EXHIBIIT 58
April 19, 0000
Xxxxx Xxxxx Xxxx Xxxxxx Equity and Mortgage Investments
00 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Reference is hereby made to (i) the Fixed Rate Loan Agreement (as
amended through the date hereof, the "Gotham Loan Agreement") dated as of
August 11, 1998 by and between First Union Real Estate Equity and Mortgage
Investments (the "Company"), Ableco Finance LLC, as Agent, Gotham Partners,
L.P. ("Gotham LP"), Gotham Partners III, L.P. ("Gotham III LP"), Xxxxxxx
Associates, L.P. ("Xxxxxxx Associates"), and Bankers Trust Company, (ii)
the Fixed Rate Loan Agreement (as amended through the date hereof, the
"Other Loan Agreement," and together with the Gotham Loan Agreement, the
"Loan Agreements") dated as of August 11, 1998 by and between the Company,
Bankers Trust Company, BankBoston N.A. and Wellsford Capital, (iii) the
Standby Purchase Agreement dated as of August 11, 1998 (the "Gotham
Partners Standby Purchase Agreement") by and between the Company and Gotham
LP, (iv) the Standby Purchase Agreement dated as of August 11, 1998 (the
"Gotham III Standby Purchase Agreement," and together with the Gotham
Partners Standby Purchase Agreement, the "Standby Purchase Agreements") by
and between the Company and Gotham III LP, (v) the Letter Agreement dated
August 11, 1998 (the "August 11 Letter Agreement") among the Company,
Gotham LP, Gotham III LP and Xxxxxxx Associates and (vi) the rights
offering(s) described in your registration statement on Form S-3 (File No.
333-63547) originally filed on September 17, 1998, as the same may be
amended with the consent of each of the Standby Purchasers (which consent
may not be unreasonably withheld or delayed), and in any prospectus or
prospectus supplement thereto (collectively, and together with all the
documents incorporated by reference therein, the "Registration Statement").
Gotham LP, Gotham III LP and Gotham Partners International, Ltd. ("GPI,"
and together with Gotham LP and Gotham III LP, "Gotham") are referred to
herein as the "Standby Purchasers."
1. One or More Rights Offerings Contemplated; Standby Purchase
Agreements Remain in Full Force and Effect. Notwithstanding the references
to "the Rights Offering" in each of the Standby Purchase Agreements and to
"the Offering" in each of the Loan Agreements, the parties hereto hereby
agree that such references shall refer to not more than two rights
offerings to be conducted by the Company (for purposes of this letter
agreement, each, an "Offering"). In addition, the parties also agree that
references in each of the Standby Purchase Agreements to the "Shelf
Registration Statement" shall be deemed to refer to the Registration
Statement. The parties hereby further agree that, except as otherwise
provided herein, the terms and conditions of the Standby Purchase
Agreements shall remain in full force and effect and shall apply to each
Offering, mutatis mutandis. Notwithstanding the foregoing, the parties
hereby further agree that the obligations of the Standby Purchasers under
the Standby Purchase Agreements shall be limited to the two Offerings
contemplated by this letter agreement.
2. First Offering. The Company hereby agrees that it shall
conduct an Offering (the "First Offering") of such size as shall be
determined by the Board of Trustees of the Company, provided that (i) the
First Offering shall generate gross proceeds to the Company of at least
$50,000,000 and (ii) the subscription price per share (the "First
Subscription Price") of the Company's Shares of Beneficial Interest, $1.00
par value per share (the "Common Shares"), offered for sale in the First
Offering shall be as follows: (a) if the Company commences the First
Offering on or before April 23, 1999, then the First Subscription Price
shall be $4.00 and (b) if the Company commences the First Offering after
April 23, 1999, then the First Subscription Price shall be the lesser of:
(1) $4.00; and (2) the average of the closing prices of the Common Shares
on the New York Stock Exchange (the "NYSE") during the 10 consecutive
trading days immediately preceding the date such Offering is commenced (the
"Average Market Value"), less a discount equal to 5% of such Average Market
Value (it being understood that the calculation made pursuant to this
subclause (2) shall be rounded to the nearest one-sixteenth of $1.00). For
purposes of this paragraph 2, the First Offering will be deemed to commence
on the date the rights relating thereto are distributed. The Company
further agrees that it shall provide the Standby Purchasers with five
trading days' advance notice of the record date for the distribution of
rights in the First Offering. The Company and the Standby Purchasers
understand that the proceeds of the First Offering shall be used by the
Company to repay amounts outstanding under the Loan Agreements, and for no
other purpose; provided that the parties also understand that the lenders
under the Loan Agreements shall extend the Aggregate Readvanced Loans (as
defined in the Loan Agreements) to the Company following the application of
the proceeds of the First Offering to enable the Company to repay
$9,000,000 principal amount outstanding under the Company's senior credit
facility.
