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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
May 18, 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 (Commission File Number) (IRS Employer
of incorporation) Identification No.)
3333 New Hyde Park Road
New Hyde Park, New York 11042-0020
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(Address of principal executive offices) (zip code)
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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Item 5 Other Events
Attached and incorporated by reference as Exhibit 4.(a) to this report
on Form 8-K is the Purchase Agreement (the "Purchase Agreement"), dated as of
May 18, 1998, among Kimco Realty Corporation, a Maryland corporation ("Kimco"),
The Price REIT, Inc., a Maryland corporation ("Price REIT") and LB I Group Inc.
(the "Initial Purchaser"), with Exhibits.
Item 7 Financial Statements and Exhibits
Exhibits 1(k) and 1(l) listed below are filed as exhibits and are
incorporated by reference into the registration statement on Form S-3 and all
amendments thereto (No. 333-37285).
Exhibits
1(k) Underwriting Agreement, dated May 27, 1998, between PaineWebber
Incorporated and Kimco Realty Corporation.
1(l) Terms Agreement, dated May 27, 1998, between PaineWebber
Incorporated and Kimco Realty Corporation.
4(a) Purchase Agreement, dated as of May 18, 1998, among Kimco Realty
Corporation, The Price REIT Inc. and LB I Group Inc., with exhibits.
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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: June 4, 1998
By: /s/ Michael V. Pappagallo
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Michael V. Pappagallo
Chief Financial Officer and
Vice President
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Exhibit 1(k)
KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
UNDERWRITING AGREEMENT
May 27, 1998
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
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 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
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"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 (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"
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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 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
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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 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
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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.
(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
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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.
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(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
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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.
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(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,
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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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<PAGE>
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.
(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
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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) 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.
(l) 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.
(m) 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 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.
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(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 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
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<PAGE>
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.
(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
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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 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.
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
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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 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
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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) and
(b)(3), respectively, of this Section, Latham & Watkins 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. Schulman, 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
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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
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
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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.
(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. 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)(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.
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(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 the Underwriters harmless,
their directors, officers, employees and agents and each person, if any, who
controls such Underwriters within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim asserted),
as and when incurred to which the Underwriters, or any such person, may become
subject under the 1933 Act, the 1934 Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
1934 Act and deemed to be incorporated by reference into the Prospectus, or in
any application or other document executed by or on behalf of the Company or
based on written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Securities under the securities or blue
sky laws thereof or filed with the Commission, the omission or alleged omission
to state in such document a material fact required to be stated in it or
necessary to make the statements in it, in the light of the circumstances under
which they are made, not misleading or any act or failure to act or any alleged
act or failure to act by the Underwriters in connection with, or relating in any
manner to, the Securities or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by the clause or above
(provided that the Company shall not be liable under this clause (iii) to the
extent it is finally judicially determined by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by the
Underwriters through their gross negligence or willful misconduct); provided
that the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Securities in the
public offering to any person and is based on an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information relating to the Underwriters furnished in writing to the Company by
the Underwriters expressly for inclusion in the Registration Statement or the
Prospectus. The Underwriters confirm to the
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Company and the Company acknowledges that only the following information
appearing in the Prospectus with respect to the public offering of the
Securities has been furnished to the Company by the Underwriters for use in the
Prospectus: (i) the name of the Underwriters contained on the cover page and
back cover page of the Prospectus Supplement; (ii) the stabilization legend on
the inside front cover page of the Prospectus Supplement; and (iii) the
information in the 2nd paragraph under the caption "Underwriting" in the
Prospectus Supplement. This indemnity agreement will be in addition to any
liability that the Company might otherwise have.
(b) The Underwriters will indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, each director of the Company and each
officer of the Company who signs the Registration Statement to the same extent
as the foregoing indemnity from the Company to the Underwriters, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to the
Underwriters furnished in writing to the Company by the Underwriters expressly
for use in the Registration Statement or the Prospectus. This indemnity will be
in addition to any liability that the Underwriters might otherwise have;
provided, however, that in no case shall the Underwriters be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by the Underwriters.
(c) Any party that proposes to assert the right to be indemnified under
this Section will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section, notify each such indemnifying
party of the commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve it from
any liability that it may have to any indemnified party under the foregoing
provisions of this Section 6 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party similarly notified, to
assume indemnified party, jointly with any other indemnifying party similarly
notified, to assume the defense of the action, with counsel reasonably
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (i) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (ii) the indemnified party has reasonably concluded (based
on advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available
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to the indemnifying party, (iii) a conflict or potential conflict exists (based
on advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (iv) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one additional firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld); provided, however, no
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section (c), if at any time an indemnified party shall
have requested any indemnifying party to reimburse the indemnified party for
fees and expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
Section 7. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6 is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Company or the Underwriters, the Company and the
Underwriters will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the 1933 Act, officers of
the Company who signed the Registration Statement and directors of the Company,
who also may be liable for contribution) to which the Company and the
Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth on the cover
page of the Prospectus Supplement. If, but
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only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material facts relates to information supplied by
the Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in
this Section, shall be deemed to include, for purpose of this Section, any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section, the Underwriters shall not be required to contribute
any amount in excess of the underwriting discounts and commissions received by
the Underwriters and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, any person who controls a party
to this Agreement within the meaning of the 1933 Act will have the same rights
to contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section, will notify any such party or parties from whom contribution
may be sought, but the omission so to notify will not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have under this Section. Except for a settlement entered into pursuant
to the last sentence of Section 6(c) hereof, no party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
The indemnity and the contribution agreements contained in Sections 6
and 7 and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters (ii) acceptance of
the Securities and payment therefor or (iii) any termination of this Agreement.
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
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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 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
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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 PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, attention of David Reynolds, 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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<PAGE>
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.
31
<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: /s/ Michael V. Pappagallo
---------------------------------
Name: Michael V. Pappagallo
Title: Chief Financial Officer --
Vice President
CONFIRMED AND ACCEPTED,
as of the date first
above written:
PAINEWEBBER INCORPORATED
By: /s/ David Reynolds
------------------------------
Name: David Reynolds
Title: Senior Vice President
32
<PAGE>
Exhibit 1(l)
KIMCO REALTY CORPORATION
(a Maryland Corporation)
Common Stock
TERMS AGREEMENT
Dated: May 27, 1998
To: Kimco Realty Corporation
3333 New Hyde Park Road
New Hyde Park, New York 11042-0020
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 780,487 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, PaineWebber 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 PaineWebber
Equity Trust REIT Series I (a Unit Investment Trust) (the "Trust"), a registered
unit investment trust under the Investment Company Act of 1940, as amended, for
which PaineWebber 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: 780,487
Purchase price per share: $36.5175
Number of Option Securities: Not Applicable
Delayed Delivery Contracts: Not authorized
Closing date and location: May 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."
2
<PAGE>
Please accept this offer no later than 7:00 P.M. (New York City time)
on May 27, 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,
PAINEWEBBER INCORPORATED
By: /s/ David Reynolds
--------------------------------
Name: David Reynolds
Title: Senior Vice President
Accepted:
KIMCO REALTY CORPORATION
By: /s/ Michael V. Pappagallo
----------------------------------
Name: Michael V. Pappagallo
Title: Chief Financial Officer and
Vice President
3
<PAGE>
Exhibit 4(a)
$65,000,000
The Price REIT, Inc.
and
Kimco Realty Corporation
Preferred Stock
PURCHASE AGREEMENT
May 18, 1998
LB I Group Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
The Price REIT, Inc., a Maryland corporation ("Price REIT"),
proposes to sell to you (the "Initial Purchaser") 65,000 shares of its Class A
Floating Rate Cumulative Preferred Stock, $.01 par value per share, with a
liquidation preference of $1,000 per share (the "Price REIT Preferred Stock").
Price REIT has entered into an Agreement and Plan of Merger dated as of January
13, 1998, as amended on March 5, 1998 and May 14, 1998 (the "Merger Agreement"),
among Kimco Realty Corporation, a Maryland corporation ("Kimco"), REIT Sub,
Inc., a Maryland corporation and a wholly-owned subsidiary of Kimco ("REIT
Sub"), and Price REIT, pursuant to which Price REIT will merge with and into
REIT Sub (the "Merger"). Each share of Price REIT Preferred Stock outstanding on
the effective date of the Merger (the "Merger Effective Date") will be converted
pursuant to the Merger into the right to receive, upon surrender of the
certificate representing such share, ten depositary shares (the "Kimco
Depositary Shares") each representing one-tenth of a share of Class E Floating
Rate Cumulative Preferred Stock, par value $1.00 per share, of Kimco ("Kimco
Preferred Stock"). The Price REIT Preferred Stock and the Kimco Preferred Stock
will be issued pursuant to Articles Supplementary attached hereto as Exhibits A
and B, respectively. The Kimco Depositary Shares will be issued pursuant to a
Deposit Agreement (the "Kimco Deposit Agreement") to be entered into by Kimco
and a financial institution (the "Kimco Depositary"), substantially in the form
of Exhibit C hereto.
If, prior to May 19 , 1999, the Merger has not been
consummated and the Price REIT Preferred Stock has not been repurchased by Price
REIT from the Initial Purchaser, Price REIT shall, promptly after such date,
exchange, or cause to be exchanged, the then outstanding Price REIT Preferred
Stock for depositary shares (the "Price REIT Depositary Shares") evidenced by
depositary receipts (the "Price REIT Depositary Receipts") representing that
<PAGE>
number of shares of Price REIT Preferred Stock then outstanding; provided,
however, that such exchange shall be conditioned upon the cooperation of the
Initial Purchaser and the Initial Purchaser does hereby agree to so cooperate
and to deposit the Price REIT Preferred Stock then outstanding as directed by
Price REIT as part of and as a condition to such exchange. The Price REIT
Depositary Shares will be issued pursuant to a Deposit Agreement (the "Price
REIT Deposit Agreement") to be entered into by Price REIT with a financial
institution (the "Price REIT Depositary"). The Price REIT Deposit Agreement will
be substantially in the form of the Kimco Deposit Agreement, but will provide
for the delivery to the Price REIT Depositary by the Initial Purchaser of the
Price REIT Preferred Stock then outstanding, in exchange for the issuance by the
Price REIT Depositary to the Initial Purchaser, or as directed thereby, of the
Price REIT Depositary Receipts in respect of such shares of Price REIT Preferred
Stock, and shall further include an agreement (the "Repurchase Agreement")
between Price REIT and the Price REIT Depositary permitting Price REIT to
purchase, on and after the first dividend payment date to occur after May 18,
2004, at a price equal to $1,000 per share, plus any accrued and unpaid
dividends thereon, the Price REIT Preferred Stock delivered to the Price REIT
Depositary. The Price REIT Depositary Receipts will be issued by the Price REIT
Depositary to the holders thereof subject to the right of the Price REIT
Depositary to repurchase such Price REIT Depositary Receipts from time to time
in response to the exercise by Price REIT of its right to repurchase the Price
REIT Preferred Stock from the Price REIT Depositary pursuant to the Repurchase
Agreement.
As used in this Agreement, (a) (i) "Preferred Stock" means the
Price REIT Preferred Stock and/or the Kimco Preferred Stock, (ii) "Depositary
Shares" means the Kimco Depositary Shares and/or the Price REIT Depositary
Shares, (iii) "Issuer" means Price REIT and/or Kimco and (iv) "Purchased
Securities" means the Price REIT Preferred Stock and/or the Kimco Preferred
Stock and the Kimco Depositary Shares, each as the context may require, (b)
"Offered Securities" means (i) the Kimco Preferred Stock and the Kimco
Depositary Shares if the Merger is consummated and (ii) the Price REIT Preferred
Stock and the Price REIT Depositary Shares, subject to the Repurchase Agreement,
if the Merger is not consummated and (c) "Issuer of the Offered Securities"
means Kimco if the Merger is consummated and Price REIT if the Merger is not
consummated.
The Price REIT Preferred Stock will be sold to the Initial
Purchaser without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance on an exemption therefrom.
This is to confirm the agreement concerning the purchase of
the Price REIT Preferred Stock and the offering of the Offered Securities by the
Initial Purchaser.
1. Representations, Warranties and Agreements of Price REIT.
Price REIT represents, warrants and agrees on the date hereof and on the
Delivery Date (as defined in Section 5) and, if the Merger is not consummated,
on the Effective Date of the Registration Statement and the date of the
Prospectus (each as defined in Section 7) or any amendment or supplement thereto
(each, an "Offering Representation Date") that:
<PAGE>
3
(a) Price REIT has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification (except where the failure to so qualify would not have a
material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business affairs or
business prospects of Price REIT), and has all power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged; and Price REIT has no interest in any entity or
person other than (i) its ownership of all of the outstanding capital
stock of Price/Texas, Inc., a Texas corporation ("Price Texas"), (ii)
its ownership of all of the limited partnership interests in
Price/Baybrook, Ltd., a Texas limited partnership ("Price/Baybrook"),
Price/Baybrook's ownership of 50% of the membership interests of
Price/Fry Limited Liability Company, a Texas limited liability company
("Price/Fry"), and the ownership by Price Texas of all of the general
partnership interests of Price/Baybrook, (iii) its 90% membership
interest in Smithtown Venture Limited Liability Company, a New York
limited liability company ("Smithtown"), (iv) its 50% partnership
interest in Centrepoint Associates, L.L.P., an Arizona limited
liability partnership, (v) its 50% general partnership interest in
Hayden Plaza North Associates, an Arizona general partnership, (vi) its
75% membership interest in Bridgewater Community Retail Center, LLC, a
New Jersey limited liability company, (vii) its ownership of all of the
capital stock of Price Tennessee, Inc., a Tennessee corporation ("Price
Tennessee"), and the ownership by Price Tennessee of all of the general
partnership interests in Price Tennessee Properties, L.P., a Tennessee
limited partnership ("Tennessee L.P."), (viii) its ownership of all of
the limited partnership interests in Tennessee L.P., (ix) its ownership
of all of the general partnership interests in The Price REIT
Renaissance Partnership, L.P., a California limited partnership, (x)
its 100% membership interest in Price REIT Properties, LLC, a Delaware
limited liability company, (xi) its ownership of all of the capital
stock of Price/Franklin Property, Inc., a Delaware corporation, and
(xii) its 100% membership interest in Price/Franklin, LLC, a Delaware
limited liability company (collectively, the "Affiliates," and Price
REIT's interests in the Affiliates are referred to herein collectively
as the "Interests").
(b) Each of the Affiliates has been duly organized and is
validly existing as a corporation, limited liability company or
partnership, as the case may be, and in good standing under the laws of
its jurisdiction of organization, is duly qualified to do business and
is in good standing as a foreign corporation, limited liability company
or partnership, as the case may be, in each jurisdiction in which its
respective ownership or lease of property or the conduct of its
business requires such qualification (except where the failure to so
qualify would not have
<PAGE>
4
a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business affairs or
business prospects of Price REIT), and has all power and authority
necessary to own or hold its respective properties and to conduct the
business in which it is engaged; and none of the Affiliates, other than
Price/Baybrook, is a "significant subsidiary," as such term is defined
in Rule 405 of the rules and regulations under the Securities Act (the
"Rules and Regulations").
(c) Price REIT has an authorized capitalization as set forth
in its Annual Report on Form 10-K (the "Price REIT Form 10-K"),
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed by
Price REIT since the end of its most recent fiscal year (collectively,
the "Price REIT Exchange Act Documents") with the Securities and
Exchange Commission (the "Commission") or, with respect to any
representation made on an Offering Representation Date, the Prospectus
as amended or supplemented, and all of the issued shares of capital
stock of Price REIT have been duly and validly authorized and issued,
are fully paid and non-assessable and were not issued in violation of,
and are not subject to, preemptive or similar rights arising by
operation of the Maryland General Corporation Law (the "MGCL"), or
under the charter or bylaws of Price REIT or any agreement or
instrument, or otherwise; and Price REIT's Interests have been duly and
validly authorized and issued and are fully paid and non-assessable and
are owned by Price REIT free and clear of all liens, encumbrances,
equities or claims.
(d) The Price REIT Preferred Stock has been duly authorized by
Price REIT and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar
rights; the Price REIT Preferred Stock will, upon issuance, conform to
the provisions of the related Articles Supplementary; and if such
representation is made on an Offering Representation Date, the deposit
of the Price REIT Preferred Stock in accordance with the provisions of
the Price REIT Deposit Agreement has been duly authorized by Price REIT
and the Price REIT Preferred Stock and the Price REIT Depositary Shares
conform to the description thereof in the Prospectus.
(e) Upon execution and delivery of the Price REIT Depositary
Receipts pursuant to the terms of the Price REIT Deposit Agreement, the
persons in whose names such Price REIT Depositary Receipts are
registered will be entitled to the rights specified therein and in the
Price REIT 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).
<PAGE>
5
(f) The Price REIT Exchange Act Documents, when they were
filed with the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934 (the "Exchange
Act") and the rules and regulations of the Commission thereunder, and
none of such documents contained any untrue statement of a material
fact or omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed, when
such documents are filed with the Commission will conform in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) This Agreement has been duly authorized, executed and
delivered by Price REIT.
(h) The execution, delivery and performance of this Agreement
and the Price REIT Deposit Agreement by Price REIT and the consummation
by Price REIT of the transactions contemplated hereby and thereby and
compliance by Price REIT with its obligations hereunder and thereunder
does not and will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of Price REIT or any of the Affiliates
pursuant to, any indenture, mortgage, deed of trust, loan agreement,
partnership or joint venture agreement or other agreement or instrument
to which Price REIT or any of the Affiliates is a party or by which
Price REIT or any of the Affiliates is bound or to which any of the
property or assets of Price REIT or any of the Affiliates is subject,
nor will such actions result in any violation of the provisions of the
charter or by-laws of Price REIT or any governing document of any of
the Affiliates or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over Price
REIT or any of the Affiliates or any of their properties or assets; if
such representation is made on the Delivery Date, Price REIT is not
required in connection with its offer, sale and delivery of shares of
Price REIT Preferred Stock to the Initial Purchaser to register the
Price REIT Preferred Stock under the Securities Act; and, if such
representation is made on the Delivery Date or an Offering
Representation Date, except for (i) such consents, approvals,
authorizations, registrations or qualifications as have been obtained
or made, (ii) as may be required under applicable state securities laws
or real estate syndication laws in connection with the purchase of the
Price REIT Preferred Stock by the Initial Purchaser or the offering of
the Offered Securities by the Initial Purchaser and (iii) the
registration of the Offered Securities under the Securities Act in
connection with such offering, no consent, approval, authorization or
order of, or filing or registration
<PAGE>
6
with, any such court or governmental agency or body is or will be
required for the execution, delivery and performance of this Agreement
or the Price REIT Deposit Agreement by Price REIT and the consummation
of the transactions contemplated hereby and thereby.
(i) There are no contracts, agreements or understandings
between Price REIT and any person granting such person the right to
require Price REIT to file a registration statement under the
Securities Act with respect to any securities of Price REIT owned or to
be owned by such person or to require Price REIT to include such
securities in the securities registered pursuant to the Registration
Statement.
(j) Neither Price REIT nor any of the Affiliates has
sustained, since the date of the latest financial statements included
or incorporated by reference in the Price REIT Exchange Act Documents,
any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated by the
Price REIT Exchange Act Documents; and, since such date there has not
been any change in the capital stock (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 therein) or
long-term debt (except for borrowings and repayments under its credit
facility and the assumption of indebtedness in connection with the
acquisition of properties by Price REIT or its Affiliates, in each case
in the ordinary course of business) of Price REIT or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
Price REIT and the Affiliates, otherwise than as set forth or
contemplated in the Price REIT Exchange Act Documents.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of, or included or incorporated in
the Price REIT Exchange Act Documents or, with respect to any
representation made on an Offering Representation Date, the Prospectus
as amended or supplemented, present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at
the dates and for the periods indicated, and, except as described
therein, have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved.
(l) Ernst & Young LLP, who have certified certain financial
statements of Price REIT and whose report appears in the Price REIT
Form 10-K or is incorporated by reference therein, are independent
public accountants as required by the Securities Act and the Rules and
Regulations, and were independent accountants as
<PAGE>
7
required by the Securities Act and the Rules and Regulations, during
the periods covered by the financial statements on which they reported
contained or incorporated in the Price REIT Form 10-K.
(m) Price REIT and the Affiliates have good and marketable
title in fee simple to all real property and good marketable title to
all personal property identified in the Price REIT Exchange Act
Documents or, with respect to any representation made on an Offering
Representation Date, the Prospectus as amended or supplemented, as
being owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Price REIT
Exchange Act Documents or, with respect to any representation made on
an Offering Representation Date, the Prospectus as amended or
supplemented, or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed
to be made of such property by Price REIT and the Affiliates; and all
real property and buildings held under lease by Price REIT and the
Affiliates are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by Price REIT and the Affiliates.
(n) Price REIT and the Affiliates carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(o) There are no legal or governmental proceedings pending to
which Price REIT or any of the Affiliates is a party or of which any
property or assets of Price REIT or any of the Affiliates is the
subject which, if determined adversely to Price REIT or any of the
Affiliates, might have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business affairs or business prospects of Price REIT and the
Affiliates; and to the best of Price REIT's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(p) No relationship, direct or indirect, exists between or
among Price REIT on the one hand, and the directors, officers,
stockholders, customers or suppliers of Price REIT on the other hand,
which is required to be described in the Price REIT Exchange Act
Documents which is not so described.
(q) No labor disturbance by the employees of Price REIT exists
or, to the knowledge of Price REIT, is imminent which might be expected
to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business affairs
or business prospects of Price REIT.
<PAGE>
8
(r) Neither Price REIT nor any of the Affiliates (i) is in
violation of its charter, by-laws or other organizational document, as
applicable, (ii) is in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
partnership or joint venture agreement or other agreement or instrument
to which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or
to the conduct of its business which default or violation might have a
material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business affairs or
business prospects of Price REIT.
(s) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by
Price REIT or any of the Affiliates (or, to the knowledge of Price
REIT, any of their predecessors in interest) at, upon or from any of
the property now or previously owned or leased by Price REIT or the
Affiliates in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable, law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of
Price REIT; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any toxic
wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by Price REIT or any of the Affiliates or
with respect to which Price REIT or any of the Affiliates have
knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would not
be reasonably likely to have, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the general
affairs, management, financial position, stockholders' equity or
results of operations of Price REIT; and the terms "hazardous wastes",
"toxic wastes", "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.
<PAGE>
9
(t) Neither Price REIT nor any Affiliate is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 (the "Investment Company Act") and the rules and
regulations of the Commission thereunder.
(u) Price REIT has been and is organized in conformity with
the requirements for qualification as a real estate investment trust
under the Internal Revenue Code of 1986, as amended (the "Code"), and
its method of operation has at all times enabled, and its proposed
method of operation will enable, Price REIT to meet the requirements
for taxation as a real estate investment trust under the Code.
(v) Neither Price REIT nor any of its affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act) has directly,
or through any agent, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in
the Securities Act) which is or will be integrated with the sale of the
Price REIT Preferred Stock in a manner that would require the
registration under the Securities Act of the Price REIT Preferred Stock
or (ii) engaged in any form of general solicitation or general
advertising in connection with the offering of the Purchased Securities
(as those terms are used in Regulation D under the Securities Act), or
in any manner involving a public offering with in the meaning of
Section 4(2) of the Securities Act.
(w) With respect to the purchase of Price REIT Preferred Stock
pursuant hereto, the Board of Directors of Price REIT has exempted the
Initial Purchaser from the Ownership Limit (as defined in the Articles
Supplementary relating to the Price REIT Preferred Stock) pursuant to
subparagraph 6 of paragraph H of such Articles Supplementary and has
determined under Section 3 of Article IX of the Price REIT charter that
Article IX thereof does not apply to the issuance of Price REIT
Preferred Stock to the Initial Purchaser on the Delivery Date.
2. Representation, Warranties and Agreements of Kimco. Kimco
represents, warrants and agrees on the date hereof, on the Delivery Date so long
as the Merger has not been terminated and, if the Merger is consummated, on each
Offering Representation Date that:
(a) Kimco 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 most recent Annual
Report on Form 10-K (the "Kimco Form 10-K"), Quarterly Reports on Form
10-Q or Current Reports on Form 8-K filed by Kimco since the end of its
most recent fiscal year (the "Kimco Exchange Act Documents") or, with
respect to any representation made on an Offering
<PAGE>
10
Representation Date, the Prospectus as amended or supplemented; and
Kimco 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 Kimco and its subsidiaries considered as one
enterprise.
(b) Each significant subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated under the Securities Act) of Kimco (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 Kimco Exchange Act Documents or, with respect to any
representation made on an Offering Representation Date, the Prospectus
as amended or supplemented, 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 Kimco 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 Kimco, 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 Kimco or any of its subsidiaries and referred to in the
Kimco Exchange Act Documents or, with respect to any representation
made on an Offering Representation Date, the Prospectus as amended or
supplemented.
(c) The authorized, issued and outstanding stock of Kimco is
as set forth in the Kimco Exchange Act Documents or, with respect to
any representation made on an Offering Representation Date, the
Prospectus as amended or supplemented (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 therein); and the
outstanding capital stock of Kimco has been duly authorized and validly
issued and is fully paid and non-assessable and is not subject to
preemptive or other similar rights.
(d) The deposit of the Kimco Preferred Stock in accordance
with the provisions of the Kimco Deposit Agreement has been or will be
duly authorized by Kimco; the Kimco Preferred Stock has been duly
authorized and, when issued and delivered pursuant to the Merger, will
be validly issued, fully paid and
<PAGE>
11
non-assessable and will not be subject to preemptive or other similar
rights; the Kimco Preferred Stock will, upon issuance, conform to the
provisions of the related Articles Supplementary; and if such
representation is made on an Offering Representation Date, the Kimco
Preferred Stock and the Kimco Depositary Shares conform to the
description thereof in the Prospectus.
(e) Upon execution and delivery of the Kimco Depositary
Receipts pursuant to the terms of the Kimco Deposit Agreement, the
persons in whose names such Kimco Depositary Receipts are registered
will be entitled to the rights specified therein and in the Kimco
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).
(f) The Kimco Exchange Act Documents, when they were filed
with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and none of such documents contained any untrue
statement of a material fact or omitted to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed, when such documents are filed with the
Commission will conform in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(g) This Agreement has been duly authorized, executed and
delivered.
(h) Neither Kimco 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 Kimco 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 Kimco 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 Kimco and its
subsidiaries considered as one enterprise; and the execution, delivery
and performance of this Agreement and the Kimco Deposit Agreement by
Kimco and the consummation by Kimco of the transactions contemplated
hereby and thereby and compliance by Kimco 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
<PAGE>
12
encumbrance upon any property or assets of Kimco or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which Kimco 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 Kimco or any of its
subsidiaries is subject, nor will such action result in any violation
of the charter or by-laws of Kimco or any applicable law,
administrative regulation or administrative or court order or decree.
(i) There are no contracts, agreements or understandings
between Kimco and any person granting such person the right to require
Kimco to file a registration statement under the Securities Act with
respect to any securities of Kimco owned or to be owned by such person
or to require Kimco to include such securities in the securities
registered pursuant to the Registration Statement.
(j) Neither Kimco nor any of its subsidiaries has sustained,
since the date of the latest financial statements included or
incorporated by reference in the Kimco Exchange Act Documents, any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated by the Kimco Exchange Act
Documents the effect of which would have a material adverse effect on
Kimco and its subsidiaries taken as a whole; and, since such date,
there has not been any change in the capital stock (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 therein) or long-term debt of Kimco or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of Kimco and
its subsidiaries, otherwise than as set forth or contemplated in the
Kimco Exchange Act Documents the effect of which would have a material
adverse effect on Kimco and its subsidiaries taken as a whole.
(k) The historical financial statements included or
incorporated by reference in the Kimco Exchange Act Documents, or, with
respect to any representation or warranty made on an Offering
Representation Date, the Prospectus as amended or supplemented, present
fairly the financial position of Kimco 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 Kimco Exchange Act Documents or, with respect to any
representation or warranty made on an Offering Representation Date, the
Prospectus as amended or supplemented, 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 Kimco Exchange Act Documents or, with
respect to any representation or warranty made on an Offering
Representation Date, the
<PAGE>
13
Prospectus as amended or supplemented, present fairly the information
required to be stated therein.
(l) 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 Kimco Exchange Act Documents, or
with respect to any representation or warranty made on an Offering
Representation Date, the Prospectus as amended or supplemented, are
independent public accountants as required by the Securities Act and
the Rules and Regulations.
(m) The pro forma condensed consolidated financial statements
included or incorporated by reference in the Kimco Exchange Act
Documents or, with respect to any representation or warranty made on an
Offering Representation Date, the Prospectus as amended or
supplemented, if any, present fairly the pro forma financial position
of Kimco and its consolidated subsidiaries as at the dates indicated
and the pro forma results of their operations for the periods
specified; 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
Securities Act and the Rules and Regulations, and such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of such statements.
(n) Except as otherwise disclosed in the Kimco Exchange Act
Documents or, with respect to any representation or warranty made on an
Offering Representation Date, the Prospectus as amended or
supplemented, 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 Kimco and its subsidiaries considered
as one enterprise, (i) all properties and assets described in the Kimco
Exchange Act Documents or, with respect to any representation or
warranty made on an Offering Representation Date, the Prospectus as
amended or supplemented, are owned with good and marketable title by
Kimco, its 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 Kimco, its subsidiaries or, to the knowledge of
Kimco, Related Entities holds or uses real properties or assets as a
lessee are in full force and effect, and neither Kimco nor any of its
subsidiaries or, to the knowledge of Kimco, Related Entitles 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 rights 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
<PAGE>
14
the properties and assets of Kimco its subsidiaries or Related Entities
which are required to be disclosed in the Kimco Exchange Act Documents
or, with respect to any representation or warranty made on an Offering
Representation Date, the Prospectus as amended or supplemented, are
disclosed therein; (iv) neither Kimco nor any of its subsidiaries or,
to the knowledge of Kimco, 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 Kimco or its subsidiaries or, to the
knowledge of Kimco, Related Entities leases its properties and neither
Kimco nor any of its 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 Kimco, or its
subsidiaries or, to the knowledge of Kimco, 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 Kimco or, to the knowledge of Kimco, its subsidiaries or Related
Entities in all material respects complied with all applicable codes
and zoning laws and regulations; and (vii) neither Kimco nor any of its
subsidiaries has knowledge of any pending or threatened condemnation,
zoning change or other proceeding or action that will in any manner
materially adversely affect the size of, use of, improvements on,
construction on, or access to any material properties of any of Kimco
or its subsidiaries or Related Entities.
(o) Title insurance in favor of the mortgagee or Kimco, its
subsidiaries and/or the 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 Kimco and its subsidiaries considered as one
enterprise.
(p) The mortgages and deeds of trust encumbering the
properties and assets described in the Kimco Exchange Act Documents or,
with respect to any representation or warranty made on an Offering
Representation Date, the Prospectus as amended or supplemented, are not
convertible nor does any of Kimco or its subsidiaries hold a
participating interest therein.
(q) Each of the partnership and joint ventures agreements to
which Kimco or any of its subsidiaries is a party, and which relates to
real property described in the Kimco Exchange Act Documents or, with
respect to any representation or warranty made on an Offering
Representation Date, the Prospectus as amended or supplemented, has
been duly authorized, executed and delivered by such applicable party
and, assuming the due authorization and execution thereof by the
parties thereto, constitutes the valid agreement of such
<PAGE>
15
applicable party, 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.
(r) 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 Kimco, threatened against or affecting Kimco or
any of its subsidiaries which is required to be disclosed in the Kimco
Exchange Act Documents or, with respect to any representation or
warranty made on an Offering Representation Date, the Prospectus as
amended or supplemented (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 Kimco 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, or the Kimco Deposit Agreement, or the transactions
contemplated herein or therein; all pending legal or governmental
proceedings to which Kimco 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 Kimco Exchange Act Documents or, with respect to any
representation or warranty made on an Offering Representation Date, the
Prospectus as amended or supplemented, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material.
(s) Neither Kimco 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 Kimco and its subsidiaries considered
as one enterprise.
(t) If such representation is made on an Offering
Representation Date, except for (i) such consents, approvals,
authorizations, registrations, or qualifications as have been obtained
or made, (ii) as may be required under the state securities laws or
real estate syndication laws in connection with the offering of the
Offered Securities by the Initial Purchaser and (iii) the registration
of the Offered Securities under the Securities Act in connection with
such offering, no
<PAGE>
16
consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is or will be
required for the execution, delivery and performance of this Agreement
or the Kimco Deposit Agreement by Kimco and the transactions
contemplated hereby or thereby.
(u) Kimco 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 Kimco and its subsidiaries considered as one enterprise, and neither
Kimco 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 Kimco and
its subsidiaries considered as one enterprise.
