SECOND AMENDED AND RESTATED BYLAWS OF
CNL AMERICAN PROPERTIES FUND, INC.
The Bylaws of CNL AMERICAN PROPERTIES FUND, INC., a corporation organized
under the laws of the State of Maryland (the "Company"), having The Corporation
Trust Incorporated as its resident agent located at 32 South Street, Baltimore,
Maryland 21202, are as follows:
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of the Company shall be
located at such place or places as the Board of Directors may designate in the
State of Maryland.
SECTION 2. ADDITIONAL OFFICES. The Company may have additional offices at
such places as the Board of Directors may from time to time determine or the
business of the Company may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE. All meetings of stockholders shall be held at the
principal office of the Company or at such other place within the United States
as shall be stated in the notice of the meeting.
SECTION 2. ANNUAL MEETING. An annual meeting of the stockholders for the
election of Directors, as such term is defined below, and the transaction of any
business within the powers of the Company shall be held upon reasonable notice
and not less than 30 days after delivery of the annual report.
SECTION 3. SPECIAL MEETINGS. Subject to the rights of the holders of any
series of Preferred Shares (as such term is defined in the Company's Articles of
Incorporation, as amended (the "Articles of Incorporation")) to elect additional
Directors under specified circumstances, special meetings of the stockholders
may be called by (i) a majority of the Board of Directors; (ii) a majority of
the Independent Directors (as such term is defined herein); or (iii) the
secretary at the request in writing of stockholders holding outstanding Voting
Shares (as such term is defined in the Articles of Incorporation) representing
at least 10% of all votes entitled to be cast on any issue proposed to be
considered at any such special meeting, not less than 15 nor more than 60 days
after such request is received. Written or printed notice of any special meeting
called pursuant to subsection (iii) will be provided to all stockholders within
ten days after any such request is received, stating the time and place of the
meeting specified in the request, which shall be a time and place convenient to
the stockholders.
SECTION 4. NOTICE. Not less than 15 nor more than 60 days before each
meeting of stockholders, the secretary shall give to each stockholder entitled
to vote at such meeting, and to each stockholder not entitled to vote who is
entitled to notice of the meeting, written or printed notice stating the time
and place of the meeting and, in the case of a special meeting or as otherwise
may be required by statute or these Bylaws, the purpose for which the meeting is
called, either by mail to the address of such stockholder as it appears on the
records of the Company, or by presenting it to such stockholder personally or by
leaving it at his residence or usual place of business. If mailed, such notice
shall be deemed to be given when deposited in the United States mail addressed
to the stockholder at his post office address as it appears on the records of
the Company, with postage thereon prepaid.
SECTION 5. SCOPE OF NOTICE. Any business of the Company may be transacted
at an annual meeting of stockholders without being specifically designated in
the notice, except such business as is required by statute to be stated in such
notice. No business shall be transacted at a special meeting of stockholders
except as specifically designated in the notice.
SECTION 6. QUORUM. At any meeting of stockholders, the presence in person
or by proxy of stockholders holding 50% of the then outstanding shares shall
constitute a quorum; but this section shall not affect any requirement under any
statute, any other provision of these Bylaws, or the Articles of Incorporation
for the vote necessary for the adoption of any measure. If, however, such quorum
shall not be present at any meeting of the stockholders, the stockholders
entitled to vote at such meeting, present in person or by proxy, shall have
power to adjourn the meeting from time to time to a date not more than 120 days
after the original record date without notice other than announcement at the
meeting. At such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting as
originally notified.
SECTION 7. VOTING. A majority of all the votes cast at a meeting of
stockholders duly called and at which a quorum is present shall be sufficient to
elect a Director, notwithstanding the concurrence of the Board of Directors to
such action. Each share may be voted for as many individuals as there are
Directors to be elected and for whose election the share is entitled to be
voted. A majority of the votes cast at a meeting of stockholders duly called and
at which a quorum is present shall be sufficient to approve any other matter
which may properly come before the meeting, unless more than a majority of the
votes cast is required by statute or by the Articles of Incorporation. Unless
otherwise provided in the Articles of Incorporation, each Common Share owned of
record on the applicable record date shall be entitled to one vote on each
matter submitted to a vote at a meeting of stockholders. The Company's Advisor
(as such term is defined in the Articles of Incorporation), the Directors and
any affiliates are prohibited from voting on or consenting to matters submitted
to the stockholders regarding the removal of the Advisor, Directors or any
affiliate or any transaction between the Company and any of them, nor will such
shares be counted in determining a quorum or a majority in such circumstances.
SECTION 8. PROXIES. A stockholder may vote the shares owned of record by
him, either in person or by proxy executed in writing by the stockholder or by
his duly authorized attorney in fact. Such proxy shall be filed with the
secretary of the Company before or at the time of the meeting. No proxy shall be
valid after eleven months from the date of its execution, unless otherwise
provided in the proxy.
SECTION 9. VOTING OF SHARES BY CERTAIN HOLDERS. Shares registered in the
name of a corporation, partnership, trust or other entity, if entitled to be
voted, may be voted by the chief executive officer or a vice president, a
general partner, trustee or other fiduciary thereof, as the case may be, or a
proxy appointed by any of the foregoing individuals, unless some other person
who has been appointed to vote such shares pursuant to a bylaw or a resolution
of the board of directors of such corporation or other entity presents a
certified copy of such bylaw or resolution, in which case such person may vote
such shares. Any trustee or other fiduciary may vote shares registered in his
name as such fiduciary, either in person or by proxy.
