Exhibit 3.1
FORM OF
HERSHA HOSPITALITY TRUST
ARTICLES OF AMENDMENT AND RESTATEMENT
Hersha Hospitality Trust, a Maryland real estate investment
trust (the "Trust") organized under Title 8 of the Corporation and Associations
Article of the Annotated Code of Maryland ("Title 8"), desires to amend and
restate its Declaration of Trust as currently in effect as hereinafter provided.
FIRST: The Declaration of Trust as currently in effect is hereby
amended and restated as follows, such that the following provisions shall be and
become all the provisions of the Declaration of Trust:
ARTICLE I
FORMATION
The Trust is a real estate investment trust (a "REIT") within the
meaning of Title 8. The Trust shall not be deemed to be a general partnership,
limited partnership, joint venture, joint stock company or a corporation (but
nothing herein shall preclude the Trust from being treated for tax purposes as
an association under the Code).
ARTICLE II
NAME
The name of the Trust is:
Hersha Hospitality Trust
Under circumstances in which the Board of Trustees of the Trust (the
"Board of Trustees" or "Board") determines that the use of the name of the Trust
is not practicable, the Trust may use any other designation or name for the
Trust.
ARTICLE III
PURPOSES AND POWERS
Section 1. Purposes. The purposes for which the Trust is formed are to
invest in and to acquire, hold, manage, administer, control and dispose of real
property and interests in real property, including, without limitation or
obligation, engaging in business as a REIT under the Internal Revenue Code of
1986, as amended (the "Code").
Section 2. Powers. The Trust shall have all of the powers granted to
REITs by Title 8 and all other powers set forth in these Articles of Amendment
and Restatement of its Declaration of Trust as filed for record with the State
Department of Assessment and Taxation of Maryland, and any amendments or
supplements thereto (the "Declaration of Trust") that are not inconsistent with
law and are appropriate to promote and attain the purposes set forth in the
Articles of Amendment and Restatement.
ARTICLE IV
RESIDENT AGENT
The name of the resident agent of the Trust in the State of Maryland is
[James J. Hanks, Jr., c/o Ballard Spahr Andrews & Ingersoll, whose post office
address is 300 East Lombard Street, Baltimore, Maryland 21202]. The resident
agent is a citizen of and resides in the State of Maryland. The Trust may have
such offices or places of business within or outside the State of Maryland as
the Board of Trustees of the Trust may from time to time determine.
ARTICLE V
BOARD OF TRUSTEES
Section 1. Powers.
(A) Subject to any express limitationscontained in the Articles of
Amendment and Restatement or in the Bylaws of the Trust ("Bylaws"), (i) the
business and affairs of the Trust shall be managed under the direction of the
Board of Trustees and (ii) the Board shall have full, exclusive and absolute
power, control and authority over any and all property of the Trust. The Board
may take any action as it, in its sole judgment and discretion, deems necessary
or appropriate to conduct the business and affairs of the Trust. The Articles of
Amendment and Restatement shall be construed with a presumption in favor of the
grant of power and authority to the Board. Any construction of the Articles of
Amendment and Restatement or determination made in good faith by the Board
concerning its powers and authority hereunder shall be conclusive. The
enumeration and definition of particular powers of the Trustees included in the
Articles of Amendment and Restatement or in the Bylaws shall in no way be
construed or deemed by inference or otherwise in any manner to exclude or limit
the powers conferred upon the Board of Trustees under the general laws of the
State of Maryland or any other applicable laws.
(B) Except as otherwise provided in the Bylaws, the Board, without any
action by the shareholders of the Trust, shall have and may exercise, on behalf
of the Trust, without limitation, the power to adopt, amend and repeal Bylaws;
to elect officers in the manner prescribed in the Bylaws; to solicit proxies
from holders of shares of beneficial interest of the Trust; and to do any other
acts and deliver any other documents necessary or appropriate to the foregoing
powers.
(C) It shall be the duty of the Board of Trustees to use any and all
commercially reasonable efforts to ensure that the Trust satisfies the
requirements for qualification as a REIT under the Code, including, but not
limited to, the ownership of outstanding shares of its beneficial interest, the
nature of its assets, the sources of its income, and the amount and timing of
its distributions to its shareholders. The Board of Trustees shall take no
action to disqualify the Trust as a REIT or to otherwise revoke the Trust's
election to be taxed as a REIT without the affirmative vote of two-thirds of the
number of Common Shares entitled to vote on such matter at a meeting of the
shareholders.
Section 2. Classification and Number. (A) The Trustees of the Trust
(hereinafter the "Trustees") (other than any Trustee elected solely by holders
of one or more classes or series of Preferred Shares) shall be classified, with
respect to the terms for which they severally hold office, into two classes, as
nearly equal in number as possible, one class ("Class I") to hold office
initially for a term expiring at the first annual meeting of shareholders (1999)
and another class ("Class II") to hold office initially for a term expiring at
the second succeeding annual meeting of shareholders (2000), with the Trustees
of each class to hold office until their successors are duly elected and
qualified. Any vacancy will be filled, including a vacancy created by an
increase in the number of Trustees, at a regular meeting or at any special
meeting called for that purpose, by a majority of the remaining Trustees, even
if such remaining Trustees constitutes less than a quorum. At each annual
meeting of shareholders, the successors to the class of Trustees whose term
expires at such meeting shall be elected to hold office for a term expiring at
the annual meeting of shareholders held in the second year following the year of
their election. Shareholder votes to elect Trustees shall be conducted in the
manner provided in the Bylaws.
(B) The number of Trustees initially shall be seven, which number may be
increased or decreased pursuant to the Bylaws. The name, address and class of
the Trustees who shall serve until their successors are duly elected and
qualified are:
Name Address Class
Hasu P. Shah 148 Sheraton Drive Class II
Box A
New Cumberland, PA 17070
Bharat C. Mehta 148 Sheraton Drive Class II
Box A
New Cumberland, PA 17070
K.D. Patel 148 Sheraton Drive Class II
Box A
New Cumberland, PA 17070
L. McCarthy Downs, III 707 E. Main Street Class I
20th Floor
Richmond, VA 23219
Class I
Class I
Class II
The Trustees may increase the number of Trustees and fill any vacancy, whether
resulting from an increase in the number of Trustees or otherwise, on the Board
of Trustees in the manner provided in the Bylaws. The Independent Trustees (as
hereinafter defined) shall nominate replacements for vacancies among the
Independent Trustees' positions. In the event that, after the closing of the
Initial Public Offering (as hereinafter defined), a majority of the Board of
Trustees are not Independent Trustees by reason of the resignation or removal of
one or more Independent Trustees or otherwise, the remaining Independent
Trustees (or, if there are no Independent Trustees, the remaining members of the
Board of Trustees) shall promptly elect that number of Independent Trustees
necessary to cause the Board of Trustees to include a majority of Independent
Trustees. It shall not be necessary to list in the Articles of Amendment and
Restatement the names and addresses of any Trustees hereinafter elected.