2.1 First Standby Purchase Commitment. (a) In connection
with the First Offering, Gotham hereby agree to purchase, subject to the
terms and conditions of this letter agreement, from the Company, at the
First Subscription Price, all of the Common Shares offered for sale in the
First Offering and not validly subscribed for through the exercise of
Rights (as defined in each of the Standby Purchase Agreements) and any
oversubscription option or privilege in accordance with the terms of the
First Offering (the "First Standby Purchase Commitment"); provided,
however, that the maximum aggregate subscription price required to be paid
(and the corresponding maximum number of Common Shares required to be
purchased) by such Standby Purchasers in the First Offering shall equal the
difference of (i) the lesser of (a) an amount equal to the product of (I)
the number of Common Shares offered for sale in the First Offering
multiplied by (II) the First Subscription Price and (b) $50,000,000 minus
(ii) an amount equal to the product of (a) the number of Common Shares
validly subscribed for in the First Offering through the exercise of Rights
and any oversubscription option or privilege (but excluding the purchase of
Common Shares by the Standby Purchasers pursuant to the provisions of this
paragraph 2.1) multiplied by (b) the First Subscription Price (it being
understood that if the calculation made pursuant to this proviso results in
an amount that is less than zero, the value assigned to such amount shall
be zero).
(b) The parties hereby agree that the Standby Purchasers'
obligations under the First Standby Purchase Commitment shall expire on the
45th day following the date the First Offering is commenced (the "First
Expiration Date") if the First Offering shall not have been consummated by
the First Expiration Date. For all purposes of this Agreement, an Offering
shall be deemed consummated on the Closing Date (as defined in each of the
Standby Purchase Agreements). The Company shall give the Standby Purchasers
at least one business day's advance notice of the Closing Date.
2.2 Payments. The Company acknowledges that the Standby
Purchasers entered into the Standby Purchase Agreements to enable the
Company to consummate the Loan Agreements. The Company hereby agrees that
in consideration for their agreement to enter into the Standby Purchase
Agreements and for other good and valuable consideration, receipt of which
is hereby acknowledged by the Company, Gotham is entitled to a payment of
$1,800,000 (collectively, the "First Payments"), which First Payments the
Company agrees have been earned. The parties hereby agree that the
applicable First Payments shall be paid by the Company to the Standby
Purchasers contemporaneously with the execution this letter agreement.
3. Second Offering. The parties hereby agree that in the event
the Company elects to conduct another Offering for the sole purpose of
repaying all or a portion of the amounts outstanding under the Loan
Agreements (the "Second Offering") (and the Company hereby agrees that it
shall conduct such Second Offering if required to do so under the Loan
Agreements), the Standby Purchasers shall purchase such number of Common
Shares offered for sale in the Second Offering as described in paragraph
3.1 below (the "Second Standby Purchase Commitment"). The Company agrees
that it shall provide the Standby Purchasers with five trading days'
advance notice of the record date for the distribution of the rights in the
Second Offering. The Second Standby Purchase Commitment shall be subject to
the condition that the subscription price per Common Share (the "Second
Subscription Price") of the Common Shares offered for sale in the Second
Offering shall equal the Average Market Value of the Common Shares
immediately preceding the date the Second Offering is commenced, less a
discount equal to 15% of such Average Market Value (it being understood
that the calculation made pursuant to this sentence shall be rounded to the
nearest one-sixteenth of $1.00); provided, however, that such Second
Subscription Price shall in no event exceed $4.00 (subject to appropriate
adjustment for stock splits and stock dividends as shall be reasonably
determined by the parties hereto); and provided further, however, that the
pricing mechanism described above shall be announced publicly at least ten
trading days in advance of the date the Second Offering is commenced. For
purposes of this paragraph 3, the Second Offering will be deemed to
commence on the date the rights relating thereto are distributed. In no
event shall the Second Offering be commenced sooner than 20 trading days
after the consummation of the First Offering.