Shares of the Company directly or indirectly owned by it shall not be voted
at any meeting and shall not be counted in determining the total number of
outstanding shares entitled to be voted at any given time, unless they are held
by it in a fiduciary capacity, in which case they may be voted and shall be
counted in determining the total number of outstanding shares at any given time.
The Directors may adopt by resolution a procedure by which a stockholder
may certify in writing to the Company that any shares registered in the name of
the stockholder are held for the account of a specific person other than the
stockholder. The resolution shall set forth the class of stockholders who may
make the certification, the purpose for which the certification may be made, the
form of certification and the information to be contained in it, if the
certification is with respect to a record date or closing of the share transfer
books, the time after the record date or closing of the share transfer books
within which the certification must be received by the Company and any other
provisions with respect to the procedure which the Directors consider necessary
or desirable. On receipt of such certification, the person specified in the
certification shall be regarded as, for the purposes set forth in the
certification, the stockholder of record of the specified shares in place of the
stockholder who makes the certification.
SECTION 10. INSPECTORS. At any meeting of stockholders, the chairman of the
meeting may, or upon the request of any stockholder shall, appoint one or more
persons as inspectors for such meeting. Such inspectors shall ascertain and
report the number of shares represented at the meeting based upon their
determination of the validity and effect of proxies, count all votes, report the
results and perform such other acts as are proper to conduct the election and
voting with impartiality and fairness to all the stockholders.
Each report of an inspector shall be in writing and signed by him or by a
majority of them if there is more than one inspector acting at such meeting. If
there is more than one inspector, the report of a majority shall be the report
of the inspectors. The report of the inspector or inspectors on the number of
shares represented at the meeting and the results of the voting shall be prima
facie evidence thereof.
SECTION 11. REPORTS TO STOCKHOLDERS.
(a) Not later than 120 days after the close of each fiscal year of the
Company, the Directors shall deliver or cause to be delivered a report of the
business and operations of the Company during such fiscal year to the
stockholders, containing (i) financial statements prepared in accordance with
generally accepted accounting principles which are audited and reported on by
independent certified public accountants; (ii) the ratio of the costs of raising
capital during the period to the capital raised; (iii) the aggregate amount of
advisory fees and the aggregate amount of other fees paid to the Company's
Advisor and any affiliate of the Advisor by the Company and including fees or
charges paid to the Advisor and any affiliate of the Advisor by third parties
doing business with the Company; (iv) the Operating Expenses (as such term is
defined in the Articles of Incorporation) of the Company, stated as a percentage
of, for a specified period, the average of the aggregate book value of the
assets of the Company invested, directly or indirectly, in Properties and loans
secured by real estate before reserves for depreciation or bad debts or other
similar non-cash reserves are subtracted, computed by taking the average of such
values at the end of each month during such period as a percentage of the total
revenues applicable to such period, less the total expenses applicable to such
period excluding additions to reserves for depreciation, bad debts or other
similar non-cash reserves, and excluding the gain from the sale of the Company's
assets; (v) a report from the Independent Directors that the policies being
followed by the Company are in the best interests of its stockholders and the
basis for such determination; (vi) separately stated, full disclosure of all
material terms, factors, and circumstances surrounding any and all transactions
involving the Company, Directors, Advisors and any Affiliate thereof occurring
in the year for which the annual report is made; and (vii) Distributions, as
such term is defined in the Company's Articles of Incorporation, to the
stockholders for the period, identifying the source of such Distributions, and
if such information is not available at the time of the distribution, a written
explanation of the relevant circumstances will accompany the Distributions (with
the statement as to the source of Distributions to be sent to stockholders not
later than 60 days after the end of the fiscal year in which the distribution
was made) and such further information as the Board of Directors may determine
is required pursuant to any law or regulation to which the Company is subject. A
signed copy of the annual report and the accountant's certificate shall be filed
by the Directors with the State Department of Assessments and Taxation of
Maryland, and with such other governmental agencies as may be required by law
and as the Directors may deem appropriate. Such report shall be submitted at the
annual meeting of stockholders and, within 20 days after such meeting, placed on
file at the Company's principal office.
(b) Not later than 45 days after the end of each of the first three
quarterly periods of each fiscal year and upon written request by a stockholder,
the Directors shall deliver or cause to be delivered an interim report to such
requesting stockholder containing unaudited financial statements for such
quarter and for the period from the beginning of the fiscal year to the end of
such quarter, and such further information as the Directors may determine is
required pursuant to any law or regulation to which the Company is subject.
SECTION 12. NOMINATIONS AND STOCKHOLDER BUSINESS.
(a) Annual Meetings of Stockholders.
(1) With respect to an annual meeting of stockholders,
nominations of persons for election to the Board of Directors and the
proposal of business to be considered by the stockholders may be made only
(i) by or at the direction of the Board of Directors or (ii) by any
stockholder of the Company who was a stockholder of record at the time of
giving of notice, who is entitled to vote at the meeting and who complied
with the notice procedures set forth in this Section 12(a).
