Exhibit 4(b)
[FORM OF AMENDMENT NO. 1 TO RIGHTS AGREEMENT]
Amendment No. 1 to Rights Agreement, dated as of August 11, 1998
(this "Amendment No. 1"), by and between First Union Real Estate Equity and
Mortgage Investments, an Ohio business trust governed by the laws of the
state of Ohio (the "Company"), and National City Bank, a national banking
association (the "Rights Agent").
WHEREAS, on March 7, 1990, the Company and the Rights Agent
entered into a Rights Agreement (the "Rights Agreement"); and
WHEREAS, the Company, with the approval of the Board of Trustees
of the Company, and the Rights Agent, have mutually agreed to modify the
terms of the Rights Agreement in certain respects.
NOW, THEREFORE, in consideration of the promises and mutual
agreements herein set forth, and intending to be legally bound hereby, the
parties hereto agree that the Rights Agreement shall be and hereby is
amended in the following manner:
Section 1. Amendment of "Certain Definitions" Section.
(a) Section 1(a) of the Rights Agreement is hereby amended (a) by
deleting the word "and" that appears immediately before the words "provided
further" and (b) by replacing the period at the end of the paragraph with
the following:
", and provided further that, with respect to (a) any Person who
or which acquired any Shares of Beneficial Interest (i) pursuant to the
exercise of rights ("Rights") in accordance with the terms of the Trust's
Rights Offering (the "Rights Offering") referred to in those certain Fixed
Rate Loan Agreements, each dated as of August 11, 1998, by and among First
Union Real Estate Equity and Mortgage Investments, as Borrower, Bankers
Trust Company, as Agent, and the Lenders listed on the signature pages
thereto, as Lenders, (ii) pursuant to any oversubscription privilege (the
"Oversubscription Privilege") granted to such Person in accordance with the
terms of the Rights Offering, or (iii) pursuant to any standby purchase
commitment relating to the Rights Offering (each, a "Standby Purchase
Commitment") and (b) any Associate or Affiliate of such Person, the "15%"
figure in this paragraph shall be replaced with a percentage equal to the
sum of (x) 15% plus (y) the percentage of such Person's beneficial
ownership in the outstanding Shares of Beneficial Interest immediately
after the acquisition of Shares of Beneficial Interest pursuant to (a) the
exercise of Rights, (b) the Oversubscription Privilege and (c) the Standby
Purchase Commitments minus (z) the percentage of such Person's beneficial
ownership in the outstanding Shares of Beneficial Interest immediately
prior to the purchase of any Shares of Beneficial Interest by any Person
pursuant to (a) the exercise of Rights, (b) the Oversubscription Privilege
or (c) any Standby Purchase Commitment."
(b) Section 1(d) of the Rights Agreement is hereby amended by
deleting word "and" immediately before the symbol "(y)" in the last
paragraph of the subsection and by replacing the period at the end of the
subsection with the following:
", and (z) a Person shall not be deemed to be the Beneficial
Owner of, or to "beneficially own," any Shares of Beneficial Interest which
may be purchased pursuant to the exercise of Rights, the Oversubscription
Privilege, or a Standby Purchase Commitment until such shares are actually
purchased and issued pursuant to the exercise of Rights, the
Oversubscription Privilege, or a Standby Purchase Commitment, as the case
may be."
Section 2. Amendment of "Exercise of Rights; Purchase Price;
Expiration Date of Rights" Section.
Section 7(f) is hereby amended by replacing the period at the end
of the second sentence with the following:
";provided, however, that the provisions of this sentence and the
preceding sentence shall not apply to a Person for whom or for which the
Trust has waived the 9.8% share ownership limitation (the "Limitation") set
forth in Article VI, Section 6 of the Trust's By-Laws. With respect to any
Person for whom or for which the Trust has not waived the Limitation and to
whom or to which the provisions of the preceding two sentences are
applicable, the Board of Trustees of the Trust may, in its sole discretion
and without any obligation to do so, elect to issue or pay, upon the
exercise of the Rights that are exercisable by such Person, cash, property,
debt, voting or non-voting equity securities or any combination thereof,
having an aggregate current fair market value equal to the difference
between (a) the aggregate current Market Price of the Shares of Beneficial
Interest which, but for the provisions of this Section 7(f), would have
been issuable pursuant to the exercise of the Rights and (b) the aggregate
Exercise Price of such Shares of Beneficial Interest, which Exercise Price
is determined in accordance with Section 11(a)(ii)(C) hereof. For purposes
of the preceding sentence, the determination of fair market value shall be
in the sole and absolute discretion of the Board of Trustees of the Trust."
Section 3. Amendment of "Determination and Actions by the
Board of Trustees, etc." Section.
Section 27 is hereby amended by adding the following after the
phrase "or to amend or supplement the Agreement":
"and a determination of the percentage of Shares of Beneficial
Interest which a Person beneficially owns in accordance with Section 1(a)
hereto".
Section 4. No Personal Liability.
Notwithstanding anything contained herein to the contrary, this
Amendment No. 1 is made and executed on behalf of the Company, by its
officers on behalf of the trustees thereof, and none of the trustees or any
additional or successor trustee hereafter appointed, or any beneficiary,
officer, employee, or agent of the Company shall have any liability in his
personal or individual capacity, but instead, all parties shall look solely
to the property and assets of the Company for satisfaction of claims of any
nature arising under or in connection with this Amendment No. 1.
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1
to be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
Attest: First Union Real Estate Equity and
Mortgage Investments
By: _________________________ By: ___________________________
Name:[ ] Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: Interim Chief Executive
Officer
and Chief Financial
Officer
Attest: National City Bank
By: _________________________ By: __________________________
Name: [ ] Name: [ ]
Title: Title:
