THIRD AMENDED AND RESTATED
STANDSTILL AGREEMENT
This THIRD AMENDED AND RESTATED STANDSTILL AGREEMENT (the "Standstill
Agreement"), dated as of August 3, 2004, 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").
RECITALS:
WHEREAS, Kimco has filed a Schedule 13D, as amended, 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 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 3 18(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 that are issued
and outstanding (the "Excess Share Provisions"). All Shares Constructively Owned
by any of KRC, KRS or Xxxxxx in excess of 9.8% of the total number of Shares
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 previously requested that ART, acting through its Board of
Trustees, grant Kimco a Waiver;
WHEREAS, ART, acting through its Board of Trustees, agreed to grant Kimco
a Waiver and in connection therewith ART and Kimco entered into a Standstill
Agreement dated April 30, 1998 (the "Original Standstill Agreement") pursuant to
which Kimco and certain affiliates, agreed, among other things, not to acquire
more than 25% of the issued and outstanding shares of ART;
WHEREAS, the parties hereto amended the Original Standstill Agreement in
order to permit Kimco and certain of its affiliates to own up to 30% of the
issued and outstanding shares of ART and, accordingly, increase the size of the
Excess Shares Waiver and whereas such amendment went into effect on July 21,
2000;
WHEREAS, the parties hereto further amended the Original Standstill
Agreement pursuant to that certain Second Amended and Restated Standstill
Agreement dated as of January 31, 2003 (the "Second Amended and Restated
Standstill Agreement") in order to permit Kimco and certain of its affiliates to
own up to 33% of the issued and outstanding shares of ART and, accordingly,
increase the size of the Excess Shares Waiver;
WHEREAS, First Union Real Estate Equity and Mortgage Investments, an Ohio
Business Trust ("First Union"), beneficially owns 183,085 Shares (the "First
Union Shares");
WHEREAS, Xxxxxxx Xxxxxx and Xxxxx Xxxxxx together beneficially own 52,065
Shares (the "Xxxxxx Shares");
WHEREAS, First Union desires to sell and Kimco desires to purchase the
First Union Shares;
WHEREAS, Xxxxxx desires to sell and Kimco desires to purchase the Xxxxxx
Shares;
WHEREAS, Kimco has requested that ART amend the Second Amended and
Restated Standstill Agreement in order to permit Kimco and certain of its
affiliates to acquire the First Union Shares and the Xxxxxx Shares and own up to
39.6 1% of the issued and outstanding shares of ART and, accordingly, increase
the size of the Excess Shares Waiver; and
WHEREAS, ART, acting through its Board of Trustees, has agreed to
increase the size of the Waiver on the conditions that (i) Kimco enter into this
Third Amended and Restated Standstill Agreement and (ii) Kimco shall only
increase its ownership of shares of common stock of ART above 33% through the
purchase of the First Union Shares and the Xxxxxx Shares in privately negotiated
transactions among Kimco on the one hand and First Union and/or Xxxxxx on the
other hand and Kimco has agreed to comply with these conditions (the
transactions described in this clause (ii) being hereinafter referred to
collectively as the "First Union/Xxxxxx Purchases").
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:
1. STANDSTILL.
(a) GENERAL STANDSTILL. Kimco hereby agrees that 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
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(A) any securities of ART ("Restricted Securities") in excess
of 39.61% of the total number of shares that are issued and outstanding;
provided, however, any increase in Kimco's or their Affiliated Person's
ownership of Restricted Securities in excess of 33% of the total number of
shares that are issued and outstanding shall be limited to Restricted Securities
acquired in connection with the First Union/Xxxxxx Purchases, 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 or all of the assets or properties 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 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.
(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,
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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,
known 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 Shares is subject to
the Excess Share Provisions. Subject to the terms and conditions of this
Standstill Agreement, ART grants to Kimco a Waiver with respect to the Excess
Shares, but only with respect to Excess Shares that do not exceed 29.81% of the
total number of Shares that are currently issued and outstanding; provided,
however, that any Waiver with respect to Excess Shares that exceed 23.2% of the
total number of Shares that are currently issued and outstanding is limited for
the sole purpose of acquiring the First Union Shares and the Xxxxxx Shares
pursuant to the First Union/Xxxxxx Purchases. 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 Shares 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
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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.
(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
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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,
(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:
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If to Kimco addressed to:
Xx. Xxxxxx Xxxxxx
Kimco Realty Corporation
000 Xxx Xxxx Xxxx Xxxx
Xxx Xxxx Xxxx, XX 00000-0000
With a copy to:
Xxxx X. Xxxxxxxx, Esq.
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to ART addressed to:
Xx. Xxxx X. Xxxxxxx Atlantic Realty Trust
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
Xxxxx X. Xxxx, Esq.
Proskauer Rose LLP
0000 Xxxxxxxx
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.
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(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.
(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 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.
(n) FURTHER ASSURANCES. The parties to this Standstill Agreement,
without further consideration, use all reasonable efforts to execute and deliver
such additional documents
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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 Shares to
or below 9.8% of the total number of Shares 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/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Vice President, Treasurer
KIMCO REALTY SERVICES
By /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Vice President, Treasurer
/s/ Xxxxxx Xxxxxx
----------------------------------
XXXXXX XXXXXX
ATLANTIC REALTY TRUST
By /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive V.P.
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