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Exhibit 99.2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
Greenbelt Division
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)
)
In re )
)
CRIIMI MAE Inc., et al., ) Chapter 11
) Case Nos. 98-2-3115(DK)
Debtors. ) through 98-2-3117(DK)
) (Jointly Administered)
)
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PRAECIPE FILING AMENDED EXHIBIT E (INCLUDING EXHIBITS
THERETO) TO THE DEBTORS' SECOND AMENDED JOINT
DISCLOSURE STATEMENT
In connection with the hearing on approval of the Debtors'
Second Amended Joint Disclosure Statement held on April 25, 2000, CRIIMI MAE
Inc. ("CMI"), CRIIMI MAE Holdings II, L.P. ("Holdings") and CRIIMI MAE
Management, Inc. ("Management") (collectively, the "Debtors") and the Official
Committee of Equity Security Holders of CMI (the "Equity Committee"), by and
through their undersigned counsel, hereby file this Praecipe Filing Amended
Exhibit E (including Exhibits thereto) to the Debtors' Second Amended Disclosure
Statement (the "Disclosure Statement").
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Approval of the Disclosure Statement including Amended Exhibit
E filed herewith is hereby requested.
Dated: July 12, 2000
VENABLE, BAETJER AND AKIN, GUMP, STRAUSS,
HOWARD, LLP HAUER & FELD, L.L.P.
By: /s/ By: /s/
--------------------------- -----------------------------
Richard L. Wasserman Stanley J. Samorajczyk
Federal Bar No. 02784 Federal Bar No. 03113
Carrie B. Weinfeld 1333 New Hampshire Ave., NW
Federal Bar No. 25365 Washington, D.C. 20036
1800 Mercantile Bank and Trust Building (202) 887-4000
Two Hopkins Plaza
Baltimore, Maryland 21201 Co-Counsel for CRIIMI MAE Inc.
(410) 244-7400 and CRIIMI MAE Holdings II, L.P.,
Debtors-in-Possession
Co-Counsel for CRIIMI MAE Inc.
and CRIIMI MAE Holdings II, L.P.,
Debtors-in-Possession
SHULMAN, ROGERS, GANDAL, COVINGTON & BURLING
PORDY & ECKER, P.A.
By: /s/ By: /s/
--------------------------- -----------------------------
Morton A. Faller Michael St. Patrick Baxter
Federal Bar No. 01488 Federal Bar No. 09694
11921 Rockville Pike Dennis B. Auerbach
Third Floor Federal Bar No. 09290
Rockville, MD 20852-2753 1201 Pennsylvania Avenue, N.W.
(301) 231-0928 Washington, D.C. 20044
(202) 662-6000
Counsel for CRIIMI MAE
Management, Inc., Counsel for the Official Committee
Debtor-in-Possession of Equity Security Holders of
CRIIMI MAE Inc.
-2-
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AMENDED EXHIBIT E (INCLUDING EXHIBITS THERETO) TO
THE DEBTORS' SECOND AMENDED JOINT DISCLOSURE STATEMENT
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ARTICLES OF AMENDMENT AND RESTATEMENT
OF
CRIIMI MAE INC.
CRIIMI MAE INC., a Maryland corporation (the "Corporation"), having its
principal office in Rockville, Maryland, hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
FIRST: The Charter (including all Articles Supplementary existing as of
the effective date of these Articles of Amendment and Restatement) of the
Corporation is hereby amended and as so amended is restated by striking out in
its entirety the existing Charter (including all Articles Supplementary existing
as of the effective date of these Articles of Amendment and Restatement) and
inserting in lieu thereof the following:
ARTICLE I
NAME
The corporation's name is CRIIMI MAE Inc. (the "Corporation").
ARTICLE II
PRINCIPAL OFFICE
The address of the Corporation's principal office in the State of
Maryland is 11200 Rockville Pike, Rockville, Maryland 20852.
ARTICLE III
RESIDENT AGENT
The name and address of the Corporation's resident agent is Corporation
Trust, Inc., a Maryland corporation, with its registered office at 11200
Rockville Pike, Rockville, Maryland 20852.
ARTICLE IV
PURPOSES
The purposes for which the Corporation is formed are to conduct any
business for which corporations may be organized under the laws of the State of
Maryland including, but not limited to, engaging in, promoting and carrying on
the business of acquiring, holding, managing and disposing of mortgage
investments and any lawful act and activity related thereto.
ARTICLE V
CAPITAL STOCK
(A) AGGREGATE NUMBER AND CLASSES. The aggregate number of shares of all
classes of stock that the Corporation shall have authority to issue is three
hundred seventy
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five million (375,000,000), consisting of: three hundred million
(300,000,000) shares of common stock, par value one cent ($0.01) per share
(together with any other class or series of common stock which may hereafter
be authorized, the "Common Stock") and seventy-five million (75,000,000)
shares of preferred stock, par value one cent ($0.01) per share (together
with any other class or series of preferred stock that may hereafter be
authorized, the "Preferred Stock"), of which three million (3,000,000) shares
are classified as Series B Cumulative Convertible Preferred Stock (the
"Series B Preferred Stock"), two hundred three thousand (203,000) shares are
classified as Series E Cumulative Convertible Preferred Stock (the "Series E
Preferred Stock"), and one million six hundred ten thousand (1,610,000)
shares are classified as Series F Redeemable Cumulative Dividend Preferred
Stock (convertible during the period of ten (10) Business Days after the
fifth Business Day after the Initial Issue Date and during the period of ten
(10) Business Days ending ninety (90) calendar days after the Initial Issue
Date or the first Business Day thereafter) (the "Series F Preferred Stock").
The Common Stock and the Preferred Stock, together with any other class or
classes of Capital Stock that may hereafter be authorized, are referred to
herein collectively as the "Capital Stock." The Board of Directors of the
Corporation (the "Board of Directors" or the "Board") may classify and
reclassify any unissued Capital Stock, whether now or hereafter authorized,
by setting or changing the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications or terms or
conditions of redemption of such stock.
(B) PREFERRED STOCK. Subject to the applicable provisions of Maryland
law, the Corporation's Charter and the express terms of any class or series of
Capital Stock, including the Articles Supplementary of any class or series of
Preferred Stock then outstanding, the Preferred Stock may be issued from time to
time, in one or more series as authorized by the Board of Directors. Prior to
the issuance of a series, the Board of Directors, by resolution, shall designate
that series to distinguish it from other series and classes of the Corporation's
Capital Stock, shall specify the number of shares to be included in the series,
and shall set preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of the shares of the series. In setting the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms or conditions of redemption
of a series of Preferred Stock, the Board of Directors may designate that any
amendment, waiver or repeal of any provision of the Articles Supplementary
classifying such series of Preferred Stock shall not require the approval of the
holders of the Common Stock. Subject to the applicable provisions of Maryland
law, the Corporation's Charter and the express terms of any class or series of
Capital Stock, including the Articles Supplementary of any class or series of
Preferred Stock then outstanding, the Board of Directors may increase or
decrease the number or alter the designation or classify or reclassify any
unissued shares of a particular series of Preferred Stock by setting or changing
in one or more respects, from time to time before issuing the shares, any
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of
redemption of the shares of that series of Preferred Stock.
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1. The preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of the shares of the Series B
Preferred Stock are set forth on EXHIBIT A attached hereto.
2. The preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of shares of the Series E Preferred
Stock are set forth on EXHIBIT B attached hereto.
3. The preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of the shares of the Series F
Preferred Stock are set forth on EXHIBIT C attached hereto.
(C) COMMON STOCK. Each share of Common Stock shall entitle the holder
of record thereof to one (1) vote at all meetings of the Corporation's
stockholders, except meetings at which only holders of another specified class
or series of Capital Stock are entitled to vote. Subject to any preference
rights with respect to the payment of dividends of any series of Preferred Stock
then outstanding, the holders of Common Stock shall be entitled to receive, as
and when declared by the Board, dividends that may be paid in money or property
or by the issuance of fully paid Capital Stock, in the form of Preferred Stock,
Common Stock or any other class or series of Capital Stock now or hereafter
authorized by the Board. In the event of a liquidation, dissolution or winding
up of the Corporation or other distribution of the Corporation's assets among
stockholders for the purpose of winding up the Corporation's affairs, whether
voluntary or involuntary, and subject to the applicable provisions of Maryland
law, the Corporation's Charter and the rights, privileges, conditions and
restrictions of any series of Preferred Stock then outstanding, the Common Stock
shall entitle the holders thereof to receive the Corporation's remaining
property.
(D) FRACTIONAL SHARES. The Corporation may issue shares of Capital
Stock in fractional denominations to the same extent as its whole shares, and
shares in fractional denominations shall be shares of Capital Stock having
proportionately to the respective fractions represented thereby all the rights
of whole shares, including, without limitation, the right to vote, the right to
receive dividends and distributions, and the right to participate upon
liquidation of the Corporation, but excluding any right to receive a stock
certificate representing fractional shares.
ARTICLE VI
PREEMPTIVE RIGHTS
Except as may be expressly provided by the terms of any class or series
of Capital Stock, including the Articles Supplementary of any class or series of
Preferred Stock, by contract with the Corporation or otherwise by the Board of
Directors, no holder of shares
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of any class or series of the Corporation's Capital Stock, whether now or
hereafter authorized, shall have any preferential or preemptive right to
subscribe for, purchase or receive shares of any class or series of the Capital
Stock of the Corporation, or any options to purchase or warrants exercisable for
such Capital Stock or any rights to subscribe to or purchase such Capital Stock
or any securities convertible into or exchangeable for such Capital Stock that
may at any time or from time to time be issued, sold or offered for sale by the
Corporation.
ARTICLE VII
DIRECTORS
(A) NUMBER. On the effective date of the Corporation's plan of
reorganization, as amended as of such effective date (the "Effective Date"), the
number of directors of the Corporation shall be fixed at ______, which number
may be increased or decreased only by the Board of Directors by resolution
adopted by the vote of a majority of the entire Board of Directors, even though
less than a quorum, subject to the applicable provisions of Maryland law, this
Charter and the express terms of any class or series of Capital Stock, including
the Articles Supplementary of any class or series of Preferred Stock then
outstanding, but the number of directors shall not at any time be less than the
lesser of (a) three (3) or (b) the number of stockholders nor more than
________. On the Effective Date, [_____________________] shall serve as
directors of the Corporation and shall have and exercise any and all rights,
powers, privileges and discretionary authority granted or permitted by the
Corporation's Charter, the Corporation's Bylaws or the Maryland General
Corporation Law for the terms set forth in Paragraph (B) below and until their
respective successors are duly elected and qualified.
