and zoning laws and regulations; and (vii)
neither the Company nor KC Holdings nor any of their respective
subsidiaries has knowledge of any pending or threatened
condemnation, zoning change or other proceeding or action that
will in any manner affect the size of, use of, improvements on,
9
<PAGE>
construction on, or access to the properties of any of the
Company, KC Holdings or their respective subsidiaries or Related
Entities.
(xxiv) Title insurance in favor of the mortgagee or
the Company, KC Holdings, their respective subsidiaries and/or
their Related Entities is maintained with respect to each
shopping center property owned by any such entity in an amount
at least equal to (a) the cost of acquisition of such property
or (b) the cost of construction of such property (measured at
the time of such construction), except, in each case, where the
failure to maintain such title insurance would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise or of KC Holdings and its subsidiaries considered as
one enterprise.
(xxv) The mortgages and deeds of trust encumbering
the properties and assets described in the Prospectus are not
convertible nor does any of the Company, KC Holdings or their
respective subsidiaries hold a participating interest therein,
and said mortgages and deeds of trust with respect to property
owned by the Company and its subsidiaries are not
cross-defaulted or cross-collateralized to any property owned by
KC Holdings and its subsidiaries.
(xxvi) Each of the partnership and joint venture
agreements to which the Company or any of its subsidiaries is a
party, and which relates to real property described in the
Prospectus, has been duly authorized, executed and delivered by
such applicable party and constitutes the valid agreement
thereof, enforceable in accordance with its terms, except as
limited by (a) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or
remedies of creditors or (b) the effect of general principles of
equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which
any proceeding therefor may be brought, and the execution,
delivery and performance of any of such agreements did not, at
the time of execution and delivery, and does not constitute a
breach of, or default under, the charter or by-laws of such
party or any material contract, lease or other instrument to
which such party is a party or by which its properties may be
bound or any law, administrative regulation or administrative or
court order or decree.
(xxvii) None of the Company, KC Holdings or any of
their respective subsidiaries has any knowledge of (a) the
unlawful presence of any hazardous substances, hazardous
materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the properties owned by it or
the Related Entities, or (b) any unlawful spills, releases,
discharges or disposal of Hazardous Materials that have occurred
or are presently occurring off such properties as a result of
any construction on or operation and use of such properties
which presence or occurrence would have a material adverse
effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise or of KC
Holdings and its subsidiaries considered as one enterprise; and
in
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connection with the construction on or operation and use of
the properties owned by the Company, KC Holdings, their
respective subsidiaries and Related Entities, each of the
Company, KC Holdings and their respective subsidiaries
represents that, as of each Representation Date, it has no
knowledge of any material failure to comply with all applicable
local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to
the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters in connection with
the offering of the Underwritten Securities shall be deemed a
representation and warranty by the Company to each Underwriter
participating in such offering as to the matters covered thereby on the
date of such certificate and, unless subsequently amended or
supplemented, at each Representation Date subsequent thereto.
Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall
be deemed to have been made on the basis of the representations and
warranties herein contained and shall be subject to the terms and
conditions herein set forth.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company may grant, if so provided in the applicable
Terms Agreement relating to the Initial Underwritten Securities, an
option to the Underwriters named in such Terms Agreement, severally and
not jointly, to purchase up to the number of Option Securities set forth
therein at a price per Option Security equal to the price per Initial
Underwritten Security, less an amount equal to any dividends declared by
the Company and paid or payable on the Initial Underwritten Securities
but not on the Option Underwritten Securities. Such option, if granted,
will expire 30 days or such lesser number of days as may be specified in
the applicable Terms Agreement after the Representation Date relating to
the Initial Underwritten Securities, and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Underwritten Securities upon notice by you to the Company setting
forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time, date and place
of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by you, but
shall not be later than three full business days and not be earlier than
two full business days after the exercise of said option, unless
otherwise agreed upon by you and the Company. If the option is exercised
as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased
which the number of Initial Underwritten Securities each such Underwriter
has severally agreed to purchase as set forth in the applicable Terms
Agreement bears to the total number of Initial Underwritten Securities
(except as otherwise provided in the applicable Terms Agreement), subject
to such adjustments as you in your discretion shall make to eliminate any
sales or purchases of fractional Initial Underwritten Securities.
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(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made
at the office of Brown & Wood LLP, 58th Floor, One World Trade Center,
New York, New York 10048-0557, or at such other place as shall be agreed
upon by you and the Company, at 9:00 A.M., New York City time, on the
third business day (unless postponed in accordance with the provisions of
Section 10) following the date of the applicable Terms Agreement or, if
pricing takes place after 4:30 p.m., New York City time, on the date of
the applicable Terms Agreement, on the fourth business day (unless
postponed in accordance with the provisions of Section 10) following the
date of the applicable Terms Agreement or at such other time as shall be
agreed upon by you and the Company (each such time and date being
referred to as a "Closing Time"). In addition, in the event that any or
all of the Option Securities are purchased by the Underwriters, payment
of the purchase price for, and delivery of certificates representing,
such Option Securities, shall be made at the above-mentioned offices of
Brown & Wood LLP, or at such other place as shall be agreed upon by you
and the Company on each Date of Delivery as specified in the notice from
you to the Company. Unless otherwise specified in the applicable Terms
Agreement, payment shall be made to the Company by wire transfer or
certified or official bank check or checks in Federal or similar same-day
funds payable to the order of the Company against delivery to you for the
respective accounts of the Underwriters for the Underwritten Securities
to be purchased by them. The Underwritten Securities or, if applicable,
Depositary Receipts evidencing the Depositary Shares, shall be in such
authorized denominations and registered in such names as you may request
in writing at least one business day prior to the applicable Closing Time
or Date of Delivery, as the case may be. The Underwritten Securities,
which may be in temporary form, will be made available for examination
and packaging by you on or before the first business day prior to the
Closing Time or Date of Delivery, as the case may be.