(v) None of Kimco, or any of its 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 Kimco and its subsidiaries considered as one enterprise; and in
connection with the construction on or operation and use of the
properties owned by Kimco, its subsidiaries and Related Entities, Kimco
represents that 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.
(w) Neither Kimco nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
and the rules and regulation thereunder.
(x) Kimco has been and is organized in conformity with the
requirements for qualification as a real estate investment trust under
the Code, and its method of operation has at all times enabled, and its
proposed method of operation will enable, Kimco to meet the
requirements for taxation as a real estate investment trust under the
Code.
<PAGE>
17
(y) Neither Kimco nor any of its affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act) has directly, or
through any agent, (i) sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the
Kimco Preferred Stock or the Kimco Depositary Shares in a manner that
would require the registration under the Securities Act of the Kimco
Preferred Stock or the Kimco Depositary Shares or (ii) engaged in any
form of general solicitation or general advertising in connection with
the offering of the Purchased Securities (as those terms are used in
Regulation D under the Securities Act), or in any manner involving a
public offering with in the meaning of Section 4(2) of the Securities
Act. Kimco, however, makes no representation with respect to actions
taken by the Initial Purchaser.
3. Purchase by the Initial Purchaser; Compensation. (a) On the
basis of the representations and warranties of Price REIT contained in, and
subject to the terms and conditions of, this Agreement, Price REIT agrees to
sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from
Price REIT, 65,000 shares of Price REIT Preferred Stock on the Delivery Date at
a purchase price of $1,000 per share.
(b) As compensation to the Initial Purchaser for its
commitment hereunder:
(i) on the Delivery Date, Price REIT shall pay to the
Initial Purchaser an amount equal to $1,300,000, being equal
to 2% of the aggregate liquidation preference of the Price
REIT Preferred Stock being purchased hereunder; and
(ii) on the first Business Day after the date (the
"Repurchase Termination Date") that is the earliest of (x) 150
days after the Merger Effective Date and (y) the first
anniversary of the date of this Agreement, if all of the
Purchased Securities have not been theretofore repurchased,
Kimco or, if the Merger shall not have been consummated, Price
REIT, shall pay the Initial Purchaser an amount equal to 1.5%
of the aggregate liquidation preference of the Purchased
Securities issued and outstanding on such date.
(c) Price REIT shall not be obligated to deliver any of the
Price REIT Preferred Stock, except upon payment for all of the Price
REIT Preferred Stock as provided herein.
4. Sale of Purchased Securities and Resale of Offered
Securities. The Initial Purchaser has advised each Issuer that, if the Purchased
Securities are not repurchased, it proposes to offer the Offered Securities for
resale upon the terms and conditions set forth in this Agreement and in the
Prospectus (as defined in Section 7) after the Repurchase Termination Date. The
Initial Purchaser hereby represents and warrants to and agrees with Price REIT
that
<PAGE>
18
the Initial Purchaser (i) is purchasing the Price REIT Preferred Stock
pursuant to a private sale exempt from registration under the Securities Act,
(ii) subject to the provisions of Section 12(c), unless offers and sales are
made pursuant to the Registration Statement, (A) will not solicit offers for, or
offer or sell, the Offered Securities by means of any form of general
solicitation or general advertising or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act, and (B) will solicit
offers for the Offered Securities only from, and will offer, sell or deliver the
Offered Securities, as part of its initial offering, only to (1) in the case of
offers inside the United States, persons whom the Initial Purchaser reasonably
believes to be qualified institutional buyers ("Qualified Institutional Buyers")
as defined in Rule 144A under the Securities Act, as such rule may be amended
from time to time ("Rule 144A") or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser that each such
account is a Qualified Institutional Buyer, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and (2) in the case
of offers outside the United States, to persons other than U.S. persons
("foreign purchasers", which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust));
5. Delivery of and Payment for Purchased Securities. Delivery
of and payment for the Price REIT Preferred Stock shall be made at the offices
of Simpson Thacher & Bartlett at 425 Lexington Avenue, New York, New York 10017,
at 10:00 A.M., New York City time, on May 18, 1998, or at such other date or
place as shall be determined by agreement between the Initial Purchaser and
Price REIT. This date and time are sometimes referred to as the "Delivery Date."
On the Delivery Date, Price REIT shall deliver or cause to be
delivered certificates representing the Price REIT Preferred Stock to the
Initial Purchaser against payment to or upon the order of Price REIT of the
purchase price therefor, less the compensation payable on the Delivery Date by
Price REIT to the Initial Purchaser pursuant to Section 3(b), by wire transfer
of immediately available funds to an account specified by Price REIT. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of the Initial Purchaser
hereunder.
6. Conditions to the Initial Purchaser's Obligations. The
obligations of the Initial Purchaser hereunder on the Delivery Date are subject
to the accuracy, when made and on the Delivery Date, of the representations and
warranties of Price REIT and of Kimco contained herein, to the performance by
Price REIT of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement and the Price
REIT Preferred Stock and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be
satisfactory in all respects to counsel for the Initial Purchaser, and
Price REIT shall have furnished to such counsel all documents and
<PAGE>
19
information that they may reasonably request to enable them to pass
upon such matters.
(b) Gibson Dunn & Crutcher LLP shall have furnished to the
Initial Purchaser its written opinion, as counsel to Price REIT,
addressed to the Initial Purchaser and dated the Delivery Date, in form
and substance satisfactory to the Initial Purchaser, to the effect
that:
(i) Price REIT is duly qualified as a foreign
corporation to transact business and is in good standing in
the following states: Arizona, California, Colorado,
Connecticut, Florida, Kansas, Minnesota, New Jersey, New York,
North Carolina, Oklahoma, Virginia and Washington;
(ii) The Affiliates are validly existing and in good
standing under the laws of their respective jurisdictions of
organization, and Price/Texas, Price/Baybrook, Price/Fry and
Smithtown have all power and authority necessary to own or
hold their respective properties and conduct the businesses in
which they are engaged;
(iii) To the best of counsel's knowledge and other
than as set forth in the Price REIT Exchange Act Documents,
there are no legal or governmental proceedings pending to
which Price REIT or any of the Affiliates is a party or of
which any property or assets of Price REIT or any of the
Affiliates is the subject which, if determined adversely to
Price REIT or any of the Affiliates, might have a material
adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business affairs
or business prospects of Price REIT; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(iv) This Agreement has been duly executed and
delivered by Price REIT;
(v) The issue and sale of the Price REIT Preferred
Stock, the compliance by Price REIT with all of the provisions
of this Agreement and the consummation of the transactions
contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any agreement or
instrument which is filed as an exhibit to the Price REIT
Exchange Act Documents, nor will such actions result in any
violation of the provisions of the charter or by-laws of Price
REIT or governing documents of any of the Affiliates or any
statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over Price REIT or any of its properties or
assets; and, except for the
<PAGE>
20
registration of the Offered Securities under the Securities
Act and for the approvals, authorizations, registrations or
qualifications as may be required under the applicable state
securities laws and real estate syndication laws in connection
with the offering of the Offered Securities by the Initial
Purchaser if the Offered Securities are Price REIT Preferred
Stock and Price REIT Depositary Shares, no consent, approval,
authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by Price
REIT and the consummation of the transactions contemplated
hereby;
(vi) To the best of such counsel's knowledge, there
are no contracts, agreements or understandings between Price
REIT and any person granting such person the right to require
Price REIT to file a registration statement under the
Securities Act with respect to any securities of Price REIT
owned or to be owned by such person or to require Price REIT
to include such securities in the securities registered
pursuant to the Registration Statement;
(vii) No registration of the Price REIT Preferred
Stock under the Securities Act is required for the offer and
sale of the Price REIT Preferred Stock by Price REIT to the
Initial Purchaser;
(viii) Price REIT has been and is organized in
conformity with the requirements for qualification as a real
estate investment trust under the Code, and its method of
operation has at all times enabled, and its proposed method of
operation as described in the Price REIT Exchange Act
Documents and as represented by management will enable, Price
REIT to meet the requirements for taxation as a real estate
investment trust under the Code; and
(ix) Neither Price REIT nor any of the Affiliates is
required to be registered under the Investment Company Act.
In rendering such opinion, Gibson, Dunn & Crutcher LLP may rely as to
matters involving the application of laws of the State of Maryland, to
the extent deemed proper and specified in such opinion, upon the
opinion of Ballard Spahr Andrews & Ingersoll LLP and may rely as to
matters of fact, to the extent deemed proper, on certificates of
responsible officers of Price REIT and public officials.
(c) Ballard Spahr Andrews & Ingersoll LLP shall have furnished
to the Initial Purchaser its written opinion, as counsel to Price REIT
with respect to matters of Maryland law, addressed to the Initial
Purchaser and dated the Delivery Date, in form and substance
satisfactory to the Initial Purchaser, to the effect that:
<PAGE>
21
(i) Price REIT has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Maryland and has all corporate power and
authority to own, lease and operate its properties as
described in the Price REIT Form 10-K, to conduct the business
in which it is engaged and to perform its obligations under
this Agreement;
(ii) The Price REIT Preferred Stock has been duly
authorized for issuance and sale to the Initial Purchaser
pursuant to this Agreement and, when issued and delivered by
Price REIT pursuant to this Agreement against payment of the
purchase price therefor, will be validly issued and fully paid
and non-assessable and will not be subject to preemptive or
other similar rights arising by operation of the MGCL or under
the charter or by-laws of Price REIT or any agreement or other
instrument known to such counsel;
(iii) The execution and delivery of this Agreement
has been duly authorized by Price REIT; and
(iv) Price REIT has an authorized capitalization as
set forth in the Price REIT Form 10-K; the relative rights,
preferences, interests and powers of the Price REIT Preferred
Stock are as set forth in the Articles Supplementary relating
thereto in addition and subject to those terms otherwise set
forth in the Price REIT charter, the Price REIT by-laws or the
MGCL, and all such relative rights, preferences, interests and
powers are valid under the MGCL; and the form of certificate
used to evidence the Price REIT Preferred Stock is in due and
proper form under the MGCL and complies with all applicable
statutory requirements under the MGCL.
In rendering such opinion, Ballard Spahr Andrews & Ingersoll
LLP may rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of Price REIT
and public officials.
(d) Latham & Watkins shall have furnished to the
Initial Purchaser its written opinion, as counsel to Kimco,
addressed to the Initial Purchaser and dated the Delivery
Date, in form and substance satisfactory to the Initial
Purchaser, to the effect that:
(i) Kimco 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;
<PAGE>
22
(ii) Kimco has corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Kimco Form
10-K, and to perform its obligations under this
Agreement;
(iii) Kimco 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 prospects of Kimco and
its subsidiaries considered as one enterprise;
(iv) This Agreement has been duly
authorized, executed and delivered by Kimco;
(v) No authorization, approval or consent of
any New York or federal court or New York or federal
governmental agency is required that has not been
obtained in connection with the consummation by Kimco
of the transactions contemplated by this Agreement,
except as may be required under the Securities Act in
connection with the offering of the Offered
Securities by the Initial Purchaser and state
securities laws or real estate syndication laws if
the Offered Securities are Kimco Preferred Stock and
Kimco Depositary Shares;
(vi) Commencing with Kimco's taxable year
beginning January 1, 1992, Kimco has been organized
in conformity with the requirements for qualification
as a "real estate investment trust", and its proposed
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 Kimco
to such counsel as described herein; and
(vii) Neither Kimco nor any of its
subsidiaries is required to be registered under the
Investment Company Act.
In rendering such opinion, Latham & Watkins may rely as to
matters involving the application of laws of the State of
Maryland, to the extent deemed proper and specified in such
opinion, upon the opinion of Ballard Spahr Andrews & Ingersoll
LLP and may rely as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of Kimco and
public officials.
(e) Robert P. Schulman, counsel for Kimco, or other
counsel satisfactory to the Initial Purchaser, shall have
furnished to the Initial Purchaser his written opinion, as
counsel to Kimco, addressed to the Initial Purchaser and
<PAGE>
23
dated the Delivery Date, in form and substance satisfactory to
the Initial Purchaser, 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 Kimco Exchange Act Documents,
other than those disclosed therein, and all pending
legal or governmental proceedings to which Kimco or
any of its subsidiaries is a party or of which any of
the property of Kimco or its subsidiaries is the
subject which are not described in the Kimco Exchange
Act Documents, 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 Kimco Exchange Act Documents or to be filed as
exhibits to the Kimco Exchange Act Documents 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 Kimco Exchange
Act Documents), 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 Kimco and
its subsidiaries considered as one enterprise;
(iii) To the best of his knowledge and
information, the execution and delivery of this
Agreement and the consummation of the transactions
contemplated herein and compliance by Kimco with its
obligations hereunder 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 Kimco or
any of its subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument to which Kimco 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 Kimco or any of its subsidiaries is
subject, nor will such action result in violation of
the provisions of the charter or by-laws of Kimco or
any applicable law, administrative regulation or
administrative or court order or decree;
(iv) Each of the partnership and joint
venture agreements to which Kimco or any of its
subsidiaries is a party, and which relates to real
<PAGE>
24
property described in Kimco Exchange Act Documents,
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) Kimco and its subsidiaries and the
Related Entities hold title to the properties and
assets described in the Kimco Exchange Act Documents,
subject only to the liens and encumbrances securing
indebtedness reflected in the Kimco Exchange Act
Documents 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 Kimco
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 Kimco Exchange Act Documents 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 Kimco 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 Kimco, 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 Kimco or any of its subsidiaries and
described in the Kimco Exchange Act Documents; and
(vii) To the best of such counsel's
knowledge, there are no contracts, agreements or
understandings between Kimco and any person granting
such person the right to require Kimco to file a
registration statement under the Act with respect to
any securities of Kimco owned or
<PAGE>
25
to be owned by such person or to require Kimco to
include such securities in the securities registered
pursuant to the Registration Statement.
(f) Price REIT shall have furnished to the Initial
Purchaser a certificate, dated the Delivery Date, of its
Chairman of the Board or its President and its principal
financial officer or accounting officer stating that:
(i) The representations, warranties and
agreements of Price REIT in Section 1 are true and
correct as of the Delivery Date; and Price REIT has
complied with all its agreements contained herein;
and
(ii) (A) Neither Price REIT nor any of the
Affiliates has sustained since the date of the latest
financial statements included or incorporated by
reference in the Price REIT Exchange Act Documents
any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or
court or governmental action, order or decree,
otherwise than set forth or contemplated in the Price
REIT Exchange Act Documents or (B) since such date,
there has not been any change in the capital stock
(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 therein) or long-term debt
(except for borrowings and repayments under its
credit facility and the assumption of indebtedness in
connection with the acquisition of properties by
Price REIT or its Affiliates, in each case in the
ordinary course of business) of Price REIT or any of
the Affiliates or any change, or any development
involving a prospective change, in or affecting the
general affairs, management, financial position,
stockholders' equity or results of operations of
Price REIT and its Affiliates, otherwise than as set
forth or contemplated in the Price REIT Exchange Act
Documents.
(g) Kimco shall have furnished to the Initial
Purchaser a certificate, dated the Delivery Date, of its
Chairman of the Board or its President and its principal
financial officer or accounting officer stating that:
(i) The representations, warranties and
agreements of Kimco in Section 2 are true and correct
as of the Delivery Date; and
(ii) (A) Neither Kimco nor any of its
subsidiaries has sustained since the date of the
latest financial statements included or incorporated
by reference in the Kimco Exchange Act Documents any
loss or interference with its business from fire,
explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute
<PAGE>
26
or court or governmental action, order or decree,
otherwise than set forth or contemplated in the Kimco
Exchange Act Documents, the effect of which would
have a material adverse effect on Kimco and its
subsidiaries taken as a whole or (B) since such date,
there has not been any change in the capital stock
(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 therein) or long-term debt of
Kimco or any of its subsidiaries or any change, or
any development involving a prospective change, in or
affecting the general affairs, management, financial
position, stockholders' equity or results of
operations of Kimco and its subsidiaries, otherwise
than as set forth or contemplated in the Kimco
Exchange Act Documents, the effect of which would
have a material adverse effect on Kimco and its
subsidiaries taken as a whole.
(h) (i) Neither Price REIT nor any of the Affiliates
shall have sustained since the date of the latest financial
statements included or incorporated by reference in the Price
REIT Exchange Act Documents any loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Price REIT Exchange
Act Documents or (ii) since such date, there shall not have
been any change in the capital stock (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 therein) or long-term debt (except for
borrowings and repayments under its credit facility and the
assumption of indebtedness in connection with the acquisition
of properties by Price REIT or its Affiliates, in each case in
the ordinary course of business) of Price REIT or any of the
Affiliates or any change, or any development involving a
prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or
results of operations of Price REIT and the Affiliates,
otherwise than as set forth or contemplated in the Price REIT
Exchange Act Documents, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Initial Purchaser, so material and adverse as to make it
impracticable or inadvisable to proceed with the delivery of
the Price REIT Preferred Stock or the subsequent reoffering of
the Price REIT Preferred Stock and the Price REIT Depositary
Shares.
(i) (i) Neither Kimco nor any of its subsidiaries
shall have sustained since the date of the latest financial
statements included in the Kimco Exchange Act Documents any
loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action,
order or decree, otherwise than as set
<PAGE>
27
forth or contemplated in the Kimco Exchange Act Documents, the
effect of which would have a material adverse effect on Kimco
and its subsidiaries taken as a whole or (ii) since such date
there shall not have been any change in the capital stock
(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 therein)
or long-term debt of Kimco or any of its subsidiaries or any
change, or any development involving a prospective change, in
or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of
Kimco and its subsidiaries, otherwise than as set forth or
contemplated in the Kimco Exchange Act Documents, the effect
of which, in any such case described in clause (i) or (ii),
is, in the judgment of the Initial Purchaser, so material and
adverse as to make it impracticable or inadvisable to proceed
with the delivery of the Price REIT Preferred Stock or the
subsequent reoffering of the Price REIT Preferred Stock and
the Price REIT Depositary Shares.
(j) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating
accorded Price REIT's debt securities by any "nationally
recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) of
the Rules and Regulations and (ii) no such organization shall
have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any
of Price REIT's debt securities.
7. Further Agreements of the Issuer of the Offered Securities.
Kimco, if the Merger has been consummated, or Price REIT if the Merger has not
been consummated, agree if all of the Purchased Securities have not been
repurchased on or before the Repurchase Termination Date:
(a) (i) Not more than 30 days after the Repurchase Termination
Date, to prepare and file with the Commission a registration statement
on Form S-3, which shall be in form and substance satisfactory to the
Initial Purchaser, with respect to the resale by the Initial Purchaser
of the Offered Securities pursuant to Rule 415 of the Rules and
Regulations and (ii) use its best efforts to cause such registration
statement to be declared effective not later than 100 days after the
Repurchase Termination Date. As used in this Agreement, "Effective
Time" means the date and the time as of which such registration
statement is declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary Prospectus" means
each prospectus included in such registration statement, or amendments
thereof, before it becomes effective under the Securities Act and any
prospectus filed by the Company pursuant to Rule 424(a) of the Rules
and Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including any documents
incorporated by reference therein at such time; and "Prospectus"
<PAGE>
28
means the prospectus that is part of the Registration Statement at the
Effective Time or, if necessary, filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations with the consent of the
Initial Purchaser. Reference made herein to any Preliminary Prospectus
or to the Prospectus shall be deemed to refer to and include any
documents incorporated by reference therein pursuant to Form S-3 under
the Securities Act, as of the date of such Preliminary Prospectus or
the Prospectus, as the case may be, and any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the Exchange
Act after the date of such Preliminary Prospectus or the Prospectus, as
the case may be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be, and any reference to
any amendment to the Registration Statement shall be deemed to include
any Annual Report on Form 10-K of the Issuer of the Offered Securities
filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Time that is incorporated by reference
in the Registration Statement.
(b) The Registration Statement and the Prospectus and any
further amendments or supplements thereto will, when they become
effective or are filed with the Commission, as the case may be, conform
in all material respects to the requirements of the Securities Act and
the Rules and Regulations and will not contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Issuer of the Offered Securities by or on
behalf of the Initial Purchaser for inclusion therein.
(c) In connection with the preparation of the Registration
Statement:
(i) to consult with the Initial Purchaser and its
counsel as to the scope and content of the Registration
Statement and furnish to the Initial Purchaser and its counsel
one or more drafts thereof, as necessary, and sufficient time
to comment thereon;
(ii) upon request, to provide copies of the documents
incorporated by reference in the Registration Statement to the
Initial Purchaser and its counsel; and
(iii) to make available at reasonable times for
inspection by the Initial Purchaser and its counsel all
financial and other records, pertinent corporate documents and
properties of the Issuer of the Offered Securities and cause
the officers, directors, managers and employees of the Issuer
of
<PAGE>
29
the Offered Securities to supply all information reasonably
requested by the Issuer of the Offered Securities in
connection with the Registration Statement prior to its
effectiveness.
(d) Prior to the Effective Date:
(i) to cooperate with the Initial Purchaser and its
counsel in connection with the registration and qualification
of the Offered Securities under the securities or Blue Sky
laws of such jurisdictions as Initial Purchaser may reasonably
request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of
the Offered Securities; provided, however, that the Issuer of
the Offered Securities shall not be required to register or
qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the
service of process in suits or to taxation, in any
jurisdiction where it is not now so subject;
(ii) to cause the Offered Securities to be rated by
Moody's Investors Service and the Standard and Poor's Ratings
Group; and
(iii) to provide CUSIP numbers for the Offered
Securities.
(e) Furnish to the Initial Purchaser on the Effective Date:
(i) a certificate, dated the Effective Date, of its
Chairman of the Board or its President and its principal
financial officer or accounting officer stating that:
(A) The representations, warranties and
agreements of the Issuer of the Offered Securities in
Section 1 or Section 2, as the case may be, are true
and correct as of such date, except with respect to
such matters as may be described in such certificate;
and the Issuer of the Offered Securities has complied
with all its agreements contained herein; and
(B) They have carefully examined the
Registration Statement and the Prospectus and, in
their opinion, the Registration Statement and the
Prospectus, as of the Effective Date, did not include
any untrue statement of a material fact and did not
omit to state any material fact required to be stated
therein or necessary to make the statements therein
not misleading.
(ii) If Kimco is the Issuer of the Offered
Securities, Latham & Watkins shall have furnished to the
Initial Purchaser its written opinion, as counsel to Kimco,
addressed to the Initial Purchaser and dated the Effective
Date, in form and substance satisfactory to the Initial
Purchaser, to the effect that:
<PAGE>
30
(A) Kimco 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;
(B) Kimco has corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Kimco Form
10-K and to perform its obligations under this
Agreement;
(C) Kimco 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 prospects of Kimco and
its subsidiaries considered as one enterprise;
(D) The shares of Kimco Preferred Stock and
the deposit of the Kimco Preferred Stock in
accordance with the provisions of the Kimco Deposit
Agreement have been duly and validly authorized by
all necessary corporate action; the Kimco Preferred
Stock is validly issued, fully paid and
non-assessable and not subject to preemptive or other
similar rights arising under the MGCL, or the charter
or bylaws of Kimco or, to the best of such counsel's
knowledge, otherwise;
(E) The authorized, issued and outstanding
stock of Kimco is as set forth in the Kimco Exchange
Act Documents (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 Kimco Exchange Act Documents); and the
outstanding capital stock of Kimco has been duly
authorized, validly issued, fully paid and
non-assessable and is not subject to preemptive or
other similar rights arising under the MGCL, or the
charter or bylaws of Kimco or, to the best of such
counsel's knowledge otherwise;
(F) Upon execution and delivery of the Kimco
Depositary Receipts pursuant to the terms of the
Kimco Deposit Agreement, the persons in whose names
such Kimco Depositary Receipts are registered will be
entitled to the rights specified therein and in the
Kimco Deposit Agreement;
(G) The relative rights, preferences,
interests and powers of the Kimco Preferred Stock are
as set forth in the Articles Supplementary relating
thereto in addition and subject to those terms
otherwise set forth in the Price REIT charter, the
Price REIT by-laws and the MGCL, and all
<PAGE>
31
such relative rights, preferences, interests and
powers are valid under the MGCL; and the form of
certificate used to evidence the Kimco Preferred
Stock, being represented by Kimco 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;
(H) No authorization, approval or consent of
any court or governmental agency is required that has
not been obtained in connection with the consummation
by Kimco of the transactions contemplated by this
Agreement, except as may be required under the
Securities Act in connection with the offering of the
Offered Securities by the Initial Purchaser and state
securities laws or real estate syndication laws if
such Offered Securities are Kimco Preferred Stock and
Kimco Depositary Shares;
(I) Commencing with Kimco's taxable year
beginning January 1, 1992, Kimco has been organized
in conformity with the requirements for qualification
as a "real estate investment trust", and its proposed
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 Kimco
to such counsel as described herein; and
(J) Neither Kimco nor any of its
subsidiaries is required to be registered under the
Investment Company Act;
(K) The Registration Statement was declared
effective under the Securities Act as of the date and
time specified in such opinion and no stop order
suspending the effectiveness of the Registration
Statement has been issued under the Securities Act
and, to the knowledge of such counsel, no proceeding
for that purpose is pending or threatened by the
Commission;
(L) The Registration Statement, as of the
Effective Date, and the Prospectus, as of its issue
date (excluding in each case the documents
incorporated by reference therein), complied as to
form in all material respects with the requirements
for registration statement on Form S-3 under the
Securities Act and the regulations promulgated
thereunder; it being understood, however, that such
counsel expresses no opinion with respect to the
financial statements, schedules and other financial
data included or incorporated by reference in, or
omitted from, the Registration Statement or the
Prospectus; and it being understood, further, that in
<PAGE>
32
passing upon the compliance as to form of the
Registration Statement and the Prospectus, such
counsel has assumed that the statements made therein
are correct and complete, and the documents
incorporated by reference in the Prospectus (other
than the financial statements and related schedules
therein, as to which such counsel need express no
opinion), when they were filed with the Commission
complied as to form in all material respects with the
requirements of the Exchange Act and the rules and
regulations of the Commission thereunder. In passing
upon the compliance as to form of such documents,
such counsel will assume that the statements made
therein are correct and complete.
(M) The statements made in the Prospectus
under specified captions describing the Kimco
Preferred Stock and the Kimco Depositary Shares,
insofar as they purport to constitute summaries of
certain terms of documents referred to therein, are
accurate in all material respects;
(N) The statements set forth in the
Prospectus under specified captions relating to
Kimco's status as a "real estate investment trust"
under the Code and 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; and
(O) No authorization, approval or consent of
any New York or federal court or New York or fedearl
governmental authority or agency is required that has
not been obtained in connection with the consummation
by Kimco of the transactions contemplated by this
Agreement and the Kimco Deposit Agreement, except
such as may be required under the Securities Act in
connection with the offering of the Offered
Securities by the Initial Purchaser and state
securities laws or real estate syndication laws if
the Offered Securities are Kimco Preferred Stock and
Kimco Depositary Shares.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws of the State of Maryland, to
the extent deemed proper and specified in such opinion, upon
the opinion of Ballard Spahr Andrews & Ingersoll LLP and may
rely as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Issuer of the
Offered Securities and public officials. The opinions rendered
in (F) above are subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws
now or thereafter 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
<PAGE>
33
therefor may be brought. Such counsel shall also have
furnished to the Initial Purchaser a written statement,
addressed to the Initial Purchaser and dated the Effective
Date, in form and substance satisfactory to the Initial
Purchaser, to the effect that such counsel participated in
conferences with officers and other representatives of Kimco,
counsel to Kimco and representatives of the independent public
accountants for Kimco, at which the contents of the
Registration Statement and the Prospectus and related matters
were discussed and, although such counsel is not passing upon,
and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or
incorporated by reference in the Registration Statement and
the Prospectus (other than as set forth in paragraphs (M) and
(N)) and have not made any independent check or verification
thereof, during the course of such participation no facts have
come to their attention that cause them to believe that the
Registration Statement, as of the Effective Date, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make material statements therein not misleading, or that the
Prospectus (including the documents incorporated by reference
therein), as of its date, contained, as of the date of such
statements contains, an untrue statement of a material fact or
omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading; it being understood that such
counsel expresses no belief with respect to the financial
statements or other financial data included or incorporated by
reference in, or omitted from, the Registration Statement or
the Prospectus.
(iii) If Kimco is the Issuer of the Offered
Securities, Robert P. Schulman, counsel for Kimco, or other
counsel satisfactory to the Initial Purchaser, shall have
furnished to the Initial Purchaser his written opinion, as
counsel to Kimco, dated the Effective Date, in form and
substance satisfactory to the Initial Purchaser, to the effect
that:
(A) 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 Kimco or any of its
subsidiaries is a party or of which any of the
property of Kimco 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;
(B) 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 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
<PAGE>
34
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, mortgages,
(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 Kimco and its subsidiaries
considered as one enterprise;
(C) To the best of his knowledge and
information, the execution and delivery of this
Agreement and the Kimco Deposit Agreement and the
consummation of the transactions contemplated herein
and compliance by Kimco with its obligations
hereunder 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 Kimco or
any of its subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument to which Kimco 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 Kimco or any of its subsidiaries is
subject, nor will such action result in violation of
the provisions of the charter or by-laws of Kimco or
any applicable law, administrative regulation or
administrative or court order or decree;
(D) Each of the partnership and joint
venture agreements to which Kimco or any of its
subsidiaries is a party, and which related 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;
(E) Kimco and its subsidiaries and the
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;
<PAGE>
35
(F) Each Significant Subsidiary of Kimco 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
Kimco 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 Kimco,
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 Kimco
or any of its subsidiaries and described in the
Prospectus; and
(G) To the best of such counsel's knowledge,
there are no contracts, agreements or understandings
between Kimco and any person granting such person the
right to require Kimco to file a registration
statement under the Act with respect to any
securities of Kimco owned or to be owned by such
person or to require Kimco to include such securities
in the securities registered pursuant to the
Registration Statement.
(iv) If Price REIT is the Issuer of the Offered
Securities, Gibson Dunn & Crutcher LLP shall have furnished to
the Initial Purchaser its written opinion, as counsel to Price
REIT, addressed to the Initial Purchaser and dated the
Effective Date, in form and substance satisfactory to the
Initial Purchaser, to the effect that:
(A) The Price REIT Deposit Agreement has
been duly executed and delivered by Price REIT;
(B) To the best of counsel's knowledge and
other than as set forth in the Price REIT Exchange
Act Documents, there are no legal or governmental
proceedings pending to which Price REIT or any of its
Affiliates is a party or of which any property or
assets of Price REIT or any of the Affiliates is the
subject which, if determined adversely to Price REIT
or the Affiliates, might have a material adverse
effect on the consolidated financial position,
stockholders' equity, results of operations, business
affairs or business prospects of Price REIT; and, to
the best of
<PAGE>
36
such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental
authorities or threatened by others;
(C) Price REIT has been and is organized in
conformity with the requirements for qualification as
a real estate investment trust under the Code, and
its method of operation has at all times enabled, and
its proposed method of operation as described in
Price REIT Exchange Act Documents and as represented
by management will enable, Price REIT to meet the
requirements for taxation as a real estate investment
trust under the Code;
(D) The Registration Statement was declared
effective under the Securities Act as of the date and
time specified in such opinion and no stop order
suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of
such counsel, no proceeding for that purpose is
pending or threatened by the Commission;
(E) The Registration Statement, as of the
Effective Date, and the Prospectus, as of its date,
(other than the financial statements and other
financial data contained therein, as to which such
counsel need express no opinion) complied as to form
in all material respects with the requirements of the
Securities Act and the Rules and Regulations; and the
documents incorporated by reference in the Prospectus
(other than the financial statements and related
schedules therein, as to which such counsel need
express no opinion), when they were filed with the
Commission complied as to form in all material
respects with the requirements of the Exchange Act
and the rules and regulations of the Commission
thereunder.
(F) The statements made in the Prospectus
under specified captions describing the Price REIT
Preferred Stock and the Price REIT Depositary Shares,
insofar as they purport to constitute summaries of
certain terms of documents referred to therein, are
accurate in all material respects;
(G) The statements set forth in the
Prospectus under specified captions relating to Price
REIT's status as a "real estate investment trust"
under the Code and 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;
(H) No authorization, approval or consent of
any court or governmental agency is required that has
not been obtained in connection with the consummation
by Price REIT of the transactions contemplated by
<PAGE>
37
this Agreement, except as may be required under the
Securities Act in connection with the offering of the
Offered Securities by the Initial Purchaser and state
securities laws or real estate syndication laws; and
(I) To the best of such counsel's knowledge,
there are no contracts, agreements or understandings
between Price REIT and any person granting such
person the right to require Price REIT to file a
registration statement under the Securities Act with
respect to any securities of Price REIT owned or to
be owned by such person or to require Price REIT to
include such securities in the securities registered
pursuant to the Registration Statement.
