<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 10, 1998
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CABOT INDUSTRIAL TRUST
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(Exact name of Registrant as specific in its charter)
Maryland
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(State or other jurisdiction of incorporation or organization)
1-13829 04-3397866
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(Commission File Number) (I.R.S. Employer Identification No.)
Two Center Plaza, Suite 200, Boston, Massachusetts 02108
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(Address of principal executive offices) (Zip Code)
(617) 723-0900
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
On September 10, 1998, the Board of Trustees of Cabot Industrial Trust (the
"Company") amended the Rights Agreement dated as of June 11, 1998, between the
Company and BankBoston, N.A., as rights agent (as amended, the "Rights
Agreement"). Under the terms of the Rights Agreement, the holders of any Common
Shares are entitled to one preferred share purchase right (a "Right") for each
common share of beneficial interest, par value $0.01 per share (the "Common
Shares"). Each Right entitles the registered holder under certain circumstances
to purchase from the Company one one-hundredth of a Series A Junior
Participating Preferred Share, par value $0.01 per share (the "Participating
Preferred Shares"), of the Company at a price of $85.00 per one one-hundredth of
a Participating Preferred Share (the "Purchase Price"), subject to adjustment.
The Rights had been issued initially by dividend of the Company to shareholders
of record on July 15, 1998 (the "Record Date").
The Rights are attached to and evidenced by certificates evidencing Common
Shares, and no separate certificates for the Rights will be distributed. The
Rights will become exercisable and will be evidenced by separate certificates
only after the earlier to occur of (i) 10 days following a public announcement
(or such specified or unspecified later date as may be determined by the Board
of Trustees prior to the Distribution Date (as defined below)) that a person or
group of affiliated or associated persons has acquired beneficial ownership of
15% or more of the outstanding Common Shares (thereby becoming an "Acquiring
Person"), (ii) 15 business days (or such specified or unspecified later date as
may be determined by the Board of Trustees prior to the Distribution Date)
following the commencement of, or the announcement of an intention to commence,
a tender or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of persons of 15% or more of the
outstanding Common Shares, or (iii) 10 business days (or such specified or
unspecified later date as may be determined by action of the Board of Trustees
prior to the Distribution Date) after the filing of any application, request or
other document with a governmental agency seeking approval of, attempting to
rebut any presumption of control upon, or indicating an intention to enter into,
any transaction or series of transactions that would result in any person
becoming the beneficial owner of 15% or more of the outstanding Common Shares
(the first of such dates to occur being referred to herein as the "Distribution
Date"). Beneficial ownership under the Rights Agreement includes beneficial
ownership as determined under Rule 13d-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934. Common Share certificates issued
upon transfer or issuance of Common Shares after the Record Date and prior to
the Distribution Date (or earlier redemption or expiration of the Rights) will
contain a notation incorporating the Rights Agreement by reference.
Notwithstanding the foregoing, certain existing investors specified in the
Rights Agreement (the "Grandfathered Persons") who may be deemed to beneficially
own 15% or more of the Common Shares as of the Record Date will not be deemed to
be Acquiring Persons unless any such Grandfathered Person becomes the beneficial
owner of an additional 1% of the outstanding Common Shares without the prior
written approval of the Company. In addition, if the Board of Trustees in good
faith determines that a person who would otherwise be an Acquiring Person has
become such inadvertently, and such person divests as promptly as practicable a
sufficient number of Common Shares so that such person would no longer be an
Acquiring Person, then such person shall not be deemed to be an Acquiring Person
for purposes of the Rights Agreement.
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<PAGE>
The Rights will expire on June 11, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of Participating Preferred
Shares or other securities or property issuable, upon exercise of the Rights are
subject to adjustment under certain circumstances from time to time to prevent
dilution. With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price.
Participating Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Participating Preferred Share will be entitled to a
minimum preferential quarterly distribution payment, when, as and if authorized
by the Board of Trustees out of funds legally available for such purpose, of
$1.00 per share but will be entitled to an aggregate distribution of 100 times
any distribution declared per Common Share. In the event of liquidation, the
holders of the Participating Preferred Shares will be entitled to a minimum
preferential liquidation payment of $1.00 per share but will be entitled to an
aggregate payment of 100 times the payment made per Common Share. Each
Participating Preferred Share will have 100 votes, voting together with the
Common Shares. In the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, each Participating Preferred Share will be
entitled to receive 100 times the amount received per Common Share. In the
event of issuance of Participating Preferred Shares upon exercise of the Rights,
in order to facilitate trading, a depositary receipt may be issued for each one
one-hundredth of a Participating Preferred Share. The Rights will be protected
by customary antidilution provisions.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision will be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to receive, upon
exercise thereof, a number of Common Shares having a market value (determined in
accordance with the Rights Agreement) equal to two times the Purchase Price. In
lieu of the issuance of Common Shares upon exercise of Rights, the Board of
Trustees may under certain circumstances, and if there is an insufficient number
of Common Shares authorized but unissued to permit the exercise in full of the
Rights, the Board is required to, take such action as may be necessary to cause
the Company to issue or pay upon the exercise of Rights, cash (including by way
of a reduction of the Purchase Price), property, other securities or any
combination of the foregoing having an aggregate value equal to that of the
Common Shares which otherwise would have been issuable upon exercise of the
Rights. The Company may permit the Rights to be exercised for 50% of the Common
Shares (or cash, property or other securities that may be substituted for Common
Shares) that would otherwise be purchasable upon exercise thereof in
consideration of the surrender of the Rights so exercised and without other
payment of the Purchase Price.
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<PAGE>
In the event that, after any person or group becomes an Acquiring Person,
the Company is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price,
a number of shares of common stock of the acquiring company having a market
value (determined in accordance with the Rights Agreement) equal to two times
the Purchase Price.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by that person or group of 50% or more of the outstanding
Common Shares, the Board of Trustees may exchange the Rights (other than Rights
owned by that person or group which will have become void), in whole or in part,
at an exchange ratio of one Common Share (or one one-hundredth of a
Participating Preferred Share) per Right (subject to adjustment).
As soon as practicable after the Distribution Date, the Company is
obligated to use its best efforts to file a registration statement under the
Securities Act of 1933, as amended, relating to the securities issuable upon
exercise of Rights and to cause such registration statement to become effective
as soon as practicable.
At any time prior to the end of the tenth business day (or such specified
or unspecified later date as may be determined by the Board of Trustees prior to
such tenth day) following the first date of public announcement by the Company
that a person has become an Acquiring Person (the "Shares Acquisition Date"),
the Board of Trustees may redeem the Rights, in whole but not in part, at a
redemption price of $0.01 per Right (the "Redemption Price"), payable in cash,
Common Shares or any other form of consideration deemed appropriate by the Board
of Trustees. The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Trustees in its sole
discretion may establish. Immediately upon the effectiveness of any redemption
of the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Trustees without the
consent of the holders of the Rights, provided, however, that no supplement or
amendment shall be made which changes the Redemption Price, the Final Expiration
Date, the Purchase Price or the number of Participating Preferred Shares for
which a Right is exercisable, except that until a person or group of persons
becomes an Acquiring Person, the Board may amend the Rights Agreement to
increase the Purchase Price or extend the Final Expiration Date.
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.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Trustees. The Rights should not interfere
with any merger or other business combination approved by the Board of Trustees
since the Rights may be redeemed by the Company at the Redemption Price prior to
and, under certain circumstances, after the time that a person or group has
acquired beneficial ownership of 15% or more of the Common Shares.
-3-
<PAGE>
The Rights Agreement, which specifies the terms of the Rights and the
Participating Preferred Shares, as amended and restated, has been filed as an
exhibit to this report and is incorporated herein by reference. The foregoing
description of the Rights does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, the Rights Agreement, including
the definitions therein of certain terms.
On September 10, 1998, the Board of Trustees also made certain
modifications to the By-Laws of Cabot Industrial Trust. The Amended and
Restated By-Laws are filed as an exhibit to this report and are incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
----------- --------------------------------------------------------
<C> <S>
1 Rights Agreement, dated as of June 11, 1998, and amended
and restated as of September 10, 1998, between Cabot
Industrial Trust and BankBoston, N.A., as Rights Agent,
including Exhibit A thereto (Form of Articles
Supplementary relating to the Series A Junior
Participating Preferred Shares) and Exhibit B thereto
(Form of Right Certificate)
2 Amended and Restated By-Laws of Cabot Industrial Trust
as of September 10, 1998
</TABLE>
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CABOT INDUSTRIAL TRUST
Date: September 14, 1998 By: /s/ Neil E. Waisnor
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Name: Neil E. Waisnor
Title: Senior Vice President - Finance,
Treasurer and Secretary
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<PAGE>
EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
----------- -------------------------------------------------------- ----
<C> <S> <C>
1 Rights Agreement, dated as of June 11, 1998, and amended and
restated as of September 10, 1998, between Cabot Industrial
Trust and BankBoston, N.A., as Rights Agent, including
Exhibit A thereto (Form of Articles Supplementary relating
to the Series A Junior Participating Preferred Shares) and
Exhibit B thereto (Form of Right Certificate)
2 Amended and Restated By-Laws of Cabot Industrial Trust as of
September 10, 1998
</TABLE>
<PAGE>
EXHIBIT 1
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RIGHTS AGREEMENT
between
CABOT INDUSTRIAL TRUST
and
BANKBOSTON, N.A.
Rights Agent
Dated as of June 11, 1998, and
Amended and Restated as of September 10, 1998
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<PAGE>
TABLE OF CONTENTS
=================
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Section 1. Certain Definitions ............................................... 1
Section 2. Appointment of Rights Agent ....................................... 5
Section 3. Issuance of Right Certificates .................................... 5
Section 4. Form of Right Certificates ........................................ 7
Section 5. Countersignature and Registration ................................. 8
Section 6. Transfer, Division, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates ...................................... 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights ..... 9
Section 8. Cancellation and Destruction of Right Certificates ................ 11
Section 9. Availability of Preferred Shares .................................. 11
Section 10. Preferred Shares Record Date ...................................... 12
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights ............................................................ 12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares ........ 19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power ............................................................. 19
Section 14. Fractional Rights and Fractional Shares ........................... 21
Section 15. Rights of Action .................................................. 23
Section 16. Agreement of Right Holders ........................................ 23
Section 17. Right Certificate Holder Not Deemed a Shareholder ................. 24
Section 18. Concerning the Rights Agent ....................................... 24
Section 19. Merger or Consolidation or Change of Name of Rights Agent ......... 24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Section 20. Duties of Rights Agent ............................................ 25
Section 21. Change of Rights Agent ............................................ 27
Section 22. Issuance of New Right Certificates ................................ 28
Section 23. Redemption ........................................................ 28
Section 24. Exchange .......................................................... 29
Section 25. Notice of Certain Events .......................................... 30
Section 26. Notices ........................................................... 31
Section 27. Supplements and Amendments ........................................ 31
Section 28. Successors ........................................................ 32
Section 29. Benefits of this Agreement ........................................ 32
Section 30. Severability ...................................................... 32
Section 31. Governing Law ..................................................... 32
Section 32. Counterparts ...................................................... 32
Section 33. Descriptive Headings .............................................. 32
Section 34. Notice as to Liability of Trustees and Shareholders ............... 32
Exhibit A - Form of Articles Supplementary of Cabot Industrial Trust
Exhibit B - Form of Right Certificate
</TABLE>
<PAGE>
RIGHTS AGREEMENT
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Agreement, dated as of June 11, 1998, as amended and restated as of
September 10, 1998, between Cabot Industrial Trust, a Maryland real estate
investment trust (the "Company"), and BankBoston, N.A., a national banking
association (the "Rights Agent").
