KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
UNDERWRITING AGREEMENT
April 23, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281-1305
Ladies and Gentlemen:
Kimco Realty Corporation, a Maryland corporation (the
"Company"), proposes to issue and sell shares of Common Stock, $.01 par
value (the "Common Stock"), or warrants to purchase a number of shares of
Common Stock (the "Common Stock Warrants"), or both, or shares of
Preferred Stock, $1.00 par value (the "Preferred Shares"), from time to
time, in one or more offerings on terms to be determined at the time of
sale. The Preferred Shares may be offered in the form of depositary
shares (the "Depositary Shares") represented by depositary receipts (the
"Depositary Receipts"). The Common Stock Warrants will be issued pursuant
to a Common Stock Warrant Agreement (the "Warrant Agreement") between the
Company and a warrant agent (the "Warrant Agent"). Each series of
Preferred Shares may vary as to the specific number of shares, title,
stated value, liquidation preference, issuance price, ranking, dividend
rate or rates (or method of calculation), dividend payment dates, any
redemption or sinking fund requirements, any conversion provisions and
any other variable terms as set forth in the applicable articles
supplementary (each, the "Articles Supplementary") relating to such
Preferred Shares. As used herein, "Securities" shall mean the Common
Stock, the Common Stock Warrants, the Preferred Shares, the Depositary
Shares and the Depositary Receipts; and "Warrant Securities" shall mean
the Common Stock issuable upon exercise of Common Stock Warrants. As used
herein, "you" and "your", unless the context otherwise requires, shall
mean the parties to whom this Agreement is addressed together with the
other parties, if any, identified in the applicable Terms Agreement (as
hereinafter defined) as additional co-managers with respect to
Underwritten Securities (as hereinafter defined) purchased pursuant
thereto.
Whenever the Company determines to make an offering of
Securities through you or through an underwriting syndicate managed by
you, the Company will enter into an agreement
(the "Terms Agreement") providing for the sale of such Securities (the
"Underwritten Securities") to, and the purchase and offering thereof by,
you and such other underwriters, if any, selected by you as have
authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the
sale of the Underwritten Securities or as a member of an underwriting
syndicate and any Underwriter substituted pursuant to Section 10 hereof).
The Terms Agreement relating to the offering of Underwritten Securities
shall specify the number of Underwritten Securities of each class or
series to be initially issued, including the number of Common Stock
Warrants, if any (the "Initial Underwritten Securities"), whether the
Initial Underwritten Securities shall be in the form of Depositary Shares
and the fractional amount of Preferred Shares represented by each
Depositary Share, the names of the Underwriters participating in such
offering (subject to substitution as provided in Section 10 hereof), the
number of Initial Underwritten Securities which each such Underwriter
severally agrees to purchase, the names of such of you or such other
Underwriters acting as co-managers, if any, in connection with such
offering, the price at which the Initial Underwritten Securities are to
be purchased by the Underwriters from the Company, any initial public
offering price, the time, date and place of delivery and payment, any
delayed delivery arrangements and any other variable terms of the Initial
Underwritten Securities (including, but not limited to, current ratings
(in the case of Preferred Shares and Depositary Shares only),
designations, liquidation preferences, conversion provisions, redemption
provisions and sinking fund requirements and the terms of the Warrant
Securities and the terms, prices and dates upon which such Warrant
Securities may be purchased). In addition, each Terms Agreement shall
specify whether the Company has agreed to grant to the Underwriters an
option to purchase additional Underwritten Securities to cover
over-allotments, if any, and the number of Underwritten Securities
subject to such option (the "Option Securities"). As used herein, the
term "Underwritten Securities" shall include the Initial Underwritten
Securities and all or any portion of the Option Securities agreed to be
purchased by the Underwriters as provided herein, if any. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto,
may take the form of an exchange of any standard form of written
telecommunication between you and the Company. Each offering of
Underwritten Securities through you or through an underwriting syndicate
managed by you will be governed by this Agreement, as supplemented by the
applicable Terms Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-37285) for the registration of the Securities and Warrant Securities
and certain of the Company's debt securities, under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"). Such
registration statement (including all pre-effective amendments thereto)
has been declared effective by the Commission, and the Company has filed
such post-effective amendments thereto as may have been required prior to
the execution of the applicable Terms Agreement and each such
post-effective amendment has been declared effective by the Commission.
Such registration statement (as so amended, if applicable), including all
information, if any, deemed to be a part thereof pursuant to Rule 434 of
the 1933 Act Regulations, is collectively referred to herein as the
"Registration Statement" and the final prospectus and the prospectus
supplement relating to the offering of the Underwritten Securities
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(the "Prospectus Supplement"), in the form first used to confirm sales by
the Underwriters for use in connection with the offering of the
Underwritten Securities, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), prior to the execution of the
applicable Terms Agreement. All references in this Agreement to financial
statements and schedules and other information which is "contained,"
"included" or "stated" in the Registration Statement or the Prospectus
(and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration Statement
or the Prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case
may be. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the "Prospectus" shall be deemed to
include, without limitation, the final or preliminary prospectus and the
term sheet or abbreviated term sheet, taken together, provided to the
Underwriters by the Company in reliance on Rule 434 under the 1933 Act
(the "Rule 434 Prospectus"). If the Company files a registration
statement with the Commission to register a portion of the Securities and
Warrant Securities and relies on Rule 462(b) for such registration
statement to become effective upon filing with the Commission (the "Rule
462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 333-37285) and the Rule 462 Registration
Statement.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you, as of the date
hereof, and to you and each other Underwriter named in the applicable
Terms Agreement, as of the date thereof, the Closing Time (as hereinafter
defined) and each Date of Delivery, if any (as hereinafter defined)(in
each case, a "Representation Date"), as follows:
(i) The Registration Statement and the Prospectus,
at the time the Registration Statement became effective and at
each time thereafter on which the Company filed an Annual Report
on Form 10-K with the Commission, complied, and as of each
Representation Date will comply, in all material respects with
the requirements of the 1933 Act and 1933 Act Regulations; the
Registration Statement, at the time the Registration Statement
became effective and at each time thereafter on which the
Company filed an Annual Report on Form 10-K with the Commission,
did not, and at each time thereafter on which any amendment to
the Registration Statement becomes effective or the Company
files an Annual Report on Form 10-K with the Commission and as
of each Representation Date will not, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus, as of the
date hereof, does not, and as of each Representation Date will
not, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light
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of the circumstances under which they were made, not
misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement or Prospectus made
in reliance upon and in conformity with information furnished
to the Company in writing by any Underwriter through you
expressly for use in the Registration Statement or Prospectus.
(ii) The accountants who certified the financial
statements, financial statement schedules and historical
summaries of revenue and certain operating expenses for the
properties related thereto included or incorporated by reference
in the Registration Statement and the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The historical financial statements included
or incorporated by reference in the Registration Statement and
the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as at the dates
indicated and the results of their operations for the periods
specified; except as may otherwise be stated in the Registration
Statement and the Prospectus, said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and the financial
statement schedules and other financial information and data
included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information
required to be stated therein.
(iv) The historical summaries of revenue and certain
operating expenses included or incorporated by reference in the
Registration Statement and the Prospectus, if any, present
fairly the revenue and those operating expenses included in such
summaries for the periods specified in conformity with generally
accepted accounting principles; the pro forma condensed
consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, if
any, present fairly the pro forma financial position of the
Company and its consolidated subsidiaries as at the dates
indicated and the pro forma results of their operations for the
periods specified; and the pro forma condensed consolidated
financial statements, if any, have been prepared in conformity
with generally accepted accounting principles applied on a
consistent basis, the assumptions on which such pro forma
financial statements have been prepared are reasonable and are
set forth in the notes thereto, such pro forma financial
statements have been prepared, and the pro forma adjustments set
forth therein have been applied, in accordance with the
applicable accounting requirements of the 1933 Act and the 1933
Act Regulations, and such pro forma adjustments have been
properly applied to the historical amounts in the compilation of
such statements.
(v) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as may otherwise be stated therein or
contemplated thereby, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, (B) there have
been no transactions or acquisitions entered
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into by the Company or any of its subsidiaries other than those
arising in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as
one enterprise, and (C) except for regular quarterly dividends
on the Company's common stock, or dividends declared, paid or
made in accordance with the terms of any series of the
Company's preferred stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vi) The Company has been duly incorporated and is
validly existing as a corporation under the laws of Maryland and
is in good standing with the State Department of Assessments and
Taxation of Maryland with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus; and the Company is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to
so qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the Articles
Supplementary relating to the Preferred Shares or Depositary
Shares, if applicable, will be in full force and effect as of
each Representation Date.
(vii) Each significant subsidiary (as defined in
Rule 1-02 of Regulation S-X promulgated under the 1933 Act) of
the Company (each, a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have
a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise; and all of the issued and outstanding capital stock
of each Significant Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, except for security interests granted in
respect of indebtedness of the Company or any of its
subsidiaries and referred to in the Prospectus.
(viii) The authorized, issued and outstanding stock
of the Company is as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements, employee benefit plans,
dividend reinvestment plans, employee and director stock option
plans or the exercise of convertible securities referred to in
the Prospectus); and the outstanding capital stock of the
Company has been duly authorized and validly issued and is fully
paid and non-assessable and is not subject to preemptive or
other similar rights.
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(ix) The Underwritten Securities being sold pursuant
to the applicable Terms Agreement and, if applicable, the
deposit of the Preferred Shares in accordance with the
provisions of a Deposit Agreement (each, a "Deposit Agreement"),
among the Company, the financial institution named in the
Deposit Agreement (the "Depositary") and the holders of the
Depositary Receipts issued thereunder, have, as of each
Representation Date, been duly authorized by the Company and
such Underwritten Securities have been duly authorized for
issuance and sale pursuant to this Agreement and such
Underwritten Securities, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth in the applicable Terms Agreement or any
Delayed Delivery Contract (as hereinafter defined), will be
validly issued, fully paid and non-assessable and will not be
subject to preemptive or other similar rights; the Preferred
Shares, if applicable, conform to the provisions of the Articles
Supplementary; and the Underwritten Securities being sold
pursuant to the applicable Terms Agreement conform in all
material respects to all statements relating thereto contained
in the Prospectus.
(x) If applicable, the Common Stock Warrants have
been duly authorized and, when issued and delivered pursuant to
this Agreement and countersigned by the Warrant Agent as
provided in the Warrant Agreement, will have been duly executed,
countersigned, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the
benefits provided by the Warrant Agreement under which they are
to be issued; the issuance of the Warrant Securities upon
exercise of the Common Stock Warrants will not be subject to
preemptive or other similar rights; and the Common Stock
Warrants conform in all material respects to all statements
relating thereto contained in the Prospectus.
(xi) If applicable, the shares of Common Stock
issuable upon conversion of any of the Preferred Shares or the
Depositary Shares, or the Warrant Securities, will have been
duly and validly authorized and reserved for issuance upon such
conversion or exercise by all necessary corporate action and
such shares, when issued upon such conversion or exercise, will
be duly and validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such
conversion or exercise will not be subject to preemptive or
other similar rights; the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary
Shares, or the Warrant Securities, conform in all material
respects to the descriptions thereof in the Prospectus.
(xii) The applicable Warrant Agreement, if any, and
the applicable Deposit Agreement, if any, will have been duly
authorized, executed and delivered by the Company prior to the
issuance of any applicable Underwritten Securities, and each
constitutes a valid and legally binding agreement of the Company
enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other
similar laws relating to or affecting creditors' rights
generally and by general equity principles (regardless of
whether enforcement is considered in a proceeding in equity or
at law); and the Warrant Agreement, if any, and the Deposit
Agreement, if any, each conforms in all material respects to all
statements relating thereto contained in the Prospectus.
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(xiii) If applicable, upon execution and delivery of
the Depositary Receipts pursuant to the terms of the Deposit
Agreement, the persons in whose names such Depositary Receipts
are registered will be entitled to the rights specified therein
and in the Deposit Agreement, except as enforcement of such
rights may be limited by bankruptcy, insolvency or other similar
laws relating to or affecting creditors' rights generally and by
general equity principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xiv) Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except for any such violation or
default that would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the execution,
delivery and performance of this Agreement, the applicable Terms
Agreement, the applicable Warrant Agreement, if any, or the
applicable Deposit Agreement, if any, and the consummation of
the transactions contemplated herein and therein and compliance
by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action, and
will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the
charter or by-laws of the Company or any applicable law,
administrative regulation or administrative or court order or
decree.
(xv) The Company has operated and intends to
continue to operate in such a manner as to qualify to be taxed
as a "real estate investment trust" under the Internal Revenue
Code of 1986, as amended (the "Code"), for the taxable year in
which sales of the Underwritten Securities are to occur.
(xvi) Neither the Company nor any of its
subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(xvii) There is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company,
threatened against or affecting the Company or any of its
subsidiaries which is required to be disclosed in the Prospectus
(other than as disclosed therein), or which might result in any
material adverse change in the condition, financial or
7
otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and
adversely affect the consummation of this Agreement, the
applicable Terms Agreement, the applicable Warrant Agreement, if
any, or the applicable Deposit Agreement, if any, or the
transactions contemplated herein or therein; all pending legal
or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of its property or
assets is the subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material; and
there are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been so filed.
(xviii) Neither the Company nor any of its
subsidiaries is required to own or possess any trademarks,
service marks, trade names or copyrights in order to conduct the
business now operated by it, other than those the failure to
possess or own would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(xix) No authorization, approval or consent of any
court or governmental authority or agency is required that has
not been obtained in connection with the consummation by the
Company of the transactions contemplated by this Agreement, the
applicable Terms Agreement, any Warrant Agreement or any Deposit
Agreement, except such as may be required under the 1933 Act or
the 1933 Act Regulations, state securities laws or real estate
syndication laws.
