KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
U.S. UNDERWRITING AGREEMENT
September 25, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281-1305
Dear Sirs:
Kimco Realty Corporation, a Maryland corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $.01 par value (the "Common
Stock"), or warrants to purchase a number of shares of Common Stock (the "Common
Stock Warrants"), or both, or shares of Preferred Stock, $1.00 par value (the
"Preferred Shares"), from time to time, in one or more offerings on terms to be
determined at the time of sale. The Preferred Shares may be offered in the form
of depositary shares (the "Depositary Shares") represented by depositary
receipts (the "Depositary Receipts"). The Common Stock Warrants will be issued
pursuant to a Common Stock Warrant Agreement (the "Warrant Agreement") between
the Company and a warrant agent (the "Warrant Agent"). Each series of Preferred
Shares may vary as to the specific number of shares, title, stated value,
liquidation preference, issuance price, ranking, dividend rate or rates (or
method of calculation), dividend payment dates, any redemption or sinking fund
requirements, any conversion provisions and any other variable terms as set
forth in the applicable articles supplementary (each, the "Articles
Supplementary") relating to such Preferred Shares. As used herein, "Securities"
shall mean the Common Stock, the Common Stock Warrants, the Preferred Shares,
the Depositary Shares and the Depositary Receipts; and "Warrant Securities"
shall mean the Common Stock issuable upon exercise of Common Stock Warrants. As
used herein, "you" and "your", unless the context otherwise requires, shall mean
the parties to whom this Agreement is addressed together with the other parties,
if any, identified in the applicable Terms
Agreement (as hereinafter defined) as additional co-managers with respect to
Underwritten Securities (as hereinafter defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten Securities") to, and the purchase and
offering thereof by, you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the sale of
the Underwritten Securities or as a member of an underwriting syndicate and any
Underwriter substituted pursuant to Section 10 hereof). The Terms Agreement
relating to the offering of Underwritten Securities shall specify the number of
Underwritten Securities of each class or series to be initially issued,
including the number of Common Stock Warrants, if any (the "Initial Underwritten
Securities"), whether the Initial Underwritten Securities shall be in the form
of Depositary Shares and the fractional amount of Preferred Shares represented
by each Depositary Share, the names of the Underwriters participating in such
offering (subject to substitution as provided in Section 10 hereof), the number
of Initial Underwritten Securities which each such Underwriter severally agrees
to purchase, the names of such of you or such other Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from the
Company, any initial public offering price, the time, date and place of delivery
and payment, any delayed delivery arrangements and any other variable terms of
the Initial Underwritten Securities (including, but not limited to, current
ratings (in the case of Preferred Shares and Depositary Shares only),
designations, liquidation preferences, conversion provisions, redemption
provisions and sinking fund requirements and the terms of the Warrant Securities
and the terms, prices and dates upon which such Warrant Securities may be
purchased). In addition, each Terms Agreement shall specify whether the Company
has agreed to grant to the Underwriters an option to purchase additional
Underwritten Securities to cover over-allotments, if any, and the number of
Underwritten Securities subject to such option (the "Option Securities"). As
used herein, the term "Underwritten Securities" shall include the Initial
Underwritten Securities and all or any portion of the Option Securities agreed
to be purchased by the Underwriters as provided herein, if any. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between you and the Company. Each offering of Underwritten Securities through
you or
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through an underwriting syndicate managed by you will be governed by this
Agreement, as supplemented by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-4833) for the
registration of the Securities and Warrant Securities and certain of the
Company's debt securities, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement (including all pre-effective
amendments thereto) has been declared effective by the Commission, and the
Company has filed such post-effective amendments thereto as may have been
required prior to the execution of the applicable Terms Agreement and each such
post-effective amendment has been declared effective by the Commission. Such
registration statement (as so amended, if applicable), including all
information, if any, deemed to be a part thereof pursuant to Rule 434 of the
1933 Act Regulations, is collectively referred to herein as the "Registration
Statement" and the final prospectus and the prospectus supplement relating to
the offering of the Underwritten Securities (the "Prospectus Supplement"), in
the form first used to confirm sales by the Underwriters for use in connection
with the offering of the Underwritten Securities, are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), prior to the execution of the
applicable Terms Agreement. All references in this Agreement to financial
statements and schedules and other information which is "contained," "included"
or "stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the 1934 Act which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be. If the Company elects to rely on Rule 434 under
the 1933 Act Regulations, all references to the "Prospectus" shall be deemed to
include, without limitation, the final or preliminary prospectus and the term
sheet or abbreviated term sheet, taken together, provided to the Underwriters by
the Company in reliance on Rule 434 under the 1933 Act (the "Rule 434
Prospectus"). If the Company files a registration statement with the Commission
to
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register a portion of the Securities and Warrant Securities and relies on
Rule 462(b) for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 333-4833) and the Rule 462 Registration
Statement.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you, as of the date hereof, and
to you and each other Underwriter named in the applicable Terms Agreement, as of
the date thereof, the Closing Time (as hereinafter defined) and each Date of
Delivery, if any (as hereinafter defined)(in each case, a "Representation
Date"), as follows:
(i) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective and at each time thereafter on
which the Company filed an Annual Report on Form 10-K with the Commission,
complied, and as of each Representation Date will comply, in all material
respects with the requirements of the 1933 Act and 1933 Act Regulations;
the Registration Statement, at the time the Registration Statement became
effective and at each time thereafter on which the Company filed an Annual
Report on Form 10-K with the Commission, did not, and at each time
thereafter on which any amendment to the Registration Statement becomes
effective or the Company files an Annual Report on Form 10-K with the
Commission and as of each Representation Date will not, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and the Prospectus, as of the date hereof, does not, and as of
each Representation Date will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through you expressly for use in the Registration Statement or
Prospectus.
