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EXHIBIT 10.4
EXCHANGE RIGHTS AGREEMENT
THIS EXCHANGE RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
September 4, 1998, is entered into by and among RAMCO-XXXXXXXXXX PROPERTIES
TRUST, a Maryland real estate investment trust (the "COMPANY"), and A.T.C.,
L.L.C., a Virginia limited liability company (the "NEW LIMITED PARTNER").
R E C I T A L S:
A. Ramco-Xxxxxxxxxx Properties, L.P., a Delaware limited partnership
(the "OPERATING PARTNERSHIP"), was formed pursuant to the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership dated May 10,
1996, as thereafter amended as of June 25, 1996, September 29, 1996, October 3,
1997, October 8, 1997, October 14, 1997, December 18, 1997, December 31, 1997,
January 8, 1998 and September 4, 1998 (the "PARTNERSHIP AGREEMENT").
B. Pursuant to the Partnership Agreement, the New Limited Partner and
the Original Limited Partners (collectively, the "LIMITED PARTNERS") hold units
of limited partnership interest ("OP UNITS") in the Operating Partnership.
C. The Company has agreed to provide the New Limited Partner with
certain rights to exchange its OP Units for the Company's shares of beneficial
interest, par value $.10 per share ("REIT SHARES").
Accordingly, the parties hereto do hereby agree as follows:
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"ASSIGNEE" means a Person to whom one or more OP Units have been
transferred in a manner determined under the Partnership Agreement, but who has
not become a substituted limited partner in accordance therewith.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"CASH AMOUNT" means an amount of cash per OP Unit equal to the Value on
the Valuation Date of the REIT Shares Amount.
"DECLARATION OF TRUST" means the RGPT Trust Declaration of Trust, dated
as of October 2, 1997, as amended.
"EXCHANGE FACTOR" means 1.0, provided, that in the event that the
Company (i) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares; (ii) subdivides its outstanding REIT shares; or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Exchange
Factor shall be adjusted by multiplying the Exchange Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
assuming for such purpose that such dividend, distribution, subdivision or
combination has occurred as of such time, and the denominator of which shall be
the actual number of REIT Shares (determined without the above assumption)
issued and outstanding on the record date for such dividend, distribution,
subdivision or combination. Any adjustment to the Exchange Factor shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.
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"EXCHANGING PARTNER" has the meaning set forth in Section 2.1 hereof.
"EXCHANGE RIGHT" has the meaning set forth in Section 2.1 hereof.
"LIEN" means any lien, security interest, mortgage, deed of trust,
charge, claim, encumbrance, pledge, option, right of first offer or first
refusal and any other right or interest of others of any kind or nature, actual
or contingent, or other similar encumbrance of any nature whatsoever.
"NOTICE OF EXCHANGE" means the Notice of Exchange substantially in the
form of Exhibit B to this Agreement.
"REIT SHARES AMOUNT" means that number of REIT Shares equal to the
product of the number of OP Units offered for exchange by the Exchanging
Partner, multiplied by the Exchange Factor as of the Valuation Date, provided,
that in the event the Company issues to all holders of REIT Shares rights,
options, warrants or convertible or exchangeable securities entitling the
shareholders to subscribe for or purchase REIT Shares, or any other securities
or property (collectively, the "rights"), then the REIT Shares Amount shall also
include such rights that a holder of that number of REIT Shares would be
entitled to receive.
"SEC" means the Securities and Exchange Commission.
"SPECIFIED EXCHANGE DATE" means the tenth (10th) Business Day after
receipt by the Company and by the Operating Partnership of a Notice of Exchange.
"VALUATION DATE" means the date of receipt by the Company of a Notice
of Exchange or, if such date is not a Business Day, the first Business Day
thereafter.