(xx) The Company and its subsidiaries possess such
certificates, authorities or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, other
than those the failure to possess or own would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, and neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(xxi) The Company has full corporate power and
authority to enter into this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, and this
Agreement has been, and as of each Representation Date, the
applicable Terms Agreement and the Delayed Delivery Contracts,
if any, will have been, duly authorized, executed and delivered
by the Company.
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(xxii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of
the 1934 Act and the rules and regulations of the Commission
under the 1934 Act (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the
time the Registration Statement became effective and as of the
applicable Representation Date or during the period specified in
Section 3(f), did not and will not include an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(xxiii) Except as otherwise disclosed in the
Prospectus and except as would not have a material adverse
effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise: (i) all
properties and assets described in the Prospectus are owned with
good and marketable title by the Company, KC Holdings, Inc., a
Delaware corporation ("KC Holdings"), their respective
subsidiaries and/or a joint venture or partnership in which any
such party is a participant (a "Related Entity"); (ii) all of
the leases under which any of the Company, KC Holdings, their
respective subsidiaries or, to the knowledge of the Company,
Related Entities holds or uses real properties or assets as a
lessee are in full force and effect, and neither the Company, KC
Holdings nor any of their respective subsidiaries or, to the
knowledge of the Company, Related Entities is in material
default in respect of any of the terms or provisions of any of
such leases and no claim has been asserted by anyone adverse to
any such party's rights as lessee under any of such leases, or
affecting or questioning any such party's right to the continued
possession or use of the leased property or assets under any
such leases; (iii) all liens, charges, encumbrances, claims or
restrictions on or affecting the properties and assets of any of
the Company, KC Holdings or their respective subsidiaries or
Related Entities which are required to be disclosed in the
Prospectus are disclosed therein; (iv) neither the Company, KC
Holdings nor any of their respective subsidiaries or, to the
knowledge of the Company, Related Entities nor any lessee of any
portion of any such party's properties is in default under any
of the leases pursuant to which any of the Company, KC Holdings
or their respective subsidiaries or, to the knowledge of the
Company, Related Entities leases its properties and neither the
Company, KC Holdings nor any of their respective subsidiaries or
Related Entities knows of any event which, but for the passage
of time or the giving of notice, or both, would constitute a
default under any of such leases; (v) no tenant under any of the
leases pursuant to which any of the Company, KC Holdings or
their respective subsidiaries or, to the knowledge of the
Company, Related Entities leases its properties has an option or
right of first refusal to purchase the premises demised under
such lease; (vi) each of the properties of any of the Company,
KC Holdings or, to the knowledge of the Company, their
respective subsidiaries or Related Entities complies with all
applicable codes and zoning laws and regulations; and (vii)
neither the Company nor KC Holdings nor any of their respective
subsidiaries has knowledge of any pending or threatened
condemnation, zoning change or other proceeding or action that
will in any manner affect the size of, use of, improvements on,
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construction on, or access to the properties of any of the
Company, KC Holdings or their respective subsidiaries or Related
Entities.
(xxiv) Title insurance in favor of the mortgagee or
the Company, KC Holdings, their respective subsidiaries and/or
their Related Entities is maintained with respect to each
shopping center property owned by any such entity in an amount
at least equal to (a) the cost of acquisition of such property
or (b) the cost of construction of such property (measured at
the time of such construction), except, in each case, where the
failure to maintain such title insurance would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise or of KC Holdings and its subsidiaries considered as
one enterprise.
(xxv) The mortgages and deeds of trust encumbering
the properties and assets described in the Prospectus are not
convertible nor does any of the Company, KC Holdings or their
respective subsidiaries hold a participating interest therein,
and said mortgages and deeds of trust with respect to property
owned by the Company and its subsidiaries are not
cross-defaulted or cross-collateralized to any property owned by
KC Holdings and its subsidiaries.
(xxvi) Each of the partnership and joint venture
agreements to which the Company or any of its subsidiaries is a
party, and which relates to real property described in the
Prospectus, has been duly authorized, executed and delivered by
such applicable party and constitutes the valid agreement
thereof, enforceable in accordance with its terms, except as
limited by (a) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or
remedies of creditors or (b) the effect of general principles of
equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which
any proceeding therefor may be brought, and the execution,
delivery and performance of any of such agreements did not, at
the time of execution and delivery, and does not constitute a
breach of, or default under, the charter or by-laws of such
party or any material contract, lease or other instrument to
which such party is a party or by which its properties may be
bound or any law, administrative regulation or administrative or
court order or decree.
(xxvii) None of the Company, KC Holdings or any of
their respective subsidiaries has any knowledge of (a) the
unlawful presence of any hazardous substances, hazardous
materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the properties owned by it or
the Related Entities, or (b) any unlawful spills, releases,
discharges or disposal of Hazardous Materials that have occurred
or are presently occurring off such properties as a result of
any construction on or operation and use of such properties
which presence or occurrence would have a material adverse
effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise or of KC
Holdings and its subsidiaries considered as one enterprise; and
in
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connection with the construction on or operation and use of
the properties owned by the Company, KC Holdings, their
respective subsidiaries and Related Entities, each of the
Company, KC Holdings and their respective subsidiaries
represents that, as of each Representation Date, it has no
knowledge of any material failure to comply with all applicable
local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to
the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters in connection with
the offering of the Underwritten Securities shall be deemed a
representation and warranty by the Company to each Underwriter
participating in such offering as to the matters covered thereby on the
date of such certificate and, unless subsequently amended or
supplemented, at each Representation Date subsequent thereto.
Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall
be deemed to have been made on the basis of the representations and
warranties herein contained and shall be subject to the terms and
conditions herein set forth.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company may grant, if so provided in the applicable
Terms Agreement relating to the Initial Underwritten Securities, an
option to the Underwriters named in such Terms Agreement, severally and
not jointly, to purchase up to the number of Option Securities set forth
therein at a price per Option Security equal to the price per Initial
Underwritten Security, less an amount equal to any dividends declared by
the Company and paid or payable on the Initial Underwritten Securities
but not on the Option Underwritten Securities. Such option, if granted,
will expire 30 days or such lesser number of days as may be specified in
the applicable Terms Agreement after the Representation Date relating to
the Initial Underwritten Securities, and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Underwritten Securities upon notice by you to the Company setting
forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time, date and place
of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by you, but
shall not be later than three full business days and not be earlier than
two full business days after the exercise of said option, unless
otherwise agreed upon by you and the Company. If the option is exercised
as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased
which the number of Initial Underwritten Securities each such Underwriter
has severally agreed to purchase as set forth in the applicable Terms
Agreement bears to the total number of Initial Underwritten Securities
(except as otherwise provided in the applicable Terms Agreement), subject
to such adjustments as you in your discretion shall make to eliminate any
sales or purchases of fractional Initial Underwritten Securities.