(ii) The accountants who certified the financial statements, financial
statement schedules and historical summaries of revenue and certain
operating expenses for the properties related thereto included or
incorporated by
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reference in the Registration Statement and the Prospectus are
independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(iii) The historical financial statements included or incorporated by
reference in the Registration Statement and the Prospectus present fairly
the financial position of the Company and its consolidated subsidiaries as
at the dates indicated and the results of their operations for the periods
specified; except as may otherwise be stated in the Registration Statement
and the Prospectus, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; and the financial statement schedules and other financial
information and data included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information
required to be stated therein.
(iv) The historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus, if any, present fairly the revenue and those
operating expenses included in such summaries for the periods specified in
conformity with generally accepted accounting principles; the pro forma
condensed consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, if any, present
fairly the pro forma financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the pro forma results of their
operations for the periods specified; and the pro forma condensed
consolidated financial statements, if any, have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis, the assumptions on which such pro forma financial statements have
been prepared are reasonable and are set forth in the notes thereto, such
pro forma financial statements have been prepared, and the pro forma
adjustments set forth therein have been applied, in accordance with the
applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations, and such pro forma adjustments have been properly applied to
the historical amounts in the compilation of such statements.
(v) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be
stated therein or contemplated thereby, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
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its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, (B) there have been no
transactions or acquisitions entered into by the Company or any of its
subsidiaries other than those arising in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the Company's common stock, or dividends
declared, paid or made in accordance with the terms of any series of
the Company's preferred stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) The Company has been duly incorporated and is validly existing as
a corporation under the laws of Maryland and is in good standing with the
State Department of Assessments and Taxation of Maryland with corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the Articles Supplementary
relating to the Preferred Shares or Depositary Shares, if applicable, will
be in full force and effect as of each Representation Date.
(vii) Each significant subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated under the 1933 Act) of the Company (each, a
"Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise;
and all of the issued and outstanding capital stock of each
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Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except
for security interests granted in respect of indebtedness of the
Company or any of its subsidiaries and referred to in the Prospectus.
(viii) The authorized, issued and outstanding stock of the Company is
as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans, dividend reinvestment plans, employee and director
stock option plans or the exercise of convertible securities referred to in
the Prospectus); and the outstanding capital stock of the Company has been
duly authorized and validly issued and is fully paid and non-assessable and
is not subject to preemptive or other similar rights.
(ix) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and, if applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement (each, a "Deposit
Agreement"), among the Company, the financial institution named in the
Deposit Agreement (the "Depositary") and the holders of the Depositary
Receipts issued thereunder, have, as of each Representation Date, been duly
authorized by the Company and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this Agreement and such
Underwritten Securities, when issued and delivered by the Company pursuant
to this Agreement against payment of the consideration set forth in the
applicable Terms Agreement or any Delayed Delivery Contract (as hereinafter
defined), will be validly issued, fully paid and non-assessable and will
not be subject to preemptive or other similar rights; the Preferred Shares,
if applicable, conform to the provisions of the Articles Supplementary; and
the Underwritten Securities being sold pursuant to the applicable Terms
Agreement conform in all material respects to all statements relating
thereto contained in the Prospectus.
(x) If applicable, the Common Stock Warrants have been duly authorized
and, when issued and delivered pursuant to this Agreement and countersigned
by the Warrant Agent as provided in the Warrant Agreement, will have been
duly executed, countersigned, issued and delivered and will constitute
valid and legally binding obligations of the
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Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued; the issuance of the Warrant
Securities upon exercise of the Common Stock Warrants will not be
subject to preemptive or other similar rights; and the Common Stock
Warrants conform in all material respects to all statements relating
thereto contained in the Prospectus.
(xi) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares, or the
Warrant Securities, will have been duly and validly authorized and reserved
for issuance upon such conversion or exercise by all necessary corporate
action and such shares, when issued upon such conversion or exercise, will
be duly and validly issued and will be fully paid and non-assessable, and
the issuance of such shares upon such conversion or exercise will not be
subject to preemptive or other similar rights; the shares of Common Stock
issuable upon conversion of any of the Preferred Shares or the Depositary
Shares, or the Warrant Securities, conform in all material respects to the
descriptions thereof in the Prospectus.
(xii) The applicable Warrant Agreement, if any, and the applicable
Deposit Agreement, if any, will have been duly authorized, executed and
delivered by the Company prior to the issuance of any applicable
Underwritten Securities, and each constitutes a valid and legally binding
agreement of the Company enforceable in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws relating to or affecting creditors' rights generally and by
general equity principles (regardless of whether enforcement is considered
in a proceeding in equity or at law); and the Warrant Agreement, if any,
and the Deposit Agreement, if any, each conforms in all material respects
to all statements relating thereto contained in the Prospectus.
(xiii) If applicable, upon execution and delivery of the Depositary
Receipts pursuant to the terms of the Deposit Agreement, the persons in
whose names such Depositary Receipts are registered will be entitled to the
rights specified therein and in the Deposit Agreement, except as
enforcement of such rights may be limited by bankruptcy, insolvency or
other similar laws relating to or affecting creditors' rights generally and
by general equity principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
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(xiv) Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject, except for any
such violation or default that would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise; and the execution, delivery and performance of this Agreement,
the applicable Terms Agreement, the applicable Warrant Agreement, if any,
or the applicable Deposit Agreement, if any, and the consummation of the
transactions contemplated herein and therein and compliance by the Company
with its obligations hereunder and thereunder have been duly authorized by
all necessary corporate action, and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of
the charter or by-laws of the Company or any applicable law, administrative
regulation or administrative or court order or decree.
(xv) The Company has operated and intends to continue to operate in
such a manner as to qualify to be taxed as a "real estate investment trust"
under the Internal Revenue Code of 1986, as amended (the "Code"), for the
taxable year in which sales of the Underwritten Securities are to occur.
(xvi) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act").