(2) For nominations or other business to be properly
brought before an annual meeting by a stockholder pursuant to clause (ii)
of paragraph (a)(1) of this Section 12, the stockholder must have given
timely notice thereof in writing to the secretary of the Company. To be
timely, a stockholder's notice shall be delivered to the secretary at the
principal executive offices of the Company not less than 60 days nor more
than 90 days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 30 days or delayed by more than 60 days
from such anniversary date, notice by the stockholder to be timely must be
so delivered not earlier than the 90th day prior to such annual meeting
and not later than the close of business on the later of the 60th day
prior to such annual meeting or the tenth day following the day on which
public announcement of the date of such meeting is first made. Such
stockholder's notice shall set forth: (i) as to each person whom the
stockholder proposes to nominate for election or re-election as a Director
all information relating to such person that is required to be disclosed
in solicitations of proxies for election of Directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (including such person's written consent
to being named in the proxy statement as a nominee and to serving as a
Director if elected); (ii) as to any other business that the stockholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
stockholder and of the beneficial owner, if any, on whose behalf the
proposal is made; and (iii) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal
is made, the name and address of such stockholder, as they appear on the
Company's books, and of such beneficial owner and the class and number of
shares of the Company which are owned beneficially and of record by such
stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of
Section 12(a)(2) to the contrary, in the event that the number of
Directors to be elected to the Board of Directors is increased and there
is no public announcement naming all of the nominees for Director or
specifying the size of the increased Board of Directors made by the
Company at least 70 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this Section
12(a) shall also be considered timely, but only with respect to nominees
for any new positions created by such increase, if it shall be delivered
to the secretary at the principal executive offices of the Company not
later than the close of business on the tenth day following the day on
which such public announcement is first made by the Company.
(b) Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Company's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which Directors are to be elected pursuant to the Company's
notice of meeting (i) by or at the direction of the Board of Directors or (ii)
provided that the Board of Directors has determined that Directors shall be
elected at such special meeting, by any stockholder of the Company who is a
stockholder of record at the time of giving of notice provided for in this
Section 12(b), who is entitled to vote at the meeting and who complied with the
notice procedures set forth in this Section 12(b). In the event the Company
calls a special meeting of stockholders for the purpose of electing one or more
Directors to the Board of Directors, any such stockholder may nominate a person
or persons (as the case may be) for election to such position as specified in
the Company's notice of meeting, if the stockholder's notice complies with the
requirements of Section 12(a)(2) and is delivered to the secretary at the
principal executive offices of the Company not earlier than the 90th day prior
to such special meeting and not later than the close of business on the later of
the 60th day prior to such special meeting or the tenth day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees proposed by the Directors to be elected at such meeting.
(c) General.
(1) Only such persons who are nominated in accordance
with the procedures set forth in this Section 12 shall be eligible to
serve as Directors and only such business shall be conducted at a meeting
of stockholders as shall have been brought before the meeting in
accordance with the procedures set forth in this Section 12. The presiding
officer of the meeting shall have the power and duty to determine whether
a nomination or any business proposed to be brought before the meeting was
made in accordance with the procedures set forth in this Section 12 and,
if any proposed nomination or business is not in compliance with this
Section 12, to declare that such defective nomination or proposal be
disregarded.
(2) For purposes of this Section 12, "public
announcement" shall mean disclosure in a press release reported by the Dow
Jones News Service, Associated Press or comparable news service or in a
document publicly filed by the Company with the Securities and Exchange
Commission pursuant to Sections 13, 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
(3) Notwithstanding the foregoing provisions of this
Section 12, a stockholder also shall comply with all applicable
requirements of state law and of the Exchange Act and the rules and
regulations thereunder with respect to the matters set forth in this
Section 12. Nothing in this Section 12 shall be deemed to affect any
rights of stockholders to request inclusion of proposals in the Company's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
SECTION 13. VOTING BY BALLOT. Voting on any question or in any
election may be viva voce unless the presiding officer shall order or any
stockholder shall demand that voting be by ballot.
SECTION 14. NO STOCKHOLDER ACTION BY WRITTEN CONSENT. Subject to the
rights of the holders of any series of Preferred Shares to elect additional
Directors under specific circumstances, any action required or permitted to be
taken by the stockholders of the Company must be effected at an annual or
special meeting of stockholders and may not be effected by any consent in
writing by such stockholders.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS; NUMBER; QUALIFICATIONS. The business and
affairs of the Company shall be managed under the direction of its Board of
Directors (also referred to herein as "Director" or "Directors").
Notwithstanding the other requirements set forth herein and in the Articles of
Incorporation, a Director shall be an individual at least 21 years of age who is
not under legal disability. The number of Directors which shall constitute the
whole board shall not be less than three nor more than fifteen. Within such
limits, the actual number of directors which shall constitute the whole board
shall be as fixed from time to time by resolution of the Board of Directors.
SECTION 2. INDEPENDENT DIRECTORS; QUALIFICATIONS. A majority of
Directors of the Company shall be Independent Directors. To qualify as an
independent director, an individual must not be and within the last two years
has not been directly or indirectly associated with the Advisor by virtue of (i)
ownership of an interest in the Advisor or its Affiliates, (ii) employment by
the Advisor or its Affiliates, (iii) service as an officer or director of the
Advisor or its Affiliates, (iv) performance of services, other than as a
Director, for the Company, (v) service as a director or trustee of more than
three real estate investment trusts advised by the Advisor, or (vi) maintenance
of a material business or professional relationship with the Advisor or any of
its Affiliates. A business or professional relationship is considered material
if the gross revenue derived by the Director from the Advisor and Affiliates
exceeds five percent (5%) of either the Director's annual gross revenue during
either of the last two years or the Director's net worth on a fair market value
basis. An indirect relationship shall include circumstances in which a
Director's spouse, parents, children, siblings, mothers- or fathers-in-law,
sons- or daughters-in-law, or brothers- or sisters-in-law is or has been
associated with the Advisor, any of its Affiliates, or the Company.
