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Exhibit 3
STANDSTILL AGREEMENT
This STANDSTILL AGREEMENT, dated as of April 30, 1998, by and among
Atlantic Realty Trust, a Maryland real estate investment trust ("ART") on the
one hand and Kimco Realty Corporation, a Maryland corporation ("KRC"), Kimco
Realty Services, Inc., a Delaware corporation ("KRS"), and Xxxxxx Xxxxxx
("Xxxxxx") on the other hand (each of KRC, KRS and Xxxxxx, are referred to
herein, collectively, as "Kimco") (the "Standstill Agreement").
RECITALS:
WHEREAS, a Schedule 13D, as amended, was filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") with the Securities and
Exchange Commission, indicating Kimco's ownership of common shares of
beneficial interest, par value $.01 per share, of ART (the "Shares");
WHEREAS, ART's charter limits the number of shares of Common Stock
that may be owned, actually or constructively pursuant to the attribution
rules set forth in Section 544 of the Internal Revenue Code of 1986, as
amended (the "Code"), as such rules are modified by Section 856(h) of the Code
or in Section 318(a) of the Code as such rules are modified by Section
856(d)(5) of the Code (constructive ownership of stock pursuant to such
attribution rules is hereinafter referred to as "Constructive Ownership," and
the terms "Constructively Own" and "Constructive Owner" shall have the
correlative meanings) by any person to 9.8% of the total number of shares of
Common Stock that are issued and outstanding (the "Excess Share Provisions").
All shares of Common Stock Constructively Owned by any of KRC, KRS or Xxxxxx
in excess of 9.8% of the total number of shares of Common Stock that are
issued and outstanding are referred to herein as "Excess Shares";
WHEREAS, under the Charter, the Excess Shares are automatically
transferred to a charitable trust to be held for sale unless ART's board of
trustees, in accordance with the Excess Share Provisions, grants an exception
to such ownership limit provisions with respect to the Excess Shares (a
"Waiver");
WHEREAS, Kimco has requested that ART, acting through its Board of
Trustees, grant Kimco a Waiver;
WHEREAS, ART has agreed to grant Kimco a Waiver on the condition that
it enters into this Standstill Agreement and Kimco has agreed to comply with
this condition.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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1. Standstill.
(a) General Standstill. Kimco hereby agrees that from the date hereof
they shall not, and they shall cause their Affiliated Persons (as defined
below) not to directly or indirectly through an Affiliated Person, unless
specifically requested in writing in advance by the ART board of trustees:
(i) acquire, agree to acquire, or make a public offer or
proposal to acquire, in any manner, directly or indirectly
through an Affiliated Person, ownership or control of
(A) any securities of ART ("Restricted Securities") in
excess of 25%of the total number of shares that are
issued and outstanding, or
(B) any subsidiary or any assets or properties of ART or
any subsidiary or division thereof, including by way
of any fundamental transaction with ART, such as a
tender offer, business combination, merger or other
consolidation,
(ii) make any "solicitation" of "proxies" (as such terms are
used in the proxy rules of the Securities and Exchange
Commission) to vote any voting securities of ART,
(iii)form or join a "group" (as defined in Section 13(d)(3) of
the Exchange Act) in connection with any of the provisions
of this Section 1, other than a group consisting solely of
two or more of KRC, KRS, Xxxxxx and any Affiliated
Persons, and
(iv) disclose any intention, plan or arrangement inconsistent
with the provisions of this Section 1.
The provisions of this Section 1 are referred to in this Standstill Agreement,
collectively, as "Restricted Activities". Notwithstanding the foregoing, nothing
in this Section 1 shall prohibit Kimco or its Affiliated Persons from making a
proposal to acquire any asset or property that ART announces an intention to
sell or is soliciting acquisition proposals from third parties.
(b) Voting Rights. Subject to the terms of this Standstill Agreement,
Kimco may vote its shareholdings of ART stock in its sole and absolute
discretion; provided, however, Kimco shall vote any Excess Shares in
accordance with the recommendation of the ART board of trustees.
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(c) "Affiliated Person" shall mean, for the purposes of this
Standstill Agreement, (i) any corporation, limited liability company or
partnership of which Kimco Realty, Kimco Services or Xx. Xxxxxx, individually
or in the aggregate, own a majority of the voting securities (or, in the case
of a limited liability company or partnership, a majority of the economic
interest or limited partnership interests, respectively) or serve as a
managing member or general partner and (ii) Xx. Xxxxxx'x spouse, and any
relative of Xx. Xxxxxx or his spouse who has the same home as Xx. Xxxxxx and
any trust in which Xx. Xxxxxx or his spouse has a substantial beneficial
interest or as to which Xx. Xxxxxx serves as trustee or in a similar fiduciary
capacity.