(xvii) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened against or affecting the Company
or any of its subsidiaries which is required to be disclosed in the
Prospectus (other than as disclosed therein), or which might result in any
material adverse change in the condition,
9
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
or which might materially and adversely affect the properties or assets
thereof or which might materially and adversely affect the consummation of
this Agreement, the applicable Terms Agreement, the applicable Warrant
Agreement, if any, or the applicable Deposit Agreement, if any, or the
transactions contemplated herein or therein; all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is
a party or of which any of its property or assets is the subject which are
not described in the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not material;
and there are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been so filed.
(xviii) Neither the Company nor any of its subsidiaries is required to
own or possess any trademarks, service marks, trade names or copyrights in
order to conduct the business now operated by it, other than those the
failure to possess or own would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(xix) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been obtained in
connection with the consummation by the Company of the transactions
contemplated by this Agreement, the applicable Terms Agreement, any Warrant
Agreement or any Deposit Agreement, except such as may be required under
the 1933 Act or the 1933 Act Regulations, state securities laws or real
estate syndication laws.
(xx) The Company and its subsidiaries possess such certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them, other than those the failure to possess or own would not
have a material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, and neither the Company nor
any of its subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision,
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ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered
as one enterprise.
(xxi) The Company has full corporate power and authority to enter into
this Agreement, the applicable Terms Agreement and the Delayed Delivery
Contracts, if any, and this Agreement has been, and as of each
Representation Date, the applicable Terms Agreement and the Delayed
Delivery Contracts, if any, will have been, duly authorized, executed and
delivered by the Company.
(xxii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective and as of the applicable
Representation Date or during the period specified in Section 3(f), did not
and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(xxiii) Except as otherwise disclosed in the Prospectus and except as
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise: (i) all
properties and assets described in the Prospectus are owned with good and
marketable title by the Company, KC Holdings, Inc., a Delaware corporation
("KC Holdings"), their respective subsidiaries and/or a joint venture or
partnership in which any such party is a participant (a "Related Entity");
(ii) all of the leases under which any of the Company, KC Holdings, their
respective subsidiaries or, to the knowledge of the Company, Related
Entities holds or uses real properties or assets as a lessee are in full
force and effect, and neither the Company, KC Holdings nor any of their
respective subsidiaries or, to the knowledge of the Company, Related
Entities is in material default in respect of any of the terms or
provisions of any of such leases and no claim has been asserted by anyone
adverse to any such party's rights as lessee under any of such leases, or
affecting or questioning any such party's right to the
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continued possession or use of the leased property or assets under any such
leases; (iii) all liens, charges, encumbrances, claims or restrictions on
or affecting the properties and assets of any of the Company, KC Holdings
or their respective subsidiaries or Related Entities which are required to
be disclosed in the Prospectus are disclosed therein; (iv) neither the
Company, KC Holdings nor any of their respective subsidiaries or, to the
knowledge of the Company, Related Entities nor any lessee of any portion of
any such party's properties is in default under any of the leases pursuant
to which any of the Company, KC Holdings or their respective subsidiaries
or, to the knowledge of the Company, Related Entities leases its properties
and neither the Company, KC Holdings nor any of their respective
subsidiaries or Related Entities knows of any event which, but for the
passage of time or the giving of notice, or both, would constitute a
default under any of such leases; (v) no tenant under any of the leases
pursuant to which any of the Company, KC Holdings or their respective
subsidiaries or, to the knowledge of the Company, Related Entities leases
its properties has an option or right of first refusal to purchase the
premises demised under such lease; (vi) each of the properties of any of
the Company, KC Holdings or, to the knowledge of the Company, their
respective subsidiaries or Related Entities complies with all applicable
codes and zoning laws and regulations; and (vii) neither the Company nor KC
Holdings nor any of their respective subsidiaries has knowledge of any
pending or threatened condemnation, zoning change or other proceeding or
action that will in any manner affect the size of, use of, improvements on,
construction on, or access to the properties of any of the Company, KC
Holdings or their respective subsidiaries or Related Entities.
(xxiv) Title insurance in favor of the mortgagee or the Company, KC
Holdings, their respective subsidiaries and/or their Related Entities is
maintained with respect to each shopping center property owned by any such
entity in an amount at least equal to (a) the cost of acquisition of such
property or (b) the cost of construction of such property (measured at the
time of such construction), except, in each case, where the failure to
maintain such title insurance would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise or of KC Holdings and its subsidiaries considered as one
enterprise.
(xxv) The mortgages and deeds of trust encumbering the properties and
assets described in the Prospectus are not
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convertible nor does any of the Company, KC Holdings or their
respective subsidiaries hold a participating interest therein, and
said mortgages and deeds of trust with respect to property owned by
the Company and its subsidiaries are not cross-defaulted or
cross-collateralized to any property owned by KC Holdings and its
subsidiaries.
(xxvi) Each of the partnership and joint venture agreements to which
the Company or any of its subsidiaries is a party, and which relates to
real property described in the Prospectus, has been duly authorized,
executed and delivered by such applicable party and constitutes the valid
agreement thereof, enforceable in accordance with its terms, except as
limited by (a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights or remedies of creditors or (b) the effect of general
principles of equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which any
proceeding therefor may be brought, and the execution, delivery and
performance of any of such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or default under, the
charter or by-laws of such party or any material contract, lease or other
instrument to which such party is a party or by which its properties may be
bound or any law, administrative regulation or administrative or court
order or decree.
(xxvii) None of the Company, KC Holdings or any of their respective
subsidiaries has any knowledge of (a) the unlawful presence of any
hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, "Hazardous Materials") on any of the properties
owned by it or the Related Entities, or (b) any unlawful spills, releases,
discharges or disposal of Hazardous Materials that have occurred or are
presently occurring off such properties as a result of any construction on
or operation and use of such properties which presence or occurrence would
have a material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise or of KC Holdings and its
subsidiaries considered as one enterprise; and in connection with the
construction on or operation and use of the properties owned by the
Company, KC Holdings, their respective subsidiaries and Related Entities,
each of the Company, KC Holdings and their respective subsidiaries
represents that, as of each Representation Date, it has no knowledge of any
material
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failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials.
