Exhibit 10.18
SUBSCRIPTION AGENCY AGREEMENT
This SUBSCRIPTION AGENCY AGREEMENT (this "Agreement") is entered into as of
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this ____ day of ____________, 1997 among Security Capital Atlantic
Incorporated, a Maryland corporation ("ATLANTIC"), The First National Bank of
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Boston, as subscription agent (the "Subscription Agent"), and The First National
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Bank of Boston, as transfer agent and registrar.
WHEREAS, ATLANTIC has caused a Registration Statement on Form S-11 (File
No. 333-27067) (the "Registration Statement") to be filed with the Securities
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and Exchange Commission (the "Commission") under the Securities Act of 1933, as
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amended (the "Act"), relating to a proposed distribution by ATLANTIC of
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transferable subscription rights (the "Rights") and sale of newly issued shares
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of common stock, par value $.01 per share (the "Shares"), of ATLANTIC upon the
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exercise of such Rights or otherwise (the "Rights Offering");
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WHEREAS, ATLANTIC has caused the prospectus contained in the Registration
Statement to be prepared and filed with the Commission under the Act (the
"Prospectus");
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WHEREAS, the Rights will be distributed to holders of record of Shares as
of the close of business on _____________, 1997, (the "Record Date") at a ratio
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of one Right for each Share held on the Record Date;
WHEREAS, Rights holders will be entitled to purchase one Share at a price
of $ (the "Subscription Price") for each ________ Rights held;
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WHEREAS, ATLANTIC has authorized the issuance of an aggregate number of
_________ authorized and unissued Shares (the "Underlying Shares") equal to
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one-__________ of the aggregate number of Rights to be distributed pursuant to
the Rights Offering; and
WHEREAS, ATLANTIC desires the Subscription Agent and the transfer agent and
registrar to act on its behalf in connection with the Rights Offering as set
forth herein, and the Subscription Agent and the transfer agent and registrar
are willing so to act;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
SECTION 1. Appointment of Subscription Agent. ATLANTIC hereby appoints
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the Subscription Agent to act as agent for ATLANTIC in accordance with the
instructions set forth in this Agreement, and the Subscription Agent hereby
accepts such appointment. ATLANTIC may from time to time appoint such co-
subscription agents as it may deem necessary or desirable.
SECTION 2. Issuance of Securities.
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(a) ATLANTIC has authorized the issuance of the Rights and, following the
Record Date, will issue such Rights to holders of record of Shares as of the
close of business on the Record Date at a ratio of one Right for each Share held
on the Record Date. The Subscription Agent shall provide the transfer agent and
registrar such assistance as ATLANTIC may require in order to effect the
distribution of the Rights to holders of record of Shares as of the close of
business on the Record Date, including assistance in determining the number of
Rights to be distributed to each such record holder and assistance in
distributing the Rights Certificates (as defined below) evidencing the Rights
and all other ancillary documents.
(b) ATLANTIC has authorized the issuance of and will hold in reserve the
Underlying Shares, and upon the valid exercise of Rights, ATLANTIC will issue
Underlying Shares to validly exercising Rights holders as set forth in the
Prospectus.
SECTION 3. Subscription Right; Rights Certificates.
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(a) Each holder of Rights, upon the valid exercise thereof pursuant to
Section 7 hereof, is entitled to purchase from ATLANTIC one Share at the
Subscription Price for each ________ Rights held.
(b) The Rights shall be evidenced by certificates (the "Rights
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Certificates"). The Rights Certificates (and the form of election to exercise
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or transfer Rights to be printed on the reverse thereof) shall be substantially
in the form attached as Exhibit A hereto. The Rights Certificates shall be
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fully transferable.
SECTION 4. Signature and Registration.
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(a) The Rights Certificates shall be executed on behalf of ATLANTIC by its
Co-Chairman and by its Secretary by facsimile signature. Any Rights Certificate
may be signed on behalf of ATLANTIC by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of ATLANTIC to
sign such Rights Certificate, even if at the date of the execution of this
Agreement or the date of the actual issuance of such Rights Certificate, any
such person is not such an officer.
(b) The transfer agent and registrar will keep or cause to be kept, at its
office designated for such purpose, books for registration and transfer of the
Rights issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights and the number of Rights evidenced by each
outstanding Rights Certificate.
