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EXHIBIT 3.7
ARTICLES OF AMENDMENT OF THE ARTICLES OF
INCORPORATION OF AMERICAN REALTY TRUST, INC.
Setting Forth the
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING OR OPTIONAL OR OTHER SPECIAL RIGHTS, AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF OF
SPECIAL STOCK
OF
AMERICAN REALTY TRUST, INC.
SERIES C 10% CUMULATIVE PREFERRED STOCK
AMERICAN REALTY TRUST, INC., a corporation organized and existing under the
laws of the State of Georgia,
DOES HEREBY CERTIFY:
THAT, pursuant to the authority conferred upon the Board of Directors by
the Articles of Incorporation, as amended, of AMERICAN REALTY TRUST, INC. (the
"Corporation"), and pursuant to the provisions of Section 14-2-602 of the
Georgia Business Corporation Code (which section provides that no shareholder
action is required in order to effect these Articles of Amendment), said Board
of Directors, by unanimous written consent dated as of May 23, 1996, adopted
certain recitals and resolutions providing for the designations, preferences
and relative participating, optional or other special rights and
qualifications, limitations or restrictions thereof, of a series of special
stock of the Corporation, specifically the Series C 10% Cumulative Preferred
Stock, which recitals and resolutions are as follows:
WHEREAS, Article Five of the Articles of Incorporation, as amended,
of the Corporation authorizes the Corporation to issue not more than
16,666,667 shares of common voting stock, $0.01 par value per share (the
"Common Stock"), and 20,000,000 shares of a special class of stock, $2.00
par value per share (the "Special Stock"), which Special Stock may be
issued from time to time in one or more series and shall be designated as
the Board of Directors may determine to have such voting powers,
preferences, limitations and relative rights with respect to the shares of
each series of the class of Special Stock of the Corporation as expressly
provided in a resolution or resolutions providing for the issuance of such
series adopted by the Board of Directors which is vested with the
authority in respect thereof;
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WHEREAS, 500,000 shares of such Special Stock has been previously
designated as the Series A Cumulative Participating Preferred Stock prior
to the date hereof, none of which are now issued and outstanding;
WHEREAS, 4,000 shares of such Special Stock has been previously
designated as the Series B 10% Cumulative Preferred Stock, prior to the
date hereof, all 4,000 shares of which are now issued and outstanding; and
WHEREAS, the Board of Directors now desires to further amend the
Articles of Incorporation to designate an additional series of the Special
Stock;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority
granted to the Board of Directors by Article Five of the Articles of
Incorporation, as amended, the Board of Directors hereby further amends
the Articles of Incorporation to provide for the issuance of one single
series of Special Stock consisting of the number of shares in such series
as set forth below and, subject to the provisions of Article Five of the
Articles of Incorporation, as amended, of the Corporation, hereby fixes
and determines with respect to such series the following designations,
preferences and relative participating, optional or other special rights,
if any, and qualifications, limitations or restrictions thereof:
1. Designation. The distinctive designation of such series
shall be the Series C 10% Cumulative Preferred Stock and each share
of the Series C 10% Cumulative Preferred Stock shall have a par value
of $2.00 per share and a preference on liquidation under paragraph 6
below of up to $100 per share. The Series C 10% Cumulative Preferred
Stock is sometimes referred to herein as the "Series C Preferred
Stock."
2. Number of Shares. The number of shares which shall
constitute the Series C Preferred Stock shall be such number as may
actually be issued by the Corporation, not to exceed a maximum of
16,500 shares, which number may be decreased (but not below the
number then outstanding), from time to time by the Board of
Directors, subject to the provisions hereof.
