EXHIBIT 4.2
STATEMENT OF DESIGNATION
OF
7.125% SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARES
OF
WEINGARTEN REALTY INVESTORS
ARTICLE ONE
WEINGARTEN REALTY INVESTORS (the "Company"), pursuant to the provisions of
Section 3.30 of the Texas Real Estate Investment Trust Act (the "TREITA"),
hereby files this Statement of Designation of 7.125% Series B Cumulative
Redeemable Preferred Shares of the Company (the "Statement") prior to the
issuance of any shares of 7.125% Series B Cumulative Redeemable Preferred
Shares, such series of unissued shares having been established by a resolution
duly adopted by all necessary action on the part of the Company and the Board of
Trust Managers, as provided for in the Restated Declaration of Trust, as amended
("Declaration of Trust").
ARTICLE TWO
The name of the Company is Weingarten Realty Investors.
ARTICLE THREE
Pursuant to the authority conferred upon the Board of Trust Managers by the
Declaration of Trust and Section 3.30 of the TREITA, the Board of Trust
Managers, pursuant to Section 10.20 of the TREITA, adopted a resolution
establishing the 7.125% Series B Cumulative Redeemable Preferred Shares of the
Company and designating the series and fixing and determining the preferences,
limitations, and relative rights thereof, as set forth in the true and correct
copy of the resolution attached hereto as Exhibit A (the "Designating
Resolution").
ARTICLE FOUR
The Designating Resolution was adopted effective as of October 20, 1998.
ARTICLE FIVE
The Designating Resolution was duly adopted by all necessary action on the
part of the Company.
IN WITNESS WHEREOF, the undersigned officer has executed this Statement
effective as of October 20, 1998.
By: /s/ Stephen C. Richter
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Name: Stephen C. Richter
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Title: Senior Vice President and Treasurer
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THE STATE OF TEXAS (S)
(S)
COUNTY OF HARRIS (S)
BEFORE ME, the undersigned Notary Public, duly commissioned and qualified
within and for the State and County aforesaid, personally came and appeared
STEPHEN C. RICHTER, in his capacity as Senior Vice President and Treasurer of
Weingarten Realty Investors, and acknowledged to me that he executed the above
and foregoing instrument on behalf of the said Weingarten Realty Investors, as
his own free and voluntary act and deed, for the uses, purposes and
considerations therein expressed.
IN WITNESS WHEREOF, said Appearer has executed these presents together with
me, Notary, and the undersigned competent witnesses, at my office in the County
and State aforesaid, on this 20th day of October, 1998.
/s/ Stephen C. Richter
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STEPHEN C. RICHTER
/s/ Jane B. Scott
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NOTARY PUBLIC
My commission expires:
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EXHIBIT A
DESIGNATING RESOLUTION
BOARD OF TRUST MANAGERS
WEINGARTEN REALTY INVESTORS
OCTOBER 20, 1998
AUTHORIZATION OF 7.125% SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARES
WHEREAS, the Board of Trust Managers of the Company has deemed it to be in
the best interest of the Company and its shareholders for the Company to
establish a series of preferred shares pursuant to the authority granted to the
Board of Trust Managers in the Restated Declaration of Trust, as amended (the
"Declaration of Trust") of the Company:
NOW, THEREFORE, BE IT RESOLVED, that, pursuant to the authority vested in
the Board of Trust Managers by Article Seven of the Declaration of Trust of the
Company, a series of preferred shares, par value $.03 per share, is hereby
established, and the terms of the same shall be as follows:
(I) TITLE. The series of preferred shares is hereby designated as the
"7.125% Series B Cumulative Redeemable Preferred Shares" (the "Series B
Preferred Shares").
(II) NUMBER. The maximum number of authorized shares of the Series B
Preferred Shares shall be 3,600,000.
(III) RELATIVE SENIORITY. In respect of rights to receive dividends and to
participate in distributions of payments in the event of any liquidation,
dissolution or winding up of the Company, the Series B Preferred Shares shall
rank on parity with the 7.44% Series A Cumulative Redeemable Preferred Shares
(the "Series A Preferred Shares") and senior to the common shares and any other
class or series of shares of the Company ranking, as to dividends and upon
liquidation, junior to the Series B Preferred Shares (collectively, "Junior
Shares").