If authorized by the applicable Terms Agreement, the
Underwriters named therein may solicit offers to purchase Underwritten
Securities from the Company pursuant to delayed delivery contracts
("Delayed Delivery Contracts") substantially in the form of Exhibit B
hereto with such changes therein as the Company may approve. As
compensation for arranging Delayed Delivery Contracts, the Company will
pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each
of the Underwritten Securities for which Delayed Delivery Contracts are
made at the Closing Time as is specified in the applicable Terms
Agreement. Any Delayed Delivery Contracts are to be with institutional
investors of the types described in the Prospectus. At the Closing Time,
the Company will enter into Delayed Delivery Contracts (for not less than
the minimum number of Underwritten Securities per Delayed Delivery
Contract specified in the applicable Terms Agreement) with all purchasers
proposed by the Underwriters and previously approved by the Company as
provided below, but not for an aggregate number of Underwritten
Securities in excess of that specified in the applicable Terms Agreement.
The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days
prior to the Closing Time, the names of any institutional investors with
which it is proposed that the Company will enter into Delayed Delivery
Contracts and the number of Underwritten Securities to be purchased by
each of them, and the Company will advise you, at least two business days
prior to the Closing
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Time, of the names of the institutions with which the making of Delayed
Delivery Contracts is approved by the Company and the number of
Underwritten Securities to be covered by each such Delayed Delivery
Contract.
The number of Underwritten Securities agreed to be purchased by
the several Underwriters pursuant to the applicable Terms Agreement shall
be reduced by the number of Underwritten Securities covered by Delayed
Delivery Contracts, as to each Underwriter as set forth in a written
notice delivered by you to the Company; provided, however, that the total
number of Underwritten Securities to be purchased by all Underwriters
shall be the total number of Underwritten Securities covered by the
applicable Terms Agreement, less the number of Underwritten Securities
covered by Delayed Delivery Contracts.
Section 3. Covenants of the Company. The Company covenants with
you, and with each Underwriter participating in the offering of
Underwritten Securities, as follows:
(a) If the Company does not elect to rely on Rule 434 under the
1933 Act Regulations, immediately following the execution of the
applicable Terms Agreement, the Company will prepare a Prospectus
Supplement setting forth the number of Underwritten Securities covered
thereby and their terms not otherwise specified in the Prospectus
pursuant to which the Underwritten Securities are being issued, the names
of the Underwriters participating in the offering and the number of
Underwritten Securities which each severally has agreed to purchase, the
names of the Underwriters acting as co-managers in connection with the
offering, the price at which the Underwritten Securities are to be
purchased by the Underwriters from the Company, the initial public
offering price, if any, the selling concession and reallowance, if any,
any delayed delivery arrangements, and such other information as you and
the Company deem appropriate in connection with the offering of the
Underwritten Securities; and the Company will promptly transmit copies of
the Prospectus Supplement to the Commission for filing pursuant to Rule
424(b) of the 1933 Act Regulations and will furnish to the Underwriters
named therein as many copies of the Prospectus (including such Prospectus
Supplement) as you shall reasonably request. If the Company elects to
rely on Rule 434 under the 1933 Act Regulations, immediately following
the execution of the applicable Terms Agreement, the Company will prepare
an abbreviated term sheet that complies with the requirements of Rule 434
under the 1933 Act Regulations and will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such number as you shall
reasonably request, and promptly file or transmit for filing with the
Commission the form of Prospectus complying with Rule 434(c)(2) of the
1933 Act Regulations in accordance with Rule 424(b) of the 1933 Act
Regulations.
(b) The Company will notify you immediately, and confirm such
notice in writing, of (i) the effectiveness of any amendment to the
Registration Statement, (ii) the transmittal to the Commission for filing
of any Prospectus Supplement or other supplement or amendment to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii)
the receipt of any comments from the Commission, (iv) any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information,
and (v) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
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<PAGE>
and the Company will make every reasonable effort to prevent the issuance
of any such stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, the Company will give you notice of its
intention to file or prepare any amendment to the Registration Statement
or any amendment or supplement to the Prospectus, whether pursuant to the
1933 Act, 1934 Act or otherwise (including any revised prospectus which
the Company proposes for use by the Underwriters in connection with an
offering of Underwritten Securities which differs from the Prospectus on
file at the Commission at the time the Registration Statement first
becomes effective, whether or not such revised prospectus is required to
be filed pursuant to Rule 424(b) of the 1933 Act Regulations, or any
abbreviated term sheet prepared in reliance on Rule 434 of the 1933 Act
Regulations), and will furnish you with copies of any such amendment or
supplement or other documents proposed to be filed or used a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or other documents in
a form to which you or counsel for the Underwriters shall reasonably
object.
