Exhibit 10.1
AMENDMENT NO. 2 TO THE SHAREHOLDERS RIGHTS AGREEMENT
THIS AMENDMENT NO. 2 TO THE SHAREHOLDERS RIGHTS AGREEMENT, dated as of July 1,
2002 (this "Amendment"), between Shelbourne Properties III, Inc. (the "Company")
and American Stock Transfer & Trust Company, as rights agent (the "Rights
Agent"), at the Company's direction. Capitalized terms used herein and not
otherwise defined have the meanings ascribed to such terms in the Rights
Agreement (as defined below).
WHEREAS, the Company and the Rights Agent entered into the Shareholder
Rights Agreement, dated February 8, 2001, as amended by Amendment of Rights
Agreement, dated as of February 14, 2002 (the "Rights Agreement"), setting forth
the terms of the Rights;
WHEREAS, the Company and the Rights Agent may, from time to time,
supplement or amend the Rights Agreement pursuant to the provisions of Section
27 of the Rights Agreement;
WHEREAS, the Board of Directors of the Company (the "Board of Directors"),
on July 1, 2002, resolved that it is advisable, fair and in the best interests
of the Company and the stockholders for HX Investors, L.P. and its affiliates
("HX Investors") to acquire up to 236,631 issued and outstanding shares of
common stock of the Company in connection with the Settlement Agreement (as
defined below) and the Stock Purchase Agreement (as defined below);
WHEREAS, the Board of Directors further resolved to approve this Amendment
which provides, among other things, that (1) HX Investors, to the extent that HX
Investors shall not be the Beneficial Owner of more than 42% of the Common
Shares then outstanding, is exempt from the definition of Acquiring Person, (2)
the Settlement Agreement, the Stock Purchase Agreement and the transactions
contemplated thereby shall not constitute a Distribution Date, an event
described in Section 11(a)(ii) of the Rights Agreement, an event described in
Section 13 of the Rights Agreement, a Stock Acquisition Date or a Triggering
Event and (3) no Rights shall be exercisable pursuant to the Rights Agreement as
a result of the transactions contemplated by the Stock Purchase Agreement;
NOW THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Rights Agent
hereby agree as follows:
SECTION 1. Amendment to Rights Agreement. The Rights Agreement is hereby
amended as follows:
(a) The definition of "Acquiring Person" in Section 1 is amended by
inserting the following sentence at the end of such definition:
"Notwithstanding anything in this Agreement to the contrary, none of HX
Investors, L.P., a New York limited partnership ("HX Investors"), its
Affiliates or its Associates, either individually or as a group, shall
become an Acquiring Person by reason of the approval, execution or delivery
of the Settlement and Mutual Release, dated July 1, 2002, between HX
Investors and certain additional plaintiffs, as plaintiffs, and the
Company, Shelbourne Properties I, Inc. and
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Shelbourne Properties II, Inc., as defendants (the "Settlement Agreement"),
the Stock Purchase Agreement, dated July 1, 2002, by and among HX
Investors, Exeter Capital Corporation and the Company (the "Stock Purchase
Agreement"), or the consummation of the transactions contemplated thereby
or any announcement of the same."
(b) A new Section 35 is added to read in its entirety as follows:
"SECTION 35. Purchase of Stock by HX Investors. Notwithstanding
anything in this Agreement to the contrary, none of HX Investors, its
Affiliates or its Associates, either individually or as a group, to the
extent they shall not be the Beneficial Owner of more than 42% of the
Common Shares then outstanding, shall be considered an Acquiring Person,
and no event described in Section 11(a)(ii), no event described in Section
13, no Stock Acquisition Date and no Triggering Event shall occur and no
Rights shall be exercisable pursuant to Section 7 or any other provision of
this Agreement by reason of the approval, execution or delivery of the
Settlement Agreement and the Stock Purchase Agreement, the consummation of
the transactions contemplated thereby or announcement of the same."
SECTION 2. Full Force and Effect. In all respects not inconsistent with the
terms and provisions of this Agreement, the Rights Agreement is hereby ratified
and confirmed. In executing and delivering this Amendment, the Rights Agent
shall be entitled to all of the privileges and immunities afforded to the Rights
Agent under the terms and conditions of the Rights Agreement.
SECTION 3. Counterparts. This Amendment may be executed in two or more
counterparts and each such counterpart shall for all purposes be deemed to be an
original and all such counterparts shall together constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be as effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 3. Governing Law. This Amendment shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such state applicable
to contracts to be made and to be performed entirely within such state.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to the
Rights Agreement to be duly executed as of the date first written above.
SHELBOURNE PROPERTIES III, INC.
By /s/ Xxxxxx Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx Xxxxx
Title: Director
AMERICAN STOCK TRANSFER & TRUST COMPANY
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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CERTIFICATION OF COMPLIANCE WITH SECTION 27 OF RIGHTS AGREEMENT
---------------------------------------------------------------
The undersigned officer of Shelbourne Properties III, Inc. (the "Company"),
being an appropriate officer of the Company and authorized to do so by
resolution of the board of directors of the Company, dated July 1, 2002, hereby
certifies to American Stock Transfer & Trust Company, as rights agent, that the
Amendment No. 2 to the Shareholder Rights Agreement is in compliance with the
terms of Section 27 of such agreement.
SHELBOURNE PROPERTIES III, INC.
By /s/ Xxxxxx Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx Xxxxx
Title: Director
Acknowledged and Agreed:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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