HOSPITALITY PROPERTIES TRUST
ARTICLES SUPPLEMENTARY
9 1/2% SERIES A CUMULATIVE REDEEMABLE PREFERRED SHARES
without par value
HOSPITALITY PROPERTIES TRUST, a Maryland real estate investment trust,
having its principal office in Newton, Massachusetts (hereinafter called the
"Trust"), hereby certifies to the State Department of Assessments and Taxation
of Maryland that:
FIRST: Pursuant to authority expressly vested in the Trustees by
Section 5.1 of the Amended and Restated Declaration of Trust of the Trust, dated
August 21, 1995, as amended (the "Declaration"), the Trustees have duly
reclassified and designated 3,450,000 Preferred Shares of the Trust as 9 1/2%
Series A Cumulative Redeemable Preferred Shares, without par value, of the Trust
("Series A Preferred Shares").
SECOND: The preferences, rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms or
conditions of redemption of the Series A Preferred Shares are as follows, which
upon any restatement of the Declaration shall be made part of Article V of the
Declaration, with any necessary or appropriate changes to the enumeration or
lettering of sections or subsections hereof. Capitalized terms used in this
ARTICLE SECOND which are defined in the Declaration and not otherwise defined
herein are used herein as so defined in the Declaration.
9 1/2% Series A Cumulative Redeemable Preferred Shares, without par value
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1. Designation and Number. A series of Preferred Shares, designated the
9 1/2% Series A Cumulative Redeemable Preferred Shares, without par value (the
"Series A Preferred Shares"), is hereby established. The number of authorized
Series A Preferred Shares is 3,450,000.
2. Relative Seniority. In respect of rights to receive dividends and to
participate in distributions or payments in the event of any liquidation,
dissolution or winding up of the Trust, the Series A Preferred Shares shall rank
(i) senior to the Common Shares, the Junior Participating Preferred Shares and
any other class or series of Shares of the Trust, the terms of which
specifically provide that such class or series ranks, as to rights to receive
dividends and to participate in distributions or payments in the event of any
liquidation, dissolution or winding up of the Trust, junior to the Series A
Preferred Shares (the Shares described in this clause (i) being, collectively,
"Junior Shares"), (ii) on a parity with any other class or series of Shares of
the Trust, the terms of which specifically provide that such class or series
ranks, as to rights to receive dividends and to participate in distributions or
payments in the event of any liquidation, dissolution or winding up of the
Trust, on a parity with the Series A Preferred Shares, and (iii) junior to any
class or series of Shares of the Trust, the terms of which specifically provide
that such class or series ranks, as to rights to receive dividends and to
participate in distributions or payments in the event of any
liquidation, dissolution or winding up of the Trust, senior to the Series A
Preferred Shares. For the avoidance of doubt, debt securities of the Trust which
are convertible into or exchangeable for Shares of the Trust or any other debt
securities of the Trust do not constitute a class or series of Shares for
purposes of this Section 2.
3. Dividends and Distributions.
(a) Subject to the preferential rights of the holders of any class or
series of Shares of the Trust ranking senior to the Series A Preferred Shares as
to dividends, the holders of the then outstanding Series A Preferred Shares
shall be entitled to receive, when and as authorized by the Trustees, out of any
funds legally available therefor, cumulative dividends at a rate of nine and
one-half percent (9 1/2%) per annum of the Twenty-Five Dollars ($25.00) per
share liquidation preference of the Series A Preferred Shares (equivalent to the
annual rate of $2.375 per share). Such dividends shall accrue and be cumulative
from (but excluding) April 12, 1999 (the "Original Issue Date") in the case of
Series A Preferred Shares issued on or prior to May 12, 1999, and otherwise from
(but excluding) the date of the original issuance thereof, and will be payable
quarterly in arrears in cash on the last day of each March, June, September and
December beginning on June 30, 1999 (each such day being hereinafter called a
"Quarterly Dividend Date"); provided that if any Quarterly Dividend Date is not
a Business Day (as hereinafter defined), then the dividend which would otherwise
have been payable on such Quarterly Dividend Date may be paid on the next
succeeding Business Day with the same force and effect as if paid on such
Quarterly Dividend Date, and no interest or additional dividends or other sums
shall accrue on the amount so payable from such Quarterly Dividend Date to such
next succeeding Business Day. As used herein the term "Dividend Period" for
Series A Preferred Shares means the period from but excluding the Original Issue
Date or other date of the original issuance thereof, as applicable, and ending
on and including the next following Quarterly Dividend Date, and each subsequent
period from but excluding a Quarterly Dividend Date and ending on and including
the next following Quarterly Dividend Date. The amount of any dividend payable
for any full Dividend Period or portion thereof shall be computed on the basis
of a 360-day year of twelve 30-day months (it being understood that the first
Dividend Period is shorter than a full Dividend Period). Dividends shall be
payable to holders of record as they appear in the share records of the Trust at
the close of business on the applicable record date (the "Record Date"), which
shall be a date designated by the Trustees for the payment of dividends that is
not more than 60 nor less than 10 days prior to the applicable Quarterly
Dividend Date.
