Exhibit 1(k)
KIMCO REALTY CORPORATION
(a Maryland corporation)
Common Stock, Warrants to Purchase Common Stock, Preferred Stock
and Depositary Shares
UNDERWRITING AGREEMENT
May 27, 1998
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Kimco Realty Corporation, a Maryland corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $.01 par value (the "Common
Stock"), or warrants to purchase a number of shares of Common Stock (the "Common
Stock Warrants"), or both, or shares of Preferred Stock, $1.00 par value (the
"Preferred Shares"), from time to time, in one or more offerings on terms to be
determined at the time of sale. The Preferred Shares may be offered in the form
of depositary shares (the "Depositary Shares") represented by depositary
receipts (the "Depositary Receipts"). The Common Stock Warrants will be issued
pursuant to a Common Stock Warrant Agreement (the "Warrant Agreement") between
the Company and a warrant agent (the "Warrant Agent"). Each series of Preferred
Shares may vary as to the specific number of shares, title, stated value,
liquidation preference, issuance price, ranking, dividend rate or rates (or
method of calculation), dividend payment dates, any redemption or sinking fund
requirements, any conversion provisions and any other variable terms as set
forth in the applicable articles supplementary (each, the "Articles
Supplementary") relating to such Preferred Shares. As used herein, "Securities"
shall mean the Common Stock, the Common Stock Warrants, the Preferred Shares,
the Depositary Shares and the Depositary Receipts; and "Warrant Securities"
shall mean the Common Stock issuable upon exercise of Common Stock Warrants. As
used herein, "you" and "your", unless the context otherwise requires, shall mean
the parties to whom this Agreement is addressed together with the other parties,
if any, identified in the applicable Terms Agreement (as hereinafter defined) as
additional co-managers with respect to Underwritten Securities (as hereinafter
defined) purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten Securities") to, and the purchase and
offering thereof by, you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the sale of
the Underwritten Securities or as a member of an underwriting syndicate and any
Underwriter substituted pursuant to Section 10 hereof). The Terms Agreement
relating to the offering of Underwritten Securities shall specify the number of
Underwritten Securities of each class or series to be initially issued,
including the number of Common Stock Warrants, if any (the "Initial Underwritten
Securities"), whether the Initial Underwritten Securities shall be in the form
of Depositary Shares and the fractional amount of Preferred Shares represented
by each Depositary Share, the names of the Underwriters participating in such
offering (subject to substitution as provided in Section 10 hereof), the number
of Initial Underwritten Securities which each such Underwriter severally agrees
to purchase, the names of such of you or such other Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from the
Company, any initial public offering price, the time, date and place of delivery
and payment, any delayed delivery arrangements and any other variable terms of
the Initial Underwritten Securities (including, but not limited to, current
ratings (in the case of Preferred Shares and Depositary Shares only),
designations, liquidation preferences, conversion provisions, redemption
provisions and sinking fund requirements and the terms of the Warrant Securities
and the terms, prices and dates upon which such Warrant Securities may be
purchased). In addition, each Terms Agreement shall specify whether the Company
has agreed to grant to the Underwriters an option to purchase additional
Underwritten Securities to cover over-allotments, if any, and the number of
Underwritten Securities subject to such option (the "Option Securities"). As
used herein, the term "Underwritten Securities" shall include the Initial
Underwritten Securities and all or any portion of the Option Securities agreed
to be purchased by the Underwriters as provided herein, if any. The Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between you and the Company. Each offering of Underwritten Securities through
you or through an underwriting syndicate managed by you will be governed by this
Agreement, as supplemented by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-37285) for the
registration of the Securities and Warrant Securities and certain of the
Company's debt securities, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement (including all pre-effective
amendments thereto) has been declared effective by the Commission, and the
Company has filed such post-effective amendments thereto as may have been
required prior to the execution of the applicable Terms Agreement and each such
post-effective amendment has been declared effective by the Commission. Such
registration statement (as so amended, if applicable), including all
information, if any, deemed to be a part thereof pursuant to Rule 434 of the
1933 Act Regulations, is collectively referred to herein as the "Registration
Statement" and the final prospectus and the prospectus supplement relating to
the offering of the Underwritten Securities (the "Prospectus Supplement"), in
the form first used to confirm sales by the Underwriters for use in connection
with the offering of the Underwritten Securities, are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement"
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and the "Prospectus" shall be deemed to include all documents incorporated
therein by reference pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act"), prior to the execution of the applicable Terms Agreement. All
references in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement or
the Prospectus shall be deemed to mean and include the filing of any document
under the 1934 Act which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be. If the Company
elects to rely on Rule 434 under the 1933 Act Regulations, all references to the
"Prospectus" shall be deemed to include, without limitation, the final or
preliminary prospectus and the term sheet or abbreviated term sheet, taken
together, provided to the Underwriters by the Company in reliance on Rule 434
under the 1933 Act (the "Rule 434 Prospectus"). If the Company files a
registration statement with the Commission to register a portion of the
Securities and Warrant Securities and relies on Rule 462(b) for such
registration statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration statement
referred to above (No. 333-37285) and the Rule 462 Registration Statement.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you, as of the date hereof,
and to you and each other Underwriter named in the applicable Terms Agreement,
as of the date thereof, the Closing Time (as hereinafter defined) and each Date
of Delivery, if any (as hereinafter defined) (in each case, a "Representation
Date"), as follows:
(i) The Registration Statement and the Prospectus, at the time
the Registration Statement became effective and at each time thereafter
on which the Company filed an Annual Report on Form 10-K with the
Commission, complied, and as of each Representation Date will comply,
in all material respects with the requirements of the 1933 Act and 1933
Act Regulations; the Registration Statement, at the time the
Registration Statement became effective and at each time thereafter on
which the Company filed an Annual Report on Form 10-K with the
Commission, did not, and at each time thereafter on which any amendment
to the Registration Statement becomes effective or the Company files an
Annual Report on Form 10-K with the Commission and as of each
Representation Date will not, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the
Prospectus, as of the date hereof, does not, and as of each
Representation Date will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in
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conformity with information furnished to the Company in writing by any
Underwriter through you expressly for use in the Registration
Statement or Prospectus.
