Exhibit 10.1
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement"), dated as of December 30,
2002, is by and among Kramont Realty Trust, a Maryland real estate investment
trust (the "Seller") and Teachers Insurance and Annuity Association of America
("TIAA"), TIAA-CREF Real Estate Securities Fund and TIAA Life Real Estate
Securities Fund, which funds are acting through their investment manager,
Teachers Advisors, Inc., (each a "Purchaser" and collectively the "Purchasers"),
and Teachers Advisors, Inc. and Kensington Investment Group, Inc. (each an
"Investment Advisor") entering into this Agreement on behalf of themselves (as
to paragraph 4 of this Agreement) and each of the funds listed under their
respective names on SCHEDULE A.
WHEREAS, the Purchasers desire to purchase from the Seller, and the
Seller desires to issue and sell to the Purchasers, in the aggregate 2,090,000
common shares of the Seller, par value $0.01 per share (the "Shares"), with the
number of Shares acquired by each Purchaser set forth on Schedule A.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. Purchase and Sale. Subject to the terms and conditions hereof, the
Purchasers hereby agree to purchase from the Seller, and the Seller agrees to
issue and sell to the Purchasers, the Shares at a price per share of $14.35 for
an aggregate purchase amount of $29,991,500 (the "Purchase Price").
2. Representations and Warranties of Purchaser. Each Purchaser
represents and warrants with respect to itself that:
(a) Due Authorization. Such Purchaser is duly authorized to purchase
the Shares. This Agreement has been duly authorized, executed and
delivered by such Purchaser and constitutes a legal, valid and binding
agreement of such Purchaser, enforceable against such Purchaser in
accordance with its terms except as may be limited by (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights or remedies of creditors or (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.
(b) Prospectus and Prospectus Supplement. Such Purchaser has
received a copy of the Seller's Basic Prospectus dated April 3, 2002, and
Prospectus Supplement dated December 30, 2002 (each as defined below).
(c) Ownership of Shares of Beneficial Interest. As of the date
hereof, none of the Purchasers, together with its respective subsidiaries
and affiliates, owns 5% or more of the issued and outstanding shares of
beneficial interest of the Company.
3. Representations and Warranties of Seller. The Seller represents and
warrants that:
(a) The Seller meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). The Seller's Registration
Statement (as defined below) was declared effective by the by the SEC (as
defined below) and the Seller has filed such post-effective amendments
thereto as may be required prior to the execution of this Agreement and
each such post-effective amendment became effective. The SEC has not
issued, and to the Seller's knowledge, the SEC does not intend nor has it
threatened to issue, a stop order with respect to the Registration
Statement, nor has it otherwise suspended or withdrawn the effectiveness
of the Registration Statement, either temporarily or permanently, nor, to
the Seller's knowledge, does it intend or has it threatened to do so. On
the effective date, (i) the Registration Statement complied in all
material respects with the requirements of the Act and the rules and
regulations promulgated under the Act (the "Regulations"); at the
effective date the Basic Prospectus (as defined below) complied, and at
the Closing the Prospectus (as defined below) will comply, in all material
respects with the requirements of the Act and the Regulations; and (ii)
the Registration Statement at the effective date and as amended or
supplemented on the date hereof and at the Closing did not, does not and
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 any such time,
did not, does not and 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 Prospectus made in reliance upon and in conformity with
information furnished to the Seller in writing by any of the Purchasers,
Xxxxx & Steers Capital Advisors, LLC, in its capacity as placement agent,
and the Seller, and their respective affiliates, expressly for use in the
Prospectus. As used in this Agreement, the term "Registration Statement"
means the "shelf" registration statement on Form S-3 (File No. 333-85424)
as declared effective by the Securities and Exchange Commission (the
"SEC"), including exhibits, financial statements, schedules and documents
incorporated by reference therein. The term "Basic Prospectus" means the
prospectus included in the Registration Statement. The term "Prospectus
Supplement" means the prospectus supplement specifically relating to the
Securities as shall be filed with the SEC pursuant to Rule 424 under the
Act in connection with the sale of the Shares hereunder. The term
"Prospectus" means the
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Basic Prospectus and the Prospectus Supplement. Any reference in this
Agreement to the Registration Statement or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein as
of the date hereof or the date of the Prospectus, as the case may be, and
any reference herein to any amendment or supplement to the Registration
Statement or the Prospectus shall be deemed to refer to and include any
documents filed after such date and through the date of such amendment or
supplement under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and so incorporated by reference.