Section 3. Resignation, Removal or Death. Any Trustee may resign by
written notice to the Board, effective upon execution and delivery to the Trust
of such written notice or upon any future date specified in the notice. Subject
to the rights of holders of one or more classes or series of Preferred Shares to
elect one or more Trustees, a Trustee may be removed at any time, with or
without cause, at a meeting of the shareholders, by the affirmative vote of the
holders of not less than two-thirds of the Shares then outstanding and entitled
to vote generally in the election of Trustees.
Section 4. Independent Trustees. Notwithstanding anything herein to the
contrary, at all times (except during a period not to exceed sixty (60) days
following the death, resignation, incapacity or removal from office of a Trustee
prior to expiration of the Trustee's term of office), three members of the Board
of Trustees shall be comprised of persons who are not officers, directors or
employees of the Trust, any lessee of the Trust's or the Partnership's
properties or any underwriter or placement agent of the shares of beneficial
interest of the Trust that has been engaged by the Trust within the past three
years, or any "Affiliates" thereof (each such person serving on the Board of
Trustees being an "Independent Trustee").
Section 5. Definition of Affiliate. For purposes of Section 4 above,
"Affiliate" of a person shall mean (i) any person that, directly or indirectly,
controls or is controlled by or is under common control with such person, (ii)
any other person that owns, beneficially, directly or indirectly, five percent
(5%) or more of the outstanding capital shares, shares or equity interests of
such person, or (iii) any officer, director, employee, partner or trustee
(including any family member of the foregoing) of such person or of any person
controlling, controlled by or under common control with such person (excluding
trustees and persons serving in similar capacities who are not otherwise an
Affiliate of such person). The term "person" means and includes individuals,
corporations, general and limited partnerships, stock companies or associations,
joint ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts, or other entities and governments and agencies and
political subdivisions thereof. For the purpose of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, through the ownership
of voting securities, partnership interests or other equity interests.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 1. Authorized Shares. The beneficial interest of the Trust shall
be divided into shares of beneficial interest (the "Shares"). The Trust has
authority to issue fifty million (50,000,000) common shares of beneficial
interest, $.01 par value per share ("Common Shares"), and ten million
(10,000,000) preferred shares of beneficial interest, $.01 par value per share
("Preferred Shares"). The Board of Trustees, without any action by the
shareholders of the Trust, may amend the Articles of Amendment and Restatement
from time to time to increase or decrease the aggregate number of Shares or the
number of Shares of any class that the Trust has authority to issue.
Section 2. Common Shares. Subject to the provisions of Article VII, each
Common Share shall entitle the holder thereof to one vote on each matter upon
which holders of Common Shares are entitled to vote. The Board of Trustees may
reclassify any unissued Common Shares from time to time in one or more classes
or series of Shares.
Section 3. Preferred Shares. The Board of Trustees may classify any
unissued Preferred Shares and reclassify any previously classified but unissued
Preferred Shares of any class or series from time to time, in one or more
classes or series of Shares.
Section 4. Classified or Reclassified Shares. Prior to issuance of
classified or reclassified Shares of any class or series, the Board of Trustees
by resolution shall (a) designate that class or series to distinguish it from
all other classes and series of Shares; (b) specify the number of Shares to be
included in the class or series; (c) set, subject to the provisions of Article
VII and subject to the express terms of any class or series of Shares
outstanding at the time, the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of redemption for each series; and (d)
cause the Trust to file articles supplementary with the State Department of
Assessments and Taxation of Maryland ("SDAT"). Any of the terms of any class or
series of Shares set pursuant to clause (c) of this Section 4 may be made
dependent upon facts or events ascertainable outside the Articles of Amendment
and Restatement (including determinations by the Board of Trustees or other
facts or events within the control of the Trust) and may vary among holders
thereof, provided that the manner in which such facts, events or variations
shall operate upon the terms of such class or series of Shares is clearly and
expressly set forth in articles supplementary filed with the SDAT.
Section 5. Authorization by Board of Share Issuance. The Board of
Trustees may authorize the issuance from time to time of Shares of any class or
series, whether now or hereafter authorized, or securities or rights convertible
into Shares of any class or series, whether now or hereafter authorized, for
such consideration (whether in cash, property, past or future services,
obligation for future payment or otherwise) as the Board of Trustees may deem
advisable (or without consideration in the case of a Share split or Share
dividend), subject to such restrictions or limitations, if any, as may be set
forth in the Articles of Amendment and Restatement or the Bylaws.
Notwithstanding any other provision in the Articles of Amendment and
Restatement, no determination shall be made by the Board of Trustees nor shall
any transaction be entered into by the Trust that would cause any Shares or
other beneficial interest in the Trust not to constitute "transferable shares"
or "transferable certificates of beneficial interest" under Section 856(a)(2) of
the Code or which would cause any distribution to constitute a preferential
dividend as described in Section 562(c) of the Code.
Section 6. Dividends and Distributions. The holders of all Common Shares
will participate equally in dividends payable to holders of Common Shares when
and as authorized and declared by the Board of Trustees and in net assets
available for distribution to holders of Common Shares upon liquidation or
dissolution. The Board of Trustees may from time to time authorize and declare
to shareholders such dividends or distributions, in cash or other assets of the
Trust or in securities of the Trust or from any other source as the Board of
Trustees in its discretion shall determine. The Board of Trustees shall endeavor
to declare and pay such dividends and distributions as shall be necessary for
the Trust to qualify as a REIT under the Code; however, shareholders shall have
no right to any dividend or distribution unless and until authorized and
declared by the Board. The exercise of the powers and rights of the Board of
Trustees pursuant to this Section shall be subject to the provisions of any
class or series of Shares at the time outstanding.
Section 7. General Nature of Shares. All Shares shall be personal
property entitling the shareholders only to those rights provided in the
Articles of Amendment and Restatement. The shareholders shall have no interest
in the property of the Trust and shall have no right to compel any partition,
division, dividend or distribution of the Trust or of the property of the Trust.
The death of a shareholder shall not terminate the Trust.
Section 8. Fractional Shares. The Trust may, without the consent or
approval of any shareholder, issue fractional Shares, eliminate a fraction of a
Share by rounding up or down to a full Share, arrange for the disposition of a
fraction of a Share by the person entitled to it, or pay cash for the fair value
of a fraction of a Share.
Section 9. Declaration of Trust and Bylaws. All shareholders are subject
to the provisions of the Declaration of Trust and the Bylaws of the Trust.
ARTICLE VII
RESTRICTIONS ON TRANSFER AND SHARES-IN-TRUST
Section 1. Restrictions on Transfer.
