Exhibit 3.1
iSTAR FINANCIAL INC.
AMENDED AND RESTATED CHARTER
ARTICLE I
INCORPORATION
The undersigned, Michael E. McTiernan, whose address is c/o Rogers &
Wells LLP, 200 Park Avenue, New York, New York 10166, being at least 18 years of
age, does hereby form a corporation under the general laws of the State of
Maryland.
ARTICLE II
NAME
The name of the corporation (the "Corporation") is: iStar Financial
Inc.
ARTICLE III
PURPOSE
(a) The purposes for which the Corporation is formed and the business
and objects to be carried on and promoted by it are to engage in any lawful act
or activity (including, without limitation or obligation, engaging in business
as a REIT) for which corporations may be organized under the General Laws of the
State of Maryland as now or hereafter in force. In addition, the Corporation
shall have such further powers as are not inconsistent with, and are appropriate
to promote and attain, the purposes of the Corporation as set forth in this
Charter. For purposes of this Charter, "REIT" means a real estate investment
trust under Sections 856 through 860 of the Code.
(b) The primary purposes of the Corporation include to acquire a
diversified portfolio of debt and/or debt like interests in real estate and/or
real estate related assets, including (i) originating mortgage loans and/or
acquiring mortgage loans or acquiring securities collateralized, in whole or in
part, by such mortgage loans, as well as making equity investments in real
estate and real estate-related assets, (ii) acquiring direct or indirect
interests in short term, medium and long-term real estate-related debt
securities and mortgage interests, which may include warrants, equity
participations or similar rights incidental to a debt investment by the
Corporation, (iii) making, holding and disposing of purchase money loans with
respect to assets sold by the Corporation, and (iv) acquiring positions in
non-performing and sub-performing debt for the purpose of either restructuring
it as performing debt or if such efforts are unsuccessful, of obtaining shortly
thereafter primary management rights over or equity interests in the underlying
assets securing such debt (the "Diversified Portfolio"). Such investments may
incorporate a variety of real property equity and financing techniques,
including, without limitation, partnerships, joint ventures, purchase and
leasebacks, land purchase-leases, net lease financings, purchase and installment
salebacks, and Mortgages. The Corporation's authority with respect to the
Diversified Portfolio includes the power to acquire, hold, own, develop,
redevelop, construct, improve, maintain, operate, manage, sell, lease, rent,
transfer, encumber, mortgage, convey, exchange and otherwise dispose of all or
part of the Diversified Portfolio and the Diversified Portfolio may be held by
the Corporation directly or indirectly.
(c) Without the amendment, termination or waiver of provisions of
certain non-competition agreements between Starwood Capital Group, L.P. and
Starwood Hotels & Resorts, Inc., a publicly traded hotel corporation and
Starwood Hotels & Resorts Worldwide, Inc., the Corporation is prohibited from:
(i) making investments in loans collateralized by hotel assets where it is
anticipated that the underlying equity will be acquired by the debt holder
within one (1) year from the acquisition of such debt, (ii) acquiring equity
interests in hotels (other than acquisitions of warrants, equity participations
or similar rights incidental to a debt investment by the Corporation or that are
acquired as a result of the exercise of remedies in respect of a loan in which
the Corporation has an interest) or (iii) selling or contributing to or
acquiring any interests in Starwood Hotels & Resorts, Inc., including debt
positions or equity interests obtained by the Corporation under, pursuant to or
by reason of the holding of debt positions.
(d) The foregoing enumerated purposes and objects shall be in no way
limited or restricted by reference to, or inference from, the terms of any other
clause of this or any other Article of this Charter, and each shall be regarded
as independent; and they are intended to be and shall be construed as powers as
well as purposes and objects of the Corporation and shall be in addition to and
not in limitation of the general powers of corporations under the General Laws
of the State of Maryland.
ARTICLE IV
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
The present address of the principal office of the Corporation in the
State of Maryland is c/o The Corporation Trust Incorporated, 32 South Street,
Baltimore, Maryland 21202. The name and present address of the resident agent of
the Corporation in the State of Maryland are The Corporation Trust Incorporated,
32 South Street, Baltimore, Maryland 21202. The resident agent is a corporation
of and resident of the State of Maryland. The Corporation may have such other
offices or places of business within or without the State of Maryland as the
Board may from time to time determine.
ARTICLE V
CAPITAL STOCK
(a) The total number of shares of stock of all classes which the
Corporation has authority to issue is 230,000,000 shares of Capital Stock (par
value $0.001 per share), amounting in aggregate par value to $230,000. Of these
shares, 200,000,000 are initially classified as "Common Stock" and 30,000,000
are initially classified as "Preferred Stock." Of the shares of Preferred Stock,
4,400,000 shares are initially classified as 9.5% Series A Cumulative Redeemable
Preferred Stock ("Series A Preferred Stock"), 2,300,000 shares are initially
classified as 9 3/8% Series B Cumulative Redeemable Preferred Stock ("Series B
Preferred Stock"), 1,495,000 shares are initially classified as 9.20% Series C
Cumulative Redeemable Preferred Stock ("Series C Preferred Stock"), and
4,600,000 shares are initially classified as 8% Series D Cumulative Redeemable
Preferred Stock ("Series D Preferred Stock"). Subject to the other provisions of
this Article V, the Board may: (i) classify and reclassify any unissued shares
of Capital Stock by setting or changing in any one or more respects the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications or terms or
conditions of redemption of such shares of Capital Stock and (ii) to the extent
permitted by Maryland law from time to time, without any action by the
Shareholders, amend the Charter from time to
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time to increase or decrease the aggregate number of shares of Capital Stock or
the number of shares of Capital Stock of any class or series that the
Corporation has authority to issue.
(b) The following is a description of the preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of the Common Stock of the
Corporation:
(i) Each share of Common Stock shall have one vote, and, except as
otherwise provided in respect of the Preferred Stock and in respect of any
other class of stock hereafter classified or reclassified, the exclusive
voting power for all purposes shall be vested in the holders of the Common
Stock. Shares of Common Stock shall not have cumulative voting rights.
(ii) Subject to the provisions of law and any preferences of the
Preferred Stock or any other class of stock hereafter classified or
reclassified, dividends, including dividends payable in shares of another
class of the Corporation's stock, may be paid ratably on the Common Stock at
such time and in such amounts as the Board may deem advisable.
(iii) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of the
Common Stock shall be entitled, together with the holders of any other class
of stock hereafter classified or reclassified not having a preference on
distributions in the liquidation, dissolution or winding up of the
Corporation, to share ratably in the net assets of the Corporation
remaining, after payment or provision for payment of the debts and other
liabilities of the Corporation and the amount to which the holders of any
class of stock hereafter classified or reclassified having a preference on
distributions in the liquidation, dissolution or winding up of the
Corporation shall be entitled.
(c) The description of the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock
of the Corporation are set forth in Annex A, Annex B, Annex C and Annex D to
this Charter, respectively.
(d) Subject to the foregoing, the power of the Board to classify and
reclassify any of the shares of Capital Stock shall include, without limitation,
subject to the provisions of this Charter, authority to classify or reclassify
any unissued shares of Capital Stock into a class or classes of preferred stock,
preference stock, special stock or other stock, and to divide and classify
shares of any class into one or more series of such class by determining,
fixing, or altering one or more of the following:
(i) The distinctive designation of such class or series and the
number of shares to constitute such class or series; provided that, unless
otherwise prohibited by the terms of such or any other class or series, the
number of shares of any class or series may be decreased by the Board in
connection with any classification or reclassification of unissued shares
and the number of shares of such class or series may be increased by the
Board in connection with any such classification or reclassification, and
any shares of any class or series which have been redeemed, purchased,
otherwise acquired or converted into shares of Common Stock or any other
class or series shall no longer be deemed to be outstanding and shall become
part of the authorized Capital Stock and be subject to classification and
reclassification as provided in this sub-paragraph.
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(ii) Whether or not and, if so, the rates, amounts and times at
which, and the terms and conditions under which, dividends shall be payable
on shares of such class or series, whether any such dividends shall rank
senior or junior to or on a parity with the dividends payable on any other
class or series of stock, and the status of any such dividends as
cumulative, cumulative to a limited extent or non-cumulative and as
participating or non-participating.
(iii) Whether or not shares of such class or series shall have
limitations on voting rights or voting rights in addition to any voting
rights provided by law, and, if so, the terms of such voting rights.
(iv) Whether or not shares of such class or series shall have
conversion or exchange privileges and, if so, the terms and conditions
thereof, including provision for adjustment of the conversion or exchange
rate in such events or at such times as the Board shall determine.
(v) Whether or not shares of such class or series shall be subject
to redemption and, if so, the terms and conditions of such redemption,
including the date or dates upon or after which they shall be redeemable and
the amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates; and whether or
not there shall be any sinking fund or purchase account in respect thereof,
and if so, the terms thereof.
(vi) The rights of the holders of shares of such class or series
upon the liquidation, dissolution or winding up of the affairs of, or upon
any distribution of the assets of, the Corporation, which rights may vary
depending upon whether such liquidation, dissolution or winding up is
voluntary or involuntary and, if voluntary, may vary at different dates, and
whether such rights shall rank senior or junior to or on a parity with such
rights of any other class or series of stock.
(vii) Whether or not there shall be any limitations applicable,
while shares of such class or series are outstanding, upon the payment of
dividends or making of distributions on, or the acquisition of, or the use
of moneys for purchase or redemption of, any stock of the Corporation, or
upon any other action of the Corporation, including action under this
sub-paragraph, and, if so, the terms and conditions thereof.
(viii) Any other preferences, rights, restrictions, including
restrictions on transferability, and qualifications of shares of such class
or series, not inconsistent with law and the Charter.
(e) For the purposes hereof and of any articles supplementary to the
Charter providing for the classification or reclassification of any shares of
Capital Stock or of any other Charter document of the Corporation (unless
otherwise provided in any such articles or document), any class or series of
stock of the Corporation shall be deemed to rank:
(i) prior to another class or series either as to dividends or
upon liquidation, if the holders of such class or series shall be entitled
to the receipt of dividends or of amounts distributable on liquidation,
dissolution or winding up, as the case may be, in preference or priority to
holders of such other class or series;
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(ii) on a parity with another class or series either as to
dividends or upon liquidation, whether or not the dividend rates, dividend
payment dates or redemption or liquidation price per share thereof be
different from those of such others, if the holders of such class or series
of stock shall be entitled to receipt of dividends or amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or redemption or liquidation
prices, without preference or priority over the holders of such other class
or series; and
(iii) junior to another class or series either as to dividends or
upon liquidation, if the rights of the holders of such class or series shall
be subject or subordinate to the rights of the holders of such other class
or series in respect of the receipt of dividends or the amounts
distributable upon liquidation, dissolution or winding up, as the case may
be.
(f) All persons who shall acquire stock in the Corporation shall
acquire such stock subject to the provisions of this Charter and the Bylaws of
the Corporation. The Directors shall have the exclusive power to make, adopt,
amend, or repeal the Bylaws of the Corporation to the extent not inconsistent
with law or with this Charter.
ARTICLE VI
BOARD OF DIRECTORS
(a) The initial number of Directors of the Corporation shall be 10,
which number may be increased or decreased, from time to time, by resolution of
the Board approved by at least a majority of the Directors then in office
pursuant to the Bylaws of the Corporation, or by the affirmative vote of the
holders of a majority of the combined voting power of all shares of Capital
Stock entitled to vote thereon, voting together as a single class, provided that
the number of Directors so fixed shall not be less than seven nor more than 18,
and shall never be less than the minimum number permitted by the MGCL now or
hereafter in force.
(b) Subject to the rights of the holders of any class separately
entitled to elect one or more Directors, newly created Directorships resulting
from any increase in the authorized number of Directors or any vacancies on the
Board resulting from death, resignation, retirement, disqualification, removal
from office, or other cause shall be filled by resolution of the Board approved
by at least a majority of the Directors then in office, pursuant to the Bylaws
or by the affirmative vote of the holders of a majority of the votes cast at a
meeting at which a quorum is present. A Director so elected by the shareholders
shall hold office for the balance of the term then remaining. No decrease in the
number of Directors shall affect the tenure of office of any Director. Until
vacancies are filled, the remaining Directors (even though less than seven) may
exercise the powers of the Board hereunder.
(c) Whenever the holders of any one or more series of Capital Stock of
the Corporation shall have the right, voting separately as a class, to elect one
or more Directors of the Corporation, the Board shall consist of said Directors
so elected in addition to the number of Directors fixed as provided in paragraph
(a) of this Article VI. Notwithstanding the foregoing, and except as otherwise
may be required by law or by this Charter, whenever the holders of any one or
more series of Capital Stock of the Corporation shall have the right, voting
separately as a series, to elect one or more Directors of the Corporation, the
terms of the Director or Directors elected by such holders shall expire at the
next succeeding annual meeting of Shareholders.
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(d) Subject to the rights of the holders of any series separately
entitled to elect one or more Directors, any Director, or the entire Board of
Directors, may be removed from office at any time, with or without cause, at a
special meeting of the Shareholders by the affirmative vote of a majority of the
holders of the combined voting power of all classes of shares of Capital Stock
entitled to vote in the election for Directors voting together as a single
class. For purposes of the foregoing, "cause" shall mean a Director's willful
violations of this Charter or the Bylaws which violations are materially adverse
to the interests of the Shareholders, or gross negligence in the performance of
his or her duties.
(e) The Directors shall be divided into two classes as follows:
(i) the term of office of Class I Directors shall be until the
annual meeting of Shareholders held in the year 2000 and until their
successors shall be elected and have qualified and thereafter shall be for
two years and until their successors shall be elected and have qualified;
and
(ii) the term of office of Class II Directors shall be until the
annual meeting of Shareholders held in the year 2001 and until their
successors shall be elected and have qualified and thereafter shall be for
two years and until their successors shall be elected, and have qualified.
If the number of Directors is changed, any increase or decrease shall be
apportioned among the classes so as to maintain or attain, if possible, the
equality of the number of Directors in each class.
(f) The names of the individuals who now serve as Directors of the
Corporation and until their successors are elected and qualify are as follows:
(i) The following person shall serve as Class I Directors:
Jeffrey G. Dishner
Jonathan Eilian
Robin Josephs
Merrick R. Kleeman
Madison F. Grose
(ii) The following persons shall serve as Class II Directors:
Barry S. Sternlicht
Jay Sugarman
William M. Mathes
Kneeland C. Youngblood
Spencer B. Haber
(g) A minimum of the greater of (i) 33-1/3% of the total number of
Directors or (ii) three (3) members of the Board and the Executive Committee (as
established in the Bylaws) of the Board shall be Persons who are not Affiliates
of Starwood Capital Group, L.L.C.; provided, however, that if at any time the
number of Directors or members of the Executive Committee who are not Affiliates
of such
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Person becomes less than the minimum number set forth above, whether because of
the death, resignation, removal, or change in affiliation of one or more
Directors or members of the Executive Committee or otherwise, then such
requirement shall not be applicable for a period of ninety (90) days after such
event occurs, during which period the continuing Directors or Director then in
office shall appoint, pursuant to paragraph (b) of Article VI, a sufficient
number of other individuals as Directors or as members of the Executive
Committee so that again a minimum of the greater of (i) 33-1/3% of the total
number of Directors or (ii) three (3) members of the Board and the Executive
Committee then in office are not Affiliates of such Person. The Directors shall
at all times endeavor to comply with the requirement of this paragraph (i) of
Article VI as to independence, but failure so to comply with such requirement
shall not affect the validity or effectiveness of any action of the Directors or
of the Executive Committee.
ARTICLE VII
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE SHAREHOLDERS AND DIRECTORS
(a) The Board is empowered to authorize the issuance from time to time
of shares of Capital Stock of the Corporation of any class or series, whether
now or hereafter authorized, or Securities or rights convertible into shares of
its stock of any class or series, whether now or hereafter authorized, for such
consideration as the Board may deem advisable and without any action by the
Shareholders.
(b) No holder of any stock or any other Securities of the Corporation,
whether now or hereafter authorized, shall have any preemptive right to
subscribe for or purchase any stock or any other Securities of the Corporation
other than such, if any, as the Board, in its sole discretion, may determine and
at such price or prices and upon such other terms as the Board, in its sole
discretion, may fix; and any stock or other Securities which the Board may
determine to offer for subscription may, as the Board in its sole discretion
shall determine, be offered to the holders of any class or series of stock or
other Securities at the time outstanding to the exclusion of the holders of any
or all other classes or series of stock or other securities at the time
outstanding.
(c) The Corporation shall indemnify (i) its Directors and officers,
whether serving the Corporation or, at its request, any other entity, to the
full extent required or permitted by the General Laws of the State of Maryland
now or hereafter in force, including the advance or reimbursement of reasonable
expenses as incurred (including reasonable attorneys fees) under the procedures
and to the full extent permitted by law and (ii) other employees and agents to
such extent as shall be authorized by the Board or the Corporation's Bylaws and
be permitted by law. The foregoing rights of indemnification shall not be
exclusive of any other rights to which those seeking indemnification may be
entitled. The Board may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt, approve and
amend from time to time such Bylaws, resolutions or contracts implementing such
provisions or such further indemnification arrangements as may be permitted by
law. No amendment of the Charter or repeal of any of its provisions shall limit
or eliminate the right to indemnification provided hereunder with respect to
acts or omissions occurring prior to such amendment or repeal.