SECTION 5. Division, Combination and Exchange of Rights Certificates;
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Lost, Stolen, Destroyed or Mutilated Rights Certificates.
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(a) Subject to the provisions of Section 9 hereof, any Rights Certificate,
or any two or more Rights Certificates, may be divided, combined or exchanged
for any number of Rights Certificates or for a single Rights Certificate of
different denomination; provided, however, that the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates so issued shall not
exceed the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered in exchange therefor. The foregoing
notwithstanding, a bank, trust company, securities dealer or broker holding
Shares on the Record Date for more than one beneficial owner may, by submitting
a written request prior to 5:00 p.m., Eastern Daylight Time, on _______________,
1997 and, upon proper showing to the Subscription Agent, exchange its Rights
Certificate to obtain Rights Certificates for the number of Rights which each
such beneficial owner would have been entitled to receive pursuant to Section
2(a) hereof had each such beneficial owner been the holder of record of such
beneficial owner's Shares on the Record Date; provided, however, that ATLANTIC
reserves the right to refuse to issue any such Rights Certificate or Rights
Certificates if such issuance would be inconsistent with the principle that each
beneficial owner's holding will be rounded up to the nearest whole Right. No
Rights Certificates evidencing fractional Rights will be issued upon division,
combination or exchange of other Rights Certificates, and any instructions to
divide, combine or exchange Rights Certificates which would result in the
issuance of Rights Certificates evidencing fractional Rights shall be rejected.
(b) Any holder desiring to divide, combine or exchange any Rights
Certificate or Rights Certificates shall make such requests in writing to the
Subscription Agent, and shall surrender the Rights Certificate or Rights
Certificates to be divided, combined or exchanged to the Subscription Agent.
Thereupon the Subscription Agent shall deliver to the person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
In all cases of transfer by an attorney-in-fact, the original power of attorney,
duly approved, or a copy thereof, duly certified, shall be deposited and remain
with the Subscription Agent. In all cases of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority satisfactory to the Subscription Agent shall be
produced and may be required to be deposited and to remain with the Subscription
Agent in its discretion. ATLANTIC may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
division, combination or exchange of Rights Certificates.
(c) Upon receipt by ATLANTIC and the Subscription Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
and/or security satisfactory to them, which may be in the form of an open
penalty bond, and reimbursement to ATLANTIC and the Subscription Agent of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Rights Certificate if mutilated, the transfer agent and registrar will make
and deliver a new Rights Certificate of like denomination to the Subscription
Agent for delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated. If required by ATLANTIC or the
Subscription Agent an indemnity bond must be sufficient in the judgment of
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both to protect ATLANTIC, the Subscription Agent or any agent thereof from any
loss which any of them may suffer if a Rights Certificate is replaced.
SECTION 6. Subsequent Issuance of Rights Certificates. Subsequent to
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their original issuance, no Rights Certificates shall be issued except (a)
Rights Certificates issued upon any transfer, division, combination or exchange
of Rights pursuant to Section 5(a), Section 5(b) or Section 10 hereof, (b)
Rights Certificates issued in replacement of lost, stolen, destroyed or
mutilated Rights Certificates pursuant to Section 5(c) hereof and (c) Rights
Certificates issued pursuant to Section 7(h) hereof upon the partial exercise of
any Rights Certificate to evidence the unexercised portion of such Rights
Certificate.
SECTION 7. Exercise of Rights; Exercise Price; Expiration Date.
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(a) The holder of any Rights Certificate may exercise some or all of the
Rights evidenced thereby (but not in amounts other than _______ Rights or
integral multiples thereof) by delivering to the Subscription Agent, prior to
5:00 p.m., Eastern Daylight Time, on ______________, 1997 (the "Expiration
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Date"), the properly completed and duly executed Rights Certificate, together
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with payment of the full Subscription Price for each Share subscribed for
pursuant to the exercise of such Rights. In the case of holders of Rights that
are held of record through The Depository Trust Company ("DTC"), such Rights may
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be exercised by instructing DTC to transfer Rights from the DTC account of such
holder to the DTC account of the Subscription Agent, together with payment of
the Subscription Price for each Share subscribed for pursuant to the exercise of
such Rights. Alternatively, the holder of any Rights Certificate may exercise
the Rights evidenced thereby by effecting compliance with the procedures for
guaranteed delivery set forth in Section 7(b) hereof.