(A) Definitions. The following terms shall have the following
meanings:
(i) "Beneficial Ownership" shall mean ownership of Equity Shares (or
options to acquire Equity Shares) by a Person who would be treated as an owner
of such Equity Shares either (a) directly (including through a nominee or
similar arrangement) or (b) indirectly through the application of Section 544 of
the Code, as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have correlative
meanings.
(ii) "Beneficiary" shall mean, with respect to any Share Trust, one or more
organizations described in each of Section 170(b)(1)(A) (other than clause (vii)
or (viii) thereof) and Section 170(c)(2) of the Code that are named by the Share
Trust as the beneficiary or beneficiaries of such Share Trust, in accordance
with the provisions of Section 2(A) hereof.
(iii) "Board of Trustees" shall mean the Board of Trustees of the Trust.
(iv) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(v) "Constructive Ownership" shall mean ownership of Equity Shares (or
options to acquire Equity Shares) by a Person who would be treated as an owner
of such Equity Shares either directly or indirectly through the application of
Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructive Owner," "Constructively Owns," and "Constructively Owned" shall
have correlative meanings.
(vi) "Equity Shares" shall mean shares that are either Preferred Shares or
Common Shares. The term "Equity Shares" shall include all Preferred Shares and
Common Shares that are held as Shares-in-Trust in accordance with the provisions
of Section 2(A) hereof.
(vii) "Hersha Hospitality Partnership Agreement" shall mean the agreement
of limited partnership of Hersha Hospitality Limited Partnership, a Virginia
limited partnership, as amended and restated.
(viii) "Initial Public Offering" means the sale of Common Shares pursuant
to the Trust's first effective registration statement for such Common Shares
filed under the Securities Act of 1933, as amended.
(ix) "Market Price" on any date shall mean the average of the Closing Price
for the five consecutive Trading Days ending on such date. The "Closing Price"
on any date shall mean the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Equity Shares are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Equity Shares
are listed or admitted to trading or, if the Equity Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or, if such system is no longer in use,
the principal other automated quotations system that may then be in use or, if
the Equity Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Equity Shares selected by the Board of Trustees. "Trading Day"
shall mean a day on which the principal national securities exchange on which
the Equity Shares are listed or admitted to trading is open for the transaction
of business or, if the Equity Shares are not listed or admitted to trading on
any national securities exchange, shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(x) "Non-Transfer Event" shall mean an event (other than a purported
Transfer) that would result in a change in Beneficial or Constructive Ownership
of the Equity Shares, including, but not limited to, the granting of any option
or entering into any agreement for the sale, transfer or other disposition of
Equity Shares or the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Equity Shares.
(xi) "Ownership Limit" shall mean 9.9% of the number of
outstanding Common Shares and 9.9% of the number of outstanding shares of any
class or series of Preferred Shares, in each case considered separately on a
class by class or series by series basis.
(xii) "Partnership" shall mean Hersha Hospitality Limited Partnership, a
Virginia limited partnership.
(xiii) "Partnership Unit" shall mean a fractional, undivided share of the
partnership interests of Hersha Hospitality Limited Partnership, a Virginia
limited partnership.
(xiv) "Permitted Transferee" shall mean any Person designated as a
Permitted Transferee in accordance with the provisions of Section 2(E) hereof.
(xv) "Person" shall mean an individual, corporation, partnership, estate,
trust, 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 and also includes a "group" as that term is used for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
(xvi) "Prohibited Owner" shall mean, with respect to any purported Transfer
or Non-Transfer Event, any Person who, but for the provisions of Section 1(C)
hereof, would own record title to Equity Shares.
(xvii) "Redemption Rights" shall mean the rights granted under the Hersha
Hospitality Partnership Agreement to the limited partners to redeem, under
certain circumstances, their Partnership Units for cash (or, at the option of
the Trust, Common Shares).
(xviii) "REIT" shall mean a real estate investment trust under Section 856
of the Code.
(xix) "Restriction Termination Date" shall mean the first day after the
date of the Initial Public Offering on which the Board of Trustees and the
shareholders of the Trust determine, pursuant to Article V, Section 1(C), that
it is no longer in the best interests of the Trust to attempt to, or continue
to, qualify as a REIT or for any other reason, the Board of Trustees and the
shareholders amend the Articles of Amendment and Restatement to terminate the
provisions of this Article VII.
(xx) "Shares-in-Trust" shall mean any Equity Shares designated
Shares-in-Trust pursuant to Section 1(C) hereof.
(xxi) "Share Trust" shall mean any separate trust created pursuant to
Section 1(C) hereof and administered in accordance with the terms of Section 2
hereof, for the exclusive benefit of any Beneficiary.
(xxii) "Share Trustee" shall mean any person or entity unaffiliated with
both the Trust and any Prohibited Owner designated by the Trust to act as
trustee of any Share Trust, or any successor trustee thereof.
(xxiii) "Transfer" (as a noun) shall mean any sale, transfer, gift,
assignment, devise or other disposition of Equity Shares, whether voluntary or
involuntary, whether of record, constructively or beneficially and whether by
operation of law or otherwise. "Transfer" (as a verb) shall have the correlative
meaning.
(B) Restriction on Transfers.
(1) Except as provided in Section 1(G) hereof, from the date of the Initial
Public Offering and prior to the Restriction Termination Date, no Person shall
Beneficially Own or Constructively Own outstanding Equity Shares in excess of
the Ownership Limit.
(2) Except as provided in Section 1(G) hereof and subject to Section 1(H)
hereof, from the date of the Initial Public Offering and prior to the
Restriction Termination Date, any Transfer that, if effective, would result in
any Person Beneficially Owning or Constructively Owning Equity Shares in excess
of the Ownership Limit shall be void ab initio as to the Transfer of that number
of Equity Shares that would be otherwise Beneficially Owned or Constructively
Owned by such Person in excess of the Ownership Limit and the intended
transferee shall acquire no rights in such excess Equity Shares.
(3) Except as provided in Section 1(G) hereof, and subject to Section 1(H)
hereof, from the date of the Initial Public Offering and prior to the
Restriction Termination Date, any Transfer that, if effective, would result in
the Equity Shares being beneficially owned by fewer than 100 Persons (determined
without reference to any rules of attribution) shall be void ab initio as to the
Transfer of that number of shares that would be otherwise beneficially owned
(determined without reference to any rules of attribution) by the transferee,
and the intended transferee shall acquire no rights in such excess Equity
Shares.
(4) Subject to Section 1(G) and 1(H) hereof, from the date of the Initial
Public Offering and prior to the Restriction Termination Date, any Transfer of
Equity Shares that, if effective, would result in the Trust being "closely held"
within the meaning of Section 856(h) of the Code shall be void ab initio as to
the Transfer of that number of Equity Shares that would cause the Trust to be
"closely held" within the meaning of Section 856(h) of the Code, and the
intended transferee shall acquire no rights in such excess Equity Shares.