(ii) The accountants who certified the financial statements,
financial statement schedules and historical summaries of revenue and
certain operating expenses for the properties related thereto included
or incorporated by reference in the Registration Statement and the
Prospectus are independent public accountants as required by the 1933
Act and the 1933 Act Regulations.
(iii) The historical financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as at the dates indicated and the results of
their operations for the periods specified; except as may otherwise be
stated in the Registration Statement and the Prospectus, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; and the financial
statement schedules and other financial information and data included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly the information required to be stated
therein.
(iv) The historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus, if any, present fairly the revenue and
those operating expenses included in such summaries for the periods
specified in conformity with generally accepted accounting principles;
the pro forma condensed consolidated financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus, if any, present fairly the pro forma financial position of
the Company and its consolidated subsidiaries as at the dates indicated
and the pro forma results of their operations for the periods
specified; and the pro forma condensed consolidated financial
statements, if any, have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis, the
assumptions on which such pro forma financial statements have been
prepared are reasonable and are set forth in the notes thereto, such
pro forma financial statements have been prepared, and the pro forma
adjustments set forth therein have been applied, in accordance with the
applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations, and such pro forma adjustments have been properly applied
to the historical amounts in the compilation of such statements.
(v) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as may
otherwise be stated therein or contemplated thereby, (A) there has been
no material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (B) there have been no
transactions or acquisitions entered into by the Company or any of its
subsidiaries other than those arising in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the
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Company's common stock, or dividends declared, paid or made in
accordance with the terms of any series of the Company's preferred
stock, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(vi) The Company has been duly incorporated and is validly
existing as a corporation under the laws of Maryland and is in good
standing with the State Department of Assessments and Taxation of
Maryland with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the Articles
Supplementary relating to the Preferred Shares or Depositary Shares, if
applicable, will be in full force and effect as of each Representation
Date.
(vii) Each significant subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated under the 1933 Act) of the Company (each, a
"Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except for security interests granted in respect of
indebtedness of the Company or any of its subsidiaries and referred to
in the Prospectus.
(viii) The authorized, issued and outstanding stock of the
Company is as set forth in the Prospectus under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans, dividend reinvestment plans,
employee and director stock option plans or the exercise of convertible
securities referred to in the Prospectus); and the outstanding capital
stock of the Company has been duly authorized and validly issued and is
fully paid and non-assessable and is not subject to preemptive or other
similar rights.
(ix) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and, if applicable, the deposit of the
Preferred Shares in accordance with the
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provisions of a Deposit Agreement (each, a "Deposit Agreement"), among
the Company, the financial institution named in the Deposit Agreement
(the "Depositary") and the holders of the Depositary Receipts issued
thereunder, have, as of each Representation Date, been duly authorized
by the Company and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this Agreement and such
Underwritten Securities, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth in the applicable Terms Agreement or any Delayed Delivery
Contract (as hereinafter defined), will be validly issued, fully paid
and non-assessable and will not be subject to preemptive or other
similar rights; the Preferred Shares, if applicable, conform to the
provisions of the Articles Supplementary; and the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
conform in all material respects to all statements relating thereto
contained in the Prospectus.
(x) If applicable, the Common Stock Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement
and countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued; the issuance of the Warrant
Securities upon exercise of the Common Stock Warrants will not be
subject to preemptive or other similar rights; and the Common Stock
Warrants conform in all material respects to all statements relating
thereto contained in the Prospectus.
(xi) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares, or
the Warrant Securities, will have been duly and validly authorized and
reserved for issuance upon such conversion or exercise by all necessary
corporate action and such shares, when issued upon such conversion or
exercise, will be duly and validly issued and will be fully paid and
non-assessable, and the issuance of such shares upon such conversion or
exercise will not be subject to preemptive or other similar rights; the
shares of Common Stock issuable upon conversion of any of the Preferred
Shares or the Depositary Shares, or the Warrant Securities, conform in
all material respects to the descriptions thereof in the Prospectus.
(xii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, will have been duly authorized,
executed and delivered by the Company prior to the issuance of any
applicable Underwritten Securities, and each constitutes a valid and
legally binding agreement of the Company enforceable in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting creditors'
rights generally and by general equity principles (regardless of
whether enforcement is considered in a proceeding in equity or at law);
and the Warrant Agreement, if any, and the Deposit Agreement, if any,
each conforms in all material respects to all statements relating
thereto contained in the Prospectus.
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(xiii) If applicable, upon execution and delivery of the
Depositary Receipts pursuant to the terms of the Deposit Agreement, the
persons in whose names such Depositary Receipts are registered will be
entitled to the rights specified therein and in the Deposit Agreement,
except as enforcement of such rights may be limited by bankruptcy,
insolvency or other similar laws relating to or affecting creditors'
rights generally and by general equity principles (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(xiv) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, except for any such violation or default that
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise; and
the execution, delivery and performance of this Agreement, the
applicable Terms Agreement, the applicable Warrant Agreement, if any,
or the applicable Deposit Agreement, if any, and the consummation of
the transactions contemplated herein and therein and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action, and will not conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant
to any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the charter or
by-laws of the Company or any applicable law, administrative regulation
or administrative or court order or decree.
