SEC Form 4 · accession 0001209191-17-056901
RAIT Financial Trust · RAS
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Reporting owner
Period of report
Oct 11, 2017
Accepted (ET)
Oct 13, 2017 · 5:10 pm EDT
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0001045425
Table I — non-derivative securities
No Table I lines on this filing.
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Share Purchase WarrantF1,F2,F3,F4,F5,F6,F7 | — | Oct 11, 2017 | D | 11,035,875 | D | — | — | Common Shares of Beneficial Interest | — | 0 | I |
| Common Share Appreciation RightF1,F2,F3,F4,F5,F6,F7 | — | Oct 11, 2017 | D | 7,485,045 | D | — | — | Common Shares of Beneficial Interest | — | 0 | I |
Explanation of responses
- F1The reported securities are owned directly by ARS VI Investor I, LP (the "Investor"), a limited partnership in which the reporting person indirectly holds an equity interest. The Investor converted from a limited liability company into a limited partnership on December 31, 2013. Prior to the conversion, the Investor was known as ARS VI Investor I, LLC. Pursuant to the Purchase Agreement (defined in footnote 2), the Investor may designate a trustee on the issuer's board of trustees. The deputized trustee of the Investor is the reporting person, who serves on the issuer's board of trustees as the Investor's representative. The reporting person disclaims beneficial ownership of the reported securities except to the extent of the reporting person's pecuniary interest therein.
- F2These securities were issued pursuant to the Securities Purchase Agreement dated as of October 1, 2012 (the "Purchase Agreement") among the issuer, certain subsidiaries of the issuer and the Investor. The purchase price allocated per security in the Purchase Agreement was approximately $0.925 per Common Share Purchase Warrant (the "Warrants") and $0.674 per Common Share Appreciation Right (the "SARs").
- F3On October 11, 2017, the issuer received a Put Right Notice (as defined in the Warrants and SARs) from the Investor pursuant to the terms of the Warrants and SARs and the Investor surrendered all of the Warrants and SARs to the issuer. The Put Right Notice specified that the Issuer was to redeem all of the Investor's Warrants and SARs in accordance with the terms thereof. Upon surrender of the Warrants and SARs, the Investor's rights thereunder with respect to the issuer's common shares terminated (the "Termination"), and the Warrants and SARs represented the right of the Investor to receive the Put Redemption Price (as defined in the Warrants and SARs) from the issuer.
- F4The Warrants and SARs define the Put Redemption Price as $1.23 per share and provide that the number of shares used to calculate the Put Redemption Price is based on the number of shares underlying the Warrants and SARs as of the date of the original issuance of the Warrants and SARs. Accordingly, the numbers of derivative securities that serve as the basis for the calculation of the Put Redemption Price were the 9,931,000 shares underlying the Warrants and the 6,735,667 shares underlying the SARs.
- F5While not relevant to the calculation of the Put Redemption Price, prior to the Termination, the exercise price of the Warrants and SARs had adjusted in accordance with their terms to $5.40 and the number of shares underlying the Warrants and SARs had adjusted in accordance with their terms to 11,035,875 shares and 7,485,045 shares, respectively.
- F6Prior to the Termination, the issuer would not have been obligated to issue in excess of 9,931,000 of the issuer's common shares, in the aggregate, upon exercise of the Warrants unless the issuer elected to seek, and obtain, shareholder approval for the issuance of such excess common shares in accordance with New York Stock Exchange listing requirements. The issuer would have had to pay cash or issue a 180 day unsecured promissory note, or a combination of the foregoing, equal to the market value of any common shares it could not issue as a result of this limit. Prior to such termination, any exercise of the SARs would have been settled in cash, not in the issuer's common shares.
- F7The put right exercised pursuant to the Put Right Notice related to the Warrants and SARs became exercisable on October 1, 2017. The Warrants and SARs were also exercisable as of that date. Prior to the Termination, the Warrants and SARs were to expire on the earlier of (i) October 1, 2027 unless exercised on or prior to such date or (ii) (x) 30 days following the receipt of notice by the holder thereof of a defined change of control or (y) if later, the date such change of control occurred.