(b) Dividends on the Series A Preferred Shares shall accrue and be
cumulative, whether or not the Trust has earnings, there are funds legally
available for the payment of such dividends or such dividends have been
declared.
(c) If Series A Preferred Shares are outstanding, no full dividends
shall be declared or paid or set apart for payment on any other class or series
of Shares of the Trust ranking, as to dividends, on a parity with or junior to
Series A Preferred Shares for any period, unless the full cumulative dividends
on the Series A Preferred Shares have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past Dividend Periods. When dividends are not paid in full (or a
sum sufficient for such full payment is not so set apart) upon the Series A
Preferred Shares and the Shares of any other class or series
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ranking on a parity as to dividends with the Series A Preferred Shares, all
dividends declared upon Series A Preferred Shares and any such other class or
series of Shares shall in all cases bear to each other the same ratio that
accrued dividends per share on the Series A Preferred Shares and such other
class or series of Shares (which shall not include any accumulation in respect
of unpaid dividends for prior dividend periods if such other class or series
does not have a cumulative dividend) bear to each other.
(d) Except as provided in Section 3(c) above, unless full cumulative
dividends on the Series A Preferred Shares have been or contemporaneously are
declared and paid or declared and a sum sufficient for the repayment thereof set
apart for payment for all past Dividend Periods and the then current Dividend
Period, no dividends (other than in Common Shares or other Junior Shares or
options, warrants or rights to subscribe for or purchase Common Shares or other
Junior Shares) shall be declared or paid or set apart for payment and no other
distribution shall be declared or made upon the Common Shares or any other
Shares ranking junior to the Series A Preferred Shares as to rights to receive
dividends or to participate in distributions or payments in the event of any
liquidation, dissolution or winding up of the Trust, nor shall any Common Shares
or any other such Shares be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any such Shares) by the Trust except (i) by conversion into or
exchange for Common Shares or other Junior Shares, (ii) pursuant to pro rata
offers to purchase or a concurrent redemption of all, or a pro rata portion of,
the outstanding Series A Preferred Shares and any other class or series of
Shares ranking on a parity with Series A Preferred Shares as to rights to
receive dividends and to participate in distributions or payments in the event
of any liquidation, dissolution or winding up of the Trust, (iii) by redemption,
purchase or other acquisition of Common Shares made for purposes of an
incentive, benefit or share purchase plan of the Trust or any of its
subsidiaries for officers, Trustees or employees or others performing or
providing similar services, (iv) by redemption, purchase or other acquisition of
rights to purchase Junior Participating Preferred Shares pursuant to the Rights
Agreement, dated as of May 30, 1997, between the Trust and State Street Bank and
Trust Company, as rights agent, or pursuant to any replacement agreement
therefor relating to such rights, each as in effect from time to time, or of any
similar rights from time to time issued by the Trust in connection with a
successor or supplemental shareholder rights protection plan adopted by the
Trustees, and (v) for redemptions, purchases or other acquisitions by the Trust,
whether pursuant to any provision of the Declaration or otherwise, for the
purpose of preserving the Trust's status as a real estate investment trust (a
"REIT") for Federal income tax purposes.