In rendering such opinion, Gibson, Dunn & Crutcher LLP may
rely as to matters involving the application of laws of the
State of Maryland, to the extent deemed proper and specified
in such opinion, upon the opinion of Ballard Spahr Andrews &
Ingersoll LLP and may rely as to matters of fact, to the
extent deemed proper, on certificates of responsible officers
of Price REIT and public officials. Such counsel shall also
have furnished to the Initial Purchaser a written statement,
addressed to the Initial Purchaser and dated the Effective
Date, in form and substance satisfactory to the Initial
Purchaser, to the effect that (x) such counsel has acted as
counsel to Price REIT on a regular basis (although Price REIT
is also represented with respect to certain other matters, by
certain other outside counsel), has acted as counsel to Price
REIT in connection with previous financing transactions and
has acted as counsel to Price REIT in connection with the
preparation of the Registration Statement and (y) based on the
foregoing, no facts have come to the attention of such counsel
which lead it to believe that (I) the Registration Statement,
as of the Effective Date, contained any untrue statement of a
material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that
the Prospectus contains any untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading or (II) any document incorporated by reference
in the Prospectus when it was filed with the Commission
contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing opinion
and statement may be qualified by a statement to the effect
that such counsel does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus except for the
statements made in the Prospectus under the captions referred
to in subparagraphs (F) and (G) above insofar as such
statements concern legal matters or relate to the Offered
Securities.
<PAGE>
38
(v) if Price REIT is the Issuer of the Offered
Securities, Ballard Spahr Andrews & Ingersoll LLP shall have
furnished to the Initial Purchaser its written opinion, as
counsel to Price REIT with respect to matters of Maryland law,
addressed to the Initial Purchaser and dated the date of the
Memorandum, in form and substance satisfactory to the Initial
Purchaser, to the effect that:
(A) Price REIT has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Maryland and
has all corporate power and authority to own, lease
and operate its properties as described in the Price
REIT Exchange Act Documents, to conduct the business
in which it is engaged and to perform its obligations
under this Agreement; and
(B) The Price REIT Deposit Agreement has
been duly authorized by Price REIT. The deposit of
the Price REIT Preferred Stock in accordance with the
provisions of the Price REIT Deposit Agreement has
been duly and validly authorized by all necessary
corporate action;
(f) a customary comfort letter, dated the Effective Date, from
the Issuer of the Offered Securities' independent accountants, in the
customary form and covering matters of the type customarily covered in
comfort letters by independent accountants in connection with primary
underwritten offerings.
(g) Enter into such agreements, and make such representations
and warranties, and take all such other actions in connection therewith
in order to expedite or facilitate the disposition by the Initial
Purchaser of the Offered Securities as contemplated by this Agreement,
all to such extent as may be reasonably requested by the Initial
Purchaser, including using its best efforts to assist in the marketing
and sale of the Offered Securities (including by making appropriate
officers of the Issuer of the Offered Securities available for meetings
with prospective purchasers of the Offered Securities).
(h) To issue, upon the request of the Initial Purchaser, a new
certificate for the Offered Securities surrendered to the Issuer of the
Offered Securities in exchange therefor, such new certificate to be
registered in the name of such holder or in the name of the
purchaser(s) of such Offered Securities, as the case may be.
(i) To prepare the Prospectus in a form approved by the
Initial Purchaser after a reasonable opportunity for its review, which
approval shall not be unreasonably withheld, and to file such
Prospectus, if required, pursuant to Rule 424(b) under the Securities
Act not later than the second business day following the Effective
Date; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein;
to advise the Initial Purchaser, promptly after it receives notice
thereof, of the time when the Registration Statement, or any amendment
thereto, has been filed or becomes effective or any supplement to the
Prospectus or any
<PAGE>
39
amended Prospectus has been filed and to furnish the Initial Purchaser
with copies thereof; to file in a timely manner all reports and any
definitive proxy or information statements required to be filed by the
Issuer of the Offered Securities with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Offered
Securities; to advise the Initial Purchaser, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Prospectus, of the
suspension of the qualification of the Offered Securities for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(j) To furnish promptly to the Initial Purchaser and to
counsel for the Initial Purchaser a signed copy of the Registration
Statement conforming to the version originally filed electronically
with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(k) To deliver promptly to the Initial Purchaser in New York
City such number of the following documents as the Initial Purchaser
shall reasonably request: (i) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment
thereto (in each case excluding exhibits other than this Agreement, the
Prospectus (not later than 10:00 A.M., New York City time, of the
second day following the Effective Date) and any amended or
supplemented Prospectus (not later than 10:00 A.M., New York City time,
on the day following the date of such amendment or supplement) and (ii)
any document incorporated by reference in the Prospectus (excluding
exhibits thereto); and, if the delivery of a prospectus is required at
any time after the Effective Time of the Registration Statement in
connection with the offering or sale of the Offered Securities (or any
other securities relating thereto) and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Initial Purchaser and, upon its
request, to file such document and to prepare and furnish without
charge to each Initial Purchaser and to any dealer in securities as
many copies as the Initial Purchaser may from time to time request of
an amended or supplemented Prospectus which will correct such statement
or omission or effect such compliance, provided, that during such
period the Issuer of the Offered Securities may
<PAGE>
40
suspend the effectiveness of any Registration Statement for an
aggregate of up to 90 days in any 12 month period if (i) an event
occurs of the kind described above in this Section 7(k) and (ii) (A)
the Issuer of the Offered Securities determines in good faith that the
disclosure of such event at such time would have a material adverse
effect on the Issuer of the Offered Securities and its subsidiaries,
taken as a whole or (B) the disclosure relates to a previously
undisclosed pending material business transaction the disclosure of
which would impede the ability of the Issuer of the Offered Securities
to consummate such transaction;
(l) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Issuer of the
Offered Securities or the Initial Purchaser, be required by the
Securities Act or requested by the Commission;
(m) Prior to filing with the Commission (i) any amendment to
the Registration Statement or supplement to the Prospectus (excluding
any document incorporated by reference in the Prospectus) or (ii) any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Initial Purchaser and counsel for the
Initial Purchaser one business day prior to such filing and obtain the
consent of the Initial Purchaser to the filing, which consent shall not
be unreasonably withheld;
(n) As soon as practicable after the Effective Date of the
Registration Statement, to make generally available to the Issuer of
the Offered Securities' security holders and to deliver to the Initial
Purchaser an earnings statement of the Issuer of the Offered Securities
and its subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations (including,
at the option of the Issuer of the Offered Securities, Rule 158);
(o) Not to offer, sell, contract to sell or otherwise dispose
of any additional preferred stock of the Issuer of the Offered
Securities or any securities convertible into or exchangeable for or
that represent the right to receive any such similar securities,
without the consent (which consent shall not be unreasonably withheld)
of the Initial Purchaser during the period beginning from the Effective
Date and continuing to and including the earlier of (i) the termination
of trading restrictions on the Offered Securities, as communicated to
the Issuer of the Offered Securities by the Initial Purchaser, and (ii)
30 days following the Effective Date; and
(p) Subject to the provisions of Section 12(c), so long as the
Offered Securities are outstanding and are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, to
furnish to holders of the Offered Securities and prospective purchasers
of the Offered Securities designated by such holders, upon request of
such holders or such prospective purchasers, the information required
to be delivered pursuant to Rule 144(d)(4) under the Securities Act.
<PAGE>
41
8. Expenses. (a) Each Issuer agrees to pay the costs incident
to the authorization, issuance, sale and delivery of the Preferred Stock and the
Depositary Shares issued by it and any taxes payable in that connection,
including the fees and expenses of its counsel, the Depositary and the
Depositary's Counsel.
(b) The Issuer of the Offered Securities agrees to pay (i) the
costs incident to the preparation, printing and filing under the Securities Act
of the Registration Statement and any amendments and exhibits thereto; (ii) the
costs of distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus or any document incorporated by reference therein,
all as provided in this Agreement; (iii) the fees and expenses of qualifying the
Offered Securities under the securities laws of the several jurisdictions as
provided in Section 7 and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Initial
Purchaser); (iv) any fees charged by securities rating services for rating the
Offered Securities; (v) the fees and expenses of its accountants; and (vi) all
other costs and expenses incident to the performance of the obligations of the
Issuer of the Offered Securities under this Agreement.
(c) The Initial Purchaser shall pay its own costs and
expenses, including the costs and expenses of its counsel, any transfer taxes on
the Securities which it may sell and the expenses of advertising the offering of
the Offered Securities made by the Initial Purchaser.
9. Indemnification and Contribution.
(a) The Issuer of the Offered Securities shall indemnify and
hold harmless the Initial Purchaser, its officers and employees and each person,
if any, who controls the Initial Purchaser within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Offered
Securities, to which the Initial Purchaser, officer, employee or controlling
person may become subject, under the Exchange Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained
(A) in any Preliminary Prospectus, the Registration Statement or in the
Prospectus, or in any amendment or supplement thereto, or (B) in any blue sky
application or other document prepared or executed by the Issuer of the Offered
Securities (or based upon any written information furnished by the Issuer of the
Offered Securities) specifically for the purpose of qualifying any or all of the
Offered Securities under the securities laws of any state or other jurisdiction
(any such application, document or information being hereinafter called a "Blue
Sky Application"), (ii) the omission or alleged omission to state in the
Preliminary Prospectus, the Registration Statement or in the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse the Initial Purchaser and each such officer,
employee and controlling person promptly upon demand for any legal or other
<PAGE>
42
expenses reasonably incurred by the Initial Purchaser or such officer, employee
or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Issuer of the Offered
Securities shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement or in any such amendment or supplement
thereto, or in any Blue Sky Application in reliance upon and in conformity with
the written information furnished to the Issuer of the Offered Securities by or
through the Initial Purchaser specifically for inclusion therein and provided
pursuant to Section 9(e); and provided further that as to any Preliminary
Prospectus this indemnity agreement shall not inure to the benefit of the
Initial Purchaser, its officers or employees or any person controlling the
Initial Purchaser on account of any loss, claim, damage, liability or action
arising from the sale of Offered Securities to any person by the Initial
Purchaser if the Initial Purchaser failed to send or give a copy of the
Prospectus, as the same may be amended or supplemented, to that person within
the time required by the Securities Act, and the untrue statement or alleged
untrue statement of any material fact or omission or alleged omission to state a
material fact in such Preliminary Prospectus was corrected in the Prospectus,
unless such failure resulted from non-compliance by the Issuer of the Offered
Securities with Section 7(h). For purposes of the last proviso to the
immediately preceding sentence, the term "Prospectus" shall not be deemed to
include the documents incorporated therein by reference, and the Initial
Purchaser shall not be obligated to send or give any supplement or amendment to
any document incorporated by reference in any Preliminary Prospectus or the
Prospectus to any person other than a person to whom the Initial Purchaser had
delivered such incorporated document or documents in response to a written
request therefor. The foregoing indemnity agreement is in addition to any
liability which the Issuer of the Offered Securities may otherwise have to the
Initial Purchaser or to any officer, employee or controlling person of the
Initial Purchaser.
(b) The Initial Purchaser shall indemnify and hold harmless
the Issuer of the Offered Securities, its officers and employees, each of its
directors and each person, if any, who controls the Issuer of the Offered
Securities within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Issuer of the Offered Securities or any such director, officer or
controlling person may become subject, under the Exchange Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, the Registration Statement or
in the Prospectus, or in any amendment or supplement thereto, or (B) in any Blue
Sky Application or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or in the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the written information furnished to the Issuer of
the Offered Securities by or on behalf of the Initial Purchaser specifically for
inclusion therein provided pursuant to Section 9(e), and shall reimburse the
Issuer of the Offered Securities and any such director,
<PAGE>
43
officer or controlling person for any legal or other expenses reasonably
incurred by the Issuer of the Offered Securities or any such director, officer
or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which the Initial Purchaser may otherwise have to the Issuer of the
Offered Securities or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After written
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 9 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that the indemnified party shall have the right to employ counsel to represent
it and its officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the indemnified party against the indemnifying party under this Section 9 and
participate in the defense thereof, if, in the reasonable judgment of the
indemnified party, it is advisable for the indemnified party and those officers,
employees and controlling persons to be jointly represented by separate counsel
or the indemnifying party has failed to assume the defense of such action and
employ counsel reasonably acceptable to the indemnified party, and in that
event, if the indemnified party gives notice to the indemnifying party that it
elects to employ separate counsel at the expense of the indemnifying party, the
fees and expenses of such separate counsel shall be paid by the indemnifying
party and the indemnifying party shall not be entitled to assume the defense of
such action on behalf of such indemnified party. In no event, however, shall the
indemnifying party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions arising out of the same general allegation or circumstances. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each
<PAGE>
44
indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld). If any pending or threatened claim for which indemnification is
provided is settled with an indemnifying party's written consent or if there be
a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss of liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 9
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 9(a) or 9(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Issuer of the Offered Securities on the one hand and the Initial
Purchaser on the other from the sale of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Issuer of the
Offered Securities, on the one hand, and the Initial Purchaser, on the other
hand, with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Issuer
of the Offered Securities on the one hand and the Initial Purchaser on the other
with respect to such sale shall be deemed to be in the same proportion as the
total net proceeds from the sale of the Purchased Securities purchased under
this Agreement (before deducting expenses) received by both Issuers, on the one
hand, and the total compensation received by the Initial Purchaser under Section
3(b), on the other hand, bear to the total gross proceeds from the sale of the
Purchased Securities under this Agreement. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Issuer of the Offered Securities or the Initial
Purchaser, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuer of the Offered Securities and the Initial Purchaser agree that it
would not be just and equitable if contributions pursuant to this Section 9(d)
were to be determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 9(d) shall be deemed to include, for purposes
of this Section 9(d) any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9(d), the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total price of the Purchased Securities purchased by it exceeds the
amount of any damages which the Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
<PAGE>
45
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Initial Purchaser shall provide to the Issuer of the
Offered Securities on the Effective Date a letter that specifies the information
relating to the offering furnished by or on behalf of the Initial Purchaser
specifically for inclusion in the Prospectus and that confirms that such
information is correct.
10. Termination of Initial Purchaser's Obligations. The
obligations of the Initial Purchaser hereunder may be terminated by the Initial
Purchaser by notice given to and received by Price REIT prior to the Delivery
Date if, prior to that time, any of the events described in Sections 6(h), (i)
or (j) shall have occurred or if the Initial Purchaser shall decline to purchase
Purchased Securities for any reason permitted under this Agreement.
11. Initial Purchaser's Expenses. If (a) Price REIT shall fail
to tender the Price REIT Preferred Stock for delivery to the Initial Purchaser
for any reason permitted under this Agreement (other than failure of the Initial
Purchaser to comply with Section 4), or (b) the Initial Purchaser shall decline
to purchase the Price REIT Preferred Stock for any reason permitted under this
Agreement (including the termination of this Agreement pursuant to Section 10),
such Issuer shall reimburse the Initial Purchaser for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) as shall
have been incurred by it in connection with this Agreement and the proposed
purchase of the Price REIT Preferred Stock and upon demand Price REIT shall pay
the full amount thereof to the Initial Purchaser.
12. Special Provisions. (a) At any time on or prior to the
Repurchase Termination Date, upon not less than three Business Days prior
written notice by Price REIT or if the Merger has been consummated by Kimco, to
the Initial Purchaser, the Initial Purchaser agrees to sell to Price REIT or if
the Merger has been consummated, to Kimco, all shares of Price REIT Preferred
Stock or Kimco Depositary Shares owned by the Initial Purchaser at a price of
$1,000 per share, plus accrued and unpaid dividends to the date of purchase;
provided that such purchase price (other than the portion consisting of accrued
and unpaid dividends) is paid solely out of the sale proceeds of equity
securities of Price REIT or Kimco, as the case may be, and from no other source.
Delivery by the Initial Purchaser of the certificates for Price REIT Preferred
Stock or Kimco Depositary Shares, duly endorsed in blank or with stock powers
attached, pursuant to this Section 12(a) and payment therefor by wire transfer
in immediately available funds shall take place on the date specified in such
notice at the office and at the time agreed to by Price REIT or Kimco, as the
case may be, and the Initial Purchaser.
(b) Price REIT agrees that if the Merger is not consummated,
the Board of Directors of Price REIT shall adopt a resolution proposing an
amendment to the charter of Price REIT that would increase the authorized number
of directors of Price REIT to at least nine, provide that the number of
directors to be elected by the holders of the Price REIT Preferred Stock in the
event of dividend arrearages shall be increased to two, declare such amendment
<PAGE>
46
advisable and direct that such amendment be submitted for consideration at the
next annual meeting of stockholders of Price REIT.
(c) The Initial Purchaser agrees not to sell, transfer or
otherwise dispose of the Purchased Securities prior to the Repurchase
Termination Date, except to (i) an affiliate of the Initial Purchaser which
agrees to be bound by all of the provisions of this Agreement [or (ii) with the
consent of the Issuer of the Purchased Securities, which consent shall not be
unreasonably withheld, one or more QIBs pursuant to Section 4; provided that
such QIBs agree to be bound by the provisions of the second introductory
paragraph of this Agreement, Section 4, and this Section 12 (excluding Section
12(e)), a registration rights agreement containing customary terms shall have
been entered into by the Issuer of the Purchased Securities with respect to the
Purchased Securities and such QIBs shall have delivered an agreement containing
representations, warranties and agreements, acceptable to the Issuer of the
Purchased Securities, similar to those contained in Section 12(e).
(d) The Initial Purchaser hereby waives any right to appraisal
to which it may be entitled in connection with the Merger under Section 3-202 of
the MGCL with respect to any shares of Price REIT Preferred Stock owned by it.
(e) The Initial Purchaser represents, warrants and agrees
that:
(i) on the Delivery Date, the Initial Purchaser does
not Constructively Own (as defined below) more than 9.8% of
the stock or "ownership interest" (as defined below) in any
corporation or partnership listed on the attached Schedule A
(each a "Tenant").
(ii) the Initial Purchaser will promptly inform Price
REIT if the Initial Purchaser has knowledge of its actual or
Constructive Ownership (defined below) of more than 9.8% of
any voting or other equity interest in any Tenant (the "Tenant
Ownership Limit").
(iii) on the Delivery Date, to the Initial
Purchaser's knowledge, no individual Beneficially Owns (as
defined below) more than 50% (by value) of the stock of the
Initial Purchaser.
(iv) the Initial Purchaser is a wholly-owned
subsidiary of Lehman Brothers Holdings Inc. ("Holdings"); a
list of individuals and entities that have filed Schedules 13D
and 13G relating to Holdings and each individual's or entity's
ownership of Holdings is attached as Schedule B; the Initial
Purchaser does not have actual knowledge that the ownership of
such individuals or entities in Holdings on the Delivery Date
is other than as reflected.
(v) for purposes of the these representations, the
term "Constructively Owns" and "Constructive Ownership" refer
to stock or ownership interests which
<PAGE>
47
the Initial Purchaser (or another individual or entity)
actually owns, as well as stock or ownership interests which
the Initial Purchaser (or another individual or entity) is
considered to own through the application of section 318 of
the Code, as modified by section 856(d)(5) of the Code. Such
rules are generally described in Schedule C.
(vi) for purposes of the these representations, the
term "Beneficially Owns" refers to stock the Initial Purchaser
(or an individual) actually owns, as well as stock that the
Initial Purchaser (or an individual) is considered to own
through the application of section 544 of the Code, as
modified by section 856(h) of the Code. Such rules are
generally described in Schedule C.
(vii) the Initial Purchaser does not have actual
knowledge that any person who Constructively Owns more than
9.8% in value of the stock of Price REIT which is
Constructively Owned by the Initial Purchaser, Constructively
Owns an interest in any Tenant which would violate the Tenant
Ownership Limit.
(viii) (A) the exemption from the Ownership Limit
referred to in Section 7(a)(w) is subject to paragraph
H.2.(a)(ii) of the Articles Supplementary of Price REIT, and
(B) such exemption is not assignable to any other person or
entity, and
(ix) for purposes of the above representations, the
term "Ownership Interest" refers to any type of ownership
interest in either the assets or net profits of an entity
other than a corporation.
(f) In addition to the legend set forth in the paragraph I of
the Articles Supplementary of Price REIT, each certificate for the Price REIT
Preferred Stock shall contain the following legend: "The shares evidenced by
this certificate were issued pursuant and subject to the terms of a Purchase
Agreement dated May 18, 1998, by and between the Price REIT, Inc., LB I Group
Inc. and Kimco Realty Corporation (the "Purchase Agreement") which provides,
among other things, for certain restrictions on the transferability of the
shares evidenced hereby. A copy of the Purchase Agreement will be provided by
the company without charge upon request of the holder of this certificate."
13. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered
or sent by mail, telex or facsimile transmission to Lehman
Brothers Inc., Three World Financial Center, New York, New
York 10285, Attention: Preferred Stock Product Management
(Fax: 212-528-6669);
(b) if to Price REIT, shall be delivered or sent by
mail, telex or facsimile transmission to The Price REIT, Inc.,
145 South Fairfax Avenue, Los
<PAGE>
48
Angeles, California 90036, Attention: Mr. Joseph K.
Kornwasser, President and Chief Executive Officer (Fax: (213)
937-8175);
(c) if to the Kimco, shall be delivered or sent by
mail, telex or facsimile transmission to Kimco Realty
Corporation, 3333 New Hyde Park Road, New Hyde Park, New York,
Attention: Milton Cooper, Chairman of the Board (Fax: (516)
869-7117.
14. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchaser
(including any affiliate thereof to which the Purchased Securities are
transferred pursuant to Section 12(c)), Price REIT, Kimco and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of Price REIT and Kimco contained in this Agreement
shall also be deemed to be for the benefit of the officers and employees of the
Initial Purchaser, such affiliate and the person or persons, if any, who control
the Initial Purchaser or such affiliate within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Initial Purchaser
contained in Section 9 of this Agreement shall be deemed to be for the benefit
of directors, officers and employees of the Issuer of the Offered Securities and
any person controlling the Issuer of the Offered Securities within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 14, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. Notwithstanding the
above, Price REIT shall have the right to assign to a wholly-owned subsidiary of
Price REIT the rights and options inuring to the benefit of Price REIT hereunder
to repurchase from time to time the outstanding Price REIT Preferred Stock,
provided that such assignment shall not relieve or release Price REIT from any
obligations hereunder.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Issuers and the Initial Purchaser contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of the Purchased Securities and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
16. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "Business Day" means any day on which the
New York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each
<PAGE>
49
be deemed to be an original but all such counterparts shall together constitute
one and the same instrument.
19. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
<PAGE>
50
If the foregoing correctly sets forth the agreement among the
Price REIT, Kimco and the Initial Purchaser, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
THE PRICE REIT, INC.
By: /s/ LAWRENCE KRONENBERG
---------------------------
Name: Lawrence Kronenberg
Title: Executive Vice President of Finance
KIMCO REALTY CORPORATION
By: /s/ MICHAEL PAPPAGALLO
---------------------------
Name: Michael Pappagallo
Title: Chief Financial Officer and
Vice President
Accepted:
LB I GROUP INC.
By: /s/ STEVEN BERKENFELD
-------------------------
Name: Steven Berkenfeld
Title: Vice President
<PAGE>
51
SCHEDULE A
LIST OF TENANTS
A. Costco Wholesale Corporation/Costco Companies, Inc.
B. Home Depot U.S.A., Inc.
C. Homebase, Inc.
D. The Sports Authority, Inc.
E. Best Buy Co., Inc.
F. Levitz Furniture Corporation
G. Toys 'R' Us-Delaware, Inc.
H. Homeplace Stores Two, Inc. (Homeplace Stores, Inc.)
I. G.C. Theatre Corp. of California
J. Borders, Inc.
K. Officemax, Inc.
L. Petsmart, Inc.
M. Computer City, Inc.
N. Tandy Corporation (DBA Radio Shack)
O. Ross Stores, Inc.
P. Lowe's Home Centers, Inc.
Q. King Kullen Grocery Co., Inc.
R. Foodarama Supermarkets, Inc./Shoprite Stores Group, Inc.
S. L.A. Fitness, a California Limited Partnership
T. T.J. Maxx, Inc.
<PAGE>
52
U. Bally Total Fitness Corporation
V. Michaels Stores, Inc.
W. Circuit City Stores, Inc.
X. Sears, Roebuck and Co.
Y. Builders Square, Inc.
Z. Target Shopping Centers, Inc.
AA. Blockbuster Videos, Inc./Blockbuster Music Retail, Inc.
BB. Staples, Inc.
<PAGE>
53
SCHEDULE B
OWNERSHIP OF LEHMAN BROTHERS HOLDINGS INC.
AS SHOWN ON SCHEDULES 13D AND 13G
ENTITY CLASS NUMBER % OF
CLASS
FMR Corp. Common Stock 7,137,424 6.0%
The Prudential
Insurance
Company of
America Common Stock 7,079,321 5.9%
American Express Cumulative
Convertible
Voting
Preferred
Stock,
Series B 9,163,683 70.7%1/
Redeemable
Voting
Preferred
Stock 928 92.8%
Nippon Life
Insurance
Company Preferred
Stock 72 7.2%
Common Stock 5,487,802 4.6%
- ----------
1/ If converted these shares would represent approximately 2.4% of the class of
Common Stock.
<PAGE>
54
SCHEDULE C
CONSTRUCTIVE AND BENEFICIAL OWNERSHIP
The "Constructive Ownership" provisions of the Code generally provide
as follows:
1. An individual is considered as owning the stock or
Ownership Interests that are owned, actually or
constructively, by or for his or her spouse, parents,
children and grandchildren;
2. Stock or Ownership Interests that are owned, actually
or constructively, by or for a partnership or estate
are considered as owned proportionately by the
partners or beneficiaries of such partnership or
estate;
3. Stock or Ownership Interests that are owned, actually
or constructively, by or for a partner which actually
or constructively owns a 25% or greater capital or
profits interest in a partnership or a beneficiary of
an estate or trust (other than an employees' trust
described in section 401(a) of the Code which is
exempt from tax under section 501(a) of the Code)
shall be considered as owned by such partnership,
estate or trust (or, in the case of a grantor trust,
the grantor(s));
4. Stock or Ownership Interests that are owned, actually
or constructively, by or for a trust (other than an
employees' trust described in section 401(a) of the
Code which is exempt from tax under section 501(a) of
the Code) are considered as owned by such trust's
beneficiaries in proportion to the actuarial interest
of such beneficiaries (provided, however, that in the
case of a "grantor trust", as defined in sections 671
through 679 of the Code, such stock or Ownership
Interests will be considered as owned by the
grantor(s));
5. If ten percent (10%) or more in value of the stock of
a corporation is owned, actually or constructively,
by or for any person, such person be considered as
owning the stock or Ownership Interests that are
owned, actually or constructively, by or for such
corporation in that proportion which the value of the
stock which such person so owns bears to the value of
all stock in such corporation;
6. If ten percent (10%) or more in value of the stock of
a corporation is owned, actually or constructively,
by or for any person, such corporation shall be
considered as owning the stock or Ownership Interests
that are owned, actually or constructively, by or for
such person;
<PAGE>
55
7. If any person has an option to acquire stock or
Ownership Interests (including an option to acquire
an option or any one of a series of such options),
such stock or Ownership Interest shall be considered
as owned by such person;
8. Stock or Ownership Interests that are constructively
owned by a person by reason of the application of the
rules described in subparagraphs 1 through 7 above
shall, for purposes of applying subparagraphs 1
through 7, be considered as actually owned by such
person, provided, however,that (i) stock or Ownership
Interests constructively owned by an individual by
reason of subparagraph 1 shall not be considered as
owned by such individual for purposes of again
applying subparagraph 1 in order to make another the
constructive owner of such stock, (ii) stock or
Ownership Interests constructively owned by a
partnership, estate, trust or corporation by reason
of the application of subparagraphs 3 or 6 shall not
be considered as owned by it for purposes of applying
subparagraphs 2, 4 or 5 in order to make another the
constructive owner of such stock, (iii) if stock or
Ownership Interests may be considered as owned by an
individual either under subparagraphs 1 or under 7,
it shall be considered a owned by such individual
solely under subparagraph 7, and (iv) for purposes of
the above described rules, an S-corporation shall be
treated as a partnership and any shareholder of such
S-corporation shall be treated as a partner of such
partnership except that this rule shall not apply for
purposes of determining whether stock in the
S-corporation is constructively owned by any person.
The "Beneficial Ownership" provisions of the Code generally provide as
follows:
1. Stock owned actually or constructively by or for a
corporation, partnership, estate or trust shall be
considered as being owned proportionately by its
shareholders, partners or beneficiaries;
2. An individual shall be considered as owning the stock
owned, actually or constructively, by or for his or
her family - for purposes of this subparagraph 2, the
family of an individual includes only his or her
brothers and sisters (whether by whole or half
blood), spouse, ancestors and lineal descendants;
3. If any person has an option to acquire stock, such
stock shall be considered as owned by such person -
for purposes of this subparagraph 3, an option to
acquire such an option, and each one of a series of
options, shall be considered as an option to acquire
such stock;
<PAGE>
56
4. Stock constructively owned by a person by reason of
the application of subparagraphs 1 or 3, shall for
purposes of applying subparagraphs 1 or 2, be treated
as actually owned by such person; but stock
constructively owned by an individual by reason of
the application of subparagraph 2 shall not be
treated as owned by such individual for purposes of
again applying such subparagraph in order to make
another the constructive owner of such stock;
5. If stock may be considered as owned by an individual
under either subparagraph 2 or 3 above, it shall be
considered as owned by such individual under
subparagraph 3; and
6. Outstanding securities convertible into stock
(whether or not convertible during the taxable year)
shall be considered as outstanding stock.
7. Subparagraphs 2, 3 and 6 shall only be applied if the
effect is to cause five or fewer individuals (defined
in section 542 of the Code to include certain
entities) to own, actually or constructively, more
than fifty percent (50%) of Price REIT's outstanding
stock during the last half of any of its taxable
years commencing with the Price REIT's taxable year
ending December 31, 1998.
<PAGE>
Exhibit A
ARTICLES SUPPLEMENTARY
OF
THE PRICE REIT, INC.
The Price REIT, Inc., a corporation organized and existing under the
laws of the State of Maryland (the "Corporation"), hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
FIRST: Pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (the "Board of Directors") in accordance
with Article IV, subparagraph (d) of the Charter of the Corporation, including
these Articles Supplementary (the "Charter"), the Board of Directors and the
Executive Committee thereof, at special meetings held on April 29, 1998 and May
14, 1998, adopted resolutions reclassifying 65,000 shares of Preferred Stock (as
defined in the Charter) as a separate class of Preferred Stock, designated as
"Class A Floating Rate Cumulative Preferred Stock," par value $.01 per share
("Class A Preferred Stock"), with the rights granted to or imposed thereupon,
including the dividend rate, conversion rights, voting rights and liquidation
preference set forth below:
CLASS A FLOATING RATE CUMULATIVE PREFERRED STOCK
A. Certain Definitions.
Unless the context otherwise requires, the terms defined in this
paragraph (A) shall have, for all purposes of the provisions of the Charter in
respect of the Class A Preferred Stock, the meanings herein specified (with
terms defined in the singular having comparable meanings when used in the
plural).
Additional Dividend. The term "Additional Dividend" shall mean (A) with
respect to the first Additional Dividend Period, the Base Additional Dividend,
(B) with respect to the second Additional Dividend Period, the Base Additional
Dividend multiplied by two, (C) with respect to the third Additional Dividend
Period, the Base Additional Dividend multiplied by three, (D) with respect to
the fourth Additional Dividend Period, the Base Additional Dividend multiplied
by four and (E) with respect to the fifth Additional Dividend Period and all
such subsequent Additional Dividend Periods, the Base Additional Dividend
multiplied by five, which amount shall be the maximum Additional Dividend. Upon
the cure of a Registration Default, the Additional Dividend shall be reset at
the Base Additional Dividend for the first subsequent Additional Dividend
Period.
Additional Dividend Period. The term "Additional Dividend Period" shall
mean each of (i) the seven day period following a Registration Default during
which such Registration Default continues to exist, and (ii) each subsequent
seven day period during which the Registration Default continues to exist for
the entire seven day period.
<PAGE>
Base Additional Dividend. The term "Base Additional Dividend" shall
mean an amount equal to the product of (A) 0.0005, (B) the Liquidation
Preference of the shares of Class A Preferred Stock held by the relevant holder
thereof and (C) 7/360.
Beneficial Ownership. The term "Beneficial ownership" shall mean
ownership of Stock by a Person who is or would be treated as an owner of such
Stock either actually or constructively through the application of Section 544
of the Code, as modified by Section 856(h)(1)(B) of the Code. In addition,
"Beneficial ownership" shall include ownership of Stock by a Person who meets
any one of the tests for beneficial ownership as set forth under Rule 13d-3 of
the Securities Exchange Act of 1934, as amended. The terms "Beneficial owner,"
"Beneficially own," "Beneficially owns" and "Beneficially owned" shall have the
correlative meanings.