(d) To the fullest extent permitted by Maryland statutory or decisional
law, as amended or interpreted, no Director or officer of the Corporation shall
be personally liable to the Corporation or its Shareholders for money damages.
No amendment of the Charter of the Corporation or
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repeal of any of its provisions shall limit or eliminate the limitation on
liability provided to Directors and officers hereunder with respect to any act
or omission occurring prior to such amendment or repeal. In addition to any
Maryland statute limiting the liability of directors or officers of a Maryland
corporation, no Director or officer of the Corporation shall be liable to the
Corporation or to any Director for any act or omission of any other Director,
Stockholder, officer, or agent of the Corporation or be held to any personal
liability whatsoever in tort, contract, or otherwise in connection with the
affairs of this Corporation except only that arising from his own willful
violation of the provisions of this Charter or of the Bylaws which violation is
materially against the interests of the Shareholders and results in material
harm to such interests, or gross negligence in the performance of his or her
duties.
(e) The determination as to any of the following matters, made in good
faith by or pursuant to the direction of the Board consistent with the Charter
and the Bylaws and in the absence of actual receipt of an improper benefit in
money, property or services or active and deliberate dishonesty established by a
court, shall be final and conclusive and shall be binding upon the Corporation
and every holder of shares of its Capital Stock: the amount of the net income of
the Corporation for any period and the amount of assets at any time legally
available for the payment of dividends, redemption of its Capital Stock or the
payment of other distributions on its Capital Stock; the amount of paid-in
surplus, net assets, other surplus, annual or other net profit, net assets in
excess of capital, undivided profits or excess of profits over losses on sales
of assets; the amount, purpose, time of creation, increase or decrease,
alteration or cancellation of any reserves or charges and the propriety thereof
(whether or not any obligation or liability for which such reserves or charges
shall have been created shall have been paid or discharged); the fair value, or
any sale, bid or asked price to be applied in determining the fair value, of any
asset owned or held by the Corporation; any matters relating to the acquisition,
holding and disposition of any assets by the Corporation; and to determine
whether and to what extent and at what times and places and under what
conditions and regulations the books, accounts and documents of the Corporation,
or any of them, shall be open to the inspection of shareholders, except as
otherwise provided by the MGCL or by the Bylaws, and, except as so provided, no
stockholder shall have any right to inspect any book, account or document of the
Corporation unless authorized to do so by resolution of the Board.
(f) The Board shall use its reasonable best efforts to take such
actions as are necessary or appropriate to preserve the status of the
Corporation as a REIT; however, if the Board determines that it is no longer in
the best interests of the Corporation to continue to be qualified as a REIT, the
Board may revoke or otherwise terminate the Corporation's REIT election pursuant
to Section 856(g) of the Code.
(g) The Board shall, in connection with the exercise of its business
judgment involving a Business Combination (as defined in Section 3-601 of the
MGCL) or any actual or proposed transaction which would or may involve a change
in control of the Corporation (whether by purchases of shares of stock or any
other Securities of the Corporation in the open market, or otherwise, tender
offer, merger, consolidation, dissolution, liquidation, sale of all or
substantially all of the assets of the Corporation, proxy solicitation or
otherwise) in determining what is in the best interest of the Corporation and
its Shareholders and in making any recommendation to its Shareholders, give due
consideration to all relevant factors, including, but not limited to (i) the
economic effect, both immediate and long-term, upon the Corporation's
Shareholders, including Shareholders, if any, who do not participate in the
transaction; (ii) whether the proposal is acceptable based on the historical and
current operating results or financial condition of the Corporation; (iii)
whether a more favorable price could be obtained for the Corporation's stock or
other Securities in the future; (iv) the reputation and business practices of
the offeror and its management and affiliates as they would affect the employees
of the Corporation and its subsidiaries; (v) the future value of the stock or
any other Securities of the Corporation; (vi) any antitrust or other legal and
regulatory issues that are raised by the proposal; and (vii) the business and
financial condition and
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earnings prospects of the acquiring person or entity, including, but not limited
to, debt service and other existing financial obligations, financial obligations
to be incurred in connection with the acquisition, and other likely financial
obligations of the acquiring person or entity. If the Board determines that any
proposed Business Combination (as defined in Section 3-601 of the MGCL) or
actual or proposed transaction which would or may involve a change in control of
the Corporation should be rejected, it may take any lawful action to defeat such
transaction, including, but not limited to, any or all of the following:
advising Shareholders not to accept the proposal; instituting litigation against
the party making the proposal; filing complaints with governmental and
regulatory authorities; acquiring the stock or any of the Securities of the
Corporation; selling or otherwise issuing authorized but unissued stock, other
Securities, or granting options or rights with respect thereto; acquiring a
Corporation to create an antitrust or other regulatory problem for the party
making the proposal; and obtaining a more favorable offer from another
individual or entity. Nothing in this section shall preclude the Board of
Directors from specifically or generally approving or exempting business
combinations with the Corporation.
(h) Notwithstanding any provision of law permitting or requiring any
action to be taken or approved by the affirmative vote of the holders of shares
of Capital Stock entitled to cast a greater number of votes, any such action
shall be effective and valid if taken or approved by the affirmative vote of
holders of shares of Capital Stock entitled to cast a majority of all the votes
entitled to be cast on the matter, except as otherwise specifically provided in
the Charter.
(i) The Bylaws of the Corporation may be altered, amended or repealed,
and new Bylaws may be adopted, at any meeting of the Board by a majority vote of
the Directors.
(j) In the event that any provision or portion of a provision of this
Article VII is determined to be in conflict with any applicable statute, such
provision or portion thereof shall be inapplicable to the extent of such
conflict. In the event that any provision or portion of a provision of this
Article VII is determined to be invalid, void, illegal or unenforceable, the
remainder of the provisions of this Article VII shall continue to be valid and
enforceable and shall in no way be affected, impaired or invalidated. Nothing in
this Article VII shall be construed to diminish, limit or impair any rights or
defenses afforded to officers or Directors by common law, statute, other
provisions of this Charter, the Bylaws or otherwise, and the provisions of this
Article VII shall be deemed to be cumulative thereto. References in this Article
VII to Directors or officers shall be deemed to refer to any person who is or
was a Director or officer of the Corporation and any person who, while a
Director or officer of the Corporation, is or was serving at the request of the
Corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise.
ARTICLE VIII
INVESTMENT POLICY
(a) GENERAL STATEMENT OF POLICY. While the Directors are authorized,
pursuant to Article VI, to invest the Corporation Assets in a wide variety of
investments, it is the present intention of the Corporation that it shall be a
principal investment objective and policy of the Corporation to invest the
Corporation Assets in the Diversified Portfolio.
Investments of the Corporation may be made in various combinations and
may involve participations with other Persons, including Affiliates of the
Directors. Such investments may incorporate a variety of real property equity
and financing techniques, including, without limitation, partnerships,
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joint ventures, purchase and leasebacks, land purchase-leases, net lease
financings, purchase and installment salebacks, and Mortgages, and include
investments through subsidiary corporations and other entities.
The general purpose of the Corporation is to seek qualifying real
estate investment trust gross income as defined in the REIT Provisions of the
Code consistent with the investment objective and policy of the Corporation as
set forth above. The Directors intend to make investments in such a manner as to
comply with the requirements of the REIT Provisions of the Code with respect to
the composition of the Corporation's investments and the derivation of its
income; provided, however, that no Director, officer, employee, or agent of the
Corporation shall be liable to any Person, including any Stockholder, for any
act or omission resulting in the loss of tax benefits, or in the incurrence of
tax detriments, under the Code or for the Corporation not being treated for tax
purposes as a "real estate investment trust" under the REIT Provisions of the
Code. Subject to paragraph (c) of this Article VIII hereof and subject to such
restrictions as may be necessary to qualify the Corporation as a "real estate
investment trust" as defined in the REIT Provisions of the Code, the Directors
may alter the above-declared investment policy in light of changes in economic
circumstances and other relevant factors, and the methods of implementing the
Corporation's investment policies may change, in the discretion of the Directors
as economic and other conditions change.
(b) OTHER PERMISSIBLE INVESTMENTS. To the extent that the Corporation
has assets not invested in accordance with paragraph (a) of this Article VIII,
the Corporation may invest them in, subject to such restrictions as may be
necessary to qualify the Corporation as a "real estate investment trust" as
defined in the REIT Provisions of the Code:
(i) Obligations of, or guaranteed or insured by, the United States
Government or any agency or political subdivision thereof;
(ii) Obligations of, or guarantees by, any state, territory, or
possession of the United States of America or any agency or political
subdivision thereof;
(iii) Evidences of deposits in, or obligations of, banking
institutions, savings and loan associations, and savings institutions;
(iv) Real and personal property and interests therein; and
(v) Other Securities, liquid short-term investments, and property.
(c) PROHIBITED INVESTMENTS AND ACTIVITIES. The Corporation shall not
invest in commodities, foreign currencies, or bullion except in connection with
investments in other property.
ARTICLE IX
RESTRICTION ON TRANSFER, ACQUISITION AND REDEMPTION
OF SHARES OF CAPITAL STOCK
(a) OWNERSHIP LIMITATION.
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(i) Except as provided in paragraphs (k) and (u) of Article IX,
and subject to sub-paragraph (iv) of this paragraph (a) of Article IX, from
the Restriction Commencement Date until the Restriction Termination Date, no
Person (other than an Excepted Holder) shall Beneficially or Constructively
Own shares of Capital Stock in excess of the Ownership Limit and no Excepted
Holder shall Beneficially or Constructively Own shares of Capital Stock in
excess of the Excepted Holder Limit for such Excepted Holder.
(ii) Subject to sub-paragraph (iv) of this paragraph (a) of
Article IX, from the Restriction Commencement Date until the Restriction
Termination Date, any Transfer that, if effective, would result in (1) the
Corporation being "closely held" within the meaning of Section 856(h) of the
Code (without regard to whether the ownership interest is held during the
last half of a taxable year), or (2) the Corporation otherwise failing to
qualify as a REIT (including, but not limited to, Beneficial or Constructive
Ownership that would result in the Corporation owning (actually or
Constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such
tenant would cause the Corporation to fail to satisfy any of the gross
income requirements of Section 856(c) of the Code) shall be void and the
intended transferee shall acquire no rights in such shares of Capital Stock.
(iii) Subject to sub-paragraph (iv) of this paragraph (a) of
Article IX, from the Restriction Commencement Date until the Restriction
Termination Date, any Transfer that, if effective, would result in the
shares of Capital Stock being beneficially owned by less than 100 Persons
(determined without reference to any rules of attribution) shall be void AB
INITIO as to the Transfer of shares of Capital Stock which would be
otherwise beneficially owned (as provided in Section 856(a) of the Code) by
the transferee and the intended transferee shall acquire no rights in such
shares of Capital Stock.
(iv) Nothing contained in this Article IX shall preclude the
settlement of any transaction entered into through the facilities of the
principal securities exchange on which the shares of Capital Stock are
currently traded. The fact that the settlement of any transaction is
permitted shall not negate the effect of any other provision of this Article
IX and any transferee in such a transaction shall be subject to all of the
provisions and limitations set forth in this Article IX.
(b) TRANSFER IN TRUST. If, notwithstanding the other provisions
contained in this Article IX, at any time from the Restriction Commencement Date
until the Restriction Termination Date, there is a purported Transfer such that
any Person would Beneficially or Constructively Own shares of Capital Stock in
violation of sub-paragraph (a)(i) or (ii),
(i) then that number of shares of Capital Stock the Beneficial or
Constructive Ownership of which otherwise would cause such Person to
violate paragraph (a)(i) or (ii) (rounded to the higher whole share)
shall be automatically transferred to a Charitable Trust for the
benefit of a Charitable Beneficiary, as described in paragraph (n),
effective as of the close of business on the Business Day prior to the
date of such Transfer, and such Person shall acquire no rights in such
shares of Capital Stock; or
(ii) if the transfer to the Charitable Trust described in clause
(i) of this sentence would not be effective for any reason to prevent the
violation of paragraph (a)(i) or (ii), then the Transfer of that number of
shares of Capital Stock that otherwise would cause any
11
Person to violate paragraph (a)(i) or (ii) shall be void AB INITIO, and the
intended transferee shall acquire no rights in such shares of Capital Stock.
(c) REMEDIES FOR BREACH. If the Board or its designee shall at any time
determine in good faith that a Transfer has taken place in violation of
paragraph (a) of Article IX or that a Person intends to acquire or has attempted
to acquire Beneficial or Constructive Ownership of any shares of Capital Stock
in violation of paragraph (a) of Article IX, the Board or its designee shall
take such action as it deems advisable to refuse to give effect to or to prevent
such transfer, including, but not limited to, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer; PROVIDED, HOWEVER, that any Transfers or attempted Transfers in
violation of paragraph (a) of Article IX shall automatically result in the
transfer to the Charitable Trust described above and, where applicable, such
Transfer (or other event) shall be void AB INITIO as provided above irrespective
of any action (or non-action) by the Board.
(d) NOTICE TO TRUST. Any Person who acquires or attempts to acquire
Beneficial or Constructive Ownership of Capital Stock in violation of paragraph
(a) of Article IX, or any Person who would be a transferee of such Capital Stock
but for the Transfer to the Charitable Trust under paragraph (b) of Article IX,
shall immediately give written notice or, in the event of a proposed or
attempted Transfer, shall give at least fifteen (15) days prior written notice
to the Corporation of such event and shall provide to the Corporation such other
information as the Corporation may request in order to determine the effect, if
any, of such Transfer or attempted Transfer on the Corporation's status as a
REIT.
(e) INFORMATION FOR CORPORATION. From the Restriction Commencement Date
and until the Restriction Termination Date:
(i) every owner of more than 5% (or such other percentage, between
1/2 of 1% and 5%, as provided under the REIT Provisions of the Code) of the
number or value of outstanding shares of Capital Stock of the Corporation
shall upon the Corporation's written request, within thirty (30) days after
January 1 of each year, give written notice to the Corporation stating the
name and address of such owner, the number of shares of Capital Stock
Beneficially or Constructively Owned, and a description of how such shares
of Capital Stock are held. Each such Beneficial Owner shall provide to the
Corporation such additional information as the Corporation may reasonably
request in order to determine the effect, if any, of such Beneficial or
Constructive Ownership on the Corporation's status as a REIT.
(ii) each Person who is a Beneficial or Constructive Owner of
shares of Capital Stock and each Person (including the stockholder of
record) who is holding shares of Capital Stock for a Beneficial or
Constructive Owner shall provide to the Corporation in writing such
information with respect to direct, indirect and constructive ownership of
shares of Capital Stock as the Board deems reasonably necessary to comply
with the provisions of the Code applicable to a REIT, to determine the
Corporation's status as a REIT, to comply with the requirements of any
taxing authority or governmental agency or to determine any such compliance.
(f) OTHER ACTION BY BOARD. Subject to sub-paragraph (iv) of paragraph
(a) of Article IX, nothing contained in this Article IX shall limit the
authority of the Board to take such other action as it deems necessary or
advisable to protect the Corporation and the interests of its Shareholders by
preservation of the Corporation's status as a REIT.
12
(g) AMBIGUITIES. In the case of an ambiguity in the application of any
of the provisions of this Article IX, including any definition contained in
Article XI, the Board shall have the power to determine the application of the
provisions of this Article IX with respect to any situation based on the facts
known to it and the Board's determination shall be conclusive for all purposes.
(h) MODIFICATION OF EXCEPTED HOLDER AND EXISTING HOLDER LIMITS. The
Excepted Holder and Existing Holder Limits may be modified as follows:
(i) Subject to the limitations provided in paragraph (j) of
Article IX, the Board may grant options which result in Beneficial or
Constructive Ownership of shares of Capital Stock by an Existing Holder
pursuant to an option plan approved by the Board and/or the Shareholders.
Any such grant shall increase the Existing Holder Limit for the affected
Existing Holder to the maximum extent possible under paragraph (j) of
Article IX to permit the Beneficial or Constructive Ownership of the shares
of Capital Stock issuable upon the exercise of such option.
(ii) Subject to the limitations provided in paragraph (j) of
Article IX, an Existing Holder may elect to participate in a dividend
reinvestment plan approved by the Board which results in Beneficial or
Constructive Ownership of shares of Capital Stock by such participating
Existing Holder. Any such participation shall increase the Existing Holder
Limit for the affected Existing Holder to the maximum extent possible under
paragraph (j) of Article IX to permit Beneficial or Constructive Ownership
of the shares of Capital Stock acquired as a result of such participation.
(iii) The Board shall reduce the Excepted Holder Limit for any
Excepted Holder after any Transfer permitted in this Article IX by such
Excepted Holder by the percentage of the outstanding shares of Capital Stock
so Transferred or after the lapse (without exercise) of an option described
in sub-paragraph (i) of this paragraph (h) of Article IX by the percentage
of the shares of Capital Stock that the option, if exercised, would have
represented, but in either case no Excepted Holder Limit shall be reduced to
a percentage which is less than the Ownership Limit.