(b) If, prior to 5:00 p.m., Eastern Daylight Time, on the Expiration Date,
the Subscription Agent has received a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form distributed with the
Rights Certificates specifying the name of the holder of Rights and the number
of Shares subscribed for (stating separately the number of Shares subscribed for
pursuant to the exercise of Rights and the number of Shares subscribed for
pursuant to the Oversubscription Privilege) and guaranteeing that the properly
completed and duly executed Rights Certificate and payment of the full
Subscription Price for each Share subscribed for will be delivered to the
Subscription Agent within three New York Stock Exchange, Inc. ("NYSE") trading
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days after the Expiration Date, such subscription may be accepted; however, the
Subscription Agent shall withhold the certificates for the Shares until receipt
of the properly completed and duly executed Rights Certificate and payment of
such amount within such time period. The Notice of Guaranteed Delivery must be
guaranteed by a commercial bank or a trust company having an office, branch or
agency in the United States, or by a member of a Stock Transfer Association
approved medallion program such as STAMP, SEMP or MSP (an "Eligible
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Institution").
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(c) The Rights shall expire at 5:00 p.m., Eastern Daylight Time, on the
Expiration Date.
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(d) The Subscription Price shall be payable in United States currency (i)
by personal check, cashier's check, bank draft or money order drawn on a bank
located in the United States payable to "ATLANTIC Escrow Account" or (ii) by
wire transfer of funds to the account maintained by the Subscription Agent for
such purpose at The First National Bank of Boston, ABA No. ▇▇▇▇▇▇▇▇▇. The
Subscription Price shall be deemed to have been received by the Subscription
Agent only upon (i) clearance of any personal check, (ii) receipt by the
Subscription Agent of any cashier's check, bank draft or money order or (iii)
receipt of good funds in the Subscription Agent's account designated above, in
payment of the Subscription Price.
(e) If an exercising Rights holder has not indicated the number of Rights
being exercised, or if the Subscription Price payment forwarded by such holder
to the Subscription Agent is not sufficient to purchase the number of Shares
subscribed for, the Rights holder will be deemed to have exercised the maximum
number of whole Rights which may be exercised for the Subscription Price
delivered to the Subscription Agent and, to the extent that the Subscription
Price payment delivered by an exercising Rights holder exceeds the Subscription
Price multiplied by the maximum number of whole Rights which may be exercised
(such excess being the "Subscription Excess"), the Subscription Agent, as soon
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as practicable after such exercise of Rights, shall mail to such Rights holder
the Subscription Excess paid by such holder without interest or deduction.
(f) A holder of Shares on the Record Date who validly exercises all of
such holder's Rights will have the further right (the "Oversubscription
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Privilege") to oversubscribe for additional Shares, at the Subscription Price,
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to the extent all of the Underlying Shares have not been purchased through the
exercise of Rights (except for Shares underlying Rights issued to Security
Capital Group Incorporated, which will not be available for oversubscriptions).
Holders of Shares so entitled to exercise the Oversubscription Privilege may
subscribe for as many Shares as desired (subject to the maximum number of
Underlying Shares) in the manner set forth in this Section 7. If the demand for
Shares pursuant to the Oversubscription Privilege exceeds the number of Shares
available, holders of Shares on the Record Date shall participate in the
Oversubscription Privilege (up to, but not exceeding, the number of Shares
oversubscribed for by each such holder) pro rata based upon the number of Rights
exercised by each such person (without regard to the number of Shares
oversubscribed for by each such person under the Oversubscription Privilege),
with fractional Shares adjusted in any manner ATLANTIC deems appropriate.
(g) The Subscription Agent shall pay to, credit to the account of or
otherwise transfer to ATLANTIC all funds received by the Subscription Agent in
payment of the Subscription Price for Shares subscribed for pursuant to the
exercise of Rights and the Oversubscription Privilege, as soon as practicable
following the Expiration Date and any funds received pursuant to the
Oversubscription Privilege or from subscribers as provided in Section 8(b) which
are not used to purchase Shares shall be returned to the appropriate subscriber.