(5) Except as provided in Section 1(G) hereof and subject to Section 1(H)
hereof, from the date of the Initial Public Offering and prior to the
Restriction Termination Date, any Transfer of Equity Shares that, if effective,
would cause the Trust to Constructively Own 10% or more of the ownership
interests in a tenant of the Trust's or the Partnership's real property, within
the meaning of Section 856(d)(2)(B) of the Code, shall be void ab initio as to
the Transfer of that number of Equity Shares that would cause the Trust to
Constructively Own 10% or more of the ownership interests in a tenant of the
Trust's or the Partnership's real property, within the meaning of Section
856(d)(2)(B) of the Code, and the intended transferee shall acquire no rights in
such excess Equity Shares.
(C) Transfer to Share Trust.
(1) If, notwithstanding the other provisions contained in this Section 1,
at any time after the date of the Initial Public Offering and prior to the
Restriction Termination Date, there is a purported Transfer or Non-Transfer
Event such that any Person would either Beneficially Own or Constructively Own
Equity Shares in excess of the Ownership Limit, then (x) except as otherwise
provided in Section 1(G) hereof, the purported transferee shall acquire no right
or interest (or, in the case of a Non-Transfer Event, the person holding record
title to the Equity Shares Beneficially Owned or Constructively Owned by such
Beneficial Owner or Constructive Owner, shall cease to own any right or
interest) in such number of Equity Shares that would cause such Beneficial Owner
or Constructive Owner to Beneficially Own or Constructively Own Equity Shares in
excess of the Ownership Limit, (y) such number of Equity Shares in excess of the
Ownership Limit (rounded up to the nearest whole share) shall be designated
Shares-in-Trust and, in accordance with the provisions of Section 2 hereof,
transferred automatically and by operation of law to a Share Trust to be held in
accordance with that Section 2, and (z) the Prohibited Owner shall submit such
number of Equity Shares to the Trust for registration in the name of the Share
Trust. Such transfer to a Share Trust and the designation of shares as
Shares-in-Trust shall be effective as of the close of business on the business
day prior to the date of the Transfer or Non-Transfer Event, as the case may be.
(2) If, notwithstanding the other provisions contained in this Section 1,
at any time after the date of the Initial Public Offering and prior to the
Restriction Termination Date, there is a purported Transfer or Non-Transfer
Event that, if effective, would (i) result in the Equity Shares being
beneficially owned by fewer than 100 Persons (determined without reference to
any rules of attribution), (ii) result in the Trust being "closely held" within
the meaning of Section 856(h) of the Code, or (iii) cause the Trust to
Constructively Own 10% or more of the ownership interests in a tenant of the
Trust's or the Partnership's real property, within the meaning of Section
856(d)(2)(B) of the Code, then (x) the purported transferee shall not acquire
any right or interest (or, in the case of a Non-Transfer Event, the person
holding record title of the Equity Shares with respect to which such
Non-Transfer Event occurred, shall cease to own any right or interest) in such
number of Equity Shares, the ownership of which by such purported transferee or
record holder would
(A) result in the Equity Shares being beneficially owned by fewer than 100
Persons (determined without reference to any rules of attribution),
(B) result in the Trust being "closely held" within the meaning of Section
856(h) of the Code or
(C) cause the Trust to Constructively Own 10% or more of the ownership
interests in a tenant of the Trust's or the Partnership's real property, within
the meaning of Section 856(d)(2)(B) of the Code, (y) such number of Equity
Shares (rounded up to the nearest whole share) shall be designated
Shares-in-Trust and, in accordance with the provisions of Section 2 hereof,
transferred automatically and by operation of law to the Share Trust to be held
in accordance with that Section 2 and (z) the Prohibited Owner shall submit such
number of Equity Shares to the Trust for registration in the name of the Share
Trust. Such transfer to a Share Trust and the designation of shares as
Shares-in-Trust shall be effective as of the close of business on the business
day prior to the date of the Transfer or Non-Transfer Event, as the case may be.
(D) Remedies For Breach. If the Trust, or its designees, shall at any time
determine in good faith that a Transfer has taken place in violation of Section
1(B) hereof or that a Person intends to acquire or has attempted to acquire
Beneficial Ownership or Constructive Ownership of any Equity Shares in violation
of Section 1(B) hereof, the Trust shall take such action as it deems advisable
to refuse to give effect to or to prevent such Transfer or acquisition,
including, but not limited to, refusing to give effect to such Transfer on the
books of the Trust or instituting proceedings to enjoin such Transfer or
acquisition.
(E) Notice of Restricted Transfer. Any Person who acquires or attempts to
acquire Equity Shares in violation of Section 1(B) hereof, or any Person who
owned Equity Shares that were transferred to the Share Trust pursuant to the
provisions of Section 1(C) hereof, shall immediately give written notice to the
Trust of such event and shall provide to the Trust such other information as the
Trust may request in order to determine the effect, if any, of such Transfer or
Non-Transfer Event, as the case may be, on the Trust's status as a REIT.
(F) Owners Required To Provide Information. From the date of the Initial
Public Offering and prior to the Restriction Termination Date:
(1) Every Beneficial Owner or Constructive Owner of more than 5%, or such
lower percentages as required pursuant to regulations under the Code, of the
outstanding Equity Shares of the Trust shall, within 30 days after December 31
of each year, provide to the Trust a written statement or affidavit stating the
name and address of such Beneficial Owner or Constructive Owner, the number of
Equity Shares Beneficially Owned or Constructively Owned, and a description of
how such shares are held. Each such Beneficial Owner or Constructive Owner shall
provide to the Trust such additional information as the Trust may request in
order to determine the effect, if any, of such Beneficial Ownership or
Constructive Ownership on the Trust's status as a REIT and to ensure compliance
with the Ownership Limit.
2) Each Person who is a Beneficial Owner or Constructive Owner of Equity
Shares and each Person (including the shareholder of record) who is holding
Equity Shares for a Beneficial Owner or Constructive Owner shall provide to the
Trust a written statement or affidavit stating such information as the Trust may
request in order to determine the Trust's status as a REIT and to ensure
compliance with the Ownership Limit.
(G) Exception to Ownership Limit. The Ownership Limit shall not apply to
the acquisition of Equity Shares by an underwriter that participates in a public
offering of such shares, for a period of 90 days following the purchase by such
underwriter of such shares. In addition, the Board of Trustees, upon receipt of
advice of counsel or other evidence satisfactory to the Board of Trustees, in
its sole and absolute discretion, in each case to the effect that the
restrictions contained in Sections 1(B)(3), (4) and (5) hereof will not be
violated and that REIT status will not otherwise be lost, may, in its sole and
absolute discretion, exempt a Person from the Ownership Limit if such Person is
not an individual for purposes of Section 542(a)(2) of the Code, provided that
(i) the Board of Trustees obtains such representations and undertakings from
such Person as are reasonably necessary to ascertain that no individual's
Beneficial Ownership or Constructive Ownership of Equity Shares will violate the
Ownership Limit as a result of the exemption and (ii) such Person agrees that
any violation or attempted violation of the terms of the exemption will result
in a transfer to the Share Trust of Equity Shares pursuant to Section 1(C)
hereof.