(d) The Company will deliver to each Underwriter as many signed
and conformed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) as such Underwriter reasonably
requests.
(e) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request for
the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the
1934 Act or the 1934 Act Regulations.
(f) If at any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of
the Underwritten Securities any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriters or counsel for the Company, to amend or supplement the
Prospectus in order that the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of either such counsel, at any
such time to amend or supplement the Registration Statement or the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, then the Company will promptly prepare and file
with the Commission such amendment or supplement, whether by filing
documents pursuant to the 1933 Act, the 1934 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
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(g) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities, the Warrant
Securities, if any, and the shares of Common Stock issuable upon
conversion of the Preferred Shares or the Depositary Shares, if any, for
offering and sale under the applicable securities laws and real estate
syndication laws of such states and other jurisdictions of the United
States as you may designate. In each jurisdiction in which the
Underwritten Securities, the Warrant Securities, if any, and the shares
of Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, have been so qualified, the Company will file
such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as may
be required for the distribution of the Underwritten Securities and the
Warrant Securities, if any; provided, however, that the Company shall not
be obligated to qualify as a foreign corporation in any jurisdiction
where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the
Company will make generally available to its security holders as soon as
practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve
month period beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in such
Rule 158) of the Registration Statement.
(i) The Company will use its best efforts to meet the
requirements to qualify as a "real estate investment trust" under the
Code for the taxable year in which sales of the Underwritten Securities
are to occur.
(j) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in connection
with sales of the Underwritten Securities, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15
of the 1934 Act within the time periods prescribed by the 1934 Act and
the 1934 Act Regulations.
(k) The Company will not, during a period of 90 days from the
date of the applicable Terms Agreement, with respect to the Underwritten
Securities covered thereby, without your prior written consent, offer or
sell, grant any option for the sale of, or enter into any agreement to
sell, any Securities of the same class or series or ranking on a parity
with such Underwritten Securities (other than the Underwritten Securities
which are to be sold pursuant to such Terms Agreement) or, if such Terms
Agreement relates to Underwritten Securities that are convertible into
Common Stock, any Common Stock or any security convertible into Common
Stock (except for Common Stock issued pursuant to reservations,
agreements, employee benefit plans, dividend reinvestment plans, employee
and director stock option plans or as partial or full payment for
properties to be acquired by the Company), except as may be otherwise
provided in the applicable Terms Agreement.
(l) If the Preferred Shares or Depositary Shares are convertible
into shares of Common Stock or if Common Stock Warrants are issued, the
Company will reserve and keep available at all times, free of preemptive
or other similar rights, a sufficient number of shares of Common Stock or
Preferred Shares, as the case may be, for the purpose of enabling the
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Company to satisfy any obligations to issue such shares upon conversion
of the Preferred Shares or the Depositary Shares, as the case may be, or
upon exercise of the Common Stock Warrants.
(m) If the Preferred Shares or Depository Shares are convertible
into shares of Common Stock, the Company will use its best efforts to
list the shares of Common Stock issuable upon conversion of the Preferred
Shares or Depositary Shares on the New York Stock Exchange or such other
national exchange on which the Company's shares of Common Stock are then
listed.
(n) The Company has complied and will comply with the provisions
of Florida H.B. 1771, codified as Section 517.075 of the Florida
Statutes, 1987, as amended, and all regulations thereunder relating to
issuers doing business with Cuba.
Section 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this
Agreement or the applicable Terms Agreement, including (i) the printing
and filing of the Registration Statement as originally filed and of each
amendment thereto, (ii) the printing and filing of this Agreement and the
applicable Terms Agreement, (iii) the preparation, issuance and delivery
of the Underwritten Securities to the Underwriters and the Warrant
Securities, if any, (iv) the fees and disbursements of the Company's
counsel and accountants, (v) the qualification of the Underwritten
Securities, the Warrant Securities, if any, and the shares of Common
Stock issuable upon conversion of the Preferred Shares or the Depositary
Shares, if any, under securities laws and real estate syndication laws in
accordance with the provisions of Section 3(g), including filing fees and
the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey,
(vi) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto,
and of the Prospectus and any amendments or supplements thereto,
including each abbreviated term sheet delivered by the Company pursuant
to Rule 434 of the 1933 Act Regulations, (vii) the printing and delivery
to the Underwriters of copies of the applicable Deposit Agreement, if
any, and the applicable Warrant Agreement, if any, (viii) any fees
charged by nationally recognized statistical rating organizations for the
rating of the Securities, (ix) the fees and expenses, if any, incurred
with respect to the listing of the Underwritten Securities, the Warrant
Securities, if any, or the shares of Common Stock issuable upon
conversion of the Preferred Shares or the Depositary Shares, if any, on
any national securities exchange, and (x) the fees and expenses, if any,
incurred with respect to any filing with the National Association of
Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in
accordance with the provisions of Section 5 or Section 9(b)(i), the
Company shall reimburse the Underwriters named in such Terms Agreement
for all of their out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase Underwritten Securities
pursuant to the applicable Terms Agreement are subject to the accuracy of
