EXHIBIT 1
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AMENDED AND RESTATED
RIGHTS AGREEMENT
by and between
▇▇▇▇▇▇▇▇ PROPERTIES TRUST
and
EQUISERVE TRUST COMPANY, N.A.,
as Rights Agent
_________________
Dated as of January 22, 2002
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Table of Contents
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Page
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Section 1. Certain Definitions ................................................................... 1
Section 2. Appointment of Rights Agent ........................................................... 5
Section 3. Issue of Rights and Rights Certificates ............................................... 5
Section 4. Form of Rights Certificates ........................................................... 7
Section 5. Countersignature and Registration ..................................................... 8
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates,
Mutilated, Destroyed. Lost or Stolen Rights Certificates .............................. 8
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights;
Restriction on Transfer of Rights ..................................................... 9
Section 8. Cancellation and Destruction of Rights Certificates ................................... 11
Section 9. Reservation and Availability of Series B Preferred Shares ............................. 11
Section 10. Series B Preferred Shares Record Date ................................................. 12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights ........... 13
Section 12. Certificates of Adjusted Purchase Price or Number of Shares ........................... 19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power .................. 20
Section 14. Fractional Rights and Fractional Shares ............................................... 22
Section 15. Rights of Action ...................................................................... 22
Section 16. Agreement of Rights Holders ........................................................... 23
Section 17. Rights Certificate Holder Not Deemed a Shareholder .................................... 23
Section 18. Concerning the Rights Agent ........................................................... 24
Section 19. Merger or Consolidation or Change of Name of Rights Agent ............................. 24
Section 20. Duties of Rights Agent ................................................................ 25
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Section 21. Change of Rights Agent ................................................................. 27
Section 22. Issuance of New Rights Certificates .................................................... 27
Section 23. Redemption and Termination ............................................................. 28
Section 24. Exchange ............................................................................... 28
Section 25. Notice of Certain Events ............................................................... 29
Section 26. Notices ................................................................................ 30
Section 27. Supplements and Amendments ............................................................. 30
Section 28. Successors ............................................................................. 31
Section 29. Determinations and Actions by the Board of Trustees, etc. .............................. 31
Section 30. Benefits of this Agreement ............................................................. 32
Section 31. Severability ........................................................................... 32
Section 32. Governing Law .......................................................................... 32
Section 33. Counterparts ........................................................................... 32
Section 34. Descriptive Headings ................................................................... 32
EXHIBIT A - Form of Rights Certificate
EXHIBIT B - Form of Summary of Rights
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AMENDED AND RESTATED RIGHTS AGREEMENTS
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This Amended and Restated Rights Agreement, dated as of January 22, 2002
(the "Agreement"), between ▇▇▇▇▇▇▇▇ PROPERTIES TRUST, a Maryland real estate
investment trust (the "Company"), and EQUISERVE TRUST COMPANY, N.A., a federally
chartered trust company (the "Rights Agent"), provides as follows:
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Board of Trustees of the Company has authorized and declared a
dividend distribution of one Right (as hereinafter defined) for each outstanding
Common Share (as hereinafter defined) of the Company to shareholders of record
at the Close of Business (as hereafter defined) on the Record Date (as
hereinafter defined) and has authorized the issuance of one Right (as such
number may hereinafter be adjusted as provided herein) for each Common Share
that shall be issued between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date (as such terms are
hereinafter defined) unless the Board of Trustees provides to the contrary
before or at the time of issuance of any such Common Shares, each Right
initially representing the right to purchase one Unit of Series B Preferred
Shares (as hereinafter defined), and being evidenced by a Rights Certificate in
the form attached hereto as Exhibit A, upon the terms and subject to the
conditions hereof (the "Rights"); and
WHEREAS, the Board of Trustees of the Company has authorized this amendment
and restatement of the Rights Agreement, dated as of February 6, 1998, by and
between the Company and Equiserve Trust Company, N.A. (f/k/a First Chicago Trust
Company of New York);
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated below:
(a) "Acquiring Person" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall at any time be
the Beneficial Owner of either or both of (i) 10% or more of the Common Shares
then outstanding or (ii) 10% or more of the Rights then outstanding, but shall
not include: (a) the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan; (b) Security Capital Preferred Growth Incorporated
("SCPG:"), including its Affiliates and Associates, provided that SCPG and its
Affiliates and Associates shall be an Acquiring Person if and when SCPG and its
Affiliates and Associates shall become the Beneficial Owner of either or both of
(i) 11% or more of the Common Shares then outstanding or (ii) 11% or more of the
Rights then outstanding; or (c) any such Person who has become and is such a
Beneficial Owner solely because (1) of a reduction in the aggregate number of
Common Shares outstanding due to a repurchase of Common Shares by the Company
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since the last date on which such Person acquired Beneficial Ownership of any
Common Shares or (2) it acquired such Beneficial Ownership in the good faith
belief that such acquisition would not (A) cause such Beneficial Ownership to
equal or exceed 10% (or, in the case of SCPG and its Affiliates and Associates,
11%) of the Common Shares then outstanding and such Person relied in good faith
in computing the percentage of its Beneficial Ownership on publicly filed
reports or documents of the Company that are inaccurate or out-of-date or (B)
otherwise cause a Distribution Date or the adjustment provided for in Section
11(a) to occur. Notwithstanding clause (c)(2) of the preceding sentence, if any
Person that is not an Acquiring Person due to such clause (c)(2) does not reduce
its percentage of Beneficial Ownership of Common Shares to less than 10% (or, in
the case of SCPG and its Affiliates and Associates, 11%) by the Close of
Business on the fifth Business Day after notice from the Company (the date of
notice being the first day) that such Person's Beneficial Ownership of Common
Shares so equals or exceeds 10% (or, in the case of SCPG and its Affiliates and
Associates, 11%), such Person shall, at the end of such five Business Day
period, become an Acquiring Person (and such clause (c)(2) shall no longer apply
to such Person). For purposes of this definition, the determination whether any
Person acted in "good faith" shall be conclusively determined by the Board of
Trustees of the Company, acting by a vote of those trustees of the Company whose
approval would be required to redeem the Rights under Section 23.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
(c) "Agreement" shall have the meaning set forth in the first
paragraph hereof.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule l3d-3 to
the General Rules and Regulations under the Exchange Act;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed to be the
"Beneficial Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange or (B) securities issuable upon exercise of the Rights;
(iii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote, including pursuant to
any agreement, arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (iii) as a result
of an agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely from a revocable
proxy given in response to a
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public proxy solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the Exchange
Act, and (B) the beneficial ownership of such security is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iv) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person (or
any of such Person's Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (iii) of this paragraph (c)) or disposing of any voting
securities of the Company; provided, however, that notwithstanding any provision
of this Section 1(c), any Person engaged in business as an underwriter of
securities who acquires any securities of the Company through such Person's
participation in good faith in a firm commitment underwriting registered under
the Securities Act of 1933, as amended (the "Act"), shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," such securities until the
expiration of 40 days after the date of acquisition; and provided, further, that
in no case shall an officer or trustee of the Company be deemed (x) the
beneficial owner of any securities beneficially owned by another officer or
trustee of the Company solely by reason of actions undertaken by such persons in
their capacity as officers or trustees of the Company or (y) the beneficial
owner of securities held of record by the trustee of any employee benefit plan
of the Company or any Subsidiary of the Company for the benefit of any employee
of the Company or any Subsidiary of the Company, other than the officer or
trustee, by reason of any influence that such officer or trustee may have over
the voting of the securities held in the plan.
