-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AdXp4iUqHLYMO/dhy6Ey3NmScvH2mtQNmLpP74cl0kgFvbbGt4i/UT19Lh+AkI7O mfg4vsWlKDkD5JVZnyDQvg== 0000935886-95-000005.txt : 19951215 0000935886-95-000005.hdr.sgml : 19951215 ACCESSION NUMBER: 0000935886-95-000005 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19951214 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FIRST UNION REAL ESTATE EQUITY & MORTGAGE INVESTMENTS CENTRAL INDEX KEY: 0000037008 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 346513657 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-19676 FILM NUMBER: 95601560 BUSINESS ADDRESS: STREET 1: 55 PUBLIC SQUARE STREET 2: STE 1900 CITY: CLEVELAND STATE: OH ZIP: 44113 BUSINESS PHONE: 2167814030 MAIL ADDRESS: STREET 1: 55 PUBLIC SQUARE SUITE 1910 CITY: CLEVELAND STATE: OH ZIP: 44113 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION REALTY DATE OF NAME CHANGE: 19691012 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TURKEY VULTURE FUND XIII LTD CENTRAL INDEX KEY: 0000935886 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 7001 CENTER STREET CITY: MENTOR STATE: OH ZIP: 44060 BUSINESS PHONE: 2169511111 MAIL ADDRESS: STREET 2: 7001 CENTER ST CITY: MENTOR STATE: OH ZIP: 44060 SC 13D/A 1 TURKEY VULTURE FUND XIII, LTD. SC 13D/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities and Exchange Act of 1934 (Amendment No. 7)* First Union Real Estate Equity and Mortgage Investments - ------------------------------------------------------------------------------- (Name of Issuer) Shares of Beneficial Interest - ------------------------------------------------------------------------------- (Title of Class of Securities) 337400-10-5 - ------------------------------------------------------------------------------- (CUSIP Number) Marc C. Krantz, Kohrman Jackson & Krantz, 1375 East 9th Street, Cleveland, Ohio 44114, 216-736-7204 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 13, 1995 - ------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 13D CUSIP NO. 337400-10-5 - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Turkey Vulture Fund XIII, Ltd. - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Ohio - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 ------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY ------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING 1,690,500 ------------------------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,690,500 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*[ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.2% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* 00 - -------------------------------------------------------------------------------
3 CUSIP No. 337400-10-5 This Amendment No. 7 to Schedule 13D Statement is filed on behalf of TURKEY VULTURE FUND XIII, LTD., an Ohio limited liability company (the "Fund"), for the purpose of reporting that it and Richard M. Osborne, the Fund's sole managing member ("RMO"), have entered into a Settlement and Standstill Agreement (the "Settlement Agreement"), dated as of December 13, 1995, with First Union Real Estate Equity and Mortgage Investments ("First Union"). Item 4. Purpose of Transaction. Item 4 is amended and supplemented as follows: On December 13, 1995, the Fund entered into the Settlement Agreement pursuant to which the parties agreed, among other matters, to execute stipulations of dismissal with prejudice of all claims that were asserted by the parties against each other in the actions First Union v. RMO, the Fund, et al. (No. 1:95CV0274) in the U.S. District Court for the Northern District of Ohio (the "First Union Action") and The Fund and RMO v. First Union, et al. (No. 297673) in Common Pleas Court of Cuyahoga County, Ohio (the "Fund Action" and, together with the First Union Action, the "Litigation"). Under the Settlement Agreement, First Union agreed to purchase, or to cause its nominee to purchase, from the Fund 950,000 shares of beneficial interest, par value $1.00 per share (the "Stock"), at the average trading price of the Stock from January 3, 1995 through December 8, 1995, which price has been determined and agreed by the parties to be $7.50. The purchase will occur no later than January 10, 1995. First Union will pay to the Fund the dividend declared on the Stock on December 6, 1995. The Settlement Agreement has a term of ten years. It provides that neither RMO, the Fund nor any of their affiliates will, without the prior written consent of First Union, acquire any additional voting securities of First Union ("Voting Stock") and that neither RMO, the Fund nor their affiliates will, without the prior written consent of the Board of Trustees of First Union, sell, transfer or otherwise dispose of any shares of Voting Stock except: (1) in the event of