the representations and warranties of the Company herein
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contained, to the accuracy of the statements of the Company's officers
made in any certificate pursuant to the provisions hereof, to the
performance by the Company of all of its covenants and other obligations
hereunder, and to the following further conditions:
(a) At Closing Time, (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, (ii) if Preferred Shares or Depositary Shares are being
offered, the rating assigned by any nationally recognized statistical
rating organization to any preferred stock of the Company as of the date
of the applicable Terms Agreement shall not have been lowered since such
date nor shall any such rating organization have publicly announced that
it has placed any preferred stock of the Company on what is commonly
termed a "watch list" for possible downgrading, and (iii) there shall not
have come to your attention any facts that would cause you to believe
that the Prospectus, together with the applicable Prospectus Supplement,
at the time it was required to be delivered to purchasers of the
Underwritten Securities, included an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at such time,
not misleading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Latham & Watkins, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and
is validly existing as a corporation under the laws of
the State of Maryland and is in good standing with the
State Department of Assessments and Taxation of
Maryland.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or
leases real property, except where the failure to so
qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(iv) The authorized, issued and outstanding
stock of the Company is as set forth in the Prospectus
under "Capitalization" (except for subsequent
issuances, if any, pursuant to reservations,
agreements, employee benefit plans, dividend
reinvestment plans or employee and director stock
option plans referred to in the Prospectus); and the
outstanding capital stock of the Company has been duly
authorized, validly issued, fully paid and
non-assessable and is not subject to preemptive or
other similar rights arising by operation of law or, to
the best of such counsel's knowledge otherwise.
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(v) The Underwritten Securities being sold
pursuant to the applicable Terms Agreement and, if
applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement,
have been duly and validly authorized by all necessary
corporate action and such Underwritten Securities have
been duly authorized for issuance and sale pursuant to
this Agreement and such Underwritten Securities, when
issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set
forth in the applicable Terms Agreement or any Delayed
Delivery Contract, will be validly issued, fully paid
and non-assessable and will not be subject to
preemptive or other similar rights arising by operation
of law or, to the best of such counsel's knowledge,
otherwise; and the Preferred Shares, if applicable,
conform to the provisions of the Articles
Supplementary.
(vi) If applicable, the Common Stock Warrants
have been duly authorized and, when issued and
delivered pursuant to this Agreement and countersigned
by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned,
issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to
the benefits provided by the Warrant Agreement under
which they are to be issued.
(vii) If applicable, the shares of Common
Stock issuable upon conversion of any of the Preferred
Shares or Depositary Shares, or the exercise of Warrant
Securities, have been duly and validly authorized and
reserved for issuance upon such conversion or exercise
by all necessary corporate action on the part of the
Company and such shares, when issued upon such
conversion or exercise in accordance with the charter
of the Company, the Deposit Agreement, the Terms
Agreement, the Delayed Delivery Contract or the Warrant
Agreement, as the case may be, will be duly and validly
issued and will be fully paid and non-assessable, and
the issuance of such shares upon such conversion or
exercise will not be subject to preemptive or other
similar rights arising by operation of law or, to the
best of such counsel's knowledge, otherwise.
(viii) The applicable Warrant Agreement, if
any, and the applicable Deposit Agreement, if any, have
been duly authorized, executed and delivered by the
Company, and (assuming due authorization, execution and
delivery by the Warrant Agent in the case of the
Warrant Agreement, and the Depositary, in the case of
the Deposit Agreement) each constitutes a valid and
legally binding agreement of the Company enforceable in
accordance with its terms; and the Warrant Agreement,
if any, and the Deposit Agreement, if any, each
conforms in all material respects to all statements
relating thereto contained in the Prospectus.
(ix) If applicable, upon execution and
delivery of the Depositary Receipts pursuant to the
terms of the Deposit Agreement, the persons in whose
names such Depositary Receipts are registered will be
entitled to the rights specified therein and in the
Deposit Agreement.
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(x) Each of this Agreement, the applicable
Terms Agreement and the Delayed Delivery Contracts, if
any, has been duly authorized, executed and delivered
by the Company.
(xi) The Registration Statement is effective
under the 1933 Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued under the
1933 Act or proceedings therefor initiated or
threatened by the Commission.
(xii) The Registration Statement and the
Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or
issue dates, comply as to form in all material respects
with the requirements for registration statements on
Form S-3 under the 1933 Act and the 1933 Act
Regulations; it being understood, however, that no
opinion need be rendered with respect to the financial
statements, schedules and other financial and
statistical data included or incorporated by reference
in the Registration Statement or the Prospectus; it
being understood, further, that in passing upon the
compliance as to form of the Registration Statement and
the Prospectus, such counsel may assume that the
statements made therein are correct and complete. If
applicable, the Rule 434 Prospectus conforms in all
material respects to the requirements of Rule 434 under
the 1933 Act Regulations.
(xiii) Each document filed pursuant to the
1934 Act and incorporated or deemed to be incorporated
by reference in the Prospectus (other than the
financial statements, schedules and other financial and
statistical data included therein, as to which no
opinion need be rendered) complied when so filed as to
form in all material respects with the 1934 Act and the
1934 Act Regulations. In passing upon compliance as to
form of such documents, such counsel may assume that
the statements made therein are correct and complete.