(e) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which national banking institutions in the State of Maryland or State
of New York are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Dallas, Texas time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Dallas, Texas time, on the next succeeding
Business Day.
(g) "Common Shares" shall mean the common shares of beneficial
interest of the Company, $.01 par value, except that "Common Shares" when used
with reference to any Person other than the Company, if such Person is a
corporation, shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest in such Person
having power to control or direct the management of such Person, or any shares
of capital stock or other equity interests into which the foregoing shall be
reclassified or changed.
(h) "Company" shall mean ▇▇▇▇▇▇▇▇ Properties Trust, a Maryland real
estate investment trust.
(i) "Distribution Date" shall mean the earlier of (i) the close of
business on the tenth business day after the Share Acquisition Date (as
hereinafter defined) or (ii) the close of business on the tenth business day
(or such later date as may be determined by action of the Board of Trustees of
the Company prior to such time as any Person becomes an Acquiring Person) after
the date that a tender or exchange offer by any Person (other than the Company,
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any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act if, upon consummation
thereof, such Person would be an Acquiring Person (irrespective of whether any
shares were actually purchased pursuant to any such offer).
(j) "Equivalent Shares" shall mean Series B Preferred Shares (as
hereinafter defined) and any other class or series of beneficial interest of the
Company that is entitled to participate in dividends and other distributions,
including distributions upon the liquidation, dissolution or winding up of the
Company, on a proportional basis with the Common Shares. In calculating the
number of any class or series of Equivalent Shares for purposes of Section 11
hereof, the number of shares, or fractions of a share, of such class or series
of beneficial interest that is entitled to the same dividend or distribution as
a whole Common Share shall be deemed to be one share.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement, unless a different date is
otherwise specifically provided herein.
(l) "Exchange Date" shall mean the date on which the Board of Trustees
authorizes the exchange of Rights for Common Shares pursuant to Section 24
hereof.
(m) "Expiration Date" shall mean the earliest of (i) the close of
business on the Final Expiration Date, or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, or (iii) the Exchange Date.
(n) "Final Expiration Date" shall mean February 17, 2008.
(o) "Person" shall mean any individual, firm, corporation, partnership
or other entity and any particular Person shall include any "group" acting as
described in Section 13(d)(3) of the Exchange Act.
(p) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof, as adjusted in accordance with this Agreement and as in effect from time
to time.
(q) "Record Date" shall mean the Close of Business on February 17, 1998.
(r) "Rights" shall mean the rights to purchase Series B Preferred Shares
(or other securities) as provided in this Agreement.
(s) "Rights Agent" shall mean Equiserve Trust Company, N.A., a federally
chartered trust company.
(t) "Rights Certificate" shall have the meaning set forth in Section
3(a) hereof.
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(u) "Section 11(a)(ii) Event" shall mean any occurrence of the event
described in the first sentence of Section 11(a)(ii) hereof.
(v) "Section 13 Event" shall mean any event described in clauses (w),
(x), (y) or (z) of Section 13(a) hereof.
(w) "Series B Preferred Shares" shall mean shares of Series B Junior
Participating Preferred Shares, without par value, of the Company.
(x) "Share Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(y) "Subsidiary" shall mean, with reference to any Person, any
corporatio or other entity of which an amount of voting securities sufficient to
elect a majority of the directors, trustees or Persons having similar authority
of such corporation or other entity is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(z) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(aa) "Unit" shall mean one one-thousandth of one Series B Preferred
Share.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be holders of Common Shares) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company may from time
to time appoint such Co-Rights Agents as it may deem necessary or desirable,
upon ten (10) days prior written notice to the Rights Agent. The Rights Agent
shall have no duty to supervise, and shall in no event be liable for, the acts
or omissions of any such Co-Rights Agent.
Section 3. Issue of Rights and Rights Certificates.
(a) Until the Distribution Date, (x) the Rights shall be evidenced
(subject to the provisions of paragraphs (b) and (c) of this Section 3) by the
certificates for the Common Shares registered in the names of the holders of the
Common Shares (which certificates for Common Shares shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
shall be transferable only in connection with the transfer of the underlying
Common Shares (including a transfer to the Company). Subject to the provisions
of Section 7(e) hereof, as soon as practicable after the Company has notified
the Rights Agent of the occurrence of a Distribution Date, the Rights Agent
shall send by first-class, insured, postage prepaid mail, to each such record
holder of shares of the Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more rights certificates, in substantially the form of Exhibit
A hereto (the "Rights Certificates"), evidencing one Right for each Common Share
so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per
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Common Share has been made pursuant to Section 11(n) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates evidencing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights shall be evidenced solely by such Rights
Certificates.