If the Rights Offering is withdrawn or terminated for any reason, the
Subscription Agent will return to each subscriber all funds received from such
subscriber, together with a pro rata share of any net interest thereon. No
interest will be paid on funds returned due to the proration of
oversubscriptions
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(either pursuant to the Oversubscription Privilege or the sale to third-party
purchasers of Shares for which subscriptions are not received or accepted) or
otherwise.
(h) In case the holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing the number
of Rights remaining unexercised shall be issued by the Subscription Agent to the
registered holder of such Rights Certificate or to his duly authorized assigns,
subject to the provisions of Section 9 hereof.
(i) The Subscription Agent is authorized to accept Rights Certificates
(other than Rights Certificates delivered in accordance with the procedure for
guaranteed delivery set forth in Section 7(b)), or transfers of Rights to its
account at DTC, received prior to 5:00 p.m., Eastern Daylight Time, on the
Expiration Date.
(j) Once a holder of Rights has exercised a Right, such exercise may not
be revoked.
(k) Unless a Rights Certificate (i) provides that the Shares to be issued
pursuant to the exercise of Rights represented thereby are to be registered in
the name and delivered to the holders of such Rights or (ii) is submitted for
the account of an Eligible Institution, signatures on such Rights Certificate
must be guaranteed by an Eligible Institution.
SECTION 8. Delivery of Share Certificates.
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(a) As soon as practicable after the Expiration Date and the receipt of
all required documents and payment in full of the Subscription Price, the
Subscription Agent shall deliver to each exercising Rights holder certificates
representing the Shares purchased pursuant to the exercise of Rights or the
Oversubscription Privilege.
(b) In the event that ATLANTIC or Security Capital Markets Group
Incorporated, a Delaware corporation ("Capital Markets Group"), place with
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third-party purchasers any of the Underlying Shares not subscribed for pursuant
to the exercise of Rights or the Oversubscription Privilege, ATLANTIC and
Capital Markets Group will give the Subscription Agent not less than forty-eight
hours' notice in writing as to the number of Shares which are to be issued,
together with a list of the names and denominations in which certificates for
such Shares are to be issued. As soon as practicable thereafter, the
Subscription Agent shall deliver to each such third-party purchaser certificates
representing such Shares.
SECTION 9. Fractional Rights and Shares.
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(a) ATLANTIC shall not issue fractions of Rights nor shall the
Subscription Agent distribute Rights Certificates which evidence fractional
Rights. All questions as to the validity and eligibility of any rounding of
fractional Rights shall be determined by ATLANTIC in its sole discretion, which
determinations shall be final and binding.
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(b) ATLANTIC shall not issue fractional Shares to exercising Rights
holders upon the exercise of Rights. ATLANTIC may adjust for fractional Shares
resulting from the exercise of the Oversubscription Privilege in any manner it
deems appropriate.
SECTION 10. Transfer of Rights. Any holder may transfer (a) all of the
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Rights evidenced by a Rights Certificate by properly endorsing the Rights
Certificate for transfer in accordance with the instructions accompanying the
Rights Certificate or (b) part of the Rights evidenced by a Rights Certificate
(but not fractional Rights) by delivering to the Subscription Agent such Rights
Certificate properly endorsed for transfer, with instructions to register the
Rights to be transferred in the name of the transferee (and to issue a new
Rights Certificate to the transferee evidencing such transferred Rights), and
with signatures guaranteed by an Eligible Institution. In such event, the
Subscription Agent shall issue a new Rights Certificate evidencing the balance
of the Rights to the holder or, if so instructed, to an additional transferee.
SECTION 11. Foreign Shareholders. The Subscription Agent shall not mail
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Rights Certificates to holders of Shares whose addresses are outside the United
States, Mexico and the province of Ontario, Canada. The Subscription Agent
shall hold such Rights Certificates for the account of such holders and upon
notice from such holders shall sell the Rights, if feasible, on their behalf.