(xiv) If applicable, the relative rights,
preferences, interests and powers of the Preferred
Shares or Depositary Shares, as the case may be, are as
set forth in the Articles Supplementary relating
thereto, and all such provisions are valid under the
Maryland General Corporation Law ("MGCL"); and, as
applicable, the form of certificate used to evidence
the Preferred Shares being represented by the
Depositary Shares and the form of certificate used to
evidence the related Depositary Receipts are in due and
proper form under the MGCL and comply with all
applicable statutory requirements under the MGCL.
(xv) The Underwritten Securities, the Warrant
Securities, and the shares of Common Stock issuable
upon conversion of the Preferred shares or Depository
shares, if applicable, conform in all material respects
to the statements relating thereto contained in the
Prospectus.
(xvi) No authorization, approval or consent of
any court or governmental authority or agency is
required that has not been obtained in connection with
the
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consummation by the Company of the transactions
contemplated by this Agreement, the applicable Terms
Agreement, the applicable Deposit Agreement, if any, or
the applicable Warrant Agreement, if any, except such
as may be required under the 1933 Act, 1934 Act and
state securities laws or real estate syndication laws.
(xvii) Neither the Company nor any of its
subsidiaries is required to be registered under the
1940 Act.
(xviii) Commencing with the Company's taxable
year beginning January 1, 1992, the Company has been
organized in conformity with the requirements for
qualification as a "real estate investment trust", and
its method of operation will enable it to meet the
requirements for qualification and taxation as a "real
estate investment trust" under the Code, provided that
such counsel's opinion as to this matter shall be
conditioned upon certain representations as to factual
matters made by the Company to such counsel as
described therein.
(xix) The statements set forth (a) in the
Prospectus under the caption "Certain Federal Income
Tax Considerations to the Company of its REIT Election"
and (b) in the Prospectus Supplement under the caption
"Certain Federal Income Tax Considerations", to the
extent such statements constitute matters of law,
summaries of legal matters, or legal conclusions, have
been reviewed by them and are accurate in all material
respects.
The opinions rendered in (vi), (viii) and (ix) of subsection
(b)(1) are subject to the following exceptions, limitations and
qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and
remedies of creditors; and (ii) the effect of general principles
of equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which
any proceeding therefor may be brought.
(2) The favorable opinion, dated as of Closing Time, of
Robert P. Shulman, Esq., counsel for the Company and KC
Holdings, or other counsel satisfactory to the Underwriters, in
form and substance satisfactory to counsel for the Underwriters,
to the effect that:
(i) To the best of his knowledge and
information, there are no legal or governmental
proceedings pending or threatened which are required to
be disclosed in the Prospectus, other than those
disclosed therein, and all pending legal or
governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of the
property of the Company or its subsidiaries is the
subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not
material.
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(ii) To the best of his knowledge and
information, there are no contracts, indentures,
mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in
the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement other
than those described or referred to therein or filed as
exhibits thereto, the descriptions thereof or
references thereto are correct, and, to the best of his
knowledge and information, no default exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, (except as otherwise
described in the Prospectus) loan agreement, note,
lease or other instrument so described, referred to or
filed which would have a material adverse effect on the
condition, financial or otherwise, or on the earnings,
business or business prospects of the Company and its
subsidiaries considered as one enterprise or of KC
Holdings and its subsidiaries considered as one
enterprise.
(iii) To the best of his knowledge and
information, the execution and delivery of this
Agreement, the applicable Terms Agreement, the
applicable Deposit Agreement, if any, or the applicable
Warrant Agreement, if any, and the consummation of the
transactions contemplated herein and therein and
compliance by the Company with its obligations
hereunder and thereunder will not conflict with or
constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them
may be bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject,
nor will such action result in violation of the
provisions of the charter or by-laws of the Company or
any applicable law, administrative regulation or
administrative or court order or decree.
(iv) Each of the partnership and joint venture
agreements to which the Company or any of its
subsidiaries is a party, and which relates to real
property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable
party and constitutes the valid agreement thereof,
enforceable in accordance with its terms, except as
limited by bankruptcy and general equitable principles
and the execution, delivery and performance of any of
such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or
default under, the charter or by-laws of such party or
any material contract, lease or other instrument to
which such party is a party or by which its properties
may be bound or any law, administrative regulation or
administrative or court order or decree.
(v) The Company, KC Holdings, their respective
subsidiaries and their Related Entities hold title to
the properties and assets described in the Prospectus,
subject only to the liens and encumbrances securing
indebtedness reflected in the
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Prospectus and such other liens, encumbrances and matters
of record which do not materially and adversely affect
the value of such properties and assets considered in
the aggregate.
(vi) Each Significant Subsidiary of the
Company has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate
its properties and to conduct its business as described
in the Prospectus and, to the best of his knowledge and
information, is duly qualified as a foreign corporation
to transact business and is in good standing in each
jurisdiction in which it owns or leases real property,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise; and all of the issued and
outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued,
is fully paid and non-assessable and, to the best of
their knowledge and information, is owned by the
Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, except for security
interests granted in respect of indebtedness of the
Company or any of its subsidiaries and described in the
Prospectus.