"VALUE" means, with respect to a REIT Share, the average of the daily
market price for the five (5) consecutive trading days immediately preceding the
Valuation Date. The market price for each such trading day shall be: (i) if the
REIT Shares are listed or admitted to trading on any national securities
exchange or the NASDAQ National Market System, the closing price on such day, or
if no such sale takes place on such day, the average of the closing bid and
asked prices on such day; (ii) if the REIT Shares are not listed or admitted to
trading on any national securities exchange or the NASDAQ National Marker
System, the last reported sale price on such day or, if no sale takes place on
such day, the average of the closing bid and asked prices on such day, as
reported by a reliable quotation source designated by the Company; or (iii) if
the REIT Shares are not listed or admitted to trading on any national securities
exchange or the NASDAQ National Market System and no such last reported sale
price or closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable quotation
source designated by the Company, or if there shall be no bid and asked prices
on such day, the average of the high bid and low asked prices, as so reported,
on the most recent day (not more than five (5) days prior to the date in
question) for which prices have been so reported; provided, that if there are no
bid and asked prices reported during the five (5) days prior to the date in
question, the Value of the REIT Shares shall be determined by the independent
trustees of the Company acting in good faith on the basis of such quotations and
other information as it considers, in its reasonable judgment, appropriate. In
the event the REIT Shares Amount includes rights that a holder of REIT Shares
would be entitled to receive, then the Value of such rights shall be determined
by the Company acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
ARTICLE 2
EXCHANGE RIGHT
SECTION 2.1 EXCHANGE RIGHT.
A. Subject to Sections 2.1.B, 2.1.C, 2.1.D and 2.1.E hereof, the
Company hereby grants to the New Limited Partner and the New Limited Partner
does hereby
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accept the right (the "EXCHANGE RIGHT"), exercisable on or after the date one
(1) year after September 4, 1998, to exchange on a Specified Exchange Date all
or a portion of the OP Units held by the New Limited Partner at an exchange
price equal to and in the form of the REIT Shares Amount to be paid by the
Company. The Exchange Right shall be exercised pursuant to a Notice of Exchange
delivered to the Company and to the Operating Partnership by the New Limited
Partner (the "EXCHANGING PARTNER"); provided, however, that the Operating
Partnership may exchange the OP Units subject to the Notice of Exchange in
accordance with Section 2.1.B. The New Limited Partner may not exercise the
Exchange Right for less than one thousand (1,000) OP Units or, if the New
Limited Partner holds less than one thousand (1,000) OP Units, all of the OP
Units held by the New Limited Partner. Any Assignee of the New Limited Partner
may exercise the rights of the New Limited Partner pursuant to this Section 2.1,
and the New Limited Partner shall be deemed to have assigned such rights to such
Assignee and shall be bound by the exercise of such rights by such Assignee. In
connection with any exercise of such rights by an Assignee on behalf of the New
Limited Partner, the REIT Shares Amount shall be paid by the Operating
Partnership directly to such Assignee and not to the New Limited Partner.
B. Notwithstanding the provisions of Section 2.1.A, after receiving a
Notice of Exchange the Operating Partnership may, in its sole and absolute
discretion, elect to satisfy the Exchanging Partner's Exchange Right by paying
to the Exchanging Partner the Cash Amount on the Specified Exchange Date. If the
Operating Partnership shall elect to exercise its right to purchase OP Units for
the Cash Amount under this Section 2.1.B with respect to a Notice of Exchange,
it shall so notify the Exchanging Partner within five Business Days after the
receipt by it of such Notice of Exchange. In the event the Operating Partnership
shall elect to satisfy the Exchanging Partner's Exchange Right by exchanging
REIT Shares for the OP Units offered for exchange, the Exchanging Partner agrees
to execute such documents as the Operating Partnership may reasonably require in
connection with the issuance of REIT Shares upon exercise of the Exchange Right.
C. Notwithstanding the provisions of Section 2.1.A and Section 2.1.B,
the New Limited Partner shall not be entitled to exercise the Exchange Right
pursuant to Section 2.1.A if the delivery of REIT Shares to the New Limited
Partner on the Specified Exchange Date by the Company pursuant to Section 2.1.A
(regardless of whether or not the Operating Partnership would in fact exercise
its rights under Section 2.1.B) would be prohibited under the Declaration of
Trust of the Company.