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3. Dividends and Dividend Rate. Holders of record on the
fifteenth day of each March, June, September and December of each
year of shares of the Series C Preferred Stock shall be entitled to
receive dividends, when and as declared by the Board of Directors of
the Corporation and to the extent permitted under the Georgia
Business Corporation Code, payable quarterly on each March 31, June
30, September 30 and December 31 of each year, beginning on June 30,
1996 (each a "Dividend Reference Date" and, collectively, the
"Dividend Reference Dates"), in preference to and with priority over
dividends upon all "Junior Securities" (as defined in paragraph 6
below). The dividends for the first four quarters after issuance of
the Series C Preferred Stock shall be paid by issuance of additional
shares of Series C Preferred Stock with a face amount equal to each
quarterly dividend payment. Except as otherwise provided herein,
dividends on each share of Series C Preferred Stock (a "Share") will
accrue cumulatively on a daily basis at the rate per share of ten
dollars ($10) per annum ($2.50 per calendar quarter) from and
including the date of issuance to and including the date on which the
"Redemption Price" (as defined in paragraph 4 below) of such Share is
paid, whether or not such dividends have been declared and whether or
not there are profits, surplus or other funds of the Corporation
legally available for the payment of such dividends. For purposes of
this paragraph 3, the date on which the Corporation initially issues
any Share is its date of issuance, regardless of the number of times
transfer of such Share is made on the stock records maintained by or
for the Corporation and regardless of the number of certificates that
may be issued to evidence such Share (whether by reason of transfer
of such Share or for any other reason). So long as any Shares of
Series C Preferred Stock are outstanding, the Corporation will not
declare or pay any dividends on Junior Securities (other than
dividends in respect of Common Stock payable in shares of Common
Stock) or make, directly or indirectly, any other distribution of any
sort in respect of Junior Securities, or any payment on account of
the purchase or other acquisition of the Junior Securities, unless on
the date of such declaration in the case of a dividend, or on such
date of distribution or payment, in the case of such distribution
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or other payment (a) all dividends on the Series C Preferred Stock
for all past quarter-yearly dividend periods have been paid in full
and the full dividends for the then current quarter-yearly period
shall have been paid or declared in a sum sufficient for the payment
thereof set apart, and (b) after giving effect to such payment of
dividends, other distributions, purchase or redemption, the aggregate
capital of the Corporation applicable to all capital stock of the
Corporation then outstanding, plus the earned and capital surplus of
the Corporation shall exceed the aggregate amount payable on
involuntary dissolution, liquidation or winding up of the Corporation
on all Shares of the Special Stock and all stock ranking prior to or
on a parity with the Series C Preferred Stock as to dividends or
assets outstanding after the payment of such dividends, other
distributions, purchase or redemption. Dividends shall not be paid or
declared and set apart for payment on any series of Special Stock for
any dividend period (including the Series C Preferred Stock) unless
dividends have been or are, contemporaneously, paid and declared and
set apart for payment on all outstanding series of Special Stock
entitled thereto for all dividend periods terminating on the same or
earlier date. If at any time the Corporation pays less than the total
amount of dividends then accrued with respect to the Series C
Preferred Stock, such payment will be distributed ratably among the
then holders of Series C Preferred Stock so that an amount equal is
paid with respect to each outstanding Share.
4. Redemption. The Corporation may, at any time after the
issuance thereof and from time to time, at the election of the Board
of Directors of the Corporation redeem any or all of the Series C
Preferred Stock then outstanding by written notice given not less
than twenty (20) nor more than sixty (60) days before the date fixed
for redemption (the "Redemption Date"). If mailed, such notice shall
be deemed to be delivered when deposited in the United States Mail,
postage prepaid, addressed to the holder of shares of Series C
Preferred Stock at his address as it appears on the stock transfer
records of the Corporation. Such notice shall set forth (a) the
shares to be so redeemed, (b) the date fixed for redemption, (c)
the applicable Redemption Price, and (d) the place at which the
holder(s) may obtain payment of
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the applicable Redemption Price upon surrender of the share
certificate(s). If less than all shares of Series C Preferred
Stock at any time outstanding shall be called for redemption, such
shares shall be redeemed pro rata by lot drawn or other manner deemed
fair in the sole discretion of the Board of Directors to redeem one
or more such shares without redeeming all such shares of Series C
Preferred Stock. If such notice of redemption shall have been so
mailed, on or before the Redemption Date, the Corporation may provide
for payment of a sum sufficient to redeem the applicable number of
Series C Preferred Stock called for redemption either (i) by setting
aside the sum required to be paid as the Redemption Price by the
Corporation, separate and apart from its other funds, in trust for
the account of the holder(s) of the shares of Series C Preferred
Stock to be redeemed or (ii) by depositing such sum in a bank or
trust company (either located in the state where the principal
executive office of the Corporation is maintained, such bank or trust
company having a combined surplus of at least $20,000,000 according
to its latest statement of condition, or such other bank or trust
company as may be permitted by the Articles of Incorporation, as
