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EXHIBIT 3
VORNADO REALTY TRUST
AMENDED AND RESTATED
DECLARATION OF TRUST
This AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration
of Trust" or "Declaration") is made by the undersigned Trustees.
WHEREAS, the Trustees desire to create a real estate
investment trust under the laws of the State of Maryland; and
WHEREAS, the Trustees desire that this trust qualify as a
"real estate investment trust" under the Internal Revenue Code of 1986, as
amended (the "Code"), and under Title 8 of the Corporations and Associations
Article of the Associated Code of Maryland, as amended ("Title 8"), so long as
such qualification, in the opinion of the Trustees, is advantageous to the
Shareholders; and
WHEREAS, the beneficial interest in the Trust shall be divided
into transferable shares of one or more classes evidenced by certificates;
NOW, THEREFORE, the Trustees hereby declare that they will
hold in trust all property which they have or may hereafter acquire as such
Trustees, together with the proceeds thereof, in trust, and manage the Trust
Property for the benefit of the Shareholders as provided by this Declaration of
Trust.
ARTICLE I
THE TRUST; DEFINITIONS
SECTION 1.1 Name. The name of the trust (the "Trust") is:
VORNADO REALTY TRUST
So far as may be practicable, the business of the Trust shall be conducted and
transacted under that name, which name (and the word "Trust" wherever used in
this Declaration of Trust, except where the context otherwise requires) shall
refer to the Trustees collectively but not individually or personally and shall
not refer to the Shareholders or to any officers, employees or agents of the
Trust or of such Trustees.
Under circumstances in which the Trustees determine that the
use of the name "Vornado Realty Trust" is not practicable, they may use any
other designation or name for the Trust.
SECTION 1.2 Resident Agent. The name of the resident agent of
the Trust in the State of Maryland is James J. Hanks, Jr., whose post office
address is c/o Ballard Spahr Andrews & Ingersoll, 300 East Lombard Street,
Baltimore, Maryland 21202. The Trust may have such offices or places of business
within or without the State of Maryland as the Trustee may from time to time
determine.
SECTION 1.3 Nature of Trust. The Trust is a real estate
investment that within the meaning of Title 8. The Trust shall not be deemed to
be a general partnership, limited partnership, joint venture, joint stock
company or, except as provided in Section 11.4, a corporation (but nothing
herein shall preclude the Trust from being treated for tax purposes as an
association under the Code).
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SECTION 1.4 Powers. The Trust shall have all of the powers
granted to real estate investment trusts generally by Title 8 or any successor
statute and shall have any other and further purposes as are not inconsistent
with and are appropriate to promote and attain the purposes set forth in this
Declaration of Trust.
SECTION 1.5 Definitions. As used in this Declaration of Trust,
the following terms shall have the following meanings unless the context
otherwise requires:
"Adviser" means the Person, if any, appointed employed or
contracted with by the Trust pursuant to Section 4.1.
"Affiliate" or "Affiliated" means, as to any corporation,
partnership, trust or other association (other than the Trust), any Person (i)
that holds beneficially, directly or indirectly, 1% or more of the outstanding
stock or equity interests thereof or (ii) who is an officer, director, partner
or trustee thereof or of any Person which controls, is controlled by, or under
common control with, such corporation, partnership, trust or other association
or (iii) which controls, is controlled by, or under common control with, such
corporation, partnership, trust or other association.
"Mortgages" means mortgages, deeds of trust or other security
interests on or applicable to Real Property.
"Person" means an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of
the Code), a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity, or any government or agency or
political subdivision thereof, and also includes a group as that term is used
for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
"Real Property" or "Real Estate" means land, rights in land
(including leasehold interests), and any buildings, structures, improvements,
furnishings, fixtures and equipment located on or used in connection with land
and rights or interests in land.
"REIT Provisions of the Code" means Sections 856 through 860
of the Code and any successor or other provisions of the Code relating to real
estate investment trusts (including provisions as to the attribution of
ownership of beneficial interests therein) and the regulations promulgated
thereunder.
"Securities" means Shares, any stock, shares or other
evidences of equity or beneficial or other interests, voting trust certificates,
bonds, debentures, notes or other evidence of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities" or any certificates of interest, shares or
participations in, temporary or interim certificates for, receipts for,
guarantees of, or warrants, options or rights to subscribe to, purchase or
acquire, any of the foregoing.
"Securities of the Trust" means any Securities issued by the
Trust.
"Shareholders" means holder of record of outstanding Shares.
"Shares" means shares of Preferred Stock, Common Stock or
Excess Stock (all as defined in Section 6.1).
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"Trustees" or "Board of Trustees" means, collectively the
individuals named in Section 2.2 of this Declaration of Trust so long as they
continue in office and all other individuals who have been duly elected and
qualify as trustees of the Trust hereunder.
"Trust Property" means any and all property, real, personal or
otherwise, tangible or intangible, which is transferred or conveyed to the Trust
or the Trustees (including all rents, income, profits and gains therefrom),
which is owned or held by, or for the account of, the Trust of the Trustees.
ARTICLE II
TRUSTEES
SECTION 2.1 Number. The number of Trustees initially shall be
one, which number may thereafter be increased or decreased by the Trustees then
in office from time to time; however, the total number of Trustees shall be not
more than 15. No reduction in the number of Trustees shall cause the removal of
any Trustee from office prior to the expiration of his term.
SECTION 2.2 Initial Board Term. The name and address of the
sole Trustee who shall serve until the earlier of the first annual meeting or
his successors are duly elected and qualify shall be:
NAME ADDRESS
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James J. Hanks, Jr................................. 17th Floor
300 East Lombard Street
Baltimore, MD 21202
At such point in time as there are five or more Trustees, the
Trustees shall be divided into three classes, as nearly equal in number as
possible, with the term of office of at least one class expiring each year. One
class of Trustees shall hold office initially for a term expiring at the annual
meeting of the Shareholders in the first year, another class shall hold office
initially for a term expiring at the annual meeting of Shareholders in the
second year and another class shall hold office initially for a term expiring at
the annual meeting of Shareholders in the third year. Beginning with the annual
meeting of Shareholders in the first year and at each succeeding annual meeting
of Shareholders, the directors of the class of directors whose term expires at
such meeting will be elected to hold office for a term expiring at the third
succeeding annual meeting. Each Trustee will hold office for the term for which
he is elected and until his successor is duty elected and qualifies.
SECTION 2.3 Resignation, Removal or Death. Any Trustee may
resign by written notice to the remaining Trustees, effective upon execution and
delivery to the Trust of each such notice or upon any future date specified in
the notice. A Trustee may be removed, for cause only, at a meeting of the
Shareholders called for that purpose, by the affirmative vote of the holders of
not less than two-thirds of the Shares then outstanding and entitled to vote in
the election of Trustees. Upon the resignation or removal of any Trustee, or his
otherwise ceasing to be a Trustee, he shall automatically cease to have any
right, title or interest in and to the Trust Property and shall execute and
deliver such documents as the remaining Trustees require for the conveyance of
any Trust Property held in his name, and shall account to the remaining Trustees
as they require for all property which he holds as Trustee. Upon the incapacity
or death of any Trustee, his legal representative shall perform those acts.
SECTION 2.4 Legal Title. Legal title to all Trust Property
shall be vested in the Trustees, but they may cause legal title to any Trust
Property to be held by or in the name of any Trustee, or the Trust,
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or any other Person as nominee. The right, title and interest of the Trustees in
and to the Trust Property shall automatically vest in successor and additional
Trustees upon their qualification and acceptance of election or appointment as
Trustees, and they shall thereupon have all the rights and obligations of
Trustees, whether or not conveyancing documents have been executed and delivered
pursuant to Section 2.3 or otherwise. Written evidence of the qualification and
acceptance of election or appointment of successor and additional Trustees may
be filed with the records of the Trust and in such other offices, agencies or
places as the Trustees may deem necessary or desirable.
ARTICLE III
POWERS OF TRUSTEES
SECTION 3.1 General. Subject to the express limitations herein
or in the Bylaws, (1) the business and affairs of the Trust shall be managed
under the direction of the Board of Trustees and (2) the Trustees shall have
full, exclusive and absolute power, control and authority over the Trust
Property and over the business of the Trust as if they, in their own right, were
the sole owners thereof. The Trustees may take any actions as in their sole
judgment and discretion are necessary or desirable to conduct the business of
the Trust. This Declaration of Trust shall be construed with a presumption in
favor of the grant of power and authority to the Trustees. Any construction of
this Declaration of Trust or determination made in good faith by the Trustees
concerning their powers and authority hereunder shall be conclusive. The
enumeration and definition of particular powers of the Trustees included in this
Article III shall in no way be limited or restricted by reference to or
inference from the terms of this or any other provision of this Declaration of
Trust or construed or deemed by inference or otherwise in any manner to exclude
or limit the powers conferred upon the Trustees under the general laws of the
State of Maryland as now or hereafter in force.
SECTION 3.2 Specific Powers and Authority. Subject only to the
express limitations herein, and in addition to all other powers and authority
conferred by this Declaration or by law, the Trustees, without any vote, action
or consent by the Shareholders, shall have and may exercise, at any time or
times, in the name of the Trust or on its behalf the following powers and
authorities:
(a) Investments. Subject to Section 8.5, to invest in,
purchase or otherwise acquire and to hold real, personal or mixed, tangible or
intangible, property of any kind wherever located, or rights or interests
therein or in connection therewith, all without regard to whether such property,
interests or rights are authorized by law for the investment of funds held by
trustees or other fiduciaries, or whether obligations the Trust acquires have a
term greater or lesser than the term of office of the Trustees or the possible
termination of the Trust, for such consideration as the Trustees may deem proper
(including cash, property of any kind or Securities of the Trust), provided,
however, that the Trustees shall take such actions as they deem necessary and
desirable to comply with any requirements of Title 8 relating to the types of
assets held by the Trust.
(b) Sale, Disposition and Use of Property. Subject to Article
V and Sections 8.5 and 9.3, to sell, rent, lease, hire, exchange, release,
partition, assign, mortgage, grant security interests in, encumber, negotiate,
dedicate, grant easements in and options with respect to, convey, transfer
(including transfers to entities wholly or partially owned by the Trust or the
Trustees) or otherwise dispose of any or all of the Trust Property by deeds
(including deeds in lieu of foreclosure with or without consideration), trust
deeds, assignments, bills of sale, transfers, leases, mortgages, financing
statements, security agreements and other instruments for any of such purposes
executed and delivered for and on behalf of the Trust or the Trustees by one or
more of the Trustees or by a duly authorized officer, employee, agent or nominee
of the Trust, on such terms as they deem appropriate; to give consents and
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make contracts relating to the Trust Property and its use or other property or
matters; to develop, improve, manage, use, alter and otherwise deal with the
Trust Property; to rent, lease or hire from others property of any kind;
provided, however, that the Trust may not use or apply land for any purposes not
permitted by applicable law.