(H) New York Stock Exchange Transactions. Notwithstanding any provision
contained herein to the contrary, nothing in this Articles of Amendment and
Restatement shall preclude the settlement of any transaction entered into
through the facilities of the New York Stock Exchange.
Section 2. Shares-in-Trust.
(A) Share Trust. Any Equity Shares transferred to a Share Trust and
designated Shares-in-Trust pursuant to Section 1(C) hereof shall be held for the
exclusive benefit of a Beneficiary. The Trust shall name a Beneficiary of each
Share Trust within five days after discovery of the existence thereof. Any
transfer to a Share Trust, and subsequent designation of Equity Shares as
Shares-in-Trust, pursuant to Section 1(C) hereof shall be effective as of the
close of business on the business day prior to the date of the Transfer or
Non-Transfer Event that results in the transfer to the Share Trust.
Shares-in-Trust shall remain issued and outstanding Equity Shares of the Trust
and shall be entitled to the same rights and privileges on identical terms and
conditions as are all other issued and outstanding Equity Shares of the same
class and series. When transferred to a Permitted Transferee in accordance with
the provisions of Section 2(E) hereof, such Shares-in-Trust shall cease to be
designated as Shares-in-Trust.
(B) Dividend Rights. The Share Trust, as record holder of Shares-in-Trust,
shall be entitled to receive all dividends and distributions as may be declared
by the Board of Trustees on such Equity Shares and shall hold such dividends or
distributions in trust for the benefit of the Beneficiary. The Prohibited Owner
with respect to Shares-in-Trust shall repay to the Share Trust the amount of any
dividends or distributions received by it that (i) are attributable to any
Equity Shares designated Shares-in-Trust and (ii) the record date for which was
on or after the date that such shares became Shares-in-Trust. The Trust shall
take all measures that it determines reasonably necessary to recover the amount
of any such dividend or distribution paid to a Prohibited Owner, including, if
necessary, withholding any portion of future dividends or distributions payable
on Equity Shares Beneficially Owned or Constructively Owned by the Person who,
but for the provisions of Section 1(C) hereof, would Constructively Own or
Beneficially Own the Shares-in-Trust; and, as soon as reasonably practicable
following the Trust's receipt or withholding thereof, shall pay over to the
Share Trust for the benefit of the Beneficiary the dividends so received or
withheld, as the case may be.
(C) Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of, or any distribution of the assets of,
the Trust, each holder of Shares-in-Trust shall be entitled to receive, ratably
with each other holder of Equity Shares of the same class or series, that
portion of the assets of the Trust that is available for distribution to the
holders of such class and series of Equity Shares. The Share Trust shall
distribute to the Prohibited Owner the amounts received upon such liquidation,
dissolution or winding up, or distribution; provided, however, that the
Prohibited Owner shall not be entitled to receive amounts pursuant to this
Section 2(C) in excess of (i) in the case of a purported Transfer in which the
Prohibited Owner gave value for Equity Shares and which Transfer resulted in the
transfer of the shares to the Share Trust, the price per share, if any, such
Prohibited Owner paid for the Equity Shares and (ii) in the case of a
Non-Transfer Event or Transfer in which the Prohibited Owner did not give value
for such shares (e.g., if the shares were received through a gift or devise) and
which Non-Transfer Event or Transfer, as the case may be, resulted in the
transfer of shares to the Share Trust, the price per share equal to the Market
Price on the date of such Non-Transfer Event or Transfer. Any remaining amount
in such Share Trust shall be distributed to the Beneficiary.
(D) Voting Rights. The Share Trustee shall be entitled to vote all
Shares-in-Trust. Any vote by a Prohibited Owner as a holder of Equity Shares
prior to the discovery by the Trust that the Equity Shares are Shares-in-Trust
shall, subject to applicable law, be rescinded and shall be void ab initio with
respect to such Shares-in-Trust and the Prohibited Owner shall be deemed to have
given, as of the close of business on the business day prior to the date of the
purported Transfer or Non-Transfer Event that results in the transfer to the
Share Trust of Equity Shares under Section 1(C) hereof, an irrevocable proxy to
the Share Trustee to vote the Shares-in-Trust in the manner in which the Share
Trustee, in its sole and absolute discretion, desires; provided, however, that
if the Trust has already taken irreversible trust action, the Share Trustee
shall not have the authority to reclassify and recast such vote.
(E) Designation of Permitted Transferee. The Share Trustee shall have the
exclusive and absolute right to designate a Permitted Transferee of any and all
Shares-in-Trust. In an orderly fashion so as not to materially adversely affect
the Market Price of the Shares-in-Trust, the Share Trustee shall designate any
Person as Permitted Transferee, provided, however, that (i) the Permitted
Transferee so designated purchases for valuable consideration (whether in a
public or private sale), at a price as set forth in Section 2(G) hereof, the
Shares-in-Trust and (ii) the Permitted Transferee so designated may acquire such
Shares-in-Trust without such acquisition resulting in a transfer to a Share
Trust and the redesignation of such Equity Shares so acquired as Shares-in-Trust
under Section 1(C) hereof. Upon the designation by the Share Trustee of a
Permitted Transferee in accordance with the provisions of this Section 2(E), the
Share Trustee shall (i) cause to be transferred to the Permitted Transferee that
number of Shares-in-Trust acquired by the Permitted Transferee, (ii) cause to be
recorded on the books of the Trust that the Permitted Transferee is the holder
of record of such number of Equity Shares, (iii) cause the Shares-in-Trust to be
canceled and (iv) distribute to the Beneficiary any and all amounts held with
respect to the Shares-in-Trust after making the payment to the Prohibited Owner
pursuant to Section 2(F) hereof.
(F) Compensation to Record Holder of Equity Shares that Become
Shares-in-Trust. Any Prohibited Owner shall be entitled (following discovery of
the Shares-in-Trust and subsequent designation of the Permitted Transferee in
accordance with Section 2(E) hereof or following the acceptance of the offer to
purchase such shares in accordance with Section 2(G) hereof) to receive from the
Share Trustee following the sale or other disposition of such Shares-in-Trust
the lesser of (i) in the case of (a) a purported Transfer in which the
Prohibited Owner gave value for Equity Shares and which Transfer resulted in the
transfer of the shares to the Share Trust, the price per share, if any, such
Prohibited Owner paid for the Equity Shares, or (b) a Non-Transfer Event or
Transfer in which the Prohibited Owner did not give value for such shares (e.g.,
if the shares were received through a gift or devise) and which Non-Transfer
Event or Transfer, as the case may be, resulted in the transfer of shares to the
Share Trust, the price per share equal to the Market Price on the date of such
Non-Transfer Event or Transfer and (ii) the price per share received by the
Share Trustee from the sale or other disposition of such Shares-in-Trust in
accordance with Section 2(E) hereof. Any amounts received by the Share Trustee
in respect of such Shares-in-Trust and in excess of such amounts to be paid the
Prohibited Owner pursuant to this Section 2(F) shall be distributed to the
Beneficiary in accordance with the provisions of Section 2(E) hereof. Each
Beneficiary and Prohibited Owner waive any and all claims that they may have
against the Share Trustee and the Share Trust arising out of the disposition of
Shares-in-Trust, except for claims arising out of the gross negligence or
willful misconduct of, or any failure to make payments in accordance with this
Section 2 by, such Share Trustee or the Trust.