amended, or by law) as a trust fund, with irrevocable instructions
and authority to the bank or trust company to give or complete the
notice of redemption and to pay, on or after the Redemption Date, the
applicable Redemption Price on surrender of certificates evidencing
the share(s) of Series C Preferred Stock so called for redemption
and, in either event, from and after the Redemption Date (A) the
share(s) of Series C Preferred Stock deemed to be redeemed, (B) such
setting aside or deposit shall be deemed to constitute full payment
for such Share(s), (C) such Share(s) so redeemed shall no longer be
deemed to be outstanding, (D) the holder(s) thereof shall cease to be
a shareholder of the Corporation with respect to such share(s), and
(E) such holder(s) shall have no rights with respect thereto except
the right to receive their proportionate share of the funds set aside
pursuant hereto or deposited upon surrender of their respective
certificates. Any interest on the funds so deposited shall be paid to
the Corporation. Any and all such redemption deposits shall be
irrevocable except to the following extent: any funds so deposited
which shall not
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be required for the redemption of any shares of Series C Preferred
Stock because of any prior sale or purchase by. the Corporation
other than through the redemption process, subsequent to the date of
deposit but prior to the Redemption Date, shall be repaid to the
Corporation forthwith and any balance of the funds so deposited and
unclaimed by the holder(s) of any shares of Series C Preferred Stock
entitled thereto at the expiration off one calendar year from the
Redemption Date shall be repaid to the Corporation upon its request
or demand therefor and after any such repayment the holder(s) of the
share(s) so called for redemption shall look only to the Corporation
for payment of the Redemption Price thereof. In addition to the
redemption under this paragraph 4, the Corporation may redeem or
repurchase shares of the Series C Preferred Stock from any holder(s)
thereof who consents in writing to such redemption and the provisions
of this paragraph 4 will not apply to any such consented redemption.
All shares of Series C Preferred Stock redeemed shall be can- celled
and retired and no shares shall be issued in palace thereof, but such
shares shall be restored to the status of authorized but unissued
shares of Special Stock. The "Redemption Price" (herein so called)
shall be an amount equal to the "Liquidation Value" (as defined in
paragraph 6 below) of $100 per Share plus the amount of all accrued
but unpaid dividends thereon to the Redemption Date, which shall
include all cumulative dividends in arrears and also the
proportionate part of the dividend accrued since the last Dividend
Reference Date preceding the Redemption Date and whether or not
earned or declared, but without interest.
5. Sinking Fund. The Corporation shall not be required to
maintain any so-called "Sinking Fund" for the retirement on any
basis of the Series C Preferred Stock.
6. Rights on Liquidation. In the event of any liquidation,
dissolution or winding-up of the Corporation, and after paying and
providing for the payment of all creditors of the Corporation, the
holders of shares of the Series C Preferred Stock then outstanding
shall be entitled, before any distribution or payment is made upon
any "Junior Securities" (defined to be and mean the Common Stock and
any other equity security of any kind which the Corporation at any
time has issued, issuers or
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is authorized to issue if the Series C Preferred Stock has priority
over such securities as to dividends or upon liquidation), to receive
a liquidation preference in an amount in cash equal to the aggregate
Liquidation Value of all shares of Series C Preferred Stock
then outstanding, whether any such liquidation, dissolution or
winding up is voluntary or involuntary and the holders of the Series
C Preferred Stock shall not be entitled to any other or further
distributions of assets. The term "Liquidation Value" shall be and
mean, as of any particular date, an amount per Share of Series C
Preferred Stock equal to the Redemption Price if such share were so
redeemed in accordance with the provisions of paragraph 5 above, but
in no event shall exceed $100 per share, plus any accrued and unpaid
cumulative dividends. If, upon any dissolution, liquidation or
winding-up of the affairs of the Corporation, the net assets
available for distribution shall be insufficient to permit payment to
the holders of all outstanding shares of all series of Special Stock
of the amounts to which they respectively shall be entitled, then the
assets of the Corporation to be distributed to such holders will be
distributed ratably among them based upon the amounts payable on the
shares of each such series of Special Stock in the event of voluntary
or involuntary dissolution, liquidation or winding-up, as the case
may be, in proportion to the full preferential amounts, together with
any and all arrearages to which they are respectively entitled. Upon
any such liquidation, dissolution or winding-up of the Corporation,
after the holders of Special Stock have been paid in full the amounts
to which they are entitled, the remaining assets of the Corporation
may be distributed to the holders of Junior Securities, including
Common Stock, of the Corporation. The Corporation will mail written
notice of such liquidation, dissolution or winding-up, not less than
twenty (20) nor more than fifty (50) days prior to the payment date
stated therein to each record holder of Series C Preferred Stock.
Neither the consolidation nor merger of the Corporation into or with
any other corpo- ration or corporations, nor the sale or transfer
by the Corporation of all or any part of its assets, nor a reduction
of the capital stock of the Corporation, nor the purchase or
redemption by the Corporation of any shares of its Special Stock or
Common Stock or any other
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class of its stock will be deemed to be a liquidation,
dissolution or winding-up of the Corporation within the meaning of
this paragraph 6.
