Exhibit 10
SECURITIES PURCHASE
AGREEMENT
THIS SECURITIES
PURCHASE AGREEMENT, dated as of February 16, 2005 (this “
Agreement ”), is by and between First Union Real
Estate Equity and Mortgage Investments, an unincorporated
association in the form of a business trust organized in Ohio (the
“ Company ”) and Kimco Realty Corporation, a
Maryland corporation (the “ Investor
”).
RECITALS:
WHEREAS, the
Company and the Investor are executing and delivering this
Agreement in reliance upon the exemptions from registration
provided by Regulation D (“Regulation D”) promulgated
by the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as
amended (the “Securities Act”), and/or Section 4(2) of
the Securities Act;
WHEREAS, the
Investor wishes to purchase, and the Company wishes to issue and
sell, 1,000,000 shares (the “Shares”) of the
Company’s common shares of beneficial interest, par value
$1.00 per share (the “Common Stock”), for an aggregate
purchase price of $4,000,000 (the “Purchase Price”),
upon the terms and conditions of this Agreement; and
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
AGREEMENT:
NOW, THEREFORE, in
consideration of the foregoing and of the respective covenants and
undertakings hereunder and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, intending to be legally bound, the parties hereto do
hereby agree as follows:
ARTICLE
I
DEFINITIONS
Section 1.01.
Definitions . As used in this Agreement, the following
terms have the meanings set forth below.
“
Accredited Investor ” shall mean a Person that is an
“accredited investor” within the definition contained
in Rule 501(a) under the Securities Act.
“
Affiliate ” shall mean (a) with respect to an
individual, any member of such individual’s family residing
in the same household; (b) with respect to an entity: (i) any
executive officer, director, partner or Person that owns ten
percent (10%) or more of the outstanding beneficial interest of or
in such entity, or (ii) any brother, sister, brother-in-law,
sister-in-law, lineal
descendant or
ancestor of any executive officer, director, partner or Person that
owns ten percent (10%) or more of the outstanding beneficial
interest of or in such entity; and (c) with respect to a Person,
any Person which directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with such Person or entity; provided, however, that for
purposes of the definition of “Affiliate,” no Investor
shall be deemed an “Affiliate” of the
Company.
“
Agreement ” shall have the meaning set forth in the
preamble.
“
Basket ” shall have the meaning set forth in Section
9.03.
“
Business Day ” shall mean any day other than (i) a
Saturday, (ii) a Sunday or (iii) any other day on which banks in
the City of New York are authorized or required to
close.
“
By-Laws ” shall mean, when used with respect to a
specified Person, the by-laws of a Person, as the same may be
amended from time to time.
“ Capital
Stock ” shall mean, with respect to any Person, any and
all shares, shares of beneficial interest, interests,
participations, rights in or other equivalents (however designated
and whether voting or non-voting) of such Person’s capital
stock or any form of membership, ownership or participation
interests, as applicable, including partnership interests, whether
now outstanding or hereafter issued and any and all securities,
debt instruments, rights, warrants or options exercisable or
exchangeable for or convertible into such capital stock.
“
Certificate of Incorporation ” shall mean, when used
with respect to a specified Person, the Declaration of Trust,
Articles or Certificate of Incorporation or other applicable
organizational document of such Person, as currently in
effect.
“
Closing ” shall have the meaning set forth in Section
2.02(a).
“ Closing
Date ” shall have the meaning set forth in Section
2.02(a).
“
Commission Filings ” shall have the meaning set forth
in Section 3.08.
“ Common
Stock ” shall mean the common shares of beneficial
interest, $1 par value per share, of the Company.
“
Company ” shall have the meaning set forth in the
preamble.
“ Company
Subsidiaries ” and “ Company Subsidiary
” shall have the meaning set forth in Section
3.03.
“
Consents ” shall mean all governmental and third party
consents, approvals, authorizations, qualifications and waivers
necessary to be received by a Person for the consummation of the
transaction contemplated by the Agreement.
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“
Contract ” shall mean any legally binding contract,
agreement, mortgage, deed of trust, bond, loan, indenture, lease,
license, note, option, warrant, right, instrument, commitment or
other similar document, arrangement or agreement, whether written
or oral.
“
Declaration of Trust ” shall have the meaning set
forth in Section 3.01.
“
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the SEC
promulgated thereunder.
“
GAAP ” shall mean generally accepted accounting
principles applied on a consistent basis as used in the United
States of America.
“
Governmental Body ” shall mean any government or
governmental or quasi-governmental authority including, without
limitation, any federal, state, territorial, county, municipal or
other governmental or quasi-governmental agency, board, branch,
bureau, commission, court, arbitral body (public or private),
department or other instrumentality or political unit or
subdivision, whether located in the United States or abroad, the
National Association of Securities Dealers, Inc., the New York
Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap
Market or the American Stock Exchange.