(3) The favorable opinion, dated as of Closing Time, of
Brown & Wood LLP, counsel for the Underwriters, with respect to
the matters set forth in (i), (v) to (xii), inclusive, and (xv)
of subsection (b)(1) of this Section.
(4) In giving their opinions required by subsections
(b)(1), (b)(2) and (b)(3), respectively, of this Section, Latham
& Watkins, Robert P. Shulman, Esq. (or other counsel
satisfactory to the Underwriters) and Brown & Wood LLP shall
each additionally state that nothing has come to their attention
that would lead them to believe that the Registration Statement
or any amendment thereto, at the time it became effective (or,
if an amendment to the Registration Statement or an Annual
Report on Form 10-K has been filed by the Company with the
Commission subsequent to the effectiveness of the Registration
Statement, then at the time such amendment becomes effective or
at the time of the most recent filing of such Annual Report, as
the case may be) or at the date of the applicable Terms
Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not
misleading or that the Prospectus, at the date of the applicable
Terms Agreement or at Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; it being understood that no opinion need
be rendered with respect to the financial statements, schedules
and other financial and statistical data included in the
Registration Statement or the Prospectus. In giving their
opinions, Latham & Watkins, Robert P. Shulman, Esq. (or other
counsel satisfactory to the Underwriters) and Brown &
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Wood LLP may rely, (1) as to matters involving the laws of the
State of Maryland the opinion of Ballard Spahr Andrews &
Ingersoll (or other counsel reasonably satisfactory to counsel
for the Underwriters) in form and substance satisfactory to
counsel for the Underwriters, (2) as to all matters of fact,
upon certificates and written statements of officers and
employees of and accountants for the Company, and (3) as to the
qualification and good standing of the Company or any of its
subsidiaries to do business in any state or jurisdiction, upon
certificates of appropriate government officials or opinions of
counsel in such jurisdictions.
(c) At Closing Time, there shall not have been, since the date
of the applicable Terms Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business; and you shall have received a certificate of the
Chief Executive Officer, the President or Vice President and the chief
financial officer or chief accounting officer of the Company, dated as of
such Closing Time, to the effect that (i) there has been no such material
adverse change and (ii) the representations and warranties in Section 1
are true and correct with the same force and effect as though made on
such Closing Time. As used in this Section 5(c), the term "Prospectus"
means the Prospectus in the form first used by the Underwriters to
confirm sales of the Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement,
you shall have received from Coopers & Lybrand L.L.P. a letter dated such
date, in form and substance satisfactory to you, to the effect that (i)
they are independent accountants with respect to the Company within the
meaning of the 1933 Act and the 1933 Act Regulations thereunder; (ii) it
is their opinion that the consolidated financial statements and financial
statement schedules of the Company and the historical summaries of
revenue and certain operating expenses for the properties related thereto
included or incorporated by reference in the Registration Statement and
the Prospectus and audited by them and covered by their opinions therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations; (iii) they
have performed limited procedures, not constituting an audit, including a
reading of the latest available unaudited interim consolidated financial
statements of the Company, a reading of the minute books of the Company,
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters and such other inquiries and procedures
as may be specified in such letter, and on the basis of such limited
review and procedures nothing came to their attention that caused them to
believe that (A) any material modifications should be made to the
unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus for them to be in conformity with generally
accepted accounting principles, (B) the unaudited financial statements
and financial statement schedules of the Company included or incorporated
by reference in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the 1934 Act as it relates to Form 10-Q and the 1934 Act
Regulations, (C) the unaudited operating data and balance sheet data of
the Company in the Registration Statement and the Prospectus under the
caption "Selected Consolidated Financial Data" were not determined on a
basis
23
<PAGE>
substantially consistent with that used in determining the corresponding
amounts in the audited financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, or (D) at a
specified date not more than three days prior to the date of the
applicable Terms Agreement, there has been any change in the capital
stock of the Company or in the consolidated long term debt of the Company
or any decrease in the net assets of the Company, as compared with the
amounts shown in the most recent consolidated balance sheet included or
incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of the most recent
consolidated statement of operations included or incorporated by
reference in the Registration Statement and the Prospectus to a specified
date not more that three days prior to the date of the applicable Terms
Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues, or decrease in
net income or net income per share of the Company, except in all
instances for changes, increases or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur; and
(iv) in addition to the audit referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried
out certain specified procedures, not constituting an audit, with respect
to certain amounts, percentages and financial information which are
included or incorporated by reference in the Registration Statement and
the Prospectus and which are specified by you, and have found such
amounts, percentages and financial information to be in agreement with
the relevant accounting, financial and other records of the Company and
its subsidiaries identified in such letter.
(e) At Closing Time, you shall have received from Coopers &
Lybrand L.L.P. a letter dated as of Closing Time to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the "specified date" referred
to shall be a date not more than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Underwritten Securities and the Warrant Securities, if any,
as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Underwritten Securities and the Warrant Securities, if any, as
herein contemplated shall be satisfactory in form and substance to you
and counsel for the Underwriters.
