STARWOOD 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: Starwood 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
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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
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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 Stockholders, amend the Charter from time to 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
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authorized Capital Stock and be subject to classification and
reclassification as provided in this sub-paragraph.
(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:
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(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;
(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 stockholders
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
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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 Stockholders.
(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 Stockholders 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 Stockholders, 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 Stockholders 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 Stockholders 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
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(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 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 VII 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 STOCKHOLDERS 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
Stockholders.
(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.
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(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 Stockholders for money damages.
No amendment of the Charter of the Corporation or 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 Stockholders 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 stockholders, 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 Stockholders and in making any recommendation to its Stockholders, 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
Stockholders, including Stockholders, 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
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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
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 Stockholders 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.
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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, 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.
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ARTICLE IX
RESTRICTION ON TRANSFER, ACQUISITION AND REDEMPTION
OF SHARES OF CAPITAL STOCK
(a) OWNERSHIP LIMITATION.
(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
11
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
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,
between1/2of 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
12
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 Stockholders by
preservation of the Corporation's status as a REIT.
(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
Stockholders. 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).
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(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.
(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
14
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:
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
15
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.
(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
16
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.
(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.
17
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 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
18
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.
"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
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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 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.
"STOCKHOLDERS" 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
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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.
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