SECTION 3. REGULAR MEETINGS. A meeting of the Directors shall be
held quarterly in person or by telephone. The Directors may provide, by
resolution, the time and place, either within or without the State of Maryland,
for the holding of regular meetings of the Directors without other notice than
such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of Directors may be
called by or at the request of the chief executive officer or by a majority of
the Directors then in office. The person or persons authorized to call special
meetings of the Directors may fix any place, either within or without the State
of Maryland, as the place for holding any special meeting of the Directors
called by them.
SECTION 5. NOTICE. Notice of any annual, regular or special meeting
shall be given by written notice delivered personally, transmitted by facsimile,
telegraphed or mailed to each Director at his business or residence address.
Personally delivered, facsimile transmitted or telegraphed notices shall be
given at least two days prior to the meeting. Notice by facsimile or telegraph
shall be promptly followed by mailed notice. Notice by mail shall be given at
least five days prior to the meeting. If mailed, such notice shall be deemed to
be given when deposited in the United States mail properly addressed, with
postage thereon prepaid. If given by telegram, such notice shall be deemed to be
given when the telegram is delivered to the telegraph company. Neither the
business to be transacted at, nor the purpose of, any annual, regular or special
meeting of the Directors need be stated in the notice, unless specifically
required by statute or these Bylaws.
SECTION 6. QUORUM. A whole number of Directors equal to at least a
majority of the whole Board of Directors, including a majority of Independent
Directors, shall constitute a quorum for transaction of business at any meeting
of the Directors; provided, that if less than a quorum are present at said
meeting, a majority of the Directors present may adjourn the meeting from time
to time without further notice; and provided further, that if, pursuant to the
Articles of Incorporation or these Bylaws, the vote of a majority of a
particular group of Directors is required for action, a quorum must also include
a majority of such group.
The Directors present at a meeting which has been duly called and
convened may continue to transact business until adjournment, notwithstanding
the withdrawal of enough Directors to leave less than a quorum.
SECTION 7. VOTING. The action of the majority of the Directors
present at a meeting at which a quorum is present shall be the action of the
Directors, unless the concurrence of a particular group of Directors or of a
greater proportion is required for such action by applicable statute, the
Articles of Incorporation or these Bylaws.
SECTION 8. TELEPHONE MEETINGS. Directors may participate in a
meeting by means of a conference telephone or similar communications equipment
if all persons participating in the meeting can hear each other at the same
time. Participation in a meeting by these means shall constitute presence in
person at the meeting.
SECTION 9. INFORMAL ACTION BY DIRECTORS. Any action required or
permitted to be taken at any meeting of the Directors may be taken without a
meeting, if a consent in writing to such action is signed by each Director and
such written consent is filed with the minutes of proceedings of the Directors.
SECTION 10. VACANCIES. If for any reason any or all the Directors
cease to be Directors, such event shall not terminate the Company or affect
these Bylaws or the powers of the remaining Directors hereunder (even if fewer
than three Directors remain). Any vacancy created by an increase in the number
of Directors shall be filled, at any regular meeting or at any special meeting
called for that purpose, by a majority of the Directors. Any other vacancy shall
be filled at any annual meeting or at any special meeting of the stockholders
called for that purpose, by a majority of the Common Shares outstanding and
entitled to vote. Any individual so elected as Director shall hold office for
the unexpired term of the Director he is replacing. In the event of a vacancy
among the Independent Directors, the remaining Independent Directors shall
nominate replacements for such position.
SECTION 11. COMPENSATION. Each Director is entitled to receive
$12,000 annually for serving on the Board of Directors, as well as fees of
$1,000 per meeting of the Board of Directors attended and $500 for each
telephonic meeting of the Board of Directors in which the Director participates.
The Director serving as Chair of the Audit Committee is entitled to receive fees
of $1,500 per meeting of the Audit Committee attended and $500 per telephonic
meeting of the Audit Committee in which the Director participates. The Director
serving as chair of any other Committee is entitled to receive fees of $1,000
per meeting of such committee attended and $500 per telephonic meeting of such
committee in which the Director participates. Each other Director is entitled to
receive fees of $1,000 per meeting of the Audit Committee attended, $1,000 per
meeting of any Special Committee of the Board of Directors attended, $750 per
meeting of any other committee attended and $500 for each telephonic meeting of
any committee in which the Director participates.
SECTION 12. ELECTION AND REMOVAL OF DIRECTORS; TERM. The
stockholders may, at any time, remove any Director in the manner provided in the
Articles of Incorporation. The term of service for a Director is one year,
without limit on successive terms.
SECTION 13. LOSS OF DEPOSITS. No Director shall be liable for any
loss which may occur by reason of the failure of the bank, trust company,
savings and loan association, or other institution with which moneys or shares
have been deposited.
SECTION 14. SURETY BONDS. Unless required by law, no Director shall
be obligated to give any bond or surety or other security for the performance of
any of his duties.