(B) UNAFFILIATED DIRECTORS; CLASSIFIED BOARD. A majority of the
directors shall be directors who do not perform any services for the
Corporation, other than as directors, and who are not directors, officers, or
employees of C.R.I., Inc., a Delaware corporation ("Unaffiliated Directors").
Subject to the applicable provisions of Maryland law, this Charter and the
express terms of any class or series of Capital Stock, including the Articles
Supplementary of any class or series of Preferred Stock then outstanding, the
directors shall be classified, with respect to the time for which they severally
hold office, into three (3) classes, as nearly equal in number as reasonably
possible, with the term of office of one class to expire initially at the 2001
annual meeting of stockholders, the term of office of another class to expire
initially at the 2002 annual meeting of stockholders and the term of office of
the remaining class to expire initially at the 2003 annual meeting of
stockholders, with the members of each class of directors to hold office until
their respective successors are duly elected and qualified, subject, however, to
prior death, resignation, retirement, disqualification or removal from office.
At each annual meeting of stockholders following such initial classification,
directors elected to succeed those directors whose terms then expire shall be
elected for a term of office to expire at the third succeeding annual meeting of
stockholders after their election and when their respective successors are duly
elected and qualified.
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(C) VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Except as otherwise
required by law or as may be expressly provided by the terms of any class or
series of Capital Stock, including the Articles Supplementary of any class of
series of Preferred Stock, any vacancy on the Board of Directors as a result of
any reason and any newly created directorship resulting by reason of any
increase in the number of directors shall be filled only by the Board of
Directors, by resolution adopted by the vote of a majority of the remaining
directors then in office, even though less than a quorum. Any director so
appointed shall hold office until the next meeting of stockholders at which
directors of the class for which such director has been chosen are to be elected
and until his or her successor is elected and qualified. Subject to the
provisions of this Charter, if the number of directors is changed, any increase
or decrease in directorships shall be apportioned among the classes of directors
so as to maintain the number of directors in each class as nearly equal as
possible, but in no case shall a decrease in the number of directors
constituting the Board of Directors shorten the term of any incumbent director.
(D) REMOVAL OF DIRECTORS. Except as may be expressly provided by the
terms of any class or series of Capital Stock, including the Articles
Supplementary of any class or series of Preferred Stock, any director may be
removed, but only for cause, and only upon the affirmative vote of least 66-2/3%
of the voting power of all of the then outstanding shares of Capital Stock
entitled to vote generally in the election of directors.
(E) INCREASE IN AUTHORIZED CAPITAL STOCK. Subject to the applicable
provisions of Maryland law, the Corporation's Charter and the express terms of
any class or series of Capital Stock, including the Articles Supplementary of
any class or series of Preferred Stock then outstanding, the Board of Directors,
with the approval of a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships
at the time any such amendment is presented to the Board for approval) and
without action by the stockholders, may amend the Charter to increase or
decrease the aggregate number of shares of Capital Stock the Corporation has
authority to issue.
(F) ISSUANCE OF CAPITAL STOCK. Subject to the applicable provisions of
Maryland law, the Corporation's Charter and the express terms of any class or
series of Capital Stock, including the Articles Supplementary of any class or
series of Preferred Stock then outstanding, the Board of Directors of the
Corporation is hereby empowered to authorize the issuance from time to time of
shares of Capital Stock of any class or series, whether now or hereafter
authorized, and securities convertible into shares of Capital Stock of any
series, class or classes, whether now or hereafter authorized, for such
consideration as the Board of Directors may deem advisable.
(G) INTERESTED DIRECTOR TRANSACTIONS. No contract or other transaction
between this Corporation and any other corporation, partnership, individual or
other entity and no act of this Corporation shall in any way be affected or
invalidated by the fact that any of the directors of this Corporation are
directors, principals, partners or officers of such other entity, or are
pecuniarily or otherwise interested in such contract, transaction or act;
provided that (i) the existence of such relationship or such interest shall be
disclosed or
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known to the Board of Directors or to a committee of the Board of Directors if
the matter involves a committee decision, and the contract, transaction or act
shall be authorized, approved or ratified by a majority of disinterested
directors on the Board or on such committee, as the case may be, even if the
number of disinterested directors constitutes less than a quorum or (ii) the
contract, transaction or act shall be authorized, ratified or approved in any
other manner permitted by the Maryland General Corporation Law.
ARTICLE VIII
AMENDMENTS TO THE BYLAWS
Subject to the applicable provisions of Maryland law, to the
Corporation's Charter and the express terms of any class or series of Capital
Stock, including, the Articles Supplementary of any series of Preferred Stock
then outstanding, the Bylaws of the Corporation may be added to, altered,
amended, repealed or suspended by a vote of a majority of the Board of Directors
at any regular or special meeting of the Board at which a quorum is present,
but, subject to the same proviso, the stockholders may make additional Bylaws
and may alter, repeal or suspend any Bylaws, whether adopted by them or
otherwise, upon the affirmative vote of the holders of at least 66-2/3% of the
voting power of all of the then outstanding shares of Capital Stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class; PROVIDED, HOWEVER, that no Bylaw so made shall serve
to invalidate any prior action of the Board which would have been valid if such
Bylaw had not been made.
ARTICLE IX
FACTORS TO CONSIDER PRIOR TO APPROVAL OF AN ACQUISITION OF
CONTROL OF THE CORPORATION
The Board, when evaluating any offer of another party to acquire
control of the Corporation, may consider the effect of the acquisition on
stockholders, employees, suppliers, customers and creditors of the Corporation
and communities in which offices or other establishments of the Corporation are
located.
ARTICLE X
AMENDMENTS TO THE CHARTER
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in the Charter in the manner prescribed by the laws of
the State of Maryland, subject to the applicable provisions of Maryland law, the
Corporation's Charter and the express terms of any class or series of Capital
Stock, including the Articles Supplementary of any class or series of Preferred
Stock then outstanding, except that no amendment which would change any rights
with respect to any outstanding class or series of Capital Stock of the
Corporation, by reducing the amounts payable thereon upon liquidation of the
Corporation, or by diminishing or eliminating any voting rights pertaining
thereto, may be made unless approved by the affirmative vote of the holders of
at least 66-2/3% of the then outstanding securities of such class or series of
Capital Stock of the Corporation, and all rights, powers, privileges and
discretionary authority granted
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or conferred upon stockholders or directors herein are granted subject to this
reservation; PROVIDED, HOWEVER, that, notwithstanding any other provision of the
Charter or any provision of law or otherwise which might otherwise permit a
lesser vote or no vote, but in addition to any vote of the holders of any class
or series of the Corporation's Capital Stock required by law, by the Charter or
by the terms of any such class or series of Capital Stock, the affirmative vote
of the holders of at least 66-2/3% of the voting power of all of the then
outstanding shares of Capital Stock entitled to vote generally in the election
of directors, voting together as a single class, shall be required to amend,
repeal, or adopt any provision inconsistent with this Article X or Article VII,
Article VIII, Article IX, Article XI , Article XII or Article XIII hereof.
ARTICLE XI
RESTRICTION ON TRANSFER,
ACQUISITION AND REDEMPTION OF CAPITAL STOCK
(A) DEFINITIONS. For the purposes of this Article XI, the following
terms shall have the following meanings:
1. "AFFILIATE" shall mean any corporation, partnership,
limited liability company, trust or other association, or any Person
which controls, is controlled by, or is under common control with, such
corporation, partnership, limited liability company, trust or other
association. As used in this definition "control" (including with its
correlative meanings, "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such
Person (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise).
2. "BENEFICIAL OWNERSHIP" shall mean ownership of Capital
Stock of the Corporation by a Person who would be treated as an owner
of such Capital Stock under Section 542(a)(2) of the Code 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 variants thereof shall
have the correlative meanings.
3. "BENEFICIARY" shall mean any organization that is exempt
from federal income taxation under Section 501(c)(3) of the Code and to
which contributions are deductible under Section 170(c) of the Code,
which organization shall be designated a beneficiary (as determined
pursuant to Paragraph (S) hereof) of an interest in the Special Trust
(created pursuant to Paragraph (O)) representing Excess Stock;
PROVIDED, HOWEVER, that the Excess Stock would not be considered Excess
Stock in the hands of such beneficiary. The term "Beneficiaries" shall
have the correlative meaning.
4. "CODE" shall mean the Internal Revenue Code of 1986, as
amended, or any successor statute, the regulations promulgated and
rulings issued thereunder
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and any successor regulations or rulings which may be promulgated or
issued thereunder.
5. "EXCESS STOCK" shall have the meaning ascribed to it in
Paragraph (C) hereof.
6. "EXISTING HOLDER" shall mean (a) any Person who, as of the
Restriction Commencement Date, is the Beneficial Owner of Capital Stock
of the Corporation in excess of the Ownership Limit, so long as, but
only so long as, such Person Beneficially Owns such Capital Stock in
excess of the Ownership Limit and (b) any Person to whom an Existing
Holder Transfers, subject to the limitations provided in this Article
XI, Beneficial Ownership of Capital Stock of the Corporation causing
such transferee to Beneficially Own Capital Stock in excess of the
Ownership Limit.
7. "EXISTING HOLDER LIMIT" shall mean (a) for any Existing
Holder who is an Existing Holder by virtue of clause (a) of the
definition thereof, initially, the percentage of the outstanding
Capital Stock of the Corporation Beneficially Owned by such Existing
Holder, as of the Restriction Commencement Date, and, after any
adjustment pursuant to Paragraph (I) hereof, shall mean such percentage
of such outstanding Capital Stock as so adjusted; and (b) for any
Existing Holder who becomes an Existing Holder by virtue of clause (b)
of the definition thereof, initially, the percentage of the outstanding
Capital Stock of the Corporation Beneficially Owned by such Existing
Holder at the time that such Existing Holder becomes an Existing
Holder, but in no event shall such percentage be greater than the
Existing Holder Limit for the Existing Holder who Transfers Beneficial
Ownership of Capital Stock of the Corporation to such transferee
Existing Holder or, in the case of more than one transferor, in no
event shall such percentage be greater than the smallest Existing
Holder Limit of any transferring Existing Holder, and, after any
adjustment pursuant to Paragraph (S) hereof, shall mean such percentage
of the outstanding Capital Stock of the Corporation as so adjusted.