11
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made
at the office of Brown & Wood LLP, 58th Floor, One World Trade Center,
New York, New York 10048-0557, or at such other place as shall be agreed
upon by you and the Company, at 9:00 A.M., New York City time, on the
third business day (unless postponed in accordance with the provisions of
Section 10) following the date of the applicable Terms Agreement or, if
pricing takes place after 4:30 p.m., New York City time, on the date of
the applicable Terms Agreement, on the fourth business day (unless
postponed in accordance with the provisions of Section 10) following the
date of the applicable Terms Agreement or at such other time as shall be
agreed upon by you and the Company (each such time and date being
referred to as a "Closing Time"). In addition, in the event that any or
all of the Option Securities are purchased by the Underwriters, payment
of the purchase price for, and delivery of certificates representing,
such Option Securities, shall be made at the above-mentioned offices of
Brown & Wood LLP, or at such other place as shall be agreed upon by you
and the Company on each Date of Delivery as specified in the notice from
you to the Company. Unless otherwise specified in the applicable Terms
Agreement, payment shall be made to the Company by wire transfer or
certified or official bank check or checks in Federal or similar same-day
funds payable to the order of the Company against delivery to you for the
respective accounts of the Underwriters for the Underwritten Securities
to be purchased by them. The Underwritten Securities or, if applicable,
Depositary Receipts evidencing the Depositary Shares, shall be in such
authorized denominations and registered in such names as you may request
in writing at least one business day prior to the applicable Closing Time
or Date of Delivery, as the case may be. The Underwritten Securities,
which may be in temporary form, will be made available for examination
and packaging by you on or before the first business day prior to the
Closing Time or Date of Delivery, as the case may be.
If authorized by the applicable Terms Agreement, the
Underwriters named therein may solicit offers to purchase Underwritten
Securities from the Company pursuant to delayed delivery contracts
("Delayed Delivery Contracts") substantially in the form of Exhibit B
hereto with such changes therein as the Company may approve. As
compensation for arranging Delayed Delivery Contracts, the Company will
pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each
of the Underwritten Securities for which Delayed Delivery Contracts are
made at the Closing Time as is specified in the applicable Terms
Agreement. Any Delayed Delivery Contracts are to be with institutional
investors of the types described in the Prospectus. At the Closing Time,
the Company will enter into Delayed Delivery Contracts (for not less than
the minimum number of Underwritten Securities per Delayed Delivery
Contract specified in the applicable Terms Agreement) with all purchasers
proposed by the Underwriters and previously approved by the Company as
provided below, but not for an aggregate number of Underwritten
Securities in excess of that specified in the applicable Terms Agreement.
The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days
prior to the Closing Time, the names of any institutional investors with
which it is proposed that the Company will enter into Delayed Delivery
Contracts and the number of Underwritten Securities to be purchased by
each of them, and the Company will advise you, at least two business days
prior to the Closing
12
Time, of the names of the institutions with which the making of Delayed
Delivery Contracts is approved by the Company and the number of
Underwritten Securities to be covered by each such Delayed Delivery
Contract.
The number of Underwritten Securities agreed to be purchased by
the several Underwriters pursuant to the applicable Terms Agreement shall
be reduced by the number of Underwritten Securities covered by Delayed
Delivery Contracts, as to each Underwriter as set forth in a written
notice delivered by you to the Company; provided, however, that the total
number of Underwritten Securities to be purchased by all Underwriters
shall be the total number of Underwritten Securities covered by the
applicable Terms Agreement, less the number of Underwritten Securities
covered by Delayed Delivery Contracts.
Section 3. Covenants of the Company. The Company covenants with
you, and with each Underwriter participating in the offering of
Underwritten Securities, as follows:
(a) If the Company does not elect to rely on Rule 434 under the
1933 Act Regulations, immediately following the execution of the
applicable Terms Agreement, the Company will prepare a Prospectus
Supplement setting forth the number of Underwritten Securities covered
thereby and their terms not otherwise specified in the Prospectus
pursuant to which the Underwritten Securities are being issued, the names
of the Underwriters participating in the offering and the number of
Underwritten Securities which each severally has agreed to purchase, the
names of the Underwriters acting as co-managers in connection with the
offering, the price at which the Underwritten Securities are to be
purchased by the Underwriters from the Company, the initial public
offering price, if any, the selling concession and reallowance, if any,
any delayed delivery arrangements, and such other information as you and
the Company deem appropriate in connection with the offering of the
Underwritten Securities; and the Company will promptly transmit copies of
the Prospectus Supplement to the Commission for filing pursuant to Rule
424(b) of the 1933 Act Regulations and will furnish to the Underwriters
named therein as many copies of the Prospectus (including such Prospectus
Supplement) as you shall reasonably request. If the Company elects to
rely on Rule 434 under the 1933 Act Regulations, immediately following
the execution of the applicable Terms Agreement, the Company will prepare
an abbreviated term sheet that complies with the requirements of Rule 434
under the 1933 Act Regulations and will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such number as you shall
reasonably request, and promptly file or transmit for filing with the
Commission the form of Prospectus complying with Rule 434(c)(2) of the
1933 Act Regulations in accordance with Rule 424(b) of the 1933 Act
Regulations.
(b) The Company will notify you immediately, and confirm such
notice in writing, of (i) the effectiveness of any amendment to the
Registration Statement, (ii) the transmittal to the Commission for filing
of any Prospectus Supplement or other supplement or amendment to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii)
the receipt of any comments from the Commission, (iv) any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information,
and (v) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
13
and the Company will make every reasonable effort to prevent the issuance
of any such stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, the Company will give you notice of its
intention to file or prepare any amendment to the Registration Statement
or any amendment or supplement to the Prospectus, whether pursuant to the
1933 Act, 1934 Act or otherwise (including any revised prospectus which
the Company proposes for use by the Underwriters in connection with an
offering of Underwritten Securities which differs from the Prospectus on
file at the Commission at the time the Registration Statement first
becomes effective, whether or not such revised prospectus is required to
be filed pursuant to Rule 424(b) of the 1933 Act Regulations, or any
abbreviated term sheet prepared in reliance on Rule 434 of the 1933 Act
Regulations), and will furnish you with copies of any such amendment or
supplement or other documents proposed to be filed or used a reasonable
amount of time prior to such proposed filing or use, as the case may be,
and will not file any such amendment or supplement or other documents in
a form to which you or counsel for the Underwriters shall reasonably
object.
(d) The Company will deliver to each Underwriter as many signed
and conformed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) as such Underwriter reasonably
requests.
(e) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request for
the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the
1934 Act or the 1934 Act Regulations.
(f) If at any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of
the Underwritten Securities any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriters or counsel for the Company, to amend or supplement the
Prospectus in order that the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of either such counsel, at any
such time to amend or supplement the Registration Statement or the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, then the Company will promptly prepare and file
with the Commission such amendment or supplement, whether by filing
documents pursuant to the 1933 Act, the 1934 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
14
(g) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Underwritten Securities, the Warrant
Securities, if any, and the shares of Common Stock issuable upon
conversion of the Preferred Shares or the Depositary Shares, if any, for
offering and sale under the applicable securities laws and real estate
syndication laws of such states and other jurisdictions of the United
States as you may designate. In each jurisdiction in which the
Underwritten Securities, the Warrant Securities, if any, and the shares
of Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, have been so qualified, the Company will file
such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as may
be required for the distribution of the Underwritten Securities and the
Warrant Securities, if any; provided, however, that the Company shall not
be obligated to qualify as a foreign corporation in any jurisdiction
where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the
Company will make generally available to its security holders as soon as
practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve
month period beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in such
Rule 158) of the Registration Statement.