If no instructions have been received prior to 10:00 a.m., Eastern Daylight
Time, on the fifth business day immediately preceding the Expiration Date, the
Subscription Agent shall sell such Rights, if feasible, and shall remit the net
proceeds, if any, to such holders promptly following the Expiration Date. If
such Rights can be sold, sales of such Rights will be deemed to have been
effected at the weighted-average price received by the Subscription Agent for
the sale of all Rights sold by the Subscription Agent on that day pursuant to
this Section 11, less any applicable brokerage commissions, taxes and other
expenses, provided that ATLANTIC shall pay the fees of the Subscription Agent in
respect of such sales. In connection therewith, the Subscription Agent agrees
that it (a) is acting solely on behalf and for the benefit of such holders who
wish to sell their Rights and not as agent, or on behalf, of ATLANTIC, (b) shall
not accept any instructions from ATLANTIC with respect to the timing of such
sales, (c) shall effect all such sales in accordance with applicable law and (d)
shall not effect any such sales in a manner that would cause a material adverse
change in the market for the Rights.
SECTION 12. Reports. The Subscription Agent shall notify both ATLANTIC
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and its designated representatives by telephone as requested during the period
commencing with the mailing of Rights Certificates and ending on the Expiration
Date (and in the case of guaranteed deliveries pursuant to Section 7(b), the
period ending three business days after the Expiration Date), which notice shall
thereafter be confirmed in writing, of (a) the number of Rights exercised on the
day of such request, (b) the number of Shares subscribed for pursuant to the
exercise of Rights and the number of such Shares for which payment has been
received on such day, (c) the number of Shares subscribed for pursuant to the
Oversubscription Privilege on such day, (d) the number of Shares subject to
guaranteed delivery pursuant to Section 7(b) on such day, (e) the number of
Rights for which defective exercises have been received on such day, (f) the
number of Shares for which subscription forms have been received from third-
party purchasers as contemplated by Section 8(b) on such day and (g) cumulative
totals derived from
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the information set forth in clauses (a) through (f) above. At or before 5:00
p.m., Eastern Daylight Time, on the first business day following the Expiration
Date, the Subscription Agent shall certify in writing to ATLANTIC the cumulative
totals through the Expiration Date derived from the information set forth in
clauses (a) through (f) above. The Subscription Agent shall also maintain and
update a listing of holders who have fully or partially exercised their Rights,
holders who have transferred their Rights and their transferees and holders who
have not exercised their Rights. The Subscription Agent shall provide ATLANTIC
or its designated representatives with the information compiled pursuant to this
Section 12 as any of them shall request. The Subscription Agent hereby
represents, warrants and agrees that the information contained in each
notification referred to in this Section 12 shall be accurate in all material
respects.
SECTION 13. Future Instructions and Interpretation.
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(a) All questions as to the timeliness, validity, form and eligibility of
any exercise of Rights will be determined by ATLANTIC, which determinations
shall be final and binding. ATLANTIC in its sole discretion may waive any defect
or irregularity, permit a defect or irregularity to be corrected within such
time as it may determine or reject the purported exercise of any Right.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as ATLANTIC determines
in its sole discretion. Neither ATLANTIC nor the Subscription Agent shall be
under any duty to give notification of any defect or irregularity in connection
with the submission of Rights Certificates or incur any liability for failure to
give such notification.
(b) The Subscription Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
authorized officer of ATLANTIC and to apply to such officers for advice or
instructions in connection with its duties and it shall not be liable for any
action taken or omitted by it in good faith in accordance with the instructions
of any such officer.
SECTION 14. Payment of Taxes. ATLANTIC covenants and agrees that it will
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pay when due and payable all documentary, stamp and other taxes, if any, which
may be payable in respect of the issuance or delivery of any Rights or Shares;
provided, however, that ATLANTIC shall not be liable for any tax liability
arising out of any transaction which results in, or is deemed to be, an exchange
of Rights or Shares or a constructive dividend with respect to the Rights or
Shares; and provided, further, that ATLANTIC shall not be required to pay any
tax or other governmental charge which may be payable in respect of any transfer
involved in the transfer or delivery of any Rights Certificate or the issuance
or delivery of certificates for Shares in a name other than that of the
registered holder of the Rights Certificate evidencing the Rights exercised or
transferred, and the Subscription Agent shall not register any such transfer or
issue any such certificate until such tax or governmental charge, if required,
shall have been paid.