(c) Financings. To borrow or in any other manner raise money
for the purposes and on the terms they determine, and to evidence the same by
issuance of Securities of the Trust, which may have such provisions as the
Trustees determine; to reacquire each Securities of the Trust; to enter into
other contracts or obligations on behalf of the Trust; to guarantee, indemnify
or act as surety with respect to payment or performance of obligations of any
Person; to mortgage, pledge, assign, grant security interests in or otherwise
encumber the Trust Property to secure any such Securities of the Trust, contacts
or obligations (including guarantees, indemnifications and suretyships); and to
renew, modify, release, compromise, extend, consolidate or cancel, in whole or
in part, any obligation to or of the Trust or participate in any reorganization
of obligors to the Trust.
(d) Loans. Subject to the provisions of Section 8.5, to lend
money or other Trust Property on such terms, for such purposes and to such
Persons as they may determine.
(e) Issuance of Securities. Subject to the provisions of
Article VI, to create and authorize the issuance, in shares, units or amounts of
one or more types, series or classes, of Securities of the Trust, which may have
such voting rights, dividend or interest rates, preferences, subordinations,
conversion or redemption prices or rights, maturity dates, distribution,
exchange, or liquidation rights or other rights as the Trustees may determine,
without vote of or other action by the Shareholders; to issue any type of
Securities of the Trust, and any options, warrants, or rights to subscribe
therefor, all without vote of or other action by the Shareholders, to such
Persons for such consideration, at such time or times and in such manner and on
such terms as the Trustees determine; to list any of the Securities of the Trust
on any securities exchange; and to purchase or otherwise acquire, hold, cancel,
reissue, sell and transfer any Securities of the Trust.
(f) Expenses and Taxes. To pay any charges, expenses or
liabilities necessary or desirable, in the sole discretion of the Trustees, for
carrying out the purposes of this Declaration of Trust and conduction the
business of the Trust, including compensation or fees to Trustees, officers,
employees and agents of the Trust, and to Persons contracting with the Trust,
and any taxes, levies, charges and assessments of any kind imposed upon or
chargeable against the Trust, the Trust Property, or the Trustees in connection
therewith; and to prepare and file any tax returns, reports or other documents
and take any other appropriate action relating to the payment of any such
charges, expenses or liabilities.
(g) Collection and Enforcement. To collect, sue for and
receive money or other property due to the Trust; to consent to extensions of
the time for payment, or to the renewal, of any Securities or obligations; to
engage or to intervene in, prosecute, defend, compound, enforce, compromise,
release, abandon or adjust any actions, suits, proceedings, disputes, claims,
demands, security interests, or things relating to the Trust, the Trust
Property, or the Trust's affairs; to exercise any rights and enter into any
agreements, and take any other action necessary or desirable in connection with
the foregoing.
(h) Deposits. To deposit funds or Securities constituting part
of the Trust Property in banks, trust companies, savings and loan associations,
financial institutions and other depositories, whether or not such deposits will
draw interest, subject to withdrawal on such terms and in such manner as the
Trustees determine.
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(i) Allocation; Accounts. To determine whether moneys, profits
or other assets of the Trust shall be charged or credited to, or allocated
between, income and capital, including whether or not to amortize any premium or
discount and to determine in what manner any expenses or disbursements are to be
borne as between income and capital (regardless of how such items would normally
or otherwise be charged to or allocated between income and capital without such
determination); to treat any dividend or other distribution on any investment
as, or apportion it between, income and capital; in their discretion to provide
reserves for depreciation, amortization, obsolescence or other purposes in
respect of any Trust Property in such amounts and by such methods as they
determine; to determine what constitutes net earnings, profits or surplus; to
determine the method or form in which the accounts and records of the Trust
shall be maintained; and to allocate to the Shareholders equity account less
than all of the consideration paid for Shares and to allocate the balance to
paid-in capital or capital surplus.
(j) Valuation of Property. To determine the value of all or
any part of the Trust Property and of any services, Securities, property or
other consideration to be furnished to or acquired by the Trust, and to revalue
all or any part of the Trust Property, all in accordance with such appraisals or
other information as are reasonable, in their sole judgment.
(k) Ownership and Voting Powers. To exercise all of the
rights, powers, options and privileges pertaining to the ownership of any
Mortgages, Securities, Real Estate and other Trust Property to the same extent
that an individual owner might, including without limitation to vote or give any
consent, request, or notice or waive any notice, either in person or by proxy or
power of attorney, which proxies and powers of attorney may be for any general
or special meetings or action, and may include the exercise of discretionary
powers.
(l) Officers, Etc.; Delegation of Powers. To elect, appoint or
employ such officers for the Trust and such committees of the Board of Trustees
with such powers and duties as the Trustees may determine or the Trust's Bylaws
provide; to engage, employ or contract with and pay compensation to any Person
(including, subject to Section 8.5, any Trustee and any Person who is an
Affiliate of any Trustee) as agent, representative, Adviser, member of an
advisory board, employee or independent contractor (including advisers,
consultants, transfer agents, registrars, underwriters, accountants, attorneys
at law, real estate agents, property and other managers, appraisers, brokers,
architects, engineers, construction managers, general contractors or otherwise)
in one or more capacities, to perform such services on such terms as the
Trustees may determine; to delegate to one or more Trustees, officers or other
Persons engaged or employed as aforesaid or to committees of Trustees or to the
Adviser, the performance of acts or other things (including granting of
consents), the making of decisions and the execution of such deeds, contracts or
other instruments, either in the names of the Trust, the Trustee, or as their
attorneys or otherwise, as the Trustees may determine; and to establish such
committees as they deem appropriate.
(m) Associations. Subject to Section 8.5, to cause the Trust
to enter into joint ventures, general or limited partnerships, participation or
agency arrangements or any other lawful combinations, relationships, or
associations of any kind.
(n) Reorganizations, Etc. Subject to Sections 9.2 and 9.3, to
cause to be organized or assist in organizing any Person under the laws of any
jurisdiction to acquire all or any part of the Trust Property or carry on any
business in which the Trust shall have an interest; to merge or consolidate the
Trust with any Person; to sell, rent, lease, hire, convey, negotiate, assign,
exchange or transfer all or any part of the Trust Property to or with any Person
in exchange for Securities of such Person or otherwise; and to lend money to,
subscribe for and purchase the Securities of, and enter into any contracts with,
any Person in which the Trust holds, or is about to acquire, Securities or any
other interests.
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(o) Insurance. To purchase and pay for out of Trust Property
insurance policies insuring the Trust and the Trust Property against any and all
risks, and insuring the Shareholders, Trustees, officers, employees and agents
of the Trust individually against all claims and liabilities of every nature
arising by reason of holding or having held any such status, office or position
or by reason of any action alleged to have been taken or omitted (including
those alleged to constitute misconduct, gross negligence, reckless disregard of
duty or bad faith) by any such Person in such capacity, whether or not the Trust
would have the power to indemnify such Person against such claim or liability.
(p) Executive Compensation, Pension and Other Plans. To adopt
and implement executive compensation, pension, profit sharing, stock option,
stock bonus, stock purchase, stock appreciation rights, savings, thrift,
retirement, incentive or benefit plans, trusts or provisions, applicable to any
or all Trustees, officers, employees or agents of the Trust, or to other Persons
who have benefited the Trust, all on such terms and for such purposes as the
Trustees may determine.
(q) Distributions. To declare and pay dividends or other
distributions to Shareholders, subject to the provisions of Section 6.4.
(r) Indemnification. In addition to the indemnification
provided for in Section 8.4, to indemnify any Person, including any Adviser or
independent contractor, with whom the Trust has dealings.
(s) Charitable Contributions. To make donations for the public
welfare or for community, charitable, religious, educational, scientific, civic
or similar purposes, regardless of any direct benefit to the Trust.
(t) Discontinue Operations; Bankruptcy. To discontinue the
operations of the Trust (subject to Section 10.2); to petition or apply for
relief under any provision of federal or state bankruptcy, insolvency or
reorganization laws or similar laws for the relief of debtors; to permit any
Trust Property to be foreclosed upon without raising any legal or equitable
defenses that may be available to the Trust or the Trustees or otherwise
defending or responding to such foreclosure; to confess judgment against the
Trust; or to take such other action with respect to indebtedness or other
obligations of the Trustees, in such capacity, the Trust Property or the Trust
as the Trustees in their discretion may determine.
(u) Termination of Status. To terminate the status of the
Trust as a real estate investment trust under the REIT Provisions of the Code.
(v) Fiscal Year. Subject to the Code, to adopt, and from time
to time change, a fiscal year for the Trust.
(w) Seal. To adopt and use a seal, but the use of a seal shall
not be required for the execution of instruments or obligations of the Trust.
(x) Bylaws. To adopt, implement and from time to time amend
Bylaws of the Trust relating to the business and organization of the Trust which
are not inconsistent with the provisions of this Declaration of Trust.
(y) Voting Trust.. To participate in, and accept Securities
issued under or subject to, any voting trust.
(z) Proxies. To solicit proxies of the Shareholders at the
expense of the Trust.
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(aa) Further Powers. To do all other acts and things and
execute and deliver all instruments incident to the foregoing powers, and to
exercise all powers which they deem necessary, useful or desirable to carry on
the business of the Trust or to carry out the provisions of this Declaration of
Trust, even if such powers are not specifically provided hereby.
ARTICLE IV
ADVISER
SECTION 4.1 Appointment. The Trustees are responsible for
setting the general policies of the Trust and for the general supervision of its
business conducted by officers, agents, employees, advisers or independent
contractors of the Trust. However, the Trustees are not required personally to
conduct the business of the Trust, and they may (but need not) appoint, employ
or contract with any Person (including a Person Affiliated with any Trustee) as
an Adviser and may grant or delegate such authority to the Adviser as the
Trustees may, in their sole discretion, deem necessary or desirable. The
Trustees may determine the terms of retention and the compensation of the
Adviser and may exercise broad discretion in allowing the Adviser to administer
and regulate the operations of the Trust, to act as agent for the Trust, to
execute documents on behalf of the Trust and to make executive decisions which
conform to general policies and principles established by the Trustees.
SECTION 4.2 Affiliation and Functions. The Trustees, by
resolution or in the Bylaws, may provide guidelines, provisions, or requirements
concerning the affiliation and functions of the Adviser.
ARTICLE V
INVESTMENT POLICY
The fundamental investment policy of the Trust is to make
investments in such a manner as to comply with the REIT Provisions of the Code
and with the requirements of Title 8, with respect to the composition of the
Trust's investments and the derivation of its income. Subject to Section 3.2(u),
the Trustees will use their best efforts to carry out this fundamental
investment policy and to conduct the affairs of the Trust in such a manner as to
continue to qualify the Trust for the tax treatment provided in the REIT
Provisions of the Code; however, no Trustee, officer, employee or agent of the
Trust shall be liable for any act or omission resulting in the loss of tax
benefits under the Code, except to the extent provided in Section 8.2. The
Trustees may change from time to time by resolution or in the Bylaws of the
Trust, such investment policies as they determine to be in the best interests of
the Trust, including prohibitions or restrictions upon certain types of
investments.
ARTICLE VI
SHARES
SECTION 6.1 Authorized Shares. The total number of shares of
beneficial interest which the Trust is authorized to issue is 102,000,000
shares, of which 1,000,000 shares shall be preferred stock, no par value per
share ("Preferred Stock"), 50,000,000 shares shall be common stock, $0.04 par
value per share ("Common Stock"), and 51,000,000 shares shall be excess stock,
$0.04 par value per share ("Excess Stock").
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SECTION 6.2 Common Stock.
(a) Dividend Rights. Subject to the preferential dividend
rights of the Preferred Stock, if any, as may be determined by the Board of
Trustees pursuant to Section 6.3, the holders of shares of the Common Stock
shall be entitled to receive such dividends as may be declared by the Board of
Trustees.
(b) Rights Upon Liquidation. Subject to the preferential
rights of the Preferred Stock, if any, as may be determined by the Board of
Trustees pursuant to Section 6.3 and the preferential rights of the Excess
Preferred Stock (as defined in Section 6.6(a)), if any, in the event of any
voluntary or involuntary liquidation, dissolution or winding up of, or any
distribution of the assets of, the Trust, each holder of shares of the Common
Stock shall be entitled to receive, ratably with each other holder of Common
Stock and Excess Common Stock (as defined in Section 6.6(a)), that portion of
the assets of the Trust available for distribution to the holders of Common
Stock or Excess Common Stock that bears the same relation to the total amount of
such assets of the Trust as the number of shares of Common Stock held by such
holder bears to the total number of shares of Common Stock and Excess Common
Stock then outstanding.
(c) Voting Rights. The holders of shares of the Common Stock
shall be entitled to vote on all matters (for which a common stockholder shall
be entitled to vote thereon) at all meetings of the stockholders of the Trust,
and shall be entitled to one vote for each share of the Common Stock entitled to
vote at such meeting, voting together with the holders of the Preferred Stock
who are entitled to vote (except as otherwise may be determined by the Board of
Trustees pursuant to Section 6.3).
SECTION 6.3 Preferred Stock. With respect to the Preferred
Stock, the Board of Trustees shall have the power from time to time (a) to
classify or reclassify, in one or more series, any unissued shares of Preferred
Stock and (b) to reclassify any unissued shares of any series of Preferred
Stock, in the case of either (a) or (b) by setting or changing the number of
shares constituting such series and the designation, preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of such shares and, in
such event, the Trust shall file for record with the State Department of
Assessments and Taxation of Maryland articles supplementary in substance and
form as prescribed by Title 8.
SECTION 6.4 Dividends or Distributions. The Trustees may from
time to time declare and pay to Shareholders such dividends or distributions in
cash, property or other assets of the Trust or in Securities of the Trust or
from any other source as the Trustees in their discretion shall determine. The
Trustees shall endeavor to declare and pay such dividends and distributions as
shall be necessary for the Trust to qualify as a real estate investment trust
under the REIT Provisions of the Code; however, Shareholders shall have no right
to any dividend or distribution unless and until declared by the Trustees. The
exercise of the powers and rights of the Trustees pursuant to this section shall
be subject to the provisions of any class or series of Shares at the time
outstanding. The receipt by any Person in whose name any Shares are registered
on the records of the Trust or by his duly authorized agent shall be a
sufficient discharge for all dividends or distributions payable or deliverable
in respect of such Shares and from all liability to see to the application
thereof.
SECTION 6.5 General Nature of Shares. All Shares shall be
personal property entitling the Shareholders only to those rights provided in
this Declaration or in the resolution creating any class or series of Shares.
The legal ownership of the Trust Property and the right to conduct the business
of the Trust are vested exclusively in the Trustees; the Shareholders shall have
no interest therein other than beneficial interest in the Trust conferred by
their Shares and shall have no right to compel any partition, division, dividend
or distribution of the Trust or any of the Trust Property. The death of a
Shareholder shall not terminate the Trust or give his legal representative any
rights against other Shareholders, the
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Trustees or the Trust Property, except the right, exercised in accordance with
applicable provisions of the Bylaws, to receive a new certificate for Shares in
exchange for the certificate held by the deceased Shareholder. Holders of Shares
shall not have any preemptive right to subscribe to any securities of the Trust.
SECTION 6.6 Restrictions on Ownership and Transfer; Exchange
For Excess Stock.
(a) Definitions. For the purposes of Sections 6.6, 6.7, 6.8
and 6.9, the following terms shall have the following meanings:
"Adoption Date" shall mean the effective date of the merger of
Vornado, Inc. into the Trust.
"Beneficial Ownership" shall mean ownership of Shares either
directly or constructively through the application of Section 544 of the Code,
as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings.
"Beneficiary" shall mean the beneficiary of the Special Trust
as determined pursuant to Section 6.8(e).
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Common Equity Stock" shall mean outstanding Shares that are
either Common Stock or Excess Common Stock.
"Constructive Ownership" shall mean ownership of Shares either
directly or constructively through the application of Section 318(a) of the
Code, as modified by Section 856(d)(5) of the Code. The terms "Constructive
Owner," "Constructively Owns" and "Constructively Owned" shall have the
correlative meanings.
"Constructive Ownership Limit" shall mean 9.9% of the
outstanding Equity Stock of any class.
"Equity Stock" shall mean outstanding Shares that are either
Common Equity Stock or Preferred Equity Stock. Equity Stock of any particular
class shall mean Common or Preferred Stock of that class and Excess Common or
Preferred Stock that would, under Section 6.8(e)(1), automatically be exchanged
for Common or Preferred Stock of that class in the event of a transfer of an
interest in the Special Trust in which such Excess Stock is held.
"Excess Common Stock" shall mean Excess Stock that would,
under Section 6.8(e)(1), automatically be exchanged for Common Stock in the
event of a transfer of an interest in the Special Trust in which such Excess
Stock is held.
"Excess Preferred Stock" shall mean Excess Stock that would,
under Section 6.8(e)(1), automatically be exchanged for Preferred Stock in the
event of a transfer of an interest in the Special Trust in which such Excess
Stock is held.
"Existing Constructive Holder" shall mean any Person who (i)
is the Constructive Owner of Shares in excess of the Constructive Ownership
Limit on the Adoption Date, so long as, but only so long as, such Person (x)
provides the certification requested by the Board of Trustees as to such
Person's status as a tenant of the Trust or an owner, directly or indirectly, of
a tenant of the Trust and such certification is and remains true, (y)
Constructively Owns Shares in excess of the Constructive Ownership Limit and
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(z) is not a Disqualified Constructive Holder, or (ii) is designated by the
Board of Trustees as an Existing Constructive Holder pursuant to the provisions
of Section 6.6(l)(2), so long as, but only so long as, such Person (x) complies
with any conditions or restrictions associated with such designation, (y)
Constructively Owns Shares in excess of the Constructive Ownership Limit, and
(z) is not a Designated Constructive Holder.
"Existing Holder" shall mean (i) any Person who is the
Beneficial Owner of Shares of Common Stock in excess of the Ownership Limit on
the Adoption Date, so long as, but only so long as, such Person Beneficially
Owns shares of Common Stock in excess of the Ownership Limit and (ii) any Person
(other than another Existing Holder) to whom an Existing Holder Transfers
Beneficial Ownership of shares of Common Stock causing such transferee to
Beneficially Own shares of Common Stock in excess of the Ownership Limit but not
in excess of such Person's Existing Holder Limit. Interstate Properties shall
not be treated as an Existing Holder for purposes of Section 6.6(i)(1) hereof,
instead, transfers of shares of Common Stock by Interstate Properties shall be
treated as transfers of shares of Common Stock by each of the partners of
Interstate Properties in proportion to their interest in that partnership.
"Existing Holder Limit" (i) for any Existing Holder who is an
Existing Holder by virtue of clause (i) of the definition of "Existing Holder",
shall mean, initially, the percentage of the outstanding Common Equity Stock
Beneficially Owned by such Existing Holder on the Limitation Date, and after any
adjustment pursuant to Section 6.6(i), shall mean the percentage of the
outstanding Common Equity Stock as so adjusted; and (ii) for any Existing Holder
who becomes such an Existing Holder by virtue of clause (ii) of the definition
of "Existing Holder", shall mean, initially, the percentage of the outstanding
Common Equity Stock Beneficially Owned by such Existing Holder at the time that
such Existing Holder becomes an Existing Holder, provided, that such Person's
Existing Holder Limit shall be the lower of the foregoing percentage and the
highest percentage of Common Equity Stock that could be Beneficially Owned by
such Person without resulting in the five largest then-existing Existing Holder
Limits exceeding 49.9% of the Common Stock (or, if there are fewer than five
then-existing Existing Holders, (i) all then-existing Existing Holder Limits
plus (ii) the product of (x) the Ownership Limit and (b) five less the number of
then-existing Existing Holders shall not exceed 49.9% of the Common Stock) and,
after any adjustment pursuant to Section 6.6(i), shall mean such percentage of
the outstanding Common Equity Stock as so adjusted. For purposes of making the
determination required by the preceding sentence, an Existing Holder that is not
treated as an individual for purposes of Section 542(a)(2) will not be treated
as an Existing Holder if all of the shares of Common Stock Beneficially Owned by
such Existing Holder are also treated as Beneficially Owned by Existing Holders
that are treated as individuals for purposes of Section 542(a)(2) of the Code.
From the Limitation Date and prior to the Ownership Limitation Termination Date,
the secretary of the Trust shall maintain and, upon request, make available to
each Existing Holder a schedule which sets forth the then current Existing
Holder Limit for such Existing Holder. There shall be a single Existing Holder
Limit for each "family", as such term is defined in Section 544 of the Code.
"Limitation Date" shall mean the date on which the Trust
issues at least 4.875 million shares of Common Stock, or such other date as may
be specified by the Board of Trustees by Board action taken prior to the date of
such an issuance.
"Market Price" shall mean the last reported sales price
reported on the New York Stock Exchange of Shares of the relevant class on the
trading day immediately preceding the relevant date, or if the Shares of the
relevant class are not then traded on the New York Stock Exchange, the last
reported sales price of Shares of the relevant class on the trading day
immediately preceding the relevant date as reported on any exchange or quotation
system over which the Shares of the relevant class may be traded, or if the
Shares of the relevant class are not then traded over any exchange or quotation
system, then the
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market price of the Shares of the relevant class on the relevant date as
determined in good faith by the Board of Trustees of the Trust.
"Ownership Limit", with respect to the Common Stock, shall
initially mean 2.0% of the outstanding Common Equity Stock of the Trust, and,
after an adjustment as set forth in Section 6.6(j), shall mean such greater
percentage (but not more than 9.9%) as so adjusted, and, with respect to any
class of Preferred Stock, shall mean 9.9% of the outstanding Preferred Equity
Stock of such class.
"Ownership Limitation Termination Date" shall mean the first
day after the date on which the Board of Trustees determines that it is no
longer in the best interests of the Trust to attempt to, or continue to, qualify
as a REIT.
"Person" shall mean an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of
the Code), a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity or any government or agency or
political subdivision thereof and also includes a group as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
but does not include an underwriter which participates in a public offering of
Shares for a period of 25 days following the purchase by such underwriter of
those Shares.
"Preferred Equity Stock" shall mean outstanding Shares that
are either Preferred Stock or Excess Preferred Stock. Preferred Equity Stock of
any particular class shall mean Preferred Stock of that class and Excess
Preferred Stock that would, under Section 6.8(e)(1), automatically be exchanged
for Preferred Stock of that class in the event of a transfer of an interest in
the Special Trust in which such Excess Preferred Stock is held.
"Purported Beneficial Holder" shall mean, with respect to any
event other than a purported Transfer which results in Excess Stock, the person
for whom the Purported Record Holder of the Shares that were, pursuant to
Section 6.6(c), automatically exchanged for Excess Stock upon the occurrence of
such event held such Shares.
"Purported Beneficial Transferee" shall mean, with respect to
any purported Transfer which results in Excess Stock, the purported beneficial
transferee for whom the Purported Record Transferee would have acquired Shares,
if such Transfer had been valid under Section 6.6(b).
"Purported Record Holder" shall mean, with respect to any
event other than a purported Transfer which results in Excess Stock, the record
holder of the Shares that were, pursuant to Section 6.6(c), automatically
exchanged for Excess Stock upon the occurrence of such event.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Stock, the record holder of the
Shares if such Transfer had been valid under Section 6.6(b).
"REIT" shall mean a real estate investment trust under Section
856 of the Code.
"Special Trust" shall mean the trust created pursuant to
Section 6.8(a).
"Tenant" shall mean any Person that leases (or subleases) real
property of the Trust.
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"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Shares (including (i) the granting of any option
or entering into any agreement for the sale, transfer or other disposition of
Shares or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Shares), whether
voluntary or involuntary, whether of record or beneficially and whether by
operation of law or otherwise.
"Trustee" shall mean, for purposes of Article VI only, the
Trust as trustee for the Special Trust, and any successor trustee appointed by
the Trust.
(b) Restrictions on Ownership and Transfer.
(1) Except as provided in Section 6.6(l), from the Adoption
Date and prior to the Ownership Limitation Termination Date, no Person (other
than, in the case of Common Stock, an Existing Holder) shall Beneficially Own
Shares of any class in excess of the Ownership Limit for such class of Shares
and no Person (other than an Existing Constructive Holder) shall Constructively
Own Shares in excess of the Constructive Ownership Limit. In addition, except as
provided in Section 6.6(l), from the Limitation Date and prior to the Ownership
Limitation Termination Date, no Existing Holder shall Beneficially Own shares of
Common Stock in excess of the Existing Holder Limit for such Existing Holder.
(2) Except as provided in Section 6.6(l), from the Adoption
Date and prior to the Ownership Limitation Termination Date, any Transfer that,
if effective, would result in any Person (other than, in the case of a Transfer
of Common Stock, an Existing Holder) Beneficially Owning Shares of any class in
excess of the Ownership Limit with respect to Shares of such class shall be void
ab initio as to the Transfer of such Shares which would be otherwise
Beneficially Owned by such Person in excess of such Ownership Limit; and the
intended transferee shall acquire no rights to such Shares.
(3) Except as provided in Section 6.6(l), from the Limitation
Date and prior to the Ownership Limitation Termination Date, any Transfer that,
if effective, would result in any Existing Holder Beneficially Owning shares of
Common Stock in excess of the applicable Existing Holder Limit shall be void ab
initio as to the Transfer of such shares of Common Stock which would be
otherwise Beneficially Owned by such Existing Holder in excess of the applicable
Existing Holder Limit; and such Existing Holder shall acquire no rights to such
shares of Common Stock.
(4) From the Adoption Date and prior to the Ownership
Limitation Termination Date, any Transfer that, if effective, would result in
any Person (other than an Existing Constructive Holder) Constructively Owning
Shares in excess of the Constructive Ownership Limit shall be void ab initio as
to the Transfer of such Shares which would be otherwise Constructively Owned by
such Person in excess of such amount; and the intended transferee shall acquire
no rights in such Shares.
(5) From the Adoption Date and prior to the Ownership
Limitation Termination Date, any Transfer that, if effective, would result in
Shares being beneficially owned by less than 100 Persons (determined without
reference to any rules of attribution) shall be void ab initio as to the
Transfer of such Shares which would be otherwise beneficially owned by the
transferee; and the intended transferee shall acquire no rights in such Shares.
(6) From the Adoption Date and prior to the Ownership
Limitation Termination Date, any Transfer that, if effective, would result in
the Trust being "closely held" within the meaning of Section 856(h) of the Code
shall be void ab initio as to the Transfer of the Shares which would cause the
Trust to be "closely held" within the meaning of Section 856(h) of the Code; and
the intended transferee shall acquire no rights in such Shares.
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(c) Exchange For Excess Stock.
(1) If, notwithstanding the other provisions contained in this
Article VI, at any time from the Adoption Date and prior to the Ownership
Limitation Termination Date, there is a purported Transfer such that any Person
(other than, in the case of Common Stock, an Existing Holder) would Beneficially
Own Shares of any class in excess of the applicable Ownership Limit with respect
to such class, then, except as otherwise provided in Section 6.6(l)(1), such
number of Shares in excess of such Ownership Limit (rounded up to the nearest
whole Share) shall be automatically exchanged for an equal number of shares of
Excess Stock. Such exchange shall be effective as of the close of business on
the business day prior to the date of the Transfer.
(2) If, notwithstanding the other provisions contained in this
Article VI, at any time from the Limitation Date and prior to the Ownership
Limitation Termination Date, there is a purported transfer such that an Existing
Holder would Beneficially Own shares of Common Stock in excess of the applicable
Existing Holder Limit, then, except as otherwise provided in Section 6.6(l)(1),
such number of shares of Common Stock in excess of such Existing Holder Limit
(rounded up to the nearest whole Share) shall be automatically exchanged for an
equal number of shares of Excess Stock. Such exchange shall be effective as of
the close of business on the business day prior to the date of the Transfer.
(3) If, notwithstanding the other provisions contained in this
Article VI, at any time from the Adoption Date and prior to the Ownership
Limitation Termination Date, there is a purported Transfer such that any Person
(other than an Existing Constructive Holder) Constructively Owns Shares in
excess of the Constructive Ownership Limit, then such Shares in excess of such
limit (rounded up to the nearest whole Share) shall be automatically exchanged
for an equal number of shares of Excess Stock. Such exchange shall be effective
as of the close of business on the business day prior to the date of the
Transfer.
(4) If, notwithstanding the other provisions contained in this
Article VI, at any time from the Adoption Date and prior to the Ownership
Limitation Termination Date, there is a purported Transfer which, if effective,
would cause the Trust to become "closely held" within the meaning of Section
856(h) of the Code, then the Shares being Transferred which would cause the
Trust to be "closely held" within the meaning of Section 856(h) of the Code
(rounded up to the nearest whole share) shall be automatically exchanged for an
equal number of shares of Excess Stock. Such exchange shall be effective as of
the close of business on the business day prior to the date of the Transfer.
(5) If, notwithstanding the other provisions contained in this
Article VI, at any time from the Adoption Date and prior to the Ownership
Limitation Termination Date, any Person other than, with respect to Common
Stock, an Existing Holder (the "Purchaser") purchases or otherwise acquires an
interest in a Person which Beneficially Owns Shares (the "Purchase") and, as a
result, the Purchaser would Beneficially Own Shares of any class in excess of
the applicable Ownership Limit with respect to such class, then, except as
provided in Section 6.6(l)(1), such number of Shares in excess of such Ownership
Limit (rounded up to the nearest whole Share) shall be automatically exchanged
for an equal number of shares of Excess Stock. Such exchange shall be effective
as of the close of business on the business day prior to the date of the
Purchase. In determining which Shares are exchanged, Shares of the relevant
class Beneficially Owned by the Purchaser prior to the Purchase shall be treated
as exchanged before any Shares Beneficially Owned by the Person an interest in
which is being so purchased or acquired are so treated.
(6) If, notwithstanding the other provisions contained in this
Article VI, at any time from the Limitation Date and prior to the Ownership
Limitation Termination Date, an Existing Holder purchases
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or otherwise acquires an interest in a Person which Beneficially Owns Shares
(the "Purchase") and, as a result, such Existing Holder would Beneficially Own
shares of Common Stock in excess of the applicable Existing Holder Limit, then,
except as provided in Section 6.6(l)(1), such number of shares of Common Stock
in excess of such Existing Holder Limit (rounded up to the nearest whole Share)
shall be automatically exchanged for an equal number of shares of Excess Stock.
Such exchange shall be effective as of the close of business on the business day
prior to the date of the Purchase. In determining which shares of Common Stock
are exchanged, shares of Common Stock Beneficially Owned by the purchasing
Existing Holder prior to the Purchase shall be treated as exchanged before any
shares of Common Stock Beneficially Owned by the Person an interest in which is
being so purchased or acquired are so treated.
(7) If, notwithstanding the other provisions contained in this Article
VI, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, any Person, other than an Existing Constructive Holder (the
"Purchaser"), purchases or otherwise acquires an interest in a Person which
Constructively Owns Shares (the "Purchase") and, as a result, the Purchaser
would Constructively Own Shares in excess of the Constructive Ownership Limit,
then such number of Shares in excess of the Constructive Ownership Limit
(rounded up to the nearest whole Share) shall be automatically exchanged for an
equal number of shares of Excess Stock. Such exchange shall be effective as of
the close of business on the business day prior to the date of the Purchase. In
determining which Shares are exchanged, Shares Constructively Owned by the
Purchaser prior to the Purchase shall be treated as exchanged before any Shares
Constructively Owned by the Person an interest in which is being so purchased or
acquired are so treated.
(8) If, notwithstanding the other provisions contained in this Article
VI, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, there is a redemption, repurchase, restructuring or similar
transaction with respect to a Person that Beneficially Owns Shares (the
"Entity") and, as a result, a Person (other than, in the case of Common Stock,
an Existing Holder) holding an interest in the Entity would Beneficially Own
Shares in excess of the applicable Ownership Limit with respect to such class,
then, except as provided in Section 6.6(l)(1), such number of Shares in excess
of such Ownership Limit (rounded up to the nearest whole Share) shall be
automatically exchanged for an equal number of shares of Excess Stock. Such
exchange shall be effective as of the close of business on the business day
prior to the date of the redemption, repurchase, restructuring or similar
transaction. In determining which Shares are exchanged, Shares of the relevant
class Beneficially Owned by the Entity shall be treated as exchanged before any
Shares Beneficially Owned by the Person holding an interest in the Entity
(independently of such Person's interest in the Entity) are so treated.
(9) If, notwithstanding the other provisions contained in this Article
VI, at any time from the Limitation Date and prior to the Ownership Limitation
Termination Date, there is a redemption, repurchase, restructuring or similar
transaction with respect to a Person that Beneficially Owns shares of Common
Stock (the "Entity") and, as a result, an Existing Holder would Beneficially Own
shares of Common Stock in excess of the applicable Existing Holder Limit, then,
except as provided in Section 6.6(l)(1), such number of shares of Common Stock
in excess of such Existing Holder Limit (rounded up to the nearest whole Share)
shall be automatically exchanged for an equal number of Shares of Excess Stock.
Such exchange shall be effective as of the close of business on the business day
prior to the date of the transfer. In determining which shares of Common Stock
are exchanged, shares of Common Stock Beneficially Owned by the Entity shall be
treated as exchanged before any shares of Common Stock Beneficially Owned by the
Existing Holder (independently of such Existing Holder's interest in the Entity)
are so treated.
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(10) If, notwithstanding the other provisions contained in this Article
VI, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, there is a redemption, repurchase, restructuring or similar
transaction with respect to a Person that Constructively Owns Shares (the
"Entity") and, as a result, a Person (other than an Existing Constructive
Holder) holding an interest in the Entity would Constructively Own Shares of any
class in excess of the Constructive Ownership Limit, then such number of Shares
in excess of the Constructive Ownership Limit (rounded up to the nearest whole
Share) shall be automatically exchanged for an equal number of shares of Excess
Stock. Such exchange shall be effective as of the close of business on the
business day prior to the date of the transfer. In determining which Shares are
exchanged, Shares Constructively Owned by the Entity shall be treated as
exchanged before any Shares Constructively Owned by the Person holding an
interest in the Entity (independently of such Person's interest in the Entity)
are so treated.
(11) If, notwithstanding the other provisions contained in this Article
VI, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, an event, other than an event described in Sections 6.6(c)(1)
through (10), occurs which would, if effective, result in any Person (other than
an Existing Constructive Holder) Constructively Owning Shares in excess of the
Constructive Ownership Limit, then the smallest number of Shares Constructively
Owned by such Person which, if exchanged for Excess Stock, would result in such
Person's Constructive Ownership of Shares not being in excess of the
Constructive Ownership Limit, shall be automatically exchanged for an equal
number of shares of Excess Stock. Such exchange shall be effective as of the
close of business on the business day prior to the date of the relevant event.
(12) If, notwithstanding the other provisions contained in this Article
VI, at any time from the Adoption Date and prior to the Ownership Limitation
Termination Date, an event, other than an event described in Sections 6.6(c)(1)
through (10), occurs which would, if effective, result in any Person (other
than, in the case of Common Stock, an Existing Holder) Beneficially Owning
Shares in excess of the applicable Ownership Limit, then, except as provided in
Section 6.6(1)(1), the smallest number of Shares Beneficially Owned by such
Person which, if exchanged for Excess Stock, would result in such Person's
Beneficial Ownership of Shares not being in excess of such Ownership Limit,
shall be automatically exchanged for an equal number of shares of Excess Stock.
Such exchange shall be effective as of the close of business on the business day
prior to the date of the relevant event.
(13) Subject to the provisions of Section 6.6(c)(14), if,
notwithstanding the other provisions contained in this Article VI, at any time
from the Limitation Date and prior to the Ownership Limitation Termination Date,
an event, other than an event described in Section 6.6(c)(1) through (10),
occurs which would, if effective, result in any Existing Holder Beneficially
Owning Shares of Common Stock in excess of the applicable Existing Holder Limit,
then, except as provided in Section 6.6(l)(1), the smallest number of shares of
Common Stock Beneficially Owned by such Existing Holder which, if exchanged for
Excess Stock, would result in such Existing Holder's Beneficial Ownership of
Shares of Common Stock not being in excess of the such Existing Holder Limit,
shall be automatically exchanged for an equal number of shares of Excess Stock.
Such exchange shall be effective as of the close of business on the business day
prior to the date of the relevant event. Any event which results in Beneficial
Ownership on the Limitation Date by an Existing Holder of Shares of Common Stock
that were not Beneficially Owned by such Existing Holder on the Adoption Date
shall be treated, for purposes of this Section 6.6(c)(13), as an event occurring
on the day after the Limitation Date and such shares of Common Stock shall not
be taken into account in determining such Existing Holder's Existing Holder
Limit.
(14) In addition, if a Person (the "nonreporting Person") who
Beneficially Owns more than 2.0% of the outstanding shares of Common Stock on
the Adoption Date does not provide all of the information required by Section
6.6(f)(2) hereof and, as a result, five or fewer Persons would, but for
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the exchange required by this paragraph, Beneficially Own, in the aggregate,
more than 49.9% of the outstanding shares of Common Stock, then, as of the day
prior to the date on which such aggregate ownership would have come to exceed
49.9%, shares of Common Stock Beneficially Owned by such nonreporting Person in
excess of 2.0% of the outstanding shares of Common Equity Stock, to the extent
not described on the written notice, if any, provided by such nonreporting
Person pursuant to Section 6.6(f)(2) hereof, shall be automatically exchanged
for shares of Common Stock to the extent necessary to prevent such aggregate
ownership from exceeding 49.9%.
(d) Remedies For Breach. If the Board of Trustees or its designees
shall at any time determine in good faith that a Transfer has taken place in
violation of Section 6.6(b) or that a Person intends to acquire or has attempted
to acquire beneficial ownership (determined without reference to any rules of
attribution), Beneficial Ownership or Constructive Ownership of any Shares in
violation of Section 6.6(b), the Board of Trustees or its designees shall take
such action as it deems advisable to refuse to give effect or to prevent such
Transfer (or any Transfer related to such intent), including, but not limited
to, refusing to give effect to such Transfer on the books of the Trust or
instituting proceedings to enjoin such Transfer; provided, however, that any
Transfers or attempted Transfers in violation of Sections 6.6(b)(2) through (4)
or Section 6.6(b)(6) shall automatically result in the exchange described in
Section 6.6(c), irrespective of any action (or nonaction) by the Board or
Trustees.
(e) Notice of Ownership or Attempted Ownership in Violation of Section
6.6(b). Any Person who acquires or attempts to acquire Beneficial or
Constructive Ownership of Shares in violation of Section 6.6(b), shall
immediately give written notice to the Trust of such event and shall provide to
the Trust such other information as the Trust may request in order to determine
the effect, if any, of such acquisition or attempted acquisition on the Trust's
status as a REIT.
(f) Owners Required to Provide Information.
(1) From the Adoption Date and prior to the Ownership Limitation
Termination Date:
(a) every Beneficial Owner of more than 2.0% of the
outstanding Equity Stock of any class shall, within 30 days after
January 1 of each year, give written notice to the Trust stating the
name and address of such Beneficial Owner, the number of Shares
Beneficially Owned, and a description of how such Shares are held. Each
such Beneficial Owner shall provide to the Trust such additional
information as the Trust may request in order to determine the effect,
if any, of such Beneficial Ownership on the Trust's status as a REIT.
(b) each Person who is a Beneficial Owner or Constructive
Owner of Shares and each Person (including the shareholder of record)
who is holding Shares for a Beneficial Owner or Constructive Owner
shall provide to the Trust such information as the Trust may request,
in good faith, in order to determine the Trust's status as a REIT or to
comply with regulations promulgated under the REIT provisions of the
Code.
(2) every Beneficial Owner of more than 2.0% of the outstanding shares
of Common Stock on the Adoption Date shall, within 60 days of the Adoption Date,
give written notice, a form for which will be made available by the Trust to
those Persons that are Shareholders as of the Adoption Date, to the Trust
stating the name and address of such Beneficial Owner, the number of shares of
Common Stock Beneficially Owned, and a description of how such shares of Common
Stock are held.
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(g) Remedies Not Limited. Nothing contained in this Article VI shall
limit the authority of the Board of Trustees to take such other action as it
deems necessary or advisable to protect the Trust and the interests of its
Shareholders by preservation of the Trust's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this Article VI, including any definition contained in Section
6.6(a) and any ambiguity with respect to which Shares are to be exchanged for
Excess Stock in a given situation, the Board of Trustees shall have the power to
determine the application of the provisions of this Article VI with respect to
any situation based on the facts known to it.
(i) Modification of Existing Holder Limits. The Existing Holder Limits
may be modified as follows:
(1) Subject to the limitations provided in Section 6.6(k), any Existing
Holder may Transfer shares of Common Stock to a Person who is already an
Existing Holder up to the number of shares of Common Stock Beneficially Owned by
such transferor Existing Holder in excess of the Ownership Limit with respect to
Common Stock. Any such Transfer will decrease the Existing Holder Limit for such
transferor Existing Holder and increase the Existing Holder Limit for such
transferee Existing Holder by the percentage of the outstanding Common Equity
Stock so Transferred. The transferor Existing Holder shall give the Board of
Trustees of the Trust prior written notice of any such Transfer.
(2) Subject to the limitations provided in Section 6.6(k), the Board of
Trustees may grant stock options which result in Beneficial Ownership of shares
of Common Stock by an Existing Holder pursuant to a stock option plan approved
by the Shareholders. Any such grant shall increase the Existing Holder Limit for
the affected Existing Holder to the maximum extent possible under Section 6.6(k)
to permit the Beneficial Ownership of the shares of Common Stock issuable upon
the exercise of such stock option.
(3) The Board of Trustees may reduce the Existing Holder Limit for any
Existing Holder, with the written consent of such Existing Holder, after any
Transfer permitted in this Section 6.6 by such Existing Holder to a Person other
than an Existing Holder or after the lapse (without exercise) of a stock option
described in Section 6.6(i)(2).
(4) Upon the divorce of an Existing Holder, the Existing Holder Limits
of the divorced couple shall be adjusted to reflect their Beneficial Ownership
of shares of Common Stock after such divorce.
(j) Modifications of Ownership Limit. Subject to the limitations
provided in Section 6.6(k), the Board of Trustees may from time to time increase
the Ownership Limit with respect to a class of Shares.
(k) Limitations on Modifications.