(g) In the event the Underwriters exercise their option provided
in a Terms Agreement as set forth in Section 2(b) hereof to purchase all
or any portion of the Option Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company hereunder shall be true and correct
as of each Date of Delivery, and, at the relevant Date of Delivery, you
shall have received:
(1) A certificate, dated such Date of Delivery, of the
Chief Executive Officer, the President or the chief financial or
chief accounting officer of the Company, in their capacities as
such, confirming that the certificate delivered at Closing Time
pursuant to Section 5(c) hereof remains true and correct as of
such Date of Delivery.
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(2) The favorable opinion of Latham & Watkins, counsel
for the Company, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise substantially to the same
effect as the opinion required by Sections 5(b)(1) and 5(b)(4)
hereof.
(3) The favorable opinion of Robert P. Shulman, Esq.,
counsel for the Company and KC Holdings, or other counsel
satisfactory to the Underwriters, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise
substantially to the same effect as the opinion required by
Sections 5(b)(2) and 5(b)(4) hereof.
(4) The favorable opinion of Brown & Wood LLP, counsel
for the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise to the same effect as the
opinion required by Sections 5(b)(3) and 5(b)(4) hereof.
(5) A letter from Coopers & Lybrand L.L.P., in form and
substance satisfactory to you and dated such Date of Delivery,
substantially the same in scope and substance as the letter
furnished to you pursuant to Section 5(d) hereof, except that
the "specified date" in the letter furnished pursuant to this
Section 5(h)(5) shall be a date not more than three days prior
to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms
Agreement may be terminated by you by notice to the Company at any time
at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof.
Section 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act
as follows:
(1) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including the information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) or Rule 434 of
the 1933 Act Regulations, if applicable, or the omission or
alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged
untrue statement of a material fact included in the Prospectus
(or any amendment or supplement thereto) or the omission, or
alleged omission therefrom, of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or
25
<PAGE>
threatened, or of any claim whatsoever based upon any such
untrue statement or omission referred to in subsection (1)
above, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the
Company; and
(3) against any and all expense whatsoever (including,
the fees and disbursements of counsel chosen by you), as
incurred, which was reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is
not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through you expressly for use
in the Registration Statement (or any amendment thereto) and the
Prospectus (or any amendment or supplement thereto); provided further,
that with respect to any preliminary prospectus, such indemnity shall not
inure to the benefit of any Underwriter (or the benefit of any person
controlling such Underwriter) if the person asserting any such losses,
liabilities, claims, damages or expenses purchased the Underwritten
Securities which are the subject thereof from such Underwriter and if
such person was not sent or given a copy of the Prospectus (excluding any
documents incorporated therein by reference) at or prior to confirmation
of the sale of such Underwritten Securities to such person in any case
where such sending or giving is required by the 1933 Act and the untrue
statement or omission of a material fact contained in such preliminary
prospectus was corrected in the Prospectus and the Prospectus was
delivered to such Underwriter a reasonable amount of time prior to the
date of delivery of such confirmation.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, but only with respect to
untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company
by such Underwriter through you expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment
or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. If it so
elects within a reasonable time after receipt of such notice, an
26
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indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by
it and approved by the indemnified parties defendant in such action,
unless such indemnified parties reasonably object to such assumption on
the ground that there may be legal defenses available to them which are
different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in connection
with such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 is for any reason held to be unenforceable by
the indemnified parties although applicable in accordance with its terms,
the Company and the Underwriters with respect to the offering of the
Underwritten Securities shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Company and one or more of the
Underwriters in respect of such offering, as incurred, in such
proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on
the cover page of the Prospectus in respect of such offering bears to the
initial public offering price appearing thereon and the Company is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Underwritten Securities purchased by it pursuant to the
applicable Terms Agreement and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay in respect of such losses, liabilities,
claims, damages and expenses. For purposes of this Section, each person,
if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in
this Agreement or the applicable Terms Agreement, or contained in
certificates of officers of the Company submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any
termination of this Agreement or the applicable Terms Agreement, or
investigation made by or on behalf of any Underwriter or any controlling
person, or by or on behalf of the Company and shall survive delivery of
and payment for the Underwritten Securities.
27
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Section 9. Termination of Agreement. ERROR! BOOKMARK NOT DEFINED.
This Agreement (excluding the applicable Terms Agreement) may be
terminated for any reason at any time by the Company or by you upon the
giving of 30 days' written notice of such termination to the other party
hereto.