“
Indemnitee ” shall have the meaning set forth in
Section 9.01.
“
Indemnitor ” shall have the meaning set forth in
Section 9.01.
“
Investor ” shall have the meaning set forth in the
preamble.
“ Law
” shall mean any treaty, statute, ordinance, code, rule,
regulation, Order or other legal requirement enacted, adopted,
promulgated, applied or followed by any Governmental
Body.
“ Legal
Proceeding ” shall mean any judicial, administrative or
arbitral actions, suits, proceedings (public or private) or
governmental proceedings.
“
Legend ” shall mean the Legend set forth in Section
4.02(e).
“
Lien ” shall mean any mortgage, pledge, lien
(statutory or otherwise), security interest, hypothecation,
conditional sale agreement, encumbrance or similar restriction or
agreement.
“
Loss ” shall have the meaning set forth in Section
9.01.
“
Material Adverse Effect ” shall mean any event,
condition or contingency that has had, or is reasonably likely to
have, a material adverse effect on the business, assets,
liabilities (including contingent liabilities), results of
operations, financial condition or, to the knowledge of the
Company, prospects of the Company and the Company Subsidiaries,
taken as a whole. For the purposes of this Agreement, a
Material Adverse Effect shall not be deemed to arise by reason of
(i) events of war impacting the economy in general, and (ii)
changes in general economic conditions.
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“
Notice ” shall have the meaning set forth in Section
9.02(a).
“
NYSE ” shall mean the New York Stock
Exchange.
“
Order ” shall mean any order, injunction, judgment,
decree, ruling, writ, assessment or arbitration award.
“
Person ” shall mean any individual, corporation,
partnership, firm, limited liability company, joint venture, trust,
association, unincorporated organization, group, joint-stock
company, Governmental Body or other entity.
“
Purchase Price ” shall mean $4,000,000 in the
aggregate, payable as set forth in Section 2.02.
“
SEC ” shall mean the U.S. Securities and Exchange
Commission.
“
Securities Act ” shall mean the Securities Act of
1933, as amended, and the rules and regulations of the SEC
promulgated thereunder.
“
Subsidiary ” shall mean, as to any Person, any other
Person more than 50% of the shares of the voting stock, voting
interests, membership interests or partnership interests of which
are owned or controlled, or the ability to select or elect more
than 50% of the directors or similar managers is held, directly or
indirectly, by such first Person or one or more of its Subsidiaries
or by such first Person and one or more of its Subsidiaries;
provided, however, that First Union Management, Inc. shall not be
deemed to be a Subsidiary of the Company.
“
Unaudited Financial Statements ” shall have the
meaning specified in Section 3.07.
Section 1.02.
Rules of
Construction . Unless the context otherwise
requires:
(a)
an accounting term defined by GAAP that is not otherwise defined
herein has the meaning assigned to it in accordance with
GAAP;
(b)
“or” is not exclusive;
(c)
words in the singular include the plural, and words in the plural
include the singular;
(d)
the words “include” and “including” shall
be deemed to mean “include, without limitation,” and
“including, without limitation”;
(e)
“herein,” “hereof,” “hereto,”
“hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular article,
section, paragraph or clause where such terms may
appear;
(f)
references to sections mean references to such section in this
Agreement, unless stated otherwise; and
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(g)
the use of any gender shall be applicable to all
genders.
ARTICLE
II
ISSUANCE, SALE AND PURCHASE OF THE SHARES.
Section 2.01.
Sale and
Purchase of the Shares . Upon the terms and subject to
the conditions of this Agreement, the Company will sell to the
Investor, and the Investor will purchase from the Company, the
Shares for a purchase price of $4,000,000 (the “Purchase
Price”).
Section 2.02.
Closing .
(a)
Subject to the satisfaction or waiver of the conditions set forth
in this Agreement, the closing of the transaction contemplated by
Section 2.01 (the “ Closing ”) shall take place
at 10:00 AM on the first business day following receipt by the
Company of notice that the Shares have been duly listed on the
NYSE, pending notice of issuance, but not later than Wednesday,
February 23, 2005, or at such other time as may be mutually agreed
upon by the Investor and the Company (the “ Closing
Date ”). The Closing shall occur on the Closing
Date at the offices of Katten Muchin Zavis Rosenman, 575 Madison
Avenue, New York, New York.
(b)
At the Closing: (i) the Company will deliver to the Investor (x) a
certificate for the Shares registered in the name of the Investor
and (y) legal opinions of counsel to the Company addressed to the
Investor, satisfactory to counsel to the Investor and in
substantially the form of Annex A and Annex B (the “Company
Counsel Opinions”); (ii) the Investor, in full payment for
the Shares, will deliver to the Company the Purchase Price in
immediately available funds, by wire transfer to such account as
the Company shall specify, and (iii) each party shall take or cause
to happen such other actions, and shall execute and deliver such
other instruments or documents, as shall be required under Article
VII.