(G) Purchase Right in Shares-in-Trust. Shares-in-Trust shall be deemed to
have been offered for sale to the Trust, 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-in-Trust (or, in the case of devise, gift or Non-Transfer Event, the
Market Price at the time of such devise, gift or Non-Transfer Event) and (ii)
the Market Price on the date the Trust, or its designee, accepts such offer. The
Trust shall have the right to accept such offer for a period of ninety days
after the later of (i) the date of the Non-Transfer Event or purported Transfer
that resulted in such Shares-in-Trust and (ii) the date the Trust determines in
good faith that a Transfer or Non-Transfer Event resulting in Shares-in-Trust
has occurred, if the Trust does not receive a notice of such Transfer or
Non-Transfer Event pursuant to Section 1(E) hereof. Section 3. Remedies Not
Limited. Subject to Section 1(H) hereof, nothing contained in this Article VII
shall limit the authority of the Trust to take such other action as it deems
necessary or advisable to protect the Trust and the interests of its
shareholders by preservation of the Trust's status as a REIT and to ensure
compliance with the Ownership Limit.
Section 4. Ambiguity. In the case of an ambiguity in the application of any
of the provisions of Article VII, including any definition contained in Section
1(A) hereof, the Board of Trustees shall have the power to determine the
application of the provisions of this Article VII with respect to any situation
based on the facts known to it.
Section 5. Legend. Each certificate for Equity Shares shall bear
substantially the following legend: "The [Common or Preferred] Shares
represented by this certificate are subject to restrictions on transfer. Subject
to certain further restrictions and except as provided in the Articles of
Amendment and Restatement of the Trust, no Person may (i) Beneficially or
Constructively Own Common Shares in excess of 9.9% of the number of outstanding
Common Shares, (ii) Beneficially or Constructively Own Preferred Shares of any
class or series of Preferred Shares in excess of 9.9% of the number of
outstanding Preferred Shares of such class or series, (iii) Beneficially Own
Equity Shares that would result in the Equity Shares being beneficially owned by
fewer than 100 Persons (determined without reference to any rules of
attribution), (iv) Beneficially Own Equity Shares that would result in the Trust
being "closely held" under Section 856(h) of the Internal Revenue Code of 1986,
as amended (the "Code"), or (v) Constructively Own Equity Shares that would
cause the Trust to Constructively Own 10% or more of the ownership interests in
a tenant of the Trust's or the Partnership's real property, within the meaning
of Section 856(d)(2)(B) of the Code. Any Person who attempts to Beneficially or
Constructively Own shares of Equity Shares in excess of the above limitations
must immediately notify the Trust in writing. If any restrictions above are
violated, the Equity Shares represented hereby will be transferred automatically
to a Share Trust and shall be designated Shares-in-Trust to a trustee of a 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. All capitalized terms in
this legend have the meanings defined in the Trust's Articles of Amendment and
Restatement, as the same may be further amended from time to time, a copy of
which, including the restrictions on transfer, will be sent without charge to
each shareholder who so requests. Such requests must be made to the Secretary of
the Trust at its principal office or to the transfer agent."
In place of the foregoing legend, the certificate may state that the Trust
will furnish a full statement about certain restrictions or transferability to a
shareholder on request and without charge.
Section 6. Severability. If any provision of this Article VII or any
application of any such provision is determined to be invalid by any federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
Section 7. Non-Waiver. No delay or failure on the part of the Trust or the
Board of Trustees in exercising any right hereunder shall operate as a waiver of
any right of the Trust or the Board of Trustees, as the case may be, except to
the extent specifically waived in writing.
ARTICLE VIII
SHAREHOLDERS
Section 1.Meetings. There shall be an annual meeting of the shareholders,
to be held on proper notice at such time (after the delivery of the annual
report) and convenient location as shall be determined by or in the manner
prescribed in the Bylaws, for the election of the Trustees, if required, and for
the transaction of any other business within the powers of the Trust. Except as
otherwise provided in this Articles of Amendment and Restatement, special
meetings of shareholders may be called in the manner provided in the Bylaws. If
there are no Trustees, the officers of the Trust shall promptly call a special
meeting of the shareholders entitled to vote for the election of successor
Trustees. Any meeting may be adjourned and reconvened as the Trustees determine
or as provided in the Bylaws.
Section 2. Voting Rights. Subject to the provisions of any class or series
of Shares then outstanding, the shareholders shall be entitled to vote only on
the following matters: (a) termination of REIT status as provided in Article V,
Section (1)(C), (b) election of Trustees as provided in Article V, Section 2(A)
and the removal of Trustees as provided in Article V, Section 3; (c) amendment
of the Articles of Amendment and Restatement as provided in Article X; (d)
termination of the Trust as provided in Article XII, Section 2; (e) merger or
consolidation of the Trust, or the sale or disposition of substantially all of
the Trust Property (as hereinafter defined), as provided in Article XI; and (f)
such other matters with respect to which a vote of the shareholders is required
by applicable law or the Board of Trustees has adopted a resolution declaring
that a proposed action is advisable and directing that the matter be submitted
to the shareholders for approval or ratification. Except with respect to the
foregoing matters, no action taken by the shareholders at any meeting shall in
any way bind the Board of Trustees.
Section 3. Preemptive and Appraisal Rights. Except as may be provided by
the Board of Trustees in setting the terms of classified or reclassified Shares
pursuant to Article VI, Section 4, no holder of Shares shall, as such holder,
(a) have any preemptive or preferential right to purchase or subscribe for any
additional Shares of the Trust or any other security of the Trust that it may
issue or sell or (b), except as expressly required by Title 8, have any right to
require the Trust to pay him the fair value of his Shares in an appraisal or
similar proceeding.
Section 4. Extraordinary Actions. Except as specifically provided in
Article V, Sections 1(C) and 3, Article X, Sections 2 and 3, and Article XII,
Section 2 of this Articles of Amendment and Restatement, if the provisions of
applicable law require a vote of holders of Shares entitled to be cast on a
matter or action that is greater than a majority but such law permits the
Articles of Amendment and Restatement to reduce such voting requirement, any
such matter or action shall be effective and valid if taken or authorized by the
affirmative vote of holders of Shares entitled to cast a majority of all the
votes entitled to be cast on the matter or action.