(b) A Summary of Rights, in substantially the form attached hereto as
Exhibit B (the "Summary of Rights"), shall be sent by the Company by
first-class, postage prepaid mail, to each record holder of the Common Shares as
of the Record Date, at the address of each such holder shown on the records of
the Company. Until the Distribution Date, the Rights shall be evidenced by such
certificates evidencing the Common Shares, and the registered holders of the
Common Shares shall also be the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the Expiration Date, the transfer
of any certificates evidencing Common Shares in respect of which Rights have
been issued shall also constitute, subject to the provisions of Section 7(e)
hereof, the transfer of the Rights associated with such Common Shares.
(c) Unless the Board of Trustees by resolution adopted at or before the
time of the issuance (including pursuant to the exercise of rights under the
Company's benefit plans) of any Common Shares specifies to the contrary, Rights
shall be issued in respect of all Common Shares that are issued after the Record
Date but prior to the earlier of the Distribution Date or the Expiration Date.
Certificates representing Common Shares outstanding prior to the Record Date
that are issued upon transfer or exchange of such Common Shares, shall also be
deemed to be certificates for Rights, and shall bear substantially the following
legend:
"This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Amended and Restated Rights Agreement
between ▇▇▇▇▇▇▇▇ Properties Trust (the "Company") and Equiserve Trust
Company, N.A., (the "Rights Agent") dated as of January 22, 2002 (the
"Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of the
Company. Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights that are owned or that were previously owned by a Person who is, was
or becomes an Acquiring Person or any Affiliate or Associate of an
Acquiring Person may become null and void."
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Shares
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute, subject to the provisions of
Section 7(e) hereof, the transfer of the Rights associated with the Common
Shares represented by such certificates.
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In the event that the Company purchases or acquires any Common Shares
after the Record Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled and retired so that the
Company shall not be entitled to exercise any Rights associated with the Common
Shares that are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof) shall each be substantially
in the form set forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Distribution Date, and on their face shall entitle the holders
thereof to purchase such number of Units of Series B Preferred Shares as shall
be set forth therein at the price set forth therein (such exercise price per
unit, being hereinafter referred to as the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that evidences Rights beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Trustees of the Company has
determined is part of a plan, arrangement or understanding which has a primary
purpose to avoid or effects the avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) substantially the
following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a person who was or became an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person. Accordingly, this Rights
Certificate and the Rights represented hereby may become void in the
circumstances specified in Section 7(e) of the Rights Agreement."
The Company shall notify the Rights Agent, and, if such notification is given
orally, the Company shall confirm promptly the same in writing, at such time as
the Company has notice that any Person constitutes an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, and until such notice is
received by the Rights Agent the Rights Agent may conclusively
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presume for all purposes that the foregoing legend need be imprinted only on
Right Certificates beneficially owned by Persons that the Company has previously
identified to the Rights Agent as constituting an Acquiring Person or an
Affiliate or Associate of an Acquiring Person and transferees of any such
Persons.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chief Executive Officer, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be countersigned manually or by facsimile by the
Rights Agent and shall not be valid for any purpose unless so countersigned. The
Rights Certificates shall be countersigned by an authorized signatory of the
Rights Agent but it shall not be necessary for the same signatory to countersign
all of the Rights Certificates issued hereunder. In case any officer of the
Company who shall have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates, Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates (other than Rights
Certificates that have become void pursuant to Section 7(e) hereof or that have
been exchanged pursuant to Section 24 hereof) entitling the registered holder to
purchase a like number of Units of Series B Preferred Shares (or, following a
Triggering Event, Common Shares, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered then entitle
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or
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exchanged at the principal office or offices of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the, reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment from the holder of the Rights of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Subject to Section 7(e) hereof, upon receipt by the Company and
the Rights 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 or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights;
Restriction on Transfer of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(ii), Section 11(a)(iii),
Section 13, Section 23(a), and Section 24 hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Rights Certificate, with
the form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together, except as otherwise provided
in Section 11(a)(ii) hereof, with payment of the aggregate Purchase Price with
respect to the total number of Units of Series B Preferred Shares (or Common
Shares or other securities or property, as the case may be) as to which
surrendered Rights are then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each Unit of Series B Preferred Shares
pursuant to the exercise of a Right shall initially be $85.00 and shall be
subject to adjustment from time to time as provided in Section 11 hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per Unit of Series B Preferred Shares (or Common Shares, other securities
or property, as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly, (i) (A) requisition from any transfer
agent of the Units
9
of Series B Preferred Shares (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the total
number of Units of Series B Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of Units of Series B Preferred Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of Units of Series B Preferred
Shares as are to be purchased (in which case certificates for the Units of
Series B Preferred Shares represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) after receipt thereof, deliver
such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be reduced
(including to zero) pursuant to Section 11(a)(iii) hereof) may be made in cash
or by certified bank check or bank draft payable to the order of the Company. In
the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or(iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Trustees
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effects the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights Certificates or any other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its Affiliates or
Associates, or any transferee thereof, hereunder.
10
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered
for such exercise and (ii) provided such additional evidence of the identity of
theBeneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Series B Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Series B Preferred Shares
(or, following the occurrence of a Triggering Event, out of its authorized and
unissued Series B Preferred Shares or other securities, as the case may be), the
number of Series B Preferred Shares (or such other securities) that, except as
provided in Section 11(a)(iii) hereof, will be sufficient from time to time to
permit the exercise in full of all outstanding Rights and all Rights that are at
the time issuable, in accordance with the provisions of this Agreement.