The Board of Trustees of the Company has authorized and declared a dividend
of one preferred share purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Company outstanding as of the close of business on
July 15, 1998 (the "Record Date"), each Right representing the right to purchase
one one-hundredth of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further agreed to
authorize and direct the issuance of one Right with respect to each Common Share
that shall become outstanding between the Record Date and the first to occur of
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, 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
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following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as hereinafter defined) who
or which, together with all Affiliates and Associates (as such terms are
hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of 15% or more of the Common Shares of the Company
then outstanding, but shall not include the Company, any Subsidiary (as
hereinafter defined) of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common
Shares for or pursuant to the terms of any such plan, or any Grandfathered
Person (as hereinafter defined). Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of (i) an acquisition of
Common Shares by the Company which, by reducing the number of Common Shares
outstanding, increases the proportionate number of Common Shares
beneficially owned by such Person to 15% or more of the Common Shares of
the Company then outstanding, or (ii) the acquisition by such Person of
newly issued Common Shares directly from the Company (it being understood
that a purchase from an underwriter or other intermediary is not directly
from the Company); provided, however, that if a Person shall become the
-------- -------
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding by reason of Common Share purchases by the Company or the
receipt of newly issued Common Shares directly from the Company and shall,
after such Common Share purchases or direct issuance by the Company, become
the Beneficial Owner of any additional Common Shares of the Company, then
such Person shall be deemed to be an "Acquiring
<PAGE>
Person"; provided further, however, that any transferee from such Person
-------- ------- -------
who becomes the Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding shall nevertheless be deemed to be an "Acquiring
Person." Notwithstanding the foregoing, if the Board of Trustees of the
Company determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph, has become such inadvertently, and such Person divests as
promptly as practicable (and in any event within ten Business Days after
notification by the Company) a sufficient number of Common Shares so that
such Person would no longer be an Acquiring Person, as defined pursuant to
the foregoing provisions of this paragraph, then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this Agreement.
"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, as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) 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 written or oral (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise; provided, however,
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that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; (B) the sole or shared right to vote or
dispose (including any such right pursuant to any agreement,
arrangement or understanding, whether written or oral); provided,
--------
however, that a Person shall not be deemed the Beneficial Owner of, or
-------
to beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report); or (C) "beneficial
ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act); or
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<PAGE>
(iii) which 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 (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to clause (B) of subparagraph (ii) of this
definition) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to
the Beneficial Ownership of securities of the Company by any Person, shall
mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a day on which banking institutions in New York are authorized or obligated
by law or executive order to close.
"Close of business" on any given date shall mean 5:00 P.M., Eastern
time, on such date; provided, however, that if such date is not a Business
-------- -------
Day it shall mean 5:00 P.M., Eastern time, on the next succeeding Business
Day.
"Common Shares" when used with reference to the Company shall mean the
common shares of beneficial interest, par value $0.01 per share, of the
Company. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or the equity securities or
other equity interest having power to control or direct the management of
such other Person.
"Distribution Date" shall have the meaning set forth in Section 3
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Ratio" shall have the meaning set forth in Section 24
hereof.
"Expiration Date" shall have the meaning set forth in Section 7
hereof.
"Final Expiration Date" shall have the meaning set forth in Section 7
hereof.
"Grandfathered Person" shall mean each of the following: (i) IBM
Retirement Plan Trust; (ii) Pennsylvania Public School Employes' Retirement
System; (iii) New York State Teachers' Retirement System; and (iv) State of
Wisconsin Investment Board.
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<PAGE>
Notwithstanding the foregoing, a Grandfathered Person shall cease to be a
Grandfathered Person if (y) such Grandfathered Person becomes the
Beneficial Owner of an additional 1% or more of the outstanding Common
Shares without the prior written approval of the Company, other than
pursuant to dividends or rights (including the Rights) paid or offered to
shareholders of the Company generally (other than an Acquiring Person or
Persons) or as the result of an acquisition of Common Shares by the Company
which, by reducing the number of Common Shares outstanding, increases the
proportionate number of Common Shares beneficially owned by such
Grandfathered Person; or (z) such Grandfathered Person ceases to be the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding.
"Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"Preferred Shares" shall mean the Series A Junior Participating
Preferred Shares, par value $0.01 per share, of the Company having the
rights and preferences set forth in the form of Articles Supplementary
attached to this Agreement as Exhibit A.
"Principal Party" shall have the meaning set forth in Section 13
hereof.
"Purchase Price" shall have the meaning set forth in Section 4 hereof.
"Redemption Date" shall have the meaning set forth in Section 7
hereof.
"Right Certificate" shall have the meaning set forth in Section 3
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares Acquisition Date" shall mean the first date of public
announcement by the Company that an Acquiring Person has become such.
"Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.
"Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
"Triggering Event" shall mean any event described in Section 11(a)(ii)
or Section 13(a).
Any determination or interpretation required in connection with any of the
definitions contained in this Section 1 shall be made by the Board of Trustees
of the Company in their good faith judgment, which determination shall be final
and binding on the Rights Agent and on all shareholders of the Company.
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<PAGE>
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 the holders of the 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 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 acts
or omissions of any such co-Rights Agents.
Section 3. Issuance of Right Certificates.
------------------------------
(a) Until the earlier of (i) the close of business on the tenth day after
the Shares Acquisition Date (or such specified or unspecified later date as may
be determined by action of the Board of Trustees prior to the occurrence of the
Distribution Date), (ii) the close of business on the fifteenth Business Day (or
such specified or unspecified later date as may be determined by action of the
Board of Trustees prior to the occurrence of a Distribution Date) after the date
of the commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of any
such plan) of, or of the first public announcement of, the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the Beneficial Owner of Common Shares aggregating 15% or
more of the then outstanding Common Shares, or (iii) the close of business on
the tenth Business Day (or such specified or unspecified later date as may be
determined by action of the Board of Trustees prior to the occurrence of a
Distribution Date) after the date of filing by any Person of, or the first
public announcement of the intention of any Person to file, any application,
request, submission or other document with any federal or state regulatory
authority seeking approval of, attempting to rebut any presumption of control
upon, or otherwise indicating an intention to enter into, any transaction or
series of transactions the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 15% or more of the
then outstanding Common Shares, other than a transaction in which newly issued
Common Shares are issued directly by the Company to such Person (including any
such date which is after the date of this Agreement and prior to the issuance of
the Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be certificates for Rights) and not by separate certificates, and (y)
the Rights will be transferable only in connection with the transfer of the
underlying Common Shares (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Distribution Date, at the address of such holder shown on the
records
-5-
<PAGE>
of the Company, a Right Certificate, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) With respect to certificates for Common Shares outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof, and registered
holders of Common Shares shall also be the registered holders of the associated
Rights (regardless of whether such ownership is indicated on the Common Share
certificates). Until the earliest of the Distribution Date, the Redemption Date
or the Final Expiration Date, the transfer of any certificate for Common Shares
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Rights shall be issued in respect of all Common Shares which are issued
(whether or not previously issued) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Final Expiration
Date. Certificates evidencing such Common Shares shall also be deemed to be
certificates for Rights. Certificates evidencing both Common Shares and Rights
in accordance with this Section 3 which are executed and delivered (whether or
not the Common Shares evidenced thereby were previously issued or are presented
for transfer) by the Company (including, without limitation, certificates
representing reacquired Common Shares referred to in the last sentence of this
paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them a legend that
by itself or together with prior legends is substantially to the following
effect:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in the Rights Agreement between Cabot
Industrial Trust (the "Company") and BankBoston, N.A., dated as of
June 11, 1998 (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, the 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
issued to, or held by, any Person who is, was or becomes an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, shall become null and void.
Until the Distribution Date, the Rights associated with the Common Shares shall
be evidenced by the certificates evidencing the associated Common Shares alone
(regardless of whether any such certificate contains the above legend), and the
transfer of any such certificate shall also
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<PAGE>
constitute the transfer of the Rights associated with the Common Shares
represented thereby. 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 which are no longer outstanding.
Section 4. Form of Right Certificates.
--------------------------
(a) The Right Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit B 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 Right Certificates shall entitle the holders thereof
to purchase such number of one one-hundredths of a Preferred Share as shall be
set forth therein at the price per one one-hundredth of a Preferred Share set
forth therein (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 Right 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 any Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes an Acquiring Person, or (iii) a transferee of an
Acquiring Person (or any 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, whether written or oral, regarding the transferred
Rights or (B) a transfer which is part of a plan, arrangement or understanding,
whether written or oral, which has as a primary purpose or effect the avoidance
of Section 7(e) hereof, and any Right Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall contain (to the
extent feasible and otherwise reasonably identifiable as such) the following
legend:
The Rights evidenced by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights evidenced hereby may become void in the circumstances
specified in Section 7(e) of such Agreement.
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<PAGE>
The provisions of Section 7(e) shall apply whether or not any Right Certificate
actually contains the foregoing legend.
Section 5. Countersignature and Registration. The Right Certificates
---------------------------------
shall be executed on behalf of the Company by the Chairman of its Board of
Trustees, its President or any of its Vice Presidents, or its Secretary, either
manually or by facsimile signature, shall have affixed thereto the Company's
seal or a facsimile thereof, and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless countersigned. In case any officer of
the Company who shall have signed any of the Right Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right 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 Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6. Transfer, Division, Combination and Exchange of Right
-----------------------------------------------------
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
- ---------------------------------------------------------------------
to the provisions of Sections 4(b), 7(e), 14 and 24 hereof, at any time after
the close of business on the Distribution Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be transferred, divided, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of Preferred Shares (or, following a
Triggering Event, Common Shares or other securities or property, as the case may
be) as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, divide,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, divided, combined or
exchanged at the office 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 Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and the Company shall have been provided with 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, subject to Sections 4 and
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<PAGE>
7 hereof, countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, division,
combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
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 Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
-------------------------------------------------------------
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the
Purchase Price with respect to each surrendered Right for the total number of
Preferred Shares (or Common Shares or other securities or property, as the case
may be) as to which the Rights are exercised, at or prior to the earliest of (i)
the close of business on June 11, 2008 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date") or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof (the earliest to occur of the events described in
(i), (ii) and (iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $85.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate evidencing exercisable Rights, with
the form of election to purchase and the certificate on the reverse side of the
Right Certificate duly executed, accompanied by payment of the Purchase Price
for the Preferred Shares (or Common Shares or other securities or property, as
the case may be) to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Section 9 hereof by certified check, cashier's check or money order payable
to the order of the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent of the Preferred Shares) certificates
for the number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
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<PAGE>
requests, or (B) if the Company shall have elected to deposit the Preferred
Shares issuable upon exercise of the Rights with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares evidenced 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) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
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 Right Certificate, registered
in such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate. In the event that the Company is
obligated to issue other securities (including Common Shares) 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 property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the occurrence of a Triggering 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 an Acquiring Person or
(iii) a transferee of an Acquiring Person (or any Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
an Acquiring Person and receives such Rights pursuant to either (x) 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,
whether written or oral, regarding the transferred Rights or (y) a transfer
which the Board of Trustees otherwise concludes in good faith is part of a plan,
arrangement or understanding, whether written or oral, which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action, and any holder of such Rights shall thereupon have
no rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise, from and after the occurrence of a Triggering
Event. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) hereof are complied with, but shall have no
liability to any holder of Rights for the inability to make any determinations
with respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(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
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<PAGE>
holder upon the occurrence of any purported exercise as set forth in this
Section 7 unless the certificate contained in the form of election to purchase
set forth on the reverse side of the Right Certificate surrendered for such
exercise shall have been completed and signed by the registered holder thereof
and the Company shall have been provided with 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.
(g) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities), the number of Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) that will be sufficient
to permit the exercise in full of all outstanding Rights.
Section 8. Cancellation and Destruction of Right Certificates. All Right
--------------------------------------------------
Certificates surrendered for the purpose of exercise, transfer, division,
combination or exchange shall, if surrendered to the Company or to 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 Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Availability of Preferred Shares. The Company covenants and
--------------------------------
agrees that it will take all such action as may be necessary to ensure that all
Preferred Shares (and, following the occurrence of a Triggering Event, Common
Shares and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares and/or other securities),
subject to payment of the Purchase Price, be duly and validly authorized and
issued and fully paid and nonassessable.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares (or Common Shares and/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 which may be payable in respect of any transfer or delivery
of Right Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares (or Common Shares
and/or other securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates or depositary receipts for
Preferred Shares (or Common Shares and/or other securities, as the case may be)
upon the exercise of any Rights until any such tax shall have been paid (any
such
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<PAGE>
tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose name any
----------------------------
certificate for Preferred Shares (or Common Shares and/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 the shares or securities
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
--------
however, that if the date of such surrender and payment is a date upon which the
- -------
Preferred Shares (or Common Shares and/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 or securities on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Shares
(or Common Shares and/or other securities, as the case may be) transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
holder of Preferred Shares (or Common Shares and/or other securities, as the
case may be) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other 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 of Shares or Number of
-----------------------------------------------------------
Rights. The Purchase Price, the number of Preferred 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 Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any of its shares in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
entity), except as otherwise provided in this Section 11(a) and Section
7(e) hereof, 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 shares issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number
and kind of shares which, if such Right had been exercised immediately
prior to such date and at a time when the 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; provided, however, that in no event shall the
-------- -------
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of the Company issuable upon exercise of
one Right. If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), 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).