Beginning with the Restriction Commencement Date and at all times
thereafter but prior to the Restriction Termination Date, the Secretary
of the Corporation shall maintain and, upon request shall make
available to each Existing Holder a schedule which sets forth the
then-current Existing Holder Limit for such Existing Holder.
8. "MARKET PRICE" shall mean, with respect to any class or
series of Capital Stock of the Corporation, the last reported sales
price reported on the New York Stock Exchange, Inc. (the "EXCHANGE") of
such class or series of Capital Stock on the trading day immediately
preceding the relevant date, or if not then traded on the Exchange, the
last reported sales price on the trading day immediately preceding the
relevant date as reported on any exchange or quotation system over
which such class or series of Capital Stock may be traded, or if not
then traded over any exchange or quotation system, then the market
price of such class or series of Capital Stock on the relevant date as
determined in good faith by the Board of Directors.
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9. "OWNERSHIP LIMIT" shall mean initially that number of
shares of Capital Stock of the Corporation which represents the lesser
of (a) 9.8% of the aggregate number of shares of Capital Stock of the
Corporation outstanding and (b) 9.8% of the aggregate value of the
outstanding Capital Stock, and after any adjustment as set forth in
Paragraph (J) hereof, shall mean such greater percentage of the
outstanding Capital Stock of the Corporation as so adjusted. The number
and value of outstanding shares of Capital Stock of the Corporation
shall be determined by the Board of Directors in good faith, which
determination shall be conclusive for all purposes hereof.
10. "PERSON" shall mean an individual, corporation,
partnership, estate, trust (including a corporation qualified under
Section 401(a) or 501(c)(17) of the Code), a portion of a corporation
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 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 that participated
in a public offering of any Capital Stock of the Corporation for a
period of twenty-five (25) calendar days following the purchase by such
underwriter of such Capital Stock.
11. "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 Capital
Stock of the Corporation that, pursuant to Paragraph (C) hereof, was
automatically converted into Excess Stock upon the occurrence of such
event, held such Capital Stock.
12. "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 Capital Stock of the Corporation, if such Transfer had
been valid under Paragraph (B) hereof.
13. "PURPORTED OWNER" shall mean any Purported Beneficial
Holder, Purported Beneficial Transferee, Purported Record Holder or
Purported Record Transferee, as the case may be.
14. "PURPORTED OWNER LIMITATION" shall mean, as to a Purported
Owner, on a share-by-share basis, an amount not exceeding the lesser
of: (a) (i) if the Purported Owner gave value for the Capital Stock of
the Corporation converted into Excess Stock, the price per share that
such Purported Owner paid in the purported Transfer for the Capital
Stock that was converted into such Excess Stock, or (ii) if the
Purported Owner did not give value for the Capital Stock of the
Corporation converted into Excess Stock (through a gift, devise or
otherwise), a price per share equal to the Market Price for such
converted Capital Stock of the Corporation on the date of the purported
Transfer or such other event which results in Excess Stock; and
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(b) the price per share received by the Special Trust from the sale,
exchange or other disposition of the Excess Stock.
15. "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 Capital Stock of the Corporation that,
pursuant to Paragraph (C) hereof, was automatically converted into
Excess Stock upon the occurrence of such event.
16. "PURPORTED RECORD TRANSFEREE" shall mean, with respect to
any purported Transfer, which results in Excess Stock, the Person who
would have been the record holder of the Capital Stock, if such
Transfer had been valid under paragraph (B) hereof.
17. "REIT" means real estate investment trust within the
meaning and in accordance with the REIT Provisions.
18. "REIT PROVISIONS" means Part II and III of Subchapter M of
the Chapter I of Subtitle A of the Code, relating to REITs.
19. "RESTRICTION COMMENCEMENT DATE" shall mean the date upon
which the filing of these Articles of Amendment and Restatement of the
Corporation with the Maryland State Department of Assessments and
Taxation becomes effective.
20. "RESTRICTION TERMINATION DATE" shall mean the first day on
which the Board of Directors determines that it is no longer in the
best interests of the Corporation to attempt to, or to continue to,
qualify under the REIT Provisions of the Code.
21. "SPECIAL TRUST" shall mean any special trust created
pursuant to Paragraph (E) hereof.
22. "SPECIAL TRUSTEE" shall mean a trustee of any Special
Trust, designated by the Corporation and unaffiliated with the
Corporation or any prohibited transferee or Purported Owner of Excess
Stock.
23. "TRANSFER" shall mean any sale, transfer, gift,
assignment, devise or other disposition of Capital Stock of the
Corporation, including without limitation (a) the granting of any
option or entering into any agreement for the sale, transfer or other
disposition of such Capital Stock or (b) the sale, transfer, assignment
or other disposition of any securities or rights convertible into or
exchangeable for Capital Stock of the Corporation, whether voluntary or
involuntary, whether of record or beneficially and whether by operation
of law or otherwise.
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(B) OWNERSHIP LIMITATIONS.
1. Except as provided in this Paragraph (B), beginning on the
Restriction Commencement Date and at all times thereafter but prior to
the Restriction Termination Date, no Person other than an Existing
Holder shall Beneficially Own Capital Stock of the Corporation in
excess of the Ownership Limit, and no Existing Holder shall
Beneficially Own Capital Stock of the Corporation in excess of the
Existing Holder Limit for such Existing Holder.
2. Except as provided in this Paragraph (B), beginning on the
Restriction Commencement Date and at all times thereafter but prior to
the Restriction Termination Date, any Transfer that, if effective,
would result in any Person other than an Existing Holder Beneficially
Owning Capital Stock of the Corporation in excess of the Ownership
Limit shall be void AB INITIO as to the Transfer of such portion of the
Capital Stock of the Corporation as would be otherwise Beneficially
Owned by such Person in excess of the Ownership Limit, and the intended
transferee shall acquire no rights in or to such number of shares of
such Capital Stock.
3. Except as provided in Paragraphs (I) and (L) hereof,
beginning on the Restriction Commencement Date and at all times
thereafter but prior to the Restriction Termination Date, any Transfer
that, if effective, would result in any Existing Holder Beneficially
Owning Capital Stock of the Corporation in excess of the applicable
Existing Holder Limit shall be void AB INITIO as to the Transfer of
such portion of such Capital Stock as 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 in or to
such number of shares of such Capital Stock.
4. Except as provided in Paragraph (L) hereof, beginning on
the Restriction Commencement Date and at all times thereafter but prior
to the Restriction Termination Date, any Transfer that, if effective,
would result in Capital Stock the Corporation being owned by fewer than
one hundred (100) stockholders (determined without reference to any
rules of attribution) shall be void AB INITIO and the intended
transferee shall acquire no rights in or to such Capital Stock.
5. Beginning on the Restriction Commencement Date and at all
times thereafter but prior to the Restriction Termination Date, any
Transfer that, if effective, would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code shall
be void AB INITIO as to the Transfer of such portion of the Capital
Stock of the Corporation which would cause the Corporation to be
"closely held" within the meaning of Section 856(h) of the Code, and
the intended transferee shall acquire no rights in or to such number of
shares of such Capital Stock.
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(C) EXCESS STOCK.
1. If, notwithstanding the other provisions contained in this
Article XI, at any time beginning on the Restriction Commencement Date
and at all times thereafter but prior to the Restriction Termination
Date, there is a purported Transfer such that any Person would
Beneficially Own Capital Stock of the Corporation in excess of the
applicable Ownership Limit or Existing Holder Limit, then, except as
otherwise provided in Paragraphs (I) and (L) hereof, such portion of
the Capital Stock of the Corporation in excess of such Ownership Limit
or Existing Holder Limit (rounded up to the nearest whole share) shall
automatically be converted into "EXCESS STOCK" and be treated as
provided in this Article XI. Such conversion and treatment shall be
effective as of the close of business on the business day immediately
prior to the date of the purported Transfer giving rise thereto.
2. If, notwithstanding the other provisions contained in this
Article XI, at any time beginning on the Restriction Commencement Date
and at all times thereafter but prior to the Restriction Termination
Date, there is a purported Transfer which, if effective, would cause
the Corporation to become "closely held" within the meaning of Section
856(h) of the Code, then the Capital Stock of the Corporation being
Transferred which would cause the Corporation to be "closely held"
within the meaning of Section 856(h) of the Code (rounded up to the
nearest whole share) shall automatically be converted into Excess Stock
and be treated as provided in this Article XI. Such conversion and
treatment shall be effective as of the close of business on the
business day immediately prior to the date of the purported Transfer
giving rise thereto.
3. If, at any time beginning on the Restriction Commencement
Date and at all times thereafter but prior to the Restriction
Termination Date, an event other than a purported Transfer (an "EVENT")
occurs (including, without limitation, a change in the Corporation's
capital structure) which would cause any Person to Beneficially Own
Capital Stock of the Corporation in excess of the applicable Ownership
Limit or Existing Holder Limit, then, except as otherwise provided in
Paragraphs (I) and (L) hereof, Capital Stock of the Corporation
Beneficially Owned by such Person shall automatically be converted into
Excess Stock and be treated as provided in this Article XI to the
extent necessary to eliminate such excess ownership. Such conversion
and treatment shall be effective as of the close of business on the
business day immediately prior to the date of the Event giving rise
thereto. In determining which portion of the Capital Stock of the
Corporation is converted, Capital Stock directly held or Beneficially
Owned by any Person who caused the Event to occur shall be converted
before any Capital Stock not so held is converted. Where several such
Persons exist, the conversion shall be pro rata.
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(D) PREVENTION OF TRANSFER. If the Board of Directors or its designee
shall at any time determine in good faith that a Transfer has taken place in
violation of Paragraph (B) hereof or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership (determined without reference to any
rules of attribution) of any Capital Stock of the Corporation in violation of
Paragraph (B) hereof, the Board of Directors or its designee shall take such
action as it deems advisable to refuse to give effect to or to prevent such
Transfer including, but not limited to, refusing to give effect to such Transfer
on the books of the Corporation or instituting proceedings to enjoin such
Transfer; PROVIDED, HOWEVER, that any Transfers or attempted Transfers in
violation of Paragraphs (B)(2), (3) and (5) shall automatically result in the
designation and treatment described in Paragraph (C) hereof, irrespective of any
action (or non-action) by the Board of Directors or any designee thereof.