(b) So long as the Series B Preferred Shares (and, following the
occurrence of a Triggering Event, any other securities) issuable and deliverable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(ii)
and (iii) hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Act on an
appropriate form, with respect to the securities purchasable upon exercise of
the Rights, (ii) to cause such registration statement to become effective as
soon as practicable after such filing, and (iii) to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the Expiration
Date. The Company will also
11
take such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety days after the date set forth in clause (i) of the
first sentence of this Section 9(c), the exercisability of the Rights in order
to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating, and notify the Rights Agent, that the exercisability of
the Rights has been temporarily suspended. The Company shall also issue a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that Series B Preferred Shares (or other
securities, as the case may be) delivered upon exercise of the Rights shall, at
the time of delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly authorized, validly issued, fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for Series B Preferred Shares (or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax that may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance or
delivery of a number of Series B Preferred Shares (or other securities, as the
case may be) in respect of a name other than that of, the registered holder of
the Rights Certificates evidencing Rights surrendered for exercise or to issue
or deliver any certificates for a number of Series B Preferred Shares (or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Series B Preferred Shares Record Date. Each person in whose
name any certificate for a number of Units of Series B Preferred Shares (or
other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such
Units of Series B Preferred Shares (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Series B Preferred Shares (or other securities, as the case may be) transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such certificate
shall be dated, the next succeeding Business Day on which such transfer books
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate as such shall not be entitled to any rights of a shareholder
of the Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
12
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Series B Preferred Shares payable
in Series B Preferred Shares, (B) subdivide the outstanding Series B Preferred
Shares, (C) combine the outstanding Series B Preferred Shares into a smaller
number of shares, or (D) issue any shares of beneficial interest in a
reclassification of the Series B Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of Series B Preferred
Shares or the number and kind of other shares of beneficial interest, as the
case may be, issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number of
Series B Preferred Shares or the number and kind of other shares of beneficial
interest, as the case may be, that, if such Right had been exercised immediately
prior to such date and at a time when the Series B Preferred Shares transfer
books of the Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 23 and Section 24 hereof, in the event
any Person becomes an Acquiring Person, then, proper provision shall be made by
the Company so that each record holder of each Right (except as provided in
Section 7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof for the Purchase Price in accordance with terms of this Agreement, such
number of Units of Series B Preferred Shares (or, in lieu of Series B Preferred
Shares, at the option of the Company and to the extent available, such number of
Common Shares) as shall equal the result obtained by multiplying the Purchase
Price by a fraction, the numerator of which is the number of Units of Series B
Preferred Shares for which a Right is then exercisable and the denominator of
which is 50% of the current market price of a Common Share (determined pursuant
to Section 11(d) hereof) on the date of the first occurrence of a Section
11(a)(ii) Event (such result being hereinafter referred to as the "Adjustment
Shares").
(iii) To the extent that the number of Series B Preferred Shares
that are authorized by the Company's Amended and Restated Declaration of Trust
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a),
and subject to such limitations as are necessary to prevent a default under any
13
agreement for money borrowed as presently constituted to which the Company is a
party subject to any limitations contained in any applicable law, the Company
shall: (A) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value"), over (2) the
Purchase Price (such excess being hereinafter referred to as the "Spread"), and
(B) with respect to each Right, make adequate provision to substitute for such
unavailable Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) other equity securities of
the Company, (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having, together with the Adjustment Shares issued
upon exercise of such Right, an aggregate value equal to the Cur-rent Value,
where such aggregate value has been determined by the Board of Trustees of the
Company based upon the advice of a nationally recognized investment banking firm
selected by the Board of Trustees of the Company; provided, however, if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within 30 days following the first occurrence of a
Section 11(a)(ii) Event, then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the
Purchase Price, preferred shares of beneficial interest, par value $.01 per
share, of the Company or Common Shares (to the extent such securities are
available) and then, if necessary, cash, which securities and/or assets in the
aggregate are equal to the Spread. If the Board of Trustees of the Company shall
determine in good faith that it is likely that sufficient additional preferred
shares of beneficial interest, $.01 par value, of the Company or Common Shares
could be authorized for issuance upon exercise in full of the Rights, the 30-day
period set forth above may be extended to the extent necessary, but not more
than 90 days following the first occurrence of a Section 11(a)(ii) Event, in
order that the Company may seek shareholder approval for the authorization of
such additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Shares shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of the Common Shares on the date of
the first occurrence of a Section 11(a)(ii) Event.
(b) If at any time after the date of this Agreement the Company shall
fix a record date for the issuance of rights, options or warrants to all holders
of Common Shares or of any class or series of Equivalent Shares entitling such
holders (for a period expiring within 45 calendar days after such record date)
to subscribe for or to purchase Common Shares or Equivalent Shares (or
securities convertible into Common Shares or Equivalent Shares) at a price per
share (or having a conversion price per share, if a security convertible into
Common Shares or Equivalent Shares) less than the current market price of such
Common Shares or Equivalent Shares on such record date, then, in each such case,
each Right outstanding immediately prior to such record date shall thereafter
evidence the right to purchase, for the Purchase Price, that number of Units of
Series B Preferred Shares or Equivalent Shares obtained by multiplying the
14
number of Units of Series B Preferred Shares issuable upon exercise of a Right
immediately prior to such record date by a fraction, the numerator of which
shall be the total number of Common Shares and Equivalent Shares (if any)
outstanding on such record date plus the number of additional Common Shares and
Equivalent Shares (if any) to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible) and
the denominator of which shall be the total number of Common Shares and
Equivalent Shares (if any) outstanding on such record date plus the number of
Common Shares or Equivalent Shares, as the case may be, that the aggregate
offering price of the total number of Common Shares or Equivalent Shares, as the
case may be, so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current
market price. In case such subscription price may be paid in a consideration,
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Trustees of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Common Shares and Equivalent Shares owned by or held for the
account of the Company or any Subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, each Right shall be adjusted
to evidence the right to receive that number of Units of Series B Preferred
Shares that such Right would have entitled the holder to receive, for the
Purchase Price, if such record date had not been fixed.