(b) Any certificate signed by any officer of the Company and delivered to
you or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by the
Company to each Underwriter participating in such offering as to the matters
covered thereby on the date of such certificate and, unless subsequently amended
or supplemented, at each Representation Date subsequent thereto.
Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at a price per Option Security equal to the
price per Initial Underwritten Security, less an amount equal to any dividends
declared by the Company and paid or payable on the Initial Underwritten
Securities but not on the Option Underwritten Securities. Such option, if
granted, will expire 30 days or such lesser number of days as may be specified
in the applicable Terms Agreement after the Representation Date relating to the
Initial Underwritten Securities, and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
you, but shall not be later than three full business days and not be earlier
than two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or any
portion of the Option
14
Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Underwritten Securities each such
Underwriter has severally agreed to purchase as set forth in the applicable
Terms Agreement bears to the total number of Initial Underwritten Securities
(except as otherwise provided in the applicable Terms Agreement), subject to
such adjustments as you in your discretion shall make to eliminate any sales or
purchases of fractional Initial Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the Underwritten
Securities to be purchased by the Underwriters shall be made at the office of
Brown & Wood LLP, 58th Floor, One World Trade Center, New York, New York
10048-0557, or at such other place as shall be agreed upon by you and the
Company, at 10:00 A.M., New York City time, on the third business day (unless
postponed in accordance with the provisions of Section 10) following the date of
the applicable Terms Agreement or, if pricing takes place after 4:30 p.m., New
York City time, on the date of the applicable Terms Agreement, on the fourth
business day (unless postponed in accordance with the provisions of Section 10)
following the date of the applicable Terms Agreement or at such other time as
shall be agreed upon by you and the Company (each such time and date being
referred to as a "Closing Time"). In addition, in the event that any or all of
the Option Securities are purchased by the Underwriters, payment of the purchase
price for, and delivery of certificates representing, such Option Securities,
shall be made at the above-mentioned offices of Brown & Wood LLP, or at such
other place as shall be agreed upon by you and the Company on each Date of
Delivery as specified in the notice from you to the Company. Unless otherwise
specified in the applicable Terms Agreement, payment shall be made to the
Company by wire transfer or certified or official bank check or checks in
Federal or similar same-day funds payable to the order of the Company against
delivery to you for the respective accounts of the Underwriters for the
Underwritten Securities to be purchased by them. The Underwritten Securities or,
if applicable, Depositary Receipts evidencing the Depositary Shares, shall be in
such authorized denominations and registered in such names as you may request in
writing at least one business day prior to the applicable Closing Time or Date
of Delivery, as the case may be. The Underwritten Securities, which may be in
temporary form, will be made available for examination and packaging by you on
or before the first business day prior to the Closing Time or Date of Delivery,
as the case may be.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase
15
Underwritten Securities from the Company pursuant to delayed delivery contracts
("Delayed Delivery Contracts") substantially in the form of Exhibit B hereto
with such changes therein as the Company may approve. As compensation for
arranging Delayed Delivery Contracts, the Company will pay to you at Closing
Time, for the respective accounts of the Underwriters, a fee specified in the
applicable Terms Agreement for each of the Underwritten Securities for which
Delayed Delivery Contracts are made at the Closing Time as is specified in the
applicable Terms Agreement. Any Delayed Delivery Contracts are to be with
institutional investors of the types described in the Prospectus. At the Closing
Time, the Company will enter into Delayed Delivery Contracts (for not less than
the minimum number of Underwritten Securities per Delayed Delivery Contract
specified in the applicable Terms Agreement) with all purchasers proposed by the
Underwriters and previously approved by the Company as provided below, but not
for an aggregate number of Underwritten Securities in excess of that specified
in the applicable Terms Agreement. The Underwriters will not have any
responsibility for the validity or performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least two business days prior to the Closing Time,
of the names of the institutions with which the making of Delayed Delivery
Contracts is approved by the Company and the number of Underwritten Securities
to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
Section 3. Covenants of the Company. The Company covenants with you, and
with each Underwriter participating in the offering of Underwritten Securities,
as follows:
(a) If the Company does not elect to rely on Rule 434 under the 1933 Act
Regulations, immediately following the execution of the applicable Terms
Agreement, the Company will prepare a
16
Prospectus Supplement setting forth the number of Underwritten Securities
covered thereby and their terms not otherwise specified in the Prospectus
pursuant to which the Underwritten Securities are being issued, the names of the
Underwriters participating in the offering and the number of Underwritten
Securities which each severally has agreed to purchase, the names of the
Underwriters acting as co-managers in connection with the offering, the price at
which the Underwritten Securities are to be purchased by the Underwriters from
the Company, the initial public offering price, if any, the selling concession
and reallowance, if any, any delayed delivery arrangements, and such other
information as you and the Company deem appropriate in connection with the
offering of the Underwritten Securities; and the Company will promptly transmit
copies of the Prospectus Supplement to the Commission for filing pursuant to
Rule 424(b) of the 1933 Act Regulations and will furnish to the Underwriters
named therein as many copies of the Prospectus (including such Prospectus
Supplement) as you shall reasonably request. If the Company elects to rely on
Rule 434 under the 1933 Act Regulations, immediately following the execution of
the applicable Terms Agreement, the Company will prepare an abbreviated term
sheet that complies with the requirements of Rule 434 under the 1933 Act
Regulations and will provide the Underwriters with copies of the form of Rule
434 Prospectus, in such number as you shall reasonably request, and promptly
file or transmit for filing with the Commission the form of Prospectus complying
with Rule 434(c)(2) of the 1933 Act Regulations in accordance with Rule 424(b)
of the 1933 Act Regulations.