Business Day. The term "Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in The City of New York are authorized or required by law,
regulation or executive order to close.
Calculation Agent. The term "Calculation Agent" shall mean any
calculation agent selected by the Corporation with respect to the Class A
Preferred Stock, in its capacity as calculation agent.
Code. The term "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Common Equity. The term "Common Equity" shall mean all shares now or
hereafter authorized of any class of common stock of the Corporation, including
the Common Stock, and any other stock of the Corporation, howsoever designated,
authorized after the Issue Date, which has the right (subject always to prior
rights of any class or series of Preferred Stock) to participate in the
distribution of the assets and earnings of the Corporation without limit as to
per share amount.
Common Stock. The term "Common Stock" shall mean the common stock, par
value $.01 per share, of the Corporation.
Constructive Ownership. The term "Constructive ownership" shall mean
ownership of Stock by a Person who is or would be treated as an owner of such
Stock either actually or constructively through the application of Section 318
of the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructive owner," "Constructively own," "Constructively owns" and
"Constructively owned" shall have the correlative meanings.
Depositary Shares. The term "Depositary Shares" shall mean the
Depositary Shares each representing a one-tenth (1/10) fractional interest in a
share of Class A Preferred Stock.
2
<PAGE>
Determination Date. The term "Determination Date" shall have the
meaning set forth in subparagraph (3)(a) of paragraph (B) below.
Dividend Amount. The term "Dividend Amount" shall have the meaning set
forth in subparagraph (4) of paragraph (B) below.
Dividend Payment Date. The term "Dividend Payment Date" shall have the
meaning set forth in subparagraph (2) of paragraph (B) below.
Dividend Period. The term "Dividend Period" with respect to a share of
Class A Preferred Stock shall mean the period from, and including, the Issue
Date to, and including, the first Dividend Payment Date, and thereafter, each
quarterly period from, and including, a Dividend Payment Date to, and including,
the next Dividend Payment Date.
Dividend Rate. The term "Dividend Rate" shall have the meaning set
forth in subparagraph (3) of paragraph (B) below.
Index Maturity. The term "Index Maturity" shall have the meaning set
forth in subparagraph (3)(b) of paragraph (B) below.
IRS. The term "IRS" means the United States Internal Revenue Service.
Issue Date. The term "Issue Date" shall mean the date that the Class A
Preferred Stock is first issued by the Corporation.
Junior Stock. The term "Junior Stock" shall mean, as the case may be,
(i) the Common Equity and any other class or series of stock of the Corporation
which is not entitled to receive any dividends in any Dividend Period unless all
dividends required to have been paid or declared and set apart for payment on
the Class A Preferred Stock shall have been so paid or declared and set apart
for payment or (ii) the Common Equity and any other class or series of stock of
the Corporation which is not entitled to receive any assets upon liquidation,
dissolution or winding up of the affairs of the Corporation until the Class A
Preferred Stock shall have received the entire amount to which such Class A
Preferred Stock is entitled upon such liquidation, dissolution or winding up.
Kimco. The term "Kimco" shall mean Kimco Realty Corporation, a Maryland
corporation.
Liquidation Preference. The term "Liquidation Preference" shall mean
One Thousand Dollars ($1,000.00) per share of Class A Preferred Stock.
Market Day. The term "Market Day" shall mean any Business Day on which
commercial banks and foreign exchange markets are open for business (including
dealings in foreign exchange and foreign currency deposits) in New York, New
York and London, England.
3
<PAGE>
Merger. The term "Merger" shall mean the merger of the Corporation with
and into REIT Sub contemplated by the Merger Agreement.
Merger Agreement. The term "Merger Agreement" shall mean that certain
Agreement and Plan of Merger, dated as of January 13, 1998, by and among the
Corporation, Kimco and REIT Sub, as such agreement has been and may be amended
from time to time.
Ownership Limit. The term "Ownership Limit" shall mean 9.8% by value of
the outstanding Stock of the Corporation.
Parity Stock. The term "Parity Stock" shall mean, as the case may be,
(i) any class or series of stock of the Corporation which is entitled to receive
payment of dividends on a parity with the Class A Preferred Stock or (ii) any
class or series of stock of the Corporation which is entitled to receive assets
upon liquidation, dissolution or winding up of the affairs of the Corporation on
a parity with the Class A Preferred Stock.
Paying Agent. The term "Paying Agent" shall mean any paying agent
appointed by the Corporation with respect to the Class A Preferred Stock, in its
capacity as paying agent.
Person. The term "Person" shall mean an individual, corporation,
partnership, limited liability company, estate, trust (including a trust
qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust
permanently set aside for or to be used exclusively for the purposes described
in Section 642(c) of the Code, association, private foundation within the
meaning of Section 509(a) of the Code, joint stock company or other entity; but
does not include an underwriter acting in a capacity as such in a public
offering of shares of Class A Preferred Stock (or Depositary Shares) provided
that the ownership of such shares of Class A Preferred Stock (or Depositary
Shares) by such underwriter would not result in the Corporation's being "closely
held" within the meaning of Section 856(h) of the Code, or otherwise result in
the Corporation's failing to qualify as a REIT.
Purchase Agreement. The term "Purchase Agreement" shall mean that
certain Purchase Agreement by and among the Corporation, Kimco and LB I Group
Inc., dated as of May 18, 1998.
Purported Beneficial Transferee. The term "Purported Beneficial
Transferee" shall mean, with respect to any purported Transfer (or other event)
which results in a transfer to the Corporation as trustee of a trust, as
provided in the third paragraph of Section 1 of Article IX of the Charter or
subparagraph H(2)(b) hereof, the purported beneficial transferee or owner for
whom the Purported Record Transferee would have acquired or owned shares of
Class A Preferred Stock, if such Transfer had been valid under paragraph H
hereof.
Purported Record Transferee. The term "Purported Record Transferee"
shall mean, with respect to any Purported Transfer (or other event) which
results in a transfer to the Corporation as trustee of a trust, as provided in
the third paragraph of Section 1 of Article IX of the Charter or
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subparagraph H(2)(b) hereof, the record holder of the shares of Class A
Preferred Stock if such Transfer had been valid under paragraph H hereof.
Registration Default. The term "Registration Default" shall mean the
first to occur of the following events: (i) the Registration Statement (as
defined in the Purchase Agreement) has not been filed with the Securities and
Exchange Commission on or prior to the 30th day following the Repurchase
Termination Date (as defined in the Purchase Agreement), (ii) the Registration
Statement (as defined in the Purchase Agreement) has not been declared effective
on or prior to the 100th day after the Repurchase Termination Date (as defined
in the Purchase Agreement), or (iii) the Registration Statement required to be
filed by the Purchase Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded by a post-effective amendment to such Registration
Statement that cures such failure and that is itself declared effective on or
before the fifth Business Day following the Registration Default, provided,
that, if such post-effective amendment is required because of a change in the
Plan of Distribution such post-effective amendment shall have been filed and
declared effective within 15 Business Days of the Registration Default.
Reference Banks. The term "Reference Banks" shall have the meaning set
forth in subparagraph (3)(b) of paragraph (B) below.
REIT. The term "REIT" shall mean a real estate investment trust under
Section 856 of the Code.
REIT Sub. The term "REIT Sub" shall mean REIT Sub, Inc., a Maryland
corporation and wholly-owned subsidiary of Kimco, formed in connection with the
Merger.
Record Date. The term "Record Date" shall mean the date designated by
the Board of Directors of the Corporation at the time a dividend is declared;
provided, however, that such Record Date shall be the 15th day of the calendar
month in which the applicable Dividend Payment Date falls or such other date
designated by the Board of Directors for the payment of dividends that is not
more than thirty (30) days nor less than ten (10) days prior to such Dividend
Payment Date.
Restriction Termination Date. The term "Restriction Termination Date"
shall mean the first day after the Issue Date on which (i) the Board of
Directors of the Corporation determines that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify as a REIT
and (ii) such determination is approved by the affirmative vote of the holders
of not less than two-thirds (2/3) of the shares of the Corporation's capital
stock outstanding and entitled to vote thereon.
Senior Stock. The term "Senior Stock" shall mean, as the case may be,
(i) any class or series of stock of the Corporation created after the Issue Date
ranking senior to the Class A Preferred Stock in respect of the right to receive
dividends or (ii) any class or series of stock of the Corporation created after
the Issue Date ranking senior to the Class A Preferred Stock in respect of
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the right to participate in any distribution upon liquidation, dissolution
or winding up of the affairs of the Corporation.
Stock. The term "Stock" shall have the meaning set forth in Article IX,
Section 4(d) (as amended from time to time) of the Charter.
Subsequent Dividend Period. The term "Subsequent Dividend Period" shall
have the meaning set forth in subparagraph (3) of paragraph (B) below.
Telerate Page 3750. The term "Telerate Page 3750" shall mean the
display designated as Page 3750 on the Dow Jones Telerate Service (or such other
pages as may replace Page 3750 on that service for the purpose of displaying
London, England interbank offered rates of major banks).
3-Month LIBOR. The term "3-Month LIBOR" shall have the meaning set
forth in subparagraph (3)(b) of paragraph (B) below.
Transfer. The term "Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of Class A Preferred Stock or Depositary
Shares, including (i) the granting of any option or entering into any agreement
for the sale, transfer or other disposition of Class A Preferred Stock or
Depositary Shares or (ii) the sale, transfer, assignment or other disposition of
any securities (or rights convertible into or exchangeable for Class A Preferred
Stock or Depositary Shares), whether voluntary or involuntary, whether such
transfer has occurred of record or beneficially or Beneficially or
Constructively (including but not limited to transfers of interests in other
entities which results in changes in Beneficial or Constructive ownership of
Class A Preferred Stock or Depositary Shares), and whether such transfer has
occurred by operation of law or otherwise.
B. Dividends.
1. The record holders of Class A Preferred Stock shall be entitled to
receive dividends, when and as declared by the Board of Directors of the
Corporation, out of funds legally available for payment of dividends. Such
dividends shall be payable with respect to each outstanding share of Class A
Preferred Stock by the Corporation in cash at the Dividend Rate in respect of
the Liquidation Preference. The Dividend Rate for the initial Dividend Period
will be 7.68% per annum and for each Subsequent Dividend Period will be the rate
determined in accordance with subparagraph (3) below.
2. Dividends on each outstanding share of Class A Preferred Stock shall
accrue and be cumulative from the Issue Date. Such dividends will accrue whether
or not the Corporation has earnings, whether or not there are funds legally
available for the payment of such dividends and whether or not such dividends
are declared. Dividends shall be payable quarterly in arrears when and as
declared by the Board of Directors of the Corporation on the last day of each of
January, April, July and October of each year (each, a "Dividend Payment Date"),
commencing on July 31,
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1998. In addition, any Additional Dividend shall be payable pursuant to
subparagraph (4) below. If any Dividend Payment Date occurs on a day that is not
a Business Day, any accrued dividends otherwise payable on such Dividend Payment
Date shall be paid on the next succeeding Business Day. Dividends shall be paid
to the holders of record of the Class A Preferred Stock as their names shall
appear on the stock transfer records of the Corporation at the close of business
on the Record Date for such dividend. Dividends in respect of any past Dividend
Periods that are in arrears may be declared and paid at any time to holders of
record on the Record Date therefor. Any dividend payment made on shares of Class
A Preferred Stock shall be first credited against the earliest accrued but
unpaid dividend due which remains payable.
3. The Dividend Rate ("Dividend Rate") for any Dividend Period
commencing after the initial Dividend Period (each, a "Subsequent Dividend
Period") will be a floating rate per annum determined by reference to 3-Month
LIBOR, determined as described below, plus 2.00%. "3-Month LIBOR" means the
London, England interbank offered rate for three-month, U.S. dollar deposits
and, with respect to any Subsequent Dividend Period, will be calculated by the
Calculation Agent, as follows:
(a) On the second Market Day preceding the commencement of
such Subsequent Dividend Period (each, a "Determination Date"), 3-Month
LIBOR will be determined on the basis of the offered rate for deposits
of not less than $1,000,000 for a period of three months (the "Index
Maturity"), commencing on the first day of such Subsequent Dividend
Period (or, if such day is not a Market Day, the next succeeding Market
Day), which appears on Telerate Page 3750 as of 11:00 a.m., London,
England time on said Determination Date. If no such offered rate
appears, 3-Month LIBOR with respect to such Subsequent Dividend Period
will be determined as described in (b) below.
(b) With respect to a Determination Date on which no such
offered rate appears on Telerate Page 3750 as described in (a) above,
3-Month LIBOR shall be the arithmetic mean, expressed as a percentage,
of the offered rates (unless by its terms such display provides for
only a single rate, in which case a single rate shall be used) for
deposits in U.S. dollars for the Index Maturity that appears on the
display designated as "LIBO" on the Reuters Monitor Money Market Rates
Service (or such other page as may replace the LIBO page on that
service for the purpose of displaying London, England interbank offered
rates of major banks) ("Reuters Screen LIBO Page") as of 11:00 a.m.,
London, England time, on such date. If, in turn, at least two such
rates are not displayed on the Reuters Screen LIBO Page at such time
(unless, as aforesaid, only a single rate is required), the Calculation
Agent will obtain from each of four reference banks in London, England
selected by the Calculation Agent ("Reference Banks") such bank's
offered quotation (expressed as a percentage per annum) as of
approximately 11:00 a.m., London, England time, on such Determination
Date for deposits in U.S. dollars to prime banks in the London, England
interbank market for the Index Maturity. If two or more such quotations
are
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provided as requested, then 3-Month LIBOR for such date shall be the
arithmetic average of such quotations. If, in turn, fewer than two such
quotations are provided as requested, then 3-Month LIBOR for such date
will be obtained from the preceding Market Day for which the Reuters
Screen LIBO Page displayed a rate for the Index Maturity.
(c) If on any Determination Date, the Calculation Agent is
required but unable to determine 3-Month LIBOR in the manner provided
in paragraphs (a) and (b) above, 3-Month LIBOR for such Dividend Period
shall be 3-Month LIBOR as determined on the previous Determination
Date.
(d) Each calculation in respect of the Class A Preferred Stock
will be rounded, if necessary, to the nearest one ten-thousandth of a
percentage, with five hundred thousandths being rounded upwards.
4. The Calculation Agent shall, as soon as practicable after 11:00
a.m., London, England time, on each Determination Date, determine the Dividend
Rate and inform the Paying Agent. The Paying Agent will calculate the amount of
dividends payable in respect of the following Dividend Period (the "Dividend
Amount"). The Dividend Amount for each share of Class A Preferred Stock shall be
calculated by (i) applying the Dividend Rate to the Liquidation Preference for
such share of Class A Preferred Stock outstanding during the Dividend Period,
(ii) multiplying such amount by the actual number of days such share was
outstanding during the Dividend Period concerned (which actual number of days
shall include the first day but exclude the last day of such Dividend Period),
(iii) dividing by 360 and (iv) rounding the resulting figure to the nearest cent
(with one-half cent or more being rounded upwards).
5. Within one Business Day of the occurrence of a Registration Default
the Corporation will notify the holder of the shares of Class A Preferred Stock
of such Registration Default. In the event of a Registration Default, the
applicable Additional Dividend shall accrue and be cumulative with respect to
each outstanding share of Class A Preferred Stock on the last day of any
respective Additional Dividend Period. Any accrued Additional Dividends shall be
payable at each Dividend Payment Date in the same manner as set forth in
subparagraph (2) above. Upon the cure of all Registration Defaults, the accrual
of Additional Dividends will cease unless and until a new Registration Default
shall occur.
6. All certificates, communications, opinions, determinations,
calculations, quotations and decisions given, expressed, made or obtained for
the purpose of the provisions relating to the payment and calculation of
dividends on the Class A Preferred Stock, whether by Reference Banks (or any of
them) or the Calculation Agent or Paying Agent, will (in the absence of willful
default, bad faith or manifest error) be final, conclusive and binding on the
Corporation and all of the holders of the Class A Preferred Stock and no
liability will (in the absence of willful default, bad faith or manifest error)
attach to the Calculation Agent or Paying Agent in connection with the exercise
or non-exercise by any of them of their powers, duties and discretion. None of
the Paying Agent, the Calculation Agent or the Corporation (or any of their
respective officers, directors, agents, beneficiaries, employees or affiliates)
shall have any
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liability to any person for (A) the selection of any Reference Bank or (B) any
inability to retain major banks in the London, England interbank market, in the
case of the Calculation Agent, which is caused by circumstances beyond its
reasonable control.
7. If any shares of Class A Preferred Stock are outstanding, no full
dividends shall be declared or paid or set apart for payment on any other class
or series of Preferred Stock ranking junior to or on a parity with the Class A
Preferred Stock as to dividends for any period unless full cumulative dividends
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Class A
Preferred Stock for all past Dividend Periods and the then current Dividend
Period. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the shares of the Class A Preferred Stock and
any other class or series of Preferred Stock ranking on a parity as to dividends
with the Class A Preferred Stock, all dividends declared upon the shares of the
Class A Preferred Stock and any other such class or series of Preferred Stock
shall be declared pro rata so that the amount of dividends declared per share on
the Class A Preferred Stock and such class or series of Preferred Stock shall in
all cases bear to each other the same ratio that accrued and unpaid dividends
per share on the shares of the Class A Preferred Stock and such class or series
of Preferred Stock bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on the
Class A Preferred Stock which may be in arrears.
8. Except as provided in subparagraph (7) of this paragraph (B), unless
full cumulative dividends on the Class A Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past Dividend Periods and the then
current Dividend Period, no dividends (other than in common stock or other stock
ranking junior to the Class A Preferred Stock as to dividends and upon
liquidation, dissolution and winding up of the affairs of the Corporation) shall
be declared or paid or set apart for payment or other distribution shall be
declared or made upon any Junior Stock or Parity Stock nor shall any Junior
Stock or Parity Stock be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for other stock of the Corporation ranking junior to
the Class A Preferred Stock as to dividends and upon liquidation, dissolution or
winding up)
9. Notwithstanding anything contained herein to the contrary, no
dividends on shares of Class A Preferred Stock shall be authorized or declared
by the Board of Directors of the Corporation or paid or set apart for payment by
the Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibits
such authorization, declaration, payment or setting apart for payment or
provides that such authorization, declaration, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or to the
extent such declaration or payment shall be restricted or prohibited by law.
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10. If, for any taxable year, the Corporation elects to designate as
"capital gain dividends" (as defined in Section 857 of the Code) any portion
(the "Capital Gains Amount") of the dividends (as determined for federal income
tax purposes) paid or made available for the year to holders of all classes of
stock (the "Total Dividends"), then the portion of the Capital Gains Amount that
shall be allocable to holders of the Class A Preferred Stock shall be the amount
that the total dividends paid or made available to the holders of the Class A
Preferred Stock for the year bears to the Total Dividends.
11. Notwithstanding any provision to the contrary herein, the Board of
Directors may, in its sole discretion, (i) declare a special Record Date with
respect to the portion of the initial Dividend Period prior to the Merger and
(ii) may pay a dividend on the Corporation's shares of Common Stock for the
period prior to the Merger notwithstanding the fact that the first Dividend
Payment Date for the Class A Preferred Stock will be July 31, 1998.
C. Distributions Upon Liquidation, Dissolution or Winding Up.
1. Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, subject to the prior preferences
and other rights of any class or series of stock ranking senior to the Class A
Preferred Stock as to the distribution of assets upon liquidation, dissolution
or winding up of the affairs of the Corporation, but before any distribution or
payment shall be made to the holders of any class or series of stock ranking
junior to the Class A Preferred Stock as to the distribution of assets upon any
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Class A Preferred Stock shall be entitled to receive out of the
assets of the Corporation legally available for distribution to its stockholders
liquidating distributions in cash or property at its fair market value as
determined by the Board of Directors of the Corporation in the amount of the
Liquidation Preference per share plus an amount equal to all dividends accrued
and unpaid thereon to the date of such liquidation, dissolution or winding up.
After payment of the full amount of the liquidating distributions to which they
are entitled, the holders of Class A Preferred Stock will have no right or claim
to any of the remaining assets of the Corporation and shall not be entitled to
any other distribution in the event of liquidation, dissolution or winding up of
the affairs of the Corporation.
2. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the legally available assets of the
Corporation are insufficient to pay the amount of the Liquidation Preference per
share plus an amount equal to all dividends accrued and unpaid on the Class A
Preferred Stock and the corresponding amounts payable on each class or series of
stock ranking on a parity with the Class A Preferred Stock as to the
distribution of assets upon liquidation, dissolution or winding up of the
affairs of the Corporation, then the holders of the Class A Preferred Stock and
all such stock shall share ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they otherwise would
be respectively entitled. Neither the consolidation or merger of the Corporation
into or with another corporation or corporations nor the sale, lease, transfer
or conveyance of all or substantially all of the assets of the
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Corporation to another corporation or any other entity shall be deemed a
liquidation, dissolution or winding up of the affairs of the Corporation within
the meaning of this paragraph (C).
D. [Reserved]
E. No Conversion.
Except insofar as may be provided in the Charter (including these
Articles Supplementary) to preserve the Corporation's status as a REIT, the
Class A Preferred Stock is not convertible into, or exchangeable for, any other
properties or securities of the Corporation.
F. Voting Rights.
1. The holders of record of shares of Class A Preferred Stock shall not
be entitled to any voting rights except as hereinafter provided in this
paragraph (F). So long as any shares of Class A Preferred Stock are outstanding,
the Corporation shall not, without either (a) the affirmative vote of the
holders of at least two-thirds (2/3) of the shares of the Class A Preferred
Stock, outstanding at the time, given in person or by proxy, at a meeting (such
Class A Preferred Stock voting separately as a class) or (b) the unanimous
written consent of all of the holders of shares of Class A Preferred Stock, (i)
authorize or create, or increase the authorized or issued amount of, any class
or series of Senior Stock, or reclassify any authorized stock into Senior Stock,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such Senior Stock; or (ii) amend or repeal
the provisions of the Charter in respect of the Class A Preferred Stock so as to
materially and adversely affect any right, preference, privilege or voting power
of the Class A Preferred Stock or the holders thereof; provided, however, that,
and without limiting the generality of the foregoing, neither (y) the creation
or issuance of any other class or series of Preferred Stock, or any increase in
the amount of authorized shares of Preferred Stock or authorized shares of the
Class A Preferred Stock, in each case ranking on a parity with or junior to the
Class A Preferred Stock with respect to payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up, nor (z) the
conversion of the Class A Preferred Stock into preferred stock of Kimco in the
Merger, such Kimco preferred stock generally on terms described in the form of
Articles Supplementary attached to the Purchase Agreement, but which may be
evidenced by depositary shares, shall be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
2. (a) In the event that the Corporation's Charter and Bylaws limit the
maximum number of directors of the Corporation to eight (8) or fewer, the
following paragraph shall apply and subparagraph 2(b) below shall not apply: If
and whenever dividends payable on Class A Preferred Stock or any Parity Stock
shall be in arrears for six (6) or more Dividend Periods, regardless of whether
such Dividend Periods are consecutive, then the holders of Class A Preferred
Stock (voting separately as a class with such other class or series of Parity
Stock as provided in subparagraph (6) of this paragraph (F)) shall be entitled
at the next annual meeting of the stockholders or at any special meeting to
elect one (1) additional director. Upon election, such
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director shall become a director of the Corporation and the authorized number of
directors of the Corporation shall thereupon be automatically increased by one.
(b) In the event that the Corporation's Charter and Bylaws do
not limit or limit the maximum number of directors of the Corporation to nine
(9) or more, the following paragraph shall apply and subparagraph 2(a) above
shall not apply: If and whenever dividends payable on Class A Preferred Stock or
any Parity Stock shall be in arrears for six (6) or more Dividend Periods,
regardless of whether such Dividend Periods are consecutive, then the holders of
Class A Preferred Stock (voting separately as a class with such other class or
series of Parity Stock as provided in subparagraph (6) of this paragraph (F))
shall be entitled at the next annual meeting of the stockholders or at any
special meeting to elect two (2) additional directors. Upon election, such
directors shall become directors of the Corporation and the authorized number of
directors of the Corporation shall thereupon be automatically increased by two.
3. Whenever the voting right described in subparagraph (2) of this
paragraph (F) shall have vested, such right may be exercised initially either at
a special meeting of the holders of Class A Preferred Stock and any Parity Stock
entitled to vote as provided in subparagraph (6) of this paragraph (F), called
as hereinafter provided, or at any annual meeting of stockholders held for the
purpose of electing directors and, thereafter, at such annual meetings or by the
written consent of the holders of Class A Preferred Stock and any such Parity
Stock. Such right of the holders of Class A Preferred Stock to elect a director
(or directors) together with the holders of any such Parity Stock may be
exercised until all dividends to which the holders of Class A Preferred Stock
and any such Parity Stock shall have been entitled for (i) all previous Dividend
Periods and (ii) the current Dividend Period shall have been paid in full or
declared and a sum of money sufficient for the payment thereof set aside for
payment, at which time the right of the holders of Class A Preferred Stock
together with holders of any such Parity Stock to elect a director (or
directors) shall cease, the term of such director(s) previously elected shall,
upon the resignation thereof, thereupon terminate, and the authorized number of
directors of the Corporation shall thereupon return to the number of authorized
directors otherwise in effect, but subject always to the same provisions for the
renewal and divestment of such special voting rights in the case of any such
future dividend default or defaults.
4. At any time when the voting right described in subparagraph (2) of
this paragraph (F) shall have vested in the holders of Class A Preferred Stock
and if such right shall not already have been initially exercised, a proper
officer of the Corporation shall, upon the written request of any holder of
record of Class A Preferred Stock then outstanding, addressed to the Secretary
of the Corporation, call a special meeting of holders of Class A Preferred Stock
together with the holders of any Parity Stock entitled to vote as provided in
subparagraph (6) of this paragraph (F). Such meeting shall be held on the
earliest practicable date upon the notice required for annual meetings of
stockholders at the place for holding annual meetings of stockholders of the
Corporation or, if none, at a place designated by the Secretary of the
Corporation. If such meeting shall not be called by the proper officers of the
Corporation within thirty (30) days after the personal service of such written
request upon the Secretary of the Corporation, or within thirty (30)
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days after mailing the same within the United States, by registered mail,
addressed to the Secretary of the Corporation at its principal office (such
mailing to be evidenced by the registry receipt issued by the postal
authorities), then the holders of record of ten percent (10%) of the shares of
Class A Preferred Stock then outstanding may designate in writing a holder of
Class A Preferred Stock to call such meeting at the expense of the Corporation,
and such meeting may be called by such person so designated upon the notice
required for annual meetings of stockholders and shall be held at the place for
holding annual meetings of the Corporation or, if none, at a place designated by
such holder. Any holder of Class A Preferred Stock that would be entitled to
vote at such meeting shall have access to the stock transfer records of the
Corporation for the purpose of causing a meeting of stockholders to be called
pursuant to the provisions of this paragraph (F). Notwithstanding the provisions
of this paragraph (F), however, no such special meeting shall be called if any
such request is received less than ninety (90) days before the date fixed for
the next ensuing annual or special meeting of stockholders.
5. If a director so elected by the holders of Class A Preferred Stock
and any Parity Stock shall cease to serve as a director before his/her term
shall expire, the holders of Class A Preferred Stock together with the holders
of such Parity Stock may, at a special meeting of the holders called as provided
above, elect a successor to hold office for the unexpired term of the director
whose place shall be vacant.
6. If, at any time when the holders of Class A Preferred Stock are
entitled to elect a director (or directors) pursuant to the foregoing provisions
of this paragraph (F), the holders of any one or more classes or series of
Parity Stock are entitled to elect one or more directors by reason of any
default or event specified in the Charter, as in effect at the time, and if the
terms for such classes or series of Parity Stock so provide, then the voting
rights of the Class A Preferred Stock and the one or more classes or series of
Parity Stock then entitled to vote shall be combined (with each having a number
of votes proportional to the aggregate liquidation preference of its outstanding
shares). In such case, the holders of Class A Preferred Stock and of all such
classes or series of Parity Stock then entitled to so vote, voting together as a
class, shall elect such directors. If the holders of any such classes or series
of Parity Stock have elected such directors prior to the happening of the
default or event providing for the election of directors by the holders of Class
A Preferred Stock, or prior to a written request for the holding of a special
meeting being received by the Secretary of the Corporation as elsewhere required
in subparagraph (4) of paragraph (F) above, then a new election shall be held
with all such classes or series of Parity Stock and the Class A Preferred Stock
voting together as a single class for such director(s), resulting in the
termination of the term of such previously elected director(s) upon the election
of such new director(s). If the holders of any such classes or series of Parity
Stock are entitled to elect in excess of one director (or, if the provisions of
subparagraph 2(b) apply, two directors), the Class A Preferred Stock shall not
participate in the election of more than one (or, if the provisions of
subparagraph 2(b) apply, two) such director(s), and such director(s) whose
term(s) first expire(s) (or in the event that such terms expire at the same
time, the director who as among the directors is youngest in age) shall be
deemed to be the director(s) elected by the holders of Class A Preferred Stock;
provided that if at the expiration of such term(s) the holders of Class A
Preferred Stock are entitled to vote in the
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election of directors pursuant to the provisions of this paragraph (F), then the
Secretary of the Corporation shall call a meeting (which meeting may be the
annual meeting or special meeting of stockholders referred to in subparagraph
(3) of this paragraph (F)) of holders of Class A Preferred Stock for the purpose
of electing a replacement director (or, if the provisions of subparagraph 2(b)
apply, two directors)(in accordance with the provisions of this paragraph (F))
to be held at or prior to the time of expiration of the expiring term referred
to above.
7. In any matter in which the Class A Preferred Stock is entitled to
vote (as expressly provided herein), including any action by written consent,
each share of Class A Preferred Stock shall (except as provided in subparagraph
6 of this paragraph (F)) be entitled to ten (10) votes, each of which ten (10)
votes may be directed separately by the holder thereof (or by any proxy or
proxies of such holder). With respect to each share of Class A Preferred Stock,
the holder thereof may designate up to ten (10) proxies, with each such proxy
having the right to vote a whole number of votes (totaling up to ten (10) votes
per share of Class A Preferred Stock).
G. Exclusion of Other Rights.
Except as may otherwise be required by law, but without prejudice to
any contractual obligations existing from time to time between the holders of
the Class A Preferred Stock and the Corporation, the shares of Class A Preferred
Stock shall not have any rights granted to or imposed thereupon, including as to
dividends, preferences, conversion rights or voting rights, other than those
specifically set forth in the Charter (including these Articles Supplementary),
nor shall the shares of Class A Preferred Stock have preemptive or subscription
rights. The Class A Preferred Stock has no stated maturity and is not subject to
any sinking fund or mandatory redemption.
H. Restrictions on Ownership and Transfer.
1. Application of Charter Provisions. The Class A Preferred Stock
constitutes a class of Preferred Stock of the Corporation, and Preferred Stock
constitutes Stock of the Corporation. Therefore, the Class A Preferred Stock,
being Stock, is governed by and issued subject to all the limitations, terms and
conditions of the Charter of the Corporation applicable to Stock generally,
including, but not limited to the terms and conditions (including exceptions and
exemptions) of Article IX of the Charter applicable to Stock. The foregoing
sentence shall not be construed to limit the applicability to the Class A
Preferred Stock of any other term or provision of the Charter, including the
additional restrictions on ownership and transfer provided for under
subparagraph (2) of this paragraph (H), below.
2. Restriction on Ownership and Transfers.
(a) In addition to the restrictions on ownership and transfer
otherwise provided in Article IX of the Charter, from the Issue Date and prior
to the Restriction Termination Date:
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(i) except as provided in subparagraph 6 below, no
Person shall Beneficially or Constructively own Class A Preferred Stock such
that such Person would Beneficially or Constructively own Stock in excess of the
Ownership Limit; and
(ii) no Person shall Beneficially or Constructively
own Class A Preferred Stock to the extent that such Beneficial or Constructive
ownership would result in the Corporation's being "closely held" within the
meaning of Section 856(h) of the Code, or otherwise failing to qualify as a REIT
(including but not limited to ownership that would result in the Corporation
owning (actually or Constructively) an interest in a tenant that is described in
Section 856(d)(2)(B) of the Code if the income derived by the Corporation
(either directly or indirectly through one or more partnerships) from such
tenant would cause the Corporation to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code).