(iv) Subject to the limitations provided in paragraph (j) of
Article IX, the Board may otherwise modify an Excepted Holder Limit from
time to time.
(i) INCREASE OR DECREASE IN OWNERSHIP LIMIT. Subject to the limitations
provided in paragraph (j) of Article IX, the Board may from time to time
increase or decrease the Ownership Limit; PROVIDED, HOWEVER, that any decrease
may only be made prospectively as to subsequent holders (other than a decrease
as a result of a retroactive change in existing law that would require a
decrease to retain REIT status, in which case such decrease shall be effective
immediately).
(j) LIMITATIONS ON CHANGES IN EXCEPTED HOLDER AND OWNERSHIP LIMITS.
(i) Neither the Ownership Limit nor any Excepted Holder Limit may
be increased (nor may any additional Excepted Holder Limit be created) if,
after giving effect to such increase (or creation), five Beneficial Owners
of shares of Capital Stock (including all of the then Excepted Holders)
could Beneficially Own, in the aggregate, more than 49.9% in number or value
of the outstanding shares of Capital Stock.
13
(ii) Prior to the modification of any Excepted Holder Limit or
Ownership Limit pursuant to paragraphs (h) or (i) of Article IX, the Board
may require (but shall not be obligated to obtain) such opinions of counsel,
affidavits, undertakings or agreements as it may deem necessary or advisable
in order to determine or ensure the Corporation's status as a REIT.
(iii) The Board may only reduce the Excepted Holder Limit for an
Excepted Holder: (1) with the written consent of such Excepted Holder at any
time, or (2) pursuant to the terms and conditions of the agreements and
undertakings entered into with such Excepted Holder in connection with the
establishment of the Excepted Holder Limit for that Excepted Holder. No
Excepted Holder Limit shall be reduced to a percentage which is less than
the Ownership Limit.
(k) EXCEPTIONS BY BOARD.
(i) The Board, upon receipt of a ruling from the Internal Revenue
Service or an opinion of counsel or other evidence satisfactory to the Board
and upon at least fifteen (15) days written notice from a transferee prior
to the proposed Transfer which, if consummated, would result in the intended
transferee owning shares of Capital Stock in excess of the Ownership Limit
or the Excepted Holder Limit, as the case may be, and upon such other
conditions as the Board may direct, may grant an exception to the Ownership
Limit or the Excepted Holder Limit, as the case may be, with respect to such
transferee.
(ii) In addition to exceptions permitted under sub-paragraph (i)
above, the Board may grant an exception to the Ownership Limit with respect
to a Person if: (a) such Person submits to the Board information
satisfactory to the Board, in its reasonable discretion, demonstrating that
such Person is not an individual for purposes of Section 542(a)(2) of the
Code (determined taking into account Section 856(h)(3)(A) of the Code); (b)
such Person submits to the Board information satisfactory to the Board, in
its reasonable discretion, demonstrating that no Person who is an individual
for purposes of Section 542(a)(2) of the Code (determined taking into
account Section 856(h)(3)(A) of the Code) would be considered to
Beneficially Own shares of Capital Stock in excess of the Ownership Limit by
reason of the ownership of shares of Capital Stock in excess of the
Ownership Limit by the Person receiving the exception granted under this
sub-paragraph (ii); (c) such Person submits to the Board information
satisfactory to the Board, in its reasonable discretion, demonstrating that
the ownership of shares of Capital Stock in excess of the Ownership Limit by
the Person receiving the exception granted under this sub-paragraph (ii)
will not result in the Corporation failing to qualify as a REIT; and (d)
such Person provides to the Board such representations and undertakings, if
any, as the Board may, in its reasonable discretion, require to ensure that
the conditions in clauses (a), (b) and (c) above are satisfied and will
continue to be satisfied throughout the period during which such Person owns
shares of Capital Stock in excess of the Ownership Limit pursuant to any
exception granted under this sub-paragraph (ii), and such Person agrees that
any violation of such representations and undertakings or any attempted
violation thereof will result in the application of the remedies set forth
in paragraph (c) of Article IX with respect to shares of Capital Stock held
in excess of the Ownership Limit by such Person (determined without regard
to the exception granted such Person under this sub-paragraph (ii)).
(l) LEGEND. Each certificate for shares of Capital Stock shall bear
substantially the following legend:
14
The securities represented by this certificate are subject to
restrictions on Beneficial and Constructive Ownership and Transfer for
the purpose of the Corporation's maintenance of its status as a REIT
under the Internal Revenue Code of 1986, as amended. Except as
otherwise provided pursuant to the Charter, (i) no Person may
Beneficially or Constructively Own shares of Capital Stock in excess of
9.8% (or such greater percentage as may be determined by the Board of
Directors of the Corporation) of the number or value of the outstanding
shares of Capital Stock of the Corporation unless such Person is an
Excepted Holder (in which case the Excepted Holder Limit shall be
applicable), (ii) no Person may Beneficially or Constructively Own
shares of Capital Stock that would result in the Corporation being
"closely held" under Section 856(h) of the Code or otherwise cause the
Corporation to fail to qualify as a REIT; and (iii) no Person may
Transfer shares of Capital Stock if such Transfer would result in
Capital Stock of the Corporation being owned by fewer than 100 Persons.
Any Person who attempts or proposes to Beneficially or Constructively
Own shares of Capital Stock in excess of the above limitations must
notify the Corporation in writing at least 15 days prior to such
proposed or attempted Transfer. If the restrictions on transfer are
violated, the securities represented hereby will be automatically
transferred to a Charitable Trustee of a Charitable Trust for the
benefit of one or more Charitable Beneficiaries. In addition, upon the
occurrence of certain events, attempted Transfers in violation of the
restrictions described above may be void AB INITIO. A Person who
attempts to Beneficially or Constructively Own Capital Stock in
violation of the ownership limitations described above shall have no
claim, cause of action, or any recourse whatsoever against a transferor
of such Capital Stock. All capitalized terms in this legend have the
meanings defined in the Charter, a copy of which, including the
restrictions on transfer, will be sent without charge to each
Stockholder who so requests.
Instead of the foregoing legend, the certificate may state
that the Corporation will furnish a full statement about certain
restrictions on transferability to a Stockholder on request and without
charge.
(m) SEVERABILITY. If any provision of this Article IX or any
application of any such provision is determined to be void, invalid or
unenforceable by any court having jurisdiction over the issue, the validity and
enforceability of the remaining provisions shall be affected only to the extent
necessary to comply with the determination of such court.
(n) TRUST FOR SHARES TRANSFERRED TO CHARITABLE TRUST. Upon any
purported Transfer or other event that would result in a transfer of Capital
Stock to a Charitable Trust pursuant to paragraph (b) of Article IX, such
Capital Stock shall be deemed to have been transferred to the Charitable Trustee
as trustee of a Charitable Trust for the exclusive benefit of the Charitable
Beneficiary. Such transfer to the Charitable Trustee shall be deemed to be
effective as of the close of business on the Business Day prior to the purported
Transfer or other event that results in the transfer to the Charitable Trust
pursuant to paragraph (b). The Charitable Trustee shall be appointed by the
Corporation and shall be a Person unaffiliated with the Corporation and any
Purported Beneficial Transferee. Each Charitable Beneficiary shall be designated
by the Corporation as provided in paragraph (t). Such Capital Stock so held in
trust shall be issued and outstanding shares of Capital Stock of the
Corporation. The Purported Beneficial Transferee shall have no rights in such
Capital Stock held by the Charitable Trustee except as provided in paragraph (b)
of Article IX. The Purported Beneficial Transferee shall not benefit
economically from ownership of any Capital Stock held in trust by the Charitable
Trustee, shall have no rights to dividends or other distributions and shall not
possess any rights to vote or other rights attributable to the Capital Stock
held in the Charitable Trust. The Purported Beneficial Transferee shall have no
claim, cause of action, or any other recourse whatsoever against the purported
transferor of such Capital Stock.
15
(o) DISTRIBUTIONS ON SHARES HELD BY CHARITABLE TRUST. Any distributions
(whether as dividends, distributions upon liquidation, dissolution or winding up
or otherwise) on Capital Stock held by the Charitable Trustee shall be paid to
the Charitable Trust for the benefit of the Charitable Beneficiary. Upon
liquidation, dissolution or winding up, the Purported Record Transferee shall
receive the lesser of (i) the amount of any distribution made upon liquidation,
dissolution or winding up or (ii) the price paid by the Purported Record
Transferee for the shares of Capital Stock, or if the Purported Record
Transferee did not give value for the shares of Capital Stock, the Market Price
of the shares of Capital Stock on the day of the event causing the shares of
Capital Stock to be held in trust. Any such dividend paid or distribution paid
to the Purported Record Transferee in excess of the amount provided in the
preceding sentence prior to the discovery by the Corporation that the Capital
Stock with respect to which the dividend or distribution was made had been
transferred to the Charitable Trust pursuant to paragraph (b) shall be repaid to
the Charitable Trust for the benefit of the Charitable Beneficiary.
(p) VOTING OF SHARES HELD BY CHARITABLE TRUST. The Charitable Trustee
shall be entitled to all voting rights with respect to the Capital Stock held in
the Charitable Trust for the benefit of the Charitable Beneficiary on any
matter. Any vote taken by a Purported Record Transferee prior to the discovery
by the Corporation that the shares of Capital Stock were held in trust shall,
subject to Maryland Law, be rescinded and recast in accordance with the desires
of the Charitable Trustee acting for the benefit of the Charitable Beneficiary;
PROVIDED, HOWEVER, that if the Corporation has already taken irreversible
action, then the Charitable Trustee shall not have the power to rescind and
recast such vote. The owner of the Capital Stock held by the Charitable Trustee
shall be deemed to have given an irrevocable proxy to the Charitable Trustee to
vote the Capital Stock held by the Charitable Trustee for the benefit of the
Charitable Beneficiary.
(q) SALE OF SHARES HELD BY CHARITABLE TRUST. Shares held by the
Charitable Trust shall be transferable only as provided in this paragraph (q) of
Article IX. At the direction of the Corporation, the Charitable Trustee shall
sell the shares of Capital Stock held in the Charitable Trust to a person whose
ownership of the shares of Capital Stock will not violate paragraph (a). Such
transfer shall be made within 60 days after the latest of (i) the date of the
Transfer which resulted in such Transfer to the Charitable Trust and (ii) the
date the Board determines in good faith that a Transfer resulting in the
Transfer to the Charitable Trust has occurred, if the Corporation does not
receive a notice of such Transfer pursuant to paragraph (d) of Article IX. If
such a transfer is made, the interest of the Charitable Beneficiary shall
terminate and proceeds of the sale shall be payable to the Purported Record
Transferee and to the Charitable Beneficiary. The Purported Record Transferee
shall receive the lesser of (x) the price paid by the Purported Record
Transferee for the shares of Capital Stock or, if the Purported Record
Transferee did not give value for the shares of Capital Stock, the Market Price
of the shares of Capital Stock on the day of the event causing the shares of
Capital Stock to be held in the Charitable Trust, and (y) the price received by
the Charitable Trust from the sale or other disposition of the shares of Capital
Stock. Any proceeds in excess of the amount payable to the Purported Record
Transferee shall be paid to the Charitable Beneficiary. Prior to any transfer of
any shares of Capital Stock held by the Charitable Trust by the Charitable
Trustee, the Corporation must have waived in writing its purchase rights under
paragraph (r) of Article IX. It is expressly understood that the Purported
Record Transferee may enforce the provisions of this paragraph (q) of Article IX
against the Charitable Beneficiary.
(r) If any of the foregoing restrictions on transfer of shares held by
the Charitable Trust is determined to be void, invalid or unenforceable by any
court of competent jurisdiction, then the Purported Record Transferee may be
deemed, at the option of the Corporation, to have acted as an agent of the
Corporation in acquiring such shares and to hold such shares on behalf of the
Corporation.
16
(s) CALL BY CORPORATION ON SHARES HELD BY THE CHARITABLE TRUST. Shares
of Capital Stock held by the Charitable Trust shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that created such
shares held by the Charitable Trust (or, in the case of a devise, gift or other
transaction in which no value was given for such shares held by the Charitable
Trust, the Market Price at the time of such devise, gift or other transaction)
and (ii) the Market Price of the shares of Capital Stock to which such shares
held by the Charitable Trust relates on the date the Corporation, or its
designee, accepts such offer (the "Redemption Price"). The Corporation shall
have the right to accept such offer until the Charitable Trustee has sold the
shares of Capital Stock held in the Charitable Trust pursuant to paragraph (q).
Upon such a sale to the Corporation, the interest of the Charitable Beneficiary
in the shares of Capital Stock sold shall terminate and the Charitable Trustee
shall distribute the net proceeds of the sale to the Purported Record
Transferee.
(t) DESIGNATION OF CHARITABLE BENEFICIARIES. By written notice to the
Charitable Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Charitable
Trust such that (i) Capital Stock held in the Charitable Trust would not violate
the restrictions set forth in paragraph (a) in the hands of such Charitable
Beneficiary and (ii) each such organization must be described in Section
501(c)(3), 170(b)(1)(A) or 170(c)(2) of the Code.
(u) UNDERWRITTEN OFFERINGS. The Ownership Limit shall not apply to the
acquisition of shares of Capital Stock or rights, options or warrants for, or
securities convertible into, shares of Capital Stock by an underwriter in a
public offering, provided that the underwriter makes a timely distribution of
such shares of Capital Stock or rights, options or warrants for, or securities
convertible into, shares of Capital Stock.
ARTICLE X
AMENDMENTS
The Corporation reserves the right from time to time to make any
amendments of the Charter which may now or hereafter be authorized by law,
including any amendments changing the terms or contract rights, as expressly set
forth in the Charter, of any of its outstanding stock by classification,
reclassification or otherwise. Except as otherwise provided in the Charter, any
amendment to the Charter shall be valid only if approved by the affirmative vote
of a majority of all the votes entitled to be cast on the matter.
ARTICLE XI
DEFINITIONS
(a) The following terms shall, whenever used in this Charter, unless
the context otherwise requires, have the meanings specified in this Article XI.
The singular shall refer to the plural, and the masculine gender shall be deemed
to refer to the feminine and neuter, and vice versa, as the context requires.
"AFFILIATE" shall mean with respect to a Stockholder or Director (i)
any Person directly or indirectly owning, controlling, or holding, with power to
vote, 20% or more of the outstanding voting securities of such Stockholder, (ii)
any Person 20% or more of whose outstanding voting securities are
17
directly or indirectly owned, controlled, or held, with power to vote, by such
Director, or such Stockholder, and (iii) any officer, director, or partner of
such Stockholder.
"BENEFICIAL OWNERSHIP" shall mean ownership of shares of Capital Stock
by a Person who would be treated as an owner of such shares of Capital Stock
either directly or constructively through the application of Section 544 of the
Code, as modified by Section 856(h) of the Code. The terms "BENEFICIAL Owner,"
"BENEFICIALLY OWNS," "BENEFICIALLY OWN" and "BENEFICIALLY OWNED" shall have
correlative meanings.
"BOARD" shall mean the Board of Directors of the Corporation.
"BUSINESS DAY" shall mean any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in New
York City are authorized or required by law, regulation or executive order to
close.
"BYLAWS" shall mean the Bylaws of the Corporation and all amendments
thereto.
"CAPITAL STOCK" shall mean all classes and series of stock which the
Corporation shall have authority to issue. The term "CAPITAL STOCK" shall
include Common Stock, preferred stock, preference stock, special stock or other
stock.
"CHARITABLE BENEFICIARY" shall mean one or more beneficiaries of the
Charitable Trust as determined pursuant to paragraph (t) of Article IX, provided
that each such organization must be described in Sections 501(c)(3),
170(b)(1)(A) and 170(c)(2) of the Code.
"CHARITABLE TRUST" shall mean any trust provided for in paragraph
(b)(i) and paragraph (n) of Article IX.
"CHARITABLE TRUSTEE" shall mean the Person unaffiliated with the
Corporation and a Purported Beneficial Transferee, that is appointed by the
Corporation to serve as trustee of the Charitable Trust.
"CHARTER" shall mean these Articles of Amendment and Restatement of the
Corporation, as amended, supplemented or modified from time to time. References
in this Charter to "herein" and "hereunder" shall be deemed to refer to this
Charter in its entirety and shall not be limited to the particular text,
article, or section in which such words appear.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, including successor statutes thereto.
"CONSTRUCTIVE OWNERSHIP" shall mean ownership of Capital Stock by a
Person, whether the interest in Capital Stock is held directly or indirectly
(including by a nominee), and shall include interests that would be treated as
owned through the application of Section 318(a) of the Code, as modified by
Section 856(d)(5) of the Code. The terms "CONSTRUCTIVE OWNER," "CONSTRUCTIVELY
OWNS" and "CONSTRUCTIVELY OWNED" shall have the correlative meanings.