(xv) The Company has operated and intends to continue to
operate in such a manner as to qualify to be taxed as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended
(the "Code"), for the taxable year in which sales of the Underwritten
Securities are to occur.
(xvi) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act").
(xvii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened against or affecting
the Company or any of its subsidiaries which is required to be
disclosed in the Prospectus (other than as disclosed therein), or which
might result in any material adverse change in the condition, financial
or
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otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, or
which might materially and adversely affect the properties or assets
thereof or which might materially and adversely affect the consummation
of this Agreement, the applicable Terms Agreement, the applicable
Warrant Agreement, if any, or the applicable Deposit Agreement, if any,
or the transactions contemplated herein or therein; all pending legal
or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of its property or assets is
the subject which are not described in the Prospectus, including
ordinary routine litigation incidental to the business, are, considered
in the aggregate, not material; and there are no contracts or documents
of the Company or any of its subsidiaries which are required to be
filed as exhibits to the Registration Statement by the 1933 Act or by
the 1933 Act Regulations which have not been so filed.
(xviii) Neither the Company nor any of its subsidiaries is
required to own or possess any trademarks, service marks, trade names
or copyrights in order to conduct the business now operated by it,
other than those the failure to possess or own would not have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(xix) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been obtained
in connection with the consummation by the Company of the transactions
contemplated by this Agreement, the applicable Terms Agreement, any
Warrant Agreement or any Deposit Agreement, except such as may be
required under the 1933 Act or the 1933 Act Regulations, state
securities laws or real estate syndication laws.
(xx) The Company and its subsidiaries possess such
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them, other than those the failure to
possess or own would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially and adversely affect the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(xxi) The Company has full corporate power and authority to
enter into this Agreement, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, and this Agreement has been, and as
of each Representation Date, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, will have been, duly authorized,
executed and delivered by the Company.
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(xxii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became effective
and as of the applicable Representation Date or during the period
specified in Section 3(f), did not and will not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(xxiii) Except as otherwise disclosed in the Prospectus and
except as would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise: (i) all properties and assets described in the
Prospectus are owned with good and marketable title by the Company, KC
Holdings, Inc., a Delaware corporation ("KC Holdings"), their
respective subsidiaries and/or a joint venture or partnership in which
any such party is a participant (a "Related Entity"); (ii) all of the
leases under which any of the Company, KC Holdings, their respective
subsidiaries or, to the knowledge of the Company, Related Entities
holds or uses real properties or assets as a lessee are in full force
and effect, and neither the Company, KC Holdings nor any of their
respective subsidiaries or, to the knowledge of the Company, Related
Entities is in material default in respect of any of the terms or
provisions of any of such leases and no claim has been asserted by
anyone adverse to any such party's rights as lessee under any of such
leases, or affecting or questioning any such party's right to the
continued possession or use of the leased property or assets under any
such leases; (iii) all liens, charges, encumbrances, claims or
restrictions on or affecting the properties and assets of any of the
Company, KC Holdings or their respective subsidiaries or Related
Entities which are required to be disclosed in the Prospectus are
disclosed therein; (iv) neither the Company, KC Holdings nor any of
their respective subsidiaries or, to the knowledge of the Company,
Related Entities nor any lessee of any portion of any such party's
properties is in default under any of the leases pursuant to which any
of the Company, KC Holdings or their respective subsidiaries or, to the
knowledge of the Company, Related Entities leases its properties and
neither the Company, KC Holdings nor any of their respective
subsidiaries or Related Entities knows of any event which, but for the
passage of time or the giving of notice, or both, would constitute a
default under any of such leases; (v) no tenant under any of the leases
pursuant to which any of the Company, KC Holdings or their respective
subsidiaries or, to the knowledge of the Company, Related Entities
leases its properties has an option or right of first refusal to
purchase the premises demised under such lease; (vi) each of the
properties of any of the Company, KC Holdings or, to the knowledge of
the Company, their respective subsidiaries or Related Entities complies
with all applicable codes and zoning laws and regulations; and (vii)
neither the Company nor KC Holdings nor any of their respective
subsidiaries has knowledge of any pending or threatened condemnation,
zoning change or other proceeding or action that will in any manner
affect the size of, use of, improvements on,
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construction on, or access to the properties of any of the Company, KC
Holdings or their respective subsidiaries or Related Entities.
(xxiv) Title insurance in favor of the mortgagee or the
Company, KC Holdings, their respective subsidiaries and/or their
Related Entities is maintained with respect to each shopping center
property owned by any such entity in an amount at least equal to (a)
the cost of acquisition of such property or (b) the cost of
construction of such property (measured at the time of such
construction), except, in each case, where the failure to maintain such
title insurance would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise or of KC Holdings and its subsidiaries considered as one
enterprise.
(xxv) The mortgages and deeds of trust encumbering the
properties and assets described in the Prospectus are not convertible
nor does any of the Company, KC Holdings or their respective
subsidiaries hold a participating interest therein, and said mortgages
and deeds of trust with respect to property owned by the Company and
its subsidiaries are not cross-defaulted or cross-collateralized to any
property owned by KC Holdings and its subsidiaries.
(xxvi) Each of the partnership and joint venture agreements to
which the Company or any of its subsidiaries is a party, and which
relates to real property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable party and
constitutes the valid agreement thereof, enforceable in accordance with
its terms, except as limited by (a) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or remedies of
creditors or (b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be
brought, and the execution, delivery and performance of any of such
agreements did not, at the time of execution and delivery, and does not
constitute a breach of, or default under, the charter or by-laws of
such party or any material contract, lease or other instrument to which
such party is a party or by which its properties may be bound or any
law, administrative regulation or administrative or court order or
decree.