(b) except as provided in subparagraph 6 below,
(i) if any Transfer (whether or not such Transfer is
the result of a transaction entered into through the facilities of the New York
Stock Exchange ("NYSE")) or other event occurs that, if effective, would result
in any Person's Beneficially or Constructively owning shares of Class A
Preferred Stock in violation of subparagraph H(2)(a) hereof, then (A) if such
Transfer or other event constitutes a Disqualifying Event within the meaning of
Article IX of the Charter, the provisions of Article IX will apply to such
Transfer or other event, and (B) if such Transfer or other event does not
constitute a Disqualifying Event within the meaning of Article IX of the
Charter, such Transfer or other event shall be deemed to constitute a
Disqualifying Event for purposes of Article IX of the Charter, and the
provisions thereof shall apply as though a Disqualifying Event had occurred
thereunder. If the event that results in a violation of paragraph H(2)(a) hereof
is not a Transfer, then the number of shares of Class A Preferred Stock owned by
any Person that results in such violation of paragraph H(2)(a) hereof shall be
transferred to a trust as though required to be so transferred under Article IX
of the Charter. Notwithstanding anything herein to the contrary, the Corporation
shall not have any right, pursuant to these Articles Supplementary, to redeem
such shares held in trust insofar as the inclusion herein of provisions to that
effect would violate the prohibition on the preferred stock's being redeemable
as provided in the last sentence of paragraph (d) of Article IV of the Charter.
(ii) In the event that shares of Class A Preferred
Stock are transferred to the Corporation as trustee of a trust pursuant to
paragraph H(2)(b)(i) hereof and Article IX of the Charter, and alternative
arrangements are not agreed upon by and between the Corporation and the Person
whose shares of Class A Preferred Stock are transferred to the Corporation as
trustee of a trust within 10 Business Days, such Person may transfer their
interest in the trust to any other Person (provided that such transfer is not to
the Corporation and does not otherwise violate Section 1 of Article IX of the
Charter or Paragraph H(2)(a) hereof) at a price not in excess of (A) if such
transfer to the Corporation as trustee of a trust resulted from a Transfer, the
price paid or to be paid by the purported transferee of such shares or (B) if
such transfer to the Corporation as trustee of a trust resulted from an event
that was not a Transfer, the Market Value
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(as defined below) of the shares transferred to the Corporation as trustee of a
trust on the date of the event that resulted in the transfer of such shares to
the Corporation as a trustee of such trust. Upon such transfer of the interest
in the trust, the trustee shall distribute the number of shares of Class A
Preferred Stock represented by that interest to the transferee of such Person.
(iii) For purposes of this paragraph H(2)(b), "Market
Value" means the closing sale price for a share of Class A Preferred Stock on
the last business day immediately preceding the day on which any shares of Class
A Preferred Stock are transferred to the Corporation as trustee of a trust
pursuant to paragraph H(2) or Article IX of the Charter, for such share on the
NASDAQ National Market System as reported in the Wall Street Journal, or if not
available, the New York Times; or if such shares are not quoted on the NASDAQ
National Market System, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such shares are
listed as reported in the Wall Street Journal, or if not available, the New York
Times; or, if such shares are not listed on any such exchange, the closing bid
quotation with respect to a share of such Class A Preferred Stock on the last
business day immediately preceding the day on which any shares of Class A
Preferred Stock are transferred to the Corporation as trustee of a trust
pursuant to paragraph H(2) or Article IX of the Charter, on the NASDAQ Automated
Quotations System or any similar system then in use or, as reported in the Wall
Street Journal or, if not available, the New York Times; or if no such
quotations are available, the fair market value of a share of such Class A
Preferred Stock as determined by the Board of Directors in good faith, on the
last business day immediately preceding the day on which any shares of Class A
Preferred Stock are transferred to the Corporation as trustee of a trust
pursuant to paragraph H(2) or Article IX of the Charter.
3. Notice of Restricted Transfer. Any Person who acquires or attempts
to acquire Class A Preferred Stock in violation of this paragraph H, or any
Person who is a Purported Beneficial Transferee such that an automatic transfer
to a trust results hereunder or under the third paragraph of Section 1 of
Article IX of the Charter, shall immediately give written notice to the
Corporation of such event and shall provide to the Corporation such other
information as the Corporation may request in order to determine the effect, if
any, of such Transfer or attempted Transfer on the Corporation's status as a
REIT.
4. Owners Required to Provide Information. From the Issue Date and
prior to the Restriction Termination Date each Person who is a beneficial owner
or Beneficial owner or Constructive owner of shares of Class A Preferred Stock
and each Person (including the stockholder of record) who is holding shares of
Class A Preferred Stock for a beneficial owner or Beneficial owner or
Constructive owner shall, on demand, provide to the Corporation a completed
questionnaire containing the information regarding their ownership of such
shares, as set forth in the regulations (as in effect from time to time) of the
U.S. Department of Treasury under the Code. In addition, each Person who is a
beneficial owner or Beneficial owner or Constructive owner of shares of Class A
Preferred Stock and each Person (including the stockholder of record) who is
holding shares of Class A Preferred Stock for a beneficial owner or Beneficial
owner or Constructive owner shall, on demand, be required to disclose to the
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Corporation in writing such information as the Corporation may request in order
to determine the effect, if any, of such stockholder's actual and constructive
ownership of shares of Class A Preferred Stock on the Corporation's status as a
REIT and to ensure compliance with the Ownership Limit, or such other limit as
provided from time to time in these Articles Supplementary or the Charter or as
otherwise permitted by the Board of Directors.
5. Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this paragraph H and including any definition contained in
paragraph A hereof, the Board of Directors shall have the power to determine the
application of the provisions of this paragraph H with respect to any situation
based on the facts known to it (subject, however, to the provisions of the
Charter). In the event this paragraph H requires an action by the Board of
Directors and these Articles Supplementary fail to provide specific guidance
with respect to such action, the Board of Directors shall have the power to
determine the action to be taken so long as such action is not contrary to the
provisions of this paragraph H. Absent a decision to the contrary by the Board
of Directors (which the Board may make in its sole and absolute discretion), if
a Person would have (but for the remedies set forth in the third paragraph of
Section 1 of Article IX of the Charter) acquired Beneficial or Constructive
ownership of Class A Preferred Stock in violation of this paragraph H, such
remedies (as applicable) shall apply first to the shares of Class A Preferred
Stock which, but for such remedies, would have been actually owned by such
Person, and second to shares of Class A Preferred Stock which, but for such
remedies, would have been Beneficially owned or Constructively owned (but not
actually owned) by such Person, pro rata among the Persons who actually own such
shares of Class A Preferred Stock based upon the relative number of the shares
of Class A Preferred Stock held by each such Person.
6. Exceptions.
(a) Subject to subparagraph (2)(a)(ii) of this paragraph H
above, the Board of Directors, in its sole discretion, may exempt a Person from
the limitation on a Person's Beneficially owning shares of Class A Preferred
Stock in excess of the Ownership Limit established pursuant to these Articles
Supplementary if the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain that no
individual's Beneficial ownership of such shares of Class A Preferred Stock will
violate the Ownership Limit or that any such violation will not cause the
Corporation to fail to qualify as a REIT under the Code, and in any event agrees
that such exemption will remain subject to, and not constitute an exemption from
the provisions and limitations provided for under, subparagraph (2)(a)(ii) of
paragraph (H).
(b) Subject to Subparagraph (2)(a)(ii) of this paragraph H,
the Board of' Directors, in its sole discretion, may exempt a Person from the
limitation on a Person's Constructively owning Class A Preferred Stock in excess
of the Ownership Limit if such Person does not own, actually or Constructively,
an interest in a tenant of the Corporation (or a tenant of any entity owned in
whole or in part by the Corporation) that would cause the Corporation to own,
actually or Constructively more than a 9.8% interest (as set forth in Section
856(d)(2)(B) of
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the Code) in such tenant and the Corporation obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain this fact
and agrees that such exemption will remain subject to, and not constitute an
exemption from the provisions and limitations provided for under,
subparagraph(2)(a)(ii) of paragraph (H). Notwithstanding the foregoing, the
inability of a Person to make the certification described in this subparagraph
6(b) shall not prevent the Board of Directors, in its sole discretion, from
exempting such Person from the limitation on a Person Constructively owning
Class A Preferred Stock in excess of 9.8% of the outstanding shares of Class A
Preferred Stock if the Board of Directors determines that the resulting
application of Section 856(d)(2)(B) of the Code would affect the
characterization of less than 0.5% of the gross income (as such term is used in
Section 856(c)(2) of the Code) of the Corporation in any taxable year, after
taking into account the effect of this sentence with respect to all other Class
A Preferred Stock to which this sentence applies.
(c) Prior to granting any exception pursuant to subparagraph
6(b) of this paragraph H, the Board of Directors may require a ruling from the
IRS, or an opinion of counsel, or other evidence, in either case in form and
substance satisfactory to the Board of Directors in its sole discretion, as it
may deem necessary or advisable in order to determine or ensure the
Corporation's status as a REIT.
I. Legend.
Each certificate for Class A Preferred Stock shall bear substantially
the following legend:
"The Corporation will furnish to any stockholder, on request and
without charge, a full statement of the information required by Section
2-211(b) of the Corporations and Associations Article of the Annotated
Code of Maryland with respect to the designations and any preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends and other distributions, qualifications, and terms and
conditions of redemptions of the stock of each class which the
Corporation has authority to issue and, if the Corporation is
authorized to issue any preferred or special class in series, (i) the
differences in the relative rights and preferences between the shares
of each series to the extent set, and (ii) the authority of the Board
of Directors to set such rights and preferences of subsequent series.
The foregoing summary does not purport to be complete and is subject to
and qualified in its entirety by reference to the charter of the
Corporation (the "Charter"), a copy of which will be sent without
charge to each stockholder who so requests. Such request must be made
to the Secretary of the Corporation at its principal office.
"The shares of Class A Preferred Stock represented by this certificate
are subject to restrictions on Beneficial and Constructive ownership
and transfer for the purpose of the Corporation's maintenance of its
status as a real estate investment trust under the Code. Subject to
certain further restrictions and except as
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expressly provided in the Corporation's Charter, (i) no Person may
Beneficially or Constructively own Class A Preferred Stock such that
such Person would Beneficially or Constructively own Stock in excess of
the Ownership Limit, (ii) no Person may Beneficially or Constructively
own shares of Class A Preferred Stock that would result in the
Corporation's being "closely held" under Section 856(h) of the Code or
otherwise cause the Corporation to fail to qualify as a REIT; and (iii)
no Person may Transfer shares of Class A Preferred Stock if such
Transfer would result in the capital stock of the Corporation being
owned by fewer than 100 persons. Any person who Beneficially or
Constructively owns or attempts to Beneficially or Constructively own
shares of Class A Preferred Stock which causes or will cause a Person
to Beneficially or Constructively own shares of Class A Preferred Stock
in excess of the above limitations must immediately notify the
Corporation. If any of the restrictions on transfer or ownership are
violated, the shares of Class A Preferred Stock represented hereby may
be transferred to the Corporation as trustee of a trust. In addition,
the Corporation may redeem shares upon the terms and conditions
specified by the Board of Directors in its sole discretion if the Board
of Directors determines that ownership or a transfer or other event may
violate certain of the restrictions set forth in the Charter above,
some of which are described above. Furthermore, upon the occurrence of
certain events, attempted transfers in violation of the restrictions
described above may be void ab initio. All terms in this legend that
are defined in the Charter of the Corporation, including the Articles
Supplementary establishing the terms of the Class A Preferred Stock,
shall have the meanings ascribed to them in the Charter or Articles
Supplementary of the Corporation, as the same may be amended from time
to time, a copy of which will be sent without charge to each
Stockholder that so requests."
J. Headings of Subdivisions.
The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
K. Severability of Provisions.
If any preferences or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of the Class A Preferred Stock set forth in the Charter
is invalid, unlawful or incapable of being enforced by reason of any rule of law
or public policy, all other preferences or other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
or terms or conditions of redemption of Class A Preferred Stock set forth in the
Charter which can be given effect without the invalid, unlawful or unenforceable
provision thereof shall, nevertheless, remain in full force and effect, and no
preferences or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications or terms or conditions of
redemption of Class A Preferred Stock
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herein set forth shall be deemed dependent upon any other provision thereof
unless so expressed therein.
L. Registration as Depositary Shares.
Shares of Class A Preferred Stock may be registered in the form of
Depositary Shares representing a one-tenth fractional interest in a share of
Class A Preferred Stock on such terms and conditions as may be provided for in
any agreement binding upon the Corporation (whether directly or through merger
with any other corporation).
SECOND: The shares of Class A Preferred Stock have been
reclassified by the Board of Directors under a power contained in the Charter.
THIRD: These Articles Supplementary have been approved by the
Board of Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation
acknowledges these Articles Supplementary to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under oath,
the undersigned President acknowledges that to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties for perjury.
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IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
attested to by its Secretary on this 18th day of May, 1998.
ATTEST: THE PRICE REIT, INC.
/s/ George Jezek /s/ Joseph K. Kornwasser
- ---------------------------------- -------------------------------------
George Jezek Joseph K. Kornwasser
Secretary Chief Executive Officer and President
<PAGE>
EXHIBIT B
ARTICLES SUPPLEMENTARY
OF
KIMCO REALTY CORPORATION
Kimco Realty Corporation, a corporation organized and existing under
the laws of the State of Maryland (the "Corporation"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: Pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (the "Board of Directors") in accordance
with Article IV.D. of the charter of the Corporation, including these Articles
Supplementary (the "Charter"), the Board of Directors, by unanimous written
consent dated _____, 1998, adopted resolutions reclassifying 65,000 shares (the
"Shares") of Preferred Stock (as defined in the Charter) as a separate class of
Preferred Stock, Class E Floating Rate Cumulative Preferred Stock, $1.00 par
value per share ("Class E Preferred Stock"), and reclassifying 65,000 shares
(the "Class E Excess Shares") of Preferred Stock (as defined in the Charter) as
a separate class of stock, Class E Excess Preferred Stock, $1.00 par value per
share ("Class E Excess Preferred Stock"), each with the preferences, conversion
and other rights voting powers, restrictions, limitations as to dividends or
other distributions, qualifications, and terms and conditions of redemption set
forth below:
Class E Floating Rate Cumulative Preferred Stock
A. Certain Definitions.
Unless the context otherwise requires, the terms defined in this
paragraph (A) shall have, for all purposes of the provisions of the Charter in
respect of the Class E Preferred Stock, the meanings herein specified (with
terms defined in the singular having comparable meanings when used in the
plural).
Additional Dividend. The term "Additional Dividend" shall mean (A) with
respect to the first Additional Dividend Period, the Base Additional Dividend,
(B) with respect to the second Additional Dividend Period, the Base Additional
Dividend multiplied by two, (C) with respect to the third Additional Dividend
Period, the Base Additional Dividend multiplied by three, (D) with respect to
the fourth Additional Dividend Period, the Base Additional Dividend multiplied
by four and (E) with
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respect to the fifth Additional Dividend Period and all such subsequent
Additional Dividend Periods, the Base Additional Dividend multiplied by five,
which amount shall be the maximum Additional Dividend. Upon the cure of a
Registration Default, the Additional Dividend shall be reset at the Base
Additional Dividend for the first subsequent Additional Dividend Period.
Additional Dividend Period. The term "Additional Dividend Period" shall
mean each of (i) the seven day period following a Registration Default during
which such Registration Default continues to exist, and (ii) each subsequent
seven day period during which the Registration Default continues to exist for
the entire seven day period.
Aggregate Ownership Limit. The term "Aggregate Ownership Limit" shall
mean 9.8% in value of all the outstanding Capital Stock. The number and value of
shares of the outstanding shares of Capital Stock shall be determined by the
Board of Directors in good faith, which determination shall be conclusive for
all purposes thereof.
Base Additional Dividend. The term "Base Additional Dividend" shall
mean an amount equal to the product of (A) 0.0005, (B) the Liquidation
Preference of the shares of Class E Preferred Stock held by the relevant holder
thereof and (C) 7/360.
Beneficial Ownership. The term "Beneficial Ownership" shall mean
ownership of stock by a Person who is or would be treated as an owner of stock
either directly or constructively through the application of Section 544 of the
Code, as modified by Section 856(h)(1)(B) of the Code. In addition "Beneficial
Ownership" shall include ownership of Capital Stock by a Person who meets any
one of its tests for beneficial ownership as set forth under Rule 13d-3 of the
Securities Exchange Act of 1934, as amended. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
Beneficiary. The term "Beneficiary" shall mean the beneficiary of the
Trust as determined pursuant to subparagraph (11)(d)(1) of paragraph (G) below.
Business Day. The term "Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law, regulation or
executive order to close.
Calculation Agent. The term "Calculation Agent" shall mean any
calculation agent selected by the Corporation with respect to the Class E
Preferred Stock, in its capacity as calculation agent.
Capital Stock. The term "Capital Stock" shall mean all classes of
series of stock of the Corporation, including, without limitation, Common
Equity, Class A Preferred Stock, Class B Preferred Stock, Class C Preferred
Stock, Class D Preferred Stock and Class E Preferred Stock.
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Class A Preferred Stock. The term "Class A Preferred Stock" shall mean
the 7 3/4% Class A Cumulative Redeemable Preferred Stock, $1.00 par value per
share, of the Corporation.
Class B Preferred Stock. The term "Class B Preferred Stock" shall mean
the 8 1/2% Class B Cumulative Redeemable Preferred Stock, $1.00 par value per
share, of the Corporation.
Class C Preferred Stock. The term "Class C Preferred Stock" shall mean
the 8 3/8% Class C Cumulative Redeemable Preferred Stock, $1.00 par value per
share, of the Corporation.
Class D Preferred Stock. The term "Class D Preferred Stock" shall mean
the 7.5% Class D Cumulative Convertible Preferred Stock, $1.00 par value per
share, of the Corporation.
Class E Preferred Stock. The term "Class E Preferred Stock" shall mean
the Class E Floating Rate Cumulative Preferred Stock, $.01 par value per share,
of the Corporation.
Code. The term "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Common Equity. The term "Common Equity" shall mean all shares now or
hereafter authorized of any class of common stock of the Corporation, including
the Common Stock, and any other stock of the Corporation, howsoever designated,
authorized after the Issue Date, which has the right (subject always to prior
rights of any class or series of preferred stock) to participate in the
distribution of the assets and earnings of the Corporation without limit as to
per share amount.
Common Stock. The term "Common Stock" shall mean the common stock, $.01
par value per share, of the Corporation.
Constructive Ownership. The term "Constructive Ownership" shall mean
ownership of stock by a Person who is or would be treated as an owner of such
Class E Preferred Stock or Class E Excess Preferred Stock either directly or
constructively through the application of Section 318 of the Code, as modified
by Section 856(d)(5) of the Code. The terms "Constructive Owner,"
"Constructively Owns" and "Constructively Owned" shall have the correlative
meanings.
Depositary Shares. The term "Depositary Shares" shall mean the
Depositary Shares each representing a one-tenth (1/10) fractional interest in a
share of Class E Preferred Stock.
Determination Date. The term "Determination Date" shall have the
meaning set forth in subparagraph (3)(a) of paragraph (B) below.
Dividend Amount. The term "Dividend Amount" shall have the meaning set
forth in subparagraph (4) of paragraph (B) below.
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Dividend Payment Date. The term "Dividend Payment Date" shall have the
meaning set forth in subparagraph (2) of paragraph (B) below.
Dividend Period. The term "Dividend Period" with respect to a share of
Class E Preferred Stock shall mean the period from, and including, the last
Dividend Payment Date to, and including, the next Dividend Payment Date; or if
it is the first such Dividend Period, the period from, and including, the last
Dividend Payment Date for the Price REIT Series A Preferred Stock to, and
including, the next Dividend Payment Date, or if no such date has occurred, then
from and including the issue date of the Price REIT Series A Preferred Stock.
Dividend Rate. The term "Dividend Rate" shall have the meaning set
forth in subparagraph (3) of paragraph (B) below.
Index Maturity. The term "Index Maturity" shall have the meaning set
forth in subparagraph (3)(b) of paragraph (B) below.
IRS. The term "IRS" means the United States Internal Revenue Service.
Issue Date. The term "Issue Date" shall mean the date that shares of
Class E Preferred Stock are first issued by the Corporation.
Junior Stock. The term "Junior Stock" shall mean, as the case may be,
(i) the Common Equity and any other class or series of stock of the Corporation
which is not entitled to receive any dividends in any Dividend Period unless all
dividends required to have been paid or declared and set apart for payment on
the Class E Preferred Stock shall have been so paid or declared and set apart
for payment or (ii) the Common Equity and any other class or series of stock of
the Corporation which is not entitled to receive any assets upon liquidation,
dissolution or winding up of the affairs of the Corporation until the Class E
Preferred Stock shall have received the entire amount to which such Class E
Preferred Stock is entitled upon such liquidation, dissolution or winding up.
Liquidation Preference. The term "Liquidation Preference" shall mean
$1,000.00 per share of Class E Preferred Stock.
Market Day. The term "Market Day" shall mean any Business Day on which
commercial banks and foreign exchange markets are open for business (including
dealings in foreign exchange and foreign currency deposits) in New York, New
York and London, England.
Market Price. The term "Market Price" shall mean the price of the Class
E Preferred Stock (i) as determined by multiplying by ten the last reported
sales price of the Depositary Shares reported on the New York Stock Exchange on
the trading day immediately preceding the relevant
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date or, (ii) if the Depositary Shares are not then traded on the New York Stock
Exchange, as determined by multiplying by ten the last reported sales price of
the Depositary Shares on the trading day immediately preceding the relevant date
as reported on any exchange or quotation system over which the Depositary Shares
may be traded or, (iii) if the Depositary Shares are not then traded over any
exchange or quotation system, as determined in good faith by the Board of
Directors of the Corporation.
Merger. The term "Merger" shall mean the merger of The Price REIT, Inc.
with and into REIT Sub Inc., a wholly owned subsidiary of the Corporation,
contemplated by the Merger Agreement.
Merger Agreement. The term "Merger Agreement" shall mean that certain
Agreement and Plan of Merger, dated as of January 13, 1998, among the
Corporation, REIT Sub and Price REIT as such agreement has been and may be
amended from time to time.
Parity Stock. The term "Parity Stock" shall mean, as the case may be,
(i) any class or series of stock of the Corporation which is entitled to receive
payment of dividends on a parity with the Class E Preferred Stock or (ii) any
class or series of stock of the Corporation which is entitled to receive assets
upon liquidation, dissolution or winding up of the affairs of the Corporation on
a parity with the Class E Preferred Stock. The term "Parity Stock" shall include
the Class A Preferred Stock, the Class B Preferred Stock, the Class C Preferred
Stock and the Class D Preferred Stock.
Paying Agent. The term "Paying Agent" shall mean any paying agent
appointed by the Corporation with respect to the Class E Preferred Stock, in its
capacity as paying agent.
Person. The term "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Section 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for or to be
used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock Corporation or other entity; as amended; but does not include
an underwriter which participates in a public offering of the Class E Preferred
Stock or any interest therein, provided that such ownership by such underwriter
would not result in the Corporation being "closely held" within the meaning of
Section 856(h) of the Code, or otherwise result in the Corporation failing to
qualify as a REIT.
Preferred Equity Stock. The term "Preferred Equity Stock" shall mean
shares of stock that are either Class E Preferred Stock or Class E Excess
Preferred Stock.
Price REIT. The term "Price REIT" shall mean The Price REIT, Inc.
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Purchase Agreement. The term "Purchase Agreement" shall mean that
certain Purchase Agreement by and among the Corporation, The Price REIT Inc., a
Maryland corporation ("Price REIT") and DL Mortgage Corp., dated as of May 18,
1998.
Purported Beneficial Transferee. The term "Purported Beneficial
Transferee" shall mean, with respect to any purported Transfer or other event
which results in Class E Excess Preferred Stock, the purported beneficial
transferee or owner for whom the Purported Record Transferee would have acquired
or owned shares of Class E Preferred Stock if such Transfer or ownership had
been valid under subparagraph (1) of paragraph (G) below.
Purported Record Transferee. The term "Purported Record Transferee"
shall mean, with respect to any purported Transfer or other event which results
in Class E Excess Preferred Stock, the record holder of the Preferred Equity
Stock if such Transfer or ownership had been valid under subparagraph (1) of
paragraph (G) below.
Record Date. The term "Record Date" shall mean the date designated by
the Board of Directors of the Corporation at the time a dividend is declared;
provided, however, that such Record Date shall be the 15th day of the calendar
month in which the applicable Dividend Payment Date falls or such other date
designated by the Board of Directors for the payment of dividends that is not
more than thirty (30) days nor less than ten (10) days prior to such Dividend
Payment Date.
Redemption Date. The term "Redemption Date" shall have the meaning set
forth in subparagraph (2) of paragraph (D) below.
Redemption Price. The term "Redemption Price" shall mean a price per
share equal to $1000.00 together with accrued and unpaid dividends, if any,
thereon to the Redemption Date.
Registration Default. The term "Registration Default" shall mean the
first to occur of the following events: (i) the Registration Statement (as
defined in the Purchase Agreement) has not been filed with the Securities and
Exchange Commission on or prior to the 30th day following the Repurchase
Termination Date (as defined in the Purchase Agreement), (ii) the Registration
Statement (as defined in the Purchase Agreement) has not been declared effective
on or prior to the 100th day after the Repurchase Termination Date (as defined
in the Purchase Agreement), or (iii) the Registration Statement required to be
filed by the Purchase Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded by a post-effective amendment to such Registration
Statement that cures such failure and that is itself declared effective on or
before the fifth Business Day following the Registration Default, provided,
that, if such post-effective amendment is required because of a change in the
Plan of Distribution such post-effective amendment shall have been filed and
declared effective within 15 Business Days of the Registration Default.
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Reference Banks. The term "Reference Banks" shall have the meaning set
forth in subparagraph (3)(b) of paragraph (B) below.
REIT. The term "REIT" shall mean a real estate investment trust under
Section 856 of the Code.
REIT Sub. The term "REIT Sub" shall mean REIT Sub, Inc., a Maryland
corporation and wholly owned subsidiary of Kimco, formed in connection with the
Merger.
Restriction Termination Date. The term "Restriction Termination Date"
shall mean the first day after the Issue Date on which (i) the Board of
Directors of the Corporation determines that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify as a REIT
and (ii) such determination is approved by the affirmative vote of the holders
of not less than two-thirds (2/3) of the shares of the Corporation's capital
stock outstanding and entitled to vote thereon.
Senior Stock. The term "Senior Stock" shall mean, as the case may be,
(i) any class or series of stock of the Corporation created after the Issue Date
in accordance with subparagraph (1) of paragraph (E) ranking senior to the Class
E Preferred Stock in respect of the right to receive dividends or (ii) any class
or series of stock of the Corporation created after the Issue Date in accordance
with subparagraph (1) of paragraph (E) ranking senior to the Class E Preferred
Stock in respect of the right to participate in any distribution upon
liquidation, dissolution or winding up of the affairs of the Corporation.
Telerate Page 3750. The term "Telerate Page 3750" shall mean the
display designated as Page 3750 on the Dow Jones Telerate Service (or such other
pages as may replace Page 3750 on that service for the purpose of displaying
London, England interbank offered rates of major banks).
3-Month LIBOR. The term "3-Month LIBOR" shall have the meaning set
forth in subparagraph (3)(b) of paragraph (B) below.
Transfer. The term "Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of Preferred Equity Stock or Depositary
Shares, including (i) the granting of any option or entering into any agreement
for the sale, transfer or other disposition of Preferred Equity Stock or
Depositary Shares or (ii) the sale, transfer, assignment or other disposition of
any securities (or rights convertible into or exchangeable for Preferred Equity
Stock or Depositary Shares), whether voluntary or involuntary, whether of record
or beneficially or Beneficially or Constructively (including but not limited to
transfers of interests in other entities which results in changes in Beneficial
or Constructive Ownership of Preferred Equity Stock or Depositary Shares), and
whether by operation of law or otherwise.
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Trust. The term "Trust" shall mean the trust created pursuant to
subparagraph (11)(a) of paragraph (G).
Trustee. The term "Trustee" shall mean the Corporation as trustee for
the Trust, and any successor trustee appointed by the Corporation.
B. Dividends.
1. The record holders of Class A Preferred Stock shall be entitled to
receive dividends, when and as declared by the Board of Directors of the
Corporation, out of funds legally available for payment of dividends. Such
dividends shall be payable with respect to each outstanding share of Class A
Preferred Stock by the Corporation in cash at the Dividend Rate in respect of
the Liquidation Preference. The Dividend Rate for the initial Dividend Period
shall be, if the first Dividend Payment Date is July 31, 1998, the same rate
borne by the Price REIT Series A Preferred Stock and, if the first Dividend
Payment Date is after July 31, 1998, the rate determined in accordance with
subparagraph (3) below; for each Dividend Period after the initial Dividend
Period, the Dividend Rate will be the rate determined in accordance with
subparagraph (3) below;
2. Dividends on each outstanding share of Class E Preferred Stock shall
accrue as set forth in the definition of Dividend Period and be cumulative from
the Issue Date of such share. Such dividends will accrue whether or not the
Corporation has earnings, whether or not there are funds legally available for
the payment of such dividends and whether or not such dividends are declared.
Dividends shall be payable quarterly in arrears when and as declared by the
Board of Directors of the Corporation on the last day of each of January, April,
July and October of each year (each, a "Dividend Payment Date"), commencing on
July 31, 1998 if the Merger occurs prior to such date, and on the first such
later date if the Merger occurs after July 31, 1998. In addition, any Additional
Dividend shall be payable pursuant to subparagraph (4) below. If any Dividend
Payment Date occurs on a day that is not a Business Day, any accrued dividends
otherwise payable on such Dividend Payment Date shall be paid on the next
succeeding Business Day. Dividends shall be paid to the holders of record of the
Class E Preferred Stock as their names shall appear on the stock transfer
records of the Corporation at the close of business on the Record Date for such
dividend. Dividends in respect of any past Dividend Periods that are in arrears
may be declared and paid at any time to holders of record on the Record Date
therefor. Any dividend payment made on shares of Class E Preferred Stock shall
be first credited against the earliest accrued but unpaid dividend due which
remains payable.
3. The Dividend Rate ("Dividend Rate"), for any Dividend Period
commencing on or after July 31, 1998, will be a floating rate per annum
determined by reference to 3-Month LIBOR, determined as described below, plus
2.00%. "3-Month LIBOR" means the London, England
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<PAGE>
interbank offered rate for three-month, U.S. dollar deposits and, with respect
to any such Dividend Period, will be calculated by the Calculation Agent, as
follows:
(a) On the second Market Day preceding the commencement of
such Subsequent Dividend Period (each, a "Determination Date"), 3-Month
LIBOR will be determined on the basis of the offered rate for deposits
of not less than $1,000,000 for a period of three months (the "Index
Maturity"), commencing on the first day of such Dividend Period (or, if
such day is not a Market Day, the next succeeding Market Day), which
appears on Telerate Page 3750 as of 11:00 a.m., London, England time on
said Determination Date. If no such offered rate appears, 3-Month LIBOR
with respect to such Dividend Period will be determined as described in
(b) below.
(b) With respect to a Determination Date on which no such
offered rate appears on Telerate Page 3750 as described in (a) above,
3-Month LIBOR shall be the arithmetic mean, expressed as a percentage,
of the offered rates (unless by its terms such display provides for
only a single rate, in which case a single rate shall be used) for
deposits in U.S. dollars for the Index Maturity that appears on the
display designated as "LIBO" on the Reuters Monitor Money Market Rates
Service (or such other page as may replace the LIBO page on that
service for the purpose of displaying London, England interbank offered
rates of major banks) ("Reuters Screen LIBO Page") as of 11:00 a.m.,
London, England time, on such date. If, in turn, at least two such
rates are not displayed on the Reuters Screen LIBO Page at such time
(unless, as aforesaid, only a single rate is required), the Calculation
Agent will obtain from each of four reference banks in London, England
selected by the Calculation Agent ("Reference Banks") such bank's
offered quotation (expressed as a percentage per annum) as of
approximately 11:00 a.m., London, England time, on such Determination
Date for deposits in U.S. dollars to prime banks in the London, England
interbank market for the Index Maturity. If two or more such quotations
are provided as requested, then 3-Month LIBOR for such date shall be
the arithmetic average of such quotations. If, in turn, fewer than two
such quotations are provided as requested, then 3-Month LIBOR for such
date will be obtained from the preceding Market Day for which the
Reuters Screen LIBO Page displayed a rate for the Index Maturity.
(c) If on any Determination Date, the Calculation Agent is
required but unable to determine 3-Month LIBOR in the manner provided
in paragraphs (a) and (b) above, 3-Month LIBOR for such Dividend Period
shall be 3-Month LIBOR as determined on the previous Determination
Date.
- ----------
1 If the Merger effective date occurs after July 31, 1998, the Dividend
Rate beginning on the effective date of the Merger will be the rate
determined for the Price REIT Series A Preferred Stock for the period
commencing July 31, 1998 and these Articles Supplementary shall be
redrafted to reflect such Dividend Rate.
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<PAGE>
(d) Each calculation in respect of the Class E Preferred Stock
will be rounded, if necessary, to the nearest one ten-thousandth of a
percentage, with five hundred thousandths being rounded upwards.