(e) No interest, or sum of money in lieu thereof, shall be payable in
respect of any dividend payment or payments on Series A Preferred Shares which
may be in arrears, and the holders of Series A Preferred Shares are not be
entitled to any dividends, whether payable in cash, securities or other
property, in excess of the full cumulative dividends described in this Section
3. Except as otherwise expressly provided herein, the Series A Preferred Shares
shall not be entitled to participate in the earnings or assets of the Trust.
(f) Any dividend payment made on the Series A Preferred Shares shall
be first credited against the earliest accrued but unpaid dividend due with
respect to such Shares which remains payable. Any cash dividends paid in respect
of Series A Preferred Shares, including any
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portion thereof which the Trust elects to designate as "capital gain dividends"
(as defined in Section 857 (or any successor provision) of the Internal Revenue
Code) or as a return of capital, shall be credited to the cumulative dividends
on the Series A Preferred Shares.
(g) No dividends on the Series A Preferred Shares shall be authorized
by the Trustees or be paid or set apart for payment by the Trust at such time as
the terms and provisions of any agreement of the Trust, including any agreement
relating to its indebtedness, directly or indirectly prohibit authorization,
payment or setting apart for payment or provide that such authorization, payment
or setting apart for payment would constitute a breach thereof or a default
thereunder, or if such declaration, payment or setting apart for payment shall
be restricted or prohibited by law.
(h) The Trust shall remain entitled to receive and retain any interest
or other earnings on any money set aside for the payment of dividends on Series
A Preferred Shares and holders thereof shall have no claim to such interest or
other earnings. Any funds for the payment of dividends on Series A Preferred
Shares which have been set apart by the Trust and which remain unclaimed by the
holders of the Series A Preferred Shares entitled thereto on the first
anniversary of the applicable Quarterly Dividend Date, or other dividend payment
date shall revert and be repaid to the general funds of the Trust, and
thereafter the holders of the Series A Preferred Shares entitled to the funds
which have reverted or been repaid to the Trust shall look only to the general
funds of the Trust for payment, without interest or other earnings thereon.
(i) "Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in New York, New York or Boston, Massachusetts are authorized or required by
law, regulation or executive order to close.
4. Liquidation Rights.
(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Trust, then, before any distribution or payment shall be made
to the holders of any Common Shares or any other Shares ranking junior to the
Series A Preferred Shares as to rights to participate in distributions or
payments in the event of any liquidation, dissolution or winding up of the
Trust, but subject to the preferential rights of holders of any class or series
of Shares ranking senior to the Series A Preferred Shares as to rights to
participate in distributions or payments in the event of any liquidation,
dissolution or winding up of the Trust, the holders of Series A Preferred Shares
shall be entitled to receive, out of assets of the Trust legally available for
distribution to shareholders, liquidating distributions in cash or property at
its fair market value as determined by the Trustees in the amount of Twenty-Five
Dollars ($25.00) per Series A Preferred Share, plus an amount equal to all
dividends accrued and unpaid thereon.
(b) After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Series A Preferred Shares will have
no right or claim to any of the remaining assets of the Trust.
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(c) In the event that upon any voluntary or involuntary liquidation,
dissolution or winding up of the Trust, the available assets of the Trust are
insufficient to pay the full amount of the liquidating distributions on all
outstanding Series A Preferred Shares and the full amount amounts payable as
liquidating distributions on all Shares of other classes or series of Shares of
the Trust ranking on a parity with the Series A Preferred Shares as to rights to
participate in distributions or payments in the event of any liquidation,
dissolution or winding up of the Trust, then the holders of the Series A
Preferred Shares and all other such classes or series of Shares shall share
ratably in any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.
(d) For purposes of this Section 4, neither the sale, lease, transfer
or conveyance of all or substantially all of the property or business of the
Trust, nor the merger or consolidation of the Trust into or with any other
entity or the merger or consolidation of any other entity into or with the Trust
or a statutory share exchange by the Trust, shall be deemed to be a dissolution,
liquidation or winding up of the Trust.
(e) In determining whether a distribution (other than upon voluntary
or involuntary liquidation), by dividend, redemption or other acquisition of
Shares or otherwise, is permitted under Maryland law, amounts that would be
needed, if the Trust were to be dissolved at the time of the distribution, to
satisfy the preferential rights upon dissolution of the holders of Series A
Preferred Shares will not be added to the Trust's total liabilities.