3.1 Second Standby Purchase Commitment. (a) In connection
with the Second Offering, Gotham hereby agree to purchase from the Company,
at the Second Subscription Price, the Common Shares offered for sale in the
Second Offering and not validly subscribed for through the exercise of
Rights and any oversubscription option or privilege in accordance with the
terms of the Second Offering; provided, however, that the maximum aggregate
subscription price required to be paid (and the corresponding maximum
number of Common Shares required to be purchased) by such Standby
Purchasers in the Second Offering shall equal the difference of (i) the
lesser of (the "Second Base Commitment Amount") (a) an amount equal to the
aggregate principal amount outstanding under the Loan Agreements on the day
immediately preceding the date the Second Offering is consummated and (b)
$40,000,000 minus (ii) an amount equal to the product of (a) the number of
Common Shares validly subscribed for in the Second Offering through the
exercise of Rights and any oversubscription option or privilege (but
excluding the purchase of Common Shares by the Standby Purchasers pursuant
to the provisions of this paragraph 3.1) multiplied by (b) the Second
Subscription Price (it being understood that if the calculation made
pursuant to this clause (ii) results in an amount that is less than zero,
the value assigned to such amount shall be zero).
(b) The parties hereby agree that the Standby Purchasers'
obligations under the Second Standby Purchase Commitment shall expire on
the 45th day following the date the Second Offering is commenced (the
"Second Expiration Date") if the Second Offering shall not have been
consummated by the Second Expiration Date.
3.2 Second Payments. The Standby Purchasers and the Company
hereby agree that there will be no additional consideration, fee or payment
due or payable to the Standby Purchasers in connection with the Second
Standby Purchase Commitment.
4. Termination by the Standby Purchasers. In addition to their
other rights in this letter agreement, the parties hereby agree that each
Standby Purchaser shall have the right to terminate, without any liability,
its obligations hereunder and under its Standby Purchase Agreement with
respect to a particular Offering if (i) after January 15, 1999 there shall
be a material adverse change in the Company's business, financial condition
or results of operations (except to the extent (a) such business, financial
condition or results of operations are reflected or described in (x) the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998, as amended by its Amendment to Annual Report on Form 10-K/A for the
fiscal year ended December 31, 1998, as filed with the Securities and
Exchange Commission on April 13, 1999, or (y) the section of the base
prospectus entitled "The Company" contained in the Registration Statement,
as amended through April 13, 1999, or (b) any such changes result from the
decline in the trading prices of stocks generally), (ii) between the date
the rights with respect to such Offering are distributed and the Closing
Time (as defined in each of the Standby Purchase Agreements) of such
Offering, trading in securities generally on the NYSE is suspended, (iii)
between the date the rights with respect to such Offering are distributed
and the Closing Time, an event of default exists under any instrument
governing outstanding indebtedness of the Company such that the lenders
thereunder shall have the right to accelerate such indebtedness and such
default would result in a material adverse effect on the financial
condition of the Company and its subsidiaries, taken as a whole, provided,
however, that the Standby Purchasers shall not have such right of
termination so long as the lenders waive such default for at least 30 days
after the Closing Date, (iv) between the date the rights with respect to
such Offering are distributed and the Closing Time of such Offering, a
general moratorium on commercial banking activities in New York shall have
been declared by either federal or New York State authorities, (v) the
Common Shares are suspended (other than with respect to temporary
suspensions lasting no more than one trading day in duration) or delisted
from trading on the NYSE on or after April 22, 1999, (vi) any of the
closing conditions contained in Section 7 of each of the Standby Purchase
Agreements (as applicable to the respective Standby Purchasers) (other than
subsection (d) of such Section 7) shall not be satisfied as of the Closing
Time of such Offering, (vii) the Company shall otherwise be in material
breach of this letter agreement or the applicable Standby Purchase
Agreement, (viii) the Company fails to deliver a certificate of its chief
executive officer, dated the Closing Date of such Offering and delivered
prior to the Closing Time on such date, certifying that, to the knowledge
of the Company, as of such date no event or state of facts exists that
would give a Standby Purchaser the right to terminate its obligations under
this letter agreement or its Standby Purchase Agreement pursuant to this
paragraph 4 or (ix) such Offering is not consummated by February 11, 2000
(provided that with respect to the Second Offering, such date shall be
changed to August 11, 1999 if the First Offering is consummated on or prior
to May 15, 1999 and generates gross proceeds to the Company of at least
$50,000,000). The parties hereby further agree that a material adverse
change in the Company's business, financial condition or results of
operations shall not be deemed to exist solely as a result of a decline in
the price of any class of the Company's capital stock. Any exercise of the
right to terminate hereunder by a Standby Purchaser shall be in writing and
delivered prior to the Closing Time of an Offering in accordance with the
provisions of paragraph 14 below. Any termination by a Standby Purchaser
shall be without prejudice to any claims for damages which such Standby
Purchaser may have as a result of the Company's failure, if any, to comply
with its obligations.