Section 2.03.
Use of Proceeds
. The Company shall use the proceeds from the sale of the
Shares for general corporate purposes.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company
represents and warrants to the Investor as follows:
Section 3.01.
Organization and Good
Standing . The Company is an unincorporated association
in the form of a business trust organized, validly existing and in
good standing under the Laws of the State of Ohio and has trust
power and authority to own, lease and operate its properties and
carry on its business as presently conducted. The Company is
duly qualified, registered or licensed as a foreign business entity
to do business and is in good standing in each jurisdiction in
which the ownership or leasing of its properties or the character
of its present operations makes such qualification, registration or
licensing necessary, except where the failure to so qualify or be
in good standing could not reasonably have a Material Adverse
Effect. The
5
Company has
heretofore delivered or made available to the Investor complete and
correct copies of the declaration of trust of the Company, as
amended to date (the “Declaration of
Trust”).
Section 3.02.
Authority; Binding
Effect . The Company has trust power and authority to
execute and deliver this Agreement and to consummate the
transaction contemplated hereby. The execution and delivery
of this Agreement and the consummation by the Company of the
transaction contemplated hereby have been duly and validly approved
by all necessary action on the part of the Company. This
Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except as such
enforceability may be subject to the effects of any applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar Laws affecting creditors’ rights
generally and subject to the effects of general equitable
principles.
Section 3.03.
Organization and Good
Standing of Company Subsidiaries . Schedule 3.03
lists all Subsidiaries of the Company and their respective
jurisdictions of formation (collectively, the “ Company
Subsidiaries ” and each, a “ Company
Subsidiary ”). Except as set forth in Schedule
3.03 , the Company owns, directly or indirectly, all the shares
of outstanding Capital Stock of each Company Subsidiary.
There are no outstanding securities or rights convertible into or
exchangeable for shares of any Capital Stock of any Company
Subsidiary and there are no Contracts by which any Company
Subsidiary is bound to issue additional shares of Capital
Stock. All of the shares of Capital Stock of each of the
Company Subsidiaries are duly and validly authorized, fully paid
and non-assessable and, except for the Liens set forth in Schedule
3.03, are owned by the Company free and clear of any Lien with
respect thereto. Each Company Subsidiary is duly organized,
validly existing and in good standing under the Laws of its
jurisdiction of organization, and has all requisite corporate power
and authority to own, operate and lease its properties and to carry
on its business as it is now being conducted, and is duly licensed
or qualified to do business in each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, except where the failure to be so
licensed or qualified in any such jurisdiction could not reasonably
have a Material Adverse Effect.
Section 3.04.
Capitalization
. Schedule 3.04(a) sets forth, in each case as of the
date hereof, (i) the authorized capitalization of the Company, the
number of shares of each class issued and outstanding and the
number of shares reserved for issuance in connection with the
Company’s stock option plans, and (ii) all options, warrants,
convertible securities, rights to subscribe to, calls, contracts,
undertakings, arrangements and commitments to issue which may
result in the issuance of stock of the Company. All of the
issued and outstanding shares of the Company’s Capital Stock
have been duly and validly authorized and issued and are fully paid
and non-assessable and are not subject to any preemptive
rights. No securities of the Company are entitled to
preemptive or similar rights, and no person has any right of first
refusal, preemptive right, right of participation, or any similar
right to participate in the transaction contemplated by this
Agreement.
Section 3.05.
No Violations;
Consents . Neither the execution, delivery or
performance by the Company of this Agreement nor the consummation
of the transaction contemplated hereby, will (a) conflict with, or
result in the breach of, any provision of the organizational
documents of
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the Company or
any Company Subsidiary, (b) conflict with, violate, result in the
breach or termination of, or constitute a default or give rise to
any right of termination, amendment, cancellation or acceleration
or right to increase the obligations or otherwise modify the terms
thereof under any Contract or Order to which the Company or any
Company Subsidiary is a party or by which the Company or any
Company Subsidiary or any of the properties or assets of the
Company or any Company Subsidiary is bound, (c) constitute a
violation of any Law applicable to the Company or any Company
Subsidiary; or (d) result in the creation of any Lien upon the
properties or assets of the Company or any Company Subsidiary.
Except for the approval of the NYSE referred to in Section
7.01(c), no Consent is required on the part of the Company or the
Company Subsidiaries in connection with the execution and delivery
of this Agreement and the consummation of the transaction
contemplated hereby.
Section 3.06.
Listing .
The Company is not in violation of the listing requirements of the
NYSE in any material respect. The Company has not received
any written notice from the NYSE that the Common Stock is to be
delisted by the NYSE.