(IV) DIVIDENDS.
(A) The holders of the then outstanding Series B Preferred Shares
shall be entitled to receive, when and as declared by the Board of Trust
Managers out of any funds legally available therefor, cumulative dividends at
the rate of $1.7812 per share per year, payable in equal amounts quarterly in
cash on the 15th day of each March, June, September and December or, if not a
Business Day (as hereinafter defined), the next succeeding Business Day (each
such day being hereafter called a "Quarterly Dividend Date" and each period
ending on a Quarterly Dividend Date being hereinafter called a "Dividend
Period"). Dividends shall begin to accrue on the date of issuance of the Series
B
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Preferred Shares and shall first be paid on December 15, 1998. Dividends shall
be payable to holders of record as they appear in the share records of the
Company at the close of business on the applicable record date (the "Record
Date"), which shall be the date designated by the Board of Trust Managers of the
Company for the payment of dividends that is not more than 30 nor less than 10
days prior to such Quarterly Dividend Date. The amount of any dividend payable
for any Dividend Period shorter than a full Dividend Period shall be prorated
and computed on the basis of a 360-day year of twelve 30-day months. Dividends
paid on the Series B Preferred Shares in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a per share basis among the Series B Preferred Shares. Except as
provided in section (VI)(B)(v) and the last sentence of this paragraph, unless
the full cumulative dividends on the Series B Preferred Shares have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period, no dividends (other than dividends payable solely in
common shares or other capital shares of the Company ranking junior to the
Series B Preferred Shares as to dividends and upon liquidation) shall be
declared or paid or set aside for payment or other distribution made upon the
common shares or any other capital shares of the Company ranking junior to or on
a parity with the Series B Preferred Shares as to dividends or upon liquidation,
nor shall any common shares, or any other capital shares of the Company ranking
junior to or on a parity with the Series B Preferred Shares as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of such shares) by the Company or any subsidiary of the Company
(except by conversion into or exchange for such capital shares of the Company
ranking junior to the Series B Preferred Shares as to dividends and upon
liquidation). If accrued dividends on the Series B Preferred Shares for all
prior dividend periods have not been paid in full, then any dividend declared on
the Series B Preferred Shares for any dividend period and on any series of
preferred shares at the time outstanding ranking on a parity as to the dividends
with the Series B Preferred Shares will be declared ratably in proportion to
accrued and unpaid dividends on the Series B Preferred Shares and such series of
preferred shares at the time outstanding ranking on a parity as to dividends
with the Series B Preferred Shares.
"Business Day" shall mean any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in New York City
are authorized or required by law, regulation or executive order to close.
(B) The amount of any dividends accrued on any Series B Preferred
Shares at any Quarterly Dividend Date shall be the amount of any unpaid
dividends accumulated thereon, to and including such Quarterly Dividend Date,
whether or not earned or declared, and the amount of dividends accrued on any
shares of Series B Preferred Shares at any date other than a Quarterly Dividend
Date shall be equal to the sum of the amount of any unpaid dividends accumulated
thereon, to and including the last preceding Quarterly Dividend Date, whether or
not earned or declared, plus an amount calculated on the basis of the annual
dividend rate of $1.7812 per share for the period after such last preceding
Quarterly Dividend Date to and including the date as of which the calculation is
made based on a 360-day year of twelve 30-day months.
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(C) Except as provided in this resolution, the Series B Preferred
Shares will not be entitled to any dividends in excess of full cumulative
dividends as described above and shall not be entitled to participate in the
earnings or assets of the Company, and no interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on the
Series B Preferred Shares which may be in arrears.
(D) Any dividend payment made on the Series B Preferred Shares shall be
first credited against the earliest accrued but unpaid dividend due with respect
to such shares which remains payable.