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<PAGE>
(ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right, except as provided
below and in Section 7(e) hereof, shall thereafter have a right to receive,
upon exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by
(B) 50% of the then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.
(iii) In lieu of issuing Common Shares of the Company in accordance
with Section 11(a)(ii) hereof, the Company may, in the sole discretion of
the Board of Trustees, elect to (and, in the event that the Board of
Trustees has not exercised the exchange right contained in Section 24
hereof and there are not sufficient issued but not outstanding and
authorized but unissued Common Shares to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the Company
shall) take all such action as may be necessary to authorize, issue or pay,
upon the exercise of the Rights, cash (including by way of a reduction of
the Purchase Price), property, other securities or any combination thereof
having an aggregate value equal to the value of the Common Shares of the
Company which otherwise would have been issuable pursuant to Section
11(a)(ii), which aggregate value shall be determined by a majority of the
Board of Trustees. For purposes of the preceding sentence, the value of the
Common Shares shall be determined pursuant to Section 11(d) hereof and the
value of any equity securities which a majority of the Board of Trustees
determines to be equivalent to a Common Share (including the Preferred
Shares, in such ratio as the Board of Trustees shall determine) shall be
deemed to have the same value as the Common Shares. Any such election by
the Board of Trustees must be made and publicly announced within 60 days
following the date on which the event described in Section 11(a)(ii) shall
have occurred. Following the occurrence of the event described in Section
11(a)(ii), a majority of the Board of Trustees then in office may suspend
the exercisability of the Rights for a period of up to 60 days following
the date on which the event described in Section 11(a)(ii) shall have
occurred to the extent that the Board of Trustees has not determined
whether to exercise the Company's right of election under this Section
11(a)(iii). 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.
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<PAGE>
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Shares (or shares having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a conversion
price per share, if a security convertible into Preferred Shares or equivalent
preferred shares) less than the then current per share market price of the
Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares 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 and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
-------- -------
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of the Company issuable upon exercise of one
Right. In case such subscription price is 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 and shall be binding on the Rights Agent and on the holders of the Rights.
Preferred Shares owned by or held for the account 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, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving entity) of evidences of indebtedness or
assets (other than a regular periodic cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares 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 assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
attributable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
-------- -------
in no event shall the consideration to be paid upon the exercise of one Right be
-14-
<PAGE>
less than the aggregate par value of the shares of the Company to be issued upon
exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than under
Section 11(a)(iii) hereof, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for the purpose of
any computation under Section 11(a)(iii) hereof, the "current per share
market price" of a Security on any date shall be deemed to be the average
of the daily closing prices per share of such Security for thirty (30)
consecutive Trading Days immediately following such date; provided,
--------
however, that in the event that the current per share market price of the
-------
Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such
shares (other than the Rights), or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading
Days 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 per share market price" shall be
appropriately adjusted to reflect the current market price per share
equivalent (ex-dividend) of such Security. 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 Security is 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 Security is listed or admitted to trading or, if the Security is 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 in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
Security is 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 Security selected by the Board of Trustees of the Company. If
on any such date no market maker is making a market in the Security, the
fair value of such Security 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 Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share
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<PAGE>
market price" of the Preferred Shares shall be conclusively deemed to be
the current per share market price of the Common Shares of the Company as
determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect
any share split, share dividend or similar transaction occurring after the
date hereof), multiplied by one hundred. If neither the Common Shares of
the Company nor the Preferred Shares are publicly held or so listed or
traded, "current per share market price" 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.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
-------- -------
that any adjustments which 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 one one-millionth of a Preferred Share or one ten-
thousandth of any other share or security, 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 which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right 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
Preferred Shares contained in this Section 11, and the provisions of Sections 7,
9, 10, 13 and 14 with respect to the 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 Purchase Price hereunder shall entitle the holder thereof
to purchase, at the adjusted Purchase Price, the number of one one-hundredths of
a Preferred Share 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 in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter entitle the holder
thereof to purchase, at the adjusted Purchase Price, that number of one one-
hundredths of a Preferred Share (calculated to the nearest one one-millionth of
a Preferred Share) obtained by (i) multiplying (A) the number of one one-
hundredths of a Preferred Share covered by a Right immediately prior to such
adjustment by (B) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
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<PAGE>
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share 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 Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right 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 Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-hundredths of a Preferred Share issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price 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
Preferred Shares and other securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such
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<PAGE>
adjustment; provided, however, that the Company shall deliver to such holder a
-------- -------
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment.
(m) 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 it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (x) the
number of one one-hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number
of one one-hundredths of a Preferred Share so purchasable immediately prior to
such event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (y) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected.
(o) So long as the shares issuable 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 upon such exercise.
(p) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a registration
statement under the Securities Act with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act) until the date of
the expiration of the Rights. The Company will also take such action as may be
appropriate under the blue sky laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
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<PAGE>
exercisability of the Rights in order to prepare and file such registration
statement or in order to comply with such blue sky laws. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(q) In the event that the Rights become exercisable following the
occurrence of a Triggering Event, the Company may permit the Rights, subject to
Section 7(e) hereof, to be exercised for 50% of the Common Shares (or cash,
property or other securities to be substituted for Common Shares pursuant to
Section 11(a)(iii)) that would otherwise be purchasable under subsection (a) in
consideration of the surrender to the Company of the Rights so exercised and
without other payment of the Purchase Price. Rights exercised under this
subsection (q) shall be deemed to have been exercised in full and shall be
canceled.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate 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 and may assume that no adjustment has been made
unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
--------------------------------------------------------------
Power.
- -----
(a) If after the Shares Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person, (y)
any Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving entity of such
merger and, in connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more 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 one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of validly authorized and issued, fully paid, non-
assessable and freely tradeable common shares of the Principal Party (as
hereinafter defined), free and clear of all liens, rights of call or first
refusal, encumbrances or other adverse claims, as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable (or,
if such Right is not then exercisable for a number of one one-hundredths of a
Preferred Share,
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<PAGE>
the number of such fractional shares for which it was exercisable immediately
prior to an event described under Section 11(a)(ii) hereof) and dividing that
product by (B) 50% of the then current per share market price of the common
shares of such Principal Party (determined pursuant to Section 11(d) hereof) on
the date of consummation of such consolidation, merger, sale or transfer; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, or otherwise, 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 and (iv)
such Principal Party shall take such steps (including, but not limited to, the
authorization and reservation of a sufficient number of its common shares in
accordance with Section 9 hereof) in connection with such consummation as may be
necessary to assure 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.
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
merger or consolidation, and if no securities are so issued, the Person
that is the surviving entity of such merger or consolidation (including the
Company if applicable); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), 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 described in clauses (b)(i) and
- -------- -------
(b)(ii): (1) if the common shares of such Person are not at such time and have
not been continuously over the preceding 12-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 are and have been so
registered, "Principal Party" shall refer to such other Person; (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; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have sufficient common shares
authorized to permit the full exercise of the Rights and prior thereto the
Company and such Principal Party shall have
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<PAGE>
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 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 Securities
Act, 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 Securities Act)
until the Expiration Date;
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act; and
(iii) take such actions as may be necessary or appropriate under the
blue sky laws of the various states.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that one of the
transactions described in this Section 13(a) shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii) hereof, the Rights
which have not theretofore been exercised shall thereafter become exercisable in
the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there may be paid to the registered holders of the Right
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 the 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 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 in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are
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<PAGE>
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 Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the holders of
--------
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred Share, the
Company may, to the extent necessary to reduce such fraction to an integral
multiple of one one-hundredth, pay to the registered holders of Right
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-
hundredth of a Preferred Share. For the purposes of this Section 14(b), the
current market value of one one-hundredth of a Preferred Share shall be one one-
hundredth of the closing price of a Preferred Share (as determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not
be required to issue fractions of Common Shares upon exercise of the Rights or
to distribute certificates which evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered holders of Right
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 Common
Share. For purposes of this Section 14(c), the current market value of one
Common Share shall be the closing price of one Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
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<PAGE>
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the 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 Right Certificate in the manner provided
in such Right 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 will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right 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 the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer;
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Right 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 Right Certificates 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 nor the Rights Agent shall 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 any 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.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder,
-------------------------------------------------
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of
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<PAGE>
trustees or upon any matter submitted to shareholders at any meeting thereof, or
to give or withhold consent to any trust 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 Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. 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 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.
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 Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, 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, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the stock transfer or corporate
trust 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, that such Person 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 Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
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<PAGE>
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right 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 Right 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 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, the President,
any Vice President, or the 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 to the Company and any
other Person only for any and all losses, liabilities, costs, damages and
expenses (including attorneys' fees) arising out of or in connection with the
Rights Agent's gross negligence, bad faith or willful misconduct. Anything in
this Agreement to the contrary notwithstanding, in no event shall the Rights
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage and regardless
of the form of the action.
(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 Right
Certificates (except its countersignature thereof) or be required to verify the
same, 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 Right 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 Right Certificate; nor shall it
be
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<PAGE>
responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 7(e) hereof) or any adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided
for in Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 12 describing a change or adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares to be issued pursuant to this Agreement or any Right Certificate
or as to whether any Preferred Shares or Common Shares will, when issued, be
validly authorized and 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 of the Board, the President, any Vice President, the Secretary or the
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 by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions. Any 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 under this Agreement
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder, Trustee, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or its Subsidiaries or become pecuniarily interested in any
transaction in which the Company or its Subsidiaries may be interested, or
contract with or lend money to the Company or its Subsidiaries 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 or its Subsidiaries or for any other legal entity.
(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
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<PAGE>
of any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) 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 Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class 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 Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right 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 Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right 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
corporation or bank organized and doing business under the laws of the United
States or of any other state of the United States, which 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 which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100 million. 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 or Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right 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 Right Certificates. Notwithstanding any of
----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new
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<PAGE>
Right 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 Right Certificates made in accordance with the provisions
of this Agreement.
Section 23. Redemption.
----------
(a) The Company may, at its option, at any time prior to the close of
business on the tenth day (or such specified or unspecified later date as may be
determined by action of the Board of Trustees prior to such tenth day) following
the Shares Acquisition Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any share split, share dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the Rights by the
Company may be made effective at such time on such basis and with such
conditions as the Board of Trustees in its sole discretion may establish.
Notwithstanding anything in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of any event described in Section
11(a)(ii) hereof until such time as the Company's right of redemption hereunder
has expired. The Company may, at its option, pay the Redemption Price in cash,
Common Shares (based on the current per share market price of the Common Shares
at the time of redemption) or any other form of consideration deemed appropriate
by the Board of Trustees.
(b) Immediately upon the action of the Board of Trustees of the Company
ordering the redemption of the Rights (or at the effective time of such
redemption established by the Board of Trustees of the Company pursuant to the
last sentence of paragraph (a) of this Section 23), and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any
-------- -------
such notice shall not affect the validity of such redemption. Within 10 days
after such action of the Board of Trustees ordering the redemption of the Rights
or, if later, the effectiveness of the redemption of the Rights pursuant to the
last sentence of paragraph (a), the Company shall mail a notice of redemption to
all the holders of the then outstanding Rights at their last addresses as they
appear 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 which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
The Company may, at its option, discharge all of its obligations with respect to
the Rights by (i) issuing a press release announcing the manner of redemption of
the Rights, (ii) depositing with a bank or trust company having a capital and
surplus of at least $100,000,000, funds necessary for such redemption, in trust,
to be applied to the redemption of the Rights so called for redemption and (iii)
arranging for the mailing of the Redemption Price to the registered holders of
the Rights; then, and upon such action, all outstanding Rights Certificates
shall be null and void without further action by the Company. Neither the
Company nor any
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<PAGE>
of its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in this
Section 23, in Section 24 hereof, or in connection with the purchase of Common
Shares prior to the Distribution Date.
Section 24. Exchange.
--------
(a) The Company may, at its option, at any time after a Triggering Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of 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 after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Company shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Affiliate or Subsidiary of
the Company, any employee benefit plan of the Company or of any Affiliate or
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Trustees of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall 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
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
-------- -------
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which 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 and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section 11(b) hereof) for Common Shares exchangeable for
Rights, at the initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) for each Common Share, as appropriately adjusted to
reflect adjustments in the voting rights of the Preferred Shares pursuant to the
terms thereof, so that the fraction of a Preferred Share delivered in lieu of
each Common Share shall have the same voting rights as one Common Share.