(xxvii) None of the Company, KC Holdings or any of their
respective subsidiaries has any knowledge of (a) the unlawful presence
of any hazardous substances, hazardous materials, toxic substances or
waste materials (collectively, "Hazardous Materials") on any of the
properties owned by it or the Related Entities, or (b) any unlawful
spills, releases, discharges or disposal of Hazardous Materials that
have occurred or are presently occurring off such properties as a
result of any construction on or operation and use of such properties
which presence or occurrence would have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise or of KC Holdings and its subsidiaries
considered as one enterprise; and in
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connection with the construction on or operation and use of the
properties owned by the Company, KC Holdings, their respective
subsidiaries and Related Entities, each of the Company, KC Holdings and
their respective subsidiaries represents that, as of each
Representation Date, it has no knowledge of any material failure to
comply with all applicable local, state and federal environmental laws,
regulations, ordinances and administrative and judicial orders relating
to the generation, recycling, reuse, sale, storage, handling, transport
and disposal of any Hazardous Materials.
(b) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by the
Company to each Underwriter participating in such offering as to the matters
covered thereby on the date of such certificate and, unless subsequently amended
or supplemented, at each Representation Date subsequent thereto.
Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the applicable Terms Agreement relating to
the Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at a price per Option Security equal to the
price per Initial Underwritten Security, less an amount equal to any dividends
declared by the Company and paid or payable on the Initial Underwritten
Securities but not on the Option Underwritten Securities. Such option, if
granted, will expire 30 days or such lesser number of days as may be specified
in the applicable Terms Agreement after the Representation Date relating to the
Initial Underwritten Securities, and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
you, but shall not be later than three full business days and not be earlier
than two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Underwritten
Securities each such Underwriter has severally agreed to purchase as set forth
in the applicable Terms Agreement bears to the total number of Initial
Underwritten Securities (except as otherwise provided in the applicable Terms
Agreement), subject to such adjustments as you in your discretion shall make to
eliminate any sales or purchases of fractional Initial Underwritten Securities.
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.
(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
14
upon conversion of the Preferred Shares or the Depositary Shares, if any, for
offering and sale under the applicable securities laws and real estate
syndication laws of such states and other jurisdictions of the United States as
you may designate. In each jurisdiction in which the Underwritten Securities,
the Warrant Securities, if any, and the shares of Common Stock issuable upon
conversion of the Preferred Shares or the Depositary Shares, if any, have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for so long as may be required for the distribution of the Underwritten
Securities and the Warrant Securities, if any; provided, however, that the
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the Company
will make generally available to its security holders as soon as practicable,
but not later than 90 days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of Rule 158 of the
1933 Act Regulations) covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in such Rule 158) of the Registration Statement.
(i) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable year
in which sales of the Underwritten Securities are to occur.
(j) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) If the Preferred Shares or Depositary Shares are convertible into
shares of Common Stock or if Common Stock Warrants are issued, the Company will
reserve and keep available at all times, free of preemptive or other similar
rights, a sufficient number of shares of Common Stock or Preferred Shares, as
the case may be, for the purpose of enabling the Company to satisfy any
obligations to issue such shares upon conversion of the Preferred Shares or the
Depositary Shares, as the case may be, or upon exercise of the Common Stock
Warrants.
(l) If the Preferred Shares or Depository Shares are convertible into
shares of Common Stock, the Company will use its best efforts to list the shares
of Common Stock issuable upon conversion of the Preferred Shares or Depositary
Shares on the New York Stock Exchange or such other national exchange on which
the Company's shares of Common Stock are then listed.
(m) The Company has complied and will comply with the provisions of
Florida H.B. 1771, codified as Section 517.075 of the Florida Statutes, 1987, as
amended, and all regulations thereunder relating to issuers doing business with
Cuba.
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement or the
applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each
15
amendment thereto, (ii) the printing and filing of this Agreement and the
applicable Terms Agreement, (iii) the preparation, issuance and delivery of the
Underwritten Securities to the Underwriters and the Warrant Securities, if any,
(iv) the fees and disbursements of the Company's counsel and accountants, (v)
the qualification of the Underwritten Securities, the Warrant Securities, if
any, and the shares of Common Stock issuable upon conversion of the Preferred
Shares or the Depositary Shares, if any, under securities laws and real estate
syndication laws in accordance with the provisions of Section 3(g), including
filing fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey, (vi) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto, and of
the Prospectus and any amendments or supplements thereto, including each
abbreviated term sheet delivered by the Company pursuant to Rule 434 of the 1933
Act Regulations, (vii) the printing and delivery to the Underwriters of copies
of the applicable Deposit Agreement, if any, and the applicable Warrant
Agreement, if any, (viii) any fees charged by nationally recognized statistical
rating organizations for the rating of the Securities, (ix) the fees and
expenses, if any, incurred with respect to the listing of the Underwritten
Securities, the Warrant Securities, if any, or the shares of Common Stock
issuable upon conversion of the Preferred Shares or the Depositary Shares, if
any, on any national securities exchange, and (x) the fees and expenses, if any,
incurred with respect to any filing with the National Association of Securities
Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance
with the provisions of Section 5 or Section 9(b)(i), the Company shall reimburse
the Underwriters named in such Terms Agreement for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company herein contained, to the accuracy
of the statements of the Company's officers made in any certificate pursuant to
the provisions hereof, to the performance by the Company of all of its covenants
and other obligations hereunder, and to the following further conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, (ii) if
Preferred Shares or Depositary Shares are being offered, the rating assigned by
any nationally recognized statistical rating organization to any preferred stock
of the Company as of the date of the applicable Terms Agreement shall not have
been lowered since such date nor shall any such rating organization have
publicly announced that it has placed any preferred stock of the Company on what
is commonly termed a "watch list" for possible downgrading, and (iii) there
shall not have come to your attention any facts that would cause you to believe
that the Prospectus, together with the applicable Prospectus Supplement, at the
time it was required to be delivered to purchasers of the Underwritten
Securities, included an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in light of
the circumstances existing at such time, not misleading.