(i) The Company will use its best efforts to meet the
requirements to qualify as a "real estate investment trust" under the
Code for the taxable year in which sales of the Underwritten Securities
are to occur.
(j) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in connection
with sales of the Underwritten Securities, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15
of the 1934 Act within the time periods prescribed by the 1934 Act and
the 1934 Act Regulations.
(k) The Company will not, during a period of 90 days from the
date of the applicable Terms Agreement, with respect to the Underwritten
Securities covered thereby, without your prior written consent, offer or
sell, grant any option for the sale of, or enter into any agreement to
sell, any Securities of the same class or series or ranking on a parity
with such Underwritten Securities (other than the Underwritten Securities
which are to be sold pursuant to such Terms Agreement) or, if such Terms
Agreement relates to Underwritten Securities that are convertible into
Common Stock, any Common Stock or any security convertible into Common
Stock (except for Common Stock issued pursuant to reservations,
agreements, employee benefit plans, dividend reinvestment plans, employee
and director stock option plans or as partial or full payment for
properties to be acquired by the Company), except as may be otherwise
provided in the applicable Terms Agreement.
(l) If the Preferred Shares or Depositary Shares are convertible
into shares of Common Stock or if Common Stock Warrants are issued, the
Company will reserve and keep available at all times, free of preemptive
or other similar rights, a sufficient number of shares of Common Stock or
Preferred Shares, as the case may be, for the purpose of enabling the
15
Company to satisfy any obligations to issue such shares upon conversion
of the Preferred Shares or the Depositary Shares, as the case may be, or
upon exercise of the Common Stock Warrants.
(m) If the Preferred Shares or Depository Shares are convertible
into shares of Common Stock, the Company will use its best efforts to
list the shares of Common Stock issuable upon conversion of the Preferred
Shares or Depositary Shares on the New York Stock Exchange or such other
national exchange on which the Company's shares of Common Stock are then
listed.
(n) The Company has complied and will comply with the provisions
of Florida H.B. 1771, codified as Section 517.075 of the Florida
Statutes, 1987, as amended, and all regulations thereunder relating to
issuers doing business with Cuba.
Section 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this
Agreement or the applicable Terms Agreement, including (i) the printing
and filing of the Registration Statement as originally filed and of each
amendment thereto, (ii) the printing and filing of this Agreement and the
applicable Terms Agreement, (iii) the preparation, issuance and delivery
of the Underwritten Securities to the Underwriters and the Warrant
Securities, if any, (iv) the fees and disbursements of the Company's
counsel and accountants, (v) the qualification of the Underwritten
Securities, the Warrant Securities, if any, and the shares of Common
Stock issuable upon conversion of the Preferred Shares or the Depositary
Shares, if any, under securities laws and real estate syndication laws in
accordance with the provisions of Section 3(g), including filing fees and
the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey,
(vi) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto,
and of the Prospectus and any amendments or supplements thereto,
including each abbreviated term sheet delivered by the Company pursuant
to Rule 434 of the 1933 Act Regulations, (vii) the printing and delivery
to the Underwriters of copies of the applicable Deposit Agreement, if
any, and the applicable Warrant Agreement, if any, (viii) any fees
charged by nationally recognized statistical rating organizations for the
rating of the Securities, (ix) the fees and expenses, if any, incurred
with respect to the listing of the Underwritten Securities, the Warrant
Securities, if any, or the shares of Common Stock issuable upon
conversion of the Preferred Shares or the Depositary Shares, if any, on
any national securities exchange, and (x) the fees and expenses, if any,
incurred with respect to any filing with the National Association of
Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in
accordance with the provisions of Section 5 or Section 9(b)(i), the
Company shall reimburse the Underwriters named in such Terms Agreement
for all of their out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase Underwritten Securities
pursuant to the applicable Terms Agreement are subject to the accuracy of
the representations and warranties of the Company herein
16
contained, to the accuracy of the statements of the Company's officers
made in any certificate pursuant to the provisions hereof, to the
performance by the Company of all of its covenants and other obligations
hereunder, and to the following further conditions:
(a) At Closing Time, (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission, (ii) if Preferred Shares or Depositary Shares are being
offered, the rating assigned by any nationally recognized statistical
rating organization to any preferred stock of the Company as of the date
of the applicable Terms Agreement shall not have been lowered since such
date nor shall any such rating organization have publicly announced that
it has placed any preferred stock of the Company on what is commonly
termed a "watch list" for possible downgrading, and (iii) there shall not
have come to your attention any facts that would cause you to believe
that the Prospectus, together with the applicable Prospectus Supplement,
at the time it was required to be delivered to purchasers of the
Underwritten Securities, included an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at such time,
not misleading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Latham & Watkins, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and
is validly existing as a corporation under the laws of
the State of Maryland and is in good standing with the
State Department of Assessments and Taxation of
Maryland.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or
leases real property, except where the failure to so
qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(iv) The authorized, issued and outstanding
stock of the Company is as set forth in the Prospectus
under "Capitalization" (except for subsequent
issuances, if any, pursuant to reservations,
agreements, employee benefit plans, dividend
reinvestment plans or employee and director stock
option plans referred to in the Prospectus); and the
outstanding capital stock of the Company has been duly
authorized, validly issued, fully paid and
non-assessable and is not subject to preemptive or
other similar rights arising by operation of law or, to
the best of such counsel's knowledge otherwise.
17
(v) The Underwritten Securities being sold
pursuant to the applicable Terms Agreement and, if
applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement,
have been duly and validly authorized by all necessary
corporate action and such Underwritten Securities have
been duly authorized for issuance and sale pursuant to
this Agreement and such Underwritten Securities, when
issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set
forth in the applicable Terms Agreement or any Delayed
Delivery Contract, will be validly issued, fully paid
and non-assessable and will not be subject to
preemptive or other similar rights arising by operation
of law or, to the best of such counsel's knowledge,
otherwise; and the Preferred Shares, if applicable,
conform to the provisions of the Articles
Supplementary.
(vi) If applicable, the Common Stock Warrants
have been duly authorized and, when issued and
delivered pursuant to this Agreement and countersigned
by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned,
issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to
the benefits provided by the Warrant Agreement under
which they are to be issued.