"CORPORATION ASSETS" shall mean, as of any particular time, any and all
property, real, personal, or otherwise, tangible or intangible, which is held,
transferred, conveyed, or paid to the Corporation and all rents, income,
profits, and gains therefrom.
"DEBT" shall mean indebtedness of the Corporation.
"DIRECTOR" shall mean the Person that is elected pursuant to Article VI
to serve as Director of the Corporation, and any successor thereto.
"EXCEPTED HOLDER" shall mean (i) a stockholder of the Corporation for
whom an Excepted Holder Limit is created by the Board pursuant to paragraph (k)
of Article IX and (ii) an Existing Holder.
18
"EXCEPTED HOLDER LIMIT" shall mean (i) provided that the affected
Excepted Holder agrees to comply with the requirements established by the Board
pursuant to paragraph (k) of Article IX and subject to adjustment pursuant to
paragraph (h) of Article IX, the percentage limit established by the Board for
such Excepted Holder pursuant to paragraph (k) of Article IX and (ii) with
respect to an Existing Holder, the Existing Holder Limit.
"EXISTING HOLDER" shall mean (i) any Person who is, or would be upon
the exchange of Debt or any Security of the Corporation, the Beneficial or
Constructive Owner of shares of Capital Stock in excess of the Ownership Limit
immediately after the Restriction Commencement Date, so long as, but only so
long as, such Person Beneficially or Constructively Owns or would, upon exchange
of Debt or any Security of the Corporation, Beneficially or Constructively Own
shares of Capital Stock in excess of the Ownership Limit and (ii) any Person to
whom an Existing Holder Transfers, subject to the limitations provided in this
Article IX, Beneficial or Constructive Ownership of shares causing such
transferee to Beneficially or Constructively Own shares of Capital Stock in
excess of the Ownership Limit.
"EXISTING HOLDER LIMIT" (i) for any Existing Holder who is an Existing
Holder by virtue of clause (i) of the definition thereof, shall mean, initially,
the percentage of the outstanding shares of Capital Stock Beneficially or
Constructively Owned (with such percentage for each class determined separately)
or which would be Beneficially or Constructively Owned upon the exchange of Debt
or any Security of the Corporation, by such Existing Holder upon and immediately
after the Restriction Commencement Date, and, after any adjustment pursuant to
paragraph (h) of Article IX, shall mean such percentage of the outstanding
shares of Capital Stock as so adjusted, and (ii) for any Existing Holder who
becomes an Existing Holder by virtue of clause (ii) of the definition thereof,
shall mean, initially, the percentage of the outstanding shares of Capital Stock
Beneficially or Constructively Owned (with such percentage for each class
determined separately) by such Existing Holder at the time that such Existing
Holder becomes an Existing Holder, but in no event shall such percentage be
greater than the lesser of (a) the Existing Holder Limit for the Existing Holder
who Transferred Beneficial or Constructive Ownership of such shares of Capital
Stock or, in the case of more than one transferor, in no event shall such
percentage be greater than the smallest Existing Holder Limit of any
transferring Existing Holder, or (b) the Ownership Limit if the Existing Holder
is a person other than a trust qualified under Section 401(a) of the Code and
exempt from tax under Section 501(a) of the Code, and, after any adjustment
pursuant to paragraph (h) of Article IX, shall mean such percentage of the
outstanding shares of Capital Stock as so adjusted. From the Restriction
Commencement Date until the Restriction Termination Date, the Corporation shall
maintain and, upon request, make available to each Existing Holder, a schedule
which sets forth the then current Existing Holder Limit for each Existing
Holder.
"MARKET PRICE" shall mean the last reported sales price reported on the
NYSE for a particular class of shares of Capital Stock on the trading day
immediately preceding the relevant date, or if not then traded on such exchange,
the last reported sales price for such class of shares of Capital Stock on the
trading day immediately preceding the relevant date as reported on any exchange
or quotation system over or through which such class of shares of Capital Stock
may be traded, or if not then traded over or through any exchange or quotation
system, then the market price of such class of shares of Capital Stock on the
relevant date as determined in good faith by the Board.
"MGCL" shall mean the Maryland General Corporation Law, as amended from
time to time, including successor statutes thereto.
"MORTGAGES" shall mean mortgages, deeds of trust, or other security
instruments on real property or rights or interests in real property or entities
owning or controlling real property.
"OWNERSHIP LIMIT" shall initially mean 9.8%, in number of shares of
Capital Stock, or value of the aggregate outstanding shares of Capital Stock,
whichever is more restrictive, of the Corporation, and after any adjustment as
set forth in paragraph (i) of Article IX, shall mean such percentage in number
of
19
shares of Capital Stock, or value of the aggregate outstanding shares of Capital
Stock, as so adjusted. Such number and/or value shall be determined by the Board
in good faith, which determination shall be conclusive for all purposes hereof.
"PERSON" shall mean an individual, corporation, partnership, estate,
trust (including a trust qualified under Section 401(a) or 501(c)(17) of the
Code), a portion of a trust permanently set aside for or to be used exclusively
for the purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity.
"PURPORTED BENEFICIAL TRANSFEREE" shall mean, with respect to any
purported Transfer, any Person who, but for the provisions of paragraph (b) of
Article IX, would Beneficially or Constructively Own shares of Capital Stock.
"PURPORTED RECORD TRANSFEREE" shall mean, with respect to any purported
Transfer, any Person who, but for the provisions of paragraph (b) of Article IX,
would be the record owner of shares of Capital Stock.
"REIT" shall mean a real estate investment trust under Sections 856
through 860 of the Code.
"REIT PROVISIONS OF THE CODE" shall mean Part II, Subchapter M of
Chapter 1 of Subtitle A of the Code, as now enacted or hereafter amended,
including successor statutes and regulations promulgated thereunder.
"RESTRICTION COMMENCEMENT DATE" shall mean the date upon which the
Charter containing this Article IX is accepted for record with the State
Department of Assessments and Taxation of Maryland.
"RESTRICTION TERMINATION DATE" shall mean the first day after the
Restriction Commencement Date on which the Board determines that it is no longer
in the best interests of the Corporation to attempt to, or continue to, qualify
as a REIT.
"SECURITIES" shall mean common and preferred stock in a corporation,
shares of beneficial interest in a trust or other unincorporated association,
general partner interests in a general partnership, interests in a joint
venture, general or limited partnership interests in a limited partnership,
membership interests or non-member manager interests in a limited liability
company, notes, debentures, bonds, and other evidences of indebtedness,
including Mortgages, whether secured or unsecured, and includes any options,
warrants, and rights to subscribe to or convert into any of the foregoing.
"SHAREHOLDERS" shall mean, at any particular time, those Persons who
are shown as the holders of record of all shares of Capital Stock on the records
of the Corporation at such time.
"TRANSFER" shall mean any issuance, sale, transfer, gift, assignment,
devise or other disposition, as well as any other event that causes any Person
to acquire Beneficial or Constructive Ownership, of shares of Capital Stock
(including (a) a change in the capital structure of the Corporation, (b) a
change in the relationship between two or more Persons which causes a change in
Beneficial or Constructive Ownership of shares of Capital Stock, (c) Transfers
of interests in other entities that result in changes in Beneficial or
Constructive Ownership of shares of Capital Stock, (d) the granting of any
option, warrant or similar agreement, or entering into any agreement for the
sale, transfer or other disposition of shares of Capital Stock, (e) the sale,
transfer, assignment or other disposition of any Securities or rights
convertible into or exchangeable for shares of Capital Stock, but excluding the
exchange of Debt or any Security of the Corporation for shares of Capital Stock
and (f) any transfer or other disposition of any interest in shares of Capital
Stock as a result of a change in the marital status of the holder thereof),
whether voluntary or involuntary, whether of record, constructively or
beneficially and whether by operation of law or otherwise. The terms "TRANSFERS"
and "TRANSFERRED" shall have correlative meanings.
20
ANNEX A
SERIES A PREFERRED STOCK
1. DESIGNATION AND NUMER OF SHARES.
A series of Preferred Stock, designated the "9.5% Series A Cumulative
Redeemable Preferred Stock" (the "Series A Preferred Stock"), is hereby
established. The Series A Preferred Stock shall consist of 4,400,000 shares,
which number may be increased or decreased (but not below the number of Series A
Preferred Stock then issued and outstanding) from time to time by a resolution
or resolutions of the Board of Directors. Series A Preferred Stock repurchased
by the Corporation shall be canceled and shall revert to authorized but unissued
shares of Preferred Stock, undesignated as to class or series, subject to
reissuance by the Corporation as shares of Preferred Stock of any one or more
series.
2. RANK.
The distinctive name and designation of this series of preferred stock
is Series A Preferred Stock. Each share of Series A Preferred Stock shall rank
senior to any "Junior Securities" (herein defined) in the payment of dividends
and in the liquidation, dissolution or winding up of the Corporation. No Series
of Preferred Stock hereafter issued shall rank senior to or on a parity with the
Series A Preferred Stock unless the issuance thereof is in compliance with the
terms of the Investor Rights Agreement among the Corporation, certain holders of
the Series A Preferred Stock and certain other parties thereto relating among
other things to the Series A Preferred Stock.
3. DIVIDENDS.
(a) Each share of Series A Preferred Stock shall entitle the holder
thereof to receive dividends out of any assets legally available therefor, prior
to and in preference to any declaration or payment of any dividend (payable
other than in Junior Securities) payable on any Junior Securities and pari passu
with any securities ranking on parity with the Series A Preferred Stock and
junior to any Senior Preferred Stock (herein defined). Dividends shall be
payable when and as authorized by the Board of Directors and declared by the
Corporation. Dividends on each share of Series A Preferred Stock shall accrue at
the rate determined pursuant to Section 3(c) (the "Dividend Rate") on the
Liquidation Value. The dividend on the Series A Preferred Stock shall be
cumulative and shall be payable in cash in arrears on April 15, July 15, October
15 and January 15 of each year (each a "Dividend Payment Date"), to holders of
record on the last day of the month immediately preceding such Dividend Payment
Date (i.e., March 31, June 30, September 30 and December 31). Dividends shall
accrue whether or not they have been declared and whether or not there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends. To the extent that any dividend on the Series A Preferred
Stock is not paid on the Dividend Payment Date, such dividend shall accumulate
and compound quarterly from that date at the then applicable Dividend Rate until
such dividend is paid in full. The date on which the Corporation initially
issues a Series A Preferred Stock shall be referred to as the Original Issue
Date regardless of the number of transfers of such shares made on the stock
records maintained by or for the Corporation and regardless of the number of
certificates that may be issued to evidence such share.
(b) The Corporation shall not (i) pay or set aside for payment any
dividends (payable other than in Junior Securities), on Junior Securities or
(ii) redeem, repurchase or otherwise acquire any Junior Securities (except as
required by Article IX of the Amended and Restated Charter of the Corporation
(the "Charter") or the real estate investment trust qualification provisions of
applicable law)
until all accumulated, accrued and unpaid dividends (including any compounded
dividends thereon) have been paid on the Series A Preferred Stock through the
last preceding Dividend Payment Date.
(c) The Dividend Rate shall initially be 9.5% per annum. On each of
December 15, 2005, 2006 and 2007, the Dividend Rate shall increase by 0.25% per
annum. If the Corporation fails to pay on any four (4) or more consecutive
Dividend Payment Date the full amount of unpaid dividends accrued or accumulated
as of each such Dividend Payment Date on the Series A Preferred Stock (whether
or not such payments are legally permissible or are prohibited by an agreement
to which the Corporation is subject), any of which dividends remain unpaid on
the day after the fourth such Dividend Payment Date, the Dividend Rate on the
Series A Preferred Stock then in effect shall be increased by 0.50% per annum
with such increase being effective retroactive to the immediately prior Dividend
Payment Date with respect to which all accrued or accumulated but unpaid
dividends have been paid. Such increased Dividend Rate shall remain in effect
until the close of business on the date that all accrued or accumulated
dividends (including any compounded dividends thereon) in arrears on the Series
A Preferred Stock are paid in full at which time the Dividend Rate increase
shall be of no further force and effect, the Dividend Rate shall be reset to
that Dividend Rate that would have been in effect at such time pursuant to the
first and second sentences of this Section 3(c) but for the effect of the third
sentence of this Section 3(c) (subject to subsequent increases pursuant to this
section) and the calculation of the periods dividends are in arrears shall be
reset to zero (0). Subject to subsequent increases after reset pursuant to the
preceding sentence, no additional dividend rate increases shall be made for
defaults in the payment of dividends in excess of such four (4) consecutive
Dividend Payment Dates, but the aforesaid increase shall remain in effect in
accordance with the immediately preceding sentence until the time specified
therein.
(d) The amount of dividends payable for each quarterly dividend period
for the Series A Preferred Stock shall be computed by dividing the Dividend Rate
by four. The amount of dividends payable for the initial dividend period or any
other period shorter or longer than a full quarterly period shall be computed on
the basis of twelve 30-day months and a 360-day year.
(e) Dividend payments shall be made by wire transfer to an account
designated by each holder of Series A Preferred Stock or, if no account
information is provided to the Corporation by a holder of Series A Preferred
Stock, dividend payments shall be made by check delivered by first class mail to
the address of such holder as set forth in the stock records of the Corporation.
4. LIQUIDATION, DISSOLUTION OR WINDING UP; CERTAIN MERGERS, CONSOLIDATIONS
AND ASSET SALES.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of Series A Preferred
Stock then outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders after and subject to
the payment in full of all amounts required to be distributed to the holders of
any other class or series of Shares of the Corporation that specifically state
that on liquidation they rank prior and in preference to the Series A Preferred
Stock, whether or not convertible into Junior Securities (collectively referred
to as "Senior Preferred Stock"), but before any payment shall be made to the
holders of Common Stock or any other class or series of stock ranking on
liquidation junior to the Series A Preferred Stock (the Common Stock and any
other class or series of stocks ranking in payment of dividends or on
liquidation junior to the Series A Preferred Stock, or options, warrants or
rights to purchase or that are convertible into any such stock but in no event
including any Senior Preferred Stock being collectively referred to as "Junior
Securities") by reason of their ownership thereof, an amount equal to $50.00 per
share (such amount being the "Liquidation Value"), plus any dividends declared,
accumulated or accrued (including any compounded dividends thereon) but unpaid
thereon. If, upon any such liquidation, dissolution or winding up of the
Corporation, the remaining assets of the Corporation available for distribution
to its
stockholders shall be insufficient to pay the holders of Series A Preferred
Stock and all other classes or series of stock ranking on liquidation on a
parity with the Series A Preferred Stock the full amount to which they shall be
entitled, the holders of Series A Preferred Stock and any class or series of
stock ranking on liquidation on a parity with the Series A Preferred Stock shall
share ratably in any distribution of the remaining assets and funds of the
Corporation in proportion to the respective amounts which would otherwise be
payable in respect of the stock held by them upon such distribution if all
amounts payable on or with respect to such stock were paid in full.
(b) After the payment of all preferential amounts required to be paid
to the holders of Senior Preferred Stock, Series A Preferred Stock and any other
class or series of stock of the Corporation ranking on liquidation on a parity
with the Series A Preferred Stock, upon the dissolution, liquidation or winding
up of the Corporation, the holders of shares of Junior Securities then
outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its shareholders.
(c) The voluntary consolidation or merger of the Corporation into or
with any other entity or entities which results in the exchange of outstanding
stock of the Corporation for securities or other consideration issued or paid or
caused to be issued or paid by any such entity or affiliate thereof, and the
voluntary sale or transfer by the Corporation of all or substantially all its
assets, shall not be deemed to be a liquidation, dissolution or winding up of
the Corporation within the meaning of the provisions of this Section 4 unless
such sale, conveyance, exchange or transfer is in connection with a dissolution
or winding up of the business of the Corporation, provided, however, that any
consolidation or merger of the Corporation in which the Corporation is not the
surviving entity shall be deemed to be a liquidation, dissolution or winding up
of the affairs of the Corporation within the meaning of this Section 4 if, (i)
in connection therewith, any holders of Junior Securities receive as
consideration, whether in whole or in part, for such: (1) cash (other than as
payment for fractional shares), (2) notes, debentures or other evidences of
indebtedness or obligations to pay cash (other than as payment for fractional
shares) or (3) preferred stock of the surviving entity (whether or not the
surviving entity is the Corporation) which ranks on a parity with or senior to
the preferred stock received by holders of the Series A Preferred Stock with
respect to liquidation or dividends or (ii) the holders of the Series A
Preferred Stock do not receive preferred stock of the surviving entity with
rights, powers and preferences equal to (or more favorable to the holders than)
the rights, powers and preferences of the Series A Preferred Stock.
5. VOTING.
(a) Except as otherwise provided in Section 8 hereof or by the
provisions of Subsection 5(b) below, holders of Series A Preferred Stock shall
not be entitled to vote.
(b) Without the written consent or affirmative vote of the holders of a
majority of the then outstanding Series A Preferred Stock, given in writing or
by vote at a meeting, consenting or voting (as the case may be) separately as a
class, the Corporation shall not amend, alter or repeal the preferences, special
rights or other powers of the Series A Preferred Stock as set forth in these
terms of the Series A Preferred Stock.