5. Redemption by the Trust.
(a) Optional Redemption. The Series A Preferred Shares are not
redeemable prior to April 12, 2004, except as otherwise provided in Section 5(b)
below. On and after April 12, 2004, the Trust may, at its option, redeem Series
A Preferred Shares in whole or from time to time in part, for cash at a
redemption price per share of Twenty-Five Dollars ($25.00), together with all
accrued and unpaid dividends to the date fixed for redemption, except as
otherwise provided in Section 5(c)(vi) below (the "Series A Redemption Price"),
and without interest. Each date fixed for redemption of Series A Preferred
Shares pursuant to this Section 5(a) or to Section 5(b) below is referred to in
these provisions of the Series A Preferred Shares as a "Series A Redemption
Date." The Series A Preferred Shares have no stated maturity and are not subject
to any sinking fund or mandatory redemption. Any redemption of Series A
Preferred Shares pursuant to this Section 5(a) shall be made in accordance with
the applicable provisions of Section 5(c) below.
(b) Special Optional Redemption. The Trust may, at its option, redeem
at any time all or from time to time any Series A Preferred Shares which
constitute Excess Series A Preferred Shares (as defined in Section 9 below) for
cash at a redemption price per share equal to the Series A Redemption Price,
subject, with respect to the portion of the Series A Redemption Price
constituting accrued and unpaid dividends to the date fixed for redemption, to
the provisions of the second paragraph of subsection (c) of Section 5.14 of the
Declaration and to Section 5(c)(vi) below, and without interest. The Trust's
right to redeem Excess Series A Preferred Shares shall be in addition to, and
shall not limit, its rights with respect to such Series A Preferred Shares set
forth in Section 9 below or in Section 5.14 of the Declaration. Any redemption
of Series A Preferred Shares
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pursuant to this Section 5(b) shall be made in accordance with the applicable
provisions of Section 5(c) below.
(c) Procedures and Terms for Redemption.
(i) Notice of redemption will be mailed at least 30 days but
not more than 60 days before the Series A Redemption Date to each
holder of record of Series A Preferred Shares to be redeemed at the
address shown on the share transfer books of the Trust; provided that
if the Trust shall have reasonably concluded, based on advice of
independent tax counsel experienced in such matters, that a redemption
pursuant to Section 5(b) must be made on a date (the "Special
Redemption Date") which is earlier than 30 days after the date of such
mailing in order to preserve the status of the Trust as a REIT for
Federal income tax purposes or to comply with Federal tax laws
relating to the Trust's qualification as a REIT, then the Trust may
give such shorter notice as is necessary to effect such redemption on
the Special Redemption Date. Each notice of redemption shall state:
(A) the applicable Series A Redemption Date; (B) the number of Series
A Preferred Shares to be redeemed; (C) the applicable Series A
Redemption Price; (D) the place or places where certificates for such
Series A Preferred Shares are to be surrendered for payment of the
Series A Redemption Price; and (E) that dividends on the Series A
Preferred Shares to be redeemed will cease to accrue on such Series A
Redemption Date. If fewer than all the Series A Preferred Shares are
to be redeemed, the notice mailed to each such holder thereof shall
also specify the number of Series A Preferred Shares to be redeemed
from each such holder or the method for calculating that number. No
failure to give such notice or any defect therein or in the mailing
thereof shall affect the validity of the proceedings for the
redemption of any Series A Preferred Shares except as to the holder to
whom the Trust has failed to give notice or to whom notice was
defective.
(ii) If notice of redemption of Series A Preferred Shares
has been mailed in accordance with Section 5(c)(i) above and if the
funds necessary for such redemption have been set aside by the Trust
in trust for the benefit of the holders the Series A Preferred Shares
so called for redemption, subject to the provisions of Section 5(c)(v)
below, then from and after the Series A Redemption Date specified in
the notice dividends will cease to accumulate, and such Shares shall
no longer be deemed to be outstanding and shall not have
the status of Series A Preferred Shares and all rights of the holders
thereof as Shareholders of the Trust (except the right to receive the
Series A Redemption Price) shall terminate.