(E) If, for any taxable year, the Company elects to designate as
"capital gain dividends" (as defined in Section 857 of the Internal Revenue Code
of 1986, as amended (the "Code")), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders of all classes of
shares (the "Total Dividends"), then the portion of the Capital Gains Amount
that shall be allocated to the holders of the Series B Preferred Shares shall
equal (i) the Capital Gains Amount multiplied by (ii) a fraction that is equal
to (a) the total dividends paid or made available to the holders of the Series B
Preferred Shares for the year over (b) the Total Dividends. Subject to the
provisions of applicable law, the current and accumulated earnings and profits
of the Company will be allocated first to distributions to the Series B
Preferred Shares, the Series A Preferred Shares and such other series of
preferred shares ranking on parity as to dividends on an equal basis and then to
distributions with respect to common shares of the Company.
(F) No dividends on the Series B Preferred Shares shall be authorized
by the Board of Trust Managers or be paid or set apart for payment by the
Company at such time as the terms and provisions of any agreement of the
Company, including any agreement relating to its indebtedness, prohibit such
authorization, payment or setting apart for payment or provide that such
authorization, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such authorization or payment shall be
restricted or prohibited by law. Notwithstanding the foregoing, dividends on the
Series B Preferred Shares will accrue whether or not the Company has earnings,
whether or not there are funds legally available for the payment of such
dividends and whether or not such dividends are authorized.
(V) LIQUIDATION RIGHTS.
(A) Upon the voluntary or involuntary dissolution, liquidation or
winding up of the Company, the holders of the Series B Preferred Shares then
outstanding shall be entitled to receive and to have paid out of the assets of
the Company available for distribution to its shareholders, before any payment
or distribution shall be made on any Junior Shares, the amount of $25.00 per
share, plus accrued and unpaid dividends thereon.
(B) After the payment to the holders of the Series B Preferred Shares
of the full preferential amounts provided for in this resolution, the holders of
the Series B Preferred Shares, as such, shall have no right or claim to any of
the remaining assets of the Company.
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(C) If, upon any voluntary or involuntary dissolution, liquidation, or
winding up of the Company, the amounts payable with respect to the preference
value of the Series B Preferred Shares and any other shares of the Company
ranking as to any such distribution on a parity with the Series B Preferred
Shares are not paid in full, the holders of the Series B Preferred Shares and of
such other shares will share ratably in any such distribution of assets of the
Company in proportion to the full respective preference amounts to which they
are entitled.
(D) Neither the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Company, nor the merger or
consolidation of the Company into or with any other entity or the merger or
consolidation of any other entity into or with the Company, shall be deemed to
be a dissolution, liquidation or winding up, voluntary or involuntary, for the
purposes of this resolution.
(VI) REDEMPTION.
(A) OPTIONAL REDEMPTION BY THE COMPANY. On and after October 20, 2003,
the Company may, at its option, redeem at any time all or, from time to time,
part of the Series B Preferred Shares at a price per share (the "Redemption
Price"), payable in cash, of $25.00, together with all accrued and unpaid
dividends to and including the date fixed for redemption (the "Redemption
Date"), without interest, to the full extent the Company has funds legally
available therefor. The Series B Preferred Shares have no stated maturity and
will not be subject to any sinking fund or mandatory redemption provisions,
except as provided for in subparagraph (IX) below.
(B) PROCEDURES OF COMPANY REDEMPTION.
(i) Notice of redemption will be given by publication in a newspaper
of general circulation in the City of New York, such publication to be made once
a week for two successive weeks commencing not less than 30 nor more than 60
days prior to the Redemption Date. Notice of any redemption will also be mailed
by the transfer agent, postage prepaid, not less than 30 nor more than 60 days
prior to the Redemption Date, addressed to each holder of record of the Series B
Preferred Shares to be redeemed at the address set forth in the share transfer
records of the transfer agent. No failure to give such notice or any defect
therein or in the mailing thereof shall affect the validity of the proceedings
for the redemption of any Series B Preferred Shares except as to the holder to
whom the Company has failed to give notice or except as to the holder to whom
notice was defective. In addition to any information required by law or by the
applicable rules of any exchange upon which Series B Preferred Shares may be
listed or admitted to trading, such notice shall state: (a) the Redemption Date;
(b) the Redemption Price; (c) the number of Series B Preferred Shares to be
redeemed; (d) the place or places where certificates for such shares are to be
surrendered for payment of the Redemption Price; and (e) that dividends on the
shares to be redeemed will cease to accumulate on the Redemption Date. If fewer
than all of the Series B Preferred Shares held by any holder are to be redeemed,
the notice mailed to such holder shall also specify the number of Series B
Preferred Shares to be redeemed from such holder.