Section 3.07.
Financial
Statements . The Company has previously delivered to the
Investor copies of the unaudited combined balance sheet of the
Company and the Company Subsidiaries as of September 30, 2004 and
the related unaudited combined statements of operations and cash
flows for the three months and nine months ended September 30,
2004, as reported in the Company’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2004, filed with
the SEC under the Exchange Act (the “ Unaudited Financial
Statements ”). The Unaudited Financial Statements
accurately reflect the books and records of the Company and present
fairly, in all material respects, the combined financial position
of the Company and the Company Subsidiaries and the combined
results of their operations and their cash flows for the period and
date covered thereby, in conformity with GAAP, except for changes
resulting from year-end adjustments (none of which will be material
in amount) and the absence of footnote disclosures thereto.
Section 3.08.
Commission Filings .
The Company has filed all reports, registration statements, proxy
statements and other materials, together with any amendments
required to be made with respect thereto, that were required to be
filed with the SEC under the Securities Act or the Exchange Act
from and after December 31, 2003 (all such reports and statements
are collectively referred to herein as the “ Commission
Filings ”). As of their respective dates, the
Commission Filings, including the financial statements contained
therein, complied in all material respects with all of the statutes
and published rules and regulations enforced or promulgated by the
regulatory authority with which the Commission Filings were filed,
and, except to the extent the information in any Commission Filing
has been revised or superseded by a later filed Commission Filing,
did not and do not as of the date hereof contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The financial statements of
the Company included in the Commission Filings comply in all
material respects with applicable accounting requirements and the
rules and regulations of the SEC with respect thereto as in effect
at the time of filing. Such financial statements have been
prepared in accordance with GAAP, except as may be otherwise
specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of
the Company
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and its
consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, year-end
audit adjustments.
Section 3.09.
Absence of Certain
Developments . Except as specifically disclosed in the
Commission Filings, since September 30, 2004 and through the date
hereof, no event or series of events occurred which could
reasonably have a Material Adverse Effect.
Section 3.10.
Litigation . There are
no Legal Proceedings pending or, to the knowledge of the Company,
threatened, that question the validity of this Agreement or the
transaction contemplated hereby or any action taken or to be taken
by the Company or any Company Subsidiary in connection with the
consummation of the transaction contemplated hereby. Except
as otherwise specifically disclosed herein or in the Commission
Filings, there are no Legal Proceedings pending or, to the
knowledge of the Company, threatened, against or involving the
Company or any Company Subsidiary or any of their respective
properties or assets, at Law or in equity, involving, individual
claims of more than $1,000,000 or claims in the aggregate of more
than $3,000,000. There is no outstanding or, to the knowledge
of the Company, threatened, Order of any Governmental Body against
the Company or any Company Subsidiary or any of their respective
properties or assets, which Order could reasonably have a Material
Adverse Effect.
Section 3.11.
Compliance with Laws .
The Company and the Company Subsidiaries are in compliance in all
respects with all Laws and Orders promulgated by any Governmental
Body applicable to the Company and the Company Subsidiaries or to
the conduct of the business or operations of the Company and the
Company Subsidiaries or the use of their properties (including any
leased properties) and assets, except where failure to comply would
not have a Material Adverse Effect. Since January 1, 2004,
neither the Company nor any Company Subsidiary has received any
written notice of violation or alleged material violation of any
such Law or Order by any Governmental Body in any material respect
that has not been resolved. Since January 1, 2004, neither the
Company nor any Company Subsidiary has received written notice that
it is the subject of an investigation by any Governmental Body
which could reasonably have a Material Adverse Effect.
Section 3.12.
Financial Advisors . No
agent, broker, investment banker, finder, financial advisor or
other Person is or will be entitled to any broker’s or
finder’s fee or any other commission or similar fee from the
Company, directly or indirectly, in connection with the transaction
contemplated hereby.
Section 3.13.
No General Solicitation
. None of the Company or any of its “affiliates”
(as defined in Rule 501(b) of Regulation D under the Securities Act
(“Regulation D”)), has, directly or through an agent,
engaged in any form of general solicitation or general advertising
in connection with the offering of the Shares (as those terms are
used in Regulation D) under the Securities Act or in any manner
involving a public offering within the meaning of Section 4(2) of
the Securities Act; and the Company has not entered into any
contractual arrangement with respect to the distribution of the
Shares except for this Agreement, and the Company will not enter
into any such arrangement.
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Section 3.14.
No Default . The
Company is not in default in the payment or performance of any of
its Contracts, except where such default would not have a Material
Adverse Effect.
Section 3.15.
Registration of Shares
. The Company has not entered into any agreement to register
its debt or equity securities under the Securities Act.
Section 3.16.
Disclosure Controls .
The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for t
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