(iii) Upon surrender, in accordance with the Trust's notice
of redemption, of the certificates for any Series A Preferred Shares
redeemed (properly endorsed or assigned for transfer and with
applicable signature guarantees, if the Trust shall so require and the
notice shall so state), the Series A Preferred Shares shall be
redeemed by the Trust at the Series A Redemption Price. In case fewer
than all the Series A Preferred Shares evidenced by any such
certificate are redeemed, a new certificate or certificates shall be
issued evidencing the unredeemed Series A Preferred Shares without
cost to the holder thereof.
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(iv) If fewer than all of the outstanding Series A Preferred
Shares are to be redeemed, the number of Series A Preferred Shares to
be redeemed will be determined by the Trust and such Shares may be
redeemed pro rata from the holders of record of such Shares in
proportion to the number of such Shares held by such holders (with
adjustments to avoid redemption of fractional Shares), by lot or by
any other equitable method determined by the Trust.
(v) Any funds for the redemption of Series A Preferred
Shares which have been set aside by the Trust pursuant to Section
5(c)(ii) above, shall be irrevocably set aside separate and apart from
the Trust's other funds in trust for the pro rata benefit of the
holders of the Series A Preferred Shares called for redemption, except
that:
(A) the Trust shall be entitled to receive any
interest or other earnings, if any, earned on any
money so set aside in trust, and the holders of
any Shares redeemed shall have no claim to such
interest or other earnings; and
(B) any balance of monies deposited by the Trust and
unclaimed by the holders of the Series A Preferred
Shares entitled thereto at the expiration of one
year from the applicable Series A Redemption Date
shall be repaid, together with any interest or
other earnings earned thereon, to the general
funds of the Trust, and after any such repayment,
the holders of the Shares entitled to the funds
which have been repaid to the Trust shall look
only to the general funds of the Trust for payment
without interest or other earnings thereon.
(vi) Anything in these provisions of the Series A Preferred
Shares to the contrary notwithstanding, the holders of record of
Series A Preferred Shares at the close of business on a Record Date
will be entitled to receive the dividend payable with respect to such
Shares on the corresponding Quarterly Dividend Date notwithstanding
the redemption of such Shares after such Record Date and on or prior
to such Quarterly Dividend Date or the Trust's default in the payment
of the dividend due on such Quarterly Dividend Date, in which case the
amount payable upon redemption of such Series A Preferred Shares will
not include such dividend (and the full amount of the dividend payable
for the applicable Dividend Period shall instead be paid on such
Quarterly Dividend Date to the holders of record on such Record Date
as aforesaid). Except as provided in this clause (vi) and except to
the extent that accrued and unpaid dividends are payable as a part of
the Series A Redemption Price pursuant to Section 5(a) or 5(b), the
Trust will make no payment or allowance for unpaid dividends,
regardless of whether or not in arrears, on Series A Preferred Shares
called for redemption.
(vii) Notwithstanding the foregoing, unless the full
cumulative dividends on all Series A Preferred Shares shall have been
or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
Dividend Periods and the then current Dividend Period, no Series A
Preferred Shares shall be redeemed unless all outstanding Series A
Preferred Shares are simultaneously redeemed; provided, however, that
(i) the foregoing shall not prevent the redemption of Series A
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Preferred Shares pursuant to Section 5(b) above or the purchase or
acquisition of Series A Preferred Shares pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding
Series A Preferred Shares, and (ii) the foregoing shall not in any
respect limit the terms and provisions of Section 5.14 of the
Declaration or Section 9 hereof. In addition, unless the full
cumulative dividends on all outstanding Shares of Series A Preferred
Shares have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for
all past Dividend Periods and the then current Dividend Period, the
Trust shall not purchase or otherwise acquire directly or indirectly
any Series A Preferred Shares (except by conversion into or exchange
for Common Shares or other Junior Shares); provided, however, that (i)
the foregoing shall not prevent the redemption of Series A Preferred
Shares pursuant to Section 5(b) above or the purchase or acquisition of
Series A Preferred Shares pursuant to a purchase or exchange offer made
on the same terms to holders of all outstanding Series A Preferred
Shares, and (ii) the foregoing shall not in any respect limit the terms
and provisions of Section 5.14 of the Declaration or Section 9 hereof.