merger, consolidation, business combination, tender or exchange offer, restructuring, recapitalization or similar transaction, which transaction is approved by the Board of Trustees; (2) in privately negotiated transactions of not more than 1% of the then-outstanding Voting Stock in any single transaction or series of transactions; or (3) in open- market transactions, executed by a registered broker or dealer who receives no more than the usual and customary broker's commission, that do not involve the sale of more than 25% of the average trading volume in the Stock over the prior 4 weeks. RMO agreed (a) to deliver to First Union copies of monthly broker transaction reports reflecting transactions by RMO and the Fund in the Stock, (b) not to take any action that would result in the distribution of the Stock to the members of the Fund, and (c) to promptly notify First Union in the event that RMO or the Fund receive any margin calls with respect to the Stock, and to the extent RMO and the Fund fail to meet such margin calls, to allow First Union to purchase, at the then-current market price, any Stock subject to such margin calls. 4 CUSIP No. 337400-10-5 Under the terms of the Settlement Agreement, each of RMO, the Fund and their affiliates has agreed that none will, without the prior written consent of the Board of Trustees: (1) take any action to acquire control or influence the management, Board of Trustees or policies of First Union; (2) make or participate in any solicitation of proxies or consents with respect to any Voting Stock or become a participant in any election contest with respect to trustees of First Union; (3) call or seek to call a special meeting of shareholders of First Union; (4) seek, directly or indirectly, any list of holders of Voting Stock; (5) initiate, propose or otherwise solicit holders of Voting Stock for the approval of one or more shareholder proposals; (6) form, join or in any way participate in a "group" as defined in Regulation 13D under the Securities Exchange Act of 1934, as amended, with respect to Voting Stock; (7) seek or propose any merger, consolidation, business combination, tender or exchange offer, sale or purchase of assets or securities, restructuring, recapitalization, or similar transaction of or involving First Union; or (8) enter into any arrangements, understanding or agreements with, or advise, assist or encourage any other person in connection with the foregoing. Each of RMO, the Fund and their affiliates has agreed that it will, except with the prior written consent of the Board of Trustees, vote all Voting Stock beneficially owned by them in the manner recommended by the management of First Union. Under the Settlement Agreement, the parties agreed to release the other parties and such other parties' present and former trustees, officers, members and affiliates from all manner of claims, actions and causes of action that each now has or may have by reason of any matter alleged or asserted, or relating to the matters alleged or asserted, in the Litigation, except for any actions or causes of action arising by reason of breach of the Settlement Agreement. The parties indemnified each other for any breaches of such release by the parties' present and former trustees, officers, members and affiliates. RMO and First Union have also entered into an agreement under which an affiliate of RMO may purchase on market terms certain office property owned by First Union. The purchase is subject to normal contingencies, including environmental due diligence. A copy of the Settlement Agreement is filed as Exhibit 7.17 hereto and is incorporated herein by reference and copy of the joint press release of RMO, the Fund and First Union is attached as Exhibit 7.18 hereto. The foregoing description of the Settlement Agreement is qualified in its entirety by reference to the text of such Agreement. Item 5. Interest in Securities of the Issuer. Item 5 is amended and supplemented as follows: (a) According to the most recently available filing with the Securities and Exchange Commission by First Union, there are 18,435,057 shares of the Stock outstanding. The Fund beneficially owns 1,690,500 shares of Stock, or approximately 9.2% of the outstanding Stock. 5 CUSIP No. 337400-10-5 (b) The Fund, and RMO as sole managing member thereof, has the sole power to dispose, or to direct the disposition of, the 1,690,500 shares of Stock owned by the Fund. Under the Settlement Agreement, First Union agreed to purchase, or to cause its nominee to purchase, from the Fund 950,000 shares of the Stock, and the Fund agreed that it will, except with the prior written consent of the Board of Trustees of First Union, vote all Stock (and other voting securities of First Union, if any) beneficially owned by it in the manner recommended by the management of First Union. (c) Under the Settlement Agreement, First Union agreed to purchase, or to cause its nominee to purchase, from the Fund 950,000 shares of the Stock at the average trading price of the Stock from January 3, 1995 through December 8, 1995, which price has been determined and agreed by the parties to be $7.50. The purchase will occur no later than January 10, 1995. The foregoing description of the Settlement Agreement in this Item 5 is qualified in its entirety by reference to the text of such Agreement. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Item 6 is amended and supplemented as follows: Reference is made to Item 4 above regarding the Settlement Agreement entered into by the Fund, RMO and First Union, which is incorporated herein by reference. Item 7. Material to be Filed as Exhibits. Exhibit 7.17 -- Settlement and Standstill Agreement, dated as of December 13, 1995 Exhibit 7.18 -- Joint Press Release dated December 13, 1995 6 CUSIP No. 337400-10-5 After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. TURKEY VULTURE FUND XIII, LTD. Dated: December 13, 1995 /s/ Richard M. Osborne ------------------------------- Richard M. Osborne Managing Member 7 EXHIBIT INDEX Exhibit 7.17 -- Settlement and Standstill Agreement, dated as of December 13, 1995 Exhibit 7.18 -- Joint Press Release dated December 13, 1995 EX-7.17 2 TURKEY VULTURE FUND XIII, LTD. EX-7.17 1 EXHIBIT 7.17 SETTLEMENT AND STANDSTILL AGREEMENT AGREEMENT, effective as of December 13, 1995, among First Union Real Estate Equity and Mortgage Investments, an Ohio business trust (the "Trust"), Richard M. Osborne ("Osborne") and Turkey Vulture Fund XIII, Ltd., an Ohio limited liability company (the "Fund") (Osborne and the Fund collectively, the "Osborne Investors"). WHEREAS, on February 3, 1995, the Trust commenced an action against Osborne, et al., in the United States District Court for the Northern District of Ohio, Eastern Division (Civil Action No. 95CV0274) (the "Federal Court Action"); WHEREAS, on November 1, 1995, Osborne, et al., commenced an action against James C. Mastandrea ("Mastandrea"), et al., in the Common Pleas Court for Cuyahoga County, State of Ohio (Civil Action No. 297673) (the "State Court Action"); and WHEREAS, each of the Federal Court Action and the State Court Action (together, the "Litigation") is presently pending and being prosecuted and has resulted in substantial distraction of the time and resources of the parties and their representatives from their other business activities; and WHEREAS, the parties believe that it would be in each of their best interests to resolve all issues between them pursuant to the terms of this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual and independent covenants hereinafter set forth and other good and valuable consideration, the parties hereto agree as follows: 1. CERTAIN DEFINITIONS. (a) "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date hereof; provided that the term "Affiliate" shall not include any member of the Fund, other than Osborne. (b) The term "control" when used with respect to any person means the power to direct the management and policies of such person, either directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. (c) The term "party" means the signatories to this Agreement and each of their heirs, successors and administrators. (d) The term "person" includes, without limitation, any individual, 2 corporation, company, limited liability company, partnership, joint venture, group, organization, employee pension, profit sharing or other benefit plan or trust, or any other entity. (e) "Shares" shall mean the shares of beneficial interest $1.00 par value of the Trust. (f) The term "Voting Securities" means all securities of the Trust entitled to vote generally for the election of trustees and all securities or rights convertible into, or exchangeable or exercisable for, any such securities. 2. DISMISSAL OF THE LITIGATION; RELEASE OF CLAIMS. (a) As soon as practicable after execution of this Agreement, the Trust, Mastandrea, Osborne and the Fund shall cause to be signed and filed stipulations of dismissal in the Federal Court Action and in the State Court Action in substantially the forms attached hereto as Exhibits 1 and 2, respectively, and such other documents or pleadings as may be necessary to cause the dismissal with prejudice of all claims and counterclaims asserted against the parties or their trustees, officers, members or Affiliates by each or any of them in the Litigation. The parties acknowledge and agree that nothing contained in this Agreement or in any such stipulations, documents or pleadings shall be deemed an admission by any person of any of the allegations contained in the Litigation. (b) The parties covenant and agree that they shall not attempt to