SECTION 15. RELIANCE. Each Director, officer, employee and agent of
the Company shall, in the performance of his duties with respect to the Company,
be fully justified and protected with regard to any act or failure to act in
reliance in good faith upon the books of account or other records of the
Company, upon an opinion of counsel or upon reports made to the Company by any
of its officers or employees or by the advisers, accountants, appraisers or
other experts or consultants selected by the Directors or officers of the
Company, regardless of whether such counsel or expert may also be a Director.
SECTION 16. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS. The Directors shall have no responsibility to devote their full time to
the affairs of the Company. Any Director, officer, employee or agent of the
Company, in his personal capacity or in a capacity as an affiliate, employee, or
agent of any other person, or otherwise, may have business interests and engage
in business activities similar to or in addition to those of or relating to the
Company, subject to the adoption of any policies relating to such interests and
activities adopted by the Directors and applicable law.
ARTICLE IV
COMMITTEES
SECTION 1. NUMBER, TENURE AND QUALIFICATIONS. The Directors may, by
resolution or resolutions passed by a majority of the whole Board, appoint from
among its members an Audit Committee and other committees, composed of two or
more Directors to serve at the pleasure of the Directors. At such time, if any,
as the Shares become listed on a national securities exchange or
over-the-counter market, the Company will form a Compensation Committee. At
least a majority of the members of each committee of the Company's Board of
Directors, or if a committee numbers two or less, both directors must be
Independent Directors.
SECTION 2. POWERS. The Directors may delegate to committees
appointed under Section 1 of this Article IV any of the powers of the Board of
Directors; provided, however, that the Directors may not delegate to committee
the power to declare dividends or other Distributions, elect Directors, issue
Preferred or Common Shares (as such terms are defined in the Articles of
Incorporation) (hereinafter "Shares") in the Company other than as provided in
the next sentence, recommend to the stockholders any action which requires
stockholder approval, amend the Bylaws or approve any merger or share exchange
which does not require stockholder approval. If the Board of Directors has given
general authorization for the issuance of Shares in the Company to a committee
of the Board, in accordance with a general formula or method specified by the
Board by resolution or by adoption of an option or other plan, such committee
may fix the terms of the Shares subject to classification or reclassification
and the terms on which the shares may be issued, including all terms and
conditions required or permitted to be established or authorized by the Board of
Directors.
SECTION 3. COMMITTEE PROCEDURES. Each committee may fix rules of
procedure for its business. A majority of the members of a committee shall
constitute a quorum for the transaction of business and the action of a majority
of those present at a meeting at which a quorum is present shall be action of
the committee. In the absence of any member of any committee, the members
thereof present at any meeting, whether or not they constitute a quorum, may
appoint another Director to act in the place of such absent member, subject to
the requirements of Section 1 of this Article IV. Any action required or
permitted to be taken at a meeting of a committee may be taken without a
meeting, if a unanimous written consent which sets forth the action to be taken
is signed by each member of the committee and filed with the minutes of the
proceedings of such committee. The members of a committee may conduct any
meeting thereof by means of a conference telephone or similar communications
equipment if all persons participating in the meeting can hear each other at the
same time. Participation in a meeting by such means shall constitute presence in
person at the meeting.
ARTICLE V
OFFICERS
SECTION 1. GENERAL PROVISIONS. The officers of the Company may
consist of a chief executive officer, a president, a chief operating officer,
one or more vice presidents, a chief financial officer and treasurer, a
secretary, and one or more assistant secretaries, as determined by the
Directors. In addition, the Directors may from time to time appoint such other
officers with such powers and duties as they shall deem necessary or desirable.
The officers of the Company shall be elected annually by the Directors at the
first meeting of the Directors held after each annual meeting of stockholders.
If the election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as may be convenient. Each officer shall hold
office until his or her successor is elected and qualifies or until his or her
death, resignation or removal in the manner hereinafter provided. Any two or
more offices except (i) chief executive officer and vice president, or (ii)
president and vice president, may be held by the same person, although any
person holding more than one office in the Company may not act in more than one
capacity to execute, acknowledge or verify an instrument required by law to be
executed, acknowledged or verified by more than one officer.
In their discretion, the Directors may leave unfilled any office
except that of the chief executive officer, the president, the treasurer and the
secretary. Election of an officer or agent shall not of itself create contract
rights between the Company and such officer or agent.
SECTION 2. REMOVAL AND RESIGNATION. Any officer or agent of the
Company may be removed by a majority of the members of the whole Board of
Directors, with or without cause, if in their judgment the best interests of the
Company would be served thereby, but such removal shall be without prejudice to
the contract rights, if any, of the person so removed. Any officer of the
Company may resign at any time by giving written notice of his resignation to
the Directors, the chief executive officer or the secretary. Any resignation
shall take effect at any time subsequent to the time specified therein or, if
the time when it shall become effective is not specified therein, immediately
upon its receipt. The acceptance of a resignation shall not be necessary to make
it effective unless otherwise stated in the resignation.
SECTION 3. VACANCIES. A vacancy in any office may be filled by the
Directors for the balance of the term.
SECTION 4. Reserved.
SECTION 5. CHIEF EXECUTIVE OFFICER. The Directors may designate a
chief executive officer from among the elected officers. The chief executive
officer shall in general supervise the management of the business affairs of the
Company and the implementation of the policies of the Company, as determined by
the Directors. He or she may execute any deed, mortgage, bond, contract or other
instrument, except in cases where the execution thereof shall be expressly
delegated by the Directors or by these Bylaws to some other officer or agent of
the Company or shall be required by law to be otherwise executed; and in general
shall perform all duties incident to the office of chief executive officer and
such other duties as may be prescribed by the Directors from time to time.