6. OPTIONAL REPURCHASE BY THE CORPORATION.
(a) From and after December 15, 2003, the Corporation shall have the
right to repurchase and redeem (the "Repurchase") all, or any part of the Series
A Preferred Stock outstanding on the date of notice of Repurchase (the
"Repurchase Date"), for a price per share equal to the Liquidation Value thereof
plus all unpaid dividends that have been declared, accumulated or accrued
(including any compounded dividends thereon) to the Repurchase Date; provided
that after the Corporation has redeemed 74% of the total number of Series A
Preferred Stock issued on the Original Issue Date, the
Corporation must redeem all remaining outstanding Series A Preferred Stock if
any are redeemed. Any Repurchase of Series A Preferred Stock shall be made pro
rata among all holders of Series A Preferred Stock and shall be in minimum
amounts equal to the lesser of (i) $10 million in Liquidation Value or (ii) the
remaining amount of Series A Preferred Stock then outstanding.
(b) All holders of record of Series A Preferred Stock will be given
written notice of the Repurchase not less than 30 days nor more than 60 days
prior to the Repurchase Date, which notice shall set forth the Repurchase Date
and place designated for Repurchase of the Series A Preferred Stock pursuant to
this Section 6. Such notice shall be sent by overnight courier or first class or
registered mail, postage prepaid, to each record holder of Series A Preferred
Stock at such holder's address last shown on the records of the transfer agent
for the Series A Preferred Stock (or the records of the Corporation, if it
serves as its own transfer agent). On or before the Repurchase Date, the
Corporation shall irrevocably deposit, for the benefit of the holders of the
Series A Preferred Stock, the funds necessary to effect the Repurchase in full
with a bank or trust company in the Borough of Manhattan, The City of New York
having a capital and surplus of not less than $500 million. The Corporation
shall have the right to revoke the notice of the Repurchase at any time prior to
the designated Repurchase Date. On or before the Repurchase Date, each holder of
Series A Preferred Stock shall surrender his, her or its certificate or
certificates for all such Series A Preferred Stock to the Corporation at the
place designated in such notice, and on the later of the Repurchase Date and the
date such certificates are surrendered, shall receive the payment to which such
holder is entitled pursuant to this Section 6. On the Repurchase Date, provided
that the Corporation has so deposited the funds necessary to effect the
Repurchase in full as provided in this Section 6, all rights with respect to the
Series A Preferred Stock, including the rights, if any, to receive notices and
vote, will terminate, except only the rights of the holders thereof, upon
surrender of their certificate or certificates therefor, to receive payment for
the Series A Preferred Stock. If so required by the Corporation, certificates
surrendered shall be endorsed or accompanied by written instrument or
instruments of transfer, in form reasonably satisfactory to the Corporation,
duly executed by the registered holder or by his or its attorney duly authorized
in writing. (c) All certificates evidencing Series A Preferred Stock that are
required to be surrendered for repurchase in accordance with the provisions
hereof shall, if the Corporation has deposited the funds necessary to effect the
Repurchase in full as provided in Section 6(b) above, from and after the
Repurchase Date, be deemed to have been retired and canceled and the Series A
Preferred Stock represented thereby converted into the right to receive payment
for such Series A Preferred Stock, notwithstanding the failure of the holder or
holders thereof to surrender such certificates on or prior to such date. The
Corporation may thereafter take such appropriate action (without the need for
shareholder action) as may be necessary to reduce the authorized Series A
Preferred Stock accordingly.
7. OPTIONAL REDEMPTION BY THE HOLDERS.
(a) In the event of a Change of Control, as defined below, each holder
of Series A Preferred Stock shall have the right to elect to have the
Corporation repurchase (the "Redemption") all, but not less than all, of the
Series A Preferred Stock held by such holder on the date of the Change of
Control (the "Change of Control Date") for a price per share equal to the
Liquidation Value thereof plus all unpaid dividends that have been declared,
accumulated or accrued (including any compounded dividends thereon) to the
Redemption Date. The procedure for electing the Redemption is set forth in
Section (b) and (c) below. The Corporation shall not be required to redeem any
Series A Preferred Stock unless holders of not less than a majority of the
Series A Preferred Stock outstanding have elected to have their Series A
Preferred Stock redeemed in which case the Corporation shall redeem all
outstanding Series A Preferred Stock including those owned by holders who have
not so elected.
(b) If a Change of Control (as defined below) has occurred, the
Corporation shall give prompt written notice of such Change of Control (the
"Change of Control Notice"), describing in
reasonable detail the definitive terms and date of consummation thereof, to each
holder of Series A Preferred Stock, but in any event, such notice shall be given
no later than five business days after the Change of Control Date. Such notice
shall be sent by overnight courier or first class or registered mail, postage
prepaid, to each record holder of Series A Preferred Stock at such holder's
address last shown on the records of the transfer agent for the Series A
Preferred Stock (or the records of the Corporation, if it serves as its own
transfer agent) and shall set forth the date of the closing of the Redemption
(the "Redemption Date"), which Redemption Date shall be the later of the Change
of Control Date or 30 days after the date the Change of Control Notice was first
mailed by the Corporation to the holders of Series A Preferred Stock, and place
designated for the redemption of the Series A Preferred Stock pursuant to this
Section 7. Upon receipt of such notice, each holder of Series A Preferred Stock
will have 20 days to elect to exercise the Redemption by delivering written
notice thereof to the Corporation. If the Corporation does not receive from the
holders of at least a majority the Series A Preferred Stock outstanding notice
of their election to exercise the Redemption within the 20 day period, no Series
A Preferred Stock shall be repurchased by the Corporation and all rights under
this Section 7 shall terminate with respect to the Change of Control identified
in the Change of Control Notice but not with respect to any future Change of
Control. If the holders of at least a majority of the Series A Preferred Stock
outstanding give notice of election to exercise the Redemption within the
required time period then on or before the Redemption Date, the Corporation
shall irrevocably deposit, for the benefit of the holders of all of the Series A
Preferred Stock, the funds necessary to effect the Redemption in full with a
bank or trust company in the Borough of Manhattan, The City of New York with
capital and surplus of not less than $500 million. On or before the Redemption
Date, each holder of Series A Preferred Stock shall surrender his, her or its
certificate for all such Series A Preferred Stock to the Corporation at the
place designated in the notice, and on the Redemption Date shall receive the
payment to which such holder is entitled pursuant to this Section 7. On the
Redemption Date, the Corporation will redeem all of the Series A Preferred Stock
for the consideration such holder is entitled pursuant to this Section 7;
provided that no holder of Series A Preferred Stock shall be entitled to receive
such consideration until the certificates representing his, her or its Shares
have been delivered to the Corporation at the place designated in such notice.
On the Redemption Date, provided that the Corporation has so deposited the funds
necessary to effect the Redemption in full as provided in this Section 7, all
rights with respect to the Series A Preferred Stock, including the rights, if
any, to receive notices and vote, will terminate, except only the rights of the
holders thereof, upon surrender of their certificate or certificates therefor,
to receive payment for the Series A Preferred Stock. If so required by the
Corporation, certificates surrendered shall be endorsed or accompanied by
written instrument or instruments of transfer, in form reasonably satisfactory
to the Corporation, duly executed by the registered holder or by his or its
attorney duly authorized in writing. On the later of the Redemption Date and the
surrender of the certificate or certificates for Series A Preferred Stock, the
Corporation shall cause to be delivered to such holder, a cash payment for such
redeemed Series A Preferred Stock. If a proposed Change of Control is not
consummated, all elections to redeem in connection therewith shall automatically
be rescinded.
(c) All certificates evidencing Series A Preferred Stock that are
required to be surrendered for repurchase in accordance with the provisions
hereof shall, if the Corporation has deposited the funds necessary to effect the
Redemption in full as provided in Section 7(b) above, from and after the
Redemption Date, be deemed to have been retired and canceled and the Series A
Preferred Stock represented thereby converted into the right to receive payment
for such shares, notwithstanding the failure of the holder or holders thereof to
surrender such certificates on or prior to such date. The Corporation may
thereafter take such appropriate action (without the need for shareholder
action) as may be necessary to reduce the authorized Series A Preferred Stock
accordingly.
(d) "Change of Control" means the occurrence of one or more of the
following events that is not approved by the Board of Directors of the
Corporation prior to the occurrence of such event: (i) any Person or "Group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), other than the Permitted Holders, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have beneficial ownership of all shares that such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of a number of shares of the
voting stock of the Corporation which would entitle the holder thereof to cast a
majority of the votes entitled to be cast on matters generally to be voted on by
the stockholders of the Corporation; provided that if the Permitted Holders have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Corporation a
Change of Control shall not be deemed to occur even if the Permitted Holders
"beneficially own" (as so defined) a lesser percentage of such voting stock than
such other person; or (ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Corporation to any Person or Group, together with any
affiliates thereof other than the Permitted Holders. "Permitted Holders" shall
mean B. Holdings, L.L.C., Starwood Mezzanine Investors, L.P., Starwood
Opportunity Fund IV, L.P., SOFI-IV SMT HOLDINGS, L.L.C., the direct the indirect
general partners thereof and their respective affiliates.
8. BOARD REPRESENTATION.
(a) If the Corporation fails to pay within 30 days of any single
Dividend Payment Date the full dividend then accrued or accumulated but unpaid
on the Series A Preferred Stock, whether or not such payment is legally
permissible or is prohibited by any agreement to which the Corporation is
subject (a "Single Dividend Deficiency Period"), then the number of directors
constituting the Board of Directors of the Corporation shall be increased to
permit the holders of a majority of the Series A Preferred Stock (the "Majority
Holders") voting separately as one class, to elect one director. If the
Corporation fails to pay the full dividends then accrued or accumulated but
unpaid (including compounded dividends) on the Series A Preferred Stock for any
six consecutive Dividend Payment Dates (including the initial Single Dividend
Deficiency Period) so that six consecutive dividend payments are not paid in
full as of the day after the sixth such Divided Payment Date, whether or not
such payment is legally permissible or is prohibited by any agreement to which
the Corporation is subject (a "Multiple Dividend Deficiency Period" and together
with a Single Dividend Deficiency Period an "Election Period"), then the number
of Directors of the Corporation shall be increased to permit the Majority
Holders, voting separately as one class, to elect one more director. Any
director elected pursuant to this Section 8 is referred to as a Preferred
Director. Upon the payment in full of all accrued or accumulated but unpaid
dividends (including compounded dividends) on the Series A Preferred Stock, the
calculation of the periods dividends are in arrears shall reset to zero (0).
(b) The right of the Majority Holders voting separately as one class to
elect Preferred Directors shall continue until such time as all accrued or
accumulated dividends (including compounded dividends) that are in arrears on
the Series A Preferred Stock are paid in full, at which time the term of any
Preferred Director shall terminate and the number of Directors constituting the
Board of Directors shall be reduced to the number necessary to reflect the
termination of the right of the Majority Holders to elect Preferred Directors;
subject to the right of the holders of Series A Preferred Stock to elect the
appropriate number of Preferred Directors if a subsequent Election Period should
occur. Any Preferred Directors shall continue in office until the earlier of (A)
such time as his or her successor shall have been elected by Majority Holders
and (B) the termination of his or her term in accordance with the immediately
preceding sentence. Notwithstanding any other sections of the Charter, during
any Election Period, the Majority Holders shall be entitled to (A) remove from
the Board any Preferred Director elected under the foregoing subsection (i), and
(B) elect each successor to any such Preferred Director removed in accordance
herewith or who otherwise vacates such office.
(c) The right of the Majority Holders to elect Preferred Directors may
be exercised at the special meeting called pursuant to this Section, at any
annual or other special meeting of stockholders
and, to the extent and in the manner permitted by applicable law, pursuant to a
written consent in lieu of a stockholders meeting. A proper officer of the
Corporation shall, upon the written request of the Majority Holders, addressed
to any officer of the Corporation, call a special meeting of the stockholders
for the purpose of electing trustees pursuant to this Section. Such meeting
shall be held at the earliest legally permissible date at the principal office
of the Corporation, or at such other place designated by the Majority Holders.
If such meeting has not been called by a proper officer of the Corporation
within 15 days after personal delivery, by hand or by a nationally recognized,
overnight courier guaranteeing next business day delivery, of such written
request upon any officer of the Corporation or within 20 days after mailing the
same to the Secretary of the Corporation at its principal office, then the
Majority Holders may call such meeting at the expense of the Corporation, and
such meeting may be called upon the notice required for annual meetings of
stockholders and shall be held at the Corporation's principal office, or at such
other place designated by the Majority Holders. In the event that the
Corporation is then subject to the proxy solicitation rules of the Securities
Exchange Act of 1934, as amended, the 15 day and 20 day periods referenced above
shall be increased to 120 days and 125 days, respectively. The Majority Holders
shall be given access to the stock record books of the Corporation for the
purpose of causing a meeting of stockholders to be called pursuant to this
Section.
(d) At any meeting or at any adjournment thereof at which the holder of
the Series A Preferred Stock have the right to elect directors, the presence, in
person or by proxy, of the holders of a majority of the Series A Preferred Stock
shall be required to constitute a quorum for the election or removal of any
director by the Majority Holders. The affirmative vote of the holders of a
majority of the Series A Preferred Stock represented in person or proxy at such
meeting shall be required to elect or remove any Preferred Director.
9. RESTRICTION ON TRANSFER, ACQUISITION AND REDEMPTION OF SERIES A
PREFERRED STOCK
The Series A Preferred Stock are subject to the provisions of Article
IX of the Charter, including, without limitation, the provision for the
redemption of shares transferred to the Charitable Trust. For this purpose, the
Market Price of the Series A Preferred Stock shall equal $50.00 per share, plus
all accrued and unpaid dividends on the Series A Preferred Stock.
10. THE CORPORATION.
Each of the parties hereto acknowledges and agrees that the name
Starwood Financial Inc. is a designation of the Corporation under the
Corporation's Charter, and all persons dealing with the Corporation shall look
solely to the Corporation's assets for the enforcement of any claims against the
Corporation, and the Directors, officers, agents and security holders of the
Corporation assume no personal liability for obligations entered into on behalf
of the Corporation, and their respective individual assets shall not be subject
to the claims of any person relating to such obligations.
ANNEX B
SERIES B PREFERRED STOCK
(1) DESIGNATION AND NUMBER. A series of Preferred Stock, designated the
"9-3/8% Series B Cumulative Redeemable Preferred Stock" (the "Series B Preferred
Stock"), is hereby established. The number of shares of the Series B Preferred
Stock shall be 2,300,000.
(2) RANK. The Series B Preferred Stock shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding up of the
Corporation, rank (a) senior to all classes or series of Common Stock of the
Corporation, and to all equity securities ranking junior to such Series B
Preferred Stock; (b) on a parity with the Corporation's 9.5% Series A Cumulative
Redeemable Preferred Stock (the "Series A Preferred Stock"), 9.2% Series C
Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock") and 8%
Series D Cumulative Redeemable Preferred Stock (the "Series D Preferred Stock");
and all equity securities issued by the Corporation the terms of which
specifically provide that such equity securities rank on a parity with the
Series B Preferred Stock and (c) junior to all equity securities issued by the
Corporation the terms of which specifically provide that such equity securities
rank senior to the Series B Preferred Stock. The term "equity securities" shall
not include convertible debt securities.
(3) DIVIDENDS.
(a) Holders of the then outstanding shares of Series B Preferred Stock
shall be entitled to receive, when and as declared by the Board of Directors,
out of funds legally available for the payment of dividends, cumulative
preferential cash dividends at the rate of 9-3/8% of the $25.00 liquidation
preference per annum (equivalent to a fixed annual amount of $2.34375 per
share). Such dividends shall be cumulative from the first date on which any
Series B Preferred Stock is issued and shall be payable quarterly in arrears on
or before March 15, June 15, September 15 and December 15 of each year or, if
not a business day, the next succeeding business day (each, a "Dividend Payment
Date"). Any dividend payable on the Series B Preferred Stock for any partial
dividend period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Dividends will be payable to holders of record as they
appear in the stock records of the Corporation at the close of business on the
applicable record date, which shall be the first day of the calendar month on
which the applicable Dividend Payment Date falls or on such other date
designated by the Board of Directors of the Corporation for the payment of
dividends that is not more than 30 nor less than 10 days prior to such Dividend
Payment Date (each, a "Dividend Record Date").
(b) No dividends on shares of Series B Preferred Stock shall be
declared by the Board of Directors of the Corporation or paid or set apart for
payment by the Corporation at such time as the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness, prohibits such declaration, payment or setting apart for payment
or provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such declaration or
payment shall be restricted or prohibited by law.
(c) Notwithstanding the foregoing, dividends on the Series B Preferred
Stock shall accrue whether or not the terms and provisions set forth in Section
3(b) hereof at any time prohibit the current payment of dividends, whether or
not the Corporation has earnings, whether or not there are funds legally
available for the payment of such dividends and whether or not such dividends
are declared. Accrued but unpaid dividends on the Series B Preferred Stock will
accumulate as of the Dividend Payment Date on which they first become payable.