5. No Material Omissions or Misstatements in Registration
Statement. The Company hereby represents that as of the date of any final
prospectus or prospectus supplement relating to any Offering contemplated
by this letter agreement, and as of the date any such Offering is
consummated, such prospectus or prospectus supplement (including all
documents incorporated or deemed to be incorporated by reference therein)
shall 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, in light of the circumstances under which they are
made, not misleading.
6. August 11 Letter Agreement Superseded. The parties hereby
agree that this letter agreement shall supersede and replace the August 11
Letter Agreement, and that except as expressly amended hereby, the Standby
Purchase Agreements shall remain unchanged and in full force and effect.
7. Registration Rights. The Company agrees that it shall enter
into a registration rights agreement with respect to the registration for
resale under the Securities Act of 1933, as amended, of all of the Common
Shares to be acquired by Gotham in the First Offering and/or the Second
Offering, which registration rights agreement shall be upon such reasonable
terms and conditions as the parties hereto shall reasonably agree.
8. Indemnification. (a) The Company hereby agrees to indemnify
and hold harmless each Standby Purchaser and its partners:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein
not misleading or arising out of an untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
prospectus supplement or final prospectus or prospectus supplement (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
with respect to any litigation, investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; and
(iii) against any and all expense whatsoever (including, without
limitation, the fees and disbursements of legal counsel) reasonably
incurred in investigating, preparing or defending against any litigation,
or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under subparagraphs (i) or
(ii) of this paragraph 8(a);
provided, however, that this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished to the Company
by or on behalf of such Standby Purchaser (as Standby Purchaser and not in
any other capacity) for use in the Registration Statement or any
preliminary prospectus or prospectus supplement or final prospectus or
prospectus supplement (or any amendment or supplement thereto).
(b) Each Standby Purchaser hereby agrees to indemnify and hold
harmless the Company, its Trustees, each of its officers who signed the
Registration Statement and the other Standby Purchasers and their partners
against any and all losses, liabilities, claims, damages and expenses
described in the indemnity contained in subparagraph (a) of this paragraph
8, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement or in
any preliminary prospectus or prospectus supplement or final prospectus or
prospectus supplement (or any amendment or supplement thereto) in reliance
upon and in conformity with information furnished to the Company by or on
behalf of such Standby Purchaser (as Standby Purchaser and not in any other
capacity) for use in the Registration Statement or such preliminary
prospectus or prospectus supplement or final prospectus or prospectus
supplement (or any amendment or supplement thereto). The aggregate
indemnification obligation by a Standby Purchaser pursuant to this
subparagraph (b) of paragraph 8 shall not exceed the product of (i) an
amount equal to the number of Common Shares acquired by such Standby
Purchaser in the applicable Offering, multiplied by (ii) the subscription
price for Common Shares in such Offering.
(c) The parties agree that each indemnified party shall give
prompt notice to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. If any
such action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall
not be liable to the indemnified party under this paragraph 8 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. The indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the
indemnified party; provided, however, that if the indemnified party is a
Standby Purchaser, the fees and expenses of such counsel shall be at the
expense of the indemnifying party if: (i) the employment of such counsel
has been specifically authorized in writing by the indemnifying party, or
(ii) the named parties to any such action (including any impleaded parties)
include both a Standby Purchaser and the indemnifying party, and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or a Standby
Purchaser has been advised that there may be one or more legal defenses
available to it different from or in conflict with any legal defenses
available to the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of
such Standby Purchaser).