(c) If at any time after the date of this Agreement the Company shall
fix a record date for the making of a distribution to all holders of Common
Shares or of any class or series of Equivalent Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of cash (other than a
regular quarterly cash dividend of the Company in compliance with any applicable
law), evidences of indebtedness, assets, securities (other than Common Shares or
any Equivalent Shares) or subscription rights, options or warrants (excluding
those referred to in Section 11(b) hereof), then, in each such case, each Right
outstanding immediately prior to such record date shall thereafter evidence the
right to purchase, for the Purchase Price, that number of Units of Series B
Preferred Shares obtained by multiplying the number of Units of Series B
Preferred Shares issuable upon exercise of a Right immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price of a Common Share or an Equivalent Share on the record date and the
denominator of which shall be the current market price of a Common Share or an
Equivalent Share on such record date less the fair market value (as determined
in good faith by the Board of Trustees of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
cash, evidences of indebtedness, assets or securities so to be distributed or of
such subscription rights, options or warrants applicable to a Common Share or an
Equivalent Share, as the case may be.Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, each Right shall be adjusted to evidence the right to receive that
number of Units of Series B Preferred Shares that such Right would have entitled
the holder to receive, for the Purchase Price, if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per Common Share on any date shall be deemed to be the average of the
daily closing prices per share of such Common Shares for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per Common Share on any date shall be deemed
to be the average of the daily closing prices per share of such
15
Common Shares for the ten consecutive Trading Days immediately following such
date; provided, however, that in the event that the current market price per
share of the Common Shares is determined during a period following the
announcement by the issuer of such Common Shares of (A) a dividend or
distribution on such Common Shares payable in shares of such Common Shares or
securities convertible into shares of such Common Shares (other than the
Rights), or (B) any subdivision, combination or reclassification of such Common
Shares, and prior to the expiration of the requisite 30 Trading Day or ten
Trading Day period, as set forth above, after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the "current market price"
shall be properly adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average, of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Common Shares are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Common Shares
are listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices quoted on
the Nasdaq Stock Market, as reported by the National Association of Securities
Dealers, Inc. ("Nasdaq") or such other quotation system then in use, or, if on
any such date the Common Shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Shares selected by the Board of
Trustees of the Company. If on any such date no market maker is making a market
in the Common Shares, the fair value of such shares on such date as determined
in good faith by the Board of Trustees of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Shares are listed or admitted to trading is open
for the transaction of business or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, a Business Day. If the
Common Shares is not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as determined in good faith
by the Board of Trustees of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of the Series B Preferred Shares shall be determined in the
same manner as set forth above for the Common Shares in Section 11(d)(i) hereof
(other than the last sentence thereof). If the current market price per share of
Series B Preferred Shares cannot be determined in the manner provided above or
if the Series B Preferred Shares are not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current market price"
per share of the Series B Preferred Shares shall be conclusively deemed to be an
amount equal to 1000 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with respect to
the Common Shares and Series B Preferred Shares occurring after the date of this
Agreement) multiplied by the current market price per
16
share of the Common Shares. If neither the Common Shares nor the Series B
Preferred Shares are publicly held or so listed or traded, "current market
price" per share of the Series B Preferred Shares shall mean the fair value per
share as determined in good faith by the Board of Trustees of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this Agreement, the
"current market price" of one one-thousandth of a share of Series B Preferred
Shares shall be equal to the "current market price" of one share of Series B
Preferred Shares divided by 1000.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the number of Units of Series B Preferred Shares for which a Right is
exercisable or in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent in such number of
shares or in the Purchase Price; provided, however, that any adjustments that by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a Unit of Series B Preferred Shares, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction that mandates such adjustment, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
13(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of beneficial interest other than Series B Preferred
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right and, if required, the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Series B Preferred Shares
contained in Section 11(a), (b), (c), (e), (g), (h), (i), (k) and (l) hereof,
and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Series B Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the number or kind of shares purchasable upon exercise of the
Rights or to the Purchase Price hereunder shall evidence the right to purchase,
at the adjusted Purchase Price, the adjusted number of Units of Series B
Preferred Shares or other securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided
below in this Section 11(h), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of Units of
Series B Preferred Shares obtained by (i) multiplying (x) the number of Units of
Series B Preferred Shares covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment and (ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price. On or after the
date of any adjustment of the Purchase Price, in lieu of any adjustment in the
number of Units of Series B Preferred Shares or any other shares of beneficial
interest purchasable upon the exercise of a Right, the Company may elect to
adjust the number of Rights. Each of the Rights outstanding after the adjustment
in the number of Rights shall be exercisable
17
for the number of Units of Series B preferred Shares for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten days later
than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(h), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase Price or
the number of Units of Series B Preferred Shares or the number and kind of other
securities issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per
Unit, the number of Units and the other terms that were expressed in the initial
Rights Certificates issued hereunder.
(j) In any case in which this Section 11 shall require that an
adjustment be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date of the number of Units
of Series B Preferred Shares and other shares of beneficial interest or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Preferred Shares and other shares of beneficial interest
or securities of the Company, if any, issuable upon such exercise before giving
effect to such adjustment; provided, however, that the Company shall deliver to
such holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(k) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board of Trustees of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Series B Preferred Shares, (ii) issuance wholly for cash of
any Series B Preferred Shares at less than the current market price, (iii)
issuance wholly for cash of Series B Preferred Shares or securities that by
their terms are convertible into or exchangeable
18
for Series B Preferred Shares, (iv) share dividend or (v) issuance of rights,
options or warrants, referred to in this Section 11, hereafter made by the
Company to holders of its Series B Preferred Shares shall not be taxable to such
shareholders.
(l) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(m)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(m) hereof), (iii)
effect a statutory share exchange with any Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(m) hereof), or (iv)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(m) hereof), if at the time of or immediately after such
consolidation, merger, statutory share exchange or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
that would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights.
(m) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare a dividend on the outstanding Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares, or (iii)
combine the outstanding Common Shares into a smaller number of shares, the
number of Rights associated with each Common Share then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each Common Share following any such event shall equal the result obtained by
multiplying the number of Rights associated with each Common Share immediately
prior to such event by a fraction the numerator of which shall be the total
number of Common Shares outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of Common Shares
outstanding immediately following the occurrence of such event.