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SECTION 15. Cancellation and Destruction of Rights Certificates. All
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Rights Certificates surrendered for the purpose of exercise, division,
combination, exchange or transfer shall be canceled by the Subscription Agent,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by this Agreement. ATLANTIC shall deliver to the Subscription Agent
for cancellation, and the Subscription Agent shall cancel, any other Rights
Certificate purchased or acquired by ATLANTIC otherwise than upon the exercise
thereof. The Subscription Agent shall deliver all canceled Rights Certificates
to ATLANTIC, or shall, at the written request of ATLANTIC, destroy such canceled
Rights Certificates, and in such case shall deliver a certificate of destruction
thereof to ATLANTIC.
SECTION 16. Right of Action. All rights of action in respect of this
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Agreement are vested in ATLANTIC and the respective registered holders of the
Rights Certificates, and any registered holder of any Rights Certificate,
without the consent of the Subscription Agent or the holder of any other Rights
Certificate, may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against ATLANTIC to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement.
SECTION 17. Concerning the Subscription Agent; Indemnification.
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(a) ATLANTIC agrees to pay to the Subscription Agent compensation in
accordance with the schedule of fees attached hereto as Exhibit B for all
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services rendered by it hereunder and, from time to time, on demand of the
Subscription Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder.
(b) ATLANTIC also agrees to indemnify and hold the Subscription Agent
harmless against any losses, claims, damages, liabilities, costs or expenses
(including reasonable fees and disbursements of legal counsel) which the
Subscription Agent may incur or become subject to arising from or out of any
claim or liability resulting from actions taken as Subscription Agent pursuant
to this Agreement; provided, however, that such covenant and agreement does not
extend to, and the Subscription Agent shall not be indemnified or held harmless
with respect to, losses, claims, damages, liabilities, costs or expenses
incurred or suffered by the Subscription Agent as a result, or arising out, of
the Subscription Agent's negligence, misconduct, bad faith or breach of this
Agreement. In connection therewith: (i) in no case shall ATLANTIC be liable
with respect to any claim against the Subscription Agent unless the Subscription
Agent shall have notified ATLANTIC in writing of the assertion of such claim
against it or of any action commenced against it with respect to such claim,
promptly after the Subscription Agent shall have notice of a claim or shall have
been served with the summons or other legal process giving information as to the
nature and basis of the claim; (ii) ATLANTIC shall be entitled to participate at
its own expense in the defense of any suit brought to enforce any such claim
and, if ATLANTIC so elects, it shall assume the defense of any such suit, in
which event ATLANTIC shall not be liable for the fees and expenses of any
additional counsel that the Subscription Agent may retain, so long as ATLANTIC
shall retain counsel reasonably
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satisfactory to the Subscription Agent, in the exercise of the Subscription
Agent's reasonable judgment, to defend such suit; and (iii) the Subscription
Agent agrees not to settle any litigation in connection with any claim or
liability with respect to which it may seek indemnification from ATLANTIC
without the prior written consent of ATLANTIC.
(c) The Subscription Agent shall be protected and shall incur no liability
for or in respect of any action taken or omitted by it without negligence,
misconduct, bad faith or breach of this Agreement in connection with its
administration of this Agreement in reliance upon any document reasonably
believed by it to be genuine and to be executed and, where necessary,
acknowledged or guaranteed by the proper person or persons.
(d) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Subscription Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Subscription Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
SECTION 18. Merger or Consolidation of Subscription Agent. Any
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corporation into which the Subscription Agent or any successor Subscription
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Subscription Agent or
any successor Subscription Agent shall be a party, or any corporation succeeding
to the corporate trust or stock transfer business of the Subscription Agent or
any successor Subscription Agent, shall be the successor to the Subscription
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
SECTION 19. Duties of Subscription Agent. The Subscription Agent
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undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which ATLANTIC and the holders of
Rights Certificates by their acceptance thereof shall be bound:
(a) The Subscription Agent may consult with legal counsel (who may be, but
is not required to be, legal counsel for ATLANTIC), and the advice or opinion of
such counsel shall be full and complete authorization and protection to the
Subscription Agent as to any action taken or omitted by it in good faith and in
accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Subscription Agent shall deem it necessary or desirable that any fact or matter
be proved or established by ATLANTIC prior to taking or omitting to take any
action hereunder, such fact or matter (unless other evidence in respect thereof
is specifically prescribed herein) may be deemed to be conclusively proved and
established by a certificate signed by a Co-Chairman of the Board, a Managing
Director or a Vice President (including any Senior Vice President) and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of ATLANTIC and delivered to the Subscription Agent; and such certificate shall
be full authorization to the
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Subscription Agent for any action taken or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Subscription Agent shall be liable hereunder only for its own
negligence, misconduct or bad faith.