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(ii) If notice has been mailed in accordance with subparagraph
(VI)(B)(i) above and provided that on or before the Redemption Date specified in
such notice all funds necessary for such redemption shall have been irrevocably
set aside by the Company, separate and apart from its other funds in trust for
the pro rata benefit of the holders of the Series B Preferred Shares so called
for redemption, so as to be, and to continue to be available therefor, then,
from and after the Redemption Date, dividends on the Series B Preferred Shares
so called for redemption shall cease to accumulate, and said shares shall no
longer be deemed to be outstanding and shall not have the status of Series B
Preferred Shares and all rights of the holders thereof as shareholders of the
Company (except the right to receive the Redemption Price) shall cease. Upon
surrender, in accordance with such notice, the certificate for any Series B
Preferred Shares so redeemed (properly endorsed or assigned for transfer, if the
Company shall so require and the notice shall so state), such Series B Preferred
Shares shall be redeemed by the Company at the Redemption Price. In case fewer
than all the Series B Preferred Shares represented by any such certificate are
redeemed, a new certificate or certificates shall be issued representing the
unredeemed Series B Preferred Shares without cost to the holder thereof.
(iii) Any funds deposited with a bank or trust company for the purpose
of redeeming Series B Preferred Shares shall be irrevocable except that:
(a) the Company shall be entitled to receive from such bank or
trust company the interest or other earnings, if any, earned on any money
so deposited in trust, and the holders of any shares redeemed shall have no
claim to such interest or other earnings; and
(b) any balance of monies so deposited by the Company and
unclaimed by the holders of the Series B Preferred Shares entitled thereto
at the expiration of two years from the applicable Redemption Date shall be
repaid, together with any interest or other earnings earned thereon, to the
Company, and after any such repayment, the holders of the shares entitled
to the funds so repaid to the Company shall look only to the Company for
payment without interest or other earnings.
(iv) No Series B Preferred Shares may be redeemed except from proceeds
from the sale of other capital stock of the Company, including but not limited
to common shares, preferred shares, depositary shares, interests, participations
or other ownership interests (however designated) and any rights (other than
debt securities convertible into or exchangeable for equity securities) or
options to purchase any of the foregoing.
(v) Unless full accumulated dividends on all Series B Preferred
Shares shall have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for all past
Dividend Periods and the then current Dividend Period, no Series B Preferred
Shares shall be redeemed or purchased or otherwise acquired directly or
indirectly by the Company or any subsidiary of the Company (except by conversion
into or exchange for capital shares of the Company ranking junior to the Series
B Preferred Shares as to dividends and upon liquidation) and no shares of any
series of preferred shares of the Company shall be redeemed unless
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all outstanding Series B Preferred Shares are simultaneously redeemed; provided,
however, that the foregoing shall not prevent the redemption of Series B
Preferred Shares in accordance with the applicable provisions of Article XVIII
of the Declaration of Trust of the Company or as may otherwise be necessary to
preserve the Company's REIT status or the purchase or acquisition of Series B
Preferred Shares pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding Series B Preferred Shares.
(vi) If the Redemption Date is after a Record Date and before the
related Quarterly Dividend Date, the dividend payable on such Quarterly Dividend
Date shall be paid to the holder in whose name the Series B Preferred Shares to
be redeemed are registered at the close of business on such Record Date
notwithstanding the redemption thereof between such Record Date and the related
Quarterly Dividend Date or the Company's default in the payment of the dividend
due.