(E) NOTICE TO CORPORATION. Any Person who acquires or attempts to
acquire Capital Stock of the Corporation in violation of Paragraph (B) hereof,
or any Person who is a transferee such that Excess Stock results under Paragraph
(C) hereof, shall immediately give written notice or, in the event of a proposed
or attempted acquisition, give at least fifteen (15) calendar days prior written
notice, to the Corporation of such event, and shall provide to the Corporation
such other information as the Corporation may request in order to determine the
effect, if any, of such acquisition or attempted acquisition on the
Corporation's status as a REIT.
(F) INFORMATION FOR CORPORATION. Beginning with the Restriction
Commencement Date and at all times thereafter but prior to the Restriction
Termination Date:
1. Every Beneficial Owner of more than 5.0% (or such other
percentage, between 0.5% and 5.0%, as provided in the income tax
regulations promulgated under the Code) of the aggregate number or
value of outstanding shares of Capital Stock of the Corporation shall,
within thirty (30) days after January 1 of each year (or within such
shorter period as may reasonably be requested by the Corporation), give
written notice to the Corporation stating the name and address of such
Beneficial Owner, the number of shares of Capital Stock of the
Corporation Beneficially Owned and the class or series of which such
shares are a part, and a description of how such Capital Stock is held.
Each such Beneficial Owner shall provide to the Corporation such
additional information as the Corporation may reasonably request in
order to determine the effect, if any, of such Beneficial Ownership on
the Corporation's status as a REIT.
2. Each Person who is a Beneficial Owner of Capital Stock of
the Corporation and each Person (including the holder of record) who is
holding Capital Stock for a Beneficial Owner shall immediately provide
to the Corporation such information as the Corporation may reasonably
request in order to determine the Corporation's status as a REIT, to
comply with the requirements of any taxing authority or governmental
agency or to determine any such compliance.
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(G) OTHER ACTION BY BOARD. Nothing contained in this Article XI shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable to protect the Corporation and the interests of the
stockholders by preservation of the Corporation's status as a REIT.
(H) AMBIGUITIES. In the case of an ambiguity in the application of any
of the provisions of this Article XI, including any definition contained in
Paragraph (A) hereof and any ambiguity with respect to which Capital Stock is to
constitute Excess Stock in a given situation, the Board of Directors shall have
the power to determine the application of the provisions of this Article XI
based on the facts known to it, which determination shall be conclusive for all
purposes hereof.
(I) MODIFICATIONS OF EXISTING HOLDER LIMITS. The Existing Holder Limits
may be modified as follows:
1. Subject to the limitations provided in Paragraph (K)
hereof, the Board of Directors may grant stock options which result in
Beneficial Ownership of Capital Stock of the Corporation by an Existing
Holder pursuant to a stock option plan approved by the Board of
Directors and/or the stockholders. Any such grant shall be deemed to
increase, without any further action by the Board of Directors, the
Existing Holder Limit for the affected Existing Holder to the maximum
extent possible under Paragraph (K) hereof to permit the Beneficial
Ownership of the Capital Stock issuable or issued upon the exercise of
such stock option.
2. Subject to the limitations provided in Paragraph (K)
hereof, an Existing Holder may elect to participate in a dividend
reinvestment plan or direct stock purchase plan approved by the Board
of Directors which results in Beneficial Ownership of Capital Stock of
the Corporation by such participating Existing Holder. Any such
participation shall increase the Existing Holder Limit for the affected
Existing Holder to the maximum extent possible under Paragraph (K)
hereof to permit Beneficial Ownership of the Capital Stock of the
Corporation acquired or which can be acquired as a result of such
participation.
3. The Board of Directors will reduce the Existing Holder
Limit for any Existing Holder following a Transfer permitted by this
Article XI by the percentage of the total outstanding shares of Capital
Stock of the Corporation so Transferred by such Existing Holder, or
after the lapse (without exercise) of a stock option described in
Paragraph (K)(1) hereof, by the percentage of the total outstanding
shares of Capital Stock that would have been issuable upon exercise of
the stock option.
(J) Increases in Ownership Limit and Existing Holder Limits. Subject to
the limitations provided in Paragraph (K) hereof, the Board of Directors may
from time to time increase the Ownership Limit or any Existing Holder Limit.
(K) LIMITATIONS ON CHANGES IN EXISTING HOLDER AND OWNERSHIP LIMITS.
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1. Neither the Ownership Limit nor any Existing Holder Limit
may be increased if, after giving effect to such increase, five (5) or
fewer Beneficial Owners of Capital Stock of the Corporation (including
all of the then Existing Holders) could Beneficially Own, in the
aggregate, more than 50.0% in number or value (determined as provided
in the definition of "Ownership Limit" in Paragraph (A) hereof) of the
outstanding Capital Stock of the Corporation.
2. Prior to the modification of any Existing Holder Limit or
Ownership Limit pursuant to Paragraphs (I) and (J) hereof, the Board of
Directors may require such opinions of counsel, affidavits,
undertakings or agreements as it may deem necessary or advisable in
order to determine or ensure the Corporation's status as a REIT.
3. No Existing Holder Limit shall be reduced to a percentage
which is less than the Ownership Limit.
(L) EXEMPTIONS. The Board of Directors may exempt a Person from the
Ownership Limit or the Existing Holder Limit, as the case may be, in its sole
and absolute discretion, upon receipt of evidence satisfactory to the Board of
Directors to the effect that such exemption will not result in the Corporation
being "closely held" within Section 856(h) of the Code, and upon such other
conditions as the Board of Directors may direct (including, without limitation,
representations, warranties and undertakings by the intended Transferee).
(M) LEGEND.
Each certificate for Capital Stock of the Corporation shall bear
substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER FOR, AMONG OTHER THINGS, THE PURPOSE OF THE
CORPORATION'S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT
TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, OR ANY SUCCESSOR
STATUTE. EXCEPT AS OTHERWISE PROVIDED PURSUANT TO THE CHARTER OF THE
CORPORATION, NO PERSON (UNLESS SUCH PERSON IS AN EXISTING HOLDER) MAY
BENEFICIALLY OWN CAPITAL STOCK OF THE CORPORATION (WHICH INCLUDES
OWNERSHIP BY ATTRIBUTION AS WELL AS DIRECT OWNERSHIP) IN EXCESS OF THAT
NUMBER OF SHARES OF CAPITAL STOCK OF THE CORPORATION WHICH EQUALS 9.8%
(OR SUCH GREATER PERCENTAGE AS MAY BE DETERMINED BY THE BOARD OF
DIRECTORS OF THE CORPORATION) OF THE LESSER OF (A) THE NUMBER OF
OUTSTANDING SHARES OF CAPITAL STOCK OF THE CORPORATION AND (B) THE
VALUE OF OUTSTANDING SHARES OF CAPITAL STOCK OF THE CORPORATION. ANY
PERSON WHO ATTEMPTS OR PROPOSES TO BENEFICIALLY OWN CAPITAL STOCK OF
THE
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CORPORATION IN EXCESS OF THE ABOVE LIMITATIONS MUST NOTIFY THE
CORPORATION IN WRITING AT LEAST FIFTEEN (15) CALENDAR DAYS PRIOR TO
SUCH PROPOSED OR ATTEMPTED TRANSFER. ALL ITALICIZED TERMS IN THIS
LEGEND HAVE THE MEANINGS SET FORTH IN THE CHARTER OF THE CORPORATION, A
COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER, WILL BE SENT
WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS. IF THE RESTRICTIONS
ON TRANSFER ARE VIOLATED, THE TRANSFER WILL BE VOID AB INITIO AND THE
SECURITIES REPRESENTED HEREBY WILL BE DESIGNATED AND TREATED AS EXCESS
STOCK WHICH WILL BE HELD IN A SPECIAL TRUST.
(N) SEVERABILITY. If any provision of this Article XI or any
application of any such provision is determined to be void, invalid or
unenforceable by any court having jurisdiction over the issue, the validity and
enforceability 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.
(O) SPECIAL TRUST FOR EXCESS STOCK. Upon any purported Transfer or
Event that results in Excess Stock pursuant to Paragraph (M) hereof, such Excess
Stock shall be deemed to have been transferred to the Special Trustee of a
Special Trust for the benefit of such Beneficiary or Beneficiaries to whom an
interest in such Special Trust may later be transferred pursuant to Paragraph
(S) hereof. Excess Stock so held in trust shall be issued and outstanding
Capital Stock of the Corporation. The Purported Record Transferee or Purported
Record Holder of such Capital Stock shall have no rights in or to such Excess
Stock except as specifically provided herein. The Purported Beneficial
Transferee or Purported Beneficial Holder of such Capital Stock shall have no
rights in or to such Excess Stock except as specifically provided herein.
(P) DIVIDENDS FOR EXCESS STOCK. The Purported Owner of Excess Stock
shall not be entitled to any dividends or other distributions with respect to
such Excess Stock. Any dividend or other distribution paid to a Purported Owner
prior to the discovery by the Corporation that Capital Stock of the Corporation
has become Excess Stock pursuant to this Article XI shall be repaid to the
Corporation by the Purported Owner immediately upon notification by the
Corporation that such dividend or other distribution was paid with respect to
Excess Stock, and such dividend or other distribution shall then be remitted by
the Corporation to the Special Trust. All dividends and other distributions
(other than those distributions of Corporation assets described in Paragraph (Q)
hereof) with respect to Excess Stock shall inure to the benefit of the
Beneficiaries.
(Q) SALES, EXCHANGES AND LIQUIDATING DISTRIBUTIONS WITH RESPECT TO
EXCESS STOCK. Upon (a) the sale or exchange of Excess Stock by the Special
Trustee, (b) the voluntary or involuntary liquidation, dissolution or winding up
of, or any other distribution of all or substantially all of the assets of, the
Corporation, or (c) the purchase of Excess Stock by the Corporation pursuant to
Paragraph (T) hereof, the Special Trustee, as holder of the Excess Stock in
trust, shall, subject to the Purported Owner Limitation, distribute ratably
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to the Purported Owner(s), (i) in the case of any liquidation, dissolution or
winding up of, or any distribution of the assets of, the Corporation, any such
assets received in respect of the Excess Stock, (ii) in the case of a sale or
exchange of Excess Stock by the Special Trustee, the amounts received from such
sale or exchange, or (iii) in the case of any purchase of Excess Stock by the
Corporation pursuant to Paragraph (T) hereof, the net amounts received from such
purchase. Any assets or amounts received upon the sale, exchange or purchase by
the Corporation of Excess Stock, in excess of the Purported Owner Limitation,
shall be distributed to the Beneficiaries.