institute litigation or commence any action or proceeding in any court asserting any of the claims or allegations which were or which could have been asserted against the parties or their trustees, officers, members or Affiliates in the Litigation, including any claim for sanctions levied in the Federal Court Action. The enforceability and effectiveness of the covenants contained in this Section 2(b) shall be expressly conditioned upon there being no breach of the provisions of this Agreement by the party or parties against whom any such future action may be brought or maintained. (c) Each of the parties, on behalf of itself or himself and his or its present and former trustees, officers, members and Affiliates, hereby releases and discharges the other parties hereto and such other parties' present and former trustees, officers, representatives, employees, attorneys, advisors, members and Affiliates from any harm, damage, loss, expense, cost, or other liability arising from or relating to any claims, counterclaims, actions, or causes of action, at law or in equity, known or unknown, direct or indirect, suspected or unsuspected, which each now has or hereafter may have by reason of any matter alleged or asserted, or relating to the matters alleged or asserted in the Litigation, except for any actions or causes of action arising by reason of breach of this Agreement. (d) Each of Osborne and the Fund agrees to reimburse, indemnify and hold the Trust harmless from, against and in respect of all losses, 3 claims, damages, liabilities, costs and expenses, including, without limitation, fines, penalties, court costs and reasonable attorneys' fees (collectively, "Loss"), which the Trust may suffer or incur in connection with a breach of Section 2(c) by any present and former officers, members and Affiliates of Osborne or the Fund. The Trust agrees to reimburse, indemnify and hold each of Osborne and the Fund harmless from, against and in respect of all Loss which Osborne and the Fund may suffer or incur in connection with a breach of Section 2(c) by any present and former trustees, officers, and Affiliates of the Trust. (e) In the event that any legal proceedings shall be instituted or any claim or demand shall be given by any person, in respect of which payment may be sought by any party or parties from any other party or parties under the provisions of Section 2(d), the party or parties seeking indemnification (collectively, the "Indemnitee") shall cause written notice of any claim of which it has knowledge which is covered by this Agreement to be forwarded promptly to the party or parties from which indemnification is sought (collectively, the "Indemnitor"). Such notice shall specify the amount and nature of the claim and the reason why it constitutes an indemnified liability, it being understood that failure to so provide notice shall not relieve the other party from liability except to the extent material damages or prejudice results from such failure. (f) In case any action is brought by a third party against any Indemnitee with respect to which such Indemnitee is entitled to indemnification hereunder and notice of such action to the Indemnitor has been given pursuant to Section 2(e), the Indemnitor will be entitled to participate therein, and to the extent it may elect by written notice delivered to the Indemnitee within thirty (30) days after receiving the aforesaid notice from such Indemnitee, to assume the defense thereof with counsel reasonably satisfactory to such Indemnitee. Such Indemnitee shall cooperate with respect to any such participation or defense. Notwithstanding the foregoing, the Indemnitee shall have the right to employ its own counsel in any such case but the fees and expenses of such counsel shall be at the expense of such Indemnitee, unless (i) the employment of such counsel shall have been authorized in writing by the Indemnitor, (ii) the Indemnitor shall not have employed counsel reasonably satisfactory to such Indemnitee to have charge of the defense of such action within thirty (30) days after notice of commencement of the action, or (iii) such Indemnitee shall have reasonably concluded, based upon written advice of counsel that there may be defenses available to it which are different from or additional to those available to the Indemnitor (in which case the Indemnitor shall not have the right to direct the defense of such action on behalf of the Indemnitee with respect to such different defenses) in any of which events such fees and expenses of one additional counsel shall be borne by the Indemnitor. Notwithstanding anything in this Section 2 to the contrary, an Indemnitor shall not be liable for any settlement of any claim or action effected without its written consent, provided, however, that such consent is not unreasonably withheld. 