16
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of Latham &
Watkins, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Maryland
and is in good standing with the State Department of Assessments
and Taxation of Maryland.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction
in which it owns or leases real property, except where the failure
to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(iv) The authorized, issued and outstanding stock of the
Company is as set forth in the Prospectus under "Capitalization"
(except for subsequent issuances, if any, pursuant to
reservations, agreements, employee benefit plans, dividend
reinvestment plans or employee and director stock option plans
referred to in the Prospectus); and the outstanding capital stock
of the Company has been duly authorized, validly issued, fully
paid and non-assessable and is not subject to preemptive or other
similar rights arising by operation of law or, to the best of such
counsel's knowledge otherwise.
(v) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement and, if applicable, the deposit of the
Preferred Shares in accordance with the provisions of a Deposit
Agreement, have been duly and validly authorized by all necessary
corporate action and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this Agreement and
such Underwritten Securities, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth in the applicable Terms Agreement or any
Delayed Delivery Contract, will be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other
similar rights arising by operation of law or, to the best of such
counsel's knowledge, otherwise; and the Preferred Shares, if
applicable, conform to the provisions of the Articles
Supplementary.
(vi) If applicable, the Common Stock Warrants have been duly
authorized and, when issued and delivered pursuant to this
Agreement and countersigned by the Warrant Agent as provided in
the Warrant Agreement, will have been duly executed,
countersigned, issued and delivered and will constitute
17
valid and legally binding obligations of the Company entitled to
the benefits provided by the Warrant Agreement under which they
are to be issued.
(vii) If applicable, the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or Depositary Shares, or
the exercise of Warrant Securities, have been duly and validly
authorized and reserved for issuance upon such conversion or
exercise by all necessary corporate action on the part of the
Company and such shares, when issued upon such conversion or
exercise in accordance with the charter of the Company, the
Deposit Agreement, the Terms Agreement, the Delayed Delivery
Contract or the Warrant Agreement, as the case may be, will be
duly and validly issued and will be fully paid and non-assessable,
and the issuance of such shares upon such conversion or exercise
will not be subject to preemptive or other similar rights arising
by operation of law or, to the best of such counsel's knowledge,
otherwise.
(viii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, have been duly authorized,
executed and delivered by the Company, and (assuming due
authorization, execution and delivery by the Warrant Agent in the
case of the Warrant Agreement, and the Depositary, in the case of
the Deposit Agreement) each constitutes a valid and legally
binding agreement of the Company enforceable in accordance with
its terms; and the Warrant Agreement, if any, and the Deposit
Agreement, if any, each conforms in all material respects to all
statements relating thereto contained in the Prospectus.
(ix) If applicable, upon execution and delivery of the
Depositary Receipts pursuant to the terms of the Deposit
Agreement, the persons in whose names such Depositary Receipts are
registered will be entitled to the rights specified therein and in
the Deposit Agreement.
(x) Each of this Agreement, the applicable Terms Agreement and
the Delayed Delivery Contracts, if any, has been duly authorized,
executed and delivered by the Company.
(xi) The Registration Statement is effective under the 1933
Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission.
(xii) The Registration Statement and the Prospectus, excluding
the documents incorporated by reference therein, as of their
respective effective or issue dates, comply as to form in all
material respects with the requirements for registration
statements on Form S-3 under the 1933 Act and the 1933 Act
Regulations; it being understood, however, that no opinion need be
rendered with respect to the financial statements, schedules and
other financial and statistical data included or incorporated by
reference in the Registration Statement or the Prospectus; it
being understood, further, that in passing upon the compliance as
to
18
form of the Registration Statement and the Prospectus, such
counsel may assume that the statements made therein are correct
and complete. If applicable, the Rule 434 Prospectus conforms in
all material respects to the requirements of Rule 434 under the
1933 Act Regulations.
(xiii) Each document filed pursuant to the 1934 Act and
incorporated or deemed to be incorporated by reference in the
Prospectus (other than the financial statements, schedules and
other financial and statistical data included therein, as to which
no opinion need be rendered) complied when so filed as to form in
all material respects with the 1934 Act and the 1934 Act
Regulations. In passing upon compliance as to form of such
documents, such counsel may assume that the statements made
therein are correct and complete.
(xiv) If applicable, the relative rights, preferences,
interests and powers of the Preferred Shares or Depositary Shares,
as the case may be, are as set forth in the Articles Supplementary
relating thereto, and all such provisions are valid under the
Maryland General Corporation Law ("MGCL"); and, as applicable, the
form of certificate used to evidence the Preferred Shares being
represented by the Depositary Shares and the form of certificate
used to evidence the related Depositary Receipts are in due and
proper form under the MGCL and comply with all applicable
statutory requirements under the MGCL.
(xv) The Underwritten Securities, the Warrant Securities, and
the shares of Common Stock issuable upon conversion of the
Preferred shares or Depository shares, if applicable, conform in
all material respects to the statements relating thereto contained
in the Prospectus.
(xvi) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company of the
transactions contemplated by this Agreement, the applicable Terms
Agreement, the applicable Deposit Agreement, if any, or the
applicable Warrant Agreement, if any, except such as may be
required under the 1933 Act, 1934 Act and state securities laws or
real estate syndication laws.
(xvii) Neither the Company nor any of its subsidiaries is
required to be registered under the 1940 Act.
(xviii) Commencing with the Company's taxable year beginning
January 1, 1992, the Company has been organized in conformity with
the requirements for qualification as a "real estate investment
trust", and its method of operation will enable it to meet the
requirements for qualification and taxation as a "real estate
investment trust" under the Code, provided that such counsel's
opinion as to this matter shall be conditioned upon certain
representations as to factual matters made by the Company to such
counsel as described therein.