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<PAGE>
(d) In the event that there shall not be sufficient Common Shares or
Preferred Shares issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Common Shares or Preferred Shares for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares. In lieu
of such fractional Common Shares, the Company shall pay 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
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
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 shares of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with, 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 or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such share
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or 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 10 days prior to the record date
for determining holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.
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<PAGE>
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
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 Right 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:
Cabot Industrial Trust
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
Attention: 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 Right 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:
BankBoston, N.A.
c/o Boston EquiServ Limited Partnership
150 Royall Street
Mail Stop 45-02-62
Canton, Massachusetts 02021
Attention: Client 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 Right Certificate 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 from
time to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, to shorten or lengthen any time period
hereunder, or to make any other provisions with respect to the Rights
(including, without limitation, changes to the Purchase Price) which the Company
may deem necessary or desirable, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent. From and
after the Distribution Date and subject to the penultimate sentence of this
Section 27, the Company may from time to time supplement or amend this Agreement
without approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to
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<PAGE>
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to make any other provisions hereunder with
respect to the Rights which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or any Affiliate or Associate of
any Acquiring Person), provided, 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 (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an appropriate officer of the Company which 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. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable; provided, however, that at any time prior to
--------
(x) the existence of an Acquiring Person or (y) the date that a tender or
exchange offer by any Person 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, the
Board 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 of the Company.
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. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, 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, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. 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.
Section 31. Governing Law. This Agreement and each Right 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
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<PAGE>
applicable to contracts to be made and performed entirely within such State,
except that those provisions of this Agreement affecting the rights, duties and
responsibilities of the Rights Agent shall be governed by and construed in
accordance with the law of the State of New York.
Section 32. 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 33. 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.
Section 34. Determinations and Actions by the Board of Trustees. 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 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 (a) interpret the provisions of this Agreement, and (b) 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 this Agreement). All such actions, interpretations and determinations
(including, for purpose of clause (b) above, all omissions with respect to the
foregoing) which are done or made by the Trustees in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Right Certificates and all other parties, and (y) not subject the Trustees
to any liability to the holders of the Right Certificates.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
CABOT INDUSTRIAL TRUST
By /s/ Ferdinand Colloredo-Mansfeld
--------------------------------
Ferdinand Colloredo-Mansfeld
Chairman and Chief Executive Officer
Attest:
By /s/ Neil E. Waisnor
-------------------
Neil E. Waisnor
Secretary
BANKBOSTON, N.A.
By /s/ Tyler Haynes
-----------------------------------
Name: Tyler Haynes
--------------------------
Title: Administration Manager
-------------------------
Attest:
By /s/ Katherine Anderson
-------------------------------
Name:Katherine Anderson
-----------------------
Title: Administration Manager
-----------------------
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<PAGE>
EXHIBIT A
---------
CABOT INDUSTRIAL TRUST
FORM OF
ARTICLES SUPPLEMENTARY
SERIES A JUNIOR
PARTICIPATING PREFERRED SHARES
Cabot Industrial Trust, a Maryland real estate investment trust (the
"Company"), hereby certifies to the State Department of Assessments and Taxation
of Maryland pursuant to Section 8-203(b) of the Annotated Code of Maryland (the
"Code") that:
FIRST: Under a power contained in Article 2, Section 1 of the Declaration
of Trust of the Company, the Board of Trustees, as required by Section 8-203(b)
of the Code, at a meeting duly called and held on June 11, 1998, has classified
1,000,000 unissued shares of the Company as Series A Junior Participating
Preferred Shares, with the following preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption, which upon
any restatement of the Declaration of Trust shall be made part of Article 2 of
the Declaration, with any necessary or appropriate changes to the enumeration
and lettering hereof:
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
Section 1. Designation and Amount. There shall be a series of preferred
----------------------
shares of the Company, $0.01 par value per share, which shall be designated
"Series A Junior Participating Preferred Shares" (the "Series A Preferred
Shares"), and the number of shares constituting that series shall be 1,000,000.
Such number of shares may be increased or decreased by resolution of the Board
of Trustees and by the filing of articles supplementary in accordance with the
provisions of Title 8 of the Corporations and Associations Code of the State of
Maryland stating that such increase or reduction has been so authorized;
provided, however, that no decrease shall reduce the number of Series A
- -------- -------
Preferred Shares to a number less than the number of Series A Preferred Shares
then outstanding plus the number of Series A Preferred Shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Company.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the prior and superior rights of the holders of any shares
of any class or series of preferred shares of the Company ranking prior and
superior to the Series A Preferred Shares with respect to dividends, the holders
of Series A Preferred Shares shall be entitled to receive, when, as and if
authorized by the Board of Trustees out of funds legally available for the
purpose, quarterly dividends payable in cash to holders of record on the last
<PAGE>
Business Day of January, April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date") (commencing on
the first Quarterly Dividend Payment Date after the first issuance of a Series A
Preferred Share or fraction thereof) in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in Common Shares (hereinafter defined) or a subdivision of the
outstanding Common Shares (by a reclassification or otherwise), authorized on
the common shares of beneficial interest, par value $0.01 per share, of the
Company (the "Common Shares") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any Series A Preferred Share or fraction thereof.
In the event the Company shall at any time following June 11, 1998 (i) declare
any dividend on 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, then in each such case the amount to which holders of
Series A Preferred Shares were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying each such
amount by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on the Series A
Preferred Shares as provided in paragraph (A) above at the time it declares a
dividend or distribution on the Common Shares (other than a dividend payable in
Common Shares).
(C) No dividend or distribution (other than a dividend or distribution
payable in Common Shares) shall be paid or payable to the holders of Common
Shares unless, prior thereto, all accrued but unpaid dividends to the date of
that dividend or distribution shall have been paid to the holders of Series A
Preferred Shares.
(D) Dividends shall begin to accrue and be cumulative on outstanding Series
A Preferred Shares from the Quarterly Dividend Payment Date next preceding the
date of issuance of such Series A Preferred Shares, unless the date of issuance
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue and
be cumulative from the date of issuance of such shares, or unless the date of
issuance is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of Series A Preferred Shares entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the Series A Preferred Shares in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Trustees may fix a record date for
the determination of holders of Series A Preferred Shares entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for the payment thereof.
-2-
<PAGE>
Section 3. Voting Rights. The holders of Series A Preferred Shares shall
-------------
have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each one
one-hundredth of a Series A Preferred Share shall entitle the holder thereof to
one vote on all matters submitted to a vote of the shareholders of the Company.
In the event the Company shall at any time following June 11, 1998 (i) declare
any dividend on 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, then in each such case the number of votes per share
to which holders of Series A Preferred Shares were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, the holders of Series A Preferred
Shares and the holders of Common Shares and any other shares of beneficial
interest of the Company having general voting rights shall vote together as one
class on all matters submitted to a vote of shareholders of the Company.
(C)
(i) Whenever, at any time or times, dividends payable on any Series A
Preferred Shares shall be in arrears in an amount equal to at least six
full quarterly dividends (whether or not declared and whether or not
consecutive), the holders of record of the outstanding Series A Preferred
Shares shall have the exclusive right, voting separately as a single class,
to elect two Trustees of the Company at a special meeting of shareholders
of the Company or at the Company's next annual meeting of shareholders, and
at each subsequent annual meeting of shareholders, as provided below. At
elections for such Trustees, the holders of Series A Preferred Shares shall
be entitled to cast one vote for each one one-hundredth of a Series A
Preferred Share held, subject to adjustment.
(ii) Upon the vesting of such right of the holders of the Series A
Preferred Shares, the maximum authorized number of members of the Board of
Trustees shall automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of the outstanding Series A
Preferred Shares as hereinafter set forth. A special meeting of the
shareholders of the Company then entitled to vote shall be called by the
Chairman, the President, any Senior Vice President or the Secretary of the
Company, if requested in writing by the holders of record of not less than
10% of the Series A Preferred Shares then outstanding. At such special
meeting, or, if no such special meeting shall have been called, then at the
next annual meeting of shareholders of the Company, the holders of the
Series A Preferred Shares shall elect, voting as above provided, two
Trustees of the Company to fill the aforesaid vacancies created by the
-3-
<PAGE>
automatic increase in the number of members of the Board of Trustees. At
any and all such meetings for such election, the holders of a majority of
the outstanding Series A Preferred Shares shall be necessary to constitute
a quorum for such election, whether present in person or by proxy, and such
two Trustees shall be elected by the vote of at least a plurality of shares
held by such shareholders present or represented at the meeting. Any
Trustee elected by holders of Series A Preferred Shares pursuant to this
Section may be removed at any annual or special meeting, by vote of a
majority of the shareholders voting as a class who elected such Trustee,
with or without cause. In case any vacancy shall occur among the Trustees
elected by the holders of the Series A Preferred Shares pursuant to this
Section, such vacancy may be filled by the remaining Trustee so elected, or
his successor then in office, and the Trustee so elected to fill such
vacancy shall serve until the next meeting of shareholders for the election
of Trustees. After the holders of the Series A Preferred Shares shall have
exercised their right to elect Trustees in any default period and during
the continuance of such period, the number of Trustees shall not be further
increased or decreased except by vote of the holders of Series A Preferred
Shares as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Preferred
---- -----
Shares.
(iii) The right of the holders of the Series A Preferred Shares,
voting separately as a class, to elect two members of the Board of Trustees
of the Company as aforesaid shall continue until, and only until, such time
as all arrears in dividends (whether or not declared) on the Series A
Preferred Shares shall have been paid or declared and set apart for
payment, at which time such right shall terminate, except as herein or by
law expressly provided, subject to revesting in the event of each and every
subsequent default of the character above-mentioned. Upon any termination
of the right of the holders of the Series A Preferred Shares as a class to
vote for Trustees as herein provided, the term of office of all Trustees
then in office elected by the holders of Series A Preferred Shares pursuant
to this Section shall terminate immediately. Whenever the term of office
of the Trustees elected by the holders of the Series A Preferred Shares
pursuant to this Section shall terminate and the special voting powers
vested in the holders of the Series A Preferred Shares pursuant to this
Section shall have expired, the maximum number of members of the Board of
Trustees of the Company shall be such number as may be provided for in the
Bylaws of the Company irrespective of any increase made pursuant to the
provisions of this Section.
(D) Except as otherwise provided herein or required by law, holders of
Series A Preferred Shares shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Shares as provided herein) for taking any corporate action.
-4-
<PAGE>
Section 4. Certain Restrictions.
--------------------
(A) Whenever any quarterly dividends or other dividends or distributions
payable on the Series A Preferred Shares as provided in Section 2 are in
arrears, then, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on Series A Preferred Shares outstanding
shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Shares, other than dividends paid or
payable in such junior shares;
(ii) declare or pay dividends on or make any other distributions on
any shares ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Shares, except
dividends paid ratably on the Series A Preferred Shares and all such parity
shares on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Shares, provided
that the Company may at any time redeem, purchase or otherwise acquire any
such parity shares in exchange for shares of the Company ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to
the Series A Preferred Shares; or
(iv) purchase or otherwise acquire for consideration any Series A
Preferred Shares, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Trustees) to all
holders of such shares upon such terms as the Board of Trustees, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of the Company unless the
Company could, under paragraph (A) of this Section, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any Series A Preferred Shares purchased or
-----------------
otherwise acquired by the Company in any manner whatsoever shall become
authorized but unissued shares of beneficial interest and may be reissued as
Common Shares or as part of a new series of preferred shares to be created by
resolution or resolutions of the Board of Trustees, subject to the conditions
and restrictions on issuance set forth herein.
-5-
<PAGE>
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
--------------------------------------
voluntary liquidation, dissolution or winding up of the Company, no distribution
shall be made to the holders of shares ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Shares
unless, prior thereto, the holders of Series A Preferred Shares shall have
received $1.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions shall
be made to the holders of Series A Preferred Shares unless, prior thereto, the
holders of Common Shares shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as share splits, share dividends and
recapitalizations with respect to the Common Shares) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding Series A Preferred Shares and Common Shares, respectively, holders
of Series A Preferred Shares and holders of Common Shares shall receive their
ratable and proportionate share of the remaining assets to be distributed in the
ratio, on a per share basis, of the Adjustment Number to 1 with respect to such
Series A Preferred Shares and Common Shares, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of preferred shares, if any, which
rank on a parity with the Series A Preferred Shares, then such remaining assets
shall be distributed ratably to the holders of the Series A Preferred Shares and
such parity shares in proportion to their respective liquidation preferences.