(1) Neither the Ownership Limit with respect to a class of Shares nor
any Existing Holder Limit may be increased (nor may any additional Existing
Holder Limit be created) if, after giving effect to such increase (or creation),
five Beneficial Owners of Shares (including all of the then-existing Existing
Holders) could Beneficially Own, in the aggregate, more than 49.9% of the
outstanding Equity Stock of the class of Shares to which such Ownership Limit or
Existing Holder Limit relates. For purposes of making the determination required
by the preceding sentence, an Existing Holder that is not treated as an
individual for purposes of Section 542(a)(2) will not be treated as an Existing
Holder if all of the shares of Common Stock Beneficially Owned by such Existing
Holder are also treated as Beneficially Owned by Existing Holders that are
treated as individuals for purposes of Section 542(a)(2) of the Code.
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(2) Prior to the modifications of any Existing Holder Limit or
Ownership Limit pursuant to Section 6.6(i) or Section 6.6(j), the Board of
Trustees may require such opinions of counsel, affidavits, undertakings or
agreements as it may deem necessary or advisable in order to determine or ensure
the Trust's status as a REIT.
(3) No Existing Holder Limit shall be reduced to a percentage which is
less than the Ownership Limit for Common Stock.
(4) The Ownership Limit with respect to a class of Shares may not be
increased to a percentage which is greater than 9.9%.
(l) Exceptions.
(1) The Board of Trustees, with a ruling from the Internal Revenue
Service or an opinion of counsel, may exempt a Person from the Ownership Limit
with respect to a class of Shares or an Existing Holder Limit, as the case may
be, if such Person is not an individual for purposes of Section 542(a)(2) of the
Code and the Board of Trustees obtains such representations and undertakings
from such Person as are reasonably necessary to ascertain that no individual's
Beneficial Ownership of Shares of such class will violate the Ownership Limit
with respect to such class or any applicable Existing Holder Limit, and such
Person agrees that any violation or attempted violation will result in, to the
extent necessary, the exchange of Shares held by such Person for Excess Stock in
accordance with Section 6.6(c).
(2) The Board of Trustees, with a ruling from the Internal Revenue
Service or an opinion of counsel, may designate a Person as an Existing
Constructive Holder, if such Person does not and represents that it will not
owe, directly or constructively (by virtue of the application of Section 318(a)
of the Code, as modified by Section 856(d)(5) of the Code), more than a 9.9%
interest (as set forth in Section 856(d)(2)(B)) in a Tenant (or such smaller
interest as would, in conjunction with the direct or constructive holdings of
the Existing Constructive Holders, cause the aggregate interest held by the
Existing Constructive Holders and such Person to exceed 9.9%) and the Trust
obtains such representations and undertakings from such Person as are reasonably
necessary to ascertain this fact and such Person agrees that any violation or
attempted violation will result in, to the extent necessary, the exchange of
Shares held by such Person in excess of the Constructive Ownership Limit for
Excess Stock in accordance with Section 6.6(c) (as though the phrase "other than
an Existing Constructive Holder" did not appear therein).
SECTION 6.7 Legend.
(a) Each certificate for Common Stock shall bear the following legend:
"The shares of Common Stock represented by this certificate
are subject to restrictions on ownership and transfer for the purpose
of the Trust's maintenance of its status as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the "Code").
No Person may Beneficially Own shares of Common Stock in excess of 2.0%
(or such greater percentage as may be determined by the Board of
Trustees) of the outstanding Common Equity Stock of the Trust (unless
such Person is an Existing Holder) and no Person may Constructively Own
shares of Common Stock in excess of 9.9% of the outstanding Common
Equity Stock of the Trust (unless such person is an Existing
Constructive Holder). Any Person who attempts to Beneficially Own or
Constructively Own Shares in excess of the above limitations must
immediately notify the Trust. All capitalized terms used in this legend
have the meanings set forth in the Declaration of Trust, a copy of
which, including the restrictions on ownership and
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transfer, will be sent without charge to each stockholder who so
requests. If the restrictions on ownership and transfer are violated,
the shares of Common Stock represented hereby will be automatically
exchanged for shares of Excess Stock which will be held in trust by the
Trust."
(b) Each certificate for Preferred Stock shall bear the following
legend:
"The shares of Preferred Stock represented by this certificate
are subject to restrictions on ownership and transfer for the purpose
of the Trust's maintenance of its status as a real estate investment
trust under the Internal Revenue Code of 1986, as amended (the "Code").
No Person may Beneficially Own shares of Preferred Stock of any class
in excess of 9.9% of the outstanding Preferred Equity Stock of such
class and no Person may Constructively Own Preferred Stock of any class
in excess of 9.9% of the outstanding Preferred Equity Stock of such
class (unless such person is an Existing Constructive Holder). Any
Person who attempts to Beneficially Own or Constructively Own Shares in
excess of the above limitations must immediately notify the Trust. All
capitalized terms used in this legend have the meanings set forth in
the Declaration of Trust, a copy of which, including the restrictions
on ownership and transfer, will be sent without charge to each
stockholder who so requests. If the restrictions on ownership and
transfer are violated, the shares of Preferred Stock represented hereby
will be automatically exchanged for shares of Excess Stock which will
be held in trust by the Trust."
SECTION 6.8 Excess Stock.
(a) Ownership in Trust. Upon any purported Transfer or other event that
results in an exchange of Shares for Excess Stock pursuant to Section 6.6(c),
such Excess Stock shall be deemed to have been transferred to the Trust, as
Trustee of a Special Trust for the exclusive benefit of the Beneficiary or
Beneficiaries to whom an interest in such Excess Stock may later be transferred
pursuant to Section 6.8(e). Shares of Excess Stock so held in trust shall be
issued and outstanding stock of the Trust. The Purported Record Transferee or
Purported Record Holder shall have no rights in such Excess Stock except as
provided in Section 6.8(e). Where a Transfer or other event results in both an
automatic exchange of Shares of more than one class for Excess Stock, then
separate Special Trusts shall be deemed to have been established for the Excess
Stock attributable to the Shares of each such class.
(b) Dividend Rights. Excess Stock shall not be entitled to any
dividends. Any dividend or distribution paid prior to the discovery by the Trust
that the Shares with respect to which the dividend or distribution was made had
been exchanged for Excess Stock shall be repaid to the Trust upon demand.
(c) Rights Upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Trust, (i) subject to the preferential rights of the
Preferred Stock, if any, as may be determined by the Board of Trustees of the
Trust pursuant to Section 6.3 and the preferential rights of the Excess
Preferred Stock, if any, each holder of shares of Excess Common Stock shall be
entitled to receive, ratably with each other holder of Common Stock and Excess
Common Stock, that portion of the assets of the Trust available for distribution
to the holders of Common Stock or Excess Common Stock which bears the same
relation to the total amount of such assets of the Trust as the number of shares
of the Excess Common Stock held by such holder bears to the total number of
shares of Common Stock and Excess Common Stock then outstanding and (ii) each
holder of shares of Excess Preferred Stock shall be entitled to receive that
portion of the assets of the Trust which a holder of the Preferred Stock that
was exchanged for such Excess Preferred Stock would have been entitled to
receive had such Preferred Stock remained outstanding. The Trust, as holder of
the Excess Stock in trust, or if the Trust shall have been dissolved, any
trustee appointed by the Trust prior to its dissolution, shall distribute
ratably to the Beneficiaries of the Special Trust, when determined, any such
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assets received in respect of the Excess Stock in any liquidation, dissolution
or winding up of, or any distribution of the assets of the Trust.
(d) Voting Rights. The holders of shares of Excess Stock shall not be
entitled to vote on any matters (except as required by law).
(e) Restrictions On Transfer; Designation of Beneficiary.
(1) Excess Stock shall not be transferrable. The Purported Record
Transferee or Purported Record Holder may freely designate a Beneficiary of an
interest in the Special Trust (representing the number of shares of Excess Stock
held by the Special Trust attributable to a purported Transfer or other event
that resulted in the Excess Stock), if (i) the shares of Excess Stock left in
the Special Trust would not be Excess Stock in the hands of such Beneficiary and
(ii) the Purported Beneficial Transferee or Purported Beneficial Holder does not
receive a price, as determined on a Share-by-Share basis, for designating such
Beneficiary that reflects a price for such Excess Stock that, in the case of a
Purported Beneficial Transferee, exceeds (x) the price such Purported Beneficial
Transferee paid for the Shares in the purported Transfer that resulted in the
exchanges of Shares for Excess Stock, or (y) if the Purported Beneficial
Transferee did not give value for such Shares (through a gift, devise or other
transaction), a price per share equal to the Market Price of such Shares on the
date of the purported Transfer that resulted in the exchange of Shares for
Excess Stock or, in the case of a Purported Beneficial Holder, exceeds the
Market Price of the Shares that were automatically exchanged for such Excess
Stock on the date of such exchange. Upon such a transfer of an interest in the
Special Trust, the corresponding shares of Excess Stock in the Special Trust
shall be automatically exchanged for an equal number of shares of Common Stock
or shares of a class of Preferred Stock (depending upon the type and class of
Shares that were originally exchanged for such Excess Stock) and such shares of
Common Stock or Preferred Stock shall be transferred of record to the transferee
of the interest in the Special Trust if such Common Stock or Preferred Stock
would not be Excess Stock in the hands of such transferee. Prior to any transfer
of any interest in the Special Trust, the Purported Record Transferee or
Purported Record Holder, as the case may be, must give advance notice to the
Trust of the intended transfer and the Trust must have waived in writing its
purchase rights under Section 6.8(f).
(2) Notwithstanding the foregoing, if a Purported Beneficial Transferee
or Purported Beneficial Holder receives a price for designating a Beneficiary of
an interest in the Special Trust that exceeds the amounts allowable under
Section 6.8(e)(1), such Purported Beneficial Transferee or Purported Beneficial
Holder shall pay, or cause such Beneficiary to pay, such excess to the Trust.
(f) Purchase Right in Excess Stock. Shares of Excess Stock shall be
deemed to have been offered for sale to the Trust, or its designee, at a price
per share equal to, in the case of Excess Stock resulting from a purported
Transfer, the lesser of (i) the price per share in the transaction that created
such Excess Stock (or, in the case of a devise or gift) the Market Price at the
time of such devise or gift) and (ii) the Market Price on the date the Trust, or
its designee, accepts such offer or, in the case of Excess Stock created by any
other event, the lesser of (i) the Market Price of the Shares originally
exchanged for the Excess Stock on the date of such exchange or (ii) the Market
Price of such Shares on the date the Trust, or its designee, accepts such offer.
The Trust shall have the right to accept such offer for a period of ninety days
after the later of (i) the date of the purported Transfer or other event which
resulted in an exchange of Shares for such Excess Stock and (ii) the date the
Board of Trustees determines in good faith that a purported Transfer or other
event resulting in an exchange of Shares for such Excess Stock has occurred, if
the Trust does not receive a notice of any such Transfer pursuant to Section
6.6(e).