SECTION 6. PRESIDENT. The president, subject to the control of the
Board of Directors and with the chief executive officer, shall in general
supervise and control all of the business and affairs of the Company. He or she
shall, when present and in the absence of the chief executive officer, preside
at all meetings of the stockholders and the Board of Directors. He or she may
sign with the secretary or the chief financial officer and treasurer,
certificates for shares of the Company. He or she may execute any deed,
mortgage, bond, contract, or other instrument, except in cases where the signing
and execution thereof shall be expressly delegated by the Directors or by these
Bylaws to some other officer or agent of the Company or shall be required by law
to be otherwise executed; and in general shall perform all duties incident to
the office of president and such other duties as may be prescribed by the chief
executive officer or the Directors from time to time.
SECTION 7. CHIEF OPERATING OFFICER. The chief operating officer,
under the direction of the chief executive officer, shall have general
management authority and responsibility for the day-to-day implementation of the
policies of the Company. He or she may execute any deed, mortgage, bond,
contract or other instrument, except in cases where the execution thereof shall
be expressly delegated by the Directors or by these Bylaws to some other officer
or agent of the Company or shall be required by law to be otherwise executed;
and in general shall perform all duties incident to the office of chief
operating officer and such other duties as may be prescribed by the Directors
from time to time.
SECTION 8. VICE PRESIDENTS. In the absence of the chief executive
officer, the president, the chief operating officer or in the event of a vacancy
in all such offices, the vice president (or in the event there be more than one
vice president, the vice presidents in the order designated at the time of their
election or, in the absence of any designation, then in the order of their
election) shall perform the duties of the chief executive officer or the
president and when so acting shall have all the powers of and be subject to all
the restrictions upon the chief executive officer and the president; and shall
perform such other duties as from time to time may be assigned to him by the
chief executive officer, by the president, by the chief operating officer or by
the Directors. The Directors may designate one or more vice presidents as
executive vice president or as vice president for particular areas of
responsibility.
SECTION 9. SECRETARY. The secretary shall: (i) keep the minutes of
the proceedings of the stockholders, the Directors and committees of the
Directors in one or more books provided for that purpose; (ii) see that all
notices are duly given in accordance with the provisions of the Articles of
Incorporation, these Bylaws or as required by law; (iii) be custodian of the
trust records and of the seal (if any) of the Company; (iv) keep a register of
the post office address of each stockholder which shall be furnished to the
secretary by such stockholder; (v) have general charge of the share transfer
books of the Company; and (vi) in general perform such other duties as from time
to time may be assigned to him or her by the chief executive officer, by the
president, by the chief operating officer or by the Directors.
SECTION 10. CHIEF FINANCIAL OFFICER AND TREASURER. The chief
financial officer and treasurer shall have the custody of the funds and
securities of the Company and shall keep full and accurate accounts of receipts
and disbursements in books belonging to the Company and shall deposit all moneys
and other valuable effects in the name and to the credit of the Company in such
depositories as may be designated by the Directors. The chief financial officer
shall disburse the funds of the Company as may be ordered by the Directors,
taking proper vouchers for such disbursements, and shall render to the chief
executive officer and Directors, at their regular meetings of the Directors or
whenever they may require it, an account of all his or her transactions as chief
financial officer and of the financial condition of the Company.
If required by the Directors, he or she shall give the Company a
bond in such sum and with such surety or sureties as shall be satisfactory to
the Directors for the faithful performance of the duties of his or her office
and for the restoration to the Company, in case of his or her death,
resignation, retirement or removal from office, all books, papers, vouchers,
moneys and other property of whatever kind in his or her possession or under his
or her control belonging to the Company.
SECTION 11. ASSISTANT SECRETARIES. The assistant secretaries, in
general, shall perform such duties as shall be assigned to them by the
secretary, or by the chief executive officer, the president, or the Directors.
SECTION 12. SALARIES. The salaries of the officers shall be fixed
from time to time by the Directors, and no officer shall be prevented from
receiving such salary by reason of the fact that he or she is also a Director.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Directors may authorize any officer or
agent to enter into any contract or to execute and deliver any instrument in the
name of and on behalf of the Company and such authority may be general or
confined to specific instances. Any agreement, deed, mortgage, lease or other
document executed by one or more of the Directors or by an authorized person
shall be deemed valid and binding upon the Directors and upon the Company when
so authorized or ratified by action of the Directors.
SECTION 2. CHECKS AND DRAFTS. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Company shall be signed by such officer or officers, agent or agents
of the Company and in such manner as shall from time to time be determined by
the Directors.
SECTION 3. DEPOSITS. All funds of the Company not otherwise employed
shall be deposited from time to time to the credit of the Company in such banks,
trust companies or other depositories as the Directors may designate.
ARTICLE VII
SHARES
SECTION 1. CERTIFICATES. The Company will not issue share
certificates. A stockholder's investment will be recorded on the books of the
Company. A stockholder wishing to transfer his or her Shares will be required to
send only an executed form to the Company, and the Company will provide the
required form upon a stockholder's request. The executed form and any other
required documentation must be received by the Company at least one calendar
month prior to the last date of the current quarter.