(C) In the event the Company shall at any time following June 11, 1998 (i)
declare any dividend on 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, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the denominator of which is
the number of Common Shares that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Company shall enter
---------------------------
into any consolidation, merger, combination or other transaction in which the
Common Shares are exchanged for or changed into other shares or securities, cash
and/or any other property, then in any such case, the Series A Preferred Shares
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of shares, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each Common Share
is exchanged or changed. In the event the Company shall at any time (i) declare
any dividend on Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares or (iii)
-6-
<PAGE>
combine the outstanding Common Shares into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of Series A Preferred Shares shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately prior to
such event.
Section 8. Redemption. The Series A Preferred Shares shall not be
----------
redeemable by the Company. The preceding sentence shall not limit the ability
of the Company to purchase or otherwise deal in such shares to the extent
permitted by law.
Section 9. Ranking. The Series A Preferred Shares shall rank junior to
-------
all other series of the Company's preferred shares (whether with or without par
value) as to the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.
Section 10. Amendment. Neither the Company's Declaration of Trust nor any
---------
Articles Supplementary relating to the Series A Preferred Shares shall be
amended in any manner which would materially and adversely alter or change the
preferences, rights or other terms of the Series A Preferred Shares without the
affirmative vote of the holders of a majority or more of the outstanding Series
A Preferred Shares, voting separately as a class.
Section 11. Fractional Shares. Series A Preferred Shares may be issued in
-----------------
fractions of a share that are integral multiples of one-one hundredth of a
share, which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends and participate in
distributions and to have the benefit of all other rights of holders of Series A
Preferred Shares.
SECOND: These Articles Supplementary have been approved by the Board of
Trustees in the manner and by the vote required by law.
THIRD: The undersigned Chairman of the Board acknowledges these Articles
Supplementary to be the act of the Company and, as to all matters or facts
required to be verified under oath, such officer acknowledges that to the best
of his knowledge, information and belief, these matters and facts are true in
all material respects and that this statement is made under the penalties for
perjury.
-7-
<PAGE>
IN WITNESS WHEREOF, these Articles Supplementary have been duly executed by
the undersigned officer this 11th day of June, 1998.
CABOT INDUSTRIAL TRUST
By:
________________________________________
Name: Ferdinand Colloredo-Mansfeld
Title: Chairman and Chief Executive Officer
-8-
<PAGE>
EXHIBIT B
---------
[Form of Right Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER JUNE 11, 2008 OR EARLIER IF THE RIGHTS EXPIRE UNDER
CERTAIN CIRCUMSTANCES OR ARE EXCHANGED OR REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01
PER RIGHT 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
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Right Certificate
CABOT INDUSTRIAL TRUST
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 Rights Agreement, dated as of June 11, 1998 (the "Rights Agreement"),
between Cabot Industrial Trust, a Maryland real estate investment trust (the
"Company"), and BankBoston, N.A. (the "Rights Agent") to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 p.m. (Eastern time) on June 11, 2008 or
notice of redemption or exchange at the office of the Rights Agent (or its
successors as Rights Agent) designated for such purpose, one one-hundredth of a
fully paid, non-assessable Series A Junior Participating Preferred Share (a
- --------------------------------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE>
"Preferred Share") of the Company, at a purchase price of $85.00 per one one-
hundredth of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the appropriate Form of Election to
Purchase and related Certificate duly executed. The number of Rights evidenced
by this Right Certificate (and the number of Preferred Shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
Preferred Share set forth above, are the number and Purchase Price as of June
11, 1998, based on the Preferred Shares as constituted at such date.
Capitalized terms not defined in this Right Certificate that are defined in the
Rights Agreement shall have the meanings ascribed to them in the Rights
Agreement.
Upon the occurrence of a Triggering Event, if the Rights evidenced by this
Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person, (ii) under certain
circumstances specified in the Rights Agreement, a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of any such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of Preferred Shares or other securities, which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right 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 Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under certain circumstances specified in such Rights Agreement.
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 Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal corporate trust office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
-2-
<PAGE>
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01 per Right at any time prior to the earlier of (i) the close of
business on the tenth day (or such specified or unspecified later date as may be
determined by action of the Board of Trustees prior to such tenth day) following
the Shares Acquisition Date or (ii) the close of business on the Final
Expiration Date.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Shares or
of any other securities of the Company which 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 trust 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 Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its seal.
Dated as of _______________ __, 19__
CABOT INDUSTRIAL TRUST
By:
-----------------------------
Name:
Title:
Attest: (SEAL)
- -------------------------------
Name:
Title:
Countersigned:
BANKBOSTON, N.A.
By:
----------------------------------
Authorized Signature
-3-
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires to transfer
the Right Certificate.)
FOR VALUE RECEIVED
-------------------------------------------------------------
hereby sells, assigns and transfers unto
---------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Date: , 19
------------ --- ----------------------------------------
Signature
Signature Guaranteed:
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 any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Date: , 19
--------------- --- -------------------------------------
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires
to exercise Rights evidenced by
the Right Certificate.)
To: CABOT INDUSTRIAL TRUST
The undersigned hereby irrevocably elects to exercise _______ Rights
evidenced by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of the Rights (or such other securities of the Company or of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of:
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
Right Certificate, a new Right 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)
Date: , 19
------------- --- -------------------------------------
Signature
<PAGE>
Signature Guaranteed:
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: , 19
--------- --- ----------------------------------------
Signature
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT 2
AMENDED AND RESTATED
CABOT INDUSTRIAL TRUST
BY-LAWS
SEPTEMBER 10, 1998
<PAGE>
CABOT INDUSTRIAL TRUST
AMENDED AND RESTATED
BYLAWS
ARTICLE 1. OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of Cabot Industrial Trust
(the "Trust") shall be located at such place or places as the Board of Trustees
(the "Board") of the Trust may designate.
SECTION 2. ADDITIONAL OFFICES. The Trust may have additional offices at
such places as the Board may from time to time determine or the business of the
Trust may require.
ARTICLE 2. MEETINGS OF SHAREHOLDERS
SECTION 1. PLACE. All meetings of shareholders shall be held at the
principal office of the Trust or at such other place within the United States as
shall be stated in the notice of the meeting.
SECTION 2. ANNUAL MEETING. An annual meeting of shareholders for the
election of Trustees and the transaction of any business within the powers of
the Trust shall be held within a reasonable period (not less than 30 days)
following delivery of the annual report described in Section 4 of Article 4 of
the Declaration of Trust, on such date and at such time as the Board may
prescribe beginning in 1998, but in any event such meeting must be held within
six months after the end of each full fiscal year.
SECTION 3. SPECIAL MEETINGS. Special meetings of shareholders may be called
by a majority of the Board, a majority of the Independent Trustees (as defined
in Section 1 of Article 5 of the Declaration of Trust) or by any executive
officer of the Trust on such date and at such time as the Board may prescribe.
Special meetings of shareholders shall also be called by the Secretary on such
date and at such time as the Board may prescribe upon the written request of
shareholders holding in the aggregate not less than twenty-five percent of the
outstanding shares of the Trust entitled to vote at such meeting. Such request
shall state the purpose of such meeting and the matters proposed to be acted on
at such meeting and shall include the information requested by clause (B) of
Section 11(a)(ii) of this Article 2. Within three days of the receipt of such
request, the Secretary shall inform such shareholders of the reasonably
estimated cost of preparing and mailing the Notice of Meeting (as defined in
Section 4 below) and, upon payment to the Trust of such costs, the Secretary
shall prepare the Notice of Meeting and give notice to each shareholder entitled
to notice of the meeting. Unless requested by shareholders entitled to cast a
majority of all the votes entitled to be cast at such meeting, a special meeting
need not be called to consider any matter which is substantially the same as a
matter voted on at any meeting of shareholders held during the 12 months
preceding such request.
2
<PAGE>
SECTION 4. NOTICE. Not less than ten nor more than 60 days before each
meeting of shareholders, the Secretary shall give to each shareholder of record
entitled to vote at such meeting and to each shareholder not entitled to vote
who is entitled to notice of such meeting written or printed notice (a "Notice
of Meeting") stating the place, date and time of the meeting and, in the case of
a special meeting or as otherwise may be required by statute, the purpose or
purposes for which the meeting is called, either personally or by mail. If
mailed, the Notice of Meeting shall be deemed to be given when deposited in the
United States mail addressed to the shareholder at his or her post office
address as it appears on the records of the Trust, with postage thereon prepaid.
SECTION 5. SCOPE OF NOTICE. Subject to Section 11(a) of this Article 2, any
business of the Trust may be transacted at an annual meeting of shareholders
without being specifically designated in the Notice of Meeting, except such
business as is required by statute to be stated in such Notice of Meeting. No
business shall be transacted at a special meeting of shareholders except as
specifically designated in the Notice of Meeting, provided that if the Board has
determined that Trustees may or shall be elected at such special meeting as set
forth in such Notice of Meeting, certain shareholder nominations of persons for
election to the Board may be considered, provided the requirements of Section
11(b) of this Article 2 are satisfied.
SECTION 6. QUORUM. At any meeting of shareholders, the presence in person
or by proxy of a majority of the outstanding shares entitled to vote at such
meeting shall constitute a quorum; but this Section 6 shall not affect any
requirement under any statute or the Declaration of Trust for the vote necessary
for the adoption of any measure. If, however, such quorum shall not be present
at any meeting of shareholders, the shareholders entitled to vote at such
meeting, present in person or by proxy, shall have power to adjourn the meeting
from time to time to a date not more than 120 days after the original record
date without notice other than announcement at the meeting. At such adjourned
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally notified.
SECTION 7. VOTING. A plurality of all the votes cast at a meeting of
shareholders duly called and at which a quorum is present shall be sufficient to
elect a Trustee. Each share entitled to vote may be voted for as many
individuals as there are Trustees to be elected and for whose election the share
is entitled to be voted. There shall be no right of cumulative voting. A
majority of the votes cast at a meeting of shareholders duly called and at which
a quorum is present shall be sufficient to approve any other matter which may
properly come before the meeting, unless more than a majority of the votes cast
is required by statute or by the Declaration of Trust. Unless otherwise provided
in the Declaration of Trust or Articles Supplementary, each outstanding share,
regardless of class, shall be entitled to one vote on each matter submitted to a
vote at a meeting of shareholders.
SECTION 8. PROXIES. A shareholder may vote the shares owned of record by
him or her, either in person or by proxy executed in writing by the shareholder
or by his or her duly authorized attorney in fact. Such proxy shall be filed
with the Secretary before or at the time of the meeting. No proxy shall be valid
after 11 months from the date of its execution, unless otherwise provided in the
proxy.
3
<PAGE>
SECTION 9. VOTING OF SHARES BY CERTAIN HOLDERS. Shares registered in the
name of a corporation, partnership, trust or other entity, if entitled to be
voted, may be voted by the president or a vice president, a general partner or
trustee thereof, as the case may be, or a proxy appointed by any of the
foregoing individuals, unless some other person who has been appointed to vote
such shares pursuant to a bylaw or a resolution of the board of directors of
such corporation or governing body of such other entity presents a certified
copy of such bylaw or resolution, in which case such person may vote such
shares. Any trustee or other fiduciary may vote shares registered in his or her
name as such fiduciary, either in person or by proxy.
Shares of the Trust directly or indirectly owned by it shall not be voted
at any meeting and shall not be counted in determining the total number of
outstanding shares entitled to be voted at any given time, unless they are held
by it in a fiduciary capacity, in which case they may be voted and shall be
counted in determining the total number of outstanding shares at any given time.
The Board may adopt by resolution a procedure by which a shareholder may
certify in writing to the Trust that any shares registered in the name of the
shareholder are held for the account of a specified person other than the
shareholder. The resolution shall set forth the class of shareholders who may
make the certification, the purpose for which the certification may be made, the
form of certification and the information to be contained in it; if the
certification is with respect to a record date or closing of the share transfer
books, the time after the record date or closing of the share transfer books
within which the certification must be received by the Trust; and any other
provisions with respect to the procedure which the Board considers necessary or
desirable. On receipt of such certification, the person specified in the
certification shall be regarded as, for the purposes set forth in the
certification, the shareholder of record of the specified shares in place of the
shareholder who makes the certification.
SECTION 10. INSPECTORS. At any meeting of shareholders, the presiding
officer of the meeting may, and upon the request of any shareholder shall,
appoint one or more persons as inspectors for such meeting. Such inspectors
shall ascertain and report the number of shares represented at the meeting based
on their determination of the validity and effect of proxies, count all votes,
report the results and perform such other acts as are proper to conduct the
election and voting with impartiality and fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or by a
majority of them if there is more than one inspector acting at such meeting. If
there is more than one inspector, the report of a majority shall be the report
of the inspectors. The report of the inspector or inspectors on the number of
shares represented at the meeting and the results of the voting shall be prima
facie evidence thereof.