(b) The Company will notify you immediately, and confirm such notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document to
be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the
Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; and the Company will make every reasonable
effort to prevent the issuance of any such stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or prepare
any amendment to the Registration Statement or any amendment or supplement to
the
17
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
18
to make the Registration Statement and Prospectus comply with such requirements.
(g) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities, the Warrant Securities, if any, and the
shares of Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, for offering and sale under the applicable securities
laws and real estate syndication laws of such states and other jurisdictions of
the United States as you may designate. In each jurisdiction in which the
Underwritten Securities, the Warrant Securities, if any, and the shares of
Common Stock issuable upon conversion of the Preferred Shares or the Depositary
Shares, if any, have been so qualified, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as may be required for the distribution of
the Underwritten Securities and the Warrant Securities, if any; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the Company will
make generally available to its security holders as soon as practicable, but not
later than 90 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve month period beginning not later than the first
day of the Company's fiscal quarter next following the "effective date" (as
defined in such Rule 158) of the Registration Statement.
(i) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable year
in which sales of the Underwritten Securities are to occur.
(j) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) The Company will not, during a period of 90 days from the date of the
applicable Terms Agreement, with respect to the Underwritten Securities covered
thereby, without your prior written consent, offer or sell, grant any option for
the sale of, or enter into any agreement to sell, any Securities of the same
class or series or ranking on a parity with such Underwritten Securities (other
than the Underwritten Securities which are to
19
be sold pursuant to such Terms Agreement) or, if such Terms Agreement relates to
Underwritten Securities that are convertible into Common Stock, any Common Stock
or any security convertible into Common Stock (except for Common Stock issued
pursuant to reservations, agreements, employee benefit plans, dividend
reinvestment plans, employee and director stock option plans or as partial or
full payment for properties to be acquired by the Company), except as may be
otherwise provided in the applicable Terms Agreement.
(l) If the Preferred Shares or Depositary Shares are convertible into
shares of Common Stock or if Common Stock Warrants are issued, the Company will
reserve and keep available at all times, free of preemptive or other similar
rights, a sufficient number of shares of Common Stock or Preferred Shares, as
the case may be, for the purpose of enabling the Company to satisfy any
obligations to issue such shares upon conversion of the Preferred Shares or the
Depositary Shares, as the case may be, or upon exercise of the Common Stock
Warrants.
(m) If the Preferred Shares or Depository Shares are convertible into
shares of Common Stock, the Company will use its best efforts to list the shares
of Common Stock issuable upon conversion of the Preferred Shares or Depositary
Shares on the New York Stock Exchange or such other national exchange on which
the Company's shares of Common Stock are then listed.
(n) The Company has complied and will comply with the provisions of Florida
H.B. 1771, codified as Section 517.075 of the Florida Statutes, 1987, as
amended, and all regulations thereunder relating to issuers doing business with
Cuba.
Section 4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement or the applicable
Terms Agreement, including (i) the printing and filing of the Registration
Statement as originally filed and of each amendment thereto, (ii) the printing
and filing of this Agreement and the applicable Terms Agreement, (iii) the
preparation, issuance and delivery of the Underwritten Securities to the
Underwriters and the Warrant Securities, if any, (iv) the fees and disbursements
of the Company's counsel and accountants, (v) the qualification of the
Underwritten Securities, the Warrant Securities, if any, and the shares of
Common Stock issuable upon conversion of the Preferred Shares or the Depositary
Shares, if any, under securities laws and real estate syndication laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey, (vi) the printing
and delivery to the Underwriters of
20
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
21
state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at such time, not misleading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of Latham &
Watkins, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Maryland and
is in good standing with the State Department of Assessments and
Taxation of Maryland.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which it owns or leases real property, except where the failure to so
qualify would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise.
(iv) The authorized, issued and outstanding stock of the Company
is as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans, dividend reinvestment plans or employee and
director stock option plans referred to in the Prospectus); and the
outstanding capital stock of the Company has been duly authorized,
validly issued, fully paid and non-assessable and is not subject to
preemptive or other similar rights arising by operation of law or, to
the best of such counsel's knowledge otherwise.
(v) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and, if applicable, the deposit of the
Preferred Shares in accordance with the provisions of a Deposit
Agreement, have been duly and validly authorized by all necessary
corporate action and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to
22
this Agreement and such Underwritten Securities, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth in the applicable Terms Agreement or any
Delayed Delivery Contract, will be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar
rights arising by operation of law or, to the best of such counsel's
knowledge, otherwise; and the Preferred Shares, if applicable, conform
to the provisions of the Articles Supplementary.
(vi) If applicable, the Common Stock Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement
and countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued.
(vii) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or Depositary Shares, or the
exercise of Warrant Securities, have been duly and validly authorized
and reserved for issuance upon such conversion or exercise by all
necessary corporate action on the part of the Company and such shares,
when issued upon such conversion or exercise in accordance with the
charter of the Company, the Deposit Agreement, the Terms Agreement,
the Delayed Delivery Contract or the Warrant Agreement, as the case
may be, will be duly and validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such conversion
or exercise will not be subject to preemptive or other similar rights
arising by operation of law or, to the best of such counsel's
knowledge, otherwise.
(viii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, have been duly authorized,
executed and delivered by the Company, and (assuming due
authorization, execution and delivery by the Warrant Agent in the case
of the Warrant Agreement, and the Depositary, in the case of the
Deposit Agreement) each constitutes a valid and legally binding
agreement of the Company enforceable in accordance with its terms; and
the Warrant Agreement, if any, and the Deposit Agreement, if any, each
23
conforms in all material respects to all statements relating thereto
contained in the Prospectus.
(ix) If applicable, upon execution and delivery of the Depositary
Receipts pursuant to the terms of the Deposit Agreement, the persons
in whose names such Depositary Receipts are registered will be
entitled to the rights specified therein and in the Deposit Agreement.