7. Ranking. The Series C Preferred Stock shall rank on a
parity as to dividends and upon liquidation, dissolution or winding
up with all other shares of Special Stock issued by the Corporation;
provided, however, that the Corporation shall not issue any shares of
Special Stock of any series which are superior to the Series C
Preferred Stock as to dividends or rights upon liquidation,
dissolution or winding up of the Corporation as long as any shares of
the Series C Preferred Stock are issued and outstanding, without the
prior written consent of the holders of a majority of such shares of
Series C Preferred Stock then outstanding voting separately as a
class.
8. Voting Rights. The holders of the shares of Series C
Preferred Stock shall only have the voting rights specifically
required by law under Section 14-2- 1004 of the Georgia Business
Corporation Code, and shall have the following additional voting
rights subject to and after compliance with any applicable laws and
rules or actual requirements of any exchange upon which any
securities of the Corporation are listed:
(a) except as may otherwise be specifically required by
law under Section 14-2-1004 of the Georgia Business
Corporation Code, the holders of the shares of Series C
Preferred Stock shall not have the right to vote such stock,
directly or indirectly, at any meeting of the shareholders of
the Corporation and such shares of stock shall not be counted
in determining the total number of outstanding shares to
constitute a quorum at any meeting of shareholders;
(b) in the event that, under any circumstance, the
holders of the Series C Preferred Stock are required by law to
vote upon any matter, the approval of such series shall be
deemed to have been obtained upon the affirmative vote of the
holders of only a majority of the shares of the Series C
Preferred Stock then outstanding;
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(c) except as set forth herein, or as otherwise
provided by the Articles of Incorporation, as amended, or by
law, holders of the Series C Preferred Stock shall have no
special voting rights and their consent shall not be required
for the taking of any corporate action.
9. Conversion Rights. The Series C Preferred Stock may be
converted at any time at the option of the holders thereof during a
ninety (90) calendar day period (the "Conversion Period" as defined
below) at the "Conversion Price" (as defined below) in the manner
hereinafter provided, into fully paid and non-assessable Common Stock
of the Corporation by multiplying the number of Shares of Series C
Preferred Stock to be converted by $100 and dividing the result by
the Conversion Price; provided, however, that as to any shares of
Series C Preferred Stock which shall have been called for redemption,
the right of conversion shall terminate at the close of business on
the second full business day prior to the date fixed for redemption
and that, on the commencement of any liquidation, dissolution or
winding up of the Corporation or the adoption by the stockholders of
the Corporation of any resolution authorizing the commencement
thereof, the right of conversion shall terminate.
(a) For the purposes of this paragraph 9, the following
terms shall have the meanings ascribed below:
(i) "Conversion Period" shall be a period in
time which commences at 7:00 a.m. local Dallas,
Texas time on the day-which is thirty (30) calendar
months after the date of original issuance of the
first certificate, issued by the Corporation,
representing shares of Series C Preferred Stock and
expire at 3:00 p.m. local Dallas, Texas time on the
ninetieth (90th) calendar day thereafter.
(ii) "Conversion Price" shall be and mean the
amount determined (rounded upward to the nearest
cent) by multiplying 0.9 times the
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simple average of the daily closing price of the
Common Stock for the three (3) trading days
immediately preceding the first day of the Conversion
Period on the market where the shares of Common Stock
of the Corporation are then regularly traded (which
is currently the New York Stock Exchange,
Inc.);provided, however, if the shares of Common
Stock of the Corporation have not traded on such
market for at least thirty (30) days during the six
calendar months preceding the first day of the
Conversion Period, then such average shall be of the
actual number of trading days in excess of three (3)
as may be available; provided further that if only
three or fewer trading days exist during the six
months immediately preceding the first day of the
Conversion Period, the Conversion Price shall be
equal to the simple average of the closing prices of
the shares of Common Stock during such shorter period
of three or fewer days on such market. The
Conversion Price shall not be subject to any
adjustment for the issuance of any shares of Common
Stock by the Corporation for any purpose.