SECTION 6.9 Tenant Ownership Limitation.
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(a) Notice Requirement. An Existing Constructive Holder shall,
immediately upon the occurrence of an event causing such Existing Constructive
Holder to Constructively Own 2.0% or more of (i) in the case of a Tenant that is
a corporation, the outstanding voting power or the total number of outstanding
shares of such Tenant, or (ii) in the case of a Tenant that is not a
corporation, the assets or net profits of such Tenant give written notice to the
Trust of its Constructive Ownership of interests in such Tenant. Such notice
shall specify, as a percentage, (i) in the case of a Tenant that is a
corporation, such Existing Constructive Holder's Constructive Ownership of the
outstanding voting power and the total number of outstanding shares of such
Tenant, or (ii) in the case of a Tenant that is not a corporation, such Existing
Constructive Holder's Constructive Ownership of the assets and net profits of
such Tenant. Existing Constructive Holders that Constructively Own such an
interest in a Tenant on the Adoption Date shall so notify the Trust within 30
days after the Adoption Date.
(b) Ownership Registration. Upon receipt of a notice described in
Section 6.9(a), (a "Section 6.9(a) Notice"), the Trust shall immediately notify
the other Existing Constructive Holders of the name of the Tenant subject to the
Section 6.9(a) Notice (the "Designated Tenant"). Each other Existing
Constructive Holders shall, within 30 days of receiving such notice from the
Trust, provide the Trust with written notice (a "Section 6.9(b) Notice")
specifying, as a percentage, (i) where the Designated Tenant is a corporation,
such Existing Constructive Holder's Constructive Ownership of the outstanding
voting power and the total number of outstanding shares of such Designated
Tenant, or (ii) where the Designated Tenant is not a corporation, such Existing
Constructive Holder's Constructive Ownership of the assets and net profits of
such Designated Tenant.
(c) Notice of Changes in Ownership. While a Tenant is a Designated
Tenant, each Existing Constructive Holder shall, within 20 days of any event
causing a change in the percentage levels of such Existing Constructive Holder's
Constructive Ownership of such Designated Tenant, notify the Trust of changes in
the information contained in such Existing Constructive Holder's Section 6.9(a)
Notice or Section 6.9(b) Notice with respect to such Designated Tenant (or any
update of such information pursuant to this Section 6.9(c)).
(d) Recordkeeping. The Secretary of the Trust shall maintain a record
of the aggregate Constructive Ownership of each Designated Tenant by the
Existing Constructive Holders and shall make such record available to an
Existing Constructive Holder upon request. A Designated Tenant shall remain a
Designated Tenant for so long as there is an Existing Constructive Holder which
Constructively Owns 2.0% or more of (i) in the case of a Designated Tenant that
is a corporation, the outstanding voting power or the total number of
outstanding shares of such Designated Tenant, or (ii) in the case of a
Designated Tenant that is not a corporation, the assets or net profits of such
Designated Tenant. The Secretary of the Trust shall notify the Existing
Constructive Holder when the status of a Tenant as a Designated Tenant
terminates. An Existing Constructive Holder's status as a Disqualified Existing
Constructive Holder will terminate when the status of the Tenant with respect to
which such disqualified status arose as a Designated Tenant terminates.
(e) Excess Ownership. If, at any time from the Limitation Date to the
Ownership Limitation Termination Date, the aggregate Constructive Ownership of a
Tenant (the "Related Party Tenant") by the Existing Constructive Holders equals
or exceeds 10.0% of (i) in the case of a Tenant that is a corporation, the
outstanding voting power or the total number of outstanding shares of such
Tenant, or (ii) in the case of a Tenant that is not a corporation, the assets or
net profits of such Tenant, then, provided that the amounts received by the
Trust from leases of real property rented by such Related Party Tenant exceeded
$100,000 in the immediately preceding fiscal year (the "De Minimis Level"), one
or more of the Existing Constructive Holders shall be a Disqualified
Constructive Holder, in accordance with the rules set forth below. The De
Minimis level for a particular Related Party Tenant shall be
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adjusted in the event that (i) there are pre-existing Designated Tenants which
are Related Party Tenants and (ii) the amounts received by the Trust from leases
of real property rented by such Designated Tenants do not exceed the De Minimis
level in the absence of such adjustment.
(1) Excess Ownership of a Non-Designated Tenant. If the Related Party
Tenant is not a Designated Tenant, then each Existing Constructive Holder whose
Constructive Ownership of interests in such Related Party Tenant is such that
such Existing Constructive Holder is required to provide a Section 6.9(a) Notice
shall be a Disqualified Constructive Holder as of the first date that the
aggregate ownership described in Section 6.9(e) first came to equal or exceed
10.0% or, if later, the first day of the first year in which amounts received by
the Trust with respect to Real Property rented by such Related Party Tenant
exceeded the De Minimis Level.
(2) Excess Ownership of a Designated Tenant. Subject to the provisions
of Section 6.9(e)(3), if the Related Party Tenant is a Designated Tenant, then
each Existing Constructive Holder that has not complied with the provisions of
Section 6.9(c) hereof shall be a Disqualified Constructive Holder as of the
first date that the aggregate ownership described in Section 6.9(e) first came
to equal or exceed 10.0% or, if later, the first day of the first year in which
amounts received by the Trust with respect to Real Property rented by such
Related Party Tenant exceeded the De Minimis Level. If the aggregate
Constructive Ownership described in Section 6.9(e) continues to equal or exceed
10.0%, then the Existing Constructive Holder (x) whose Constructive Ownership of
interests in such Designated Tenant equals or exceeds 2.0% of (i) in the case of
a Designated Tenant that is a corporation, the outstanding voting power or the
total number of outstanding shares of such Designated Tenant, or (ii) in the
case of a Designated Tenant that is not a corporation, the assets or net profits
of such Designated Tenant and (y) which was the last such Existing Constructive
Holder to (a) become an Existing Constructive Holder or (b) have an increase in
its Constructive Ownership of the feature of the Designated Tenant with respect
to which the aggregate ownership described in Section 6.9(e) equals or exceeds
10%, shall be treated as a Disqualified Constructive Holder for the period
beginning on the first date that the aggregate ownership described in Section
6.9(e) first came to equal or exceed 10.0% or, if later, the first day of the
first year in which amounts received by the Trust with respect to Real Property
rented by such Related Party Tenant exceeded the De Minimis Level. If the
aggregate Constructive Ownership of the remaining Existing Constructive Holders
continues to equal of exceed 10%, then the process described above shall be
repeated.
(3) Acquisition During Notice Periods. If the Related Party Tenant is a
Designated Tenant and the aggregate Constructive Ownership described in Section
6.9(e) equals or exceeds 10.0% as a result of increases in Constructive
Ownership taking place during the notice periods described in Section 6.9(a) or
Section 6.9(b), then the Existing Constructive Holder that Constructively Owns
an interest in the relevant feature of the Designated Tenant and that was the
last such Existing Constructive Holder to (i) become an Existing Constructive
Holder or (ii) have an increase in its Constructive Ownership of such feature of
the Designated Tenant shall be treated as a Disqualified Constructive Holder for
the period beginning on the first date that the aggregate ownership described in
Section 6.9(e) first came to equal or exceed 10.0% or, if later, the first day
of the first year in which amounts received by the Trust with respect to Real
Property rented by such Related Party Tenant exceeded the De Minimis Level. If
excess aggregate Constructive Ownership continues to exist, then this process
shall be repeated.
(f) Modifications. The Board of Trustees may, on a prospective basis,
modify the Constructive Ownership thresholds described in Section 6.9(a) and
Section 6.9(d) and the De Minimis Level described in Section 6.9(e).
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(g) Determination of Voting Power. The outstanding voting power of a
corporate Tenant shall be determined for purposes of this Section 6.9 in the
manner in which such is determined for purposes of Section 856(d)(2) of the
Code.
SECTION 6.10 Severability. If any provision of this Article VI or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
SECTION 6.11 New York Stock Exchange Transactions. Nothing in this
Article VI, shall preclude the settlement of any transaction entered into
through the facilities of the New York Stock Exchange.
ARTICLE VII
SHAREHOLDERS
SECTION 7.1 Meetings of Shareholders. There shall be an annual meeting
of the Shareholders, to be held at such time and place as shall be determined by
or in the manner prescribed in the Bylaws at which the Trustees shall be elected
and any other proper business may be conducted. Except as otherwise provided in
this Declaration of Trust, special meetings of Shareholders may be called in the
manner provided in the Bylaws. If there are no Trustees, the officers of the
Trust shall promptly call a special meeting of the Shareholders entitled to vote
for the election of successor Trustees. Any meeting may be adjourned and
reconvened as the Trustees determine or as provided in the Bylaws.
SECTION 7.2 Voting Rights of Shareholders. Subject to the provisions of
any class or series of Shares then outstanding, the Shareholders shall be
entitled to vote only on the following matters: (a) election or removal of
Trustees as provided in Sections 7.1 and 2.3; (b) amendment of this Declaration
of Trust as provided in Section 9.1; (c) termination of the Trust as provided in
Section 10.2; (d) reorganization of the Trust as provided in Section 9.2; and
(e) merger, consolidation or share exchange of the Trust, or the sale or
disposition of substantially all of the Trust Property, as provided in Section
9.3. Except with respect to the foregoing matters, no action taken by the
Shareholders at any meeting shall in any way bind the Trustees.
SECTION 7.3 Consent of Shareholders in Lieu of Meeting. Any action
required to be taken at any annual or special meeting of Shareholders may be
taken without a meeting, without prior notice and without a vote, if a consent
or consents in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares of beneficial interest having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered to the Secretary of the Trust at its principal
place of business by hand or by certified or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
Shareholder who signs the consent and no written consent shall be effective to
take the action referred to therein unless, within 60 days of the earliest dated
consent delivered in the manner required by this Section 7.3 to the Trust,
written consents signed by a sufficient number of Shareholders to take action
are delivered to the Secretary of the Trust as described in the preceding
sentence. Prompt notice of the taking of the action without a meeting by less
than unanimous written consent shall be given to those Shareholders who have not
consented in writing.
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ARTICLE VIII
LIABILITY OF SHAREHOLDERS, TRUSTEES, OFFICERS, EMPLOYEES
AND AGENTS AND TRANSACTIONS BETWEEN THEM AND THE TRUST
SECTION 8.1 Limitation of Shareholder Liability. No Shareholder shall
be liable for any debt, claim, demand, judgment or obligation of any kind of,
against or with respect to the Trust by reason of his being a Shareholder, nor
shall any Shareholder be subject to any personal liability whatsoever, in tort,
contract or otherwise, to any Person in connection with the Trust Property or
the affairs of the Trust.