Section 12. Certificates of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Series B Preferred Shares or the Common Shares, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
Common Shares) in accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the Share Acquisition Date, directly
or indirectly, (w) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(m) hereof), and the Company shall not be the continuing
or surviving person as a result of such consolidation or merger, (x) any Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(m) hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving person as a result
of such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding Common Shares shall be changed into or
exchanged for shares of beneficial interest or other securities of any other
Person or cash or any other property, (y) the Company shall be a party to a
statutory share exchange with any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(m) hereof) after which
the Company is a Subsidiary of any other Person, or (z) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(m) hereof), then, and in
each such case, proper provision shall be made so that: (i) each record holder
of a Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradable Common
Shares of the Principal Party (as hereinafter defined), not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of Common Shares for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of such shares for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first
occurrence), and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for each Right for all purposes of this Agreement) by 50% of the current market
price (determined pursuant to Section 11(d)(i) hereof) per share of the Common
Shares of such Principal Party on the date of consummation of such Section 13
Event; and (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its common stock) in connection
with the consummation of any such transaction as may be necessary to ensure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its Common Shares thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13 Event.
20
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (w), (x)
or (y) of the first sentence of Section 13(a) hereof, the Person that is the
issuer of any securities into which the Common Shares of the Company are
converted in such merger, consolidation or statutory share exchange, and if no
securities are so issued, the Person that is the other party to such merger,
consolidation or statutory share exchange; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common Shares of
which is and has been so registered, "Principal Party" shall refer to such other
Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
statutory share exchange, sale or transfer unless the Principal Party shall have
a sufficient number of authorized Common Shares that have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger, statutory share exchange or sale of assets mentioned
in paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act on an
appropriate form with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date and similarly
comply with applicable state securities laws; and
(ii) deliver to record holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that comply in all
respects with the requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or statutory share exchanges or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a)
hereof
21
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(n) hereof, or to
distribute Rights Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price, or, if not so quoted, the average of the high bid and low
asked prices on the Nasdaq Stock Market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Trustees of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Trustees of the Company shall be used.
(b) The Company shall not be required to issue fractions of Series B
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Series B Preferred Share) upon exercise of the Rights or to
distribute certificates that evidence fractional Series B Preferred Shares
(other than in such integral multiples). In lieu of fractional Series B
Preferred Shares that are not in such integral multiples, the Company may pay to
the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one one-thousandth of a Series B Preferred Share. For
purposes of this Section 14(b), the current market value of one one-thousandth
of a Series B Preferred Share shall be one one-thousandth of the current market
price of a Series B Preferred Share (as determined pursuant to Section 11(d)
hereof) for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Right or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares in respect of which Rights have been issued); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of such
Common Shares), without the consent of the Rights Agent or of the holder of any
22
other Rights Certificate (or, prior to the Distribution Date, of such Common
Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company 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. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificate or the associated Common Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company, subject to the last sentence of Section 7(e) hereof, nor
the Rights Agent shall be required to be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Units of Series B Preferred Shares or
any other securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder of the Company
or any right to
23
vote for the election of trustees or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, instruction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust, business or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights 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; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the
24
Rights Agent may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may countersign
such Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the
Chairman of the Board, any Vice-Chairman, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights 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 (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights 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 hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Series B Preferred Shares to be issued
pursuant to this Agreement or any
25
Rights Certificate or as to whether any Series B Preferred Shares will, when so
issued, be duly authorized, validly issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman, the President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company, 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 suffered to be taken by it in
good faith in accordance with instructions of any such officer. At any time the
Rights Agent may apply to the Company for written instructions with respect to
any matter arising in connection with the Rights Agent's duties and obligations
arising under this Agreement. Such application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken and the Rights Agent shall not be liable
for any action taken or omitted in accordance with a proposal included in any
such application on or after the date specified therein (which date shall be not
less than one Business Day after the Company receives such application, without
the Company's consent) unless, prior to taking or initiating any such action,
the Rights Agent has received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
26
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days notice in writing mailed to the Company, and to each transfer agent
of the Series B Preferred Shares or Common Shares, by registered or certified
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Series B Preferred
Shares or Common Shares, by registered or certified mail, and to the holders of
the Rights Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the States
of Texas and Maryland, in good standing, having a principal office in the States
Texas and Maryland, that is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
federal or state authority and that has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $100,000,000, or (b) an
affiliate of a corporation described in clause (a). After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Trustees to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, the Company may, if deemed
necessary or appropriate by the Board of Trustees of the Company, issue Rights
Certificates
27
representing the appropriate number of Rights in connection with the issuance or
sale of Common Shares following the Distribution Date.
Section 23. Redemption and Termination.
(a) The Company may, at its option, at any time prior to such time as
any Person becomes an Acquiring Person, redeem all but not less than all the
then outstanding Rights (which shall not include any rights that have become
void pursuant to Section 7(e) hereof) at a redemption price of $.001 per Right,
as it may be appropriately adjusted by the Board of Trustees of the Company to
reflect any share split or combination, share dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price") and the Company may, at its option, pay
the Redemption Price either in Common Shares (based on the current market price
(as determined pursuant to Section 11(d) hereof) per share of the Common Shares
at the time of redemption) or cash.
(b) Immediately upon the action of the Board of Trustees of the
Company authorizing the redemption of the Rights pursuant to subsection (a) of
this Section 23 and without any further action and without any notice, the right
to exercise the Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Trustees of the Company authorizing
the redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and to the holders of such Rights by mailing such notice to
all such holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be effected.
Section 24. Exchange.