(b) Upon any conversion, fractional shares shall not
be issued but any fractions shall be adjusted by the delivery
of one additional share of Common Stock in lieu of any cash on
the basis of the "closing" market price for Common Stock at
the close of business on the date of conversion unless the
Board of Directors shall determine to adjust by the issuance
of fractional scrip certificates or in some other manner. Upon
any conversion, any dividends accrued on the Series C
Preferred Stock surrendered for conversion not previously paid
shall be paid at the time of conversion. The Corporation shall
pay all issue taxes, if any, incurred in respect to the
issuance of Common Stock on conversion, provided, however,
that the Corporation shall not be required to pay any transfer
or other taxes incurred by reason of the issuance of such
Common Stock in names other' than those in which the Series C
Preferred Stock surrendered for conversion may stand.
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(c) Any conversion of Series C Preferred Stock into
Common Stock shall be made by the surrender to the
Corporation, at the office of any Transfer Agent for the
Common Stock, of the certificate or certificates representing
the Series C Preferred Stock to be converted, duly endorsed or
assigned (unless such endorsement or assignment be waived by
the Corporation), together with a written request for
conversion.
(d) All Series C Preferred Stock which shall have
been surrendered for conversion as herein provided shall no
longer be deemed to be outstanding and all rights with
respect to such shares of stock, including the rights, if any,
to receive notices and to vote, shall forthwith cease except
only the rights of the holders thereof to receive Common Stock
in exchange therefor. Any Series C Preferred Stock so
converted shall be permanently retired, shall no longer be
deemed outstanding and shall not under any circumstances be
reissued and the Corporation may from time to time take such
appropriate corporate action as may be necessary to reduce the
authorized Series C Preferred Stock accordingly.
(e) A number of authorized shares of Common Stock
sufficient to provide for the conversion of the Series C
Preferred Stock outstanding upon the basis hereinbefore
provided shall at all times be reserved for such conversion.
If the Corporation shall propose to issue any securities or to
make any change in its capital structure which would change
the number of shares of Common Stock into which each share of
Series C Preferred Stock shall be convertible as herein
provided, the Corporation shall at the same time also make
proper provision so that thereafter there shall be a
sufficient number of shares of Common Stock authorized and
reserved for conversion of the outstanding Series C Preferred
Stock on the new basis.
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(f) The term "Common Stock" as used in this paragraph
9 shall mean stock of the class designated as Common Stock of
the Corporation on the date the Series C Preferred Stock is
created or stock of any class or classes resulting from any
reclassification or reclassifications thereof, the right of
which to share in distributions of both earnings and assets is
without limitation in the Certificate of Incorporation (or
other similar documents) of the Corporation as to any fixed
amount or percentage and which are not subject to redemption;
provided, that if at any time there shall be more than one
such resulting class, the shares of each such class then
issuable on conversion of the Series C Preferred Stock shall
be substantially in the proportion which the total number of
shares of stock of each such class resulting from all such
reclassifications bears to the total number of shares of stock
of all such classes resulting from all such reclassifications.
(g) In case the Corporation shall propose at any time
during the Conversion Period:
(i) to pay any dividend on the Common Stock
outstanding payable in Common Stock or to make any
other distribution, other than cash dividends, to
the holders of the Common Stock outstanding; or
(ii) to offer for subscription to the holders of
the Common Stock outstanding any additional shares
of any class or any other rights or option; or
(iii) to effect any re-classification or
re-capitalization of the Common Stock outstanding
involving a change in the Common Stock, other than a
subdivision or combination of the Common Stock
outstanding; or
(iv) to merge or consolidate with or into any
other corporation, or to sell, lease, or convey all
or substantially all its property
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or business, or to liquidate, dissolve or wind up;
then, in each such case, the Corporation shall mail to the
holders of record of each of the shares of Series C Preferred
Stock at their last known post office addresses as shown by
the Corporation's records a statement, signed by an officer of
the Corporation, with respect to the proposed action, such
statement to be so mailed at least ten (10) days prior to the
date of the taking of such action or the record date for
holders of the Common Stock for the purposes thereof,
whichever is earlier. If such statement relates to any
proposed action referred to in clauses (iii) or (iv) of this
subparagraph 9, it shall set forth such facts with respect
thereto as shall reasonably be necessary to inform the holders
of the Series C Preferred Stock and the holders of such stock
as to the effect of such action upon the conversion rights of
such holders.
10. Reacquired Shares. Any shares of Series C
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such
shares shall, upon cancellation, become authorized but
unissued shares of Special Stock and may be re-issued as part
of a new series of Special Stock subject to the conditions and
restrictions on issuance set forth in the Articles of
Incorporation, as amended, or as otherwise required by law.
IN WITNESS WHEREOF, these Articles of Amendment are executed on behalf
of the Corporation by its President as of the 4th day of June, 1996.
AMERICAN REALTY TRUST, INC.
By:
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Carl L. Blaha
President
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