3. PURCHASE OF SHARES. The Trust or its nominee shall purchase from the Fund nine hundred fifty thousand (950,000) Shares (the "Purchased Shares"). 4 The purchase price for such Shares shall be the average of the composite closing trading prices for the Shares on the New York Stock Exchange during the period from January 3, 1995 through December 8, 1995, which price has been determined and agreed by the parties to be $7.50 per Share. The purchase shall occur on a date set by the Trust and noticed in writing mailed or faxed to Osborne at least forty-eight (48) hours in advance, but in no event shall such purchase occur later than January 10, 1996. At the time of purchase, the Fund shall deliver the Purchased Shares in exchange for the Trust's or its nominee's bank or certified check, or at the Fund's option, according to wire transfer instructions provided to the Trust or its nominee in writing, in the amount of Seven Million One Hundred Twenty-Five Thousand Dollars ($7,125,000). It is understood by the parties that the Trust shall also pay to the Fund the dividend declared on the Shares on December 6, 1995. Such payment shall be made at the same time all other Trust shareholders are paid such dividend. 4. REPRESENTATIONS AND WARRANTIES OF THE OSBORNE INVESTORS. Each of the Osborne Investors hereby jointly and severally represent and warrant to the Trust as follows: (a) This Agreement has been duly authorized, executed and delivered by a duly authorized representative of the Fund and by Osborne and constitutes a legal, valid and binding obligation of each of the Osborne Investors. The Fund has taken all necessary action to authorize the execution, delivery and performance of this Agreement; and the Agreement does not conflict with or violate the Fund's charter documents, operating agreement or other agreements or instruments by which the Fund or its properties are bound. (b) The Purchased Shares are owned by the Fund. When delivered to the Trust or its nominee, the Purchased Shares will be free and clear from any liens, claims, pledges and encumbrances of any kind. 5. REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust hereby represents and warrants to each of the Osborne Investors that this Agreement has been duly authorized, executed and delivered by a duly authorized officer of the Trust and constitutes a legal, valid and binding obligation of the Trust. The Trust has taken all necessary action to authorize the execution, delivery and performance of this Agreement; and the Agreement does not conflict with or violate the Trust's Declaration of Trust, By-Laws or other agreements or instruments by which the Trust or its properties are bound. 6. RESTRICTIONS ON CERTAIN ACTIONS BY THE OSBORNE INVESTORS. Each of the Osborne Investors jointly and severally agrees that, during the term of this Agreement, none of the Osborne Investors, nor any Affiliate of the Osborne Investors will, without the prior written consent of the Trust (specifically expressed in a resolution duly adopted by the Board of Trustees of the Trust): (a) except as otherwise expressly permitted by this Agreement, acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise (except pursuant to a stock split, stock dividend, or other pro rata distribution by the Trust to holders of any class of its outstanding Voting Securities), any Voting Securities; 5 (b) take any action alone or in concert with another person to seek to acquire control of or influence the management, Board of Trustees or policies of the Trust; (c) (i) make or participate in any "solicitation" as defined in Regulation 14A under the Exchange Act of proxies or consents with respect to any Voting Securities or make any public or private statements to third parties in connection with the solicitation of such proxies or consents by others including actions described in Rule 14a-1(l)(2)(iv) under the Exchange Act, (ii) become a participant in any "election contest" relating to the election of trustees of the Trust described in Rule 14a-11 under the Exchange Act, (iii) call or seek to call, directly or indirectly, any special meeting of shareholders of the Trust for any reason whatsoever, (iv) seek, request, or take any action to obtain or retain, directly or indirectly, any list of holders of any Voting Securities, (v) assist or encourage any attempt by any other person to do or seek the foregoing, (vi) initiate, propose or otherwise solicit holders of Voting Securities for the approval of one or more shareholder proposals at any time, (vii) induce or attempt to induce any other person to initiate any shareholder proposal relating to the Trust, or (viii) execute any written consent in lieu of a meeting; (d) form, join or in any way participate in a "group," as such term is defined in Regulation 13D under