(vii) If applicable, the shares of Common
Stock issuable upon conversion of any of the Preferred
Shares or Depositary Shares, or the exercise of Warrant
Securities, have been duly and validly authorized and
reserved for issuance upon such conversion or exercise
by all necessary corporate action on the part of the
Company and such shares, when issued upon such
conversion or exercise in accordance with the charter
of the Company, the Deposit Agreement, the Terms
Agreement, the Delayed Delivery Contract or the Warrant
Agreement, as the case may be, will be duly and validly
issued and will be fully paid and non-assessable, and
the issuance of such shares upon such conversion or
exercise will not be subject to preemptive or other
similar rights arising by operation of law or, to the
best of such counsel's knowledge, otherwise.
(viii) The applicable Warrant Agreement, if
any, and the applicable Deposit Agreement, if any, have
been duly authorized, executed and delivered by the
Company, and (assuming due authorization, execution and
delivery by the Warrant Agent in the case of the
Warrant Agreement, and the Depositary, in the case of
the Deposit Agreement) each constitutes a valid and
legally binding agreement of the Company enforceable in
accordance with its terms; and the Warrant Agreement,
if any, and the Deposit Agreement, if any, each
conforms in all material respects to all statements
relating thereto contained in the Prospectus.
(ix) If applicable, upon execution and
delivery of the Depositary Receipts pursuant to the
terms of the Deposit Agreement, the persons in whose
names such Depositary Receipts are registered will be
entitled to the rights specified therein and in the
Deposit Agreement.
18
(x) Each of this Agreement, the applicable
Terms Agreement and the Delayed Delivery Contracts, if
any, has been duly authorized, executed and delivered
by the Company.
(xi) The Registration Statement is effective
under the 1933 Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued under the
1933 Act or proceedings therefor initiated or
threatened by the Commission.
(xii) The Registration Statement and the
Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or
issue dates, comply as to form in all material respects
with the requirements for registration statements on
Form S-3 under the 1933 Act and the 1933 Act
Regulations; it being understood, however, that no
opinion need be rendered with respect to the financial
statements, schedules and other financial and
statistical data included or incorporated by reference
in the Registration Statement or the Prospectus; it
being understood, further, that in passing upon the
compliance as to form of the Registration Statement and
the Prospectus, such counsel may assume that the
statements made therein are correct and complete. If
applicable, the Rule 434 Prospectus conforms in all
material respects to the requirements of Rule 434 under
the 1933 Act Regulations.
(xiii) Each document filed pursuant to the
1934 Act and incorporated or deemed to be incorporated
by reference in the Prospectus (other than the
financial statements, schedules and other financial and
statistical data included therein, as to which no
opinion need be rendered) complied when so filed as to
form in all material respects with the 1934 Act and the
1934 Act Regulations. In passing upon compliance as to
form of such documents, such counsel may assume that
the statements made therein are correct and complete.
(xiv) If applicable, the relative rights,
preferences, interests and powers of the Preferred
Shares or Depositary Shares, as the case may be, are as
set forth in the Articles Supplementary relating
thereto, and all such provisions are valid under the
Maryland General Corporation Law ("MGCL"); and, as
applicable, the form of certificate used to evidence
the Preferred Shares being represented by the
Depositary Shares and the form of certificate used to
evidence the related Depositary Receipts are in due and
proper form under the MGCL and comply with all
applicable statutory requirements under the MGCL.
(xv) The Underwritten Securities, the Warrant
Securities, and the shares of Common Stock issuable
upon conversion of the Preferred shares or Depository
shares, if applicable, conform in all material respects
to the statements relating thereto contained in the
Prospectus.
(xvi) No authorization, approval or consent of
any court or governmental authority or agency is
required that has not been obtained in connection with
the
19
consummation by the Company of the transactions
contemplated by this Agreement, the applicable Terms
Agreement, the applicable Deposit Agreement, if any, or
the applicable Warrant Agreement, if any, except such
as may be required under the 1933 Act, 1934 Act and
state securities laws or real estate syndication laws.
(xvii) Neither the Company nor any of its
subsidiaries is required to be registered under the
1940 Act.
(xviii) Commencing with the Company's taxable
year beginning January 1, 1992, the Company has been
organized in conformity with the requirements for
qualification as a "real estate investment trust", and
its method of operation will enable it to meet the
requirements for qualification and taxation as a "real
estate investment trust" under the Code, provided that
such counsel's opinion as to this matter shall be
conditioned upon certain representations as to factual
matters made by the Company to such counsel as
described therein.
(xix) The statements set forth (a) in the
Prospectus under the caption "Certain Federal Income
Tax Considerations to the Company of its REIT Election"
and (b) in the Prospectus Supplement under the caption
"Certain Federal Income Tax Considerations", to the
extent such statements constitute matters of law,
summaries of legal matters, or legal conclusions, have
been reviewed by them and are accurate in all material
respects.
The opinions rendered in (vi), (viii) and (ix) of subsection
(b)(1) are subject to the following exceptions, limitations and
qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and
remedies of creditors; and (ii) the effect of general principles
of equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which
any proceeding therefor may be brought.
(2) The favorable opinion, dated as of Closing Time, of
Robert P. Shulman, Esq., counsel for the Company and KC
Holdings, or other counsel satisfactory to the Underwriters, in
form and substance satisfactory to counsel for the Underwriters,
to the effect that:
(i) To the best of his knowledge and
information, there are no legal or governmental
proceedings pending or threatened which are required to
be disclosed in the Prospectus, other than those
disclosed therein, and all pending legal or
governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of the
property of the Company or its subsidiaries is the
subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not
material.
20
(ii) To the best of his knowledge and
information, there are no contracts, indentures,
mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in
the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement other
than those described or referred to therein or filed as
exhibits thereto, the descriptions thereof or
references thereto are correct, and, to the best of his
knowledge and information, no default exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any
contract, indenture, mortgage, (except as otherwise
described in the Prospectus) loan agreement, note,
lease or other instrument so described, referred to or
filed which would have a material adverse effect on the
condition, financial or otherwise, or on the earnings,
business or business prospects of the Company and its
subsidiaries considered as one enterprise or of KC
Holdings and its subsidiaries considered as one
enterprise.
(iii) To the best of his knowledge and
information, the execution and delivery of this
Agreement, the applicable Terms Agreement, the
applicable Deposit Agreement, if any, or the applicable
Warrant Agreement, if any, and the consummation of the
transactions contemplated herein and therein and
compliance by the Company with its obligations
hereunder and thereunder will not conflict with or
constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them
may be bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject,
nor will such action result in violation of the
provisions of the charter or by-laws of the Company or
any applicable law, administrative regulation or
administrative or court order or decree.
(iv) Each of the partnership and joint venture
agreements to which the Company or any of its
subsidiaries is a party, and which relates to real
property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable
party and constitutes the valid agreement thereof,
enforceable in accordance with its terms, except as
limited by bankruptcy and general equitable principles
and the execution, delivery and performance of any of
such agreements did not, at the time of execution and
delivery, and does not constitute a breach of, or
default under, the charter or by-laws of such party or
any material contract, lease or other instrument to
which such party is a party or by which its properties
may be bound or any law, administrative regulation or
administrative or court order or decree.