(x) Each of this Agreement, the applicable Terms Agreement and
the Delayed Delivery Contracts, if any, has been duly authorized,
executed and delivered by the Company.
(xi) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(xii) The Registration Statement and the Prospectus, excluding
the documents incorporated by reference therein, as of their
respective effective or issue dates, comply as to form in all material
respects with the requirements for registration statements on Form S-3
under the 1933 Act and the 1933 Act Regulations; it being understood,
however, that no opinion need be rendered with respect to the
financial statements, schedules and other financial and statistical
data included or incorporated by reference in the Registration
Statement or the Prospectus; it being understood, further, that in
passing upon the compliance as to form of the Registration Statement
and the Prospectus, such counsel may assume that the statements made
therein are correct and complete. If applicable, the Rule 434
Prospectus conforms in all material respects to the requirements of
Rule 434 under the 1933 Act Regulations.
(xiii) Each document filed pursuant to the 1934 Act and
incorporated or deemed to be incorporated by reference in the
Prospectus (other than the financial statements, schedules and other
financial and statistical data included therein, as to which no
opinion need be rendered) complied when so filed as to form in all
material respects with the 1934 Act and the 1934 Act Regulations. In
passing upon compliance as to
24
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.
25
(xix) The statements set forth (a) in the Prospectus under the
caption "Certain Federal Income Tax Considerations to the Company of
its REIT Election" and (b) in the Prospectus Supplement under the
caption "Certain Federal Income Tax Considerations", to the extent
such statements constitute matters of law, summaries of legal matters,
or legal conclusions, have been reviewed by them and are accurate in
all material respects.
The opinions rendered in (vi), (viii) and (ix) of subsection (b)(1)
are subject to the following exceptions, limitations and qualifications:
(i) the effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to or affecting the
rights and remedies of creditors; and (ii) the effect of general principles
of equity, whether enforcement is considered in a proceeding in equity or
at law, and the discretion of the court before which any proceeding
therefor may be brought.
(2) The favorable opinion, dated as of Closing Time, of Robert P.
Shulman, Esq., counsel for the Company and KC Holdings, or other counsel
satisfactory to the Underwriters, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) To the best of his knowledge and information, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed in the Prospectus, other than those disclosed
therein, and all pending legal or governmental proceedings to which
the Company or any of its subsidiaries is a party or of which any of
the property of the Company or its subsidiaries is the subject which
are not described in the Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material.
(ii) To the best of his knowledge and information, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement other than those described or referred to
therein or filed as exhibits thereto, the descriptions thereof or
references thereto are correct, and, to the best of his knowledge and
information, no default exists in the due performance or observance of
any material obligation, agreement,
26
covenant or condition contained in any contract, indenture, mortgage,
(except as otherwise described in the Prospectus) loan agreement,
note, lease or other instrument so described, referred to or filed
which would have a material adverse effect on the condition, financial
or otherwise, or on the earnings, business or business prospects of
the Company and its subsidiaries considered as one enterprise or of KC
Holdings and its subsidiaries considered as one enterprise.
(iii) To the best of his knowledge and information, the execution
and delivery of this Agreement, the applicable Terms Agreement, the
applicable Deposit Agreement, if any, or the applicable Warrant
Agreement, if any, and the consummation of the transactions
contemplated herein and therein and compliance by the Company with its
obligations hereunder and thereunder will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in violation of the provisions of
the charter or by-laws of the Company or any applicable law,
administrative regulation or administrative or court order or decree.
(iv) Each of the partnership and joint venture agreements to
which the Company or any of its subsidiaries is a party, and which
relates to real property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable party and
constitutes the valid agreement thereof, enforceable in accordance
with its terms, except as limited by bankruptcy and general equitable
principles and the execution, delivery and performance of any of such
agreements did not, at the time of execution and delivery, and does
not constitute a breach of, or default under, the charter or by-laws
of such party or any material contract, lease or other instrument to
which such party is a party or by which its properties may be bound or
any law, administrative regulation or administrative or court order or
decree.
(v) The Company, KC Holdings, their respective subsidiaries and
their Related Entities hold title to
27
the properties and assets described in the Prospectus, subject only to
the liens and encumbrances securing indebtedness reflected in the
Prospectus and such other liens, encumbrances and matters of record
which do not materially and adversely affect the value of such
properties and assets considered in the aggregate.
(vi) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, to the best
of his knowledge and information, is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which it owns or leases real property, except where
the failure to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and all of the issued and outstanding
capital stock of each such Significant Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and,
to the best of their knowledge and information, is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except for security interests granted in respect of
indebtedness of the Company or any of its subsidiaries and described
in the Prospectus.
(3) The favorable opinion, dated as of Closing Time, of Brown & Wood
LLP, counsel for the Underwriters, with respect to the matters set forth in
(i), (v) to (xii), inclusive, and (xv) of subsection (b)(1) of this
Section.
(4) In giving their opinions required by subsections (b)(1), (b)(2)
and (b)(3), respectively, of this Section, Latham & Watkins, Robert P.
Shulman, Esq. (or other counsel satisfactory to the Underwriters) and Brown
& Wood LLP shall each additionally state that nothing has come to their
attention that would lead them to believe that the Registration Statement
or any amendment thereto, at the time it became effective (or, if an
amendment to the Registration Statement or an Annual Report on Form 10-K
has been filed by the Company with the Commission subsequent to the
effectiveness of the Registration Statement, then at the time such
amendment becomes effective or at the time of the
28
most recent filing of such Annual Report, as the case may be) or at the
date of the applicable Terms Agreement, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading
or that the Prospectus, at the date of the applicable Terms Agreement or at
Closing Time, included or includes an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that no opinion need be rendered
with respect to the financial statements, schedules and other financial and
statistical data included in the Registration Statement or the Prospectus.