the Exchange Act, with respect to any Voting Securities of the Trust; (e) seek or propose any merger, consolidation, business combination, tender or exchange offer, sale or purchase or transfer of assets or securities, restructuring, recapitalization or similar transaction of or involving the Trust; (f) enter into any arrangements, understandings or agreements (whether written or oral) with, or advise, assist or encourage, any other person in connection with any of the foregoing; (g) sell, transfer or otherwise dispose of any Voting Securities except as follows: (i) sales in privately negotiated transactions of not more than one percent (1%) of the then-outstanding Voting Securities to any person (including Affiliates of such person) in any single transaction or series of transactions; or (ii) sales in normal open-market transactions, executed by or through a registered broker or dealer who receives no more than the usual and customary broker's commission, which do not involve the sale of more than twenty-five percent (25%) of the average trading volume in the Shares over the prior four (4) weeks; provided, that any Osborne Investor or any Affiliate may sell more than 1% of the then-outstanding Voting Securities in the event of a merger, consolidation, business combination, tender or exchange offer, 6 restructuring, recapitalization or similar transaction of or involving the Trust that is approved by the Trustees. 7. VOTING. Unless the Trust otherwise agrees in writing, during the Term of this Agreement, the Osborne Investors and any of their Affiliates which beneficially own any Voting Securities entitled to vote at a meeting of the Trust's shareholders, shall (i) vote, and shall cause their Affiliates to vote, all Voting Securities beneficially owned by them in the election of trustees of the Trust and on all other matters to be voted on by the holders of Voting Securities in the manner recommended by management of the Trust and (ii) be present or be represented by proxy at each such meeting so that all such Voting Securities may be counted for the purpose of determining the presence of a quorum. Each of the Osborne Investors hereby grants, during the term of this Agreement, to the Chief Executive Officer of the Trust, a limited power of attorney to vote any and all Shares owned by the Osborne Investors to the extent such Shares have not been voted in accordance with this Section 7. 8. COVENANTS OF OSBORNE. Osborne agrees: (a) that he will deliver copies to the Trust of monthly broker transaction reports that reflect any and all transactions by the Osborne Investors in Shares; (b) that he will not take any action that would result in distribution of Shares to members of the Fund; and (c) that in the event the Osborne Investors receive any margin calls with respect to such Shares, that Osborne will promptly notify the Trust and if the Osborne Investors fail to meet the margin call, the Osborne Investors will take the necessary action to allow the Trust to purchase any Shares subject to such margin calls at the then-current market price, to the extent that the Osborne Investors do not meet such margin calls. 9. SPECIFIC ENFORCEMENT. Each of the Trust, on the one hand, and each of the Osborne Investors, on the other, acknowledges and agrees that the other would not have an adequate remedy at law and would be irreparably harmed in the event that any of the material provisions of this Agreement were not performed in accordance with their specific terms or this Agreement were otherwise materially breached. It is accordingly agreed that the Trust, on the one hand, and the Osborne Investors, on the other, shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to specifically enforce this Agreement and the material terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction, in addition to any other remedy to which such party may be entitled, at law or in equity. Each party hereby consents to personal jurisdiction in any such action brought in the United States District Court for the Northern District of Ohio, or in any court of the State of Ohio having subject matter jurisdiction, to service of process upon them in the manner set forth in Section 14(c) hereof, to reasonable expedited proceedings for injunctive and other relief, and hereby waives any venue objections therein. 10. TERM. This Agreement shall commence on the date hereof and shall terminate on the tenth anniversary of the date hereof. 11. ENTIRE AGREEMENT. This Agreement contains the entire agreement and understanding of the parties with respect to the subject matter hereof. 