(viii) For the avoidance of doubt, the provisions of this
Section 5 shall not limit any direct or indirect purchase or
acquisition by the Trust of all or any Series A Preferred Shares on
the open market (including in privately negotiated transactions),
except as otherwise expressly provided in Section 5(c)(vii) above.
6. Voting Rights. Notwithstanding anything to the contrary contained
in the Declaration, except as set forth below in this Section 6, the holders of
the Series A Preferred Shares shall not be entitled to vote at any meeting of
the shareholders for election of Trustees or for any other purpose or otherwise
to participate in any action taken by the Trust or the shareholders thereof, or
to receive notice of any meeting of shareholders (except for such notices as may
be expressly required by law).
(a) At any time dividends on the Series A Preferred Shares shall be in
arrears for six or more quarterly periods, whether or not the quarterly periods
are consecutive, the holders of Series A Preferred Shares (voting separately as
a class with all other series of Preferred Shares of the Trust upon which like
voting rights have been conferred and are exercisable) will be entitled to vote
for the election of two additional Trustees of the Trust at the next annual
meeting of shareholders and at each subsequent meeting (and the number of
Trustees then constituting the Board of Trustees will automatically increase by
two, if not already increased by two by reason of the election of Trustees by
the holders of such Preferred Shares), until all dividends accumulated on Series
A Preferred Shares for the past Dividend Periods and the then current Dividend
Period shall have been fully paid or declared and a sum sufficient for the
payment thereof set apart for payment.
(i) Upon the full payment of all such dividends accumulated
on Series A Preferred Shares for the past Dividend Periods and the
then current Dividend Period or the declaration in full thereof and
the Trust's setting aside a sum sufficient for the payment thereof,
the right of the holders of Series A Preferred Shares to elect such
two Trustees shall cease, and (unless there are one or more other
series of Preferred Shares of the Trust upon which like voting rights
have been conferred and are exercisable) the term of office of such
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Trustees previously so elected shall automatically terminate and the
authorized number of Trustees of the Trust will thereupon
automatically return to the number of authorized Trustees otherwise in
effect, but subject always to the same provisions for the
reinstatement and divestment of the right to elect two additional
Trustees in the case of any such future dividend arrearage.
(ii) If at any time when the voting rights conferred upon
the Series A Preferred Shares pursuant to this Section 6(a) are
exercisable any vacancy in the office of a Trustee elected pursuant to
this Section 6(a) shall occur, then such vacancy may be filled only by
the written consent of the remaining such Trustee or by vote of the
holders of record of the outstanding Series A Preferred Shares and any
other series of Preferred Shares of the Trust upon which like voting
rights have been conferred and are exercisable and which are entitled
to vote as a class with the Series A Preferred Shares in the election
of Trustees pursuant to this Section 6(a).
(iii) Any Trustee elected or appointed pursuant to this
Section 6(a) may be removed only by the holders of the outstanding
Series A Preferred Shares and any other series of Preferred Shares of
the Trust upon which like voting rights have been conferred and are
exercisable and which are entitled to vote as a class with the Series
A Preferred Shares in the election of Trustees pursuant to this
Section 6(a), and may not be removed by the holders of the Common
Shares.
(iv) The term of any Trustees elected or appointed pursuant
to this Section 6(a) shall be from the date of such election or
appointment and their qualification until the next annual meeting of
the Shareholders and until their successors are duly elected and
qualify, except as otherwise provided above in this Section 6(a).