(vii) In case of redemption of less than all Series B Preferred Shares
at the time outstanding, the Series B Preferred Shares to be redeemed shall be
selected pro rata from the holders of record of such shares in proportion to the
number of Series B Preferred Shares held by such holders (with adjustments to
avoid redemption of fractional shares) or by any other equitable method
determined by the Company. Notwithstanding the foregoing, in the case of a
Redemption Request (as defined below) which has not been fulfilled at the time
the Company gives notice of its election to redeem all or any Series B Preferred
Shares, the shares which are the subject of such pending Redemption Request
shall be redeemed prior to any other Series B Preferred Shares.
(C) OPTIONAL REDEMPTION UPON DEATH OF A HOLDER OF SERIES B PREFERRED
SHARES. (i) Commencing on December 15, 1998, and on each March 15, June 15,
September 15 and December 15 thereafter (each, a "Holder Redemption Date"),
the Company will, upon the death of any registered owner of the Series B
Preferred Shares, redeem such shares in exchange for cash or common shares of
beneficial interest of the Company ("Common Shares"), at the Company's option.
The Company shall redeem the Series B Preferred Shares subject to the
limitations that the Company will not be obligated to redeem in any one year:
(i) more than 108,000 outstanding Series B Preferred Shares during the period
from October 28, 1998 through December 15, 2008; (ii) more than 72,000
outstanding Series B Preferred Shares during the period from December 16, 2008
through December 15, 2018; (iii) more than 36,000 outstanding Series B Preferred
Shares at any time after December 16, 2018; and (iv) more than 1,000 Series B
Preferred Shares per annum per deceased registered owner of Series B Preferred
Shares (each a "Redemption Limitation" and collectively, the "Redemption
Limitations"). The Redemption Limitations are cumulative; provided, however,
that in any one year the amount of Series B Preferred Shares actually redeemed
may not exceed 108,000 shares (the "Cumulative Annual Limitation").
Accordingly, the difference, if any, between a specific year's Redemption
Limitation and the amount of Series B Preferred Shares actually redeemed in such
year may be redeemed in a subsequent year, subject to the Cumulative Annual
Limitation. The Cumulative Annual Limitation is also subject to quarterly
redemption limitations. The Company will redeem shares subject to the following
cumulative limitation: (i) March 15 - up to 27,000 shares; (ii) June 15 - up to
54,000 shares; (iii) September 15 -up to 81,000 shares; and (iv) December 15 -
up to 108,000 shares. The Company will redeem shares
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on December 15, 1998; however, all such shares redeemed will be counted against
the March 15, 1999 redemption limitation of 27,000 shares.
(ii) A request for redemption of Series B Preferred Shares may be
initiated by the personal representative or other person authorized to represent
the estate of the deceased registered owner or from a surviving joint tenant(s)
or tenant(s) by the entirety (each, a "Personal Representative"). At least 20
days prior to the Holder Redemption Date, the Personal Representative shall
deliver: (a) a written request to the transfer agent, signed by the Personal
Representative; (b) the Series B Preferred Shares to be redeemed if
certificated, or if not, notice of the number of shares to be redeemed; (c)
appropriate evidence of death and ownership of such Series B Preferred Shares at
the time of death; and (d) appropriate evidence of the authority of such
Personal Representative, all of which must be deemed acceptable by the transfer
agent at least 10 days prior to the applicable Holder Redemption Date
(collectively, the "Redemption Request"). A Redemption Request which exceeds
any of the limitations set forth in Section (VI)(C)(i) will be held for
redemption in subsequent years until redeemed in full. A Redemption Request
will be applied in the order of receipt by the transfer agent to successive
years, regardless of the number of years required to redeem such shares. All
Redemption Requests will be redeemed in the order in which received by the
transfer agent.
(iii) The transfer agent may conclusively assume, without independent
investigation, that the statements contained in each Redemption Request are true
and correct and shall have no responsibility for reviewing any documents
accompanying a Redemption Request or for determining whether the applicable
decedent is in fact the registered owner of the Series B Preferred Shares to be
redeemed or is in fact deceased and whether the Personal Representative is duly
authorized to request redemption on behalf of the applicable registered owner.