If, notwithstanding the foregoing, a Purported Owner receives an amount
from (i) the liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, (ii) the sale or exchange of Excess Stock or
(iii) the purchase of Excess Stock by the Corporation pursuant to Paragraph (T)
hereof, that exceeds the Purported Owner Limitation, such Purported Owner shall
pay such excess immediately to the Corporation, which shall remit such amount to
the Special Trustee.
(R) VOTING RIGHTS FOR EXCESS STOCK. A Purported Owner of Excess Stock
shall not be entitled to vote on any matter and shall be deemed to have given to
the Special Trustee an irrevocable proxy, coupled with an interest, to vote the
Excess Stock. If a Purported Owner shall vote such Excess Stock before it is
discovered that such Capital Stock is Excess Stock, then the vote by such
Purported Owner shall be void AB INITIO.
(S) NON-TRANSFERABILITY OF EXCESS STOCK. Excess Stock shall not be
transferable by a Purported Owner. Subject to Paragraph (T) hereof, the Special
Trustee of any Excess Stock placed in a Special Trust may freely designate a
Beneficiary of an interest in the Special Trust representing such Excess Stock.
(T) CALL BY CORPORATION ON EXCESS STOCK. Excess Stock shall be deemed
to have been offered for sale to the Corporation or its designee(s) at a price
per share equal to: (A) in the case of Excess Stock resulting from a purported
Transfer, the lesser of (i) the price per share in such purported Transfer of
the Capital Stock of the Corporation that was converted into 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 Corporation or its
designee accepts such offer and (B) in the case of Excess Stock created by any
other Event, the lesser of (i) the Market Price of the Capital Stock that was
converted into such Excess Stock on the date of such conversion and (ii) the
Market Price of such Capital Stock of the Corporation on the date the
Corporation or its designee accepts such offer. The Corporation shall have the
right to accept such offer for a period of ninety (90) calendar days after the
later of (i) the date of the purported Transfer or other Event which resulted in
an exchange of Capital Stock for such Excess Stock and (ii) the date the Board
of Directors determines in good faith that a purported Transfer or other Event
resulting in an exchange of Capital Stock of the Corporation for such Excess
Stock has occurred, if the Corporation does not receive a notice of any such
Transfer pursuant to Paragraph (E) hereof.
(U) NYSE SETTLEMENTS. Nothing in this Article XI shall preclude the
settlement of any transactions entered into through the facilities of the New
York Stock Exchange or
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any other national securities exchange or automated interdealer quotation
system; provided, that the fact that the settlement of any transaction takes
place shall not negate the effect of any other provision of this Article XI and
any transferee in such a transaction shall be subject to all of the provisions
and limitations set forth in this Article XI.
ARTICLE XII
INDEMNIFICATION AND LIMITATION OF LIABILITY
(A) MANDATORY INDEMNIFICATION. The Corporation shall indemnify each
person who is or was, or has agreed to become, a director or officer of the
Corporation and each person who, while a director of the Corporation and, at the
request of the Corporation, is or was serving, or has agreed to serve, as a
director, officer, partner, joint venturer, trustee, employee or agent of
another corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan against any and all liabilities and expenses incurred in
connection with each such person's services in such capacities to the maximum
extent permitted by the Maryland General Corporation Law, as from time to time
amended.
(B) DISCRETIONARY INDEMNIFICATION. If approved by the Board of
Directors, the Corporation may indemnify any of its employees or agents against
any or all liabilities and expenses incurred in connection with each such
person's services in such capacities and any of its employees, agents or other
persons who are or were serving, or who have agreed to serve, at the request of
the Corporation, as a director, officer, partner, joint venturer, trustee,
employee or agent of another corporation, partnership, joint venture, other
enterprise or employee benefit plan, to the extent and on such terms and subject
to such conditions and limitations, as determined to be appropriate by the Board
of Directors.
(C) ADVANCING EXPENSES PRIOR TO A DECISION. The Corporation shall
advance expenses to its directors and officers entitled to mandatory
indemnification to the maximum extent permitted by the Maryland General
Corporation Law and may, in the discretion of the Board of Directors, advance
expenses to employees, agents and others who may be granted indemnification.
(D) OTHER PROVISIONS FOR INDEMNIFICATION. The Board of Directors may,
by Bylaw, resolution or agreement, make further provision for indemnification of
directors, officers, employees and agents and the advancement of expenses
thereto.
(E) LIMITATION OF LIABILITY OF DIRECTORS AND OFFICERS. To the maximum
extent that limitations on the liability of directors and officers are permitted
by the Maryland General Corporation Law, as from time to time amended, no
director or officer of the Corporation shall have liability to the Corporation
or its stockholders for money damages. This limitation on liability applies to
events occurring at the time a person serves as a director or officer of the
Corporation whether or not such person is a director or officer at the time of
any proceeding in which liability is asserted.
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(F) EFFECT OF AMENDMENT OR REPEAL. No amendment or repeal of any
section of this Article XII, or the adoption of any provision of the
Corporation's Charter inconsistent with this Article XII, shall apply to or
affect in any respect the rights to indemnification or limitation of liability
of any director or officer of the Corporation with respect to any alleged act or
omission which occurred prior to such amendment, repeal or adoption.
ARTICLE XIII
CONFLICT WITH TERMS OF ANY CLASS OR
SERIES OF PREFERRED STOCK
In the event of a conflict between the terms of (1) the Corporation's
Charter as in effect from time to time, other than the terms of any class or
series of Preferred Stock, including the terms of the Series B, E and F
Preferred Stock set forth in Exhibits A, B and C, respectively, to this Charter,
and the terms of any Articles Supplementary of any class or series of Preferred
Stock then outstanding, and (2) any such class or series of Preferred Stock,
including the terms of the Series B, E and F Preferred Stock set forth in
Exhibits A, B and C, respectively, to this Charter, and the terms of any
Articles Supplementary, unless otherwise required by the applicable provisions
of Maryland law, this Charter or the express terms of such class or series of
Preferred Stock, including the terms of the Series B, E and F Preferred Stock
set forth in Exhibits A, B and C, respectively, to this Charter, and the terms
of any Articles Supplementary, the terms of such class or series of Preferred
Stock, including the terms of the Series B, E and F Preferred Stock set forth in
Exhibits A, B and C, respectively, to this Charter, and the terms of any
Articles Supplementary shall govern and control.
SECOND: The Corporation desires to amend and restate its Charter as
currently in effect. The provisions set forth in the above Articles of Amendment
and Restatement are all of the provisions of the Corporation's Charter currently
in effect as hereby amended.
THIRD: The amendment and restatement of the Charter of the Corporation
herein made was carried out pursuant to Section 3-301 of the Maryland General
Corporation Law. The amendment and restatement of the Charter of the Corporation
was (i) approved by the Board of Directors on __________, 2000, and (ii) carried
out pursuant to that certain Debtors' Third Amended Joint Plan of Reorganization
dated ________, 2000, and confirmed by order of the United States Bankruptcy
Court of the District of Maryland, Greenbelt Division, and entered on _______,
2000 in the Chapter 11 reorganization proceedings of the Corporation pending as
IN RE CRIIMI MAE INC., ET. AL (CASE NOS. 98-23115 THROUGH 98-23117 (JOINTLY
ADMINISTERED).
FOURTH: The current address of the principal office of the Corporation
is 11200 Rockville Pike, Rockville, Maryland 20852, and the Corporation's
current resident agent is Corporation Trust, Inc., whose address is 11200
Rockville Pike, Rockville, Maryland 20852.
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FIFTH: The Corporation currently has ___ (__) directors. The directors
currently in office are _____________________________________________________.
SIXTH: These Articles of Amendment and Restatement increase the
authorized stock of the Corporation and the aggregate par value of such
authorized stock. Immediately before the amendment and restatement, the total
number of shares of all classes of stock of the Corporation heretofore
authorized, and the number and par value of the shares of each class were one
hundred forty five million (145,000,000) shares, of the par value of one cent
($0.01) each, of which one hundred twenty million (120,000,000) shares were
classified as Common Stock and twenty-five million (25,000,000) shares were
classified as Preferred Stock, of which three million (3,000,000) shares were
classified as Series B Preferred Stock, two hundred three thousand (203,000)
shares were classified as Series E Preferred Stock, and one million six hundred
ten thousand (1,610,000) shares were classified as Series F Preferred Stock. The
aggregate par value of all authorized shares having par value was one million
four hundred fifty thousand dollars ($1,450,000). As amended and restated, the
total number of shares of all classes of stock of the Corporation and the par
value of such shares, are three hundred seventy five million (375,000,000)
shares, of the par value of one cent ($0.01) each, of which three hundred
million (300,000,000) shares are classified as Common Stock and seventy five
million (75,000,000) shares are classified as Preferred Stock of which three
million (3,000,000) shares are classified as Series B Preferred Stock, two
hundred three thousand (203,000) shares are classified as Series E Preferred
Stock, and one million six hundred ten thousand (1,610,000) shares are
classified as Series F Preferred Stock. The aggregate par value of all
authorized shares having par value is five million dollars ($3,750,000).
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IN WITNESS WHEREOF, CRIIMI MAE Inc. has caused the Articles of
Amendment and Restatement to be signed in its name and on its behalf by its
Senior Vice-President/General Counsel and attested by its Secretary on
___________, 2000.
CRIIMI MAE INC.
By:
-------------------------------------
David B. Iannarone
Senior Vice-President/General Counsel
ATTEST:
-------------------------
Secretary
H. William Willoughby
THE UNDERSIGNED, Senior Vice-President/General Counsel of CRIIMI MAE
Inc., who executed on behalf of said Corporation the foregoing Articles of
Amendment and Restatement, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf of said Corporation, the foregoing
Articles of Amendment and Restatement to be the corporate act of said
Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
-----------------------------------
David B. Iannarone
Senior Vice-President/General Counsel
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EXHIBIT A TO ARTICLES OF AMENDMENT AND RESTATEMENT
(THE "SERIES B PREFERRED STOCK ARTICLES")(1)
The Series B Cumulative Convertible Preferred Stock shall be subject to
all of the provisions of the Articles of Amendment and Restatement of the
Corporation relating to the Capital Stock of the Corporation generally and
shall, as set by the Board of Directors, have the following preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption:
1. DEFINITIONS. For the purposes of these Series B Preferred Stock
Articles the following terms shall have the meanings indicated:
"Base Common Dividend Rate" shall mean $.30 per shares of Common Stock,
subject to adjustment as described in Section 4(d).