D. Notwithstanding the provisions of Section 2.1.A and Section 2.1.B,
the Exchange Right may be exercised prior to the date which is one (l) year
after September 4, 1998 (i) with the prior written consent of at least a
majority of the Company's independent trustees or (ii) in the event of the death
of the New Limited Partner prior to such date, to the minimum extent necessary
to permit the estate of the New Limited Partner to acquire REIT Shares pursuant
to Section 2.1.A or cash pursuant to Section 2.1.B that could be utilized to
fund the payment of any estate taxes that may be payable at such time.
E. The Exchange Right shall expire with respect to any OP Units for
which an Exchange Notice has not been delivered to the Company and to the
Operating Partnership on or before December 31, 2094.
F. Any exchange of OP Units pursuant to this Article 2 shall be deemed
to have occurred as of the Specified Exchange Date for all purposes, including
without limitation the payment of distributions or dividends in respect of OP
Units or REIT shares, as applicable. Any OP Units acquired by the Operating
Partnership pursuant to an exercise by the New Limited Partner of an Exchange
Right shall be deemed to be acquired by and reallocated or reissued to the
Operating Partnership. The Company, as general partner of the Operating
Partnership, shall amend the Partnership Agreement to reflect each such exchange
and reallocation or reissuance of OP Units and each corresponding recalculation
of the OP Units of the New Limited Partner. The number of OP Units to be
reallocated or reissued to the Operating Partnership shall
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equal the number of REIT Shares issued to the New Limited Partner upon exercise
of an Exchange Right.
G. Except in connection with a merger, business combination or other
reorganization transaction, the Company shall not exchange any of its OP Units
as long as there are any other holders of OP Units.
ARTICLE 3
OTHER PROVISIONS
SECTION 3.1 COVENANTS OF THE COMPANY.
A. At all times during the pendency of the Exchange Right, the Company
shall reserve for issuance such number of REIT Shares as may be necessary to
enable the Company to issue such shares in full payment of the REIT Shares
Amount in regard to all OP Units held by Limited Partners which are from time to
time outstanding.
B. During the pendency of the Exchange Right, the Company shall deliver
to the New Limited Partner in a timely manner all reports filed by the Company
with the SEC to the extent the Company also transmits such reports to its
shareholders and all other communications transmitted from time to time by the
Company to its shareholders generally.
C. The Company shall notify the New Limited Partner, upon request, of
the then current Exchange Factor.
SECTION 3.2 FRACTIONAL SHARES.
No fractional REIT Shares shall be issued upon exchange of OP Units.
The number of full shares of REIT Shares which shall be issuable upon exchange
of OP Units (or the cash equivalent amount thereof if the Cash Amount is paid)
shall be computed on the basis of the aggregate amount of OP Units so
surrendered. Instead of any fractional REIT Shares which would otherwise be
issuable upon exchange of any OP Units, the Company shall pay a cash adjustment
in respect of such fraction in an amount equal to the Cash Amount of an OP Unit
multiplied by such fraction.
ARTICLE 4
GENERAL PROVISIONS
SECTION 4.1 ADDRESSES AND NOTICE.
Any notice, demand, request or report required or permitted to be given
or made to the New Limited Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by first class United States mail or by other means of written communication to
the New Limited Partner or Assignee at the address listed on the records of the
Partnership. Notice to the Company shall be made to the following address: 00000
Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, Attn: Chairman.
SECTION 4.2 TITLES AND CAPTIONS.
All article or section titles or captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
SECTION 4.3 PRONOUNS AND PLURALS.
Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
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SECTION 4.4 FURTHER ACTION.
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
SECTION 4.5 BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
SECTION 4.6 WAIVER.
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
SECTION 4.7 COUNTERPARTS.
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all of the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.
SECTION 4.8 APPLICABLE LAW.
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of laws thereof.
SECTION 4.9 INVALIDITY OF PROVISIONS.
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed as of the day and year first above written.
RAMCO-XXXXXXXXXX PROPERTIES
TRUST, a Maryland real estate investment
Trust
By:/s/ Xxxxx Xxxxxxxxxx
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Its:Executive Vice President
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A.T.C., L.L.C.,
a Virginia limited liability company
By: A.T. CENTER, INC., a Virginia corporation,
Its Managing Member
By:/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Its: President
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EXHIBIT "A"
NOTICE OF EXCHANGE
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