4
<PAGE>
SECTION 11. NOMINATIONS AND SHAREHOLDER BUSINESS.
(a) ANNUAL MEETINGS OF SHAREHOLDERS.
(i) Nominations of persons for election to the Board and the
proposal of business to be considered by the shareholders may be made at an
annual meeting of shareholders (A) pursuant to the Notice of Meeting, (B)
by or at the direction of the Board or (C) by any shareholder of the Trust
who was a shareholder of record at the time of giving the notice provided
for in this Section 11(a), who is entitled to vote at the meeting and who
complied with the notice procedures set forth in this Section 11(a).
(ii) For nominations or other business to be properly brought before
an annual meeting by a shareholder pursuant to clause (C) of paragraph (i)
of this Section 11(a), the shareholder must have given timely notice
thereof in writing to the Secretary. To be timely, a shareholder's notice
shall be delivered to the Secretary at the principal executive offices of
the Trust not less than 60 days nor more than 90 days prior to the first
anniversary of the preceding year's annual meeting; provided, however, that
-------- -------
if the date of the annual meeting is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date or if the Trust has
not previously held an annual meeting, notice by the shareholder to be
timely must be so delivered (x) not more than 90 days prior to such annual
meeting nor less than 60 days prior to such annual meeting or (y) not later
than the close of business on the tenth day following the day on which
public announcement of the date of such meeting is first made by the Trust.
Such shareholder's notice shall set forth (A) as to each person whom the
shareholder proposes to nominate for election or reelection as a Trustee,
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of Trustees, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (including such
person's written consent to being named in the proxy statement as a nominee
and to serving as a Trustee if elected), (B) as to any other business that
the shareholder proposes to bring before the meeting, a brief description
of the business desired to be brought before the meeting, the reasons for
conducting such business at the meeting and any material interest in such
business of such shareholder and of the beneficial owner, if any, on whose
behalf the proposal is made, and (C) as to the shareholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made, (1) the name and address of such shareholder, as they
appear on the Trust's books, and of such beneficial owner, (2) the class
and number of shares of the Trust which are owned beneficially and of
record by such shareholder and such beneficial owner and, (3) in the case
of a nomination, (x) a description of all arrangements or understandings
between such shareholder and each proposed nominee and any other person or
persons (including their names) pursuant to which the nomination(s) are to
be made by such shareholder, (y) a representation that such shareholder
intends to appear in person or by proxy at the meeting, if there is a
meeting, to nominate the persons named in its notice and (z) any other
information relating to such shareholder that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of Trustees pursuant
to Section 14 of the Exchange Act and the rules and regulations promulgated
thereunder.
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(iii) Notwithstanding anything in the second sentence of paragraph
(ii) of this Section 11(a) to the contrary, if the number of Trustees to be
elected to the Board is increased and there is no public announcement
naming all of the nominees for Trustee or specifying the size of the
increased Board made by the Trust at least 70 days prior to the first
anniversary of the preceding year's annual meeting, a shareholder's notice
required by this Section 11(a) shall also be considered timely, but only
with respect to nominees for any new positions created by such increase, if
it shall be delivered to the Secretary at the principal executive offices
of the Trust not later than the close of business on the tenth day
following the day on which such public announcement is first made by the
Trust.
(b) SPECIAL MEETINGS OF SHAREHOLDERS. Only such business shall be conducted
at a special meeting of shareholders as shall have been brought before the
meeting pursuant to the Notice of Meeting. Nominations of persons for election
to the Board may be made at a special meeting of shareholders at which Trustees
are to be elected (i) pursuant to the Notice of Meeting, (ii) by or at the
direction of the Board or (iii) provided that the Board has determined that
--------
Trustees shall or may be elected at such special meeting, by any shareholder of
the Trust who was a shareholder of record at the time of giving of the Section
11(b) Notice (as defined below), who is entitled to vote at the meeting and who
complied with the notice procedures set forth in this Section 11(b). If the
Trust calls a special meeting of shareholders for the purpose of electing one or
more Trustees to the Board, any such shareholder may nominate a person or
persons (as the case may be) for election to such position as specified in the
Notice of Meeting, if a shareholder's notice containing the information required
by clauses (A) and (C) of the second sentence of paragraph (ii) of Section 11(a)
(a "Section 11(b) Notice") shall be delivered to the Secretary at the principal
executive offices of the Trust (A) not more than 90 days prior to such meeting
nor less than 60 days prior to such meeting or (B) not later than the close of
business on the tenth day following the day on which public announcement of the
date of the special meeting and of the nominees proposed by the Board to be
elected at such meeting is first made by the Trust.
(c) GENERAL.
(i) Only such persons who are nominated in accordance with the
procedures set forth in this Section 11 shall be eligible to serve as
Trustees. Only such business shall be conducted at an annual meeting of
shareholders as shall have been brought before the meeting in accordance
with the procedures set forth in Section 11(a). The presiding officer of
the meeting shall have the power and duty to determine whether a nomination
or any business proposed to be brought before the meeting was made in
accordance with the procedures set forth in this Section 11 and, if any
proposed nomination or business is not in compliance with this Section 11,
to declare that such nomination or proposal be disregarded.
(ii) For purposes of this Section 11, "public announcement" shall mean
disclosure by the Trust in a press release by the Trust reported by the Dow
Jones News Service, Associated Press or comparable news service or in a
document publicly filed by the Trust with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
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(iii) Notwithstanding the foregoing provisions of this Section 11, a
shareholder shall also comply with all applicable requirements of state law
and of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section 11. Nothing in this
Section 11 shall be deemed to affect any rights of shareholders to request
inclusion of, nor any rights of the Trust to omit, proposals in the Trust's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
SECTION 12. INFORMAL ACTION BY SHAREHOLDERS. Any action required or
permitted to be taken at a meeting of shareholders may be taken without a
meeting if a consent in writing, setting forth such action, is signed by each
shareholder entitled to vote on the matter and any other shareholder entitled to
notice of the meeting of shareholders (but not to vote thereat) has waived in
writing any right to dissent from such action, and such consent and waiver are
filed with the minutes of proceedings of the shareholders.
SECTION 13. VOTING BY BALLOT. Voting on any question or in any election may
be vive voce unless the presiding officer shall order or any shareholder shall
demand that voting be by ballot.
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ARTICLE 3. TRUSTEES
SECTION 1. GENERAL POWERS. The business and affairs of the Trust shall be
managed under the direction of the Board. The Board shall keep a record of its
acts and proceedings, which shall form a part of the records of the Trust in the
custody of the Secretary.
SECTION 2. NUMBER, TERM AND QUALIFICATIONS. At any regular meeting or at
any special meeting of the Board called for that purpose, a majority of the
Trustees may establish, increase or decrease the number of Trustees, provided
--------
that the number thereof shall never be less than three nor more than 15, and
provided further that the term of office of a Trustee shall not be affected by
- -------- -------
any decrease in the number of Trustees. Each Trustee shall hold office for the
term for which he or she is elected and until his or her successor is elected
and qualifies, subject, however, to prior death, resignation or removal from
office. The initial number of Trustees is seven.
SECTION 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board
shall be held immediately after and at the same place as the annual meeting of
shareholders, no notice other than this Bylaw being necessary. The Board may
provide, by resolution, the time and place, either within or without the State
of Maryland, for the holding of regular meetings of the Board without other
notice than such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the Board may be called by
or at the request of the Chairman and Chief Executive Officer or the President
or by a majority of the Trustees then in office. The person or persons
authorized to call special meetings of the Board may fix any place, either
within or without the State of Maryland, as the place for holding any special
meeting of the Board called by them.
SECTION 5. NOTICE. Notice of any special meeting of the Board shall be
given by written notice delivered personally, transmitted by facsimile,
telegraphed or mailed to each Trustee at his or her business or residence
address. Personally delivered, facsimile transmitted or telegraphed notices
shall be given at least two days prior to the meeting. Notice by mail shall be
given at least five days prior to the meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail properly addressed,
with postage thereon prepaid. If given by telegram, such notice shall be deemed
to be given when the telegram is delivered to the telegraph company. If given by
facsimile, such notice shall be deemed to be given upon completion of the
transmission and receipt of a completed answer-back indicating receipt. Neither
the business to be transacted at, nor the purpose of, any annual, regular or
special meeting of the Board need be stated in the notice, unless specifically
required by statute or these Bylaws.
SECTION 6. QUORUM. A majority of the Trustees shall constitute a quorum for
transaction of business at any meeting of the Board, provided that, if less than
--------
a majority of the Trustees are present at any meeting, a majority of the
Trustees present may adjourn the meeting from time to time without further
notice, and provided further that if, pursuant to the Declaration of Trust or
-------- -------
these Bylaws, the vote of a majority of a particular group of Trustees is
required for action, a quorum must also include a majority of such group. The
Trustees present at a meeting which has been duly called
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and convened may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Trustees to leave less than a quorum.
SECTION 7. VOTING. Except as otherwise provided in the Declaration of
Trust, the action of a majority of the Trustees present at a meeting at which a
quorum is present shall be the action of the Board, unless the concurrence of a
greater proportion is required for such action by applicable statute.
SECTION 8. TELEPHONE MEETINGS. Trustees may participate in a meeting by
means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person at
the meeting.
SECTION 9. INFORMAL ACTION BY TRUSTEES. Any action required or permitted to
be taken at any meeting of the Board may be taken without a meeting, if a
consent in writing to such action is signed by each Trustee and such written
consent is filed with the minutes of proceedings of the Board.
SECTION 10. VACANCIES. If for any reason any or all of the Trustees shall
cease to be Trustees, such event shall not affect these Bylaws or the powers of
the remaining Trustees hereunder (even if fewer than three Trustees remain). Any
vacancy (including a vacancy created by an increase in the number of Trustees)
shall be filled, at any regular meeting or at any special meeting of the Board
called for that purpose, by a majority of the Trustees. Any individual so
elected as a Trustee shall hold office until the next annual meeting of
shareholders.
SECTION 11. REMOVAL. The shareholders may, at any time, remove any Trustee
in the manner provided in the Declaration of Trust.
SECTION 12. INTERESTED TRUSTEE TRANSACTIONS. Section 2-419 of the Maryland
General Corporation Law shall be available for and apply to any contract or
other transaction between the Trust and any of its Trustees or between the Trust
and any other trust, corporation, firm or other entity in which any of its
Trustees is a trustee or director or has a material financial interest.
ARTICLE 4. COMMITTEES
SECTION 1. EXECUTIVE COMMITTEE. The Board, by resolution adopted by a
majority of the Trustees, may designate two or more Trustees to constitute an
Executive Committee, to serve as such, unless the resolution designating the
Executive Committee is sooner amended or rescinded by the Board , until the next
annual meeting of the Board or until their respective successors are designated.
A majority of the members of the Executive Committee shall be Independent
Trustees (as defined in Section 1 of Article 5 of the Declaration of Trust). The
Board, by resolution adopted by a majority of the Trustees, may also designate
additional Trustees as alternate members of the Executive Committee to serve as
members of the Executive Committee in the place and stead of any
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regular member or members who may be unable to attend a meeting or otherwise
unavailable to act as a member of the Executive Committee. In the absence or
disqualification of a member and all alternate members who may serve in the
place and stead of such member, the member or members present at any meeting and
not disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another Trustee to act at the meeting in the
place of any such absent or disqualified member.
Except as expressly limited by the laws of the State of Maryland or the
Declaration of Trust, the Executive Committee shall have and may exercise all
the powers and authority of the Board in the management of the business and
affairs of the Trust between the meetings of the Board. The Executive Committee
shall keep a record of its acts and proceedings, which shall form a part of the
records of the Trust in the custody of the Secretary, and all actions of the
Executive Committee shall be reported to the Board at the next meeting of the
Board.
Meetings of the Executive Committee may be called at any time by the
Chairman (or any Co-Chairman), any Vice Chairman, the Chief Executive Officer,
the President or any two Executive Committee members. No notice of meetings need
be given. A majority of the members of the Executive Committee shall constitute
a quorum for the transaction of business and, except as expressly limited by
this Section 1, the act of a majority of the members present at any meeting at
which there is a quorum shall be the act of the Executive Committee. Except as
expressly provided in this Section 1, the Executive Committee shall fix its own
rules of procedure.