19
(xix) The statements set forth (a) in the Prospectus under the
caption "Certain Federal Income Tax Considerations to the Company
of its REIT Election" and (b) in the Prospectus Supplement under
the caption "Certain Federal Income Tax Considerations", to the
extent such statements constitute matters of law, summaries of
legal matters, or legal conclusions, have been reviewed by them
and are accurate in all material respects.
The opinions rendered in (vi), (viii) and (ix) of subsection (b)(1) are subject
to the following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors; and (ii) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought.
(2) The favorable opinion, dated as of Closing Time, of Robert P.
Schulman, Esq., counsel for the Company and KC Holdings, or other
counsel satisfactory to the Underwriters, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) To the best of his knowledge and information, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed in the Prospectus, other than those
disclosed therein, and all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a
party or of which any of the property of the Company or its
subsidiaries is the subject which are not described in the
Prospectus, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material.
(ii) To the best of his knowledge and information, there are
no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred
to in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement other than those
described or referred to therein or filed as exhibits thereto, the
descriptions thereof or references thereto are correct, and, to
the best of his knowledge and information, no default exists in
the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, (except as otherwise described in the
Prospectus) loan agreement, note, lease or other instrument so
described, referred to or filed which would have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business or business prospects of the Company and its
subsidiaries considered as one enterprise or of KC Holdings and
its subsidiaries considered as one enterprise.
(iii) To the best of his knowledge and information, the
execution and delivery of this Agreement, the applicable Terms
Agreement, the applicable
20
Deposit Agreement, if any, or the applicable Warrant Agreement, if
any, and the consummation of the transactions contemplated herein
and therein and compliance by the Company with its obligations
hereunder and thereunder will not conflict with or constitute a
breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound or to which
any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in violation
of the provisions of the charter or by-laws of the Company or any
applicable law, administrative regulation or administrative or
court order or decree.
(iv) Each of the partnership and joint venture agreements to
which the Company or any of its subsidiaries is a party, and which
relates to real property described in the Prospectus, has been
duly authorized, executed and delivered by such applicable party
and constitutes the valid agreement thereof, enforceable in
accordance with its terms, except as limited by bankruptcy and
general equitable principles and the execution, delivery and
performance of any of such agreements did not, at the time of
execution and delivery, and does not constitute a breach of, or
default under, the charter or by-laws of such party or any
material contract, lease or other instrument to which such party
is a party or by which its properties may be bound or any law,
administrative regulation or administrative or court order or
decree.
(v) The Company, KC Holdings, their respective subsidiaries
and their Related Entities hold title to the properties and assets
described in the Prospectus, subject only to the liens and
encumbrances securing indebtedness reflected in the Prospectus and
such other liens, encumbrances and matters of record which do not
materially and adversely affect the value of such properties and
assets considered in the aggregate.
(vi) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus and, to the best of his knowledge and information, is
duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which it owns or
leases real property, except where the failure to so qualify would
not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise; and all of the issued and outstanding capital stock of
each such Significant Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, to the best
of their knowledge and information, is owned by the Company,
directly or through
21
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, except for security
interests granted in respect of indebtedness of the Company or any
of its subsidiaries and described in the Prospectus.
(3) The favorable opinion, dated as of Closing Time, of Brown &
Wood LLP, counsel for the Underwriters, with respect to the
matters set forth in (i), (v) to (xii), inclusive, and (xv) of
subsection (b)(1) of this Section.
(4) In giving their opinions required by subsections (b)(1) and
(b)(3), respectively, of this Section, Latham & Watkins and Brown
& Wood LLP shall each additionally state that nothing has come to
their attention that would lead them to believe that the
Registration Statement or any amendment thereto, at the time it
became effective (or, if an amendment to the Registration
Statement or an Annual Report on Form 10-K has been filed by the
Company with the Commission subsequent to the effectiveness of the
Registration Statement, then at the time such amendment becomes
effective or at the time of the most recent filing of such Annual
Report, as the case may be) or at the date of the applicable Terms
Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading
or that the Prospectus, at the date of the applicable Terms
Agreement or at Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; it being understood that no opinion need be rendered
with respect to the financial statements, schedules and other
financial and statistical data included in the Registration
Statement or the Prospectus. In giving their opinions, Latham &
Watkins, Robert P. Schulman, Esq. (or other counsel satisfactory
to the Underwriters) and Brown & Wood LLP may rely, (1) as to
matters involving the laws of the State of Maryland the opinion of
Ballard Spahr Andrews & Ingersoll (or other counsel reasonably
satisfactory to counsel for the Underwriters) in form and
substance satisfactory to counsel for the Underwriters, (2) as to
all matters of fact, upon certificates and written statements of
officers and employees of and accountants for the Company, and (3)
as to the qualification and good standing of the Company or any of
its subsidiaries to do business in any state or jurisdiction, upon
certificates of appropriate government officials or opinions of
counsel in such jurisdictions.