Section 5. Board Approval. The submission of any action to the shareholders
for their consideration shall first be approved as advised by the Board of
Trustees.
Section 6. Action By Shareholders Without a Meeting. The Bylaws may provide
that any action required or permitted to be taken by the shareholders may be
taken without a meeting by the written consent of the shareholders entitled to
cast a sufficient number of votes to approve the matter as required by statute,
the Articles of Amendment and Restatement or the Bylaws, as the case may be.
ARTICLE IX
LIABILITY LIMITATION, INDEMNIFICATION
AND TRANSACTIONS WITH THE TRUST
Section 1. Limitation of Shareholder Liability. No shareholder shall be
liable for any debt, claim, demand, judgment or obligation of any kind of,
against or with respect to the Trust by reason of his being a shareholder, nor
shall any shareholder be subject to any personal liability whatsoever, in tort,
contract or otherwise, to any person in connection with the property or the
affairs of the Trust by reason of his being a shareholder.
Section 2. Limitation of Trustee and Officer Liability. To the maximum
extent that Maryland law in effect from time to time permits limitation of the
liability of trustees and officers of a REIT, no Trustee or officer of the Trust
shall be liable to the Trust or to any shareholder for money damages. Neither
the amendment nor repeal of this Section, nor the adoption or amendment of any
other provision of the Articles of Amendment and Restatement or Bylaws
inconsistent with this section, shall apply to or affect in any respect the
applicability of the preceding sentence with respect to any act or failure to
act that occurred prior to such amendment, repeal or adoption. In the absence of
any Maryland statute limiting the liability of trustees and officers of a
Maryland REIT for money damages in a suit by or on behalf of the Trust or by any
shareholder, no Trustee or officer of the Trust shall be liable to the Trust or
to any shareholder for money damages except to the extent that (a) the Trustee
or officer actually received an improper benefit or profit in money, property or
services, for the amount of the benefit or profit in money, property or services
actually received; or (b) a judgment or other final adjudication adverse to the
Trustee or officer is entered in a proceeding based on a finding in the
proceeding that the Trustee's or officer's action or failure to act was the
result of active and deliberate dishonesty and was material to the cause of
action adjudicated in the proceeding.
Section 3. Express Exculpatory Clauses in Instruments. Neither the
shareholders nor the Trustees, officers, employees or agents of the Trust shall
be liable under any written instrument creating an obligation of the Trust, and
all Persons shall look solely to the Trust Property for the payment of any claim
under or for the performance of that instrument. The omission of the foregoing
exculpatory language from any instrument shall not affect the validity or
enforceability of such instrument and shall not render any Shareholder, Trustee,
officer, employee or agent liable thereunder to any third party, nor shall the
Trustees or any officer, employee or agent of the Trust be liable to anyone for
such omission. As used in this Articles of Amendment and Restatement, "Trust
Property" means any and all property, real, personal or otherwise, tangible or
intangible, which is transferred or conveyed to the Trust or the Trustees
(including all rents, income, profits and gains therefrom), which is owned or
held by, or for the account of, the Trust or the Trustees.
Section 4. Indemnification. The Trust shall have the power, to the maximum
extent permitted by Maryland law in effect from time to time, to obligate itself
to indemnify, and to pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to, (a) any individual who is a present or former
shareholder, Trustee or officer of the Trust or (b) any individual who, while a
Trustee of the Trust and at the request of the Trust, serves or has served as a
director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
from and against any claim or liability to which such person may become subject
or which such person may incur by reason of his status as a present or former
shareholder, Trustee or officer of the Trust. The Trust shall have the power,
with the approval of its Board of Trustees, to provide such indemnification and
advancement of expenses to a person who served as a predecessor of the Trust in
any of the capacities described in (a) or (b) above, and to any employee or
agent of the Trust or a predecessor of the Trust.
Section 5. Transactions Between the Trust and its Trustees, Officers,
Employees and Agents. Subject to any express restrictions in the Articles of
Amendment and Restatement or adopted by the Trustees in the Bylaws or by
resolution, the Trust may enter into any contract or transaction of any kind
with any person, including any Trustee, officer, employee or agent of the Trust
or any person affiliated with a Trustee, officer, employee or agent of the
Trust, whether or not any of them has a financial interest in such transaction.
ARTICLE X
AMENDMENTS
Section 1. General. The Trust reserves the right from time to time to
make any amendment to the Articles of Amendment and Restatement, now or
hereafter authorized by law, including any amendment altering the terms or
contract rights, as expressly set forth in the Articles of Amendment and
Restatement, of any Shares. All rights and powers conferred by this Articles of
Amendment and Restatement on shareholders, Trustees and officers are granted
subject to this reservation. An amendment to the Articles of Amendment and
Restatement (a) shall be signed and acknowledged by at least a majority of the
Trustees or an officer duly authorized by at least a majority of the Trustees,
(b) shall be filed for record with SDAT as provided in Article XIII, Section 5
and (c) shall become effective as of the later of the time the SDAT accepts the
amendment for record or the time established in the amendment, not to exceed 30
days after the amendment is accepted for record. All references to the Articles
of Amendment and Restatement shall include all amendments thereto.
Section 2. By Trustees. The Trustees by a two-thirds vote may amend the
Articles of Amendment and Restatement from time to time in the manner provided
by Title 8, without any action by the shareholders, to qualify as a REIT under
the Code or under Title 8.
Section 3. By Shareholders. Other than amendments pursuant to Section 2
of this Article X and Section 1 of Article VI, any amendment to the Declaration
of Trust shall be valid only if approved by the affirmative vote of at least a
majority of all the votes entitled to be cast on the matter, except that any
amendment to Article V, Article VII, Article X, Sections 2 and 3, and Article
XII, Section 2 of this Articles of Amendment and Restatement shall be valid only
if approved by the affirmative vote of two-thirds of all the votes entitled to
be cast on the matter; but in each case only after due authorization, advice and
approval of the Board of Trustees.
ARTICLE XI
MERGER, CONSOLIDATION OR SALE OF TRUST PROPERTY
Subject to the provisions of any class or series of Shares at the time
outstanding, the Trust may (a) merge the Trust into another entity, (b)
consolidate the Trust with one or more other entities into a new entity or (c)
sell, lease, exchange or otherwise transfer all or substantially all of the
Trust Property. Any such action must be approved as advised by the Board of
Trustees and, after notice to all shareholders entitled to vote on the matter,
by the affirmative vote of a majority of all the votes entitled to be cast on
the matter.
ARTICLE XII
DURATION AND TERMINATION OF TRUST
Section 1. Duration. The Trust shall continue perpetually unless terminated
pursuant to Section 2 of this Article XII or pursuant to any applicable
provision of Title 8.
Section 2. Termination.