(b) So long as any Series A Preferred Shares remain outstanding, the
Trust shall not, without the affirmative vote or consent of the holders of at
least two-thirds of the Series A Preferred Shares outstanding at the time, given
in person or by proxy, either in writing or at a meeting (the holders of Series
A Preferred Shares voting separately as a class), (i) authorize or create, or
increase the authorized or issued amount of, any class or series of Shares
ranking senior to the Series A Preferred Shares with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up of the Trust, or reclassify any authorized Shares of the Trust into any such
Shares, or create, authorize or issue any obligation or security convertible
into or evidencing the right to purchase any such Shares; or (ii) amend, alter
or repeal the provisions of the Declaration or the terms of the Series A
Preferred Shares, whether by merger, consolidation or otherwise, so as to
materially and adversely affect any right, preference, privilege or voting power
of the Series A Preferred Shares; provided, however, that any increase in the
amount of authorized Preferred Shares, any issuance of or increase in the amount
of Series A Preferred Shares or any creation or issuance of or increase in the
amount of authorized shares of any class or series of Preferred Shares which
rank on a parity with the Series A Preferred Shares with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up of the Trust or which are Junior Shares shall not be deemed to materially and
adversely affect the rights, preferences, privileges or voting powers of the
Series A Preferred Shares.
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(c) The voting provisions set forth in clauses (a) and (b) above will
not apply if, at or prior to the time when the act with respect to which a vote
would otherwise be required shall be effected, all outstanding Series A
Preferred Shares shall have been redeemed or called for redemption and
sufficient funds shall have been deposited in trust pursuant to the provisions
of Sections 5(c)(ii) and 5(c)(v) hereof to effect the redemption.
(d) On each matter submitted to a vote of the holders of Series A
Preferred Shares or on which the holders of Series A Preferred Shares are
otherwise entitled to vote as provided herein, each Series A Preferred Share
shall be entitled to one vote, except that when Shares of any other class or
series of Preferred Shares of the Trust have the right to vote with the Series A
Preferred Shares as a single class on any matter, the Series A Preferred Shares
and the Shares of each such other class or series will have one vote for each
Twenty-Five Dollars ($25.00) of liquidation preference.
7. Conversion. The Series A Preferred Shares are not convertible into
or exchangeable for any other property or securities of the Trust. This
provision will not prevent the Trust from offering to convert or exchange the
Series A Preferred Shares.
8. Status of Redeemed and Reacquired Series A Preferred Shares. In the
event any Series A Preferred Shares shall be redeemed pursuant to Section 5
hereof or otherwise reacquired by the Trust, the Shares so redeemed or
reacquired shall become authorized but unissued Shares of Series A Preferred
Shares, available for future issuance and reclassification by the Trust or, if
so determined by the Trustees, may be retired and canceled by the Trust.
9. Restrictions on Transfer.
(a) As a condition to the transfer (including, without limitation, any
sale, transfer, gift, assignment, devise or other disposition of Series A
Preferred Shares, whether voluntary or involuntary, whether beneficially or of
record, and whether effected constructively, by operation of law or otherwise)
and/or registration of transfer of any Series A Preferred Shares ("Excess Series
A Preferred Shares") which could in the opinion of the Trustees result in
(i) direct or indirect ownership (as defined in Section 5.14
of the Declaration) of Series A Preferred Shares representing more
than 9.8% in number, value or voting power of the total Series A
Preferred Shares outstanding becoming concentrated in the hands of one
owner other than an Excepted Person (as such term is defined in the
Declaration),
(ii) the outstanding Series A Preferred Shares of the Trust
being owned by fewer than one hundred (100) persons, or
(iii) the Trust being "closely held" within the meaning of
Section 856(h) of the Internal Revenue Code,
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such potential owner (a "Proposed Transferee") shall file with the
Trust the statement or affidavit described in Section 5.14(b) of the
Declaration no later than the fifteenth (15th) day prior to any
proposed transfer, registration of transfer or transaction which, if
consummated, would have any of the results set forth above; provided,
however, that the Trustees may waive such requirement of prior notice
upon determination that such waiver is in the best interests of the
Trust. Subject to Section 5.14(i) of the Declaration, the Trustees
shall have the power and right (i) to refuse to transfer or issue
Excess Series A Preferred Shares or share certificates to any Proposed
Transferee whose acquisition of such Excess Series A Preferred Shares
would, in the opinion of the Trustees, result in the direct or
indirect beneficial ownership of any Excess Series A Preferred Shares
by a Person other than an Excepted Person and (ii) to treat such
Excess Series A Preferred Shares as having been transferred not to the
Proposed Transferee but rather to a trustee for the benefit of one or
more Charitable Beneficiaries (as defined in the Declaration) selected
and otherwise as described in Section 5.14(c) of the Declaration. Any
such trust shall be deemed to have been established by the holder of
such Excess Series A Preferred Shares for the benefit of the
applicable Charitable Beneficiary or Charitable Beneficiaries on the
day prior to the date of the purported transfer to the Proposed
Transferee, which purported transfer shall be void ab initio and the
Proposed Transferee shall be deemed never to have acquired any
interest in or with respect to the Excess Series A Preferred Shares
purportedly transferred.