In giving their opinions, Latham & Watkins, Robert P. Shulman, Esq. (or
other counsel satisfactory to the Underwriters) and Brown & Wood LLP may
rely, (1) as to matters involving the laws of the State of Maryland the
opinion of Ballard Spahr Andrews & Ingersoll (or other counsel reasonably
satisfactory to counsel for the Underwriters) in form and substance
satisfactory to counsel for the Underwriters, (2) as to all matters of
fact, upon certificates and written statements of officers and employees of
and accountants for the Company, and (3) as to the qualification and good
standing of the Company or any of its subsidiaries to do business in any
state or jurisdiction, upon certificates of appropriate government
officials or opinions of counsel in such jurisdictions.
(c) At Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business; and you shall have
received a certificate of the Chief Executive Officer, the President or Vice
President and the chief financial officer or chief accounting officer of the
Company, dated as of such Closing Time, to the effect that (i) there has been no
such material adverse change and (ii) the representations and warranties in
Section 1 are true and correct with the same force and effect as though made on
such Closing Time. As used in this Section 5(c), the term "Prospectus" means the
Prospectus in the form first used by the Underwriters to confirm sales of the
Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you shall
have received from Coopers & Lybrand L.L.P. a letter dated such date, in form
and substance satisfactory to
29
you, to the effect that (i) they are independent accountants with respect to the
Company within the meaning of the 1933 Act and the 1933 Act Regulations
thereunder; (ii) it is their opinion that the consolidated financial statements
and financial statement schedules of the Company and the historical summaries of
revenue and certain operating expenses for the properties related thereto
included or incorporated by reference in the Registration Statement and the
Prospectus and audited by them and covered by their opinions therein comply as
to form in all material respects with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations; (iii) they have performed limited
procedures, not constituting an audit, including a reading of the latest
available unaudited interim consolidated financial statements of the Company, a
reading of the minute books of the Company, inquiries of certain officials of
the Company who have responsibility for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter, and on
the basis of such limited review and procedures nothing came to their attention
that caused them to believe that (A) any material modifications should be made
to the unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration Statement and
the Prospectus for them to be in conformity with generally accepted accounting
principles, (B) the unaudited financial statements and financial statement
schedules of the Company included or incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the 1934 Act as
it relates to Form 10-Q and the 1934 Act Regulations, (C) the unaudited
operating data and balance sheet data of the Company in the Registration
Statement and the Prospectus under the caption "Selected Consolidated Financial
Data" were not determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus, or (D) at a specified date not more than three days prior to the
date of the applicable Terms Agreement, there has been any change in the capital
stock of the Company or in the consolidated long term debt of the Company or any
decrease in the net assets of the Company, as compared with the amounts shown in
the most recent consolidated balance sheet included or incorporated by reference
in the Registration Statement and the Prospectus or, during the period from the
date of the most recent consolidated statement of operations included or
incorporated by reference in the Registration Statement and the Prospectus to a
specified date not more that three days prior to the date of the applicable
Terms Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues, or decrease in net
income or net income per share of
30
the Company, except in all instances for changes, increases or decreases which
the Registration Statement and the Prospectus disclose have occurred or may
occur; and (iv) in addition to the audit referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included or
incorporated by reference in the Registration Statement and the Prospectus and
which are specified by you, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting, financial
and other records of the Company and its subsidiaries identified in such letter.
(e) At Closing Time, you shall have received from Coopers & Lybrand L.L.P.
a letter dated as of Closing Time to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Underwritten
Securities and the Warrant Securities, if any, as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Underwritten Securities and the Warrant Securities,
if any, as herein contemplated shall be satisfactory in form and substance to
you and counsel for the Underwriters.
(g) In the event the Underwriters exercise their option provided in a Terms
Agreement as set forth in Section 2(b) hereof to purchase all or any portion of
the Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the Company
hereunder shall be true and correct as of each Date of Delivery, and, at the
relevant Date of Delivery, you shall have received:
(1) A certificate, dated such Date of Delivery, of the Chief Executive
Officer, the President or the chief financial or chief accounting officer
of the Company, in their capacities as such, confirming that the
certificate delivered at Closing Time pursuant to Section 5(c) hereof
remains true and correct as of such Date of Delivery.
31
(2) The favorable opinion of Latham & Watkins, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise substantially to the same effect as the opinion
required by Sections 5(b)(1) and 5(b)(4) hereof.
(3) The favorable opinion of Robert P. Shulman, Esq., counsel for the
Company and KC Holdings, or other counsel satisfactory to the Underwriters,
in form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and otherwise
substantially to the same effect as the opinion required by Sections
5(b)(2) and 5(b)(4) hereof.
(4) The favorable opinion of Brown & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Sections 5(b)(3) and 5(b)(4) hereof.
(5) A letter from Coopers & Lybrand L.L.P., in form and substance
satisfactory to you and dated such Date of Delivery, substantially the
same in scope and substance as the letter furnished to you pursuant to
Section 5(d) hereof, except that the "specified date" in the letter
furnished pursuant to this Section 5(h)(5) shall be a date not more
than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, the applicable Terms Agreement may be
terminated by you by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the information deemed to be part of
the Registration Statement pursuant to Rule 430A(b) or Rule 434 of the 1933
Act Regulations, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any
32
untrue statement or alleged untrue statement of a material fact included in
the Prospectus (or any amendment or supplement thereto) or the omission, or
alleged omission therefrom, of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission referred to in
subsection (1) above, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Company; and
(3) against any and all expense whatsoever (including, the fees and
disbursements of counsel chosen by you), as incurred, which was reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) and the Prospectus (or any amendment or supplement thereto);
provided further, that with respect to any preliminary prospectus, such
indemnity shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) if the person asserting any such
losses, liabilities, claims, damages or expenses purchased the Underwritten
Securities which are the subject thereof from such Underwriter and if such
person was not sent or given a copy of the Prospectus (excluding any documents
incorporated therein by reference) at or prior to confirmation of the sale of
such Underwritten Securities to such person in any case where such sending or
giving is required by the 1933 Act and the untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
Prospectus and the Prospectus was delivered to such Underwriter a reasonable
amount of time prior to the date of delivery of such confirmation.