SECTION 2. TRANSFERS. Transfers of Shares shall be effective, and
the transferee of the Shares will be recognized as the holder of such Shares as
of the first day of the following quarter on which the Company receives properly
executed documentation. Stockholders who are residents of New York may not
transfer fewer than 250 shares at any time.
The Company shall be entitled to treat the holder of record of any
Share or Shares as the holder in fact thereof and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of
Maryland.
SECTION 3. NOTICE OF ISSUANCE OR TRANSFER. Upon issuance or transfer
of Shares, the Company shall send the stockholder a written statement that
complies with the requirements of Section 7.6(xii) of Articles of Incorporation
and reflects such investment or transfer. In addition such written statement
shall set forth (i) the name of the Company; (ii) the name of the stockholder or
other person to whom it is issued or transferred; (iii) the class of shares and
number of shares purchased; (iv) the designations and any preferences,
conversions and other rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms and conditions of redemption of the
shares of each class which the Company is authorized to issue; (v) the
differences in the relative rights and preferences between the shares of each
series of shares to the extent they have been set; (vi) the authority of the
Board of Directors to set the relative rights and preferences; (vii) the
restrictions on transferability of the shares sold or transferred (without
affecting ss. 8-204 of the Commercial Law Article of the Maryland General
Corporation Law (the "MGCL"); and (viii) any other information required by law.
The Company, alternatively, may furnish notice that a full statement of the
information contained in the foregoing subsections (i) through (viii) and
otherwise complying with Section 7.6(xii) of the Articles of Incorporation will
be provided to any stockholder upon request and without charge.
SECTION 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The
Directors may set, in advance, a record date for the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders, or
stockholders entitled to receive payment of any Distribution or the allotment of
any other rights, or in order to make a determination of stockholders for any
other proper purpose. Such date, in any case, shall not be prior to the close of
business on the day the record date is fixed and shall not be more than 90 days
and, in the case of a meeting of stockholders, not less than ten days, before
the date on which the meeting or particular action requiring such determination
of stockholders is to be held or taken.
In the context of fixing a record date, the Directors may provide
that the share transfer books shall be closed for a stated period but not longer
than 20 days. If the share transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed at least ten days before the date of
such meeting.
If no record date is fixed and the share transfer books are not
closed for the determination of stockholders, (i) the record date for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the date on which notice of
meeting is mailed or the 30th day before the meeting, whichever is the closer
date to the meeting, and (ii) the record date for the determination of
stockholders entitled to receive payment of a Distribution or an allotment of
any other rights shall be the close of business on the day on which the
resolution of the Directors declaring the Distribution or allotment of rights is
adopted, but the payment or allotment of rights may not be made more than 60
days after the date on which the resolution is adopted.
When a determination of stockholders entitled to vote at any meeting
of stockholders has been made as provided in this Section 4, such determination
shall apply to any adjournment thereof, except where the determination has been
made through the closing of the transfer books and the stated period of closing
has expired.
SECTION 5. SHARE LEDGER. The Company shall maintain at its principal
office or at the office of its counsel, accountants or transfer agent, an
original or duplicate share ledger, in written form or in any other form which
can be converted within a reasonable time into written form for visual
inspection, containing the name and address of each stockholder and the number
of shares of each class held by such stockholder.
SECTION 6. FRACTIONAL SHARES; ISSUANCE OF UNITS. Directors may issue
fractional shares or provide for the issuance of scrip, all on such terms and
under such conditions as they may determine. Notwithstanding any other provision
of the Articles of Incorporation or these Bylaws, the Directors may issue units
consisting of different securities of the Company. Any security issued in a unit
shall have the same characteristics as any identical securities issued by the
Company, except that the Directors may provide that for a specified period
securities of the Company issued in such unit may be transferred on the books of
the Company only in such unit.
Before issuance of any shares classified or reclassified or
otherwise issued in a unit, the Board of Directors will file articles
supplementary with the Maryland State Department of Assessments and Taxation
that describe such shares, including (a) the preferences, conversion and other
rights, voting powers, restrictions, limitations as to distributions,
qualifications, and terms and conditions of redemption, as set or changed by the
Board of Directors; and (b) a statement that the shares have been classified or
reclassified by the Board of Directors pursuant to its authority under the
Company's charter. The articles supplementary will be executed in the manner
provided by Title 7 of the Maryland General Corporation Law (the "MGCL").
ARTICLE VIII
ACCOUNTING YEAR
The Directors shall have the power, from time to time, to fix the
fiscal year of the Company by a duly adopted resolution.
ARTICLE IX
DISTRIBUTIONS
SECTION 1. DECLARATION. Distributions upon the shares of the Company
may be declared by the Directors, subject to the provisions of law and the
Articles of Incorporation. Distributions may be paid in cash or other property
of the Company, subject to the provisions of law and the Articles of
Incorporation.
SECTION 2. CONTINGENCIES. Before payment of any Distributions, there
may be set aside out of any funds of the Company available for Distributions
such sum or sums as the Directors may from time to time, in their absolute
discretion, think proper as a reserve fund for the contingencies, for equalizing
Distributions, for repairing or maintaining any property of the Company or for
such other purpose as the Directors shall determine to be in the best interest
of the Company, and the Directors may modify or abolish any such reserve in the
manner in which it was created.
ARTICLE X
INVESTMENT POLICY
Subject to the provisions of the Articles of Incorporation, the
Directors may from time to time adopt, amend, revise or terminate any policy or
policies with respect to investments by the Company as they shall deem
appropriate in their sole discretion. In addition, the Independent Directors
shall review the Company's investment policies at least annually to determine
that the policies are in the best interests of the stockholders.