(d) The Subscription Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same, and all such statements and
recitals are and shall be deemed to have been made by ATLANTIC only.
(e) The Subscription Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Subscription Agent) or in
respect of the validity or execution of any Rights Certificate; nor shall it be
responsible for any breach by ATLANTIC of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Shares will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.
(f) ATLANTIC agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the
Subscription Agent for the carrying out or performing by the Subscription Agent
of the provisions of this Agreement.
(g) Nothing herein shall preclude the Subscription Agent from acting in
any other capacity for ATLANTIC.
(h) The Subscription Agent shall comply with the information and backup
withholding requirements of the Internal Revenue Code of 1986, as amended (the
"Code"), including, without limitation, where appropriate, on a timely basis,
----
filing with the Internal Revenue Service and furnishing to holders of Rights
duly completed Forms 1099B. The Subscription Agent shall also collect and duly
preserve Forms W-8 and W-9 and other forms or information necessary to comply
with the backup withholding requirements of the Code. The Subscription Agent
shall have no obligation to furnish distributees of Rights with Forms 1099DIV or
to withhold any taxes with respect to the distribution of Rights.
(i) The Subscription Agent shall withhold from payments made to record
owners amounts sufficient to comply with the backup withholding requirements of
the Code. For purposes of backup withholding that may be applicable in respect
of Rights distributed to record owners other than foreign holders, the
Subscription Agent shall withhold and sell Rights on behalf of such record
owners in amounts necessary to satisfy such backup withholding requirements.
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SECTION 20. Notices to ATLANTIC, Holders and Subscription Agent. All
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notices and other communications provided for or permitted hereunder shall be
made by hand delivery, prepaid first-class mail, or telecopier:
(a) if to ATLANTIC, to:
Security Capital Atlantic Incorporated
Six Piedmont Center
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Subscription Agent, to:
The First National Bank of Boston
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: _________________________
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to a registered holder, at the address shown on the Share
register of ATLANTIC.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; three business days
after being deposited in the mail, postage prepaid, if mailed as aforesaid; and
when receipt is acknowledged, if telecopied.
SECTION 21. Supplements and Amendments. ATLANTIC and the Subscription
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to cure any ambiguity or
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provision contained herein, or to make any other
provisions in regard to matters or questions arising hereunder which ATLANTIC
and the Subscription Agent may deem necessary or desirable and which shall not
adversely affect the interests of the holders of the Rights Certificates.
SECTION 22. Successors. All the covenants and provisions of this
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Agreement by or for the benefit of ATLANTIC or the Subscription Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 23. Termination. This Agreement shall terminate at 5:00 p.m.,
-----------
Eastern Daylight Time, on the thirtieth day following the Expiration Date. Upon
termination of this Agreement, and provided that all subscriptions for Shares
accepted prior to such termination are issued and delivered by ATLANTIC,
ATLANTIC shall be discharged from all obligations under this Agreement except
for its obligation to the Subscription Agent under Section 17 hereof and
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except with respect to the obligation of ATLANTIC to provide instructions and
directions to the Subscription Agent as provided in this Agreement.
SECTION 24. Governing Law. This Agreement and each Rights Certificate
-------------
shall be deemed to be a contract made under the laws of The Commonwealth of
Massachusetts and for all purposes shall be construed in accordance with the
internal laws of said State.
SECTION 25. Benefits of This Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any person or corporation other than ATLANTIC, the
Subscription Agent and the holders of the Rights Certificates any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of ATLANTIC, the Subscription Agent and
the holders of the Rights Certificates.
SECTION 26. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
SECTION 27. Descriptive Headings. Descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date first above written.
SECURITY CAPITAL ATLANTIC INCORPORATED
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
THE FIRST NATIONAL BANK OF BOSTON,
Subscription Agent
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
THE FIRST NATIONAL BANK OF BOSTON, transfer
agent and registrar
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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