(d) The parties further agree that no indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding. No
indemnifying party shall be liable for any settlement of any action or
claim for monetary damages which an indemnified party may effect without
the written consent of the indemnifying party, which written consent shall
not be unreasonably withheld.
9. Contribution. If the indemnification provided for in paragraph
8 is unavailable to or insufficient to hold harmless an indemnified party
under subparagraphs (a) or (b) of paragraph 8 in respect of any loss,
liability, claim, damage or expense (or actions in respect thereof)
referred to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability,
claim, damage or expense (or actions in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the Company
on the one hand and the Standby Purchasers on the other from any Offering
to which such loss, liability, claim, damage or expense (or action in
respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subparagraph (c)
of paragraph 8 above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Standby Purchasers on
the other in connection with the statements or omissions which resulted in
such loss, liability, claim, damage or expense (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Standby
Purchasers on the other in connection with any Offering shall be deemed to
be in the same proportion as the total net proceeds from such Offering
(before deducting expenses but after deducting any payments made by the
Company to the Standby Purchasers pursuant to paragraph 2.2 hereof)
received by the Company bear to the total payments received by such Standby
Purchasers. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or the Standby
Purchasers on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Standby Purchasers agree that it would not be
just and equitable if contributions pursuant to this paragraph 9 were
determined by pro rata allocation between the Company on the one hand and
the Standby Purchasers on the other or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this paragraph 9. The amount paid or payable by an indemnified
party as a result of the loss, liability, claim, damage or expense (or
actions in respect thereof) referred to above in this paragraph 9 shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act of 1933, as amended)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
10. Opinion of Counsel. The Company hereby agrees that in
connection with any purchase of Common Shares by the Standby Purchasers
pursuant to the terms of this letter agreement, the Standby Purchasers
shall receive an opinion of independent legal counsel to the Company that
addresses the issues set forth in Exhibit A attached hereto, that is
substantially in the form set forth in such Exhibit A and that is otherwise
in form and substance reasonably acceptable to the Standby Purchasers.
11. GPI Bound by Gotham Partners Standby Purchase Agreement. By
its execution of this letter agreement, (i) GPI hereby agrees, including
without limitation, for the benefit of the lenders under the Loan
Agreements, to be bound by the terms and conditions of the Gotham Partners
Standby Purchase Agreement as if it were originally a party thereto and
acknowledges that it shall be jointly and severally liable with Gotham LP
and Gotham III LP thereunder and (ii) Gotham LP and Gotham III LP hereby
acknowledge that GPI shall be so bound and liable and agree that they will
separately arrange and coordinate with GPI with respect to any specific
obligations to be performed by GPI under the Gotham Partners Standby
Purchase Agreement.
12. Obligations Not Several. All the obligations of Gotham LP,
Gotham III LP and GPI under this letter agreement are joint and several.
13. Binding Effect. The parties hereby agree that if the terms
and conditions set forth in this letter agreement are in conflict with, or
inconsistent in any way with, the Standby Purchase Agreements, the terms of
this letter agreement shall control.
14. Notices. All notices and other communications under this
letter agreement shall be in writing and deemed to have been duly given if
delivered by hand, courier or mail or transmitted by any standard form of
telecommunication, if to: (i) the Company, to Xxxxx 0000, 00 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000-0000, Attention: Xxxx X. Xxxxx, Senior Vice
President, General Counsel and Secretary, Facsimile: (000) 000-0000, with a
copy to Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxx X. Xxxxxxxxxx, Esq.,
Facsimile: (000) 000-0000; or (ii) Gotham LP, Gotham III LP or GPI, to
Gotham Partners Management Co., LLC, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Facsimile: (212)
286-1133, with copies to Xxxxxxx, Procter & Xxxx, LLP, 000 Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxxxxxx, Esq., Facsimile: (000) 000-0000. Notices shall be deemed
effective on receipt thereof.