4. The Calculation Agent shall, as soon as practicable after 11:00
a.m., London, England time, on each Determination Date, determine the Dividend
Rate and inform the Paying Agent. The Paying Agent will calculate the amount of
dividends payable in respect of the following Dividend Period (the "Dividend
Amount"). The Dividend Amount for each share of Class E Preferred Stock shall be
calculated by (i) applying the Dividend Rate to the Liquidation Preference for
such share of Class E Preferred Stock outstanding during the Dividend Period,
(ii) multiplying such amount by the actual number of days such share was
outstanding during the Dividend Period concerned (which actual number of days
shall include the first day but exclude the last day of such Dividend Period),
(iii) dividing by 360 and (iv) rounding the resulting figure to the nearest cent
(with one-half cent or more being rounded upwards).
5. Within one Business Day of the occurrence of a Registration Default,
the Corporation will notify the holder of the shares of Class E Preferred Stock
of such Registration Default. In the event of a Registration Default, the
applicable Additional Dividend shall accrue and be cumulative with respect to
each outstanding share of Class E Preferred Stock on the last day of any
respective Additional Dividend Period. Any accrued Additional Dividends shall be
payable at each Dividend Payment Date in the same manner as set forth in
subparagraph (2) above. Upon the cure of all Registration Defaults, the accrual
of Additional Dividends will cease unless and until a new Registration Default
shall occur.
6. All certificates, communications, opinions, determinations,
calculations, quotations and decisions given, expressed, made or obtained for
the purpose of the provisions relating to the payment and calculation of
dividends on the Class E Preferred Stock, whether by Reference Banks (or any of
them) or the Calculation Agent or Paying Agent, will (in the absence of willful
default, bad faith or manifest error) be final, conclusive and binding on the
Corporation and all of the holders of the Class E Preferred Stock and no
liability will (in the absence of willful default, bad faith or manifest error)
attach to the Calculation Agent or Paying Agent in connection with the exercise
or non-exercise by any of them of their powers, duties and discretion. None of
the Paying Agent, the Calculation Agent or the Corporation (or any of their
respective officers, directors, agents, beneficiaries, employees or affiliates)
shall have any liability to any person for (A) the selection of any Reference
Bank or (B) any inability to retain major banks in the London, England interbank
market, in the case of the Calculation Agent, which is caused by circumstances
beyond its reasonable control.
7. If any shares of Class E Preferred Stock are outstanding, no full
dividends shall be declared or paid or set apart for payment on any other class
or series of Preferred Stock ranking junior to or on a parity with the Class E
Preferred Stock as to dividends for any period unless full cumulative
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<PAGE>
dividends have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment on the Class E
Preferred Stock for all past Dividend Periods and the then current Dividend
Period. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the shares of the Class E Preferred Stock and
any other class or series of Preferred Stock ranking on a parity as to dividends
with the Class E Preferred Stock, all dividends declared upon the shares of the
Class E Preferred Stock and any other such class or series of Preferred Stock
shall be declared pro rata so that the amount of dividends declared per share on
the Class E Preferred Stock and such class or series of Preferred Stock shall in
all cases bear to each other the same ratio that accrued and unpaid dividends
per share on the shares of the Class E Preferred Stock and such class or series
of Preferred Stock bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on the
Class E Preferred Stock which may be in arrears.
8. Except as provided in subparagraph (7) of this paragraph (B), unless
full cumulative dividends on the Class E Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past Dividend Periods and the then
current Dividend Period, no dividends (other than in common stock or other stock
ranking junior to the Class E Preferred Stock as to dividends and upon
liquidation, dissolution and winding up of the affairs of the Corporation) shall
be declared or paid or set apart for payment or other distribution shall be
declared or made upon any Junior Stock or Parity Stock nor shall any Junior
Stock or Parity Stock be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for other stock of the Corporation ranking junior to
the Class E Preferred Stock as to dividends and upon liquidation, dissolution or
winding up).
9. Notwithstanding anything contained herein to the contrary, no
dividends on shares of Class E Preferred Stock shall be authorized or declared
by the Board of Directors of the Corporation or paid or set apart for payment by
the Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibits
such authorization, declaration, payment or setting apart for payment or
provides that such authorization, declaration, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or to the
extent such declaration or payment shall be restricted or prohibited by law.
10. If, for any taxable year, the Corporation elects to designate as
"capital gain dividends" (as defined in Section 857 of the Code) any portion
(the "Capital Gains Amount") of the dividends (as determined for federal income
tax purposes) (the "Dividends") paid or made available for the year to holders
of all classes of stock (the "Total Dividends"), then the portion of the Capital
Gains Amount that shall be allocable to holders of the Class E Preferred Stock
shall be the amount that the total Dividends paid or made available to the
holders of the Class E Preferred Stock for the year bears to the Total
Dividends.
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<PAGE>
C. Distributions Upon Liquidation, Dissolution or Winding Up.
1. Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, subject to the prior preferences
and other rights of any class or series of stock ranking senior to the Class E
Preferred Stock as to the distribution of assets upon liquidation, dissolution
or winding up of the affairs of the Corporation, but before any distribution or
payment shall be made to the holders of any class or series of stock ranking
junior to the Class E Preferred Stock as to the distribution of assets upon any
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of Class E Preferred Stock shall be entitled to receive out of the
assets of the Corporation legally available for distribution to its stockholders
liquidating distributions in cash or property at its fair market value as
determined by the Board of Directors of the Corporation in the amount of the
Liquidation Preference per share plus an amount equal to all dividends accrued
and unpaid thereon to the date of such liquidation, dissolution or winding up.
After payment of the full amount of the liquidating distributions to which they
are entitled, the holders of Class E Preferred Stock will have no right or claim
to any of the remaining assets of the Corporation and shall not be entitled to
any other distribution in the event of liquidation, dissolution or winding up of
the affairs of the Corporation.
2. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the legally available assets of the
Corporation are insufficient to pay the amount of the Liquidation Preference per
share plus an amount equal to all dividends accrued and unpaid on the Class E
Preferred Stock and the corresponding amounts payable on each class or series of
stock ranking on a parity with the Class E Preferred Stock as to the
distribution of assets upon liquidation, dissolution or winding up of the
affairs of the Corporation, then the holders of the Class E Preferred Stock and
all such stock shall share ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they otherwise would
be respectively entitled. Neither the consolidation or merger of the Corporation
into or with another corporation or corporations nor the sale, lease, transfer
or conveyance of all or substantially all of the assets of the Corporation to
another corporation or any other entity shall be deemed a liquidation,
dissolution or winding up of the affairs of the Corporation within the meaning
of this paragraph (C).
D. Redemption by the Corporation.
1. The Class E Preferred Stock is not redeemable prior to [the fifth
anniversary of the 150th day after the effective date of the Merger]. On and
after such fifth anniversary, the Corporation, at its option upon the written
notice specified below, may redeem shares of the Class E Preferred Stock, in
whole or in part, at any time or from time to time, for cash at a redemption
price of One Thousand Dollars ($1,000) per share, plus all accrued and unpaid
dividends thereon (except as provided in paragraph 2) to the date fixed for
redemption (the "Redemption Date") (except with respect to any Class E Excess
Preferred Stock (as defined in the
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Charter) previously exchanged for Class E Preferred Stock pursuant to the
Charter), without interest (the "Redemption Amount").
2. Upon any redemption of the Class E Preferred Stock, the Corporation
shall pay in cash any accrued and unpaid dividends in arrears for any Dividend
Period ending on or prior to the Redemption Date. If the Redemption Date falls
after a Record Date and prior to the corresponding Dividend Payment Date, then
each holder of Class E Preferred Stock at the close of business on such Record
Date shall be entitled to the dividend payable on such shares of Class E
Preferred Stock on the corresponding dividend payment date notwithstanding the
redemption of such shares of Class E Preferred Stock before such Dividend
Payment Date. Except as provided above, the Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on such shares of
Class E Preferred Stock to be redeemed.
3. In order to exercise its redemption option, the Corporation shall
give notice ("Notice") of such redemption to each holder of record of the shares
of Class E Preferred Stock to be redeemed not less than 30 days or more than 60
days prior to the Redemption Date. The Notice will be (i) mailed by the
Corporation, postage prepaid, addressed to the respective holders of record of
the Class E Preferred Stock to be redeemed at their respective addressees as
they appear on the stock transfer records of the Corporation, and (ii) made by
publication in a newspaper of general circulation in The City of New York, such
publication to be made once a week for two successive weeks commencing not less
than 30 nor more than 60 days prior to the Redemption Date. No failure to give
such Notice or any defect therein or in the mailing thereof shall affect the
validity of the proceedings for the redemption of any shares of Class E
Preferred Stock, except as to any holder to whom the Corporation has failed to
give Notice or except as to any holder to whom Notice was defective. In addition
to any information required by law or by the applicable rules of any exchange
upon which Class E Preferred Stock may be listed or admitted to trading, such
Notice shall state: (i) the Redemption Date; (ii) the redemption price; (iii)
the number of shares of Class E Preferred Stock to be redeemed and, if less than
all shares held by the particular holder are to be redeemed, the number of such
shares to be redeemed; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on the Redemption
Date.
4. Notice having been published or mailed in accordance with
subparagraph (3) of this paragraph (D), from and after the Redemption Date
(unless the Corporation shall fail to make available an amount of cash necessary
to effect such redemption), (i) except as otherwise provided herein, dividends
on the shares of Class E Preferred Stock so called for redemption shall cease to
accrue, (ii) said shares shall no longer be deemed to be outstanding, and (iii)
all rights of the holders thereof as holders of Class E Preferred Stock of the
Corporation shall cease (except the rights to receive cash, without interest,
payable upon surrender and endorsement of their certificates, if so required,
and to receive any dividends payable thereon). The Corporation's obligation to
provide cash in accordance with the preceding sentence shall be deemed fulfilled
if, on or before the Redemption
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Date, the Corporation shall deposit with a bank or trust Corporation (which may
be an affiliate of the Corporation) that has an office in the Borough of
Manhattan, City of New York, or in Baltimore, Maryland and that has, or is an
affiliate of a bank or trust Corporation that has, capital and a surplus of a
least $50,000,000, cash necessary for such redemption, in trust, with
irrevocable instructions that such cash be applied to the redemption of the
shares of Class E Preferred Stock so called for redemption. No interest shall
accrue for the benefit of any holder of shares of Class E Preferred Stock to be
redeemed on any cash so set aside by the Corporation. Subject to applicable
escheat laws, any such cash unclaimed at the end of two years from the
Redemption Date shall revert to the general funds of the Corporation, after
which reversion, the holders of such shares so called for redemption shall look
only to the general funds of the Corporation for the payment of such cash.
5. As promptly as practicable after the surrender of the certificates
for any such shares of Class E Preferred Stock so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and if the Notice
shall so state) in accordance with said Notice, such shares of Class E Preferred
Stock shall be exchanged for an amount of cash (without interest thereon) equal
to the Redemption Amount. In the event of the redemption of less than all shares
of Class E Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected by the Corporation pro rata from the holders of record of such
shares in proportion to the number of shares held by such holders (with
adjustments to avoid redemption of fractional shares) or by any other equitable
method determined by the Corporation that will not result in the issuance of any
Class E Excess Preferred Stock. If fewer than all the shares of Class E
Preferred Stock represented by any certificate are redeemed, then new
certificates representing the unredeemed shares of Class E Preferred Stock shall
be issued without cost to the holder thereof.
6. Unless full cumulative dividends on all shares of Class E Preferred
Stock shall have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for payment for all past
Dividend Periods and the then current Dividend Period, (i) no shares of any
Class E Preferred Stock shall be redeemed, unless all outstanding shares of
Class E Preferred Stock are simultaneously redeemed and (ii) the Corporation
shall not purchase or otherwise acquire directly or indirectly any shares of
Class E Preferred Stock (except by exchange for stock of the Corporation ranking
junior to the Class E Preferred Stock as to dividends and upon liquidation,
dissolution or winding up); provided, however, that the foregoing shall not
prevent the purchase or acquisition of shares of Class E Preferred Stock
pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding shares of Class E Preferred Stock.
7. All shares of Class E Preferred Stock redeemed pursuant to this
paragraph (D) shall be retired and shall be reclassified as authorized and
unissued shares of Preferred Stock, without designation as to class or series,
and may thereafter be reissued as shares of any class or series of Preferred
Stock.
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8. Class E Excess Preferred Stock previously exchanged for Class E
Preferred Stock pursuant to the Charter may be redeemed, in whole or in part, at
any time when outstanding shares of Class E Preferred Stock are being redeemed,
for cash at a redemption price of $1,000 per share, but excluding accrued and
unpaid dividends on such Excess Stock, without interest. Such Excess Stock shall
be redeemed in such proportion and in accordance with such procedures as shares
of Class E Preferred Stock are being redeemed.
E. No Conversion
Except insofar as may be provided in the Charter (including these
Articles Supplementary) to preserve the Corporation's status as a REIT, the
Class E Preferred Stock is not convertible into, or exchangeable for, any other
properties or securities of the Corporation.
F. Voting Rights.
1. The holders of record of shares of Class E Preferred Stock shall not
be entitled to any voting rights except as hereinafter provided in this
paragraph (F). So long as any shares of Class E Preferred Stock are outstanding,
the Corporation shall not, without either (a) the affirmative vote of the
holders of at least two-thirds (2/3) of the shares of the Class E Preferred
Stock, outstanding at the time, given in person or by proxy, at a meeting (such
Class E Preferred Stock voting separately as a class or (b) the unanimous
written consent of all of the holders of shares of Class E Preferred Stock, (i)
authorize or create, or increase the authorized or issued amount of, any class
or series of Senior Stock, or reclassify any authorized stock into Senior Stock,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such Senior Stock; or (ii) amend or repeal
the provisions of the Charter in respect of the Class E Preferred Stock so as to
materially and adversely affect any right, preference, privilege or voting power
of the Class E Preferred Stock or the holders thereof; provided, however, that,
and without limiting the generality of the foregoing, neither (y) the creation
or issuance of any other class or series of Preferred Stock, or any increase in
the amount of authorized shares of Preferred Stock or authorized shares of the
Class E Preferred Stock, in each case ranking on a parity with or junior to the
Class E Preferred Stock with respect to payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up, nor (z) the
conversion of the Class E Preferred Stock, into the preferred stock of any other
successor entity to the Corporation, with preferences and other terms
substantially similar to those set forth herein (but which may also (A) afford
the issuer thereof rights of redemption in respect of such shares on terms
substantially similar to those applicable to the Class E Preferred Stock by
contract or otherwise and (B) subject the holder(s) thereof to certain
restrictions on ownership consistent with the issuer's maintenance of status as
a REIT under the Code), but which may be evidenced by depositary shares,
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shall be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers.
2. (a) If and whenever dividends payable on Class E Preferred Stock or
any Parity Stock shall be in arrears for six (6) or more Dividend Periods,
regardless of whether such Dividend Periods are consecutive, then the holders of
Class E Preferred Stock (voting separately as a class with such other class or
series of Parity Stock as provided in subparagraph (6) of this paragraph (F))
shall be entitled at the next annual meeting of the stockholders or at any
special meeting to elect two (2) additional directors. Upon election, such
directors shall become directors of the Corporation and the authorized number of
directors of the Corporation shall thereupon be automatically increased by two.
3. Whenever the voting right described in subparagraph (2) of this
paragraph (F) shall have vested, such right may be exercised initially either at
a special meeting of the holders of Class E Preferred Stock and any Parity Stock
entitled to vote as provided in subparagraph (6) of this paragraph (F), called
as hereinafter provided, or at any annual meeting of stockholders held for the
purpose of electing directors and, thereafter, at such annual meetings or by the
written consent of the holders of Class E Preferred Stock and any such Parity
Stock. Such right of the holders of Class E Preferred Stock to elect directors
together with the holders of any such Parity Stock may be exercised until all
dividends to which the holders of Class E Preferred Stock and any such Parity
Stock shall have been entitled for (i) all previous Dividend Periods and (ii)
the current Dividend Period shall have been paid in full or declared and a sum
of money sufficient for the payment thereof set aside for payment, at which time
the right of the holders of Class E Preferred Stock together with holders of any
such Parity Stock to elect directors shall cease, the term of such director
previously elected shall, upon the resignation thereof, thereupon terminate, and
the authorized number of directors of the Corporation shall thereupon return to
the number of authorized directors otherwise in effect, but subject always to
the same provisions for the renewal and divestment of such special voting rights
in the case of any such future dividend default or defaults.
4. At any time when the voting right described in subparagraph (2) of
this paragraph (F) shall have vested in the holders of Class E Preferred Stock
and if such right shall not already have been initially exercised, a proper
officer of the Corporation shall, upon the written request of any holder of
record of Class E Preferred Stock then outstanding, addressed to the Secretary
of the Corporation, call a special meeting of holders of Class E Preferred Stock
together with the holders of any Parity Stock entitled to vote as provided in
subparagraph (6) of this paragraph (F). Such meeting shall be held on the
earliest practicable date upon the notice required for annual meetings of
stockholders at the place for holding annual meetings of stockholders of the
Corporation or, if none, at a place designated by the Secretary of the
Corporation. If such meeting shall not be called by the proper officers of the
Corporation within thirty (30) days after the personal service of such written
request upon the Secretary of the Corporation, or within thirty (30) days after
mailing the same within the United States, by registered mail, addressed to the
Secretary of the Corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal authorities), then the
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holders of record of ten percent (10%) of the shares of Class E Preferred Stock
then outstanding may designate in writing a holder of Class E Preferred Stock to
call such meeting at the expense of the Corporation, and such meeting may be
called by such person so designated upon the notice required for annual meetings
of stockholders and shall be held at the place for holding annual meetings of
the Corporation or, if none, at a place designated by such holder. Any holder of
Class E Preferred Stock that would be entitled to vote at such meeting shall
have access to the stock transfer records of the Corporation for the purpose of
causing a meeting of stockholders to be called pursuant to the provisions of
this paragraph (F). Notwithstanding the provisions of this paragraph (F),
however, no such special meeting shall be called if any such request is received
less than ninety (90) days before the date fixed for the next ensuing annual or
special meeting of stockholders.
5. If, at any time when the holders of Class E Preferred Stock are
entitled to elect directors pursuant to the foregoing provisions of this
paragraph (F), the holders of any one or more classes or series of Parity Stock
are entitled to elect one or more directors by reason of any default or event
specified in the Charter, as in effect at the time, and if the terms for such
classes or series of Parity Stock so provide, then the voting rights of the
Class E Preferred Stock and the one or more classes or series of Parity Stock
then entitled to vote shall be combined (with each having a number of votes
Sproportional to the aggregate liquidation preference of its outstanding
shares). In such case, the holders of Class E Preferred Stock and of all such
classes or series of Parity Stock then entitled to so vote, voting together as a
class, shall elect such directors. If the holders of any such classes or series
of Parity Stock have elected such directors prior to the happening of the
default or event providing for the election of directors by the holders of Class
E Preferred Stock, or prior to a written request for the holding of a special
meeting being received by the Secretary of the Corporation as elsewhere required
in subparagraph (4) of paragraph (F) above, then a new election shall be held
with all such classes or series of Parity Stock and the Class E Preferred Stock
voting together as a single class for such director(s), resulting in the
termination of the term of such previously elected director(s) upon the election
of such new director(s). If the holders of any such classes or series of Parity
Stock are entitled to elect two directors, the Class E Preferred Stock shall not
participate in the election of more than two such directors, and such directors
whose terms first expire shall be deemed to be the directors elected by the
holders of Class E Preferred Stock; provided that if at the expiration of such
terms the holders of Class E Preferred Stock are entitled to vote in the
election of directors pursuant to the provisions of this paragraph (F), then the
Secretary of the Corporation shall call a meeting (which meeting may be the
annual meeting or special meeting of stockholders referred to in subparagraph
(3) of this paragraph (F)) of holders of Class E Preferred Stock for the purpose
of electing a replacement directors (in accordance with the provisions of this
paragraph (F)) to be held at or prior to the time of expiration of the expiring
term referred to above.
7. If and for so long as the shares of Class E Preferred Stock are
represented by Depositary Shares in accordance with paragraph (K) hereof,
then]in any matter in which the Class E Preferred Stock is entitled to vote (as
expressly provided herein), including any action by written
17
<PAGE>
consent, each share of Class E Preferred Stock shall be entitled to ten (10)
votes, each of which ten (10) votes may be directed separately by the holder
thereof (or by any proxy or proxies of such holder). With respect to each share
of Class E Preferred Stock, the holder thereof may designate up to ten (10)
proxies, with each such proxy having the right to vote a whole number of votes
(totaling ten (10) votes per share of Class E Preferred Stock).
G. Restrictions on Ownership to Preserve Tax Benefit; Conversion and
Exchange for Class E Excess Preferred Stock; and Terms of Class E
Excess Preferred Stock.
1. Restriction on Ownership and Transfer.
a. Except as provided in subparagraph (8) of this paragraph
(G), no Person shall Beneficially Own or Constructively Own Class E Preferred
Stock in excess of the Aggregate Ownership Limit;
b. Except as provided in subparagraph (8) of this paragraph
(G), any Transfer (whether or not such Transfer is the result of a transaction
entered into through the facilities of the New York Stock Exchange ("NYSE"))
that, if effective, would result in any Person Beneficially Owning Class E
Preferred Stock in excess of the Aggregate Ownership Limit shall be void ab
initio as to the Transfer of such Class E Preferred Stock which would be
otherwise Beneficially Owned by such Person in excess of the Aggregate Ownership
Limit; and the intended transferee shall acquire no rights in such Class E
Preferred Stock;
c. Except as provided in subparagraph (8) of this paragraph
(G), any Transfer (whether or not such Transfer is the result of a transaction
entered into through the facilities of the NYSE) that, if effective, would
result in any Person Constructively Owning Class E Preferred Stock in excess of
the Aggregate Ownership Limit shall be void ab initio as to the Transfer of such
Class E Preferred Stock which would be otherwise Constructively Owned by such
Person in excess of the Aggregate Ownership Limit; and the intended transferee
shall acquire no rights in such Class E Preferred Stock; and
d. Notwithstanding any other provisions contained in this
paragraph (G), any Transfer (whether or not such Transfer is the result of a
transaction entered into through the facilities of the NYSE) or other event
that, if effective, would result in the Corporation being "closely held" within
the meaning of Section 856(h) of the Code, or would otherwise result in the
Corporation failing to qualify as a REIT (including, but not limited to, a
Transfer or other event that would result in the Corporation owning (directly or
Constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such
tenant would cause the Corporation to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code) shall be void ab initio as to the
Transfer of the Class E Preferred Stock
18
<PAGE>
or other event which would cause the Corporation to be "closely held" within the
meaning of Section 856(h) of the Code or would otherwise result in the
Corporation failing to qualify as a REIT; and the intended transferee or owner
or Constructive or Beneficial Owner shall acquire or retain no rights in such
Class E Preferred Stock.
2. Conversion into and Exchange for Class E Excess Preferred Stock. If,
notwithstanding the other provisions contained in this paragraph (G), at any
time after the date of the Initial Issue Date, there is a purported Transfer
(whether or not such Transfer is the result of a transaction entered into
through the facilities of the NYSE), change in the capital structure of the
Corporation or other event such that one or more of the restrictions on
ownership and transfers described in subparagraph (1) of this paragraph (G),
above, has been violated, then the Class E Preferred Stock being Transferred (or
in the case of an event other than a Transfer, the Class E Preferred Stock owned
or Constructively Owned or Beneficially Owned or, if the next sentence applies,
the Class E Preferred Stock identified in the next sentence) which would cause
one or more of the restrictions on ownership or transfer to be violated (rounded
up to the nearest whole share) shall be automatically converted into an equal
number of shares of Class E Excess Preferred Stock. If at any time of such
purported Transfer any of the shares of the Class E Preferred Stock are then
owned by a depositary to permit the trading of beneficial interests in
fractional shares of Class E Preferred Stock, then shares of Class E Preferred
Stock that shall be converted to Class E Excess Preferred Stock shall be first
taken from any Class E Preferred Stock that is not in such depositary that is
Beneficially Owned or Constructively Owned by the Person whose Beneficial
Ownership or Constructive Ownership would otherwise violate the restrictions of
subparagraph (1) of this paragraph (G) prior to converting any shares in such
depositary. Any conversion pursuant to this subparagraph shall be effective as
of the close of business on the business day prior to the date of such Transfer
or other event.
3. Remedies for Breach. If the Board of Directors or its designees
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of subparagraph (1) of this paragraph (G) or that a
Person intends to acquire, has attempted to acquire or may acquire direct
ownership, beneficial ownership (determined without reference to any rules of
attribution), Beneficial Ownership or Constructive Ownership of any shares of
the Corporation in violation of subparagraph (1) of this paragraph (G), the
Board of Directors or its designees shall take such action as it deems advisable
to refuse to give effect to or to prevent such Transfer or other event,
including, but not limited to, causing the Corporation to purchase such shares
upon the terms and conditions specified by the Board of Directors in its sole
discretion, refusing to give effect to such Transfer or other event on the books
of the Corporation or instituting proceedings to enjoin such Transfer or other
event; provided, however, that any Transfer (or, in the case of events other
than a Transfer, ownership or Constructive Ownership or Beneficial Ownership) in
violation of subparagraph (1) of this paragraph (G) shall automatically result
in the conversion described in subparagraph (ii), irrespective of any action (or
non-action) by the Board of Directors.
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<PAGE>
4. Notice of Restricted Transfer. Any Person who acquires or attempts
to acquire Class E Preferred Stock or other securities in violation of
subparagraph (1) of this paragraph (G), or any Person who owns or will own Class
E Excess Preferred Stock as a result of an event under subparagraph (2) of this
paragraph (G), shall immediately give written notice to the Corporation of such
event and shall provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if any, of such
Transfer or attempted Transfer or other event on the Corporation's status as a
REIT.
5. Owners Required to Provide Information. From and after the Initial
Issue Date, each Person who is a beneficial owner or Beneficial Owner or
Constructive Owner of Class E Preferred Stock and each Person (including the
stockholder of record) who is holding Class E Preferred Stock for a Beneficial
Owner or Constructive Owner shall provide to the Corporation such information
that the Corporation may request, in good faith, in order to determine the
Corporation's status as a REIT.
6. Remedies Not Limited. Nothing contained in this paragraph (G) (but
subject to subparagraph (12) of this paragraph (G)) shall limit the authority of
the Board of Directors to take such other action as it deems necessary or
advisable to protect the Corporation and the interests of its stockholders by
preservation of the Corporation's status as a REIT.
7. Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this paragraph (G)), including any definition contained in
paragraph (A), the Board of Directors shall have the power to determine the
application of the provisions of this paragraph (G) with respect to any
situation based on the facts known to it (subject, however, to the provisions of
paragraph (12) of this paragraph (G)).
8. Exceptions.
a. Subject to subparagraph (1)(d) of this paragraph (G), the
Board of Directors, in its sole and absolute discretion, with the advice of the
Corporation's tax counsel, may exempt a Person from the limitation on a Person
Beneficially Owning Class E Preferred Stock in excess of the Aggregate Ownership
Limit if such Person is not an individual for purposes of Section 542(a)(2) of
the Code and the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain that no
individual's Beneficial Ownership of such Class E Preferred Stock will violate
the Aggregate Ownership Limit and such Person agrees that any violation of such
representations or undertaking (or other action which is contrary to the
restrictions contained in this paragraph (G)) or attempted violation will result
in such Class E Preferred Stock being exchanged for Class E Excess Preferred
Stock in accordance with subparagraph (2) of this paragraph (G).
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<PAGE>
b. Subject to subparagraph (1)(d) of this paragraph (G), the
Board of Directors, in its sole and absolute discretion, with advice of the
Corporation's tax counsel, may exempt a Person from the limitation on a Person
Constructively Owning Class E Preferred Stock in excess of the Aggregate
Ownership Limit if such Person does not and represents that it will not own,
directly or constructively (by virtue of the application of Section 318 of the
Code, as modified by Section 856(d)(5) of the Code), more than a 9.8% interest
(as set forth in Section 856(d)(2)(B)) in a tenant of the Corporation and the
Board of Directors obtains such representations and undertakings from such
Person as are reasonably necessary to ascertain this fact and such Person agrees
that any violation or attempted violation will result in such Class E Preferred
Stock in excess of the Aggregate Ownership Limit being exchanged for Class E
Excess Preferred Stock in accordance with subparagraph (2) of this paragraph
(G).
c. Prior to granting any exception pursuant to subparagraph
(8)(a) or (8)(b) of this paragraph (G), the Board of Directors may require a
ruling from the IRS, or an opinion of counsel, in either case in form and
substance satisfactory to the Board of Directors, in its sole discretion as it
may deem necessary or advisable in order to determine or ensure the
Corporation's status as a REIT; provided, however, that obtaining a favorable
ruling or opinion shall not be required for the Board of Directors to grant an
exception hereunder.
9. Legend. Each certificate for Class E Preferred Stock shall bear
substantially the following legend:
"The Corporation will furnish to any stockholder, on request and
without charge, a full statement of the information required by Section 2-211(b)
of the Corporations and Associations Article of the Annotated Code of Maryland
with respect to the designations and any preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications, and terms and conditions of redemptions of the
stock of each class which the Corporation has authority to issue and, if the
Corporation is authorized to issue any preferred or special class in series, (i)
the differences in the relative rights and preferences between the shares of
each series to the extent set, and (ii) the authority of the Board of Directors
to set such rights and preferences of subsequent series. The foregoing summary
does not purport to be complete and is subject to and qualified in its entirety
by reference to the charter of the Corporation (the "Charter"), a copy of which
will be sent without charge to each stockholder who so requests. Such request
must be made to the Secretary of the Corporation at its principal office.
"The securities represented by this certificate are subject to
restrictions on ownership for the purpose of the Corporation's maintenance of
its status as a real estate investment trust under the Internal Revenue Code of
1986, as amended. Except as otherwise provided pursuant to the Charter of the
Corporation, no Person may Beneficially Own or Constructively Own shares of
Class E Preferred Stock in excess of 9.8% in value of the aggregate of the
outstanding shares of Capital Stock. Any Person who attempts to Beneficially Own
or Constructively Own shares of Class E
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<PAGE>
Preferred Stock in excess of the above limitation must immediately notify the
Corporation. All capitalized terms in this legend have the meanings defined in
the Charter of the Corporation, a copy of which, including the restrictions on
transfer, will be sent to any stockholder on request and without charge.
Transfers in violation of the restrictions described above shall be void ab
initio. If the restrictions on ownership and transfer are violated, the
securities represented hereby will be designated and treated as shares of Class
E Excess Preferred Stock which will be held in trust by the Corporation. The
foregoing summary does not purport to be complete and is subject to and
qualified in its entirety by reference to the Charter, a copy of which,
including the restrictions on transfer, will be sent without charge to each
stockholder who so requests. Such request must be made to the Secretary of the
Corporation at its principal office."
10. Severability. If any provision of this paragraph (G) or any
application of any such provision is determined to be invalid by any federal or
state court having jurisdiction, the validity of the remaining provisions shall
not be affected and other applications of such provision shall be affected only
to the extent necessary to comply with the determination of such court.
11. Class E Excess Preferred Stock.
a. Ownership in Trust. Upon any purported Transfer (whether or
not such Transfer is the result of a transaction entered into through the
facilities of the NYSE) or other event that results in the issuance of Class E
Excess Preferred Stock pursuant to subparagraph (2) of this paragraph (G), such
Class E Excess Preferred Stock shall be deemed to have been transferred to the
Corporation, as Trustee of a Trust for the exclusive benefit of such Beneficiary
or Beneficiaries to whom an interest in such Class E Excess Preferred Stock may
later be transferred pursuant to subparagraph (11)(d) of this paragraph (G).
Class E Excess Preferred Stock so held in trust shall be issued and outstanding
shares of stock of the Corporation. The Purported Record Transferee shall have
no rights in such Class E Excess Preferred Stock except the right to designate a
transferee of such Class E Excess Preferred Stock upon the terms specified in
subparagraph (11)(d) of this paragraph (G). The Purported Beneficial Transferee
shall have no rights in such Class E Excess Preferred Stock except as provided
in subparagraph (11)(d) of this paragraph (G).
b. Dividend Rights. Class E Excess Preferred Stock shall not
be entitled to any dividends or other distribution (except as provided in
subparagraph (11)(c) of this paragraph (G). Any dividend or distribution paid
prior to the discovery by the Corporation that shares of Preferred Stock have
been converted into Class E Excess Preferred Stock shall be repaid to the
Corporation upon demand.
c. Rights Upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, each holder of shares of Class E Excess
Preferred Stock shall be entitled to receive, ratably with each other holder of
shares of Preferred Equity Stock, that portion of the assets of the Corporation
22
<PAGE>
available for distribution to the holders of shares of Preferred Equity Stock as
the number shares of Class E Excess Preferred Stock held by such holder bears to
the total number of shares of Preferred Equity Stock then outstanding. The
Corporation, as holder of the Class E Excess Preferred Stock in trust, or if the
Corporation shall have been dissolved, any trustee appointed by the Corporation
prior to its dissolution, shall distribute ratably to the Beneficiaries of the
Trust, when and if determined in accordance with subparagraph (11)(d) of this
paragraph (G), any such assets received in respect of the Class E Excess
Preferred Stock in any liquidation, dissolution or winding up of, or any
distribution of the assets of the Corporation.
d. Restrictions on Transfer; Designation of Beneficiary.