(c) At Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business; and you shall have
received a certificate of the Chief Executive Officer, the President or Vice
President and the chief financial officer or chief accounting officer of the
Company, dated as of such Closing Time, to the effect
22
that (i) there has been no such material adverse change and (ii) the
representations and warranties in Section 1 are true and correct with the same
force and effect as though made on such Closing Time. As used in this Section
5(c), the term "Prospectus" means the Prospectus in the form first used by the
Underwriters to confirm sales of the Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you
shall have received from Coopers & Lybrand L.L.P. a letter dated such date, in
form and substance satisfactory to you, to the effect that (i) they are
independent accountants with respect to the Company within the meaning of the
1933 Act and the 1933 Act Regulations thereunder; (ii) it is their opinion that
the consolidated financial statements and financial statement schedules of the
Company and the historical summaries of revenue and certain operating expenses
for the properties related thereto included or incorporated by reference in the
Registration Statement and the Prospectus and audited by them and covered by
their opinions therein comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act Regulations;
(iii) they have performed limited procedures, not constituting an audit,
including a reading of the latest available unaudited interim consolidated
financial statements of the Company, a reading of the minute books of the
Company, inquiries of certain officials of the Company who have responsibility
for financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, and on the basis of such limited review and
procedures nothing came to their attention that caused them to believe that (A)
any material modifications should be made to the unaudited financial statements
and financial statement schedules of the Company included or incorporated by
reference in the Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles, (B) the unaudited
financial statements and financial statement schedules of the Company included
or incorporated by reference in the Registration Statement and the Prospectus do
not comply as to form in all material respects with the applicable accounting
requirements of the 1934 Act as it relates to Form 10-Q and the 1934 Act
Regulations, (C) the unaudited operating data and balance sheet data of the
Company in the Registration Statement and the Prospectus under the caption
"Selected Consolidated Financial Data" were not determined on a basis
substantially consistent with that used in determining the corresponding amounts
in the audited financial statements included or incorporated by reference in the
Registration Statement and the Prospectus, or (D) at a specified date not more
than three days prior to the date of the applicable Terms Agreement, there has
been any change in the capital stock of the Company or in the consolidated long
term debt of the Company or any decrease in the net assets of the Company, as
compared with the amounts shown in the most recent consolidated balance sheet
included or incorporated by reference in the Registration Statement and the
Prospectus or, during the period from the date of the most recent consolidated
statement of operations included or incorporated by reference in the
Registration Statement and the Prospectus to a specified date not more that
three days prior to the date of the applicable Terms Agreement, there were any
decreases, as compared with the corresponding period in the preceding year, in
consolidated revenues, or decrease in net income or net income per share of the
Company, except in all instances for changes, increases or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur;
and (iv) in addition to the audit referred to in their opinions and the limited
procedures referred to in clause (iii) above, they have carried out certain
specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information
23
which are included or incorporated by reference in the Registration Statement
and the Prospectus and which are specified by you, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its subsidiaries
identified in such letter.
(e) At Closing Time, you shall have received from Coopers & Lybrand
L.L.P. a letter dated as of Closing Time to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities and the Warrant Securities, if any, as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Underwritten Securities and the
Warrant Securities, if any, as herein contemplated shall be satisfactory in form
and substance to you and counsel for the Underwriters.
(g) In the event the Underwriters exercise their option provided in a
Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the
Company hereunder shall be true and correct as of each Date of Delivery, and, at
the relevant Date of Delivery, you shall have received:
(1) A certificate, dated such Date of Delivery, of the Chief
Executive Officer, the President or the chief financial or chief
accounting officer of the Company, in their capacities as such,
confirming that the certificate delivered at Closing Time pursuant
to Section 5(c) hereof remains true and correct as of such Date of
Delivery.
(2) The favorable opinion of Latham & Watkins, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise substantially to the same effect as the
opinion required by Sections 5(b)(1) and 5(b)(4) hereof.
(3) The favorable opinion of Robert P. Schulman, Esq., counsel for
the Company and KC Holdings, or other counsel satisfactory to the
Underwriters, in form and substance satisfactory to counsel for
the Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise substantially to the same effect
as the opinion required by Sections 5(b)(2) and 5(b)(4) hereof.
(4) The favorable opinion of Brown & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion
required by Sections 5(b)(3) and 5(b)(4) hereof.
24
(5) A letter from Coopers & Lybrand L.L.P., in form and substance
satisfactory to you and dated such Date of Delivery, substantially
the same in scope and substance as the letter furnished to you
pursuant to Section 5(d) hereof, except that the "specified date"
in the letter furnished pursuant to this Section 5(h)(5) shall be
a date not more than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof.
Section 6. Indemnification.
(a) The Company agrees to indemnify and hold the Underwriters harmless,
their directors, officers, employees and agents and each person, if any, who
controls such Underwriters within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in settlement of, any action, suit or proceeding
between any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim asserted),
as and when incurred to which the Underwriters, or any such person, may become
subject under the 1933 Act, the 1934 Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
1934 Act and deemed to be incorporated by reference into the Prospectus, or in
any application or other document executed by or on behalf of the Company or
based on written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Securities under the securities or blue
sky laws thereof or filed with the Commission, the omission or alleged omission
to state in such document a material fact required to be stated in it or
necessary to make the statements in it, in the light of the circumstances under
which they are made, not misleading or any act or failure to act or any alleged
act or failure to act by the Underwriters in connection with, or relating in any
manner to, the Securities or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by the clause or above
(provided that the Company shall not be liable under this clause (iii) to the
extent it is finally judicially determined by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by the
Underwriters through their gross negligence or willful misconduct); provided
that the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Securities in the
public offering to any person and is based on an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information relating to the Underwriters furnished in writing to the Company by
the Underwriters expressly for inclusion in the Registration Statement or the
Prospectus. The Underwriters confirm to the
25
Company and the Company acknowledges that only the following information
appearing in the Prospectus with respect to the public offering of the
Securities has been furnished to the Company by the Underwriters for use in the
Prospectus: (i) the name of the Underwriters contained on the cover page and
back cover page of the Prospectus Supplement; (ii) the stabilization legend on
the inside front cover page of the Prospectus Supplement; and (iii) the
information in the 2nd paragraph under the caption "Underwriting" in the
Prospectus Supplement. This indemnity agreement will be in addition to any
liability that the Company might otherwise have.