(iv) At the Company's option, the Series B Preferred Shares may be
redeemed for either cash or Common Shares. If such shares are redeemed by the
Company for cash, the redemption price of such shares is $25.00 per share (plus
all accrued and unpaid dividends). If, however, such shares are redeemed by the
Company for Common Shares, the redemption price will be $25.25 per Series B
Preferred Share and the number of Common Shares received will be based on the
closing price of the Series B Common Shares on the day prior to the Decedent
Redemption Date (plus all accrued and unpaid dividends, which shall be paid in
cash). No fractional Common Shares will be issued. In lieu of any fractional
shares, the Company will pay cash in an amount equal to the product of such
fraction multiplied by the closing price of one share on the day prior to the
Decedent Redemption Date.
(v) For purposes of this Section (VI)(C), Series B Preferred Shares
held in tenancy by the entirety, joint tenancy or by tenants in common will be
deemed to be held by a single registered owner and the death of a tenant by the
entirety, joint tenant or tenant in common will be deemed the death of a
registered owner. The death of a person who, during his lifetime, was entitled
to substantially all of the rights of a registered owner of Series B Preferred
Shares will be deemed the death of the registered owner, regardless of the
recordation of such shares on the records of the
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transfer agent, if such rights can be established to the satisfaction of the
transfer agent and the Company. Such shares shall be deemed to exist in typical
cases of nominee ownership, ownership under the Uniform Gifts to Minors Act or
the Uniform Transfers to Minors Act, community property or other similar joint
ownership arrangements, including individual retirement accounts or Keogh [H.R.
10] plans maintained solely by or for the decedent or by or for the decedent and
any spouse, and trust and certain other arrangements where one person has
substantially all of the rights of a registered owner during such person's
lifetime. Series B Preferred Shares registered in the name of banks, trust
companies or broker-dealers who are members of a national securities exchange or
the National Association of Securities Dealers, Inc. ("Qualified Institutions"),
are subject to the Redemption Limitations described above as applied to each
Beneficial Owner (as defined herein) of such shares held by any Qualified
Institution. In connection with the Redemption Request, each Qualified
Institution must submit evidence, satisfactory to the transfer agent, that it
holds the Series B Preferred Shares subject to request on behalf of such
beneficial owner and must certify the aggregate amount of Redemption Requests
made on behalf of such beneficial owner. A Beneficial Owner means the person who
has the right to sell, transfer or otherwise dispose of the Series B Preferred
Shares and the right to receive the proceeds therefrom payable to the registered
owner thereof.
In the case of any Redemption Request which is presented pursuant to
Section (VI)(C) which has not been fulfilled at the time the Company gives
notice of its election to redeem all, or part, of the Series B Preferred Shares
pursuant to Sections (VI)(A) and (VI)(B) hereof, such shares shall be redeemed
pursuant to such Sections (VI)(A) and (VI)(B) prior to any other shares of
Series B Preferred Shares being redeemed. Any Redemption Request may be
withdrawn by the Personal Representative presenting the same upon delivery of a
written request for such withdrawal given to the transfer agent at least 10 days
prior to payment for redemption of such shares pursuant to this Section (VI)(C).
Any Personal Representative that withdraws its request for redemption shall no
longer be entitled to exercise its rights under this Section (VI)(C).
(VII) VOTING RIGHTS. Except as required by law, and as set forth below, the
holders of the Series B Preferred Shares shall not be entitled to vote at any
meeting of the shareholders for the election of Trust Managers or for any other
purpose or otherwise to participate in any action taken by the Company or the
shareholders thereof, or to receive notice of any meeting of shareholders.