(b) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change or any development
involving a prospective material adverse change in or affecting the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Seller and the subsidiaries of the Seller, if
any (the "Subsidiaries") considered as one enterprise, whether or not
arising in the ordinary course of business, (B) there have been no
transactions entered into by the Seller or any of its Subsidiaries, other
than those in the ordinary course of business, which are material with
respect to the Seller and its Subsidiaries considered as one enterprise,
and (C) other than regular quarterly dividends, there has been no dividend
or distribution of any kind declared, paid or made by the Seller on any
class of its shares of beneficial interest.
(c) The Seller has been duly organized as a real estate investment
trust and is validly existing in good standing under the laws of the State
of Maryland. Each of the Subsidiaries of the Seller has been duly
organized and is validly existing in good standing under the laws of its
jurisdiction of organization. Each of the Seller and its Subsidiaries has
the required power and authority to own and lease its properties and to
conduct its business as described in the Prospectus; and each of the
Seller and its Subsidiaries is duly qualified to transact business 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 the earnings, business
affairs or business prospects of the Seller and its Subsidiaries
considered as one enterprise.
(d) As of the date hereof, the authorized capital stock of the
Company consisted of 96,683,845 common shares and 3,316,155 preferred
shares of beneficial interest, par value $.01 per share, of which
21,265,985 common shares, 1,183,240 9.75% Series B-1 Cumulative
Convertible Preferred Shares and 1,653,200 Series D Cumulative Redeemable
Preferred Shares ("Series D Preferred Shares"), are issued and
outstanding, and 146,800 Series D Preferred Shares are held in treasury,
as of such date.
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The issued and outstanding shares of beneficial interest of Seller have
been duly authorized and validly issued and are fully paid and
non-assessable; the Shares have been duly authorized, and when issued and
delivered as contemplated hereby, will be validly issued, fully paid and
non-assessable and will be listed, subject to notice of issuance, on the
New York Stock Exchange, effective as of the Closing; the Shares and the
shares of beneficial interest of the Seller conform to all statements
relating thereto contained in the Prospectus; and the issuance of the
Shares is not subject to preemptive or other similar rights.
(e) Neither the Seller nor any of its Subsidiaries is in violation
of its organizational documents 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 or agreement to which the Seller 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 Seller or any of its
Subsidiaries is subject where such violation or default would have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Seller and its
Subsidiaries considered as one enterprise; and, the execution, delivery
and performance of this Agreement, and the issuance and delivery of the
Shares and the consummation of the transactions contemplated herein have
been duly authorized by all necessary action and will not conflict with or
constitute a material 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 Seller or any of its Subsidiaries pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument or agreement to which the Seller 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 Seller or any of its Subsidiaries is subject,
nor will any such action result in any violation of the provisions of the
Amended and Restated Declaration of Trust, by-laws or other organizational
documents of the Seller or any of its Subsidiaries or any applicable law,
administrative regulation or administrative or court decree.
(f) The Seller is organized in conformity with the requirements for
qualification and, as of the date hereof and as of the Closing, operates
in a manner that qualifies it as a "real estate investment trust" under
the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder and will be so qualified after giving effect to the
sale of the Shares.
(g) The Seller is not required to be registered under the Investment
Company Act of 1940, as amended.
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(h) 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 Seller, threatened or contemplated, against or affecting
the Seller 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 otherwise,
or in the earnings, business affairs or business prospects of the Seller
and its Subsidiaries considered as one enterprise, or which might
materially and adversely affect their respective property or assets or
which might materially and adversely affect the consummation of this
Agreement; all pending legal or governmental proceedings to which the
Seller or any of its Subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in
the Prospectus, including ordinary routine litigation incidental to its
business, are, considered in the aggregate, not material to the business
of the Seller and its Subsidiaries considered as one enterprise.
(i) No authorization, approval or consent of any court or United
States federal or state governmental authority or agency is necessary in
connection with the sale of the Shares hereunder, except such as may be
required under the Act or the Regulations or state securities laws or real
estate syndication laws.
(j) The Seller and its Subsidiaries possess such material
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now conducted by them, and neither the Seller 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 Seller and its subsidiaries considered as one
enterprise, nor, to the knowledge of the Seller, are any such proceedings
threatened or contemplated.