(v) The Company, KC Holdings, their respective
subsidiaries and their Related Entities hold title to
the properties and assets described in the Prospectus,
subject only to the liens and encumbrances securing
indebtedness reflected in the
21
Prospectus and such other liens, encumbrances and matters
of record which do not materially and adversely affect
the value of such properties and assets considered in
the aggregate.
(vi) Each Significant Subsidiary of the
Company has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate
its properties and to conduct its business as described
in the Prospectus and, to the best of his knowledge and
information, is duly qualified as a foreign corporation
to transact business and is in good standing in each
jurisdiction in which it owns or leases real property,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise; and all of the issued and
outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued,
is fully paid and non-assessable and, to the best of
their knowledge and information, is owned by the
Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, except for security
interests granted in respect of indebtedness of the
Company or any of its subsidiaries and described in the
Prospectus.
(3) The favorable opinion, dated as of Closing Time, of
Brown & Wood LLP, counsel for the Underwriters, with respect to
the matters set forth in (i), (v) to (xii), inclusive, and (xv)
of subsection (b)(1) of this Section.
(4) In giving their opinions required by subsections
(b)(1), (b)(2) and (b)(3), respectively, of this Section, Latham
& Watkins, Robert P. Shulman, Esq. (or other counsel
satisfactory to the Underwriters) and Brown & Wood LLP shall
each additionally state that nothing has come to their attention
that would lead them to believe that the Registration Statement
or any amendment thereto, at the time it became effective (or,
if an amendment to the Registration Statement or an Annual
Report on Form 10-K has been filed by the Company with the
Commission subsequent to the effectiveness of the Registration
Statement, then at the time such amendment becomes effective or
at the time of the most recent filing of such Annual Report, as
the case may be) or at the date of the applicable Terms
Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not
misleading or that the Prospectus, at the date of the applicable
Terms Agreement or at Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; it being understood that no opinion need
be rendered with respect to the financial statements, schedules
and other financial and statistical data included in the
Registration Statement or the Prospectus. In giving their
opinions, Latham & Watkins, Robert P. Shulman, Esq. (or other
counsel satisfactory to the Underwriters) and Brown &
22
Wood LLP may rely, (1) as to matters involving the laws of the
State of Maryland the opinion of Ballard Spahr Andrews &
Ingersoll (or other counsel reasonably satisfactory to counsel
for the Underwriters) in form and substance satisfactory to
counsel for the Underwriters, (2) as to all matters of fact,
upon certificates and written statements of officers and
employees of and accountants for the Company, and (3) as to the
qualification and good standing of the Company or any of its
subsidiaries to do business in any state or jurisdiction, upon
certificates of appropriate government officials or opinions of
counsel in such jurisdictions.
(c) At Closing Time, there shall not have been, since the date
of the applicable Terms Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business; and you shall have received a certificate of the
Chief Executive Officer, the President or Vice President and the chief
financial officer or chief accounting officer of the Company, dated as of
such Closing Time, to the effect that (i) there has been no such material
adverse change and (ii) the representations and warranties in Section 1
are true and correct with the same force and effect as though made on
such Closing Time. As used in this Section 5(c), the term "Prospectus"
means the Prospectus in the form first used by the Underwriters to
confirm sales of the Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement,
you shall have received from Coopers & Lybrand L.L.P. a letter dated such
date, in form and substance satisfactory to you, to the effect that (i)
they are independent accountants with respect to the Company within the
meaning of the 1933 Act and the 1933 Act Regulations thereunder; (ii) it
is their opinion that the consolidated financial statements and financial
statement schedules of the Company and the historical summaries of
revenue and certain operating expenses for the properties related thereto
included or incorporated by reference in the Registration Statement and
the Prospectus and audited by them and covered by their opinions therein
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations; (iii) they
have performed limited procedures, not constituting an audit, including a
reading of the latest available unaudited interim consolidated financial
statements of the Company, a reading of the minute books of the Company,
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters and such other inquiries and procedures
as may be specified in such letter, and on the basis of such limited
review and procedures nothing came to their attention that caused them to
believe that (A) any material modifications should be made to the
unaudited financial statements and financial statement schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus for them to be in conformity with generally
accepted accounting principles, (B) the unaudited financial statements
and financial statement schedules of the Company included or incorporated
by reference in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the 1934 Act as it relates to Form 10-Q and the 1934 Act
Regulations, (C) the unaudited operating data and balance sheet data of
the Company in the Registration Statement and the Prospectus under the
caption "Selected Consolidated Financial Data" were not determined on a
basis
23
substantially consistent with that used in determining the corresponding
amounts in the audited financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, or (D) at a
specified date not more than three days prior to the date of the
applicable Terms Agreement, there has been any change in the capital
stock of the Company or in the consolidated long term debt of the Company
or any decrease in the net assets of the Company, as compared with the
amounts shown in the most recent consolidated balance sheet included or
incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of the most recent
consolidated statement of operations included or incorporated by
reference in the Registration Statement and the Prospectus to a specified
date not more that three days prior to the date of the applicable Terms
Agreement, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues, or decrease in
net income or net income per share of the Company, except in all
instances for changes, increases or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur; and
(iv) in addition to the audit referred to in their opinions and the
limited procedures referred to in clause (iii) above, they have carried
out certain specified procedures, not constituting an audit, with respect
to certain amounts, percentages and financial information which are
included or incorporated by reference in the Registration Statement and
the Prospectus and which are specified by you, and have found such
amounts, percentages and financial information to be in agreement with
the relevant accounting, financial and other records of the Company and
its subsidiaries identified in such letter.
(e) At Closing Time, you shall have received from Coopers &
Lybrand L.L.P. a letter dated as of Closing Time to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the "specified date" referred
to shall be a date not more than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Underwritten Securities and the Warrant Securities, if any,
as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Underwritten Securities and the Warrant Securities, if any, as
herein contemplated shall be satisfactory in form and substance to you
and counsel for the Underwriters.
(g) In the event the Underwriters exercise their option provided
in a Terms Agreement as set forth in Section 2(b) hereof to purchase all
or any portion of the Option Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company hereunder shall be true and correct
as of each Date of Delivery, and, at the relevant Date of Delivery, you
shall have received:
(1) A certificate, dated such Date of Delivery, of the
Chief Executive Officer, the President or the chief financial or
chief accounting officer of the Company, in their capacities as
such, confirming that the certificate delivered at Closing Time
pursuant to Section 5(c) hereof remains true and correct as of
such Date of Delivery.
24
(2) The favorable opinion of Latham & Watkins, counsel
for the Company, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise substantially to the same
effect as the opinion required by Sections 5(b)(1) and 5(b)(4)
hereof.
(3) The favorable opinion of Robert P. Shulman, Esq.,
counsel for the Company and KC Holdings, or other counsel
satisfactory to the Underwriters, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise
substantially to the same effect as the opinion required by
Sections 5(b)(2) and 5(b)(4) hereof.
(4) The favorable opinion of Brown & Wood LLP, counsel
for the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise to the same effect as the
opinion required by Sections 5(b)(3) and 5(b)(4) hereof.