(a) The Company may, at its option, by resolution of its Board of
Trustees, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to Section 7(e) hereof) for Common Shares
at an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any share split, share dividend or similar transaction occurring with
respect to the Common Shares after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Trustees of the
Company authorizing the exchange of the Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of Rights held by such holder multiplied by the Exchange Ratio. Promptly
after the action of the Board of Trustees of the Company authorizing the
exchange of the Rights, the Company shall give notice of such exchange to the
Rights Agent and to the holders of such Rights by mailing such notice to all
such holders at each holder's last address as it appears upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the
28
registry books of the transfer agent for the Common Shares. Any notice that is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the Common Shares for Rights will be effected.
(c) In the event that there shall not be sufficient Common Shares
authorized but unissued to permit the exchange in full of such Rights in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional Common Shares for issuance upon exchange of
the Rights. In the event the Company shall, after good faith effort, be unable
to take all such action as may be necessary to authorize such additional Common
Shares, the Company shall substitute, for each Common Share that would otherwise
be issuable upon exchange of a Right, a number of shares of other equity
securities of the Company or fraction thereof such that the current per share
market price of one share of such other equity securities multiplied by such
number or fraction is equal to the current per share market price of one Common
Share as of the date of issuance of such shares of such other equity securities
or fraction thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates that evidence fractional Common Shares. In
lieu of such fractional Common Shares, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
subsection (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to Section 11(d) hereof)
for the Trading Day immediately prior to the Exchange Date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Series B Preferred Shares or to make any other distribution to the
holders of Series B Preferred Shares (other than a regular quarterly cash
dividend of the Company in compliance with any applicable law, or (ii) to offer
to the holders of Series B Preferred Shares rights or warrants to subscribe for
or to purchase any additional Series B Preferred Shares or other shares of
beneficial interest of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Series B Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Series B
Preferred Shares), or (iv) to effect any consolidation or merger into or with
any other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(m) hereof), or to effect a statutory share exchange
with any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(m) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than a Subsidiary of the Company in one or
more transactions each of which complies with Section 11(m) hereof), or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which
29
shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, statutory share exchange, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Series B Preferred Shares, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the Series B Preferred Shares for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Series B Preferred Shares whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Series B
Preferred Shares shall be deemed thereafter to refer, if appropriate, not only
to Series B Preferred Shares but also to Common Shares or other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
▇▇▇▇▇▇▇▇ Properties Trust
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Equiserve Trust Company, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution Date and
subject to the penultimate sentence of this Section 27, the Company may, and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the
30
approval of any holders of certificates representing Common Shares. From and
after the Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein that may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner that the
Company may deem necessary or desirable and that shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided, however, that
this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company that
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment.
No supplement or amendment shall be made that changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of Units or Common
Shares for which a Right is exercisable; provided, however, that at any time
prior to the Distribution Date, the Board of Trustees of the Company may amend
this Agreement to increase the Purchase Price or extend the Final Expiration
Date. Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Shares.
Notwithstanding anything herein to the contrary, this Agreement may not be
amended at a time when the Rights are not redeemable.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Trustees, etc. For
all purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding Common Shares of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The
Board of Trustees of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Trustees, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Trustees of the Company in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Trustees of the Company to any
liability to the holders of the Rights.
31
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent, the
registered holders from time to time of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of the Company and the Persons specified
above.
Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Trustees of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Trustees of
the Company.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Maryland and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts made
and to be performed entirely within such State.
Section 33. 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, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. 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.
[SIGNATURE PAGE FOLLOWS]
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
▇▇▇▇▇▇▇▇ PROPERTIES TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and Secretary
EQUISERVE TRUST COMPANY, N.A.
By: /S/ ▇▇▇▇▇▇ ▇. FERRARI
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. Ferrari
Title: Senior Managing Director
33
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER FEBRUARY 17, 2008, OR EARLIER IF REDEEMED OR EXCHANGED BY
THE COMPANY. THE COMPANY, AT ITS OPTION, MAY REDEEM THE RIGHTS EVIDENCED BY THIS
CERTIFICATE AT A REDEMPTION PRICE OF $.001 PER RIGHT OR EXCHANGE THE RIGHTS FOR
COMMON SHARES ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON. ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]1
Rights Certificate
This certifies that _____________________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement, dated as of January 22,
2002 (the "Rights Agreement"), between ▇▇▇▇▇▇▇▇ Properties Trust, a Maryland
real estate investment trust (the "Company"), and Equiserve Trust Company, N.A.,
a federally chartered trust company (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M. (Dallas, Texas time) on February 17, 2008
at the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, non-assessable
share (a "Unit") of Junior Participating Cumulative Preferred Shares, Series B
(the "Series B Preferred Shares") or other securities of the Company, at a
purchase price of $85.00 per Unit (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. (All capitalized terms not defined herein
shall have the meaning set forth in the Rights Agreement.) The Purchase Price
may be paid in cash or by certified bank check or bank draft payable to the
order of the Company. The number of Rights evidenced by this Rights Certificate
(and the number of shares which may be purchased upon exercise thereof) set
forth above, and the Purchase Price per share set forth above, are the number
and Purchase Price as of __________ ____, based on the Series B Preferred Shares
as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of Series B Preferred Shares or other securities that may be purchased upon
the exercise of the
A-1
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Under certain circumstances specified in Section 7(e) of the Rights Agreement,
Rights that are or were owned by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person may become null and void and no longer
exercisable by any Person (including any subsequent transferee). Copies of the
Rights Agreement are on file at the above-mentioned office of the Rights Agent
and are also available upon written request to the Secretary of the Corporation.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Units of Series B Preferred Shares as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
then entitle such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Company, at its
option, may redeem the Rights evidenced by this Certificate at a redemption
price of $.001 per Right or exchange the Rights for Common Shares.
No fractional Series B Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-thousandth of a share of Series B Preferred Shares), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Series B Preferred Shares
or of any other securities of the Company that may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
trustees or upon any matter submitted to shareholders at any meeting thereof, or
to give or withhold consent to any action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
A-2
WITNESS the facsimile signatures of the proper officers of the Company and
its corporate seal.