2. Release.
(a) Kimco, on behalf of themselves and for each of their heirs,
executors, administrators, successors, and/or assigns (collectively, the
"Kimco Releasor"), hereby remises, releases, and forever discharges each of
ART, their direct and indirect subsidiaries, shareholders, affiliates,
subdivisions, predecessors, successors or assigns, and their present and
former directors, officers, employees, agents and attorneys and their heirs,
executors, administrators, successors, and assignees (collectively, the "ART
Releasees"), and each of them, of and from any and all claims, demands, or
causes of action whatsoever from the beginning of the world to the date
present, whether individual, class or derivative in nature, at law or in
equity, whether based on any federal, state, or foreign law or right of
action, foreseen or unforeseen matured or unmatured, know or unknown, accrued
or not accrued, which the Kimco Releasor has, had or have or can, shall, or
may hereafter have against the ART Releasees, or any of them, alleged or which
could have been alleged or arising out of or relating to the decision by ART's
Board of Directors to approve, and ART's execution and delivery of, the tax
agreement dated May 10, 1996 by and between Ramco-Xxxxxxxxxx Properties Trust
(together with its subsidiaries, "RPT") or any amounts paid by ART to RPT or
to the Internal Revenue Service pursuant to its obligations under such
agreement; provided, however, that this release shall be ineffective with
respect to each ART Releasee if any person whose vote was required to approve
such decision received or stands to receive, directly or indirectly, any
benefit as a result thereof other than his or her pro rata benefit as a
securityholder of RPT. Kimco hereby acknowledges that all amounts paid to Xxxx
X. Xxxxxxx, Xxxxxxx Xxxxxxxxx, the members of the Special Acquisition
Committee and Wolf Block (as such terms are defined below) in connection with
the acquisition of substantially all the property and assets of
Ramco-Xxxxxxxxxx, Inc. and its affiliates by RPS Realty Trust ("RPS") as
described in RPS's Proxy Statement dated March 29, 1996 (the "Proxy
Statement") shall not be deemed to be a benefit for this purpose. Capitalized
terms used but not otherwise defined in this Section 2 shall have the meanings
set forth in the Proxy Statement.
3. Waiver. Kimco acknowledges its understanding that, as set forth in
the Recitals to this Standstill Agreement, ownership of the Common Stock is
subject
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to the Excess Share Provisions. Subject to the terms and conditions of this
Standstill Agreement, ART grants to Kimco effective May 14, 1997 a Waiver with
respect to the Excess Shares, but only with respect to Excess Shares that do
not exceed 15.2% of the total number of shares of Common Stock that are
currently issued and outstanding. Kimco understands and agrees that ART's
grant to Kimco of the Waiver is conditioned upon the continuing accuracy of
the representations and warranties set forth in Section 4 of this Standstill
Agreement and upon such Waiver otherwise not causing ART to fail to qualify as
a REIT for income tax purposes, and Kimco further understands and agrees that,
subject to the Waiver, if any such Excess Share Provisions are hereafter
violated by it or if any of such representations and warranties cease to be
true, the Excess Shares may be automatically transferred to a trust for the
benefit of a charitable beneficiary (as set forth in the Excess Share
Provisions) and that, if so transferred, the applicable shareholder's
ownership rights in such Excess Shares will be terminated. ART agrees that the
remedies provided in its charter shall be the sole remedies available to ART
in the event that any of the representations and warranties of Kimco set forth
in Section 4 of this Standstill Agreement ceased to be true or the ownership
of Common Stock by Kimco otherwise would violate any of the restrictions set
forth in the ART's charter.
4. Representations and Warranties of Kimco. Kimco hereby jointly and
severally represents and warrants to, and agrees with, ART as follows:
(a) Capacity; Enforceability. Each of the Kimco persons executing
this Standstill Agreement has full capacity and authority, and corporate
authority and capacity, as the case may be, to execute and deliver this
Standstill Agreement. This Standstill Agreement has been duly and validly
executed and delivered by and on behalf of each of them and constitutes a
valid obligation of each of them, enforceable in accordance with its terms,
except to the extent such enforceability may be limited by applicable
insolvency, bankruptcy, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by general equity principles.