SECTION 2. AUDIT COMMITTEE. The Board, by resolution adopted by a majority
of the Trustees, may designate two or more Trustees to constitute an Audit
Committee, to serve as such, unless the resolution designating the Audit
Committee is sooner amended or rescinded by the Board, until the next annual
meeting of the Board or until their respective successors are designated. The
Board, by resolution adopted by a majority of the Trustees, may also designate
additional Trustees as alternate members of the Audit Committee to serve as
members of the Audit Committee in the place and stead of any regular member or
members who may be unable to attend a meeting or otherwise unavailable to act as
a member of the Audit Committee. In the absence or disqualification of a member
and all alternate members who may serve in the place and stead of such member,
the member or members present at any meeting and not disqualified from voting,
whether or not such member or members constitute a quorum, may unanimously
appoint another Trustee to act at the meeting in the place of any such absent or
disqualified member. Each member of the Audit Committee shall be independent of
management of the Trust and free from any relationship that, in the opinion of
the Board, would interfere with the exercise of independent judgment as a member
of the Audit Committee.
Except as expressly limited by the laws of the State of Maryland or the
Declaration of Trust, the Audit Committee shall have and may exercise all the
powers and authority of the Board to establish auditing procedures for the Trust
and to appoint and oversee the Trust's independent public accountants to the
fullest extent. The Audit Committee shall keep a record of its acts and
proceedings, which shall form a part of the records of the Trust in the custody
of the Secretary, and all actions of the Audit Committee shall be reported to
the Board at the next meeting of the Board.
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Meetings of the Audit Committee may be called at any time by the Chairman
and Chief Executive Officer or the President or by any two Audit Committee
members. Two days' written or telephonic notice of meetings shall be given. A
majority of the members of the Audit Committee shall constitute a quorum for the
transaction of business and, except as expressly limited by this Section 2, the
act of a majority of the members present at any meeting at which there is a
quorum shall be the act of the Audit Committee. Except as expressly provided in
this Section 2, the Audit Committee shall fix its own rules of procedure.
SECTION 3. EXECUTIVE COMPENSATION COMMITTEE. The Board, by resolution
adopted by a majority of the Trustees, may designate two or more Trustees to
constitute an Executive Compensation Committee, to serve as such, unless the
resolution designating the Executive Compensation Committee is sooner amended or
rescinded by the Board, until the next annual meeting of the Board or until
their respective successors are designated. The Board, by resolution adopted by
a majority of the Trustees, may also designate additional Trustees as alternate
members of the Executive Compensation Committee to serve as members of the
Executive Compensation Committee in the place and stead of any regular member or
members who may be unable to attend a meeting or otherwise unavailable to act as
a member of the Executive Compensation Committee. In the absence or
disqualification of a member and all alternate members who may serve in the
place and stead of such member, the member or members present at any meeting and
not disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another Trustee to act at the meeting in the
place of any such absent or disqualified member. Each member of the Executive
Compensation Committee shall be a "non-employee director" within the meaning of
Rule 16b-3(b)(3)(i) promulgated under the Exchange Act. A majority of the
members of the Executive Compensation Committee shall be Independent Trustees
(as defined in Section 1 of Article 5 of the Declaration of Trust).
Except as expressly limited by the laws of the State of Maryland or the
Declaration of Trust, the Executive Compensation Committee shall have and may
exercise such powers as the Board may determine and specify by resolution. The
Executive Compensation Committee shall keep a record of its acts and
proceedings, which shall form a part of the records of the Trust in the custody
of the Secretary, and all actions of the Executive Compensation Committee shall
be reported to the Board at the next meeting of the Board.
Meetings of the Executive Compensation Committee may be called at any time
by the Chairman and Chief Executive Officer or the President or by any two
Executive Compensation Committee members. Two days' written or telephonic notice
of meetings shall be given. A majority of the members of the Executive
Compensation Committee shall constitute a quorum for the transaction of business
and, except as expressly limited by this Section 3, the act of a majority of the
members present at any meeting at which there is a quorum shall be the act of
the Executive Compensation Committee. Except as expressly provided in this
Section 3, the Executive Compensation Committee shall fix its own rules of
procedure.
SECTION 4. OTHER COMMITTEES. The Board, by resolution adopted by a majority
of the Trustees, may designate one or more other committees, each such committee
to consist of two or
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more Trustees. Except as expressly limited by the laws of the State of Maryland
or the Declaration of Trust, any such committee shall have and may exercise such
powers as the Board may determine and specify in the resolution designating such
committee. The Board, by resolution adopted by a majority of the Trustees, may
also designate one or more additional Trustees as alternate members of any such
committee to replace any absent or disqualified member at any meeting of the
committee, and at any time may change the membership of any committee or amend
or rescind the resolution designating the committee. In the absence or
disqualification of a member or alternate member of a committee, the member of
members present at any meeting and not disqualified from voting, whether or not
such member or members constitute a quorum, may unanimously appoint another
Trustee to act at the meeting in the place of any such absent or disqualified
member, provided that the Trustee so appointed meets any qualifications stated
in the resolution designating the committee. Each committee shall keep a record
of proceedings and report the same to the Board to such extent and in such form
as the Board may require. Unless otherwise provided in the resolution
designating a committee, a majority of all the members of any such committee may
select its chairman, fix its rules of procedure, fix the time and place of its
meetings and specify what notice of meetings, if any, shall be given.
SECTION 5. TELEPHONE MEETINGS. Members of a committee of the Board may
participate in a meeting by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means shall
constitute presence in person at the meeting.
SECTION 6. INFORMAL ACTION BY COMMITTEES. Any action required or permitted
to be taken at any meeting of a committee of the Board may be taken without a
meeting, if a consent in writing to such action is signed by each member of the
committee and such written consent is filed with the minutes of proceedings of
such committee.
ARTICLE 5. OFFICERS
SECTION 1. GENERAL PROVISIONS. The officers of the Trust may include a
Chairman and Chief Executive Officer, a President, a Chief Financial Officer,
one or more Vice Presidents, a Secretary, a Treasurer, one or more Assistant
Secretaries and one or more Assistant Treasurers. In addition, the Board may
from time to time appoint such other officers with such powers and duties as
they shall deem proper. The officers of the Trust shall be elected annually by
the Board at the first meeting of the Board held after each annual meeting of
shareholders, except that each of the Chairman and Chief Executive Officer and
the President may appoint one or more Vice Presidents, Assistant Secretaries and
Assistant Treasurers. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as may be convenient.
Each officer shall hold office until his or her successor is elected and
qualifies or until his or her death, resignation or removal in the manner
hereinafter provided. Any two or more offices except President and Vice
President may be held by the same person. In its discretion, the Board may leave
unfilled any office. Election of an officer or agent shall not of itself create
contract rights between the Trust and such officer or agent.
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SECTION 2. REMOVAL AND RESIGNATION. Any officer or agent of the Trust may
be removed by the Board if in its judgment the best interests of the Trust would
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Any officer of the Trust may resign at
any time by giving written notice of his or her resignation to the Board, the
Chairman and Chief Executive Officer, the President or the Secretary. Any
resignation shall take effect at any time subsequent to the time specified
therein or, if the time when it shall become effective is not specified therein,
immediately upon its receipt. The acceptance of a resignation shall not be
necessary to make it effective unless otherwise stated in the resignation. Such
resignation shall be without prejudice to the contract rights, if any, of the
Trust.
SECTION 3. VACANCIES. A vacancy in any office may be filled by the Board
for the balance of the term.
SECTION 4. CHAIRMAN AND CHIEF EXECUTIVE OFFICER. The Chairman and Chief
Executive Officer shall preside over the meetings of the Board and of
shareholders at which he or she shall be present. The Chairman and Chief
Executive Officer shall have general responsibility for implementation of the
policies of the Trust, as determined by the Board, and for the management,
supervision and control of all of the business and affairs of the Trust. He or
she may execute any deed, mortgage, bond, contract or other instrument, except
in cases where the execution thereof shall be expressly delegated by the Board
or by these Bylaws to some other officer or agent of the Trust or shall be
required by law to be otherwise executed; and in general shall perform all
duties incident to the office of Chairman and Chief Executive Officer and such
other duties as may be prescribed by the Board from time to time.
SECTION 5. PRESIDENT. The President shall have general responsibility for
implementation of the policies of the Trust, as determined by the Board and the
Chairman and Chief Executive Officer. In the absence of the Chairman and Chief
Executive Officer, or if there is a vacancy in such office, the President shall
perform the duties of the Chairman and Chief Executive Officer and when so
acting shall have all the powers of and be subject to all the restrictions on
the Chairman and Chief Executive Officer. He or she may execute any deed,
mortgage, bond, contract or other instrument, except in cases where the
execution thereof shall be expressly delegated by the Board or the Chairman and
Chief Executive Officer or by these Bylaws to some other officer or agent of the
Trust or shall be required by law to be otherwise executed; and in general shall
perform all duties incident to the office of President and such other duties as
may be prescribed by the Board or the Chairman and Chief Executive Officer from
time to time.
SECTION 6. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall have
general responsibility for implementation of the policies of the Trust, as
determined by the Board, the Chairman and Chief Executive Officer or the
President, and for the management, supervision and control of the financial and
accounting affairs of the Trust. In the absence of a designation of a Treasurer
by the Board, the Chief Financial Officer shall be the Treasurer of the Trust.
In the absence of the Chairman and Chief
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Executive Officer and the President, or if there are vacancies in such offices,
the Chief Financial Officer shall perform the duties of the Chairman and Chief
Executive Officer and the President and when so acting shall have all the powers
of and be subject to all the restrictions on the Chairman and Chief Executive
Officer and the President. He or she may execute any deed, mortgage, bond,
contract or other instrument, except in cases where the execution thereof shall
be expressly delegated by the Board, the Chairman and Chief Executive Officer or
the President or by these Bylaws to some other officer or agent of the Trust or
shall be required by law to be otherwise executed; and in general shall perform
all duties incident to the office of Chief Financial Officer and such other
duties as may be prescribed by the Board, the Chairman and Chief Executive
Officer or the President from time to time.
SECTION 7. VICE PRESIDENTS. In the absence of the Chairman and Chief
Executive Officer, the President and the Chief Financial Officer, or if there
are vacancies in such offices, the Vice President (or if there is more than one
Vice President, the Vice Presidents in the order designated at the time of their
election or, in the absence of any designation, then in the order of their
election) shall perform the duties of the Chairman and Chief Executive Officer
and the President and when so acting shall have all the powers of and be subject
to all the restrictions on the Chairman and Chief Executive Officer and the
President; and shall perform such other duties as from time to time may be
assigned to him or her or them by the Chairman and Chief Executive Officer, the
President or the Board . The Board may designate one or more Vice Presidents as
Executive Vice Presidents or as Vice Presidents for particular areas of
responsibility.
SECTION 8. SECRETARY. The Secretary shall (a) keep the minutes of the
proceedings of the shareholders, the Board and committees of the Board in one or
more books provided for that purpose, (b) see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law, (c) be
custodian of the records and of the seal of the Trust, (d) keep a register of
the post office address of each shareholder which shall be furnished to the
Secretary by such shareholder, (e) have general charge of the share transfer
books of the Trust and (f) in general perform such other duties as from time to
time may be assigned to him or her by the Chairman and Chief Executive Officer
or the Board.
SECTION 9. TREASURER. The Treasurer shall have the custody of the funds and
securities of the Trust and shall keep full and accurate accounts of receipts
and disbursements in books belonging to the Trust and shall deposit all moneys
and other valuable effects in the name and to the credit of the Trust in such
depositories as may be designated by the Board. In the absence of a designation
of a Chief Financial Officer by the Board, the Treasurer shall be the Chief
Financial Officer.
The Treasurer shall disburse the funds of the Trust as may be ordered by
the Board, taking proper vouchers for such disbursements, and shall render to
the Chairman and Chief Executive Officer, the President and the Board, at the
regular meetings of the Board or whenever it may so require, an account of all
his or her transactions as Treasurer and of the financial condition of the
Trust.
If required by the Board, he or she shall give the Trust a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board for the
faithful performance of the duties of
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his or her office and for the restoration to the Trust, in case of his or her
death, resignation, retirement or removal from office, of all books, papers,
vouchers, moneys and other property of whatever kind in his or her possession or
under his or her control belonging to the Trust.