(b) Any Excess Series A Preferred Shares shall automatically be deemed
to constitute Excess Shares (within the meaning of the Declaration) and shall be
treated in the manner prescribed for Excess Shares, including those set forth in
Section 5.14(c) thereof.
(c) Notwithstanding any other provision of the Declaration or hereof
to the contrary, but subject to Section 5.14(i) of the Declaration, any
purported acquisition of Series A Preferred Shares (whether such purported
acquisition results from the direct or indirect acquisition or ownership (as
defined for purposes of the Declaration) of Series A Preferred Shares) which
would result in the disqualification of the Trust as a REIT shall be null and
void. Any such Shares may be treated by the Trustees in the manner prescribed
for Excess Series A Preferred Shares in these provisions of the Series A
Preferred Shares and for Excess Shares in Section 5.14(c) of the Declaration.
(d) The provisions of this Section 9 shall not limit the applicability
of Section 5.14 of the Declaration to Series A Preferred Shares in accordance
with the terms thereof, and the provisions of this Section 9 and of Section 5.14
of the Declaration shall not limit the right of the Trust to elect to redeem
Excess Series A Preferred Shares pursuant to Section 5(b) hereof. Subject only
to Section 5.14(i) of the Declaration, nothing contained in this Section 9 or in
any other provision of the Series A Preferred Shares in these provisions of the
Series A Preferred Shares shall limit the authority of the Trustees to take such
other action as they deem necessary or advisable to protect the Trust and the
interests of the Shareholders by preserving the Trust's status as a REIT. The
provisions of subsections (f) through (i) of Section 5.14 of the Declaration
shall be applicable to this Section 9 as though (i) the references therein to
Section 5.14 of the Declaration referred instead to this Section 9 and (ii) the
references therein to subsections of Section 5.14 of the Declaration referred to
the comparable provisions of this Section 9.
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10. Severability. If any preference, right, voting power, restriction,
limitation as to dividends, qualification, term or condition of redemption or
other term of the Series A Preferred Shares is invalid, unlawful or incapable or
being enforced by reason of any rule of law or public policy, then, to the
extent permitted by law, all other preferences, rights, voting powers,
restrictions, limitations as to dividends, qualifications, terms and conditions
of redemption and other terms of the Series A Preferred Shares which can be
given effect without the invalid, unlawful or unenforceable preference, right,
voting power, restriction, limitation as to dividends, qualification, term or
condition of redemption or other term of the Series A Preferred Shares shall
remain in full force and effect and shall not be deemed dependent upon any
invalid, unlawful or unenforceable preference, right, voting power, restriction,
limitation as to dividends, qualification, term or condition of redemption or
other term of the Series A Preferred Shares.
THIRD: The Series A Preferred Shares have been classified and
designated by the Board of Trustees under the authority contained in the
Declaration.
FOURTH: These Articles Supplementary have been approved by the Board
of Trustees in the manner and by the vote required by law.
FIFTH: The undersigned President of the Trust acknowledges these Articles
Supplementary to be the trust act of the Trust and, as to all matters or facts
required to be verified under oath, the undersigned President acknowledges that,
to the best of his knowledge, information and belief, these matters and facts
are true in all material respects and this statement is made under the penalties
for perjury.
IN WITNESS WHEREOF, HOSPITALITY PROPERTIES TRUST has caused these
Articles Supplementary to be signed in its name and on its behalf by its
President and witnessed by its Assistant Secretary on April 7, 1999.
WITNESS: HOSPITALITY PROPERTIES TRUST
______________________________ By: _____________________________
Alexander A. Notopoulos, Jr., John G. Murray, President
Assistant Secretary
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