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York or Maryland are
authorized or obligated by law or executive order to close.
"Common Stock" shall mean the common stock of the Corporation, par
value $.01 per share. "Conversion Ratio" shall equal 2.2844, subject to
adjustment as described in Section 4 (d).
"Conversion Premium" shall equal three percent (3%).
"Conversion Price" shall mean $10.94 per share of Common Stock, subject
to adjustment as described in Section 10(f).
"Dividend Average Price" shall mean the Volume Weighted Average Price
of the Common Stock traded during the ten Trading Days beginning one Trading Day
after the Dividend Declaration Date (a "Dividend Pricing Period"), utilizing the
Bloomberg (Equity) VAP function, or, (x) if that information is not available,
the average of the sum of the average daily high and low sale prices for the
Common Stock for each day during a Dividend Pricing Period, as reported on the
stock exchange composite tape, weighted by the number of shares of Common Stock
traded for that day or, (y) if the Common Stock is traded over-the-counter, the
average of the sum of the daily averages of the last reported high bid and low
asked quotations for the Common Stock for each day during a Dividend Pricing
Period, weighted by the number of shares of Common Stock traded for that day.
"Dividend Declaration Date" shall mean, with respect to any quarterly
dividend, a date
------------------------------
(1) This EXHIBIT A represents the relative rights and preferences of the
Corporation's Series B Preferred Stock, as amended by the Plan, which amendments
relate principally to the payment of dividends, consistent with the Plan, and
will be effected only if Holders of Series B Preferred Stock vote to accept the
Plan.
<PAGE>
on which the Board of Directors declares such dividend.
"Effective Date" shall mean the first day, other than a Saturday,
Sunday, or a "legal holiday" (as defined in Rule 9005(a) of the Federal Rules of
Bankruptcy Procedure), that is not less than eleven (11) days after the date on
which the clerk of the U.S. Bankruptcy Court for the District of Maryland,
Greenbelt Division, or such other court that exercises jurisdiction over the
Corporation's bankruptcy case, enters the Order confirming the Corporation's
plan of reorganization as such may be amended, modified or supplemented from
time to time, and on which day, as determined by the Corporation (i) all
conditions to the Effective Date as set forth in the Corporation's plan of
reorganization have been satisfied or waived by the Corporation, and (ii) no
stay of the Order confirming the Corporation's plan of reorganization is in
effect.
"Liquidation Value" with respect to a share of Series B Preferred Stock
shall mean $25.00.
"Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"Redemption Price" with respect to a share of Series B Preferred Stock
shall mean $25.00.
"Series E Preferred Stock" shall mean the Corporation's Series E
Cumulative Convertible Preferred Stock, par value $0.01 per share.
"Series F Preferred Stock" shall mean the Corporation's Series F
Redeemable Cumulative Dividend Preferred Stock (convertible during the period of
ten (10) Business Days after the fifth Business Day after the Initial Issue Date
and during the period of ten (10) Business Days ending ninety (90) calendar days
after the Initial Issue Date or the First Business Day thereafter), par value
$0.01 per share.
"Subsidiary" of any Person means any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
"Trading Day" shall mean any day on which the principal national
securities exchange on which the Common Stock is listed or admitted to trading
is open for the transaction of business or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, a Business Day.
"Volume Weighted Average Price of the Common Stock" for a given period
shall mean the quotient of (i) the aggregate dollar value obtained by
multiplying (a) the number of shares of Common Stock traded at each given price
during such period, by (b) such price, divided by (ii) the total number of
shares of Common Stock traded during such period.
2. DESIGNATION AND NUMBER. The shares of such series of Preferred Stock
shall be designated as "Series B Cumulative Convertible Preferred Stock" (the
"SERIES B PREFERRED STOCK"). The number of shares initially constituting the
Series B Preferred Stock shall be
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3,000,000, which number may be decreased (but not increased) by the Board of
Directors without a vote of the holders of Series B Preferred Stock; PROVIDED,
HOWEVER, that such number may not be decreased below the number of then
outstanding shares of Series B Preferred Stock.
3. RANK. The Series B Preferred Stock shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding up, rank (i) senior
to (w) the Series E Preferred Stock, (x) the Series F Preferred Stock, (y) the
Common Stock, and (z) to all other Capital Stock of the Corporation the terms of
which specifically provide that such Capital Stock ranks junior to the Series B
Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Corporation, (ii) on parity with all Capital
Stock of the Corporation the terms of which specifically provide that such
Capital Stock ranks on a parity with the Series B Preferred Stock with respect
to dividend rights or rights upon liquidation, dissolution or winding up of the
Corporation and (iii) junior to all Capital Stock of the Corporation the terms
of which specifically provide that such Capital Stock ranks senior to the Series
B Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Corporation.
4. DIVIDENDS AND DISTRIBUTIONS. (a) The holders of shares of Series B
Preferred Stock, in preference to the holders of shares of Common Stock and of
any other shares of Capital Stock of the Corporation ranking junior to the
Series B Preferred Stock as to payment of dividends, shall be entitled to
receive, when, as and if declared by the Board of Directors, out of the assets
of the Corporation legally available therefor, cumulative dividends, payable in
quarterly installments on the last Business Day of each calendar quarter in each
year (each such date being referred to herein as a "QUARTERLY DIVIDEND PAYMENT
DATE") commencing on September 30, 1996. Each such quarterly dividend shall be
fully cumulative, to the extent not paid, and shall accrue (whether or not
earned or declared), without interest, from the date of issuance of the Series B
Preferred Stock, and thereafter from the first day of the quarterly period in
which such dividend may be payable as herein provided. Dividends payable for
each quarterly dividend period (including the period corresponding to the
initial Quarterly Dividend Payment Date on September 30, 1996) shall be computed
by dividing the annual dividend by four. Dividends payable with respect to any
partial dividend period (other than the initial Quarterly Dividend Payment Date)
shall be computed on the basis of a 360-day year of twelve 30-day months.
Dividends shall be payable in cash or in Common Stock (or a combination
thereof), at the Corporation's option, including without limitation, all accrued
and unpaid dividends as of the Effective Date. If dividends are paid in cash,
the cash dividend rate on shares of the Series B Preferred Stock shall equal the
sum of (i) $0.68 per share per quarter (equivalent to $2.72 per share per annum)
plus (ii) the product of (x) the excess over the Base Common Dividend Rate, if
any, of the quarterly cash dividend declared or paid in respect of each share of
Common Stock for the applicable quarter, (y) the Conversion Ratio and (z) one
plus the Conversion Premium. If the dividends are paid in Common Stock, the
number of shares of Common Stock issuable by the Corporation shall be determined
by dividing the cash amount which would be payable if cash dividends were to be
paid on the Quarterly Dividend Payment Date by the Dividend Average Price. No
fractional shares of Common Stock shall be issued. Instead of any fractional
share of Common Stock, the Corporation shall pay a cash adjustment in respect to
such fraction.
(b) Dividends paid on the shares of the Series B Preferred
Stock in an amount
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less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated among all such shares of Series B Preferred Stock
and all other shares of Capital Stock of the Corporation ranking on a parity as
to dividends with the Series B Preferred Stock ("DIVIDEND PARITY STOCK"), at the
time outstanding pro rata so that the amount of dividends declared per share of
Series B Preferred Stock and the Dividend Parity Stock shall in all cases bear
to each other the same ratio that accrued dividends per share on the Series B
Preferred Stock and the Dividend Parity Stock bear to each other. The Board of
Directors may fix a record date for the determination of holders of shares of
the Series B Preferred Stock entitled to receive payment of a dividend declared
thereon, which record date shall be no more than sixty (60) days nor less than
ten (10) days prior to the date fixed for the payment thereof.
(c) Any dividend payment made on shares of the Series B
Preferred Stock shall first be credited against the earliest accrued but unpaid
dividend due with respect to shares of the Series B Preferred Stock which
remains payable.
(d) In case the Corporation shall (A) pay a dividend or make a
distribution on shares of its Common Stock in Common Stock, (B) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares or (C) combine or reclassify its outstanding shares of Common Stock into
a smaller number of shares:
(i) the Base Common Dividend Rate in effect
immediately prior thereto shall be adjusted retroactively as provided
below so that the Base Common Dividend Rate thereafter shall be
determined by multiplying the Base Common Dividend Rate by a fraction
of which the denominator shall be the number of shares of Common Stock
outstanding immediately following such action and of which the
numerator shall be the number of shares of Common Stock outstanding
immediately prior thereto; and
(ii) the Conversion Ratio in effect immediately prior
thereto shall be adjusted retroactively as provided below so that the
Conversion Ratio thereafter shall be determined by multiplying the
Conversion Ratio by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately following such
action and of which the denominator shall be the number of shares of
Common Stock outstanding immediately prior thereto.
Such adjustments shall be made whenever any event listed in the first sentence
of this Section 4(d) shall occur and shall become effective retroactively
immediately after the record date in the case of a dividend (pursuant to Section
4 (d)(A)) and immediately after the effective date in the case of a subdivision,
combination or reclassification (pursuant to Section 4 (d)(B) or 4(d)(C)). No
adjustment in the Base Common Dividend Rate or the Conversion Ratio shall be
required unless the adjustment would require an increase or decrease of at least
1% of each of the Base Common Dividend Rate and the Conversion Ratio then in
effect; PROVIDED, HOWEVER, that any adjustment that by reason of this Section
4(d) is not required to be made shall be carried forward and taken into account
in any subsequent adjustment. Notwithstanding anything to the contrary in this
Section 4(d), Common Stock issued pursuant to the Corporation's dividend
reinvestment plan shall not result in any adjustment to the Base Common Dividend
Rate or the Conversion Ratio.
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(e) The holders of shares of Series B Preferred Stock shall
not be entitled to receive any dividends or other distributions except as
expressly provided herein.
5. VOTING RIGHTS. So long as the Series B Preferred Stock remains
outstanding, the holders of shares of the Series B Preferred Stock shall have
the following voting rights:
(a) The holders of shares of Series B Preferred Stock shall
have no voting rights except as set forth below or as otherwise from time to
time required by law.