SECTION 10. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such duties as
shall be assigned to them by the Secretary or Treasurer, respectively, or by the
Chairman and Chief Executive Officer, the President or the Board. The Assistant
Treasurers shall, if required by the Board, give bonds for the faithful
performance of their duties in such sums and with such surety or sureties as
shall be satisfactory to the Board.
SECTION 11. SALARIES. The salaries and other compensation of the officers
shall be fixed from time to time by the Board and no officer shall be prevented
from receiving such salary by reason of the fact that he or she is also a
Trustee.
ARTICLE 6. CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Chairman and Chief Executive Officer, the
President, the Chief Financial Officer and each Vice President are each
authorized to enter into any contract and to execute and deliver any instrument
in the name of and on behalf of the Trust, so long as the dollar value of the
Trust's obligation or liability under such contract or instrument does not
exceed $100,000. The Board may authorize any officer or agent to enter into any
contract or to execute and deliver any instrument in the name of and on behalf
of the Trust, and such authority may be general or confined to specific
instances. Any agreement, deed, mortgage, lease or other document executed by
one or more of the Trustees or by an authorized person shall be valid and
binding on the Board and on the Trust when such execution is authorized or
ratified by these Bylaws or by action of the Board.
SECTION 2. CHECKS AND DRAFTS. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Trust shall be signed by the Chief Financial Officer or such officer or
officers, agent or agents of the Trust designated by the Chief Financial Officer
or in such other manner as shall from time to time be determined by the Board.
SECTION 3. DEPOSITS. All funds of the Trust not otherwise employed shall be
deposited from time to time to the credit of the Trust in such banks, trust
companies or other depositories as the Chairman and Chief Executive Officer, the
President, the Chief Financial Officer or the Board may designate.
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ARTICLE 7. SHARES
SECTION 1. CERTIFICATES. Each shareholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class held by him or her in the Trust. Each certificate shall be
signed by the Chairman and Chief Executive Officer, the President or any Vice
President and countersigned by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer and may be sealed with the seal, if any, of
the Trust. The signatures may be either manual or facsimile. Certificates shall
be consecutively numbered; and if the Trust shall, from time to time, issue
several classes of shares, each class may have its own number series. A
certificate is valid and may be issued whether or not an officer who signed it
is still an officer when it is issued. Each certificate representing shares
which are restricted as to their transferability or voting powers, which are
preferred or limited as to their dividends or distributions or as to their
allocable portion of the assets upon liquidation or which are redeemable at the
option of the Trust, shall have a statement of such restriction, limitation,
preference or redemption provision, or a summary thereof, plainly stated on the
certificate. In lieu of such statement or summary, the Trust may set forth on
the face or back of the certificate a statement that the Trust will furnish to
any shareholder, upon request and without charge, a full statement of such
information.
SECTION 2. TRANSFERS. Upon surrender to the Trust or the transfer agent of
the Trust of a share certificate duly endorsed or accompanied by proper evidence
of succession, assignment or authority to transfer, the Trust shall issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction on its books.
The Trust shall be entitled to treat the holder of record of any share as
the holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of the State of Maryland.
Any issuance, redemption or transfer of, or restriction on, shares which
would operate to disqualify the Trust as a real estate investment trust for
Federal income tax purposes shall be void ab initio.
Notwithstanding the foregoing, transfers of shares of any class will be
subject in all respects to the Declaration of Trust and all of the terms and
conditions contained therein.
SECTION 3. LOST CERTIFICATE. The Board or the Secretary (or any other
officer designated by the Board or the Secretary) may direct a new certificate
to be issued in place of any certificate previously issued by the Trust alleged
to have been lost, stolen or destroyed upon the making of an affidavit of that
fact by the person claiming the certificate to be lost, stolen or destroyed.
When authorizing the issuance of a new certificate, the Board or the Secretary
(or any other officer designated by the Board or the Secretary) may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or his or her legal
representative to advertise the same in such manner as it or he or she shall
require and/or to give
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bond, with sufficient surety, to the Trust to indemnify it against any loss or
claim which may arise as a result of the issuance of a new certificate.
SECTION 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board
may set, in advance, a record date for the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders, or shareholders
entitled to receive payment of any dividend or distribution or the allotment of
any other rights, or in order to make a determination of shareholders for any
other proper purpose. Such date, in any case, shall not be prior to the close of
business on the day the record date is fixed and shall be not more than 90 days
and, in the case of a meeting of shareholders, not less than ten days, before
the date on which the meeting or particular action requiring such determination
of shareholders is to be held or taken.
In lieu of fixing a record date, the Board may provide that the share
transfer books shall be closed for a stated period but not longer than 20 days.
If the share transfer books are closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days before the date of such meeting.
If no record date is fixed and the share transfer books are not closed for
the determination of shareholders, (a) the record date for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the day on which the Notice of Meeting is given
or the 30th day before the meeting, whichever is the closer date to the meeting,
and (b) the record date for the determination of shareholders entitled to
receive payment of a dividend or distribution or an allotment of any other
rights shall be the close of business on the day on which the resolution of the
Board declaring the dividend or distribution or allotment of rights is adopted.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section 4, such determination
shall apply to any adjournment thereof, except when (a) the determination has
been made through the closing of the transfer books and the stated period of
closing has expired or (b) the meeting is adjourned to a date more than 120 days
after the record date fixed for the original meeting, in either of which cases a
new record date shall be determined as provided above.
SECTION 5. SHARE LEDGER. The Trust shall maintain at its principal office
or at the office of its counsel, accountants or transfer agent, an original or
duplicate share ledger containing the name and address of each shareholder and
the number of shares of each class held by such shareholder.
SECTION 6. FRACTIONAL SHARES; ISSUANCE OF UNITS. The Board may issue
fractional shares or provide for the issuance of scrip, all on such items and
under such conditions as they may determine. Notwithstanding any other provision
of the Declaration of Trust or these Bylaws, the Board may issue units
consisting of different securities of the Trust. Any security issued in a unit
shall have the same characteristics as any identical securities issued by the
Trust, except that the
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Board may provide that for a specified period securities of the Trust issued in
such unit may be transferred on the books of the Trust only in such unit.
SECTION 7. CONTROL SHARE ACQUISITION. Until such time as this Section 7
shall be repealed, in whole or in part, or these Bylaws shall be amended to
provide otherwise, in each case in accordance with Article 14 of these Bylaws,
the provisions of Subtitle 7 of Title 3 of the Corporations and Associations
Article of the Annotated Code of Maryland or any successor statute (the "Code")
shall not apply to "control share acquisitions" of the Trust within the meaning
of the Code. The repeal or amendment, in whole or in part, of this Section 7 may
occur at any time, whether before or after an acquisition of control shares and,
upon such repeal or amendment, may, to the extent provided by any successor law,
apply to any control share acquisition occurring prior or subsequent thereto.
ARTICLE 8. ACCOUNTING YEAR
The Board shall have the power, from time to time, to fix the fiscal year
of the Trust by a duly adopted resolution.
ARTICLE 9. DIVIDENDS AND DISTRIBUTIONS
SECTION 1. DECLARATION. Dividends and distributions on the shares of the
Trust may be authorized and declared by the Board, subject to the provisions of
law and the Declaration of Trust. Dividends and distributions may be paid in
cash, property or other assets of the Trust or in securities of the Trust or
from any other source as the Board in its discretion shall determine, subject to
the provisions of law and the Declaration of Trust.
SECTION 2. CONTINGENCIES. Before payment of any dividends or distributions,
there may be set aside out of any funds of the Trust available for dividends and
distributions such sum or sums as the Board may from time to time, in its
absolute discretion, think proper as a reserve fund for contingencies, for
equalizing dividends and distributions, for repairing or maintaining any
property of the Trust or for such other purpose as the Board shall determine to
be in the best interest of the Trust, and the Board may modify or abolish any
such reserve in the manner in which it was created.
ARTICLE 10. INVESTMENT POLICY
Subject to the provisions of law and the Declaration of Trust, the Board
may from time to time adopt, amend, revise or terminate any policy or policies
with respect to investments by the Trust as it shall deem appropriate in its
sole discretion.
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ARTICLE 11. SEAL
SECTION 1. SEAL. The Board may authorize the adoption of a seal by the
Trust. The seal shall have inscribed thereon the name of the Trust. The Board
may authorize one or more duplicate seals and provide for the custody thereof.
SECTION 2. AFFIXING SEAL. Whenever the Trust is required to affix its seal
to a document, it shall be sufficient to meet the requirements of any law, rule
or regulation relating to a seal to place the word "(SEAL)" adjacent to the
signature of the person authorized to execute the document on behalf of the
Trust.
ARTICLE 12. INDEMNIFICATION
To the maximum extent permitted by Maryland law, as amended from time to
time, the Trust shall indemnify and hold harmless, and pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to, each
Trustee and officer from and against all claims and liabilities, whether they
proceed to judgment or are settled, in connection with any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, to which such Trustee or officer may become subject by reason
of his or her being or having been a Trustee or officer, or by reason of any
action alleged to have been taken or omitted by him or her as Trustee or
officer, and shall reimburse him or her for all reasonable legal and other
expenses incurred by him or her in connection with any such claim or liability,
including any claim or liability arising under the provisions of federal or
state securities laws; provided, however, that no Trustee or officer shall be
-------- -------
entitled to indemnification under the foregoing provisions in relation to any
matter if it shall have been established that his or her action or omission was
material to the matter giving rise to the proceeding and was committed in bad
faith or was the result of active and deliberate dishonesty or the Trustee or
officer actually received an improper personal benefit in money, property or
services or, in the case of any criminal proceeding, the Trustee or officer had
reasonable cause to believe that the act or omission was unlawful. The foregoing
indemnification shall include any action alleged to have been taken or omitted
by any such Trustee or officer by reason of serving or having served at the
request of the Trust as a director, trustee, officer, partner, employee or agent
of another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. The Trust, without requiring a
preliminary determination of the ultimate entitlement to indemnification, shall
pay or reimburse reasonable expenses, as such expenses are incurred by any
Trustee or officer in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, to which such Trustee or officer a Trustee or officer; provided
--------
that if such payment or reimbursement is to be made prior to the final
disposition of any proceeding to which a Trustee or officer is a party, no
payment or reimbursement shall be made by the Trust unless and until the Trust
shall receive a written affirmation from such Trustee or officer of his or her
good faith belief that the standard for indemnification of a Trustee or officer
under Maryland law and as provided above has been met and a written undertaking
by such Trustee or officer to repay such amounts paid or reimbursed by the Trust
if it shall ultimately be determined that such standard for indemnification has
not been met. The rights accruing to a Trustee or officer under these provisions
shall not exclude any other right
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to which he or she may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse such Trustee or
officer in any proper cause even though not specifically provided for herein.
Neither the amendment nor repeal of this Article, nor the adoption or
amendment of any other provision of these Bylaws or Declaration of Trust
inconsistent with this Article, shall apply to or affect in any respect the
applicability of the preceding paragraph with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.
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ARTICLE 13. WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Declaration of
Trust or these Bylaws or pursuant to applicable law, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice. Neither the business to be transacted at nor the purpose of any
meeting need be set forth in the waiver of notice, unless specifically required
by statute. The attendance of any person at any meeting shall constitute a
waiver of notice of such meeting, except if such person attends such meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
ARTICLE 14. AMENDMENT OF BYLAWS
The Board shall have the exclusive power to adopt, alter or repeal any
provision of these Bylaws and to make new Bylaws. Notwithstanding anything to
the contrary contained herein, after the closing of the Initial Public Offering
(as such term is defined in Section 1 of Article 3 of the Declaration of Trust),
any amendment to Sections 6 or 7 of Article 3 or Sections 1 or 3 of Article 4 or
to this Article 14 shall first be approved by a majority of the Independent
Trustees (as defined in Section 1 of Article 5 of the Declaration of Trust).
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CERTIFICATE OF SECRETARY
OF
CABOT INDUSTRIAL TRUST
I, Neil E. Waisnor, do hereby certify that:
1. I am the duly elected and acting Secretary of Cabot Industrial Trust,
a Maryland real estate investment trust (the "Trust").
2. The foregoing Amended and Restated Bylaws were validly authorized and
approved by resolutions of the Board of Directors of the Trust duly adopted on
September 10, 1998, true and complete copies of which are attached hereto as
Exhibit A, and such resolutions are in full force and effect on the date hereof
and have not been amended, modified or repealed.
IN WITNESS THEREOF, I have executed this Certificate as Secretary of the
Trust this 10th day of September, 1998.
Neil E. Waisnor
Secretary
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