33
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them which are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriters with respect to the offering of the Underwritten Securities shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity
34
agreement incurred by the Company and one or more of the Underwriters in respect
of such offering, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus in respect of such
offering bears to the initial public offering price appearing thereon and the
Company is responsible for the balance; provided, however, that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Underwritten Securities
purchased by it pursuant to the applicable Terms Agreement and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
the applicable Terms Agreement, or contained in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any termination of this Agreement or the applicable Terms
Agreement, or investigation made by or on behalf of any Underwriter or any
controlling person, or by or on behalf of the Company and shall survive delivery
of and payment for the Underwritten Securities.
Section 9. Termination of Agreement. (a) This Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by you upon the giving of 30 days' written notice of such termination
to the other party hereto.
(b) You may also terminate the applicable Terms Agreement, by notice to the
Company, at any time at or prior to the Closing Time if (i) there has been,
since the date of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business
35
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) there has occurred any material adverse change in the financial markets in
the United States or any outbreak or escalation of hostilities or other national
or international calamity or crisis, the effect of which is such as to make it,
in your judgment, impracticable to market the Underwritten Securities or enforce
contracts for the sale of the Underwritten Securities, or (iii) trading in any
of the securities of the Company has been suspended by the Commission or the New
York Stock Exchange, or if trading generally on either the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by Federal, New York or Maryland
authorities, or (iv) Preferred Shares or Depositary Shares are being offered and
the rating assigned by any nationally recognized statistical rating organization
to any preferred stock of the Company as of the date of the applicable Terms
Agreement shall have been lowered since such date or if any such rating
organization shall have publicly announced that it has placed any preferred
stock of the Company on what is commonly termed a "watch list" for possible
downgrading. As used in this Section 9(b), the term "Prospectus" means the
Prospectus in the form first used by the Underwriters to confirm sales of the
Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set forth in
Section 3 with respect to any offering of Underwritten Securities shall remain
in effect so long as any Underwriter owns any such Underwritten Securities
purchased from the Company pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(h) hereof, the provisions of Section 4
hereof, the indemnity and contribution agreements set forth in Sections 6 and 7
hereof, and the provisions of Sections 8 and 13 hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then you shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:
36
(a) if the total number of Defaulted Securities does not exceed 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the non-defaulting Underwriters named in such Terms Agreement shall
be obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of the total
number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination of
the applicable Terms Agreement, either you or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, World Financial Center, North Tower, New York, New
York 10281-1305, attention of Richard B. Saltzman, Managing Director; and
notices to the Company shall be directed to it at 3333 New Hyde Park Road, New
Hyde Park, New York 11042-0020, attention of Milton Cooper, Chairman of the
Board.
Section 12. Parties. This Agreement and the applicable Terms Agreement
shall inure to the benefit of and be binding upon you and the Company and any
Underwriter who becomes a party to such Terms Agreement, and their respective
successors. Nothing expressed or mentioned in this Agreement or the applicable
Terms Agreement is intended or shall be construed to give any person, firm or
corporation, other than those referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or such Terms Agreement or any provision herein
or therein contained. This Agreement and the applicable Terms Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors and
37
said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the applicable Terms
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
Section 14. Counterparts. This Agreement and the applicable Terms Agreement
may be executed in one or more counterparts, and if executed in more than one
counterpart the executed counterparts shall constitute a single instrument.
38
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
you and the Company in accordance with its terms.
Very truly yours,
KIMCO REALTY CORPORATION
By:
--------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-------------------------------------
Name:
Title:
39
KIMCO REALTY CORPORATION
(a Maryland Corporation)
Common Stock
U.S. TERMS AGREEMENT
Dated: September 25, 1997
To: Kimco Realty Corporation
1044 Northern Boulevard
Roslyn, New York 11576
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Representative") understand that Kimco Realty Corporation, a
Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its common stock, $.01 par value per share (the "Common Stock"), set
forth below (the "Underwritten Securities"). Subject to the terms and conditions
set forth or incorporated by reference herein, the underwriters named below (the
"Underwriters") offer to purchase, severally and not jointly, the respective
numbers of Initial Underwritten Securities (as defined in the Underwriting
Agreement referred to below) set forth below opposite their respective names,
and a proportionate share of Option Securities (as defined in the Underwriting
Agreement) to the extent any are purchased, at the purchase price set forth
below.
40
Number of Shares
of Initial
Underwritten
Underwriter Securities
- ----------- ----------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................
BT Alex. Brown Incorporated........................................
Morgan Stanley & Co. Incorporated..................................
Smith Barney Inc...................................................
Total
=========
41
The Underwritten Securities shall have the following terms:
Title of Securities:
Number of Shares:
Public offering price per share: $____________
Purchase price per share: $__________
Number of Option Securities:
Delayed Delivery Contracts: not authorized
Closing date and location:
All the provisions contained in the document attached as Annex A hereto
entitled "Kimco Realty Corporation-Common Stock, Warrants to Purchase Common
Stock, Preferred Stock and Depositary Shares-U.S. Underwriting Agreement" are
hereby incorporated by reference in their entirety herein and shall be deemed to
be a part of this Terms Agreement to the same extent as if such provisions had
been set forth in full herein. Terms defined in such document are used herein as
therein defined.
42
Please accept this offer no later than 7:00 P.M. (New York City time)
on September 25, 1997 by signing a copy of this U.S. Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BT ALEX. BROWN INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:
-----------------------------------------
Name:
Title:
Acting for themselves and as Representatives
of the other named Underwriters
Accepted:
KIMCO REALTY CORPORATION
By:
------------------------------------
Name:
Title:
43