(b) You may also terminate the applicable Terms Agreement, by
notice to the Company, at any time at or prior to the Closing Time if (i)
there has been, since the date of such Terms Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, or (ii) there has occurred any material
adverse change in the financial markets in the United States or any
outbreak or escalation of hostilities or other national or international
calamity or crisis, the effect of which is such as to make it, in your
judgment, impracticable to market the Underwritten Securities or enforce
contracts for the sale of the Underwritten Securities, or (iii) trading
in any of the securities of the Company has been suspended by the
Commission or the New York Stock Exchange, or if trading generally on
either the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market has been suspended, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities
have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking
moratorium has been declared by Federal, New York or Maryland
authorities, or (iv) Preferred Shares or Depositary Shares are being
offered and the rating assigned by any nationally recognized statistical
rating organization to any preferred stock of the Company as of the date
of the applicable Terms Agreement shall have been lowered since such date
or if any such rating organization shall have publicly announced that it
has placed any preferred stock of the Company on what is commonly termed
a "watch list" for possible downgrading. As used in this Section 9(b),
the term "Prospectus" means the Prospectus in the form first used by the
Underwriters to confirm sales of the Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set
forth in Section 3 with respect to any offering of Underwritten
Securities shall remain in effect so long as any Underwriter owns any
such Underwritten Securities purchased from the Company pursuant to the
applicable Terms Agreement and (y) the covenant set forth in Section 3(h)
hereof, the provisions of Section 4 hereof, the indemnity and
contribution agreements set forth in Sections 6 and 7 hereof, and the
provisions of Sections 8 and 13 hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at the Closing Time to purchase
the Underwritten Securities which it or they are obligated to purchase
under the applicable Terms Agreement (the "Defaulted Securities"), then
you shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:
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<PAGE>
(a) if the total number of Defaulted Securities does not exceed
10% of the total number of Underwritten Securities to be purchased
pursuant to such Terms Agreement, the non-defaulting Underwriters named
in such Terms Agreement shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of
the total number of Underwritten Securities to be purchased pursuant to
such Terms Agreement, the applicable Terms Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default under
this Agreement and the applicable Terms Agreement.
In the event of any such default which does not result in a
termination of the applicable Terms Agreement, either you or the Company
shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given
if mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, World Financial
Center, North Tower, New York, New York 10281-1305, attention of Richard
B. Saltzman, Managing Director; and notices to the Company shall be
directed to it at 3333 New Hyde Park Road, New Hyde Park, New York
11042-0020, attention of Milton Cooper, Chairman of the Board.
Section 12. Parties. This Agreement and the applicable Terms
Agreement shall inure to the benefit of and be binding upon you and the
Company and any Underwriter who becomes a party to such Terms Agreement,
and their respective successors. Nothing expressed or mentioned in this
Agreement or the applicable Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than those
referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or such Terms Agreement or any provision
herein or therein contained. This Agreement and the applicable Terms
Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the parties hereto
and thereto and their respective successors and said controlling persons
and officers and directors and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
Underwritten Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the
applicable Terms Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day
refer to New York City time.
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Section 14. Counterparts. This Agreement and the applicable
Terms Agreement may be executed in one or more counterparts, and if
executed in more than one counterpart the executed counterparts shall
constitute a single instrument.
30
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a
binding agreement between you and the Company in accordance with its
terms.
Very truly yours,
KIMCO REALTY CORPORATION
By: /s/ Michael J. Flynn
-----------------------------------
Name: Michael J. Flynn
Title: President and Chief Operating
Officer
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ John C. Brady
-------------------------------------
Name: John C. Brady
Title: Managing Director
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KIMCO REALTY CORPORATION
(a Maryland Corporation)
Common Stock
TERMS AGREEMENT
---------------
Dated: April 23, 1998
To: Kimco Realty Corporation
3333 New Hyde Park Road
New Hyde Park, New York 11042
Attention: Chairman of the Board of Directors
Dear Sirs:
We understand that Kimco Realty Corporation, a Maryland corporation (the
"Company"), proposes to issue and sell 837,000 shares of its common stock (the
"Common Stock"), $.01 par value per share (the "Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter")
offers to purchase all of the Underwritten Securities at the purchase price set
forth below. The Company acknowledges that the Underwriter has informed it that
the Underwriter intends to deposit the Underwritten Securities with the trustee
of the Equity Investor Fund Cohen & Steers Realty Majors Portfolio (a Unit
Investment Trust) (the "Trust"), a registered unit investment trust under the
Investment Company Act of 1940, as amended, for which Merrill Lynch, Pierce,
Fenner & Smith Incorporated acts as sponsor and depositor, in exchange for units
(the "Units") in the Trust as soon after the execution and Delivery hereof as in
the judgement of the Underwriter is advisable.
<PAGE>
The Underwritten Securities shall have the following terms:
Title of Securities: Common Stock, $.01 par value per share
Number of Shares per share: 837,000
Purchase price per share: $34.3500
Number of Option Securities: Not Applicable
Delayed Delivery Contracts: Not authorized
Closing date and location: April 29, 1998
Brown & Wood LLP
One World Trade Center
New York, New York 10048
All of the provisions contained in the Underwriting Agreement attached as
Annex A hereto are hereby incorporated by reference in their entirety herein and
shall be deemed to be a part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein. Terms defined in such
document are used herein as therein defined. In addition, Section 9 of such
Underwriting Agreement shall be amended to include a new subclause (v) to the
following effect:
"or (v) there has occurred any material adverse change in the
financial markets in the United States or any outbreak or escalation
of hostilities or other national or international calamity or crisis,
the effect of which is such as to make it, in your judgement,
impracticable or inadvisable to (x) commence or continue the offering
of the Units (as defined in the applicable Terms Agreement) to the
public or (y) enforce contracts for the sale of the Units."
<PAGE>
Please accept this offer no later than 7:00 P.M. (New York City time)
on April 23, 1998 by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ John C. Brady
---------------------------------
Name: John C. Brady
Title: Managing Director
Accepted:
KIMCO REALTY CORPORATION
By: /s/ Michael J. Flynn
-------------------------------
Name: Michael J. Flynn
Title: President and Chief Operating
Officer