(5) A letter from Coopers & Lybrand L.L.P., in form and
substance satisfactory to you and dated such Date of Delivery,
substantially the same in scope and substance as the letter
furnished to you pursuant to Section 5(d) hereof, except that
the "specified date" in the letter furnished pursuant to this
Section 5(h)(5) shall be a date not more than three days prior
to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms
Agreement may be terminated by you by notice to the Company at any time
at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof.
Section 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act
as follows:
(1) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including the information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) or Rule 434 of
the 1933 Act Regulations, if applicable, or the omission or
alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged
untrue statement of a material fact included in the Prospectus
(or any amendment or supplement thereto) or the omission, or
alleged omission therefrom, of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or body,
commenced or
25
threatened, or of any claim whatsoever based upon any such
untrue statement or omission referred to in subsection (1)
above, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the
Company; and
(3) against any and all expense whatsoever (including,
the fees and disbursements of counsel chosen by you), as
incurred, which was reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is
not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through you expressly for use
in the Registration Statement (or any amendment thereto) and the
Prospectus (or any amendment or supplement thereto); provided further,
that with respect to any preliminary prospectus, such indemnity shall not
inure to the benefit of any Underwriter (or the benefit of any person
controlling such Underwriter) if the person asserting any such losses,
liabilities, claims, damages or expenses purchased the Underwritten
Securities which are the subject thereof from such Underwriter and if
such person was not sent or given a copy of the Prospectus (excluding any
documents incorporated therein by reference) at or prior to confirmation
of the sale of such Underwritten Securities to such person in any case
where such sending or giving is required by the 1933 Act and the untrue
statement or omission of a material fact contained in such preliminary
prospectus was corrected in the Prospectus and the Prospectus was
delivered to such Underwriter a reasonable amount of time prior to the
date of delivery of such confirmation.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, but only with respect to
untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company
by such Underwriter through you expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment
or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. If it so
elects within a reasonable time after receipt of such notice, an
26
indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by
it and approved by the indemnified parties defendant in such action,
unless such indemnified parties reasonably object to such assumption on
the ground that there may be legal defenses available to them which are
different from or in addition to those available to such indemnifying
party. If an indemnifying party assumes the defense of such action, the
indemnifying parties shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in connection
with such action. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 is for any reason held to be unenforceable by
the indemnified parties although applicable in accordance with its terms,
the Company and the Underwriters with respect to the offering of the
Underwritten Securities shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Company and one or more of the
Underwriters in respect of such offering, as incurred, in such
proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on
the cover page of the Prospectus in respect of such offering bears to the
initial public offering price appearing thereon and the Company is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Underwritten Securities purchased by it pursuant to the
applicable Terms Agreement and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay in respect of such losses, liabilities,
claims, damages and expenses. For purposes of this Section, each person,
if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in
this Agreement or the applicable Terms Agreement, or contained in
certificates of officers of the Company submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any
termination of this Agreement or the applicable Terms Agreement, or
investigation made by or on behalf of any Underwriter or any controlling
person, or by or on behalf of the Company and shall survive delivery of
and payment for the Underwritten Securities.
27
Section 9. Termination of Agreement. ERROR! BOOKMARK NOT DEFINED.
This Agreement (excluding the applicable Terms Agreement) may be
terminated for any reason at any time by the Company or by you upon the
giving of 30 days' written notice of such termination to the other party
hereto.
(b) You may also terminate the applicable Terms Agreement, by
notice to the Company, at any time at or prior to the Closing Time if (i)
there has been, since the date of such Terms Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, or (ii) there has occurred any material
adverse change in the financial markets in the United States or any
outbreak or escalation of hostilities or other national or international
calamity or crisis, the effect of which is such as to make it, in your
judgment, impracticable to market the Underwritten Securities or enforce
contracts for the sale of the Underwritten Securities, or (iii) trading
in any of the securities of the Company has been suspended by the
Commission or the New York Stock Exchange, or if trading generally on
either the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market has been suspended, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities
have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking
moratorium has been declared by Federal, New York or Maryland
authorities, or (iv) Preferred Shares or Depositary Shares are being
offered and the rating assigned by any nationally recognized statistical
rating organization to any preferred stock of the Company as of the date
of the applicable Terms Agreement shall have been lowered since such date
or if any such rating organization shall have publicly announced that it
has placed any preferred stock of the Company on what is commonly termed
a "watch list" for possible downgrading. As used in this Section 9(b),
the term "Prospectus" means the Prospectus in the form first used by the
Underwriters to confirm sales of the Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set
forth in Section 3 with respect to any offering of Underwritten
Securities shall remain in effect so long as any Underwriter owns any
such Underwritten Securities purchased from the Company pursuant to the
applicable Terms Agreement and (y) the covenant set forth in Section 3(h)
hereof, the provisions of Section 4 hereof, the indemnity and
contribution agreements set forth in Sections 6 and 7 hereof, and the
provisions of Sections 8 and 13 hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at the Closing Time to purchase
the Underwritten Securities which it or they are obligated to purchase
under the applicable Terms Agreement (the "Defaulted Securities"), then
you shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:
28
(a) if the total number of Defaulted Securities does not exceed
10% of the total number of Underwritten Securities to be purchased
pursuant to such Terms Agreement, the non-defaulting Underwriters named
in such Terms Agreement shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of
the total number of Underwritten Securities to be purchased pursuant to
such Terms Agreement, the applicable Terms Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default under
this Agreement and the applicable Terms Agreement.
In the event of any such default which does not result in a
termination of the applicable Terms Agreement, either you or the Company
shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given
if mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, World Financial
Center, North Tower, New York, New York 10281-1305, attention of Richard
B. Saltzman, Managing Director; and notices to the Company shall be
directed to it at 3333 New Hyde Park Road, New Hyde Park, New York
11042-0020, attention of Milton Cooper, Chairman of the Board.
Section 12. Parties. This Agreement and the applicable Terms
Agreement shall inure to the benefit of and be binding upon you and the
Company and any Underwriter who becomes a party to such Terms Agreement,
and their respective successors. Nothing expressed or mentioned in this
Agreement or the applicable Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than those
referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or such Terms Agreement or any provision
herein or therein contained. This Agreement and the applicable Terms
Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the parties hereto
and thereto and their respective successors and said controlling persons
and officers and directors and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
Underwritten Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the
applicable Terms Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day
refer to New York City time.
29
Section 14. Counterparts. This Agreement and the applicable
Terms Agreement may be executed in one or more counterparts, and if
executed in more than one counterpart the executed counterparts shall
constitute a single instrument.
30
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a
binding agreement between you and the Company in accordance with its
terms.
Very truly yours,
KIMCO REALTY CORPORATION
By: /s/ Michael J. Flynn
-----------------------------------
Name: Michael J. Flynn
Title: President and Chief Operating
Officer
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ John C. Brady
-------------------------------------
Name: John C. Brady
Title: Managing Director
31