(b) The affirmative vote or consent, in person or by proxy, in
writing or at a special or annual meeting of stockholders called for the
purpose, of the holders of at least:
(i) two-thirds of the outstanding shares of Series B
Preferred Stock, voting separately as a class, shall be necessary to
authorize, create or increase the authorized or issued amount of, any
class or series of the Corporation's Capital Stock ranking prior to the
Series B Preferred Stock with respect to payment of dividends or
distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized Capital Stock of the Corporation into any
such Capital Stock, or create, authorize or issue any obligation or
security convertible into or evidencing the right to purchase any such
Capital Stock;
(ii) a majority of the outstanding shares of Series B
Preferred Stock, voting separately as a class, shall be necessary to
authorize, create or increase the authorized or issued amount of, any
class or series of the Corporation's Capital Stock ranking on a parity
with the Series B Preferred Stock with respect to payment of dividends
or distribution of assets upon liquidation, dissolution or winding up
or reclassify any authorized Capital Stock of the Corporation into any
such Capital Stock, or create, authorize or issue any obligation or
security convertible into or evidencing the right to purchase any such
Capital Stock; or
(iii) two-thirds of the outstanding shares of Series
B Preferred Stock, voting separately as a class, shall be necessary to
amend, alter or repeal any of the provisions of the Articles of
Amendment and Restatement of the Corporation, including these Series B
Preferred Stock Articles, whether by merger, consolidation or otherwise
(an "EVENT"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series B Preferred Stock
or the holders thereof;
PROVIDED, HOWEVER, with respect to the occurrence of any of the Events set forth
in Section 5 (b) (iii), so long as the Series B Preferred Stock remains
outstanding with the terms thereof materially unchanged, the occurrence of any
such Event shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of the Series B Preferred
Stock; and PROVIDED, FURTHER, that (x) any increase in the amount of authorized
Common Stock or the authorization, creation or issuance of any other class or
series of Capital Stock or (y) any increase in the amount of authorized shares
of any other class or series of Capital Stock, in each case ranking on a parity
with or junior to the Series B Preferred Stock with respect to the payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up, shall not be deemed to materially and adversely affect such rights,
preferences,
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privileges or voting powers.
(c) During any period in which dividends on the Series B
Preferred Stock are cumulatively in arrears for not less than six quarterly
dividend payments (whether or not consecutive), then the number of directors
constituting the Board of Directors shall, without further action, be increased
by two and the holders of shares of the Series B Preferred Stock shall have, in
addition to the other voting rights set forth herein, the exclusive right,
voting separately as a single class, to elect the directors of the Corporation
to fill such newly created directorships, the remaining directors to be elected
by the other classes of Capital Stock entitled to vote therefor at each meeting
of stockholders held for the purpose of electing directors. Such additional
voting rights shall continue until such time as all dividends accumulated on the
Series B Preferred Stock shall have been paid in full, at which time such
additional directors shall cease to be directors and such additional voting
right of the holders of Series B Preferred Stock shall terminate subject to
revesting in the event of each and every subsequent event of the character
indicated above. In no event shall the holders of Series B Preferred Stock
voting separately as a class be entitled to elect a total of more than two
directors to the Board of Directors pursuant to this Section 5 (c).
So long as such right to vote pursuant to this Section 5(c) continues
(and unless such right has been exercised by written consent of the minimum
number of shares required to take such action), the Chairman of the Board of
Directors may call, and upon the written request of holders of record of 20% of
the outstanding shares of Series B Preferred Stock addressed to the Secretary of
the Corporation at the principal office of the Corporation, shall call, a
special meeting of the holders of shares entitled to vote as provided herein.
Such meeting shall be held within sixty (60) days after delivery of such request
to the Secretary, at the place and upon the notice provided by law and in the
by-laws of the Corporation for the holding of meetings of stockholders.
Each director elected by the holders of shares of Series B Preferred
Stock as provided in this Section 5 (c) shall, unless his or her term shall
expire earlier upon payment in full by the Corporation of all accumulated
dividends on the Series B Preferred Stock, hold office until the annual meeting
of stockholders next succeeding his election or until his successor, if any, is
elected and qualified.
In case any vacancy shall occur among the directors elected by the
holders of shares of Series B Preferred Stock as provided in this Section 5 (c),
such vacancy may be filled for the unexpired portion of the term by vote of the
remaining director theretofore elected by such holders (if there is a remaining
director), or such director's successor in office. If any such vacancy is not so
filled within twenty (20) days after the creation thereof or if both directors
so elected by the holders of Series B Preferred Stock shall cease to serve as
directors before their terms shall expire, the holders of the Series B Preferred
Stock then outstanding and entitled to vote for such directors may, by written
consent as herein provided, or at a special meeting of such holders called as
provided herein, elect successors to hold office for the unexpired terms of such
directors whose places shall be vacant.
Any director elected by the holders of shares of Series B Preferred
Stock voting separately as a single class may be removed from office with or
without cause by the affirmative vote or written consent of the holders of at
least a majority of the outstanding shares of Series B
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Preferred Stock. A special meeting of the holders of shares of Series B
Preferred Stock may be called in accordance with the procedures set forth in
this Section 5 (c).
(d)(i) The foregoing rights of holders of shares of Series B
Preferred Stock to take any actions as provided in this Section 5 may be
exercised at any annual meeting of stockholders or at a special meeting of
stockholders held for such purpose as hereinafter provided or at any adjournment
thereof, or by the written consent, delivered to the Secretary of the
Corporation, of the holders of the minimum number of shares of Series B
Preferred Stock required to take such action.
(ii) At each meeting of stockholders at which the holders of
shares of Series B Preferred Stock shall have the right, voting separately as a
single class to elect directors of the Corporation as provided in this Section 5
or to take any action, the presence in person or by proxy of the holders of
record of a majority of the total number of shares of Series B Preferred Stock
then outstanding and entitled to vote on the matter shall be necessary and
sufficient to constitute a quorum. At any such meeting or at any adjournment
thereof:
(A) the absence of a quorum of the holders of shares
of Series B Preferred Stock shall not prevent the election of directors
other than those to be elected by the holders of shares of Series B
Preferred Stock and the absence of a quorum of the holders of shares of
any other class or series of Capital Stock shall not prevent the
election of directors to be elected by the holders of shares of Series
B Preferred Stock or the taking of any action as provided in this
Section 5; and
(B) in the absence of a quorum of the holders of
shares of Series B Preferred Stock, a majority of the holders of such
shares present in person or by proxy shall have the power to adjourn
the meeting as to the actions to be taken by the holders of shares of
Series B Preferred Stock from time to time and place to place without
notice other than announcement at the meeting until a quorum shall be
present.
For the taking of any action as provided in Sections 5 (b) and 5 (c) by
the holders of Series B Preferred Stock, each such holder shall have one vote
for each share of such stock standing in such holder's name on the transfer
books of the Corporation as of any record date fixed for such purpose or, if no
such date be fixed, at the close of business on the Business Day next preceding
the day on which notice is given, or if notice is waived, at the close of
business on the Business Day next preceding the day on which the meeting is
held.
6. CERTAIN RESTRICTIONS. (a) If shares of Series B Preferred Stock are
outstanding, unless full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient (in cash and/or Common Stock,
as applicable) for the payment thereof set apart for such payment on the Series
B Preferred Stock for all past dividend periods and the then current dividend
period, other than pursuant to Section 4(b), the Corporation will not declare,
make, pay or set apart for payment or distribution any dividends or other
distributions (other than in Common Stock or other Capital Stock ranking junior
to the Series B Preferred Stock as to dividends and upon liquidation,
dissolution or winding up) on the Common Stock or any other series or class of
Capital Stock ranking, as to dividends, junior to the Series B Preferred Stock
for any period. No full dividends shall be paid or declared and set apart for
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payment on any Dividend Parity Stock for any period unless full cumulative
dividends have been, or contemporaneously are, paid or declared and set apart
for payment on the Series B Preferred Stock for all dividend payment periods
terminating on or prior to the date of payment of such full cumulative
dividends. No full dividends shall be paid or declared and set apart for payment
on the Series B Preferred Stock for any period unless full cumulative dividends
have been, or contemporaneously are, paid or declared and set apart for payment
on any Dividend Parity Stock for all dividend payment periods terminating on or
prior to the date of payment of such full cumulative dividends.
(b) If shares of Series B Preferred Stock are outstanding,
unless full cumulative dividends have been or contemporaneously are declared and
paid or declared and a sum sufficient (in cash and/or Common Stock, as
applicable) for the payment thereof set apart for such payment on the Series B
Preferred Stock for all past dividend periods and the then current dividend
period, the Corporation shall not redeem, purchase or otherwise acquire for any
consideration (or pay or make available money for a sinking fund for the
redemption of) any Common Stock or any other series or class of Capital Stock
ranking, as to dividends or upon liquidation, dissolution or winding up, on a
parity with or junior to the Series B Preferred Stock (except by conversion into
or exchange for Common Stock or other Capital Stock of the Corporation ranking
junior to the Series B Preferred Stock as to dividends and upon liquidation,
dissolution or winding up); PROVIDED, HOWEVER, the foregoing shall not prevent
the purchase or acquisition of any shares of Capital Stock of the Corporation by
the Corporation (i) in order to preserve the status of the Corporation as a real
estate investment trust ("REIT") or (ii) pursuant to a purchase or exchange
offer made on comparable terms to all holders of outstanding shares of Capital
Stock of the Corporation.
(c) The Corporation shall not permit any Subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
Capital Stock of the Corporation unless the Corporation could, pursuant to
Section 6 (b), purchase or otherwise acquire such shares at such time and in
such manner.
7. REDEMPTION. (a) The Series B Preferred Stock shall not be redeemable
in whole or in part prior to the tenth yearly anniversary of the date of
issuance of the Series B Preferred Stock. On or after the tenth yearly
anniversary of the date of issuance of the Series B Preferred Stock, to the
extent the Corporation shall have funds legally available therefor, the Series B
Preferred Stock shall be subject to redemption in whole or in part, in cash, at
the option of the Corporation on any Quarterly Dividend Payment Date, at the
Redemption Price, together in each case with an amount (in cash and/or Common
Stock, as applicable) equal to accrued and unpaid dividends to (and including)
the date fixed for redemption. On and after the date fixed for redemption,
provided that the Redemption Price (including any accrued and unpaid dividends
to (and including) the date fixed for redemption) has been duly paid or
deposited in trust for the benefit of the holders of the Series B Preferred
Stock, dividends shall cease to accrue on the Series B Preferred Stock called
for redemption, such shares shall no longer be deemed to be outstanding and all
rights of the holders of such shares as stockholders of the Corporation shall
cease, except the right to receive the moneys (and Common Stock, if applicable)
payable upon such redemption, without interest thereon, upon surrender of the
certificates evidencing such shares. Any moneys (and Common Stock, if
applicable) deposited in trust by the Corporation
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which shall not be required for redemption because of the exercise of any right
of conversion by the holders of the Series B Preferred Stock, shall be repaid to
the Corporation forthwith. Any moneys (and Common Stock, if applicable)
deposited in trust by the Corporation and unclaimed at the end of two years from
the date fixed for such redemption shall be repaid to the Corporation upon its
written request, after which repayment the holders of the shares of Series B
Preferred Stock so called for redemption shall look only to the Corporation for
the payment thereof.