(b) The Underwriters will indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, each director of the Company and each
officer of the Company who signs the Registration Statement to the same extent
as the foregoing indemnity from the Company to the Underwriters, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to the
Underwriters furnished in writing to the Company by the Underwriters expressly
for use in the Registration Statement or the Prospectus. This indemnity will be
in addition to any liability that the Underwriters might otherwise have;
provided, however, that in no case shall the Underwriters be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by the Underwriters.
(c) Any party that proposes to assert the right to be indemnified under
this Section will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section, notify each such indemnifying
party of the commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve it from
any liability that it may have to any indemnified party under the foregoing
provisions of this Section 6 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party similarly notified, to
assume indemnified party, jointly with any other indemnifying party similarly
notified, to assume the defense of the action, with counsel reasonably
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (i) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (ii) the indemnified party has reasonably concluded (based
on advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available
26
to the indemnifying party, (iii) a conflict or potential conflict exists (based
on advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (iv) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one additional firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld); provided, however, no
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section (c), if at any time an indemnified party shall
have requested any indemnifying party to reimburse the indemnified party for
fees and expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
Section 7. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6 is
applicable in accordance with its terms but for any reason is held to be
unavailable from the Company or the Underwriters, the Company and the
Underwriters will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the 1933 Act, officers of
the Company who signed the Registration Statement and directors of the Company,
who also may be liable for contribution) to which the Company and the
Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth on the cover
page of the Prospectus Supplement. If, but
27
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material facts relates to information supplied by
the Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in
this Section, shall be deemed to include, for purpose of this Section, any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section, the Underwriters shall not be required to contribute
any amount in excess of the underwriting discounts and commissions received by
the Underwriters and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, any person who controls a party
to this Agreement within the meaning of the 1933 Act will have the same rights
to contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section, will notify any such party or parties from whom contribution
may be sought, but the omission so to notify will not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have under this Section. Except for a settlement entered into pursuant
to the last sentence of Section 6(c) hereof, no party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
The indemnity and the contribution agreements contained in Sections 6
and 7 and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters (ii) acceptance of
the Securities and payment therefor or (iii) any termination of this Agreement.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or the applicable Terms Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any termination of this Agreement or the
applicable Terms Agreement, or investigation made by or on behalf of any
28
Underwriter or any controlling person, or by or on behalf of the Company and
shall survive delivery of and payment for the Underwritten Securities.
Section 9. Termination of Agreement.
(a) This Agreement (excluding the applicable Terms Agreement) may be
terminated for any reason at any time by the Company or by you upon the giving
of 30 days' written notice of such termination to the other party hereto.
(b) You may also terminate the applicable Terms Agreement, by notice to
the Company, at any time at or prior to the Closing Time if (i) there has been,
since the date of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or any outbreak or escalation of hostilities or other national or
international calamity or crisis, the effect of which is such as to make it, in
your judgment, impracticable to market the Underwritten Securities or enforce
contracts for the sale of the Underwritten Securities, or (iii) trading in any
of the securities of the Company has been suspended by the Commission or the New
York Stock Exchange, or if trading generally on either the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by either of said exchanges
or by order of the Commission or any other governmental authority, or if a
banking moratorium has been declared by Federal, New York or Maryland
authorities, or (iv) Preferred Shares or Depositary Shares are being offered and
the rating assigned by any nationally recognized statistical rating organization
to any preferred stock of the Company as of the date of the applicable Terms
Agreement shall have been lowered since such date or if any such rating
organization shall have publicly announced that it has placed any preferred
stock of the Company on what is commonly termed a "watch list" for possible
downgrading. As used in this Section 9(b), the term "Prospectus" means the
Prospectus in the form first used by the Underwriters to confirm sales of the
Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set forth
in Section 3 with respect to any offering of Underwritten Securities shall
remain in effect so long as any Underwriter owns any such Underwritten
Securities purchased from the Company pursuant to the applicable Terms Agreement
and (y) the covenant set forth in Section 3(h) hereof, the provisions of Section
4 hereof, the indemnity and contribution agreements set forth in Sections 6 and
7 hereof, and the provisions of Sections 8 and 13 hereof shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then you shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
29
terms herein set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:
(a) if the total number of Defaulted Securities does not exceed 10% of
the total number of Underwritten Securities to be purchased pursuant to such
Terms Agreement, the non-defaulting Underwriters named in such Terms Agreement
shall be obligated to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination
of the applicable Terms Agreement, either you or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, attention of David Reynolds, and notices to
the Company shall be directed to it at 3333 New Hyde Park Road, New Hyde Park,
New York 11042-0020, attention of Milton Cooper, Chairman of the Board.
Section 12. Parties. This Agreement and the applicable Terms Agreement
shall inure to the benefit of and be binding upon you and the Company and any
Underwriter who becomes a party to such Terms Agreement, and their respective
successors. Nothing expressed or mentioned in this Agreement or the applicable
Terms Agreement is intended or shall be construed to give any person, firm or
corporation, other than those referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or such Terms Agreement or any provision herein
or therein contained. This Agreement and the applicable Terms Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the applicable
Terms Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed in
said State. Specified times of day refer to New York City time.
30
Section 14. Counterparts. This Agreement and the applicable Terms
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall constitute a single
instrument.
31
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between you and the Company in accordance with its terms.
Very truly yours,
KIMCO REALTY CORPORATION
By: /s/ Michael V. Pappagallo
---------------------------------
Name: Michael V. Pappagallo
Title: Chief Financial Officer --
Vice President
CONFIRMED AND ACCEPTED,
as of the date first
above written:
PAINEWEBBER INCORPORATED
By: /s/ David Reynolds
------------------------------
Name: David Reynolds
Title: Senior Vice President
32