AGREEMENT REGARDING OWNERSHIP LIMIT WAIVER
EXHIBIT 4.1
AGREEMENT REGARDING OWNERSHIP LIMIT WAIVER
THIS AGREEMENT is entered into as of May 4 2007, by Entertainment Properties Trust, a Maryland
real estate investment trust (“EPR”), and ING Clarion Real Estate Securities (“Purchaser”).
RECITALS
A. EPR has elected, effective for its taxable years ending on and after December 31, 1997, to
be treated as a real estate investment trust (‘REIT”) for purposes of the Internal Revenue Code of
1986, as amended (the “Code”). EPR’s Amended and Restated Declaration of Trust (“Declaration of
Trust”) contains certain ownership limitations relating to EPR’s qualification as a REIT, including
a limitation on the percentage of EPR’s outstanding shares of beneficial interest (“Shares”) that
any Person (as defined in the Declaration of Trust) may own (the “Ownership Limit”).
B. Article Ninth, Section 11 of the Declaration of Trust provides that the Board of Trustees
of EPR (the “Board”), in its sole discretion, may exempt a Person from the Ownership Limit if such
Person provides to the Board such representations and undertakings as the Board, in its sole and
absolute discretion, may require, and such Person agrees that any violation of such representations
and undertakings or any attempted violation thereof will result in an application of the remedies
set forth in Article Ninth of the Declaration of Trust (“Article Ninth”) with respect to shares
held in excess of the Ownership Limit (“Excess Shares”).
C. EPR intends to issue up to 4,600,000 of its 7 3/8% Series D cumulative redeemable preferred
shares of beneficial interest (liquidation preference — $25.00 per share) (the “Series D Preferred
Shares”) on or about May 25, 2007 in connection with an underwritten public offering thereof (the
“Offering”), and Purchaser, on behalf of certain accounts and institutions, desires to acquire
approximately 34% (as determined with reference to liquidation value), in the aggregate, of the
Series D Preferred Shares to be issued in the Offering.
D. Purchaser has requested that the Board grant Purchaser a waiver of the Ownership Limit that
will permit Purchaser, on behalf of certain accounts and institutions, to acquire Series D
Preferred Shares in the amount described herein, and the Board desires to grant such waiver,
conditioned upon the continued accuracy of the representations and undertakings made by Purchaser
in this Agreement.
In consideration of the foregoing and the mutual promises and covenants contained herein, the
parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF EPR
EPR represents and warrants that the Board has approved an exemption from the Ownership Limit
for the acquisition of Series D Preferred Shares by Purchaser, conditioned upon Purchaser’s
representations and undertakings in this Agreement, permitting Purchaser, on behalf of certain
accounts and institutions, to acquire up to an aggregate of 34% (but not more than
34%), as determined by reference to liquidation value, of the issued and outstanding Series D
Preferred Shares to be sold in the Offering.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to and agrees with EPR as follows:
2.1 In connection with, and as a condition to, the grant by the Board of an exemption from the
Ownership Limit to permit Purchaser, on behalf of certain accounts and institutions, to hold up to
an aggregate of 34% (but not more than 34%), as determined by reference to liquidation value, of
the issued and outstanding Series D Preferred Shares, Purchaser represents to EPR and covenants
that no person or entity who would be considered to be an “individual” for purposes of Section
542(a)(2) of the Code would be considered, after taking into account the ownership attribution
rules under Section 544 of the Code (as modified by Sections 856(h)(1)(B) and 856(h)(3) of the
Code), the beneficial owner of more than 9.8% of the issued and outstanding Shares (assuming for
this purpose that such “individual” is not considered to own any Shares other than solely by reason
of Purchaser’s ownership of Shares). Purchaser acknowledges and agrees that, if at any time the
foregoing covenant and representation would not be accurate, the maximum number of Series D
Preferred Shares that Purchaser could own would be automatically reduced (without the requirement
for any action by EPR) to the number of Series D Preferred Shares that would cause the covenant in
the preceding sentence to be accurate.
2.2 Purchaser acknowledges that, notwithstanding the waiver of the Ownership Limit granted
pursuant to this Agreement, the Board is not granting an exemption from any other ownership
restrictions set forth in Article Ninth or with respect to any Shares other than the Series D
Preferred Shares.
2.3 Purchaser acknowledges that EPR is a “domestically controlled REIT” under the Code, and
agrees that EPR may take such actions as the Board, in its sole and absolute discretion, deems
necessary and advisable to preserve EPR’s status as a “domestically controlled REIT” under the
Code, and to ensure that EPR is not “closely held” within the meaning of Section 856(h) of the
Code, including but not limited to the designation of any Series D Preferred Shares or other
securities of EPR the acquisition of which by Purchaser or the accounts or institutions for which
it acts could cause EPR to become “closely held” or to lose its status as a “domestically
controlled REIT,” as Excess Shares subject to the Excess Share provisions of Article Ninth,
notwithstanding any other provision of this Agreement or the waiver granted hereby.
2.4 Purchaser acknowledges and agrees that any violation of its representations, warranties or
covenants in this Section 2 will result in the application of the remedies set forth in Article
Ninth in respect to any of the Shares that constitute Excess Shares in accordance with Article
Ninth.
2
3. MISCELLANEOUS
3.1 Additional Actions and Documents
Each of the parties hereby agrees to use its reasonable best efforts to cause to be taken such
further actions, to execute, deliver and file or use its reasonable best efforts to cause to be
executed, delivered and filed such further documents, and to obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and
conditions of this Agreement.
3.2 Assignment
Neither party may assign its rights and obligations under this Agreement, in whole or in part,
without the prior written consent of the other party, and any such assignment contrary to the terms
hereof shall be null and void and of no force and effect. In no event shall the assignment by
either party of its respective rights or obligations under this Agreement release such party from
its liabilities and obligations hereunder.
3.3 Amendment
This Agreement constitutes the full and entire understanding of the parties with respect to
the subject matters herein. No amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed and delivered by the party against
whom enforcement of the amendment, modification, or discharge is sought.
3.4 Waiver
No waiver shall be valid against any party hereto unless made in writing and signed by the
party against whom enforcement of such waiver is sought and then only to the extent expressly
specified therein.
3.5 Governing Law
This Amendment shall be governed by and construed under the laws of the State of Maryland
(without regard for the choice of law provisions thereof).
3.6 Severability
If any clause or provision of this Agreement operates or would prospectively operate to
invalidate this Agreement in whole or in part, then only such clause or provision shall be
ineffective, and the remainder of this Agreement shall remain operative and in full force and
effect.
3.7 Incorporation of Recitals
The recitals hereto are incorporated herein as part of this Agreement.
3
3.8 Execution in Counterparts
This Agreement may be executed in counterparts. All counterparts shall collectively
constitute a single Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date set forth
above.
ENTERTAINMENT PROPERTIES TRUST |
||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
| ING CLARION REAL ESTATE SECURITIES L.P. |
||||
| By: | /s/ Xxxxxxx X. XxXxxxxx | |||
| Name: | Xxxxxx X. XxXxxxxx | |||
| Title: | Chief Compliance Officer | |||
4