(d) Except as provided in Section 3(e) below, no dividends will be
declared or paid or set apart for payment on any capital stock of the
Corporation or any other series of preferred stock ranking, as to dividends, on
a parity with or junior to the Series B Preferred Stock (other than a dividend
in shares of the Corporation's Common Stock or in any other class of stock
ranking junior to the Series B Preferred Stock as to dividends and upon
liquidation) for any period unless (i) full cumulative dividends have been or
contemporaneously are declared and paid or declared and (ii) a sum sufficient
for the payment thereof is set apart for such payment on the Series B Preferred
Stock for all past dividend periods and the then current dividend period.
(e) When dividends are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series B Preferred Stock and the
shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Series B Preferred Stock, all dividends declared upon the
Series B Preferred Stock and any other series of Preferred Stock ranking on a
parity as to dividends with the Series B Preferred Stock shall be declared pro
rata so that the amount of dividends declared per share of Series B Preferred
Stock and such other series of Preferred Stock shall in all cases bear to each
other the same ratio that accrued dividends per share on the Series B Preferred
Stock and such other series of Preferred Stock (which shall not include any
accrual in respect of unpaid dividends for prior dividend periods if such
Preferred Stock does not have a cumulative dividend) bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on Series B Preferred Stock which may be in
arrears.
(f) Except as provided in the immediately preceding paragraph, unless
full cumulative dividends on the Series B Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period, no dividends (other than in shares of Common Stock
or other shares of capital stock ranking junior to the Series B Preferred Stock
as to dividends and upon liquidation) shall be declared or paid or set aside for
payment nor shall any other distribution be declared or made upon the Common
Stock, or any other capital stock of the Corporation ranking junior to or on a
parity with the Series B Preferred Stock as to dividends or upon liquidation,
nor shall any shares of Common Stock, or any other shares of capital stock of
the Corporation ranking junior to or on a parity with the Series B Preferred
Stock as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such shares) by the Corporation (except
by conversion into or exchange for other capital stock of the Corporation
ranking junior to the Series B Preferred Stock as to dividends and upon
liquidation).
(g) Any dividend payment made on shares of the Series B Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due,
with respect to such shares, which remains payable. Holders of the Series B
Preferred Stock shall not be entitled to any dividend, whether payable in cash,
property or stock in excess of full cumulative dividends on the Series B
Preferred Stock as described above.
(4) LIQUIDATION PREFERENCE.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of shares of Series B
Preferred Stock then outstanding are entitled to be paid out of the assets of
the Corporation, legally available for distribution to its stockholders, a
liquidation preference of $25.00 per share, plus an amount equal to any accrued
and unpaid dividends to the date of payment, before any distribution of assets
is made to holders of Common Stock or any other class or series of capital stock
of the Corporation that ranks junior to the Series B Preferred Stock as to
liquidation rights.
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(b) In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Corporation
are insufficient to pay the amount of the liquidating distributions on all
outstanding shares of Series B Preferred Stock and the corresponding amounts
payable on all shares of other classes or series of capital stock of the
Corporation ranking on a parity with the Series B Preferred Stock in the
distribution of assets, then the holders of the Series B Preferred Stock and all
other such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
(c) After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Series B Preferred Stock will have no
right or claim to any of the remaining assets of the Corporation.
(d) Written notice of any such liquidation, dissolution or winding up
of the Corporation, stating the payment date or dates when, and the place or
places where, the amounts distributable in such circumstances shall be payable,
shall be given by first class mail, postage pre-paid, not less than 30 nor more
than 60 days prior to the payment date stated therein, to each record holder of
the Series B Preferred Stock at the respective addresses of such holders as the
same shall appear on the stock transfer records of the Corporation.
(e) The consolidation or merger of the Corporation with or into any
other corporation, trust or entity or of any other corporation with or into the
Corporation, or the sale, lease or conveyance of all or substantially all of the
property or business of the Corporation, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Corporation.
(5) REDEMPTION.
(a) RIGHT OF OPTIONAL REDEMPTION. The Series B Preferred Stock is not
redeemable prior to June 15, 2001. However, in order to ensure that the
Corporation remains a qualified real estate investment trust ("REIT") for
Federal income tax purposes, the Series B Preferred Stock will be subject to the
provisions of Article IX of the Charter. Pursuant to Article IX, Series B
Preferred Stock, together with other equity stock of the Corporation, owned by a
stockholder in excess of the Ownership Limit will automatically be transferred
to a Charitable Trust for the benefit of a Charitable Beneficiary and the
Corporation will have the right to purchase such transferred shares from the
Charitable Trust. On and after June 15, 2001, the Corporation, at its option and
upon not less than 30 nor more than 60-days' written notice, may redeem shares
of the Series B Preferred Stock, in whole or in part, at any time or from time
to time, for cash at a redemption price of $25.00 per share, plus all accrued
and unpaid dividends thereon to the date fixed for redemption (except as
provided in Section 5(c) below), without interest. If less than all of the
outstanding Series B Preferred Stock is to be redeemed, the Series B Preferred
Stock to be redeemed shall be selected pro rata (as nearly as may be practicable
without creating fractional shares) or by any other equitable method determined
by the Corporation.
(b) LIMITATIONS ON REDEMPTION.
(i) The redemption price of the Series B Preferred Stock (other
than the portion thereof consisting of accrued and unpaid dividends) is
payable solely out of the sale proceeds of other capital stock of the
Corporation, which may include other series of Preferred Stock, and from no
other source. For purposes of the preceding sentence, "capital stock" means
any equity securities (including Common Stock and Preferred Stock), shares,
interest, participation or other ownership interests (however designated)
and any rights (other than debt securities convertible into or exchangeable
for equity securities) or options to purchase any of the foregoing.
(ii) Unless full cumulative dividends on all shares of Series B
Preferred Stock shall have been, or contemporaneously are, declared and paid
or declared and a sum
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sufficient for the payment thereof set apart for payment for all past
dividend periods and the then current dividend period, no shares of Series B
Preferred Stock shall be redeemed unless all outstanding shares of Series B
Preferred Stock are simultaneously redeemed, and the Corporation shall not
purchase or otherwise acquire directly or indirectly any shares of Series B
Preferred Stock (except by exchange for capital stock of the Corporation
ranking junior to the Series B Preferred Stock as to dividends and upon
liquidation); provided, however, that the foregoing shall not prevent the
purchase by the Corporation of shares transferred to a Charitable Trust
pursuant to Article IX in order to ensure that the Corporation remains
qualified as a REIT for Federal income tax purposes or the purchase or
acquisition of shares of Series B Preferred Stock pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares
of Series B Preferred Stock.
(c) RIGHTS TO DIVIDENDS ON SHARES CALLED FOR REDEMPTION. Immediately
prior to any redemption of Series B Preferred Stock, the Corporation shall pay,
in cash, any accumulated and unpaid dividends through the redemption date,
unless a redemption date falls after a Dividend Record Date and prior to the
corresponding Dividend Payment Date, in which case each holder of Series B
Preferred Stock at the close of business on such Dividend Record Date shall be
entitled to the dividend payable on such shares on the corresponding Dividend
Payment Date notwithstanding the redemption of such shares before such Dividend
Payment Date. Except as provided above, the Corporation will make no payment or
allowance for unpaid dividends, whether or not in arrears, on Series B Preferred
Stock which is redeemed.
(d) PROCEDURES FOR REDEMPTION.
(i) Notice of redemption will be (A) given by publication in a
newspaper of general circulation in the City of New York, such publication
to be made once a week for two successive weeks commencing not less than 30
nor more than 60 days prior to the redemption date, and (B) mailed by the
Corporation, postage prepaid, not less than 30 nor more than 60 days prior
to the redemption date, addressed to the respective holders of record of the
Series B Preferred Stock to be redeemed at their respective addresses as
they appear on the stock transfer records of the Corporation. No failure to
give such notice or any defect thereto or in the mailing thereof shall
affect the validity of the proceedings for the redemption of any shares of
Series B Preferred Stock except as to the holder to whom notice was
defective or not given.
(ii) In addition to any information required by law or by the
applicable rules of any exchange upon which Series B Preferred Stock may be
listed or admitted to trading, such notice shall state: (A) the redemption
date; (B) the redemption price; (C) the number of shares of Series B
Preferred Stock to be redeemed; (D) the place or places where the Series B
Preferred Stock is to be surrendered for payment of the redemption price;
and (E) that dividends on the shares to be redeemed will cease to accrue on
such redemption date. If less than all of the Series B Preferred Stock held
by any holder is to be redeemed, the notice mailed to such holder shall also
specify the number of shares of Series B Preferred Stock held by such holder
to be redeemed.
(iii) If notice of redemption of any shares of Series B Preferred
Stock has been given and if the funds necessary for such redemption have
been set aside by the Corporation in trust for the benefit of the holders of
any shares of Series B Preferred Stock so called for redemption, then, from
and after the redemption date, dividends will cease to accrue on such shares
of Series B Preferred Stock, such shares of Series B Preferred Stock shall
no longer be deemed outstanding and all rights of the holders of such shares
will terminate, except the right to receive the redemption price. Holders of
Series B Preferred Stock to be redeemed shall surrender such Series B
Preferred Stock at the place designated in such notice and, upon surrender
in accordance with said notice of the certificates for shares of Series B
Preferred Stock so redeemed (properly endorsed or assigned for transfer, if
the Corporation shall so require and the notice shall
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so state), such shares of Series B Preferred Stock shall be redeemed by the
Corporation at the redemption price plus any accrued and unpaid dividends
payable upon such redemption. In case less than all the shares of Series B
Preferred Stock represented by any such certificate are redeemed, a new
certificate or certificates shall be issued representing the unredeemed
shares of Series B Preferred Stock without cost to the holder thereof.
(iv) The deposit of funds with a bank or trust corporation for the
purpose of redeeming Series B Preferred Stock shall be irrevocable except
that:
(A) the Corporation shall be entitled to receive from such
bank or trust corporation the interest or other earnings, if any,
earned on any money so deposited in trust, and the holders of any
shares redeemed shall have no claim to such interest or other earnings;
and
(B) any balance of monies so deposited by the Corporation and
unclaimed by the holders of the Series B Preferred Stock entitled
thereto at the expiration of two years from the applicable redemption
dates shall be repaid, together with any interest or other earnings
thereon, to the Corporation, and after any such repayment, the holders
of the shares entitled to the funds so repaid to the Corporation shall
look only to the Corporation for payment without interest or other
earnings.
(e) APPLICATION OF ARTICLE IX. The shares of Series B Preferred Stock
are subject to the provisions of Article IX of the Charter, including, without
limitation, the provision for the redemption of shares transferred to the
Charitable Trust (as defined in such Article). For this purpose, the Market
Price of the Series B Preferred Stock shall equal $25.00 per share, plus all
accrued and unpaid dividends on the shares of Series B Preferred Stock.
(f) STATUS OF REDEEMED SHARES. Any shares of Series B Preferred Stock
that shall at any time have been redeemed shall, after such redemption, have the
status of authorized but unissued preferred stock, without designation as to
series until such shares are once more designated as part of a particular series
by the Board of Directors.
(6) VOTING RIGHTS.
(a) Holders of the Series B Preferred Stock will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law.
(b) Whenever dividends on any shares of Series B Preferred Stock shall
be in arrears for six or more quarterly periods (a "Preferred Dividend
Default"), the holders of such shares of Series B Preferred Stock (voting
separately as a class with the Series C Preferred Stock, the Series D Preferred
Stock and all other series of Preferred Stock, other than the Series A Preferred
Stock, ranking on a parity with the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock, and the Series D Preferred Stock
as to dividends or upon liquidation ("Parity Preferred") upon which like voting
rights have been conferred and are exercisable) will be entitled to vote for the
election of a total of two additional directors of the Corporation (the
"Preferred Stock Directors") at a special meeting called by the holders of
record of at least 20% of the Series B Preferred Stock or the holders of any
other series of Parity Preferred, other than the Series A Preferred Stock, so in
arrears (unless such request is received less than 90 days before the date fixed
for the next annual or special meeting of stockholders) or at the next annual
meeting of stockholders, and at each subsequent annual meeting until all
dividends accumulated on such shares of Series B Preferred Stock for the past
dividend periods and the dividend for the then current dividend period shall
have been fully paid or declared and a sum sufficient for the payment thereof
set aside for payment.
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(c) If and when all accumulated dividends and the dividend for the then
current dividend period on the Series B Preferred Stock shall have been paid in
full or set aside for payment in full, the holders of shares of Series B
Preferred Stock shall be divested of the voting rights set forth in Section 6(b)
hereof (subject to revesting in the event of each and every Preferred Dividend
Default) and, if all accumulated dividends and the dividend for the current
dividend period have been paid in full or set aside for payment in full on all
other series of Parity Preferred, other than the Series A Preferred Stock, upon
which like voting rights have been conferred and are exercisable, the term of
office of each Preferred Stock Director so elected shall terminate. Any
Preferred Stock Director may be removed at any time with or without cause by the
vote of, and shall not be removed otherwise than by the vote of, the holders of
record of a majority of the outstanding shares of the Series B Preferred Stock
when they have the voting rights set forth in Section 6(b) (voting separately as
a class with all other series of Parity Preferred, other than the Series A
Preferred Stock, upon which like voting rights have been conferred and are
exercisable). So long as a Preferred Dividend Default shall continue, any
vacancy in the office of a Preferred Stock Director may be filled by written
consent of the Preferred Stock Director remaining in office, or, if none remains
in office, by a vote of the holders of record of a majority of the outstanding
shares of Series B Preferred Stock when they have the voting rights set forth in
Section 6(b) (voting separately as a class with all other series of Parity
Preferred, other than the Series A Preferred Stock, upon which like voting
rights have been conferred and are exercisable). The Preferred Stock Directors
shall each be entitled to one vote per director on any matter.
(d) So long as any shares of Series B Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least two thirds of the shares of the Series B Preferred Stock
outstanding at the time, given in person or by proxy, either in writing or at a
meeting (voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of capital stock ranking
prior to the Series B Preferred Stock with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up, or
reclassify any authorized capital stock of the Corporation into any such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares or (ii) amend, alter or repeal
the provisions of the Charter, whether by merger, consolidation or otherwise, so
as to materially and adversely affect any right, preference, privilege or voting
power of the Series B Preferred Stock or the holders thereof; provided, however,
that with respect to the occurrence of any event set forth in (ii) above, so
long as the Series B Preferred Stock remains outstanding with the terms thereof
materially unchanged, the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers of the holders of the Series B Preferred Stock and; provided, further,
that any increase in the amount of the authorized Preferred Stock or the
creation or issuance of any other series of Preferred Stock, or any increase in
the amount of authorized shares of such series, in each case ranking on a parity
with or junior to the Series B Preferred Stock with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers.
(e) Each share of Series B Preferred Stock (voting together with all
common stock of the Corporation and all other series of Preferred Stock of the
Corporation entitled to vote) will be entitled to cast twenty-five
one-hundredths of one vote with respect to all matters on which the holders of
common stock are entitled to vote at each meeting of stockholders of the
Corporation.
(f) The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series B Preferred Stock
shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
(7) CONVERSION. The Series B Preferred Stock is not convertible into or
exchangeable for any other property or securities of the Corporation.
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ANNEX C
SERIES C PREFERRED STOCK
(1) DESIGNATION AND NUMBER. A series of Preferred Stock, designated the
"9.20% Series C Cumulative Redeemable Preferred Stock" (the "Series C Preferred
Stock"), is hereby established. The number of shares of the Series C Preferred
Stock shall be 1,495,000.
(2) RANK. The Series C Preferred Stock shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding up of the
Corporation, rank (a) senior to all classes or series of Common Stock of the
Corporation, and to all equity securities ranking junior to such Series C
Preferred Stock; (b) on a parity with and the Corporation's 9.5% Series A
Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock"), 9-3/8%
Series B Cumulative Redeemable Preferred Stock (the "Series B Preferred Stock")
and 8% Series D Cumulative Redeemable Preferred Stock (the "Series D Preferred
Stock") and all equity securities issued by the Corporation the terms of which
specifically provide that such equity securities rank on a parity with the
Series C Preferred Stock; and (c) junior to all equity securities issued by the
Corporation the terms of which specifically provide that such equity securities
rank senior to the Series C Preferred Stock. The term "equity securities" shall
not include convertible debt securities.
(3) DIVIDENDS.
(a) Holders of the then outstanding shares of Series C Preferred Stock
shall be entitled to receive, when and as declared by the Board of Directors,
out of funds legally available for the payment of dividends, cumulative
preferential cash dividends at the rate of 9.20% of the $25.00 liquidation
preference per annum (equivalent to a fixed annual amount of $2.30 per share).
Such dividends shall be cumulative from the first date on which any Series C
Preferred Stock is issued and shall be payable quarterly in arrears on or before
March 15, June 15, September 15 and December 15 of each year or, if not a
business day, the next succeeding business day (each, a "Dividend Payment
Date"). Any dividend payable on the Series C Preferred Stock for any partial
dividend period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Dividends will be payable to holders of record as they
appear in the stock records of the Corporation at the close of business on the
applicable record date, which shall be the first day of the calendar month on
which the applicable Dividend Payment Date falls or on such other date
designated by the Board of Directors of the Corporation for the payment of
dividends that is not more than 30 nor less than 10 days prior to such Dividend
Payment Date (each, a "Dividend Record Date").