7 12. LIMITATION OF LIABILITY. Notwithstanding anything set forth herein to the contrary, this Agreement is made and executed on behalf of the Trust, by its officers on behalf of the Trustees thereof, and none of the Trustees or officers or any additional or successor officers or Trustees or any beneficiary, employee or agent of the Trust shall have any liability in their personal or individual capacity, but instead the Osborne Investors shall look solely to the real property or assets of the Trust for satisfaction of claims of any nature arising under or in connection with this Agreement. 13. LIMITATION OF LIABILITY. Notwithstanding anything set forth herein to the contrary, this Agreement is made and executed on behalf of the Fund, by its officers, and Osborne, and none of the members of the Fund or any additional or successor members of the Fund, except Osborne, shall have any liability in their personal or individual capacity, but instead the Trust shall look solely to the real property or assets of the Fund and Osborne for satisfaction of claims of any nature arising under or in connection with this Agreement. 14. MISCELLANEOUS. (a) This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the successors and permitted assigns of the parties hereto (it being understood that no person who acquires any Voting Securities from any of the Osborne Investors in a transaction permitted by Section 6(g) hereof shall be bound by any provision of this Agreement). Except as otherwise expressly provided herein, this Agreement shall not be assignable. (b) This Agreement may not be modified, amended, altered or supplemented, except by a written instrument duly executed by each of the parties hereto. (c) Except as otherwise expressly provided herein, all notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given if so given) by personal delivery, cable, telegram or fax, or by mail (registered or certified mail, postage prepaid, return receipt requested) to the respective parties as follows: If to any of the Osborne Investors, to: Richard M. Osborne 7001 Center Street Mentor, OH 44060 with a copy to: Byron Krantz Kohrman, Jackson & Krantz 20th Floor One Cleveland Center Cleveland, OH 44114 8 If to the Trust, to: First Union Real Estate Equity & Mortgage Investments 55 Public Square Suite 1900 Cleveland, OH 44113 Attention: James C. Mastandrea Paul Levin with a copy to: Mary Ann Jorgenson Squire, Sanders & Dempsey 4900 Society Center 127 Public Square Cleveland, OH 44114 or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (d) This Agreement shall be governed by and construed in accordance with the law of the State of Ohio. 9 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the parties hereto or their duly authorized officer or representative as of the date and year first above written. FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS By: /s/ James C. Mastandrea ------------------------------------ James C. Mastandrea Chief Executive Officer and Chairman STATE OF OHIO ) ) SS: COUNTY OF CUYAHOGA ) I, Paul F. Levin, a duly licensed Notary Public on and for said county and state, do hereby attest that on the 13th day of December, 1995, personally appeared before me the above-named James C. Mastandrea, Chief Executive Officer and Chairman of First Union Real Estate Equity and Mortgage Investments, who acknowledged to me that he is duly authorized to enter into the foregoing Settlement and Standstill Agreement on behalf of First Union Real Estate Equity and Mortgage Investments; that he had read the foregoing Settlement and Standstill Agreement; and that he was signing it as his own free will and act; and who signed the said Settlement and Standstill Agreement in my presence. IN WITNESS WHEREOF, I have hereunto set my hand and official seal as of the date set forth above. /s/ Paul F. Levin ------------------- NOTARY PUBLIC My Commission Expires: PAUL F. LEVIN, Attorney at Law NOTARY PUBLIC-State of Ohio My Commission Has No Expiration Date. Section 147.03 R.C. 10 /s/ Richard M. Osborne ----------------------- RICHARD M. OSBORNE STATE OF OHIO ) ) SS: COUNTY OF CUYAHOGA ) I, Robert A. Fuerst, a duly licensed Notary Public on and for said county and state, do hereby attest that on the 13th day of December, 1995, personally appeared before me the above-named Richard M. Osborne; who acknowledged to me that he had read the foregoing Settlement and Standstill Agreement; and that he was signing it as his own free will and act; and who signed the said Settlement and Standstill Agreement in my presence. IN WITNESS WHEREOF, I have hereunto set my hand and official seal as of the date set forth above. /s/ Robert A. Fuerst --------------------- NOTARY PUBLIC My Commission Expires: Robert A. Fuerst, Attorney NOTARY PUBLIC-STATE OF OHIO My commission has no expiration date. Section 147.03 R.C. TURKEY VULTURE FUND XIII, LTD. By: /s/ Richard M. Osborne ------------------------------ Richard M. Osborne, Managing Member STATE OF OHIO ) ) SS: COUNTY OF CUYAHOGA ) 11 I, Robert