ARTICLE XI
SEAL
SECTION 1. SEAL. The Directors may authorize the adoption of a seal
by the Company. The seal shall have inscribed thereon the name of the Company
and the year of its organization. The Directors may authorize one or more
duplicate seals and provide for the custody thereof.
SECTION 2. AFFIXING SEAL. Whenever the Company is required to place
its seal to a document, it shall be sufficient to meet the requirements of any
law, rule or regulation relating to a seal to place the word "(SEAL)" adjacent
to the signature of the person authorized to execute the document on behalf of
the Company.
ARTICLE XII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Articles
of Incorporation or these Bylaws or pursuant to applicable law, a waiver thereof
in writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at nor the purpose
of any meeting need be set forth in the waiver of notice, unless specifically
required by statute. The attendance of any person at any meeting shall
constitute a waiver of notice of such meeting, except where such person attends
a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE XIII
AMENDMENT OF BYLAWS
SECTION 1. AMENDMENTS. These Bylaws may be amended or repealed by
either the affirmative vote of a majority of all Equity Shares, as such term is
defined in the Company's Articles of Incorporation, outstanding and entitled to
vote generally in the election of Directors, voting as a single group or by an
affirmative vote of a majority of the Directors (including a majority of the
Independent Directors), provided that such amendments are not inconsistent with
the Articles of Incorporation, and further provided that the Directors may not
amend these Bylaws, without the affirmative vote of a majority of the Equity
Shares, to the extent that such amendments adversely affect the rights,
preferences and privileges of Stockholders.
SECTION 2. LOCATION OF BYLAWS. The original or a certified copy of
these Bylaws, including any amendments thereto, shall be kept at the Company's
principal office, as determined pursuant to Article I, Section 1 of these
Bylaws.
ARTICLE XIV
ROLL-UP TRANSACTION
SECTION 1. PROVISION IN CONFLICT WITH LAW OR REGULATIONS. The Board
of Directors has determined, in accordance with Section 12.3 of the Articles of
Incorporation, that the following sentence included in section 10.3 of the
Articles of Incorporation is inconsistent with applicable state laws or
regulations and, as a result, does not constitute part of the Articles of
Incorporation.
In connection with a proposed Roll-Up Transaction which has not been
approved by a vote of at least two-thirds (2/3) of the Stockholders, the person
sponsoring the Roll-Up Transaction shall offer to Stockholders who vote against
the proposed Roll-Up Transaction the choice of:
(i) accepting the securities of the Roll-Up Entity offered in the proposed
Roll-Up Transaction; or
(ii) one of the following:
(a) remaining Stockholders of the Company and preserving their
interests therein on the same terms and conditions as existed previously; or
(b) receiving cash in an amount equal to the Stockholder's pro rata
share of the appraised value of the net assets of the Company.
SECTION 2. REPLACEMENT PROVISION. The following will apply to a
Roll-Up Transaction in place of the sentence referenced above.
In connection with a proposed Roll-Up Transaction, the person
sponsoring the Roll-Up Transaction shall offer to Stockholders who vote against
the proposed Roll-Up Transaction the choice of:
(i) accepting the securities of a Roll-Up Entity offered in the proposed
Roll-Up Transaction; or
(ii) one of the following:
(a) remaining Stockholders of the Company and preserving their
interests therein on the same terms and conditions as existed previously; or
(b) receiving cash in an amount equal to the Stockholder's pro rata
share of the appraised value of the net assets of the Company.
ARTICLE XV
SUITABILITY
SECTION 1. The Advisor and each person selling shares on behalf of
the Company shall make every reasonable effort to determine that the purchase of
shares is a suitable and appropriate investment for each stockholder.
SECTION 2. In making this determination, the Advisor or each person
selling shares on behalf of the Company shall ascertain that the prospective
stockholder:
(1) meets the minimum income and net worth standards established for
the Company;
(2) can reasonably benefit from the Company based on the prospective
stockholder's overall investment objectives and portfolio structure;
(3) is able to bear the economic risk of the investment based on the
prospective stockholder's overall financial situation; and
(4) has apparent understanding of:
(A) the fundamental risks of the investment;
(B) the risk that the stockholder may lose the entire
investment;
(C) the lack of liquidity of the shares;
(D) the restrictions of transferability of the shares;
(E) the background and qualifications of the Advisor; and
(F) the tax consequences of the investment.
SECTION 3. The Advisor or each person selling shares on behalf of
the Company will make this determination on the basis of information it has
obtained from a prospective stockholder. Relevant information for this purpose
will include at least the age, investment objectives, investment experience,
income, net worth, financial situation, and other investments of the prospective
stockholder, as well as any other pertinent factors.
SECTION 4. The Advisor or each person selling shares on behalf of
the Company shall maintain records of the information used to determine that an
investment in the shares is suitable and appropriate for a prospective
stockholder. The Advisor or each person selling shares on behalf of the Company
shall maintain these records for at least six years.
SECTION 5. The Advisor shall disclose in each prospectus the
responsibility of the Advisor and each person selling shares on behalf of the
Company to make every reasonable effort to determine that the purchase of shares
is a suitable and appropriate investment for each stockholder, based on
information provided by the stockholder regarding the stockholder's financial
situation and investment objectives.