(1) Shares of Class E Excess Preferred Stock shall
not be transferable. Subject to the last sentence of this clause (1), the
Purported Record Transferee may freely designate a Beneficiary of an interest in
the Trust (representing the number of shares of Class E Excess Preferred Stock
held by the Trust attributable to a purported Transfer that resulted in the
issuance of Class E Excess Preferred Stock), if (i) the Class E Excess Preferred
Stock held in the Trust would not be Class E Excess Preferred Stock in the hands
of such Beneficiary and (ii) the Purported Beneficial Transferee does not
receive a price from such Beneficiary that reflects a price per share for such
Class E Excess Preferred Stock that exceeds (x) the price per share such
Purported Beneficial Transferee paid for the Class E Preferred Stock in the
purported Transfer that resulted in the issuance of Class E Excess Preferred
Stock, or (y) if the Transfer or other event that resulted in the issuance of
Class E Excess Preferred Stock was not a transaction in which the Purported
Beneficial Transferee gave full value for such Class E Excess Preferred Stock, a
price per share equal to the Market Price on the date of the purported Transfer
or other event that resulted in the issuance of Class E Excess Preferred Stock.
Upon such transfer of an interest in the Trust, the corresponding shares of
Class E Excess Preferred Stock in the Trust shall be automatically exchanged for
an equal number of shares of Class E Preferred Stock and such Class E Preferred
Stock shall be transferred of record to the transferee of the interest in the
Trust if such Class E Preferred Stock would not be Class E Excess Preferred
Stock in the hands of such transferee. Prior to any transfer of any interest in
the Trust, the Purported Record Transferee must give advance notice to the
Corporation of the intended transfer and the Corporation must have waived in
writing its purchase rights under subparagraph (11)(f) of this paragraph (G).
(2) Notwithstanding the foregoing, if a Purported
Beneficial Transferee receives a price for designating a Beneficiary of an
interest in the Trust that exceeds the amounts allowable under subparagraph
(11)(d)(1) of this paragraph (G), such Purported Beneficial Transferee shall
pay, or cause such Beneficiary to pay, such excess to the Corporation.
e. Voting and Notice Rights. The holders of shares of Class E
Excess Preferred Stock shall have no voting rights and shall have no rights to
receive notice of any meetings.
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<PAGE>
f. Purchase Rights in Class E Excess Preferred Stock.
Notwithstanding the provisions of subparagraph (11)(d) of this paragraph (G),
shares of Class E Excess Preferred Stock shall be deemed to have been offered
for sale to the Corporation, or its designee, at a price per share equal to the
lesser of (i) the price per share in the transaction that required the issuance
of such Class E Excess Preferred Stock (or, if the Transfer or other event that
resulted in the issuance of Class E Excess Preferred Stock was not a transaction
in which the Purported Beneficial Transferee gave full value for such Class E
Excess Preferred Stock, a price per share equal to the Market Price on the date
of the purported Transfer or other event that resulted in the issuance of Class
E Excess Preferred Stock) and (ii) the Market Price on the date the Corporation,
or its designee, accepts such offer. The Corporation shall have the right to
accept such offer for a period of ninety (90) days after the later of (i) the
date of the Transfer or other event which resulted in the issuance of such
shares of Class E Excess Preferred Stock and (ii) the date the Board of
Directors determines in good faith that a Transfer or other event resulting in
the issuance of shares of Class E Excess Preferred Stock has occurred, if the
Corporation does not receive a notice of such Transfer or other event pursuant
to subparagraph (4) of this paragraph (G). The Corporation may appoint a special
trustee of the Trust for the purpose of consummating the purchase of Class E
Excess Preferred Stock by the Corporation. In the event that the Corporation's
actions cause a reduction in the number of shares of Class E Preferred Stock
outstanding and such reduction results in the issuance of Class E Excess
Preferred Stock, the Corporation is required to exercise its option to
repurchase such shares of Class E Excess Preferred Stock if the Beneficial Owner
notifies the Corporation that it is unable to sell its rights to such Class E
Excess Preferred Stock.
12. Settlement. Nothing in this paragraph (G) shall preclude the
settlement of any transaction entered into through facilities of the NYSE.
H. Exclusion of Other Rights.
Except as may otherwise be required by law, but without prejudice to
any contractual obligations existing from time to time between the holders of
the Class A Preferred Stock and the Corporation, the shares of Class A Preferred
Stock shall not have any rights granted to or imposed thereupon, including as
dividends, preferences, conversion rights or voting rights, other than those
specifically set forth in the Charter (including these Articles
Supplementary),nor shall the shares of Class E Preferred Stock have preemptive
or subscription rights. The Class E Preferred Stock has no stated maturity and
is not subject to any sinking fund or mandatory redemption.
I. Headings of Subdivisions.
The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
J. Severability of Provisions.
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If any preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
or terms or conditions of redemption of the Class E Preferred Stock set forth in
the Charter is invalid, unlawful or incapable of being enforced by reason of any
rule of law or public policy, all other preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications or terms or conditions of redemption of Class E Preferred Stock
set forth in the Charter which can be given effect without the invalid, unlawful
or unenforceable provision thereof shall, nevertheless, remain in full force and
effect, and no preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
or terms or conditions of redemption of Class E Preferred Stock herein set forth
shall be deemed dependent upon any other provision thereof unless so expressed
therein.
K. Registration as Depositary Shares.
Shares of Class E Preferred Stock shall be registered in the form of
Depositary Shares representing a one-tenth fractional interest in a share of
Class E Preferred Stock ("Depositary Shares") on such terms and conditions as
may be provided for in any agreement binding upon the Corporation (whether
directly or through merger with any other corporation).
SECOND: The Shares and the Class E Excess Shares have been reclassified
by the Board of Directors under a power contained in the Charter.
THIRD: These Articles Supplementary have been approved by the Board of
Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation acknowledges these
Articles Supplementary to be the corporate act of the Corporation and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
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IN WITNESS WHEREOF, the Corporation has caused these
Articles Supplementary to be signed in its name and on its behalf by its
President and attested to by its Secretary on this ____ day of ___, 1998.
ATTEST: KIMCO REALTY CORPORATION
- ------------------------------------ ------------------------------------
Bruce Kauderer Michael J. Flynn
Secretary President
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EXHIBIT C
DEPOSIT AGREEMENT
Dated
________, 1998
KIMCO REALTY CORPORATION
-and-
BANKBOSTON, N.A.
as Depositary
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I
DEFINITIONS............................................................................................ 1
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF Class E PREFERRED STOCK, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND
REDEMPTION OF RECEIPTS................................................................................. 2
SECTION 2.01. Form and Transferability of Receipts............................................ 2
SECTION 2.02. Deposit of Class E Preferred Stock; Execution and Delivery of Receipts
in Respect Thereof................................................................... 4
SECTION 2.03. Optional Redemption of Class E Preferred Stock for Cash......................... 5
SECTION 2.04. Registration of Transfers of Receipts........................................... 6
SECTION 2.05. Combinations and Split-ups of Receipts.......................................... 6
SECTION 2.06. Surrender of Receipts and Withdrawal of Class E Preferred Stock................. 6
SECTION 2.07. Limitations on Execution and Delivery, Transfer, Split-up. Combination,
Surrender and Exchange of Receipts................................................... 7
SECTION 2.08. Lost Receipts, etc.............................................................. 7
SECTION 2.09. Cancellation and Destruction of Surrendered Receipts............................ 7
SECTION 2.10. Conversion of Class E Preferred Stock into Class E Excess Preferred Stock....... 8
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY............................................. 8
SECTION 3.01. Filing Proofs, Certificates and Other Information............................... 8
SECTION 3.02. Payment of Fees and Expenses.................................................... 8
SECTION 3.03. Representations and Warranties as to Class E Preferred Stock.................... 9
SECTION 3.04. Representation and Warranty as to Receipts and Depositary Shares................ 9
ARTICLE IV
THE Class E PREFERRED STOCK; NOTICES................................................................... 9
SECTION 4.01. Cash Distributions.............................................................. 9
SECTION 4.02. Distributions Other Than Cash................................................... 9
SECTION 4.03. Subscription Rights, Preferences or Privileges.................................. 10
SECTION 4.04. Notice of Dividends; Fixing of Record Date for Holders of Receipts.............. 11
SECTION 4.05. Voting Rights................................................................... 11
SECTION 4.06. Changes Affecting Class E Preferred Stock and Reclassifications,
Recapitalizations, etc............................................................... 12
SECTION 4.07. Inspection of Reports........................................................... 12
SECTION 4.08. Lists of Receipt Holders........................................................ 12
SECTION 4.09. Tax and Regulatory Compliance................................................... 13
SECTION 4.10. Withholding..................................................................... 13
ii
<PAGE>
ARTICLE V
THE DEPOSITARY AND THE COMPANY......................................................................... 13
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by the Depositary
and the Registrar.................................................................... 13
SECTION 5.02. Prevention or Delay in Performance by the Depositary, the Depositary's
Agents, the Registrar or the Company................................................. 14
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents, the Registrar
and the Company...................................................................... 14
SECTION 5.04. Resignation and Removal of the Depositary; Appointment of Successor
Depositary........................................................................... 15
SECTION 5.05. Notices, Reports and Documents.................................................. 16
SECTION 5.06. Indemnification by the Company.................................................. 16
SECTION 5.07. Fees, Charges and Expenses...................................................... 16
ARTICLE VI
AMENDMENT AND TERMINATION.............................................................................. 17
SECTION 6.01. Amendment....................................................................... 17
SECTION 6.02. Termination..................................................................... 17
ARTICLE VII
MISCELLANEOUS.......................................................................................... 18
SECTION 7.01. Counterparts.................................................................... 18
SECTION 7.02. Exclusive Benefits of Parties................................................... 18
SECTION 7.03. Invalidity of Provisions........................................................ 18
SECTION 7.04. Notices......................................................................... 18
SECTION 7.05. Depositary's Agents............................................................. 19
SECTION 7.06. Holders of Receipts Are Parties................................................. 19
SECTION 7.07. Governing Law................................................................... 19
SECTION 7.08. Inspection of Deposit Agreement and Articles Supplementary...................... 19
SECTION 7.09. Headings........................................................................ 19
</TABLE>
<PAGE>
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of ________ among KIMCO REALTY CORPORATION,
a Maryland corporation, BANKBOSTON, N.A., a national banking association, as
Depositary, and all holders from time to time of Receipts (as hereinafter
defined) issued hereunder.
WITNESSETH:
WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of the Company's Class E Preferred
Stock (as hereinafter defined) with the Depositary for the purposes set forth in
this Deposit Agreement and for the issuance hereunder of the Receipts evidencing
Depositary Shares representing a fractional interest in the Class E Preferred
Stock deposited; and
WHEREAS, the Receipts are to be substantially in the form of Exhibit A
annexed to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein, it
is agreed by and among the parties hereto as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:
SECTION 1.01. "Articles Supplementary" shall mean the Articles
Supplementary filed with the State Department of Assessments and taxation of
Maryland establishing the Class E Preferred Stock as a separate class of
Preferred Stock of the Company.
SECTION 1.02. "Charter" shall mean the charter (including any Articles
Supplementary), as amended from time to time, of the Company.
SECTION 1.03. "Class E Excess Preferred Stock" shall mean shares of the
Company's Class E Excess Preferred Stock, $1.00 par value per share, to be
issued pursuant to Section 2.10.
SECTION 1.04. "Class E Preferred Stock" shall mean shares of the
Company's Class E Cumulative Redeemable Preferred Stock, $1.00 par value per
share, heretofore validly issued, fully paid and nonassessable.
SECTION 1.05. "Company" shall mean Kimco Realty Corporation, a Maryland
corporation, and its successors.
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SECTION 1.06. "Corporate Office" shall mean the corporate office of the
Depositary at which at any particular time its business in respect of matters
governed by this Deposit Agreement shall be administered, which at the date of
this Deposit Agreement is located at 150 Royall Street, Mail Stop 45-02-62,
Canton, Massachusetts 02021 and c/o BancBoston Trust Company of New York, 55
Broadway - 3rd Floor, New York, New York 10006.
SECTION 1.07. "Deposit Agreement" shall mean this agreement, as the
same may be amended, modified or supplemented from time to time.
SECTION 1.08. "Depositary" shall mean BankBoston, N.A., a national
banking association having its principal office in the United States and having
a combined capital and surplus of at least $50,000,000, and any successor as
depositary hereunder.
SECTION 1.09. "Depositary Share" shall mean a fractional interest of
1/10 of a share of Class E Preferred Stock deposited with the Depositary
hereunder and the same proportionate interest in any and all other property
received by the Depositary in respect of such share of Class E Preferred Stock
and held under this Deposit Agreement, all as evidenced by the Receipts issued
hereunder. Subject to the terms of this Deposit Agreement, each owner of a
Depositary Share is entitled, proportionately, to all the rights, preferences
and privileges of the Class E Preferred Stock represented by such Depositary
Share, including the dividend, voting, redemption, conversion and liquidation
rights contained in the Articles Supplementary.
SECTION 1.10. "Depositary's Agent" shall mean an agent appointed by the
Depositary as provided, and for the purposes specified, in Section 7.05.
SECTION 1.11. "Receipt" shall mean a Depositary Receipt issued
hereunder to evidence one or more Depositary Shares, whether in definitive or
temporary form, substantially in the form set forth as Exhibit A hereto.
SECTION 1.12. "Record date" shall mean the date fixed pursuant to
Section 4.04.
SECTION 1.13. "Record holder" or "holder" as applied to a Receipt shall
mean the person in whose name a Receipt is registered on the books maintained by
the Depositary for such purpose.
SECTION 1.14. "Registrar" shall mean BankBoston, N.A. or any bank or
trust company appointed to register ownership and transfers of Receipts, the
deposited Class E Preferred Stock or Class E Excess Preferred Stock, as the case
may be, as herein provided.
SECTION 1.15. "Securities Act" shall mean the Securities Act of 1933,
as amended.
SECTION 1.16. "Transfer Agent" shall mean BankBoston, N.A. or any bank
or trust company appointed to transfer the Receipts, the deposited Class E
Preferred Stock or Class E Excess Preferred Stock, as the case may be, as herein
provided.
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ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF Class E PREFERRED STOCK, EXECUTION AND
DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. Form and Transferability of Receipts. Definitive Receipts
shall be engraved or printed or lithographed with steel-engraved borders and
underlying tint and shall be substantially in the form set forth in Exhibit A
annexed to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided. Pending the preparation of definitive
Receipts, the Depositary, upon the written order of the Company, delivered in
compliance with Section 2.02, shall execute and deliver temporary Receipts which
may be printed, lithographed, typewritten, mimeographed or otherwise
substantially of the tenor of the definitive Receipts in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the persons executing such Receipts may determine, as evidenced by
their execution of such Receipts. If temporary Receipts are issued, the Company
and the Depositary will cause definitive Receipts to be prepared without
unreasonable delay. After the preparation of definitive Receipts, the temporary
Receipts shall be exchangeable for definitive Receipts upon surrender of the
temporary Receipts at the Corporate Office or such other offices, if any, as the
Depositary may designate, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Receipts, the Depositary shall execute
and deliver in exchange therefor definitive Receipts representing the same
number of Depositary Shares as represented by the surrendered temporary Receipt
or Receipts. Such exchange shall be made at the Company's expense and without
any charge therefor. Until so exchanged, the temporary Receipts shall in all
respects be entitled to the same benefits under this Deposit Agreement, and with
respect to the Class E Preferred Stock deposited, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual or facsimile
signature of a duly authorized signatory of the Depositary, provided that if a
Registrar (other than the Depositary) shall have been appointed then such
Receipts shall also be countersigned by manual signature of a duly authorized
signatory of the Registrar. No Receipt shall be entitled to any benefits under
this Deposit Agreement or be valid or obligatory for any purpose unless it shall
have been executed as provided in the preceding sentence. The Depositary shall
record on its books each Receipt executed as provided above and delivered as
hereinafter provided.
Except as the Depositary may otherwise determine, Receipts shall be in
denominations of any number of whole Depositary Shares. All Receipts shall be
dated the date of their issuance.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Class E Preferred Stock, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.
Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement
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shall be transferable by delivery with the same effect as in the case of a
negotiable instrument; provided, however, that until a Receipt shall be
transferred on the books of the Depositary as provided in Section 2.04, the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distribution of dividends or other
distributions, to the exercise of any conversion rights or to any notice
provided for in this Deposit Agreement and for all other purposes.
SECTION 2.02. Deposit of Class E Preferred Stock; Execution and
Delivery of Receipts in Respect. Concurrently with the execution of this Deposit
Agreement, the Company is delivering to the Depositary a certificate or
certificates, registered in the name of the Depositary and evidencing 65,000
shares of Class E Preferred Stock, properly endorsed or accompanied, if required
by the Depositary, by a duly executed instrument of transfer or endorsement, in
form satisfactory to the Depositary, together with (i) all such certifications
as may be required by the Depositary in accordance with the provisions of this
Deposit Agreement and (ii) a written order of the Company directing the
Depositary to execute and deliver to, or upon the written order of, the person
or persons stated in such order a Receipt or Receipts for the Depositary Shares
representing such deposited Class E Preferred Stock. The Depositary acknowledges
receipt of the deposited Class E Preferred Stock and related documentation and
agrees to hold such deposited Class E Preferred Stock in an account to be
established by the Depositary at the Corporate Office or at such other office as
the Depositary shall determine. The Company hereby appoints the Depositary as
the Registrar and Transfer Agent for the Class E Preferred Stock deposited
hereunder and any Class E Excess Preferred Stock issued pursuant to Section 2.10
and the Depositary hereby accepts such appointment and, as such, will reflect
changes in the number of shares (including any fractional shares) of deposited
Class E Preferred Stock held by it by notation, book-entry or other appropriate
method.
If required by the Depositary, Class E Preferred Stock presented for
deposit by the Company at any time, whether or not the register of stockholders
of the Company is closed, shall also be accompanied by an agreement or
assignment, or other instrument satisfactory to the Depositary, that will
provide for the prompt transfer to the Depositary or its nominee of any dividend
or right to subscribe for additional Class E Preferred Stock or to receive other
property that any person in whose name the Class E Preferred Stock is or has
been registered may thereafter receive upon or in respect of such deposited
Class E Preferred Stock, or in lieu thereof such agreement of indemnity or other
agreement as shall be satisfactory to the Depositary.
Upon receipt by the Depositary of a certificate or certificates for
Class E Preferred Stock deposited hereunder, together with the other documents
specified above, and upon registering such Class E Preferred Stock in the name
of the Depositary, the Depositary, subject to the terms and conditions of this
Deposit Agreement, shall execute and deliver to, or upon the order of, the
person or persons named in the written order delivered to the Depositary
referred to in the first paragraph of this Section 2.02, a Receipt or Receipts
for the number of whole Depositary Shares representing the Class E Preferred
Stock so deposited and registered in such name or names as may be requested by
such person or persons. The Depositary shall execute and deliver such Receipt or
Receipts at the Corporate Office, except that, at the request, risk and expense
of any person requesting such delivery, such delivery may be made at such other
place as may be designated by such person. Other than in the case of splits,
combinations or other reclassifications affecting the Class E Preferred Stock,
or in the case of dividends or other distributions of Class E
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Preferred Stock, if any, there shall be deposited hereunder not more than the
number of shares constituting the Class E Preferred Stock as set forth in the
Articles Supplementary, as such may be amended.
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
SECTION 2.03. Optional Redemption of Class E Preferred Stock for Cash.
Whenever the Company shall elect to redeem shares of deposited Class E Preferred
Stock for cash in accordance with the provisions of the Articles Supplementary,
it shall (unless otherwise agreed in writing with the Depositary) give the
Depositary not less than 60 days' prior written notice of the date fixed for
redemption of such Class E Preferred Stock (the "cash redemption date") and of
the number of such shares of Class E Preferred Stock held by the Depositary to
be redeemed and the applicable redemption price, as set forth in the Articles
Supplementary, including the amount, if any, of accrued and unpaid dividends to
the cash redemption date. The Depositary shall mail, first-class postage
prepaid, notice of the redemption of Class E Preferred Stock and the proposed
simultaneous redemption of the Depositary Shares representing the Class E
Preferred Stock to be redeemed, not less than 30 and not more than 60 days prior
to the cash redemption date, to the holders of record on the record date fixed
for such redemption pursuant to Section 4.04 hereof of the Receipts evidencing
the Depositary Shares to be so redeemed, at the addresses of such holders as the
same appear on the records of the Depositary; but neither failure to mail any
such notice to one or more such holders nor any defect in any such notice shall
affect the sufficiency of the proceedings for redemption as to other holders.
The Company shall provide the Depositary with such notice, and each such notice
shall state: the cash redemption date; the cash redemption price; the number of
shares of deposited Class E Preferred Stock and Depositary Shares to be
redeemed; if fewer than all the Depositary Shares held by any holder are to be
redeemed, the number of such Depositary Shares held by such holder to be so
redeemed; the place or places where Receipts evidencing Depositary Shares to be
redeemed are to be surrendered for payment of the cash redemption price; and
that from and after the cash redemption date dividends in respect of the Class E
Preferred Stock represented by the Depositary Shares to be redeemed will cease
to accrue. If fewer than all the outstanding Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed shall be selected pro rata (as
nearly as may be practicable without creating fractional Depositary Shares) or
by any other equitable method determined by the Company that will not result in
the issuance of any Class E Excess Preferred Stock. The Company shall also cause
notice of redemption to be published in a newspaper of general circulation in
The City of New York at least once a week for two successive weeks commencing
not less than 30 nor more than 60 days prior to the cash redemption date.
In the event that notice of redemption has been made as described in
the immediately preceding paragraph and the Company shall then have paid in full
to the Depositary the cash redemption price (determined pursuant to the Articles
Supplementary) of the Class E Preferred Stock deposited with the Depositary to
be redeemed (including any accrued and unpaid dividends to the cash redemption
date), the Depositary shall redeem the number of Depositary Shares representing
such Class E Preferred Stock so called for redemption by the Company and from
and after the cash redemption date (unless the Company shall have failed to
redeem the shares of Class E Preferred Stock to be redeemed by it as set forth
in the Company's notice provided for in the preceding paragraph), all dividends
in respect of the shares of Class E Preferred Stock called
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for redemption shall cease to accrue, the Depositary Shares called for
redemption shall be deemed no longer to be outstanding and all rights of the
holders of Receipts evidencing such Depositary Shares (except the right to
receive the cash redemption price and any money or other property to which
holders of such Receipts were entitled upon such redemption) shall, to the
extent of such Depositary Shares, cease and terminate. Upon surrender in
accordance with said notice of the Receipts evidencing such Depositary Shares
(properly endorsed or assigned for transfer, if the Depositary shall so
require), such Depositary Shares shall be redeemed at a cash redemption price of
$100.00 per Depositary Share plus any other money and other property payable in
respect of such Class E Preferred Stock. The foregoing shall be further subject
to the terms and conditions of the Articles Supplementary.
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with payment of the cash
redemption price for and all other amounts payable in respect of the Depositary
Shares called for redemption, a new Receipt evidencing the Depositary Shares
evidenced by such prior Receipt and not called for redemption.
SECTION 2.04. Registration of Transfers of Receipts. The Company hereby
appoints the Depositary as the Registrar and Transfer Agent for the Receipts and
the Depositary hereby accepts such appointment and, as such, shall register on
its books from time to time transfers of Receipts upon any surrender thereof by
the holder in person or by a duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer or endorsement,
together with evidence of the payment of any transfer taxes as may be required
by law. Upon such surrender, the Depositary shall execute a new Receipt or
Receipts and deliver the same to or upon the order of the person entitled
thereto evidencing the same aggregate number of Depositary Shares evidenced by
the Receipt or Receipts surrendered.
SECTION 2.05. Combinations and Split-ups of Receipts. Upon surrender of
a Receipt or Receipts at the Corporate Office or such other office as the
Depositary may designate for the purpose of effecting a split-up or combination
of Receipts, subject to the terms and conditions of this Deposit Agreement, the
Depositary shall execute and deliver a new Receipt or Receipts in the authorized
denominations requested evidencing the same aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered.
SECTION 2.06. Surrender of Receipts and Withdrawal of Class E Preferred
Stock. Any holder of a Receipt or Receipts may withdraw any or all of the
deposited Class E Preferred Stock represented by the Depositary Shares evidenced
by such Receipt or Receipts and all money and other property, if any,
represented by such Depositary Shares by surrendering such Receipt or Receipts
at the Corporate Office or at such other office as the Depositary may designate
for such withdrawals, provided that a holder of a Receipt or Receipts may not
withdraw such Class E Preferred Stock (or money and other property, if any,
represented thereby) which has previously been called for redemption or which
has been converted to Class E Excess Preferred Stock in accordance with Section
2.10. After such surrender, without unreasonable delay, the Depositary shall
deliver to such holder, or to the person or persons designated by such holder as
hereinafter provided, the number of whole or fractional shares of such Class E
Preferred Stock and all such money and other property, if any, represented by
the Depositary Shares evidenced by the Receipt or Receipts so surrendered for
withdrawal, but holders of such whole or fractional shares of Class E Preferred
Stock will not thereafter be entitled to deposit such Class E Preferred Stock
hereunder
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or to receive Depositary Shares therefor. If the Receipt or Receipts delivered
by the holder to the Depositary in connection with such withdrawal shall
evidence a number of Depositary Shares in excess of the number of Depositary
Shares representing the number of whole or fractional shares of deposited Class
E Preferred Stock to be withdrawn, the Depositary shall at the same time, in
addition to such number of whole or fractional shares of Class E Preferred Stock
and such money and other property, if any, to be withdrawn, deliver to such
holder, or (subject to Section 2.04) upon his order, a new Receipt or Receipts
evidencing such excess number of Depositary Shares. Delivery of such Class E
Preferred Stock and such money and other property being withdrawn may be made by
the delivery of such certificates, documents of title and other instruments as
the Depositary may deem appropriate, which, if required by the Depositary, shall
be properly endorsed or accompanied by proper instruments of transfer.
If the deposited Class E Preferred Stock and the money and other
property being withdrawn are to be delivered to a person or persons other than
the record holder of the Receipt or Receipts being surrendered for withdrawal of
Class E Preferred Stock, such holder shall execute and deliver to the Depositary
a written order so directing the Depositary and the Depositary may require that
the Receipt or Receipts surrendered by such holder for withdrawal of such shares
of Class E Preferred Stock be properly endorsed in blank or accompanied by a
properly executed instrument of transfer or endorsement in blank.
The Depositary shall deliver the deposited Class E Preferred Stock and
the money and other property, if any, represented by the Depositary Shares
evidenced by Receipts surrendered for withdrawal at the Corporate Office, except
that, at the request, risk and expense of the holder surrendering such Receipt
or Receipts and for the account of the holder thereof, such delivery may be made
at such other place as may be designated by such holder.
SECTION 2.07. Limitations on Execution and Delivery, Transfer,
Split-up. Combination, Surrender and Exchange of Receipts. As a condition
precedent to the execution and delivery, transfer, split-up, combination,
surrender or exchange of any Receipt, the Depositary, any of the Depositary's
Agents or the Company may require any or all of the following: (i) payment to it
of a sum sufficient for the payment (or, in the event that the Depositary or the
Company shall have made such payment, the reimbursement to it) of any tax or
other governmental charge with respect thereto (including any such tax or charge
with respect to the Class E Preferred Stock being deposited or withdrawn); (ii)
the production of proof satisfactory to it as to the identity and genuineness of
any signature (or the authority of any signature); and (iii) compliance with
such regulations, if any, as the Depositary or the Company may establish
consistent with the provisions of this Deposit Agreement as may be required by
any securities exchange upon which the deposited Class E Preferred Stock, the
Depositary Shares or the Receipts may be included for quotation or listed.
The deposit of Class E Preferred Stock may be refused, the delivery of
Receipts against Class E Preferred Stock may be suspended, the transfer of
Receipts may be refused, and the transfer, split-up, combination, surrender,
exchange or redemption of outstanding Receipts may be suspended (i) during any
period when the register of stockholders of the Company is closed or (ii) if any
such action is deemed reasonably necessary or advisable by the Depositary, any
of the Depositary's Agents or the Company at any time or from time to time
because of any requirement of law or of any government or governmental body or
commission, or under any provision of this Deposit Agreement.
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SECTION 2.08. Lost Receipts, etc. In case any Receipt shall be
mutilated or destroyed or lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, provided that the holder thereof
provides the Depositary with (i) evidence reasonably satisfactory to the
Depositary of such destruction, loss or theft of such Receipt, of the
authenticity thereof and of his ownership thereof and (ii) reasonable
indemnification satisfactory to the Depositary and the Company.
SECTION 2.09. Cancellation and Destruction of Surrendered Receipts. All
Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so cancelled.
SECTION 2.10. Conversion of Class E Preferred Stock into Class E Excess
Preferred Stock. As provided in the Articles Supplementary, upon the happening
of certain events, shares of Class E Preferred Stock (in whole or fractional
parts) shall be automatically converted into shares of Class E Excess Preferred
Stock. In the event of such a conversion, the Receipt representing the shares of
deposited Class E Preferred Stock so converted shall no longer represent, to the
extent of the shares so converted, shares of such deposited Class E Preferred
Stock. Promptly upon its knowledge of the conversion of such deposited Class E
Preferred Stock into Class E Excess Preferred Stock, the Company shall notify
the Depositary of such conversion, the number of shares of deposited Class E
Preferred Stock so converted, and the identity of the holder of the Receipt so
affected, whereupon the Depositary shall promptly notify the holder of such
Receipt as to the foregoing information and the requirement for the holder to
surrender such Receipt to the Depositary for cancellation of the number of
Depositary Shares evidenced thereby equal to the converted deposited Class E
Preferred Stock represented thereby.
If fewer than all of the Depositary Shares evidenced by a Receipt are
required to be surrendered for cancellation, the Depositary will deliver to the
holder of such Receipt upon its surrender to the Depositary a new Receipt
evidencing the Depositary Shares evidenced by such prior Receipt and not
required to be surrendered for cancellation. Upon the conversion of the
deposited Class E Preferred Stock and cancellation of the Depositary Shares
represented thereby, the Depositary will make appropriate adjustments in its
records (as contemplated in Section 2.02) to reflect such conversion and
cancellation (including the reduction of any fractional share of deposited Class
E Preferred Stock and the issuance of any Class E Excess Preferred Stock).
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ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
person presenting Class E Preferred Stock for deposit or any holder of a Receipt
may be required from time to time to file such proof of residence or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company may withhold or delay the delivery of any
Receipt, the transfer, redemption or exchange of any Receipt, the withdrawal of
the deposited Class E Preferred Stock represented by the Depositary Shares
evidenced by any Receipt, the distribution of any dividend or other distribution
or the sale of any rights or of the proceeds thereof, until such proof or other
information is filed, such certificates are executed or such representations and
warranties are made.
SECTION 3.02. Payment of Fees and Expenses. Holders of Receipts shall
be obligated to make payments to the Depositary of certain fees and expenses, as
provided in Section 5.07, or provide evidence reasonably satisfactory to the
Depositary that such fees and expenses have been paid. Until such payment is
made, transfer of any Receipt or any withdrawal of the Class E Preferred Stock
or money or other property, if any, represented by the Depositary Shares
evidenced by such Receipt may be refused, any dividend or other distribution may
be withheld, and any part or all of the Class E Preferred Stock or other
property represented by the Depositary Shares evidenced by such Receipt may be
sold for the account of the holder thereof (after attempting by reasonable means
to notify such holder a reasonable number of days prior to such sale). Any
dividend or other distribution so withheld and the proceeds of any such sale may
be applied to any payment of such fees or expenses, the holder of such Receipt
remaining liable for any deficiency.
SECTION 3.03. Representations and Warranties as to Class E Preferred
Stock. In the case of the initial deposit of the Class E Preferred Stock
hereunder, the Company and, in the case of subsequent deposits thereof, each
person so depositing Class E Preferred Stock under this Deposit Agreement shall
be deemed thereby to represent and warrant that such Class E Preferred Stock and
each certificate therefor are valid and that the person making such deposit is
duly authorized to do so. The Company hereby further represents and warrants
that such Class E Preferred Stock, when issued, will be validly issued, fully
paid and nonassessable. Such representations and warranties shall survive the
deposit of the Class E Preferred Stock and the issuance of Receipts.