A. Fuerst, a duly licensed Notary Public on and for said county and state, do hereby attest that on the 13th day of December, 1995, personally appeared before me the above-named Richard M. Osborne, Managing Member of Turkey Vulture Fund XIII, Ltd., who acknowledged to me that he is duly authorized to enter into the foregoing Settlement and Standstill Agreement on behalf of Turkey Vulture Fund XIII, Ltd.; that he had read the foregoing Settlement and Standstill Agreement; and that he was signing it as his own free will and act; and who signed the said Settlement and Standstill Agreement in my presence. IN WITNESS WHEREOF, I have hereunto set my hand and official seal as of the date set forth above. /s/ Robert A. Fuerst --------------------- NOTARY PUBLIC My Commission Expires: Robert A. Fuerst, Attorney NOTARY PUBLIC-STATE OF OHIO My commission has no expiration date. Section 147.03 R.C. 12 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION FIRST UNION REAL ESTATE EQUITY ) CIVIL ACTION NO. 1:95CV0274 AND MORTGAGE INVESTMENTS, ) ) JUDGE LESLEY BROOKS WELLS Plaintiff, ) (Magistrate Judge Streepy) ) v. ) ) RICHARD M. OSBORNE, et al., ) ) Defendants. ) STIPULATION OF SETTLEMENT By and through their undersigned counsel, the parties hereto stipulate and agree that all claims and counterclaims by each of them against any or all of the others of them herein are hereby settled and dismissed with prejudice, each party to bear its own costs. Respectfully submitted, ______________________________________ Frances Floriano Goins (#0018631) SQUIRE, SANDERS & DEMPSEY 4900 Society Center, 127 Public Square Cleveland, Ohio 44114-1304 (216/479-8500) Attorney for Plaintiff and Counterclaim Defendants First Union Real Estate Equity and Mortgage Investments and J. C. Mastandrea EXHIBIT 1 13 _______________________________ Byron S. Krantz (#00031431) KOHRMAN, JACKSON & KRANTZ One Cleveland Center, 20th Fl. Cleveland, Ohio 44114 (216)696-8700 Attorney for Defendants Richard M. Osborne and Turkey Vulture Fund XIII, Ltd. IT IS SO ORDERED. DATE:________________ _________________________________________ UNITED STATES DISTRICT COURT JUDGE 14 IN THE COURT OF COMMON PLEAS CUYAHOGA COUNTY, OHIO RICHARD M. OSBORNE, et ano., ) CASE NO. 297673 ) Plaintiffs, ) JUDGE RICHARD J. McMONAGLE ) v. ) ) JAMES C. MASTANDREA, et al., ) ) STIPULATION OF SETTLEMENT ) Defendants. ) By and through their undersigned counsel, the parties hereto stipulate and agree that all claims herein are hereby settled and dismissed with prejudice, each party to bear its own costs. Respectfully submitted, _____________________________ Byron S. Krantz (#00031431) KOHRMAN, JACKSON & KRANTZ One Cleveland Center, 20th Fl. Cleveland, Ohio 44114 (216)696-8700 Attorney for Plaintiffs EXHIBIT 2 15 ______________________________________ Frances Floriano Goins (0018631) SQUIRE, SANDERS & DEMPSEY 4900 Society Center, 127 Public Square Cleveland, Ohio 44114-1304 (216/479-8500) Attorney for Defendants IT IS SO ORDERED. DATE:____________________ ____________________________________ JUDGE EX-7.18 3 TURKEY VULTURE FUND XIII, LTD. EX-7.18 NEWS RELEASE FOR IMMEDIATE RELEASE Contact: Thomas T. Kmiecik, (216) 781-4030 Richard M. Osborne (216) 951-1111 FIRST UNION AND OSBORNE SETTLE DISPUTES CLEVELAND, OHIO, December 14, 1995 -- First Union Real Estate Equity and Mortgage Investments and Richard M. Osborne and Turkey Vulture Fund XIII, Ltd. today announced that they have entered into an agreement settling all claims between them and providing for the dismissal of the parties' pending litigation. The settlement agreement provides for First Union's purchase from Mr. Osborne and the Fund of 950,000 shares of beneficial interest of First Union at the average 1995 trading price through December 8 of $7.50 per share. Under the Agreement, Mr. Osborne and the Fund have also agreed not to acquire additional shares of First Union and, in the future, to vote their remaining shares as recommended by First Union management. Mr. Osborne stated, "I have met with First Union's management and I agree with their philosophy and the direction of First Union's strategic plan." James C. Mastandrea, Chairman and Chief Executive Officer of First Union, stated, "We are pleased to put this litigation behind us and to focus 100% of our energies and resources on repositioning our company and enhancing and creating value for our shareholders." First Union and Mr. Osborne also announced that Mr. Osborne may, subject to normal contingencies, purchase on market terms certain office property owned by First Union. Details will be provided if a transaction is finalized. First Union is an equity real estate investment trust specializing in retail and apartment properties with ownership interests in commercial office buildings. ### -----END PRIVACY-ENHANCED MESSAGE-----