15. No Personal Liability. Notwithstanding anything contained
herein to the contrary, this letter agreement is made and executed on
behalf of the Company, a business trust organized under the laws of the
State of Ohio, by its officer(s) on behalf of the Trustees thereof, and
none of the Trustees or any additional or successor Trustee hereafter
appointed, or any beneficiary, officer, employee or agent of the Company
shall, except as otherwise may be required by law, have any liability in
such Trustee's, beneficiary's, officer's, employee's or agent's personal or
individual capacity, but instead, all parties shall look solely to the
property and assets of the Company for satisfaction of claims of any nature
arising under or in connection with this letter agreement.
Please confirm your agreement with the above by signing in the
space provided below. This letter agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
Very truly yours,
GOTHAM PARTNERS, L.P.
By: Section H Partners, L.P.
By: Karenina Corp.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
GOTHAM PARTNERS III, L.P.
By: Section H Partners, L.P.
By: Karenina Corp.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
GOTHAM PARTNERS INTERNATIONAL, LTD.
By: Gotham International Advisors, L.L.C.,
its investment manager
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Managing Member
ACCEPTED AND AGREED TO:
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
EXHIBIT A
Opinion of independent counsel of the Company to be delivered pursuant
to paragraph 10 of this letter agreement :
1. The Company is validly existing as a business trust in good
standing under the applicable laws of the State of Ohio.
2. This letter agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company,
enforceable against the Company in accordance with its terms.
3. The Common Shares to be purchased by the Standby Purchasers from
the Company have been duly authorized for issuance and sale and, when
issued and delivered by the Company against payment of the consideration
therefor, will be validly issued, fully paid and nonassessable.
4. The Registration Statement has been declared effective by the
Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Securities Act"). To the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no
proceedings for such purpose have been instituted or are pending or
threatened by the Commission.
5. The execution, delivery and performance of this letter agreement
and the consummation by the Company of the transactions contemplated in
this letter agreement and compliance by the Company with its obligations
under this letter agreement do not and will not violate the Amended
Declaration of Trust or By-laws of the Company as in effect as of the date
hereof, or result in a breach of, or default under any indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to
which the Company is a party or by which the Company is bound or to which
any of its Properties or assets are subject, which such agreement or
instrument (i) has been filed with the Commission (the "Filed Contracts")
or (ii) with respect to agreements or instruments entered into by the
Company on or after June 1, 1998, is a Filed Contract or is an agreement or
instrument which such counsel has actual knowledge of (the agreements or
instruments in clauses (i) and (ii), the "Applicable Contracts"), except
for any such breach or default as would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions of
any applicable federal, New York or Ohio law, statute, rule, regulation, or
any judgment, order, or decree, known to such counsel, of any government,
government instrumentality or court of the United States, or New York or
Ohio having jurisdiction over the Company or its Properties or assets,
which violation in any such case would result in a Material Adverse Effect;
provided, however, that such counsel need express no opinion with respect
to any violation, breach or default, as applicable, not ascertainable from
the face of any agreement, instrument, judgment, decree or order referred
to above, or arising under or based upon any cross-default provision,
insofar as any such violation relates to a default under an agreement or
instrument that is not an Applicable Contract or such violation arises
under or is based upon any covenant of a financial or numerical nature or
which requires arithmetic computation.
6. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any New York, Ohio or
federal court or governmental authority or New York, Ohio or federal
agency, is necessary or required in connection with the due authorization,
execution and delivery of this letter agreement or for the offering,
issuance, sale or delivery of the Common Shares (other than under the
Securities Act and the regulations thereunder, which have been obtained, or
as may be required under the securities or blue sky laws of the various
states).
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants
for the Company and with representatives of the Standby Purchasers at which
the contents of the Registration Statement, prospectus dated _______, 1999
(the "Prospectus") and prospectus supplement dated ________, 1999 (the
"Prospectus Supplement"), and any supplements or amendments thereto, and
related matters were discussed and, although such counsel is not passing
upon and does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement, the
Prospectus or the Prospectus Supplement, and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their attention
which would lead them to believe that either the Registration Statement or
any amendments thereto, at the time the Registration Statement or such
amendments became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus or the Prospectus Supplement, as of their respective dates or at
the date of the closing of the applicable Offering, contained an untrue
statement of a material fact or omitted 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 such
counsel need express no belief as to the financial statements or schedules
or other financial or statistical data derived therefrom, included or
incorporated by reference in the Registration Statement, the Prospectus or
the Prospectus Supplement or any amendments or supplements thereto).