(A) Whenever dividends on any Series B Preferred Shares shall be in arrears
for six or more quarterly periods, whether or not such quarterly periods are
consecutive, the holders of such Series B Preferred Shares (voting separately as
a class with all other series of preferred shares upon which like voting rights
have been conferred and are exercisable) will be entitled to vote for the
election of two additional Trust Managers of the Company at a special meeting
called by the holders of record of at least ten percent (10%) of the Series B
Preferred Shares so in arrears (unless such request is received less than 90
days before the date fixed for the next annual or special meeting of the
shareholders) or at the next annual meeting of shareholders, and at each
subsequent annual meeting until all dividends accumulated on such Series B
Preferred Shares for the past dividend periods and the then current dividend
period shall have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment. In such case, the entire Board of Trust
Managers of the Company will be increased by two Trust Managers.
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(B) So long as any Series B Preferred Shares remain outstanding, the
Company will not, without the affirmative vote or consent of the holders of at
least two-thirds of the Series B Preferred Shares outstanding at the time, given
in person or by proxy, either in writing or at a meeting (such series voting
separately as a class), (i) authorize or create, or increase the authorized or
issued amount of, any class or series of shares of capital stock ranking prior
to the Series B Preferred Shares with respect to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or reclassify
any authorized shares of the Company into such shares, or create, authorize or
issue any obligation or security convertible into or evidencing the right to
purchase any such shares; or (ii) amend, alter or repeal the provisions of the
Company's Declaration of Trust or this resolution, whether by merger,
consolidation or otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of the Series B
Preferred Shares or the holders thereof; provided, however, with respect to the
occurrence of any of the Events set forth in (ii) above, so long as the Series B
Preferred Shares remain outstanding with the terms thereof materially unchanged,
taking into account that upon the occurrence of an Event, the Company may not be
the surviving entity, the occurrence of any such Event shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
power of holders of Series B Preferred Shares and provided further that (x) any
increase in the amount of the authorized Preferred Shares or the creating or
issuance of any other series of preferred shares, or (y) any increase in the
amount of authorized Series B Preferred Shares or any other series of preferred
shares, in each case ranking on a parity with or junior to the Series B
Preferred Shares with respect to payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at or prior to the time when
the act with respect to which such vote would otherwise be required shall be
effected, all outstanding Series B Preferred Shares shall have been redeemed or
called for redemption and sufficient funds shall have been deposited in trust to
effect such redemption.
(C) On each matter submitted to a vote of the holders of Series B Preferred
Shares in accordance with this resolution, or as otherwise required by law, each
Series B Preferred Share shall be entitled to one vote. With respect to each
Series B Preferred Share, the holder thereof may designate a proxy, with each
such proxy having the right to vote on behalf of the holder.
(VIII) CONVERSION. The Series B Preferred Shares are not convertible into
or exchangeable for any other property or securities of the Company except (i)
as necessary to preserve real estate investment trust status for federal income
tax purposes, or (ii) with respect to the Company's right to redeem shares
pursuant to Section VI (C) in either cash or Common Shares.
(IX) RESTRICTIONS ON OWNERSHIP. The Series B Preferred Shares shall be
subject in all respects to the provisions of Article XVIII of the Declaration of
Trust of the Company.
Ratification and Authorization
RESOLVED, that any and all acts and deeds of any officer or Trust Manager
of the Company taken prior to the date hereof on behalf of the Company with
regard to the foregoing resolutions are hereby approved, ratified and confirmed
in all respects as and for the acts and deeds of the Company.
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FURTHER RESOLVED, that the officers of the Company be, and each of them
hereby is, severally and without the necessity for joinder of any other person,
authorized, empowered and directed to execute and deliver any and all such
further documents and instruments and to do and perform any and all such further
acts and deeds that may be necessary or advisable to effectuate and carry out
the purposes and intents of the foregoing resolutions, including, but not
limited to, the filing of a statement with the County Clerk of Harris County,
Texas, setting forth the designations, preferences, limitations and rights of
Series B Preferred Shares pursuant to Section 3.30 of TREITA, all such actions
to be performed in such manner, and all such documents and instruments to be
executed and delivered in such form, as the officer performing or executing the
same shall approve, the performance or execution thereof by such officer to be
conclusive evidence of the approval thereof by such officer and by the Board of
Trust Managers.
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