(b) No dividends on shares of Series C Preferred Stock shall be
declared by the Board of Directors of the Corporation or paid or set apart for
payment by the Corporation at such time as the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness, prohibits such declaration, payment or setting apart for payment
or provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such declaration or
payment shall be restricted or prohibited by law.
(c) Notwithstanding the foregoing, dividends on the Series C Preferred
Stock shall accrue whether or not the terms and provisions set forth in Section
3(b) hereof at any time prohibit the current payment of dividends, whether or
not the Corporation has earnings, whether or not there are funds
legally available for the payment of such dividends and whether or not such
dividends are declared. Accrued but unpaid dividends on the Series C Preferred
Stock will accumulate as of the Dividend Payment Date on which they first become
payable.
(d) Except as provided in Section 3(e) below, no dividends will be
declared or paid or set apart for payment on any capital stock of the
Corporation or any other series of preferred stock ranking, as to dividends, on
a parity with or junior to the Series C Preferred Stock (other than a dividend
in shares of the Corporation's Common Stock or in any other class of stock
ranking junior to the Series C Preferred Stock as to dividends and upon
liquidation) for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment on the Series C Preferred Stock
for all past dividend periods and the then current dividend period.
(e) When dividends are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series C Preferred Stock and the
shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Series C Preferred Stock, all dividends declared upon the
Series C Preferred Stock and any other series of Preferred Stock ranking on a
parity as to dividends with the Series C Preferred Stock shall be declared pro
rata so that the amount of dividends declared per share of Series C Preferred
Stock and such other series of Preferred Stock shall in all cases bear to each
other the same ratio that accrued dividends per share on the Series C Preferred
Stock and such other series of Preferred Stock (which shall not include any
accrual in respect of unpaid dividends for prior dividend periods if such
Preferred Stock does not have a cumulative dividend) bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on Series C Preferred Stock which may be in
arrears.
(f) Except as provided in the immediately preceding paragraph, unless
full cumulative dividends on the Series C Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period, no dividends (other than in shares of Common Stock
or other shares of capital stock ranking junior to the Series C Preferred Stock
as to dividends and upon liquidation) shall be declared or paid or set aside for
payment nor shall any other distribution be declared or made upon the Common
Stock, or any other capital stock of the Corporation ranking junior to or on a
parity with the Series C Preferred Stock as to dividends or upon liquidation,
nor shall any shares of Common Stock, or any other shares of capital stock of
the Corporation ranking junior to or on a parity with the Series C Preferred
Stock as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such shares) by the Corporation (except
by conversion into or exchange for other capital stock of the Corporation
ranking junior to the Series C Preferred Stock as to dividends and upon
liquidation).
(g) Any dividend payment made on shares of the Series C Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due,
with respect to such shares, which remains payable. Holders of the Series C
Preferred Stock shall not be entitled to any dividend, whether payable in cash,
property or stock in excess of full cumulative dividends on the Series C
Preferred Stock as described above.
(4) LIQUIDATION PREFERENCE.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of shares of Series C
Preferred Stock then outstanding are entitled to be paid out of the assets of
the Corporation legally available for distribution to its stockholders a
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liquidation preference of $25.00 per share, plus an amount equal to any accrued
and unpaid dividends to the date of payment, before any distribution of assets
is made to holders of Common Stock or any other class or series of capital stock
of the Corporation that ranks junior to the Series C Preferred Stock as to
liquidation rights.
(b) In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Corporation
are insufficient to pay the amount of the liquidating distributions on all
outstanding shares of Series C Preferred Stock and the corresponding amounts
payable on all shares of other classes or series of capital stock of the
Corporation ranking on a parity with the Series C Preferred Stock in the
distribution of assets, then the holders of the Series C Preferred Stock and all
other such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
(c) After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Series C Preferred Stock will have no
right or claim to any of the remaining assets of the Corporation.
(d) Written notice of any such liquidation, dissolution or winding up
of the Corporation, stating the payment date or dates when, and the place or
places where, the amounts distributable in such circumstances shall be payable,
shall be given by first class mail, postage pre-paid, not less than 30 nor more
than 60 days prior to the payment date stated therein, to each record holder of
the Series C Preferred Stock at the respective addresses of such holders as the
same shall appear on the stock transfer records of the Corporation.
(e) The consolidation or merger of the Corporation with or into any
other
corporation, trust or entity or of any other corporation with or into the
Corporation, or the sale, lease or conveyance of all or substantially all of the
property or business of the Corporation, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Corporation.
(5) REDEMPTION.
(a) RIGHT OF OPTIONAL REDEMPTION. The Series C Preferred Stock is not
redeemable prior to August 15, 2001. However, in order to ensure that the
Corporation remains a qualified real estate investment trust ("REIT") for
Federal income tax purposes, the Series C Preferred Stock will be subject to the
provisions of Article IX of the Charter. Pursuant to Article IX, Series C
Preferred Stock, together with other equity stock of the Corporation, owned by a
stockholder in excess of the Ownership Limit will automatically be transferred
to a Charitable Trust for the benefit of a Charitable Beneficiary and the
Corporation will have the right to purchase such transferred shares from the
Charitable Trust. On and after August 15, 2001, the Corporation, at its option
and upon not less than 30 nor more than 60 days' written notice, may redeem
shares of the Series C Preferred Stock, in whole or in part, at any time or from
time to time, for cash at a redemption price of $25.00 per share, plus all
accrued and unpaid dividends thereon to the date fixed for redemption (except as
provided in Section 5(c) below), without interest. If less than all of the
outstanding Series C Preferred Stock is to be redeemed, the Series C Preferred
Stock to be redeemed shall be selected pro rata (as nearly as may be practicable
without creating fractional shares) or by any other equitable method determined
by the Corporation.
(b) LIMITATIONS ON REDEMPTION.
(i) The redemption price of the Series C Preferred Stock (other
than the portion thereof consisting of accrued and unpaid dividends) is
payable solely out of the sale proceeds of other capital stock of the
Corporation, which may include other series of Preferred
3
Stock, and from no other source. For purposes of the preceding sentence,
"capital stock" means any equity securities (including Common Stock and
Preferred Stock), shares, interest, participation or other ownership
interests (however designated) and any rights (other than debt securities
convertible into or exchangeable for equity securities) or options to
purchase any of the foregoing.
(ii) Unless full cumulative dividends on all shares of Series C
Preferred Stock shall have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period,
no shares of Series C Preferred Stock shall be redeemed unless all
outstanding shares of Series C Preferred Stock are simultaneously redeemed,
and the Corporation shall not purchase or otherwise acquire directly or
indirectly any shares of Series C Preferred Stock (except by exchange for
capital stock of the Corporation ranking junior to the Series C Preferred
Stock as to dividends and upon liquidation); provided, however, that the
foregoing shall not prevent the purchase by the Corporation of shares of
transferred to a Charitable Trust pursuant to Article IX in order to ensure
that the Corporation remains qualified as a REIT for Federal income tax
purposes or the purchase or acquisition of shares of Series C Preferred
Stock pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding shares of Series C Preferred Stock.
(c) Rights to Dividends on Shares Called for Redemption. Immediately
prior to any redemption of Series C Preferred Stock, the Corporation shall pay,
in cash, any accumulated and unpaid dividends through the redemption date,
unless a redemption date falls after a Dividend Record Date and prior to the
corresponding Dividend Payment Date, in which case each holder of Series C
Preferred Stock at the close of business on such Dividend Record Date shall be
entitled to the dividend payable on such shares on the corresponding Dividend
Payment Date notwithstanding the redemption of such shares before such Dividend
Payment Date. Except as provided above, the Corporation will make no payment or
allowance for unpaid dividends, whether or not in arrears, on Series C Preferred
Stock which is redeemed.
(d) PROCEDURES FOR REDEMPTION.
(i) Notice of redemption will be (A) given by publication in a
newspaper of general circulation in the City of New York, such publication
to be made once a week for two successive weeks commencing not less than 30
nor more than 60 days prior to the redemption date, and (B) mailed by the
Corporation, postage prepaid, not less than 30 nor more than 60 days prior
to the redemption date, addressed to the respective holders of record of the
Series C Preferred Stock to be redeemed at their respective addresses as
they appear on the stock transfer records of the Corporation. No failure to
give such notice or any defect thereto or in the mailing thereof shall
affect the validity of the proceedings for the redemption of any shares of
Series C Preferred Stock except as to the holder to whom notice was
defective or not given.
(ii) In addition to any information required by law or by the
applicable rules of any exchange upon which Series C Preferred Stock may be
listed or admitted to trading, such notice shall state: (A) the redemption
date; (B) the redemption price; (C) the number of shares of Series C
Preferred Stock to be redeemed; (D) the place or places where the Series C
Preferred Stock is to be surrendered for payment of the redemption price;
and (E) that dividends on the shares to be redeemed will cease to accrue on
such redemption date. If less than all of the Series C Preferred Stock held
by any holder is to be redeemed, the notice mailed to such holder shall also
specify the number of shares of Series C Preferred Stock held by such holder
to be redeemed.
4
(iii) If notice of redemption of any shares of Series C Preferred
Stock has been given and if the funds necessary for such redemption have
been set aside by the Corporation in trust for the benefit of the holders of
any shares of Series C Preferred Stock so called for redemption, then, from
and after the redemption date, dividends will cease to accrue on such shares
of Series C Preferred Stock, such shares of Series C Preferred Stock shall
no longer be deemed outstanding and all rights of the holders of such shares
will terminate, except the right to receive the redemption price. Holders of
Series C Preferred Stock to be redeemed shall surrender such Series C
Preferred Stock at the place designated in such notice and, upon surrender
in accordance with said notice of the certificates for shares of Series C
Preferred Stock so redeemed (properly endorsed or assigned for transfer, if
the Corporation shall so require and the notice shall so state), such shares
of Series C Preferred Stock shall be redeemed by the Corporation at the
redemption price plus any accrued and unpaid dividends payable upon such
redemption. In case less than all the shares of Series C Preferred Stock
represented by any such certificate are redeemed, a new certificate or
certificates shall be issued representing the unredeemed shares of Series C
Preferred Stock without cost to the holder thereof.
(iv) The deposit of funds with a bank or trust corporation for the
purpose of redeeming Series C Preferred Stock shall be irrevocable except
that:
(A) the Corporation shall be entitled to receive from such
bank or trust corporation the interest or other earnings, if any,
earned on any money so deposited in trust, and the holders of any
shares redeemed shall have no claim to such interest or other earnings;
and
(B) any balance of monies so deposited by the Corporation and
unclaimed by the holders of the Series C Preferred Stock entitled
thereto at the expiration of two years from the applicable redemption
dates shall be repaid, together with any interest or other earnings
thereon, to the Corporation, and after any such repayment, the holders
of the shares entitled to the funds so repaid to the Corporation shall
look only to the Corporation for payment without interest or other
earnings.
(e) APPLICATION OF ARTICLE IX. The shares of Series C Preferred Stock
are subject to the provisions of Article IX of the Charter, including, without
limitation, the provision for the redemption of shares transferred to the
Charitable Trust (as defined in such Article). For this purpose, the Market
Price of the Series B Preferred Stock shall equal $25.00 per share, plus all
accrued and unpaid dividends on the shares of Series C Preferred Stock.
(f) STATUS OF REDEEMED SHARES. Any shares of Series C Preferred Stock
that shall at any time have been redeemed shall, after such redemption, have the
status of authorized but unissued preferred stock, without designation as to
series until such shares are once more designated as part of a particular series
by the Board of Directors.
(6) VOTING RIGHTS.
(a) Holders of the Series C Preferred Stock will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law.
(b) Whenever dividends on any shares of Series C Preferred Stock shall
be in arrears for six or more quarterly periods (a "Preferred Dividend
Default"), the holders of such shares of Series C Preferred Stock (voting
separately as a class with the holders of Series B Preferred Stock and Series D
Preferred Stock and all other series of Preferred Stock, other than the Series A
Preferred Stock, ranking
5
on a parity with the Series A Preferred Stock, the Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock as to dividends or upon
liquidation ("Parity Preferred") upon which like voting rights have been
conferred and are exercisable) will be entitled to vote for the election of a
total of two additional directors of the Corporation (the "Preferred Stock
Directors") at a special meeting called by the holders of record of at least 20%
of the Series C Preferred Stock or the holders of any other series of Parity
Preferred, other than the Series A Preferred Stock, so in arrears (unless such
request is received less than 90 days before the date fixed for the next annual
or special meeting of stockholders) or at the next annual meeting of
stockholders, and at each subsequent annual meeting until all dividends
accumulated on such shares of Series C Preferred Stock for the past dividend
periods and the dividend for the then current dividend period shall have been
fully paid or declared and a sum sufficient for the payment thereof set aside
for payment.
(c) If and when all accumulated dividends and the dividend for the then
current dividend period on the Series C Preferred Stock shall have been paid in
full or set aside for payment in full, the holders of shares of Series C
Preferred Stock shall be divested of the voting rights set forth in Section 6(b)
hereof (subject to revesting in the event of each and every Preferred Dividend
Default) and, if all accumulated dividends and the dividend for the current
dividend period have been paid in full or set aside for payment in full on all
other series of Parity Preferred, other than the Series A Preferred Stock, upon
which like voting rights have been conferred and are exercisable, the term of
office of each Preferred Stock Director so elected shall terminate. Any
Preferred Stock Director may be removed at any time with or without cause by the
vote of, and shall not be removed otherwise than by the vote of, the holders of
record of a majority of the outstanding shares of the Series C Preferred Stock
when they have the voting rights set forth in Section 6(b) (voting separately as
a class with the Series B Preferred Stock, the Series D Preferred Stock and all
other series of Parity Preferred, other than the Series A Preferred Stock, upon
which like voting rights have been conferred and are exercisable). So long as a
Preferred Dividend Default shall continue, any vacancy in the office of a
Preferred Stock Director may be filled by written consent of the Preferred Stock
Director remaining in office, or, if none remains in office, by a vote of the
holders of record of a majority of the outstanding shares of Series C Preferred
Stock when they have the voting rights set forth in Section 6(b) (voting
separately as a class with all other series of Parity Preferred, other than the
Series A Preferred Stock, upon which like voting rights have been conferred and
are exercisable). The Preferred Stock Directors shall each be entitled to one
vote per director on any matter.
(d) So long as any shares of Series C Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least two thirds of the shares of the Series C Preferred Stock
outstanding at the time, given in person or by proxy, either in writing or at a
meeting (voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of capital stock ranking
prior to the Series C Preferred Stock with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up, or
reclassify any authorized capital stock of the Corporation into any such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares or (ii) amend, alter or repeal
the provisions of the Charter, whether by merger, consolidation or otherwise, so
as to materially and adversely affect any right, preference, privilege or voting
power of the Series C Preferred Stock or the holders thereof; PROVIDED, HOWEVER,
that with respect to the occurrence of any event set forth in (ii) above, so
long as the Series C Preferred Stock remains outstanding with the terms thereof
materially unchanged, the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers of the holders of the Series C Preferred Stock and; PROVIDED, FURTHER,
that any increase in the amount of the authorized Preferred Stock or the
creation or issuance of any other series of Preferred Stock, or any increase in
the amount of authorized shares of such series, in each case ranking on a parity
with or junior to the Series C Preferred Stock with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or
6
winding up, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers.
(e) Each share of Series C Preferred Stock (voting together with all
common stock of the Corporation and all other series of Preferred Stock of the
Corporation entitled to vote) will be entitled to cast twenty-five
one-hundredths of one vote with respect to all matters on which the holders of
common stock are entitled to vote at each meeting of stockholders of the
Corporation.
(f) The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series C Preferred Stock
shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
(7) CONVERSION. The Series C Preferred Stock is not convertible into or
exchangeable for any other property or securities of the Corporation.
7
ANNEX D
SERIES D PREFERRED STOCK
(1) DESIGNATION AND NUMBER. A series of Preferred Stock, designated the "8%
Series D Cumulative Redeemable Preferred Stock" (the "Series D Preferred
Stock"), is hereby established. The number of shares of the Series D Preferred
Stock shall be 4,600,000.
(2) RANK. The Series D Preferred Stock shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding up of the
Corporation, rank (a) senior to all classes or series of Common Stock of the
Corporation, and to all equity securities the terms of which specifically
provide that such equity securities rank junior to such Series D Preferred
Stock; (b) on a parity with and the Corporation's 9.5% Series A Cumulative
Redeemable Preferred Stock (the "Series A Preferred Stock"), 9-3/8% Series B
Cumulative Redeemable Preferred Stock (the "Series B Preferred Stock") and 9.2%
Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock");
and all equity securities issued by the Corporation the terms of which
specifically provide that such equity securities rank on a parity with the
Series D Preferred Stock; and (c) junior to all equity securities issued by the
Corporation the terms of which specifically provide that such equity securities
rank senior to the Series D Preferred Stock. The term "equity securities" shall
not include convertible debt securities.