(b) No Conflict. The performance of this Standstill Agreement and the
consummation of the transactions contemplated hereby will not result in a
breach or violation of any of the terms or provisions of, or constitute a
default under:
(i) the certificate of incorporation of KRC or KRS,
(ii) the by-laws of KRC or KRS,
(iii)any contract or other agreement or instrument to which
Kimco is a party or by which Kimco is bound, the breach of
which would have a material adverse effect on ART or
Kimco, or
(iv) any law, order, rule, regulation, writ, injunction or
decree applicable to Kimco.
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(c) Governmental Approvals. No consent, authorization or approval of,
exemption by, or filing with, any domestic governmental or administrative
authority, or any court, is required to be obtained or made by Kimco in
connection with the execution, delivery and performance of this Standstill
Agreement or the consummation of the transactions contemplated hereby.
(d) Excess Ownership. KRC and KRS are corporations and, to the best
of Kimco's knowledge (after due investigation), no person or entity which
would be treated as an individual for purposes of Section 542(a)(2) of the
Code, as modified by Section 856(h) of the Code, Constructively Owns in excess
of 9.8% of the value of the outstanding equity interest in KRC or KRS.
(e) Update of Representations. At the reasonable request of ART
from time to time, Kimco will update its representations to ART set forth in
Section 5(d).
(f) Related Tenants Rent. ART has provided to Kimco an accurate list
of its and its subsidiaries current tenants and, to the knowledge of Kimco,
the amount of annualized rents payable to ART or to its subsidiaries by all
such tenants of ART or its subsidiaries in which Kimco owns 10 percent or more
of the stock or other ownership interest computed in accordance with the
attribution rules of Code Section 318(a), as modified by Code Section
856(d)(5) ("Related Tenants") (such as to exclude such rents from the term
"rents from real property" by reason of Section 856(d)(2)(B) of the Code) do
not exceed $25,000. At the reasonable request of ART from time to time and
upon receipt by Kimco of a current list of ART's and its subsidiaries tenants,
Kimco will update its representation with respect to its then ownership
interests (if any) in such tenants of ART or its subsidiaries and provide ART
with such information concerning rents payable by Related Tenants as ART may
reasonably request in connection with maintaining ART's status as a REIT.
5. Representations and Warranties of ART. ART hereby represents and
warrants to, and agrees with, Kimco as follows:
(a) Capacity; Enforceability. ART has full trust authority and
capacity to execute and deliver this Standstill Agreement. This Standstill
Agreement has been duly and validly executed and delivered by and on behalf of
ART and constitutes a valid obligation of ART, enforceable in accordance with
its terms, except to the extent such enforceability may be limited by
applicable insolvency, bankruptcy, reorganization or similar laws affecting
the enforcement of creditors' rights generally and by general equity
principles.
(b) No Conflict. The performance of this Standstill Agreement and the
consummation of the transactions contemplated hereby will not result in a
breach or violation of any of the terms or provisions of, or constitute a
default under:
(i) the declaration of trust of ART,
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(ii) the by-laws of ART,
(iii)any contract or other agreement or instrument to which
ART is a party or by which ART is bound, the breach of
which would have a material adverse effect on ART or
Kimco, or
(iv) any law, order, rule, regulation, writ, injunction or
decree applicable to ART.
(c) Governmental Approvals. No consent, authorization or approval of,
exemption by, or filing with, any domestic governmental or administrative
authority, or any court, is required to be obtained or made by ART in
connection with the execution, delivery and performance of this Standstill
Agreement or the consummation of the transactions contemplated hereby.
6. Miscellaneous Provisions.
(a) Notices. Any notice, request, instruction or other document to be
given hereunder by any party hereto to another party hereto shall be in
writing, shall be deemed to have been duly given or delivered
(i) the day following dispatch to an overnight courier service
(such as Federal Express or UPS) or
(ii) five (5) days after dispatch by certified or registered
first class mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or
made:
If to Kimco addressed to:
Xx. Xxxxxx Xxxxxx
Kimco Realty Corporation
000 Xxx Xxxx Xxxx Xxxx
Xxx Xxxx Xxxx, XX 00000-0000
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With a copy to:
Xxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
If to ART addressed to:
Xx. Xxxx X. Xxxxxxx
Atlantic Realty Trust
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxx X. Xxxxxxxxxxx, Esq.