(k) The Seller has full power and authority to enter into this
Agreement, and this Agreement has been duly authorized, executed and
delivered by the Seller and constitutes a legal, valid and binding
agreement of Seller, enforceable against Seller in accordance with its
terms except as may be limited by (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting the rights or remedies of creditors or (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.
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(l) The Seller has good and marketable title to all of the
properties and assets reflected in the audited financial statements
contained in the Prospectus, subject to no lien, mortgage, pledge or
encumbrance of any kind except those reflected in such financial
statements (or as otherwise described in the Prospectus) or which are not
material or which constitute customary provisions of mortgage loans
secured by the Seller's properties creating obligations of the Seller with
respect to proceeds of the properties, environmental liabilities and other
customary protections for the mortgagees.
4. Representation and Warranty of the Investment Advisors. To induce
Seller to enter into this Agreement, each of the Investment Advisors hereby
represents and warrants that:
(a) It is an investment adviser duly registered with the Securities
and Exchange Commission under the Investment Advisers Act of 1940.
(b) It has been duly authorized to act as investment advisor on
behalf of each of the funds listed as Purchaser under its name on Schedule
A hereto.
(c) It has the power and authority to enter into and execute this
Agreement on behalf of each of the funds listed as Purchaser under its
name on Schedule A hereto.
(d) This Agreement has been duly executed and delivered by it and
constitutes a legal, valid and binding agreement of such Investment
Advisor, enforceable against it in accordance with its terms except as may
be limited by (i) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights or
remedies of creditors or (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.
5. Conditions to Obligations of the Parties. As a condition to Closing,
(i) each of the representations and warranties of the parties hereto shall be
true and correct in all respects, (ii) the New York Stock Exchange shall have
approved the Shares for listing upon notice of issuance, (iii) the Purchasers
shall have received an opinion from Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP,
dated as of December 31, 2002, substantially in the form attached hereto as
Exhibit A, (iv) the Purchasers shall have received an opinion from Proskauer
Rose LLP, dated as of December 31, 2002, substantially in the form attached
hereto as Exhibit B, (v) the Purchasers shall have received an opinion from the
general counsel of Seller, dated as of December 31, 2002, substantially in the
form attached hereto as Exhibit C, and (vi) the Purchasers shall have received a
comfort letter from BDO Xxxxxxx, LLP, dated as of December 31, 2002,
substantially in the form attached hereto as Exhibit D.
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6. Closing. Provided that the conditions set forth in Section 5 hereto
have been met or waived at such time, the transactions contemplated hereby shall
be consummated in two parts on December 31, 2002 and on January 2, 2003, or at
such other time and date as the parties hereto shall agree (each such time and
date of payment and delivery being herein called the "Closing"). At the Closing,
settlement shall occur through Xxxxxxxx & Company, or an affiliate thereof, on a
delivery versus payment basis through the DTC ID System.
7. Governing Law. This Agreement shall be construed in accordance with and
governed by the substantive laws of the State of New York, without regard to
conflict of laws principles.
8. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may be
amended only in a writing that is executed by each of the parties hereto.
9. Counterparts. This Agreement may be executed in separate counterparts,
each of which shall be deemed an original, and all of which together shall be
deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
KRAMONT REALTY TRUST
By: /s/ Xxxxx X. Xxxxxx, Xx.
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Name: Xxxxx X. Xxxxxx, Xx.
Title: President, Chief Executive Officer and
Trustee
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Managing Director
KENSINGTON INVESTMENT GROUP, INC., on behalf of
itself (solely with respect to paragraph 4) and
each Purchaser set forth under its name on
Schedule A
By: /s/ Xxxx Xxxx
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Name: Xxxx Xxxx
Title: Portfolio Manager, Executive Vice
President
TEACHERS ADVISORS, INC., on behalf of itself
(solely with respect to paragraph 4) and each
Purchaser set forth under its name on Schedule A
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
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SCHEDULE A
NAME OF PURCHASER: NUMBER OF SHARES
KENSINGTON INVESTMENT GROUP, INC.
Kensington Strategic Realty Fund 500,000
Archon Partners LP 20,000
Condor Partners LP 30,000
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Total 550,000
TIAA-CREF
Traunche A - 12/31/02 Closing
Teachers Insurance and Annuity
Association of America 1,115,000
TIAA-CREF Real Estate Securities Fund 105,000
TIAA Life Real Estate Securities Fund 40,000
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Total 1,260,000
Traunche B - 1/02/03 Closing
Teachers Insurance and Annuity
Association of America 280,000