SECTION 8.2 Limitation of Trustee and Officer Liability. To the maximum
extent that Maryland law in effect from time to time permits limitation of the
liability of trustees and officers of a real estate investment trust, no Trustee
or officer of the Trust shall be liable to the Trust or to any Shareholder for
money damages. Neither the amendment nor repeal of this Section, nor the
adoption or amendment of any other provision of this Declaration of Trust
inconsistent with this Section, shall apply to or affect in any respect the
applicability of the preceding sentence with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption. In the absence
of any Maryland statute limiting the liability of trustees and officers of a
Maryland real estate investment trust for money damages in a suit by or on
behalf of the Trust or by any Shareholder, no Trustee or officer of the Trust
shall be liable to the Trust or to any Shareholder for money damages except to
the extent that (i) the Trustee or officer actually received an improper benefit
or profit in money, property, or services, for the amount of the benefit or
profit in money, property, or services actually received; or (ii) a judgment or
other final adjudication adverse to the Trustee or officer is entered in a
proceeding based on a finding in the proceeding that the Trustee's or officer's
action or failure to act was the result of active and deliberate dishonesty and
was material to the cause of action adjudicated in the proceeding.
SECTION 8.3 Express Exculpatory Clauses in Instruments. Neither the
Shareholders nor the Trustees, officers, employees or agents of the Trust shall
be liable under any written instrument creating an obligation of the Trust, and
all Persons shall look solely to the Trust Property for the payment of any claim
under or for the performance of that instrument. The omission of the foregoing
exculpatory language from any instrument shall not affect the validity of
enforceability of such instrument and shall not render any Shareholder, Trustee,
officer, employee or agent liable thereunder to any third party, nor shall the
Trustees or any officer, employee or agent of the Trust be liable to anyone for
such omission.
SECTION 8.4 Indemnification. To the extent provided in its Bylaws, the
Trust shall the power to indemnify, and to pay or reimburse reasonable expenses
to, as such expenses are incurred by, each Shareholder, Trustee, officer,
employee or agent (including any person who, while a Trustee of the Trust, is or
was serving at the request of the Trust as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, other enterprise or employee benefit plan)
from all claims and liabilities to which such person may become subject by
reason of his being or having been a Shareholder, Trustee, officer, employee or
agent.
SECTION 8.5 Transactions Between the Trust and its Trustees, Officers,
Employees and Agents. Subject to any express restrictions in this Declaration of
Trust or adopted by the Trustees in the Bylaws or by resolution, the Trust may
enter into any contract or transaction of any kind (including without limitation
for the purchase or sale of property or for any type of services, including
those in connection with underwriting or the offer or sale of Securities of the
Trust) with any Person, including any Trustee, officer, employee or agent of the
Trust or any Person Affiliated with a Trustee, officer, employee or agent of the
Trust, whether or not any of them has a financial interest in such transaction.
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ARTICLE IX
AMENDMENTS; REORGANIZATIONS; MERGER, ETC.
SECTION 9.1 Amendment.
(a) This Declaration of Trust may be amended by the affirmative vote of
the holders of not less than a majority of the Shares then outstanding and
entitled to vote thereon, except that Section 2.3, Section 6.6, Section 6.7,
Section 6.8, this subsection and subsection (b) of this Section 9.1, shall not
be amended, altered or repealed (or any other provision of this Declaration of
Trust be amended, altered or repealed or any provision be added to this
Declaration of Trust, in either case having the effect of amending, altering or
repealing any such sections or subsections) without the affirmative vote of the
holders of not less than two thirds of the Shares then outstanding and entitled
to vote.
(b) The Trustees, by a two-thirds vote, may amend provisions of this
Declaration of Trust from time to time to enable the Trust to qualify as a real
estate investment trust under the REIT Provisions of the Code or under Title 8.
The Board of Trustees, without any action by the shareholders of the Company,
may amend the Amended and Restated Declaration of Trust from time to time to
increase or decrease the aggregate number of shares of beneficial interest or
the number of shares of beneficial interest of any class that the Company is
authorized to issue.
(c) An amendment to this Declaration of Trust shall become effective as
provided in Section 11.5.
(d) This Declaration of Trust may not be amended except as provided in
this Section 9.1.
SECTION 9.2 Reorganization. Subject to the provisions of any class or
series of Shares at the time outstanding, the Trustees have the power to (a)
cause the organization of a corporation, association, trust or other
organization to take over the Trust Property and carry on the affairs of the
Trust; (b) merge the Trust into, or sell, convey and transfer the Trust Property
to, any such corporation, association, trust or organization in exchange for
Securities thereof or beneficial interests therein, and the assumption by the
transferee of the liabilities of the Trust; and (c) thereupon terminate the
Trust and deliver such Securities or beneficial interests ratably among the
Shareholders according to the respective rights of the class or series of Shares
held by them; provided that any such action shall have been approved, at a
meeting of the Shareholders called for the purpose, by the affirmative vote of
the holders of not less than a majority of the Shares then outstanding and
entitled to vote thereon.
SECTION 9.3 Merger, Consolidation or Sale of Trust Property. Subject to
the provisions of any class or series of Shares at the time outstanding, the
Trustees shall have the power to (a) merge the Trust into another entity, (b)
consolidate the Trust with one or more other entities into a new entity or (c)
sell or otherwise dispose of all or substantially all of the Trust Property;
provided, that such action shall have been approved, at a meeting of the
Shareholders called for the purpose, by the affirmative vote of the holders of
not less than a majority of the Shares then outstanding and entitled to vote
thereon.
ARTICLE X
DURATION AND TERMINATION OF TRUST
SECTION 10.1 Duration of Trust. The Trust shall continue perpetually
unless terminated pursuant to Section 10.2 or pursuant to any applicable
provision of Title 8.
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SECTION 10.2 Termination of Trust.
(a) Subject to the provisions of any class or series of Shares at the
time outstanding, the Trust may be terminated at any meeting of Shareholders
called for that purpose, by the affirmative vote of the holders of not less than
a majority of the Shares outstanding. Upon the termination of the Trust:
(i) The Trust shall carry on no business except for the purpose of
winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust and
all of the powers of the Trustees under this Declaration of Trust shall
continue, including the powers to fulfill or discharge the Trust's contracts,
collect its assets, sell, convey, assign, exchange, transfer or otherwise
dispose of all or any part of the remaining Trust Property to one or more
Persons at public or private sale for consideration which may consist in whole
or in part of cash, Securities or other property of any kind, discharge or pay
its liabilities and do all other acts appropriate to liquidate its business.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and agreements as
they deem necessary for their protection, the Trustees may distribute the
remaining Trust Property, in cash or in kind or partly each, among the
Shareholders according to their respective rights, so that after payment in full
or the setting apart for payment of such preferential amounts, if any, to which
the holders of any Shares (other than shares of Common Stock) at the time
outstanding shall be entitled, the remaining Trust Property available for
payment and distribution to Shareholders shall, subject to any participating or
similar rights of Shares (other than shares of Common Stock) at the time
outstanding, be distributed ratably among the holders of Common Stock at the
time outstanding.
(b) After termination of the Trust, the liquidation of its business,
and the distribution to the Shareholders as herein provided a majority of the
Trustees shall execute and file with the Trust's records a document certifying
that the Trust has been duly terminated, and the Trustees shall be discharged
from all liabilities and duties hereunder, and the rights and interests of all
Shareholders shall cease.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Governing Law. This Declaration of Trust is executed by
the undersigned Trustee and delivered in the State of Maryland with reference to
the laws thereof, and the rights of all parties and the validity, construction
and effect of every provision hereof shall be subject to and construed according
to the laws of the State of Maryland without regard to conflicts of laws
provisions thereof.
SECTION 11.2 Reliance by Third Parties. Any certificate shall be final
and conclusive as to any Persons dealing with the Trust if executed by an
individual who, according to the records of the Trust or of any recording office
in which this Declaration of Trust may be recorded, appears to be the Secretary
or an Assistant Secretary of the Trust or a Trustee, and if certifying to: (a)
the number or identity of Trustees, officers of the Trust or Shareholders; (b)
the due authorization of the execution of any document; (c) the action or vote
taken, and the existence of a quorum, at a meeting of Trustees or Shareholders;
(d) a copy of this Declaration or of the Bylaws as a true and complete copy as
then in force; (e) an amendment to this Declaration; (f) the termination of the
Trust; or (g) the existence of any fact or facts which relate to the affairs of
the Trust. No purchaser, lender, transfer agent or other Person shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made on behalf of the Trust by the Trustees or by any officer, employee or agent
of the Trust.
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SECTION 11.3 Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust are severable, and if
the Trustees shall determine, with the advice of counsel, that any one or more
of such provisions (the "Conflicting Provisions") are in conflict with the REIT
Provisions of the Code, Title 8 or other applicable federal or state laws, the
Conflicting Provisions shall be deemed never to have constituted a part of this
Declaration of Trust, even without any amendment of this Declaration pursuant to
Section 9.1; provided, however, that such determination by the Trustees shall
not affect or impair any of the remaining provisions of this Declaration of
Trust or render invalid or improper any action taken or omitted prior to such
determination. No Trustee shall be liable for making or failing to make such a
determination.
(b) If any provision of this Declaration of Trust shall be held invalid
or unenforceable in any jurisdiction, such holding shall not in any manner
affect or render invalid or unenforceable such provision in any other
jurisdiction or any other provision of this Declaration of Trust in any
jurisdiction.
SECTION 11.4 Construction. In this Declaration of Trust, unless the
context otherwise requires, words used in the singular or in the plural include
both the plural and singular and words denoting any gender include all genders.
The title and headings of different parts are inserted for convenience and shall
not affect the meaning, construction or effect of this Declaration. In defining
or interpreting the powers and duties of the Trust and its Trustees and
officers, reference may be made, to the extent appropriate and not inconsistent
with the Code or Title 8, to Titles 1 through 3 of the Corporations and
Associations Article of the Annotated Code of Maryland. In furtherance and not
in limitation of the foregoing, in accordance with the provisions of Title 3,
Subtitles 6 and 7, of the Corporations and Associations Article of the Annotated
Code of Maryland, the Trust shall be included within the definition of
"corporation" for purposes of such provisions.
SECTION 11.5 Recordation. This Declaration of Trust and any amendment
hereto shall be filed for record with the State Department of Assessments and
Taxation of Maryland and may also be filed or recorded in such other places as
the Trustees deem appropriate, but failure to file for record this Declaration
or any amendment hereto in any office other than in the State of Maryland shall
not affect or impair the validity or effectiveness of this Declaration or any
amendment hereto. A restated Declaration shall, upon filing, be conclusive
evidence of all amendments contained therein and may thereafter be referred to
in lieu of the original Declaration and the various amendments thereto.
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