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(b) Amendment and Modification. This Standstill Agreement may be
modified, amended or supplemented only by an instrument in writing signed by
or on behalf of all of the parties hereto.
(c) Waiver. No party may waive any right hereunder except pursuant to
a written instrument signed by the party against whom such waiver is to be
enforced. No waiver of or delay in exercising any right hereunder shall
operate as a waiver of any right hereunder.
(d) Governing Law. This Standstill Agreement shall be governed by the
laws of the State of New York, without regard to the conflicts of law
principles thereof. The parties hereby consent to personal jurisdiction in
respect of any action arising under or in connection with this Standstill
Agreement instituted in the United States District Court for the Southern
District of New York or the courts of the State of New York and to service of
process upon them in the manner set forth in subsection (a) above.
(e) Assignment. This Standstill Agreement and the rights and
obligations hereunder may not be assigned by any party hereto without the
written consent of all other parties hereto.
(f) Counterparts. This Standstill Agreement may be executed in
separate counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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(g) Section Headings. The section headings contained in this
Standstill Agreement are solely for the purpose of reference, are not part of
the agreement of the parties and shall not in any way affect the meaning or
interpretation of this Standstill Agreement. All references in this Standstill
Agreement to Sections are to sections of this Standstill Agreement, unless
otherwise indicated.
(h) Entire Agreement. This Standstill Agreement and the Exhibits
which are a part hereof and the other writings, documents, certificates,
instruments and agreements specifically identified herein contain the entire
agreement between the parties with respect to the transactions contemplated
herein and supersede all previous written and oral negotiations, commitments
and understandings by or among any of the parties hereto with respect to any
of the matters contemplated under this Standstill Agreement. There are no
restrictions, promises, inducements, representations, warranties, covenants,
or undertakings, other than those expressly set forth or referred to herein.
(i) Severability. If and to the extent that any court of competent
jurisdiction holds any provision (or any part thereof) of this Standstill
Agreement to be invalid or unenforceable, such holding shall in no way affect
the validity of the remainder of this Standstill Agreement, including any
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parities hereunder shall be enforceable to the fullest
extent permitted by law; provided, however, that if the Waiver is finally
determined by a court of appropriate jurisdiction to be invalid or
unenforceable, this Agreement shall terminate.
(j) Execution. Facsimiles of executed copies of this Standstill
Agreement shall constitute originals of this Standstill Agreement.
(k) No Third Party Beneficiaries. Nothing contained in this
Standstill Agreement shall be deemed to confer rights on any person or to
indicate that this Standstill Agreement has been entered into for the benefit
of any person, other than the parties hereto.
(l) Binding Effects. This Standstill Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors, legal representatives and assigns.
(m) Waiver of Compliance. Any failure of any of the parties to comply
with any obligation, covenant, agreement, or condition herein may be waived by
the party or parties entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such a waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent other failure.
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(n) Further Assurances. The parties to this Standstill Agreement,
without further consideration, use all reasonable efforts to execute and
deliver such additional documents and take such other action as any party may
reasonably request to carry out the intent of this Standstill Agreement and
the transactions contemplated hereby.
(o) Equitable Principles. The parties acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Standstill Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to seek an injunction to prevent any breach of the
provisions of this Standstill Agreement and to enforce specifically the terms
and provisions hereof in any court having jurisdiction, in addition to any
other remedy to which they may be entitled at law or in equity.
(p) Public Releases and Announcements. Kimco agrees that it shall
provide to ART advance copies of, or, in the case of oral announcements,
advance notice of, any public release or announcement concerning ART to be
issued, released or made by Kimco, in each case, at least one business day
prior to such release or announcement.
(q) Termination. This Agreement shall terminate upon the earlier of
the following:
(i) As set forth in Section 6(i); and
(ii) Upon reduction of Kimco's Constructive Ownership of Common
Stock to or below 9.8% of the total number of shares of
Common Stock issued and outstanding.
7. Effect of Termination. In the event of the termination of this
Agreement as set forth in Section 6(q), Kimco shall then immediately become
subject to all rules and restrictions regarding the ownership of Shares,
including, without limitation, the limitations set forth in the organization
documents of ART.
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IN WITNESS WHEREOF, the undersigned have executed this Standstill
Agreement, on the date first written above.
KIMCO REALTY CORPORATION
By /s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman of the Board
and Chief Executive Officer
KIMCO REALTY SERVICES
By /s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: President
/s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx
ATLANTIC REALTY TRUST
By /s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman and President