(3) DIVIDENDS.
(a) Holders of the then outstanding shares of Series D Preferred Stock
shall be entitled to receive, when and as declared by the Board of Directors,
out of funds legally available for the payment of dividends, cumulative
preferential cash dividends at the rate of 8% of the $25.00 liquidation
preference per annum (equivalent to a fixed annual amount of $2.00 per share).
Such dividends shall be cumulative from the first date on which any Series D
Preferred Stock is issued and shall be payable quarterly in arrears on or before
March 15, June 15, September 15 and December 15 of each year or, if not a
business day, the next succeeding business day (each, a "Dividend Payment
Date"). Any dividend payable on the Series D Preferred Stock for any partial
dividend period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Dividends will be payable to holders of record as they
appear in the stock records of the Corporation at the close of business on the
applicable record date, which shall be the first day of the calendar month on
which the applicable Dividend Payment Date falls or on such other date
designated by the Board of Directors of the Corporation for the payment of
dividends that is not more than 30 nor less than 10 days prior to such Dividend
Payment Date (each, a "Dividend Record Date").
(b) No dividends on shares of Series D Preferred Stock shall be
declared by the Board of Directors of the Corporation or paid or set apart for
payment by the Corporation at such time as the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness, prohibit such declaration, payment or setting apart for payment or
provide that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such declaration or
payment shall be restricted or prohibited by law.
(c) Notwithstanding the foregoing, dividends on the Series D Preferred
Stock shall accrue whether or not the terms and provisions set forth in Section
3(b) hereof at any time prohibit the current payment of dividends, whether or
not the Corporation has earnings, whether or not there are funds legally
available for the payment of such dividends and whether or not such dividends
are declared.
Accrued but unpaid dividends on the Series D Preferred Stock will accumulate as
of the Dividend Payment Date on which they first become payable.
(d) Except as provided in Section 3(e) below, no dividends will be
declared or paid or set apart for payment on any Common Stock of the Corporation
or any series of Preferred Stock ranking, as to dividends, on a parity with or
junior to the Series D Preferred Stock (other than a dividend in shares of the
Corporation's Common Stock or in shares of any series of Preferred Stock ranking
junior to the Series D Preferred Stock as to dividends and upon liquidation) for
any period unless full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof is
set apart for such payment on the Series D Preferred Stock for all past dividend
periods and the then current dividend period.
(e) When dividends are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series D Preferred Stock and the
shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Series D Preferred Stock, all dividends declared upon the
Series D Preferred Stock and any other series of Preferred Stock ranking on a
parity as to dividends with the Series D Preferred Stock shall be declared pro
rata so that the amount of dividends declared per share of Series D Preferred
Stock and such other series of Preferred Stock shall in all cases bear to each
other the same ratio that accrued dividends per share on the Series D Preferred
Stock and such other series of Preferred Stock (which shall not include any
accrual in respect of unpaid dividends for prior dividend periods if such
Preferred Stock does not have a cumulative dividend) bear to each other. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on Series D Preferred Stock which may be in
arrears.
(f) Except as provided in the immediately preceding paragraph, unless
full cumulative dividends on the Series D Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period, no dividends (other than in shares of Common Stock
or in shares of any series of Preferred Stock ranking junior to the Series D
Preferred Stock as to dividends and upon liquidation) shall be declared or paid
or set aside for payment nor shall any other distribution be declared or made
upon the Common Stock, or any Preferred Stock of the Corporation ranking junior
to or on a parity with the Series D Preferred Stock as to dividends or upon
liquidation, nor shall any shares of Common Stock, or any shares of Preferred
Stock of the Corporation ranking junior to or on a parity with the Series D
Preferred Stock as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such shares) by the
Corporation (except by conversion into or exchange for other capital stock of
the Corporation ranking junior to the Series D Preferred Stock as to dividends
and upon liquidation).
(g) Any dividend payment made on shares of the Series D Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due,
with respect to such shares, which remains payable. Holders of the Series D
Preferred Stock shall not be entitled to any dividend, whether payable in cash,
property or stock in excess of full cumulative dividends on the Series D
Preferred Stock as described above.
(4) LIQUIDATION PREFERENCE.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of shares of Series D
Preferred Stock then outstanding are entitled to be paid out of the assets of
the Corporation, legally available for distribution to its stockholders, a
liquidation preference of $25.00 per share, plus an amount equal to any accrued
and unpaid dividends to
2
the date of payment, before any distribution of assets is made to holders of
Common Stock or any series of Preferred Stock of the Corporation that ranks
junior to the Series D Preferred Stock as to liquidation rights.
(b) In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Corporation
are insufficient to pay the amount of the liquidating distributions on all
outstanding shares of Series D Preferred Stock and the corresponding amounts
payable on all shares of other classes or series of capital stock of the
Corporation ranking on a parity with the Series D Preferred Stock in the
distribution of assets, then the holders of the Series D Preferred Stock and all
other such classes or series of capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
(c) After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Series D Preferred Stock will have no
right or claim to any of the remaining assets of the Corporation.
(d) Written notice of any such liquidation, dissolution or winding up
of the Corporation, stating the payment date or dates when, and the place or
places where, the amounts distributable in such circumstances shall be payable,
shall be given by first class mail, postage pre-paid, not less than 30 nor more
than 60 days prior to the payment date stated therein, to each record holder of
the Series D Preferred Stock at the respective addresses of such holders as the
same shall appear on the stock transfer records of the Corporation.
(e) The consolidation or merger of the Corporation with or into any
other corporation, trust or entity or of any other corporation with or into the
Corporation, or the sale, lease or conveyance of all or substantially all of the
property or business of the Corporation, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Corporation.
(5) REDEMPTION.
(a) RIGHT OF OPTIONAL REDEMPTION. The Series D Preferred Stock is not
redeemable prior to October 8, 2002. However, in order to ensure that the
Corporation remains a qualified real estate investment trust ("REIT") for
Federal income tax purposes, the Series D Preferred Stock will be subject to the
provisions of Article IX of the Charter. Pursuant to Article IX, Series D
Preferred Stock, together with other equity stock of the Corporation, owned by a
stockholder in excess of the Ownership Limit will automatically be transferred
to a Charitable Trust for the benefit of a Charitable Beneficiary and the
Corporation will have the right to purchase such transferred shares from the
Charitable Trust. On and after October 8, 2002, the Corporation, at its option
and upon not less than 30 nor more than 60 days' written notice, may redeem
shares of the Series D Preferred Stock, in whole or in part, at any time or from
time to time, for cash at a redemption price of $25.00 per share, plus all
accrued and unpaid dividends thereon to the date fixed for redemption (except as
provided in Section 5(c) below), without interest. If less than all of the
outstanding Series D Preferred Stock is to be redeemed, the Series D Preferred
Stock to be redeemed shall be selected pro rata (as nearly as may be practicable
without creating fractional shares) or by any other equitable method determined
by the Corporation.
(b) LIMITATIONS ON REDEMPTION.
(i) The redemption price of the Series D Preferred Stock (other
than the portion thereof consisting of accrued and unpaid dividends) is
payable solely out of the sale proceeds of other capital stock of the
Corporation, which may include other series of Preferred Stock, and from no
other source. For purposes of the preceding sentence, "capital stock" means
3
any equity securities (including Common Stock and Preferred Stock), shares,
interest, participation or other ownership interests (however designated)
and any rights (other than debt securities convertible into or exchangeable
for equity securities) or options to purchase any of the foregoing.
(ii) Unless full cumulative dividends on all shares of Series D
Preferred Stock shall have been, or contemporaneously are, declared and paid
or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period,
no shares of Series D Preferred Stock shall be redeemed unless all
outstanding shares of Series D Preferred Stock are simultaneously redeemed,
and the Corporation shall not purchase or otherwise acquire directly or
indirectly any shares of Series D Preferred Stock (except by exchange for
capital stock of the Corporation ranking junior to the Series D Preferred
Stock as to dividends and upon liquidation); provided, however, that the
foregoing shall not prevent the purchase by the Corporation of shares
transferred to a Charitable Trust pursuant to Article IX in order to ensure
that the Corporation remains qualified as a REIT for Federal income tax
purposes or the purchase or acquisition of shares of Series D Preferred
Stock pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding shares of Series D Preferred Stock.
(c) RIGHTS TO DIVIDENDS ON SHARES CALLED FOR REDEMPTION. Immediately
prior to any redemption of Series D Preferred Stock, the Corporation shall pay,
in cash, any accumulated and unpaid dividends through the redemption date,
unless a redemption date falls after a Dividend Record Date and prior to the
corresponding Dividend Payment Date, in which case each holder of Series D
Preferred Stock at the close of business on such Dividend Record Date shall be
entitled to the dividend payable on such shares on the corresponding Dividend
Payment Date notwithstanding the redemption of such shares before such Dividend
Payment Date. Except as provided above, the Corporation will make no payment or
allowance for unpaid dividends, whether or not in arrears, on Series D Preferred
Stock which is redeemed.
(d) PROCEDURES FOR REDEMPTION.
(i) Notice of redemption will be (A) given by publication in a
newspaper of general circulation in the City of New York, such publication
to be made once a week for two successive weeks commencing not less than 30
nor more than 60 days prior to the redemption date, and (B) mailed by the
Corporation, postage prepaid, not less than 30 nor more than 60 days prior
to the redemption date, addressed to the respective holders of record of the
Series D Preferred Stock to be redeemed at their respective addresses as
they appear on the stock transfer records of the Corporation. No failure to
give such notice or any defect thereto or in the mailing thereof shall
affect the validity of the proceedings for the redemption of any shares of
Series D Preferred Stock except as to the holder to whom notice was
defective or not given.
(ii) In addition to any information required by law or by the
applicable rules of any exchange upon which Series D Preferred Stock may be
listed or admitted to trading, such notice shall state: (A) the redemption
date; (B) the redemption price; (C) the number of shares of Series D
Preferred Stock to be redeemed; (D) the place or places where the Series D
Preferred Stock is to be surrendered for payment of the redemption price;
and (E) that dividends on the shares to be redeemed will cease to accrue on
such redemption date. If less than all of the Series D Preferred Stock held
by any holder is to be redeemed, the notice mailed to such holder shall also
specify the number of shares of Series D Preferred Stock held by such holder
to be redeemed.
4
(iii) If notice of redemption of any shares of Series D Preferred
Stock has been given and if the funds necessary for such redemption have
been set aside by the Corporation in trust for the benefit of the holders of
any shares of Series D Preferred Stock so called for redemption, then, from
and after the redemption date, dividends will cease to accrue on such shares
of Series D Preferred Stock, such shares of Series D Preferred Stock shall
no longer be deemed outstanding and all rights of the holders of such shares
will terminate, except the right to receive the redemption price. Holders of
Series D Preferred Stock to be redeemed shall surrender such Series D
Preferred Stock at the place designated in such notice and, upon surrender
in accordance with said notice of the certificates for shares of Series D
Preferred Stock so redeemed (properly endorsed or assigned for transfer, if
the Corporation shall so require and the notice shall so state), such shares
of Series D Preferred Stock shall be redeemed by the Corporation at the
redemption price plus any accrued and unpaid dividends payable upon such
redemption. In case less than all the shares of Series D Preferred Stock
represented by any such certificate are redeemed, a new certificate or
certificates shall be issued representing the unredeemed shares of Series D
Preferred Stock without cost to the holder thereof.
(iv) The deposit of funds with a bank or trust corporation for the
purpose of redeeming Series D Preferred Stock shall be irrevocable except
that:
(A) the Corporation shall be entitled to receive from such
bank or trust corporation the interest or other earnings, if any,
earned on any money so deposited in trust, and the holders of any
shares redeemed shall have no claim to such interest or other earnings;
and
(B) any balance of monies so deposited by the Corporation and
unclaimed by the holders of the Series D Preferred Stock entitled
thereto at the expiration of two years from the applicable redemption
dates shall be repaid, together with any interest or other earnings
thereon, to the Corporation, and after any such repayment, the holders
of the shares entitled to the funds so repaid to the Corporation shall
look only to the Corporation for payment without interest or other
earnings.
(e) APPLICATION OF ARTICLE IX. The shares of Series D Preferred Stock
are subject to the provisions of Article IX of the Charter, including, without
limitation, the provision for the redemption of shares transferred to the
Charitable Trust (as defined in such Article). For this purpose, the Market
Price of the Series D Preferred Stock shall equal $25.00 per share, plus all
accrued and unpaid dividends on the shares of Series D Preferred Stock.
(f) STATUS OF REDEEMED SHARES. Any shares of Series D Preferred Stock
that shall at any time have been redeemed shall, after such redemption, have the
status of authorized but unissued Preferred Stock, without designation as to
series until such shares are once more designated as part of a particular series
by the Board of Directors.
(6) VOTING RIGHTS.
(a) Holders of the Series D Preferred Stock will not have any voting
rights, except as set forth below or as otherwise from time to time required by
law.
(b) Whenever dividends on any shares of Series D Preferred Stock shall
be in arrears for six or more quarterly periods (a "Preferred Dividend
Default"), the holders of such shares of Series D Preferred Stock (voting
separately as a class with the holders of Series B Preferred Stock and Series C
Preferred Stock and all other series of Preferred Stock, other than the Series A
Preferred Stock, ranking
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on a parity with the Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock and Series D Preferred Stock as to dividends or upon
liquidation ("Parity Preferred") upon which like voting rights have been
conferred and are exercisable) will be entitled to vote for the election of a
total of two additional directors of the Corporation (the "Preferred Stock
Directors") at a special meeting called by the holders of record of at least 20%
of the Series D Preferred Stock or the holders of any other series of Parity
Preferred, other than the Series A Preferred Stock, so in arrears (unless such
request is received less than 90 days before the date fixed for the next annual
or special meeting of stockholders) or at the next annual meeting of
stockholders, and at each subsequent annual meeting until all dividends
accumulated on such shares of Series D Preferred Stock for the past dividend
periods and the dividend for the then current dividend period shall have been
fully paid or declared and a sum sufficient for the payment thereof set aside
for payment.
(c) If and when all accumulated dividends and the dividend for the then
current dividend period on the Series D Preferred Stock shall have been paid in
full or set aside for payment in full, the holders of shares of Series D
Preferred Stock shall be divested of the voting rights set forth in Section 6(b)
hereof (subject to revesting in the event of each and every subsequent Preferred
Dividend Default) and, if all accumulated dividends and the dividend for the
current dividend period have been paid in full or set aside for payment in full
on all other series of Parity Preferred, other than the Series A Preferred
Stock, upon which like voting rights have been conferred and are exercisable,
the term of office of each Preferred Stock Director so elected shall terminate.
Any Preferred Stock Director may be removed at any time with or without cause by
the vote of, and shall not be removed otherwise than by the vote of, the holders
of record of a majority of the outstanding shares of the Series D Preferred
Stock when they have the voting rights set forth in Section 6(b) (voting
separately as a class with the Series B Preferred Stock, the Series C Preferred
Stock and all other series of Parity Preferred, other than the Series A
Preferred Stock, upon which like voting rights have been conferred and are
exercisable). So long as a Preferred Dividend Default shall continue, any
vacancy in the office of a Preferred Stock Director may be filled by written
consent of the Preferred Stock Director remaining in office, or, if none remains
in office, by a vote of the holders of record of a majority of the outstanding
shares of Series D Preferred Stock when they have the voting rights set forth in
Section 6(b) (voting separately as a class with all other series of Parity
Preferred, other than the Series A Preferred Stock, upon which like voting
rights have been conferred and are exercisable). The Preferred Stock Directors
shall each be entitled to one vote per director on any matter.
(d) So long as any shares of Series D Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least two thirds of the shares of the Series D Preferred Stock
outstanding at the time, given in person or by proxy, either in writing or at a
meeting (voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of capital stock ranking
prior to the Series D Preferred Stock with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up, or
reclassify any authorized capital stock of the Corporation into any such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares or (ii) amend, alter or repeal
the provisions of the Charter, whether by merger, consolidation or otherwise, so
as to materially and adversely affect any right, preference, privilege or voting
power of the Series D Preferred Stock or the holders thereof; provided, however,
that with respect to the occurrence of any event set forth in (ii) above, so
long as the Series D Preferred Stock remains outstanding with the terms thereof
materially unchanged, the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers of the holders of the Series D Preferred Stock and; provided, further,
that any increase in the amount of the authorized Preferred Stock or the
creation or issuance of any other series of Preferred Stock, or any increase in
the amount of authorized shares of such series, in each case ranking on a parity
with or junior to the Series D Preferred Stock with respect to
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payment of dividends or the distribution of assets upon liquidation, dissolution
or winding up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
(e) Each share of Series D Preferred Stock (voting together with all
common stock of the Corporation and all other series of Preferred Stock of the
Corporation entitled to vote) will be entitled to cast twenty-five
one-hundredths of one vote with respect to all matters on which the holders of
common stock are entitled to vote at each meeting of stockholders of the
Corporation.
(f) The foregoing voting provisions will not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of Series D Preferred Stock
shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
(7) CONVERSION. The Series D Preferred Stock is not convertible into or
exchangeable for any other property or securities of the Corporation.
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