SECTION 3.04. Representation and Warranty as to Receipts and Depositary
Shares. The Company hereby represents and warrants that the Receipts, when
issued, will evidence legal and valid interests in the Depositary Shares and
each Depositary Share will represent a legal and valid 1/10 fractional interest
in a share of deposited Class E Preferred Stock. Such representation and
warranty shall survive the deposit of the Class E Preferred Stock and the
issuance of Receipts evidencing the Depositary Shares.
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ARTICLE IV
THE CLASS E PREFERRED STOCK; NOTICES
SECTION 4.01. Cash Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on the deposited Class E Preferred
Stock, including any cash received upon redemption of any shares of Class E
Preferred Stock pursuant to Section 2.03, the Depositary shall, subject to
Section 3.02, distribute to record holders of Receipts on the record date fixed
pursuant to Section 4.04 such amounts of such sum as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that (i) in
case the Company or the Depositary shall be required to and shall withhold from
any cash dividend or other cash distribution in respect of the Class E Preferred
Stock represented by the Receipts held by any holder an amount on account of
taxes, the amount made available for distribution or distributed in respect of
Depositary Shares represented by such Receipts subject to such withholding shall
be reduced accordingly and (ii) no cash dividends will be paid in respect of any
Depositary Share to the extent that it represents any Class E Preferred Stock
converted into Class E Excess Preferred Stock. The Depositary shall distribute
or make available for distribution, as the case may be, only such amount,
however, as can be distributed without attributing to any holder of Receipts a
fraction of one cent, and any balance not so distributable shall be held by the
Depositary (without liability for interest thereon) and shall be added to and be
treated as part of the next sum received by the Depositary for distribution to
record holders of Receipts then outstanding.
SECTION 4.02. Distributions Other Than Cash. Whenever the Depositary
shall receive any distribution other than cash on the deposited Class E
Preferred Stock, the Depositary shall, subject to Section 3.02, distribute to
record holders of Receipts on the record date fixed pursuant to Section 4.04
such amounts of the securities or property received by it as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders, in any manner that the
Depositary and the Company may deem equitable and practicable for accomplishing
such distribution, except that no distribution will be made in respect of any
Depositary Share to the extent that it represents any Class E Preferred Stock
converted into Class E Excess Preferred Stock. If, in the opinion of the
Depositary after consultation with the Company, such distribution cannot be made
proportionately among such record holders, or if for any other reason (including
any requirement that the Company or the Depositary withhold an amount on account
of taxes), the Depositary deems, after consultation with the Company, such
distribution not to be feasible, the Depositary may, with the approval of the
Company, adopt such method as it deems equitable and practicable for the purpose
of effecting such distribution, including the sale (at public or private sale)
of the securities or property thus received, or any part thereof, at such place
or places and upon such terms as it may deem proper. The net proceeds of any
such sale shall, subject to Section 3.02, be distributed or made available for
distribution, as the case may be, by the Depositary to record holders of
Receipts as provided by Section 4.01 in the case of a distribution received in
cash. The Company shall not make any distribution of such securities or property
to the holders of Receipts unless the Company shall have provided to the
Depositary an opinion of counsel stating that such securities or property have
been registered under the Securities Act or do not need to be registered.
SECTION 4.03. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names deposited Class E Preferred Stock is registered on the books of the
Company any rights, preferences or privileges to subscribe for or to purchase
any securities or any rights, preferences or privileges of any other nature,
such rights, preferences or privileges shall in each such instance be made
available by the Depositary to the record holders of Receipts in such manner as
the Company shall instruct (including by the
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issue to such record holders of warrants representing such rights, preferences
or privileges); provided, however, that (a) if at the time of issue or offer of
any such rights, preferences or privileges the Company determines upon advice of
its legal counsel that it is not lawful or feasible to make such rights,
preferences or privileges available to the holders of Receipts (by the issue of
warrants or otherwise) or (b) if and to the extent instructed by holders of
Receipts who do not desire to exercise such rights, preferences or privileges,
the Depositary shall then, if so instructed by the Company, and if applicable
laws or the terms of such rights, preferences or privileges so permit, sell such
rights, preferences or privileges of such holders at public or private sale, at
such place or places and upon such terms as it may deem proper. The net proceeds
of any such sale shall, subject to Section 3.01 and Section 3.02, be distributed
by the Depositary to the record holders of Receipts entitled thereto as provided
by Section 4.01 in the case of a distribution received in cash. The Company
shall not make any distribution of such rights, preferences or privileges,
unless the Company shall have provided to the Depositary an opinion of counsel
stating that such rights, preferences or privileges have been registered under
the Securities Act or do not need to be registered.
If registration under the Securities Act of the securities to which any
rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold the securities to which such rights, preferences
or privileges relate, the Company agrees that it will promptly file a
registration statement pursuant to the Securities Act with respect to such
rights, preferences or privileges and securities and use its best efforts and
take all steps available to it to cause such registration statement to become
effective sufficiently in advance of the expiration of such rights, preferences
or privileges to enable such holders to exercise such rights, preferences or
privileges. In no event shall the Depositary make available to the holders of
Receipts any right, preference or privilege to subscribe for or to purchase any
securities unless and until such a registration statement shall have become
effective or unless the offering and sale of such securities to such holders are
exempt from registration under the provisions of the Securities Act and the
Company shall have provided to the Depositary an opinion of counsel to such
effect.
If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees to use its best efforts to take such action or
obtain such authorization, consent or permit sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders to
exercise such rights, preferences or privileges.
SECTION 4.04. Notice of Dividends; Fixing of Record Date for Holders of
Receipts. Whenever any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to the
deposited Class E Preferred Stock, or whenever the Depositary shall receive
notice of (i) any meeting at which holders of such Class E Preferred Stock are
entitled to vote or of which holders of such Class E Preferred Stock are
entitled to notice or (ii) any election on the part of the Company to redeem any
shares of such Class E Preferred Stock, the Depositary shall in each such
instance fix a record date (which shall be the same date as the record date
fixed by the Company with respect to the Class E Preferred Stock) for the
determination of the holders of Receipts who shall be entitled to receive such
dividend, distribution, rights, preferences or privileges or the net proceeds of
the sale thereof, to give instructions for the exercise of voting
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rights at any such meeting or to receive notice of such meeting or whose
Depositary Shares are to be so redeemed.
SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting at
which the holders of deposited Class E Preferred Stock are entitled to vote, the
Depositary shall, as soon as practicable thereafter, mail to the record holders
of Receipts a notice, which shall be provided by the Company and which shall
contain (i) such information as is contained in such notice of meeting, (ii) a
statement that the holders of Receipts at the close of business on a specified
record date fixed pursuant to Section 4.04 will be entitled, subject to any
applicable provision of law, to instruct the Depositary as to the exercise of
the voting rights pertaining to the amount of Class E Preferred Stock
represented by their respective Depositary Shares and (iii) a brief statement as
to the manner in which such instructions may be given. Upon the written request
of a holder of a Receipt on such record date, the Depositary shall vote or cause
to be voted the amount of Class E Preferred Stock represented by the Depositary
Shares evidenced by such Receipt in accordance with the instructions set forth
in such request. To the extent any such instructions request the voting of a
fractional interest of a share of deposited Class E Preferred Stock, the
Depositary shall aggregate such interest with all other fractional interests
resulting from requests with the same voting instructions and shall vote the
number of whole votes resulting from such aggregation in accordance with the
instructions received in such requests. Each share of Class E Preferred Stock is
entitled to 10 votes and, accordingly, each Depositary Share is entitled to one
vote. The Company hereby agrees to take all reasonable action that may be deemed
necessary by the Depositary in order to enable the Depositary to vote such Class
E Preferred Stock or cause such Class E Preferred Stock to be voted. In the
absence of specific instructions from the holder of a Receipt, the Depositary
will abstain from voting to the extent of the Class E Preferred Stock
represented by the Depositary Shares evidenced by such Receipt. The Depositary
shall not be required to exercise discretion in voting any Class E Preferred
Stock represented by the Depositary Shares evidenced by such Receipt.
SECTION 4.06. Changes Affecting Class E Preferred Stock and
Reclassifications, etc. Upon any change in par or stated value, split-up,
combination or any other reclassification of Class E Preferred Stock, or upon
any recapitalization, reorganization, merger, amalgamation or consolidation
affecting the Company or to which it is a party or sale of all or substantially
all of the Company's assets, the Depositary shall, upon the instructions of the
Company, (i) make such adjustments in (a) the fraction of an interest
represented by one Depositary Share in one share of Class E Preferred Stock and
(b) the ratio of the redemption price per Depositary Share to the redemption
price of a share of Class E Preferred Stock, in each case as may be required by
or as is consistent with the provisions of the Articles Supplementary to fully
reflect the effects of such change in par or stated value, split-up, combination
or other reclassification of Class E Preferred Stock, or of such
recapitalization, reorganization, merger, amalgamation or consolidation or sale
and (ii) treat any shares of stock or other securities or property (including
cash) that shall be received by the Depositary in exchange for or upon
conversion of or in respect of the Class E Preferred Stock as new deposited
property under this Deposit Agreement, and Receipts then outstanding shall
thenceforth represent the proportionate interests of holders thereof in the new
deposited property so received in exchange for or upon conversion or in respect
of such Class E Preferred Stock. In any such case the Depositary may, in its
discretion, with the approval of the Company, execute and deliver additional
Receipts, or may call for the surrender of all outstanding Receipts to be
exchanged for new Receipts specifically describing such new deposited property.
Anything to the contrary herein
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notwithstanding, holders of Receipts shall have the right from and after the
effective date of any such change in par or stated value, split-up, combination
or other reclassification of the Class E Preferred Stock or any such
recapitalization, reorganization, merger, amalgamation or consolidation or sale
of all or substantially all the assets of the Company to surrender such Receipts
to the Depositary with instructions to convert, exchange or surrender the Class
E Preferred Stock represented thereby only into or for, as the case may be, the
kind and amount of shares of stock and other securities and property and cash
into which the deposited Class E Preferred Stock evidenced by such Receipts
might have been converted or for which such Class E Preferred Stock might have
been exchanged or surrendered immediately prior to the effective date of such
transaction. The Company shall cause effective provision to be made in the
charter of the resulting or surviving corporation (if other than the Company)
for protection of such rights as may be applicable upon exchange of the
deposited Class E Preferred Stock for securities or property or cash of the
surviving corporation in connection with the transactions set forth above. The
Company shall cause any such surviving corporation (if other than the Company)
expressly to assume the obligations of the Company hereunder.
SECTION 4.07. Inspection of Reports. The Depositary shall make
available for inspection by holders of Receipts at the Corporate Office and at
such other places as it may from time to time deem advisable during normal
business hours any reports and communications received from the Company that are
both received by the Depositary as the holder of deposited Class E Preferred
Stock and made generally available to the holders of the Class E Preferred
Stock. In addition, the Depositary shall transmit certain notices and reports to
the holders of Receipts as provided in Section 5.05.
SECTION 4.08. Lists of Receipt Holders. Promptly upon request from time
to time by the Company, the Depositary shall furnish to the Company a list, as
of a recent date specified by the Company, of the names, addresses and holdings
of Depositary Shares of all persons in whose names Receipts are registered on
the books of the Depositary.
SECTION 4.09. Tax and Regulatory Compliance. The Depositary shall be
responsible for (i) preparation and mailing of form 1099s for all open and
closed accounts, (ii) foreign tax withholding, (iii) withholding 31% (or any
withholding as may be required at the then applicable rate) of dividends from
eligible holders of Receipts, (iv) mailing W-9 forms to new holders of Receipts
without a certified taxpayer identification number, (v) processing certified W-9
forms, (vi) preparation and filing of state information returns and (vii)
escheatment services.
SECTION 4.10. Withholding. Notwithstanding any other provision of this
Deposit Agreement, in the event that the Depositary determines that any
distribution in property is subject to any tax which the Depositary is obligated
by law to withhold, the Depositary may dispose of all or a portion of such
property in such amounts and in such manner as the Depositary deems necessary
and practicable to pay such taxes, by public or private sale, and the Depositary
shall distribute the net proceeds of any such sale or the balance of any such
property after deduction of such taxes to the holders of Receipts entitled
thereto in proportion to the number of Depositary Shares held by them
respectively.
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ARTICLE V
THE DEPOSITARY AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by
the Depositary and the Registrar. The Depositary shall maintain at the Corporate
Office facilities for the execution and delivery, transfer, surrender and
exchange, split-up, combination and redemption of Receipts and deposit and
withdrawal of Class E Preferred Stock and at the offices of the Depositary's
Agents, if any, facilities for the delivery, transfer, surrender and exchange,
split-up, combination and redemption of Receipts and deposit and withdrawal of
Class E Preferred Stock, all in accordance with the provisions of this Deposit
Agreement.
The Depositary shall keep books at the Corporate Office for the
registration and transfer of Receipts, which books at all reasonable times shall
be open for inspection by the record holders of Receipts as provided by
applicable law. The Depositary may close such books, at any time or from time to
time, when deemed expedient by it in connection with the performance of its
duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the Class
E Preferred Stock represented by such Depositary Shares shall be listed on the
New York Stock Exchange, Inc. or any other stock exchange, the Depositary may,
with the approval of the Company, appoint a Registrar (acceptable to the
Company) for registration of such Receipts or Depositary Shares in accordance
with the requirements of such Exchange. Such Registrar (which may be the
Depositary if so permitted by the requirements of such Exchange) may be removed
and a substitute registrar appointed by the Depositary upon the request or with
the approval of the Company. If the Receipts, such Depositary Shares or such
Class E Preferred Stock are listed on one or more other stock exchanges, the
Depositary will, at the request and expense of the Company, arrange such
facilities for the delivery, transfer, surrender, redemption and exchange of
such Receipts, such Depositary Shares or such Class E Preferred Stock as may be
required by law or applicable stock exchange regulations.
SECTION 5.02. Prevention or Delay in Performance by the Depositary, the
Depositary's Agents, the Registrar or the Company. Neither the Depositary, any
Depositary's Agent, any Registrar nor the Company shall incur any liability to
any holder of any Receipt, if by reason of any provision of any present or
future law or regulation thereunder of the United States of America or of any
other governmental authority or, in the case of the Depositary, the Depositary's
Agent or the Registrar, by reason of any provision, present or future, of the
Charter or, in the case of the Company, the Depositary, the Depositary's Agent
or the Registrar, by reason of any act of God or war or other circumstance
beyond the control of the relevant party, the Depositary, any Depositary's
Agent, the Registrar or the Company shall be prevented or forbidden from doing
or performing any act or thing that the terms of this Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
any Registrar or the Company incur any liability to any holder of a Receipt by
reason of any nonperformance or delay, caused as aforesaid, in the performance
of any act or thing that the terms of this Deposit Agreement provide shall or
may be done or performed, or by reason of any exercise of, or failure to
exercise, any discretion provided for in this Deposit Agreement.
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents,
the Registrar and the Company. Neither the Depositary, any Depositary's Agent,
any Registrar nor the Company assumes any obligation or shall be subject to any
liability under this Deposit Agreement or any Receipt to holders of Receipts
other than from acts or omissions arising out of conduct
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constituting bad faith, negligence (in the case of any action or inaction with
respect to the voting of the deposited Class E Preferred Stock), gross
negligence or willful misconduct in the performance of such duties as are
specifically set forth in this Deposit Agreement.
Neither the Depositary, any Depositary's Agent, any Registrar nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to the deposited Class E Preferred
Stock, Depositary Shares or Receipts that in its reasonable opinion may involve
it in expense or liability, unless indemnity reasonably satisfactory to it
against all expense and liability be furnished as often as may be required.
Neither the Depositary, any Depositary's Agent, any Registrar nor the
Company shall be liable for any action or any failure to act by it in reliance
upon the written advice of legal counsel or accountants, or information provided
by any person presenting Class E Preferred Stock for deposit, any holder of a
Receipt or any other person believed by it in good faith to be competent to give
such information. The Depositary, any Depositary's Agent, any Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it in good faith to be
genuine and to have been signed or presented by the proper party or parties.
In the event the Depositary shall receive conflicting claims, requests
or instructions from any holders of Receipts, on the one hand, and the Company,
on the other hand, the Depositary shall be entitled to act on such claims,
requests or instructions received from the Company, and shall be entitled to the
full indemnification set forth in Section 5.06 hereof in connection with any
action so taken.
The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the deposited Class E Preferred Stock or for the
manner or effect of any such vote made, as long as any such action or non-action
is in good faith and does not result from negligence or willful misconduct of
the Depositary. The Depositary undertakes, and any Registrar shall be required
to undertake, to perform such duties and only such duties as are specifically
set forth in this Deposit Agreement, and no implied covenants or obligations
shall be read into this Agreement against the Depositary or any Registrar.
The Depositary, its parent, affiliate, or subsidiaries, any
Depositary's Agent, and any Registrar may own, buy, sell or deal in any class of
securities of the Company and its affiliates and in Receipts or Depositary
Shares or become pecuniarily interested in any transaction in which the Company
or its affiliates may be interested or contract with or lend money to or
otherwise act as fully or as freely as if it were not the Depositary or the
Depositary's Agent hereunder. The Depositary may also act as transfer agent or
registrar of any of the securities of the Company and its affiliates or act in
any other capacity for the Company or its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent
shall be deemed to be an "issuer" of the securities under the federal securities
laws or applicable state securities laws, it being expressly understood and
agreed that the Depositary and any Depositary's Agent are acting only in a
ministerial capacity as Depositary for the deposited Class E Preferred Stock;
provided, however, that the Depositary agrees to comply with all information
reporting and withholding requirements applicable to it under law or this
Deposit Agreement in its capacity as Depositary.
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Neither the Depositary (or its officers, directors, employees or
agents) nor any Depositary's Agent makes any representation or has any
responsibility as to the validity of the registration statement pursuant to
which the Depositary Shares are registered under the Securities Act, the
deposited Class E Preferred Stock, the Depositary Shares, the Receipts (except
its countersignature thereon) or any instruments referred to therein or herein,
or as to the correctness of any statement made therein or herein; provided,
however, that the Depositary is responsible for its representations in this
Deposit Agreement and for the validity of any action taken or required to be
taken by the Depositary in connection with this Deposit Agreement.
The Company agrees that it will register the deposited Class E
Preferred Stock and the Depositary Shares in accordance with the applicable
securities laws.
SECTION 5.04. Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by notice of its election to do so y delivered to the Company, such
resignation to take effect upon the appointment of a successor depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least
$50,000,000. If a successor depositary shall not have been appointed in 60 days,
the resigning Depositary may petition a court of competent jurisdiction to
appoint a successor depositary. Every successor depositary shall execute and
deliver to its predecessor and to the Company an instrument in writing accepting
its appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall promptly
execute and deliver an instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign, transfer and deliver
all rights, title and interest in the deposited Class E Preferred Stock and any
moneys or property held hereunder to such successor and shall deliver to such
successor a list of the record holders of all outstanding Receipts. Any
successor depositary shall promptly mail notice of its appointment to the record
holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted, or any corporation to which all or a substantial part
of the corporate trust or shareholder services business of the Depositary may be
transferred, shall be the successor of such Depositary without the execution or
filing of any document or any further act. Such successor depositary may execute
the Receipts either in the name of the predecessor depositary or in the name of
the successor depositary.
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SECTION 5.05. Notices, Reports and Documents. The Company agrees that
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of Receipts, in each case at the
address recorded in the Depositary's books, copies of all notices and reports
(including financial statements) required by law, by the rules of any national
securities exchange upon which the Class E Preferred Stock, the Depositary
Shares or the Receipts are included for quotation or listed or by the Charter to
be furnished by the Company to holders of the deposited Class E Preferred Stock
and, if requested by the holder of any Receipt, a copy of this Deposit
Agreement, the form of Receipt, the Articles Supplementary and the form of Class
E Preferred Stock. Such transmission will be at the Company's expense and the
Company will provide the Depositary with such number of copies of such documents
as the Depositary may reasonably request. In addition, the Depositary will
transmit to the record holders of Receipts at the Company's expense such other
documents as may be requested by the Company.
SECTION 5.06. Indemnification by the Company. The Company agrees to
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harmless from, any liability, costs and expenses (including
reasonable attorneys' fees) that may arise out of, or in connection with, its
acting as Depositary, Depositary's Agent or Registrar, respectively, under this
Deposit Agreement and the Receipts, except for any liability arising out of the
willful misconduct, gross negligence, negligence (in the case of any action or
inaction with respect to the voting of the deposited Class E Preferred Stock) or
bad faith on the part of any such person or persons. The obligations of the
Company set forth in this Section 5.06 shall survive any succession of any
Depositary, Registrar or Depositary's Agent or termination of this Deposit
Agreement.
SECTION 5.07. Fees, Charges and Expenses. No charges and expenses of
the Depositary or any Depositary's Agent hereunder shall be payable by any
person, except as provided in this Section 5.07. The Company shall pay all
transfer and other taxes and governmental charges arising solely from the
existence of this Deposit Agreement. The Company shall also pay all fees and
expenses of the Depositary in connection with the initial deposit of the Class E
Preferred Stock and the initial issuance of the Depositary Shares evidenced by
the Receipts, any redemption of the Class E Preferred Stock at the option of the
Company and all withdrawals of the Class E Preferred Stock by holders of
Depositary Shares. If a holder of Receipts requests the Depositary to perform
duties not required under this Deposit Agreement, the Depositary shall notify
the holder of the cost of the performance of such duties prior to the
performance thereof. Such holder will be liable for the charges and expenses
related to such performance. All other fees and expenses of the Depositary and
any Depositary's Agent hereunder and of any Registrar (including, in each case,
fees and expenses of counsel) incident to the performance of their respective
obligations hereunder will be promptly paid as previously agreed between the
Depositary and the Company. The Depositary shall present its statement for fees
and expenses to the Company every month or at such other intervals as the
Company and the Depositary may agree.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment. The form of the Receipts and any provision of
this Deposit Agreement may at any time and from time to time be amended by
agreement between the
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Company and the Depositary in any respect that they may deem necessary or
desirable; provided, however, that no such amendment (other than any change in
the fees of any Depositary, Registrar or Transfer Agent) which (i) shall
materially and adversely alter the rights of the holders of Receipts or (ii)
would be materially and adversely inconsistent with the rights granted to the
holders of the Class E Preferred Stock pursuant to the Charter shall be
effective unless such amendment shall have been approved by the holders of at
least two thirds of the Depositary Shares then outstanding. In no event shall
any amendment impair the right, subject to the provisions of Section 2.06 and
Section 2.07 and Article III, of any holder of any Depositary Shares to
surrender the Receipt evidencing such Depositary Shares with instructions to the
Depositary to deliver to the holder the deposited Class E Preferred Stock and
all money and other property, if any, represented thereby, except in order to
comply with mandatory provisions of applicable law. Every holder of an
outstanding Receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold such Receipt, to consent and agree to such
amendment and to be bound by this Deposit Agreement as amended thereby.
SECTION 6.02. Termination. This Deposit Agreement may be terminated by
the Company upon not less than 30 days' prior written notice to the Depositary
if (i) such termination is necessary to preserve the Company's status as a real
estate investment trust under the Internal Revenue Code of 1986, as amended (or
any successor provision) or (ii) the holders of a majority of the Depositary
Shares then outstanding consent to such termination, whereupon the Depositary
shall deliver or make available to each holder of a Receipt, upon surrender of
the Receipt held by such holder, such number of whole or fractional shares of
deposited Class E Preferred Stock as are represented by the Depositary Shares
evidenced by such Receipt, together with any other property held by the
Depositary in respect of such Receipt. In the event that this Deposit Agreement
is terminated pursuant to clause (i) of the immediately preceding sentence, the
Company hereby agrees to use its best efforts to list the Class E Preferred
Stock issued upon surrender of the Receipt evidencing the Depositary Shares
represented thereby on a national securities exchange. This Deposit Agreement
will automatically terminate if (i) all outstanding Depositary Shares shall have
been redeemed pursuant to Section 2.03 or (ii) there shall have been made a
final distribution in respect of the deposited Class E Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company and
such distribution shall have been distributed to the holders of Receipts
entitled thereto.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Section 5.06 and Section 5.07.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts. This Deposit Agreement may be executed in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Deposit Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agents and
shall be open to inspection
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during business hours at the Corporate Office and the respective offices of the
Depositary's Agents, if any, by any holder of a Receipt.
SECTION 7.02. Exclusive Benefits of Parties. This Deposit Agreement is
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any and all notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or
facsimile transmission confirmed by letter, addressed to the Company at:
KIMCO REALTY CORPORATION
3333 New Hyde Park Road
New Hyde Park, New York 11042
Attention: Corporate Secretary
Telephone No.: (516) 869-9000
or at any other address of which the Company shall have notified the Depositary
in writing.
Any notices to be given to the Depositary hereunder or under the Receipts
shall be in writing and shall be deemed to have been duly given if personally
delivered or sent by mail, or by telegram or telex or telecopier confirmed by
letter, addressed to the Depositary at the Corporate Office.
Any notices given to any record holder of a Receipt hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to such record holder at the address of such
record holder as it appears on the books of the Depositary or, if such holder
shall have filed with the Depositary in a timely manner a written request that
notices intended for such holder be mailed to some other address, at the address
designated in such request.
Delivery of a notice sent by mail, or by telegram or telex or telecopier
shall be deemed to be effected at the time when a duly addressed letter
containing the same (or a confirmation thereof in the case of a telegram or
telex or telecopier message) is deposited, postage prepaid, in a post office
letter box. The Depositary or the Company may, however, act upon any telegram or
telex or telecopier message received by it from the other or from any holder of
a Receipt, notwithstanding that such telegram or telex or telecopier message
shall not subsequently be confirmed by letter as aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may from time to time
appoint Depositary's Agents to act in any respect for the Depositary for the
purposes of this Deposit
19
<PAGE>
Agreement and may at any time appoint additional Depositary's Agents and vary or
terminate the appointment of such Depositary's Agents. The Depositary will
notify the Company of any such action.
SECTION 7.06. Holders of Receipts Are Parties. The holders of Receipts
from time to time shall be deemed to be parties to this Deposit Agreement and
shall be bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery thereof.
SECTION 7.07. Governing Law. This Deposit Agreement and the Receipts
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by, and construed in accordance with, the law of the State of New
York applicable to agreements made and to be performed in said State.
SECTION 7.08. Inspection of Deposit Agreement and Articles
Supplementary. Copies of this Deposit Agreement and the Articles Supplementary
shall be filed with the Depositary and the Depositary's Agents and shall be open
to inspection during business hours at the Corporate Office and the respective
offices of the Depositary's Agents, if any, by any holder of any Receipt.
SECTION 7.09. Headings. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or to have any bearing upon the meaning or interpretation
of any provision contained herein or in the Receipts.
20
<PAGE>
IN WITNESS WHEREOF, Kimco Realty Corporation and BankBoston, N.A. have duly
executed this Deposit Agreement as of the day and year first above set forth and
all holders of Receipts shall become parties hereto by and upon acceptance by
them of delivery of Receipts issued in accordance with the terms hereof.
KIMCO REALTY CORPORATION
By:
----------------------------
Authorized Officer
Attest:
BANKBOSTON, N.A.
By:
----------------------------
Authorized Signatory
Attest:
21
<PAGE>
The Company will furnish to any holder hereof, on request and without
charge, a full statement of the information required by Section 2-211(b) of the
Corporations and Associations Article of the Annotated Code of Maryland with
respect to the designations and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications, and terms and conditions of redemption of the
stock of each class which the Company has authority to issue and, if the Company
is authorized to issue any preferred or special class in series, (i) the
differences in the relative rights and preferences between the shares of each
series to the extent set, and (ii) the authority of the Board of Directors to
set such rights and preferences of subsequent series. The foregoing summary does
not purport to be complete and is subject to and qualified in its entirety by
reference to the charter of the Company (the "Charter"), a copy of which will be
sent without charge to each stockholder who so requests. Such request must be
made to the Secretary of the Company at its principal office or to the Transfer
Agent.
The Depositary Shares evidenced by this Depositary Receipt are subject
to restrictions on ownership and transfer for the purpose of the Company's
maintenance of its status as a Real Estate Investment Trust under the Internal
Revenue Code of 1986, as amended. Except as otherwise provided pursuant to the
Charter of the Company, no Person may Beneficially Own or Constructively Own
Depositary Shares representing Class E Preferred Stock in excess of 9.8% of the
outstanding Class E Preferred Stock and any Class E Excess Preferred Stock of
the Company, with certain further restrictions and exceptions set forth in the
Company's Charter. Any Person who attempts to Beneficially Own or Constructively
Own Depositary Shares representing Class E Preferred Stock in excess of the
above limitations must immediately notify the Company. All capitalized terms in
this legend have the meanings defined in the Company's Charter. Transfers in
violation of the restrictions described above shall be void ab initio.
In addition, if the restrictions on ownership and transfer are
violated, the Class E Preferred Stock represented by the Depositary Shares
evidenced by this Depositary Receipt will be automatically exchanged for Class E
Excess Preferred Stock which will be held in trust by the Company. As specified
in the Charter, the Company has an option to acquire Class E Excess Preferred
Stock under certain circumstances and an obligation to acquire Class E Excess
Preferred Stock in certain other circumstances. The foregoing Summary does not
purport to be complete, and is subject to and qualified in its entirety by
reference to the Charter, a copy of which, including the restrictions of
transfer, will be sent without charge to the holder hereof who so requests.
Requests for such statement may be directed to the Corporate Secretary of the
Company.
[FORM OF FACE OF RECEIPT]
DR-
CERTIFICATE FOR NOT MORE THAN ____________ DEPOSITARY SHARES
CUSIP 49446 R 505
RECEIPT FOR DEPOSITARY SHARES,
EACH REPRESENTING 1/10 OF A SHARE OF _____% CLASS E
CUMULATIVE REDEEMABLE PREFERRED STOCK, PAR VALUE $1.00 PER SHARE, OF
KIMCO REALTY CORPORATION
(a Maryland corporation)
BankBoston, N.A., as Depositary (the "Depositary"), hereby certifies
that _____________________________________________________ is the registered
owner of __________________ DEPOSITARY SHARES ("Depositary Shares"), each
Depositary Share representing 1/10 of one share of Class E Cumulative Redeemable
Preferred Stock, par value $1.00 per share (the "Stock"), of Kimco Realty
Corporation, a corporation duly organized and existing under the laws of the
State of Maryland (the "Company"), on deposit with the Depositary, subject to
the terms and entitled to the benefits of the Deposit Agreement dated as of
_______, 1998 (the "Deposit Agreement"), among the Company, the Depositary and
the holders from time to time of Receipts for Depositary Shares. By accepting
this Receipt, the holder hereof becomes a party to and agrees to be bound by all
the terms and conditions of the Deposit Agreement. This Receipt shall not be
valid or obligatory for any purpose or entitled to any benefits under the
Deposit Agreement unless it shall have been executed by the Depositary by the
manual or facsimile signature of a duly authorized officer or, if a Registrar in
respect of the Receipts (other than the Depositary) shall have been appointed,
by the manual signature of a duly authorized officer of such Registrar.
Dated:
[Countersigned: BOSTON, N.A.
as Depositary, Transfer Agent
and Registrar
] By:
- ------------------------------------- ----------------------------
By Authorized Signatory
<PAGE>
[FORM OF REVERSE OF RECEIPT]
KIMCO REALTY CORPORATION
KIMCO REALTY CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH REGISTERED
HOLDER OF A RECEIPT WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A COPY
OF THE ARTICLES SUPPLEMENTARY WITH RESPECT TO THE CLASS E PREFERRED STOCK OF
KIMCO REALTY CORPORATION. ANY SUCH REQUEST IS TO BE ADDRESSED TO THE DEPOSITARY
NAMED ON THE FACE OF THIS RECEIPT.
-------------------------
The following abbreviations when used in the instructions on the face
of this receipt shall be construed as though they were written out in full
according to applicable laws or regulations.
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM - as tenant in common UNIF GIFT MIN ACT - Custodian
-------- -----
(Cust) (Minor)
TEN ENT - as tenants by the Under Uniform Gifts to Minors Act
entireties
JT TEN - as joint tenants with
right of survivorship ---------------------------
and not as tenants in (State)
common
</TABLE>
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
----------
For value received, ________________________ hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
_________________________ Depositary Shares represented by the within Receipt,
and do hereby irrevocably constitute and appoint ______________________________
Attorney to transfer the said Depositary Shares on the books of the within named
Depositary with full power of substitution in the premises.
Dated
------------------------- ------------------------------------
NOTICE: The signature to the
assignment must correspond
with the name as written
upon the face of this
Receipt in every
particular, without
alteration or enlargement
or any change whatever.