Dated as of ___________ ____, _______
[SEAL]
ATTEST: ▇▇▇▇▇▇▇▇ PROPERTIES TRUST
____________________________________ By:_______________________
Secretary Title:_________________
Countersigned:
EQUISERVE TRUST COMPANY, N.A.
By_________________________________
Authorized Signature
A-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ____________________ hereby sells, assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _______________, _______
__________________________
Signature
Signature Guaranteed:
A-4
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:___________________________, ____ __________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
A-5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: ▇▇▇▇▇▇▇▇ PROPERTIES TRUST:
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Rights Certificate to purchase the Series B Preferred Shares
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares (or other securities) be
issued in the name of and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please print name and address)
Date: _______________, ________
__________________________________
Signature
Signature Guaranteed:
A-6
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated:_______________________, _____ _________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
/1/ The bracketed language shall be inserted only if applicable.
A-7
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE SERIES B PREFERRED SHARES
-------------------------------------------------------
On February 6, 1998, the Board of Trustees (the "Board") of ▇▇▇▇▇▇▇▇
Properties Trust, a real estate investment trust organized under the laws of
Maryland (the "Company"), approved a Rights Agreement, dated as of and to be
effective on February 6, 1998 between the Company and Equiserve Trust Company,
N.A. (f/k/a First Chicago Trust Company of New York), as Rights Agent, as
amended and restated (the "Rights Agreement"), having the principal terms
summarized below. In accordance with the Rights Agreement, the Board also
authorized a dividend distribution of one Right for each outstanding common
share of beneficial interest, $.01 par value, (the "Common Shares"), of the
Company to shareholders of record at the close of business on February 17, 1998
(the "Record Date").
Each Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of the Company's Junior Participating Cumulative
Preferred Shares, Series B ("Series B Preferred Shares"). Each one
one-thousandth of a share (a "Unit") of a Series B Preferred Share is structured
to be the equivalent of one Common Share of the Company. Shareholders will
receive one Right per Common Share held of record at the close of business on
the Record Date. The exercise price of the Right will be $85.00 subject to
adjustment (the "Purchase Price").
Rights will also attach to Common Shares issued after the Record Date but
prior to the Distribution Date unless the Board determines otherwise at the time
of issuance. The description and terms of the Rights are set forth in the Rights
Agreement.
The Rights will trade with the Common Shares and will be evidenced by
Common Shares certificates, and no separate certificates evidencing the Rights
(the "Rights Certificates") will be distributed initially. The Rights will
separate from the Common Shares and a distribution of the Rights Certificates
will occur (the "Distribution Date") upon the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 10% or more of the outstanding Common Shares
(or, in the case of Security Capital Preferred Growth Incorporated ("SCPG") and
its affiliates, 11% or more of the outstanding Common Shares) (the "Share
Acquisition Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially becoming an Acquiring Person. Until the Distribution Date, (i) the
Rights will be evidenced by the Common Shares certificates and will be
transferred with and only with such Common Shares certificates, (ii) any Common
Shares certificates issued will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any certificates
for Common Shares outstanding will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on February 17, 2008, unless earlier redeemed or
exchanged by the Company as described below. As soon as practicable after the
Distribution Date, Rights Certificates will be
B-1
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date, and thereafter such separate Rights Certificates alone
will represent the Rights.
The Agreement provides that if any person becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right (except as set
forth below) will thereafter have the right to receive, upon exercise and
payment of the Purchase Price, Series B Preferred Shares or, at the option of
the Company, Common Shares (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to twice the amount of the
Purchase Price.
In the event that, at any time following the Share Acquisition Date, (i)
the Company is acquired in a merger, statutory share exchange, or other business
combination in which the Company is not the surviving person, or (ii) 50% or
more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except as set forth below) shall thereafter have the right to
receive, upon exercise and payment of the Purchase Price, Common Shares of the
acquiring company having a value equal to twice the Purchase Price. The events
set forth in this paragraph and in the immediately preceding paragraph are
referred to as the "Triggering Events."
Upon the occurrence of a Triggering Event that entitles Rights holders to
purchase securities or assets of the Company, Rights that are or were owned by
the Acquiring Person, or any affiliate or associate of such Acquiring Person, on
or after such Acquiring Person's Share Acquisition Date shall be null and void
and shall not thereafter be exercised by any person (including subsequent
transferees). Upon the occurrence of a Triggering Event that entitles Rights
holders to purchase Common Shares of a third party, or upon the authorization of
an Exchange, Rights that are or were owned by any Acquiring Person or any
affiliate or associate of any Acquiring Person on or after such Acquiring
Person's Share Acquisition Date shall be null and void and shall not thereafter
be exercised by any person (including subsequent transferees).
The Purchase Price payable, and the number of Series B Preferred Shares,
Common Shares or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution.
At any time after any person becomes an Acquiring Person, the Company may
exchange all or part of the Rights (except as set forth below) for Common Shares
(an "Exchange") at an exchange ratio of one share per Right, as appropriately
adjusted to reflect any share split or similar transaction.
At any time until ten business days following the Share Acquisition Date or
ten business days following the commencement of a tender offer or exchange offer
that would result in a person or group becoming an Acquiring Person, the Company
may redeem the Rights in whole, but not in part, at a price of $.001 per Right
(the "Redemption Price"). Additionally, the Company may thereafter but prior to
the occurrence of a Triggering Event redeem the Rights in whole, but not in
part, at the Redemption Price provided that such redemption is incidental to a
merger or other business combination transaction involving the Company that is
approved by the Board, and does not involve an Acquiring Person, and is one in
which all holders of Common Shares are treated alike. After the redemption
period has expired, the Company's right of
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redemption may be reinstated if an Acquiring Person reduces his beneficial
ownership to less than 10% (or, in the case of SCPG and its affiliates, 11%) of
the outstanding Common Shares in a transaction or series of transactions not
involving the Company. Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Series B Preferred Shares (or other consideration) of the
Company or for Common Shares of the acquiring company as set forth above.
Other than certain provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, to make certain other changes that do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time period governing
redemption may be made at such time as the Rights are not redeemable.
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