(a) Subject to the provision of any class or series of Shares
at the time outstanding, the Trust may be terminated at any meeting of
shareholders, by the affirmative vote of two thirds of all the votes entitled to
be cast on the matter, after due authorization, advice and approval thereof by
the Board of Trustees. Upon the termination of the Trust:
(i) The Trust shall carry on no business except for the purpose of winding
up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust and all
of the powers of the Trustees under the Articles of Amendment and Restatement
shall continue, including the powers to fulfill or discharge the Trust's
contracts, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property to one or
more persons at public or private sale for consideration that may consist in
whole or in part of cash, securities or other property of any kind, discharge or
pay its liabilities and do all other acts appropriate to liquidate its business.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and agreements as it
deems necessary for its protection, the Trust may distribute the remaining Trust
Property among the shareholders so that after payment in full or the setting
apart for payment of such preferential amounts, if any, to which the holders of
any Shares at the time outstanding shall be entitled, the remaining Trust
Property shall, subject to any participating or similar rights of Shares at the
time outstanding, be distributed ratably among the holders of Common Shares at
the time outstanding.
(b) After termination of the Trust, the liquidation of its business and the
distribution to the shareholders as herein provided, a majority of the Trustees
shall execute and file with the Trust's records a document certifying that the
Trust has been duly terminated, and the Trustees shall be discharged from all
liabilities and duties hereunder, and the rights and interests of all
shareholders shall cease.
ARTICLE XIII
MISCELLANEOUS
Section 1. Governing Law. The Articles of Amendment and Restatement is
executed and delivered in the State of Maryland with reference to the laws
thereof, and the rights of all parties and the validity, construction and effect
of every provision hereof shall be subject to and construed according to the
laws of the State of Maryland without regard to conflicts of laws provisions
thereof.
Section 2. Reliance by Third Parties. Any certificate shall be final
and conclusive as to any person dealing with the Trust if executed by the
Secretary or an Assistant Secretary of the Trust or a Trustee, and if certifying
to: (a) the number or identity of Trustees, officers of the Trust or
shareholders; (b) the due authorization of the execution of any document; (c)
the action or vote taken, and the existence of a quorum, at a meeting of the
Board of Trustees or shareholders; (d) a copy of the Articles of Amendment and
Restatement or of the Bylaws as a true and complete copy as then in force; (e)
an amendment to the Articles of Amendment and Restatement; (f) the termination
of the Trust; or (g) the existence of any fact relating to the affairs of the
Trust. No purchaser, lender, transfer agent or other person shall be bound to
make any inquiry concerning the validity of any transaction purporting to be
made by the Trust on its behalf or by any officer, employee or agent of the
Trust.
Section 3. Severability.
(A) The provisions of the Articles of Amendment and
Restatement are severable, and if the Board of Trustees shall determine, with
the advice of counsel, that any one or more of such provisions (the "Conflicting
Provisions") are in conflict with the Code, Title 8 or other applicable federal
or state laws, the Conflicting Provisions, to the extent of the conflict, shall
be deemed never to have constituted a part of the Articles of Amendment and
Restatement, even without any amendment of the Articles of Amendment and
Restatement pursuant to Article X and without affecting or impairing any of the
remaining provisions of the Articles of Amendment and Restatement or rendering
invalid or improper any action taken or omitted prior to such determination. No
Trustee shall be liable for making or failing to make such a determination. In
the event of any such determination by the Board of Trustees, the Board shall
amend the Articles of Amendment and Restatement in the manner provided in
Article X, Section 2.
(B) If any provision of the Articles of Amendment and
Restatement shall be held invalid or unenforceable in any jurisdiction, such
holding shall apply only to the extent of any such invalidity or
unenforceability and shall not in any manner affect, impair or render invalid or
unenforceable such provision in any other jurisdiction or any other provision of
the Articles of Amendment and Restatement in any jurisdiction.
Section 4. Construction. In the Articles of Amendment and Restatement,
unless the context otherwise requires, words used in the singular or in the
plural include both the plural and singular and words denoting any gender
include all genders. The title and headings of different parts are inserted for
convenience and shall not affect the meaning, construction or effect of the
Articles of Amendment and Restatement. In defining or interpreting the powers
and duties of the Trust and its Trustees and officers, reference may be made by
the Trustees or officers, to the extent appropriate and not inconsistent with
the Code or Title 8, to Titles 1 through 3 of the Corporations and Associations
Article of the Annotated Code of Maryland. In furtherance and not in limitation
of the foregoing, in accordance with the provisions of Title 3, Subtitles 6 and
7, of the Corporations and Associations Article of the Annotated Code of
Maryland, the Trust shall be included within the definition of "corporation" for
purposes of such provisions.
Section 5. Recordation. The Declaration of Trust, inclusive of these
Articles of Amendment and Restatement, and any amendment hereto shall be filed
for record with the SDAT and may also be filed or recorded in such other places
as the Trustees deem appropriate, but failure to file for record the Declaration
of Trust, inclusive of these Articles of Amendment and Restatement, or any
amendment hereto, in any office other than in the State of Maryland shall not
affect or impair the validity or effectiveness of the Declaration of Trust or
any part thereof. A restated Declaration of Trust shall, upon filing, be
conclusive evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Declaration of Trust and the various
amendments thereto.
SECOND: These Articles of Amendment and Restatement have been duly adopted
by the Board of Trustees and approved by the Shareholders of the Trust as
required by law.
THIRD: The total number of shares of beneficial interest which the
Trust had authority to issue immediately prior to the filing of these Articles
of Amendment and Restatement was 1,000, all of which were common shares of
beneficial interest, par value $.01 per share. The aggregate par value of all
shares of beneficial interest having par value was $10.00.
The total number of shares of beneficial interest which the Trust has
authority to issue pursuant to these Articles of Amendment and Restatement is
60,000,000, consisting of 50,000,000 common shares of beneficial interest, par
value $.01 per share and 10,000,000 of preferred shares of beneficial interest,
par value $.01 per share. The aggregate par value of all authorized shares of
beneficial interest having par value is $60,000.00.
FOURTH: The undersigned Chairman of the Board of Trustees and Chief
Executive Officer acknowledges these Articles of Amendment and Restatement to be
the trust act of the Trust and, as to all matters or facts required to be
verified under oath, the undersigned Chairman of the Board of Trustees and Chief
Executive Officer acknowledges that, to the best of his knowledge, information
and belief, these matters are true in all material respects and that this
statement is made under the penalties for perjury.
IN WITNESS WHEREOF, the Trust has caused these Articles of Amendment
and Restatement to be signed in its name and on its behalf by its Chairman of
the Board of Trustees and Chief Executive Officer, and attest to by its
Secretary, on this ____ day of July, 1998.
HERSHA HOSPITALITY TRUST
ATTEST:
- ------------------------------ ------------------------------------
Secretary Hasu P. Shah
Chairman of the Board of Trustees
and Chief Executive Officer