(b) Notice of any redemption pursuant to Section 7 (a) shall
be given to the holders of shares of Series B Preferred Stock once not less than
thirty (30) or more than sixty (60) days prior to the date fixed for redemption.
Notice of redemption shall be given by first class mail to each such holder's
address as shown on the stock books of the Corporation and will specify (i) the
date filed for redemption, (ii) the number of shares of Series B Preferred Stock
to be redeemed, (iii) the Redemption Price, (iv) the place or places where
certificates for shares of Series B Preferred Stock are to be surrendered for
payment of the Redemption Price, (v) that dividends on the shares of Series B
Preferred Stock to be redeemed will cease to accrue on the date fixed for
redemption, and (vi) the date upon which the holders' conversion rights will
terminate. If less than all shares of Series B Preferred Stock then outstanding
are to be redeemed, the shares of Series B Preferred stock will be redeemed pro
rata from among the holders of shares of Series B Preferred Stock then
outstanding.
(c) If a notice of redemption has been given pursuant to this
Section 7, and any holder of shares of the Series B Preferred Stock shall, prior
to the close of business on the fifth day preceding the date fixed for
redemption, give written notice to the Corporation pursuant to Section 10 below
of the conversion of any or all of the shares to be redeemed held by the holder
(accompanied by a certificate or certificates for such shares, duly endorsed, or
assigned to the Corporation, and any necessary transfer tax payment, as required
by Section 10 below), then such redemption shall not become effective as to such
shares to be converted and such redemption shall become effective as provided in
Section 10 below, whereupon any funds (and Common Stock, if applicable)
deposited by the Corporation for the redemption of such shares shall (subject to
any right of the holder of such shares to receive the dividend payable thereon
as provided in Section 10 below) immediately upon such conversion be returned to
the Corporation or, if then held in trust by the Corporation, shall be
discharged from the trust.
8. REACQUIRED SHARES. Any shares of Series B Preferred Stock converted,
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares of Series B Preferred Stock shall upon their cancellation, and
upon the filing of an appropriate certificate with the Maryland State Department
of Assessments and Taxation, become authorized but unissued shares of Preferred
Stock and may be reissued as part of another series of Preferred Stock subject
to the conditions or restrictions on issuance set forth herein, to the extent
any Series B Preferred Stock remains outstanding.
9. LIQUIDATION, DISSOLUTION OR WINDING UP. (a) Upon any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation then, before any distribution or payment shall be made to the
holders of any shares of Common Stock or any other class or series of Capital
Stock of the Corporation ranking junior to the Series B Preferred
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Stock in the distribution of assets upon any liquidation, dissolution or winding
up of the Corporation, the holders of Series B Preferred Stock shall be entitled
to receive out of assets of the Corporation legally available for distribution
to stockholders, liquidating distributions in the amount of the Liquidation
Value per share, plus an amount equal to all dividends accrued and unpaid
thereon as of the date of liquidation, dissolution or winding up. After payment
of the full amount of the liquidating distributions to which they are entitled,
the holders of Series B Preferred Stock will have no right or claim to any of
the remaining assets of the Corporation. In the event that, upon any such
voluntary or involuntary liquidation, dissolution or winding up, the available
assets of the Corporation are insufficient to pay the amount of the liquidating
distributions on all outstanding shares of Series B Preferred Stock and the
corresponding amounts payable on all shares of other classes or series of
Capital Stock of the Corporation ranking on a parity with the Series B Preferred
Stock in the distribution of assets upon liquidation, dissolution or winding up,
then the holders of the Series B Preferred Stock and all other such classes or
series of Capital Stock shall share ratably in any such distribution of assets
in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
(b) Neither the consolidation, merger or other business
combination of the Corporation with or into any other Person, nor the sale,
lease or conveyance of all or substantially all of the property or business of
the Corporation shall be deemed to constitute a liquidation, dissolution or
winding up of the Corporation for purposes of this Section 9.
10. CONVERSION. (a) Holders of shares of Series B Preferred Stock shall
have the right, exercisable at any time, except in the case of shares of Series
B Preferred Stock called for redemption (as described in Section 7 above), to
convert shares of Series B Preferred Stock into fully paid and nonassessable
shares of Common Stock (calculated as to each conversion to the nearest 1/100th
of a share) at the Conversion Price. The number of shares of Common Stock into
which a share of Series B Preferred Stock shall be convertible shall be
determined by dividing the Liquidation Value by the Conversion Price. In the
case of shares of the Series B Preferred Stock called for redemption, conversion
rights shall expire at the close of business on the fifth Business Day
immediately preceding the date fixed for redemption. No payment or adjustment
for accrued dividends on the shares of Series B Preferred Stock is to be made on
conversion, but holders of record of shares of Series B Preferred Stock on a
record date applicable to a Quarterly Dividend Payment Date shall be entitled to
receive such quarterly dividend payment notwithstanding the conversion of such
shares prior to such Quarterly Dividend Payment Date.
(b) Holders of Series B Preferred Stock may convert such
Series B Preferred Stock into Common Stock by surrendering to the Corporation's
transfer agent, Registrar and Transfer Company (the "TRANSFER AGENT"), at its
offices in the City of New York, New York or New Jersey, the certificate of such
Series B Preferred Stock to be converted, properly endorsed and medallion
certified and accompanied by a written notice stating that such holder elects to
convert all or a specified whole number of such shares in accordance with the
provisions of this Section 10 and specifying the name or names in which such
holder wishes the certificate or certificates for shares of Common Stock to be
issued (a "CONVERSION NOTICE"). In case a Conversion Notice shall specify a name
or names other than that of such holder, such Conversion Notice shall be
accompanied by payment of all transfer taxes, if any, payable upon the issuance
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of shares of Common Stock in such name or names. Other than such taxes, the
Corporation will pay any and all issue and other taxes (other than taxes based
on income) that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of Series B Preferred Stock pursuant hereto.
(c) As promptly as practicable, and in any event within five
Business Days after the date of delivery of the shares of Series B Preferred
Stock to be converted (and the Conversion Notice), the Corporation shall deliver
or cause to be delivered (i) certificates representing the number of validly
issued, fully paid and nonassessable full shares of Common Stock to which the
holder of shares of Series B Preferred Stock being converted shall be entitled
and (ii) if less than the full number of shares of Series B Preferred Stock
evidenced by the surrendered certificate or certificates is being converted, a
new certificate or certificates, of like tenor, for the number of shares
evidenced by such surrendered certificate or certificates less the number of
shares being converted. All conversions shall be deemed to have been made at the
close of business on the date of delivery of the Conversion Notice, so that the
rights of the holder thereof as to the shares being converted shall cease except
for the right to receive shares of Common Stock in accordance herewith, and the
Person entitled to receive the shares of Common Stock shall be treated for all
purposes as having become the record holder of such shares of Common Stock at
such time. The Corporation shall not be required to convert, and no surrender of
shares of Series B Preferred Stock shall be effective for that purpose, while
the transfer books of the Corporation for the Common Stock are closed for any
purpose (but not for any period in excess of ten (10) calendar days); but the
surrender of shares of Series B Preferred Stock for conversion during any period
while such books are so closed shall become effective for conversion immediately
upon the reopening of such books, as if the conversion had been made on the date
such shares of Series B Preferred Stock were surrendered, and at a rate of
conversion which assumes the conversion took place during the period immediately
prior to the closing of such books.
(d) No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of shares of the Series B
Preferred Stock. If more than one share of the Series B Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate number of shares of the Series B Preferred Stock so
surrendered. Instead of any fractional share of Common Stock otherwise issuable
upon conversion of any shares of the Series B Preferred Stock, the Corporation
shall pay a cash adjustment in respect to such fraction in an amount equal to
the same fraction of Sale Price (as defined below) of the Common Stock at the
close of business on the day of conversion. In the absence of a Sale Price, the
Board of Directors shall in good faith determine the current market price on the
basis of such quotation as it considers appropriate. As used herein, "SALE
PRICE" means the closing sales price of the Common Stock (or if no sale price is
reported, the average of the high and low bid prices) as reported by the
principal national or regional stock exchange on which the Common Stock is
listed or, if the Common Stock is not listed on a national or regional stock
exchange, as reported by the Nasdaq Stock Market and if not so reported, then as
reported by the National Quotation Bureau Incorporated.
(e) The Corporation shall reserve out of its authorized but
unissued Common
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Stock or its Common Stock held in treasury enough shares of Common Stock to
permit the conversion of all of the then-outstanding shares of the Series B
Preferred Stock. For the purposes of this Section 10 (e), the full number of
shares of Common Stock, then issuable upon the conversion of all
then-outstanding shares of the Series B Preferred Stock shall be computed as if
at the time of computation, all outstanding shares of the Series B Preferred
Stock were held by a single holder. The Corporation shall from time to time, in
accordance with the laws of the State of Maryland, increase the authorized
amount of its Common Stock if at any time the authorized amount of its Common
Stock remaining unissued shall not be sufficient to permit the conversion of all
shares of the Series B Preferred Stock (as provided herein) at the time
outstanding. If any shares of Common Stock required to be reserved for issuance
upon conversion of shares of the Series B Preferred Stock hereunder require
registration with or approval of any governmental authority under any federal or
state law before the shares may be issued upon conversion, the Corporation will
in good faith and as expeditiously as possible endeavor to cause the shares to
be so registered or approved. All shares of Common Stock issued upon conversion
of the shares of the Series B Preferred Stock shall be validly issued, fully
paid and nonassessable.
(f) The Conversion Price shall be subject to adjustment
as follows:
(i) In case the Corporation shall (A) pay a dividend
or make a distribution on any class of its Capital Stock in shares of
its Common Stock, other than on shares of Series B Preferred Stock, (B)
subdivide or reclassify its outstanding shares of Common Stock into a
greater number of shares or (C) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Conversion
Price in effect immediately prior thereto shall be adjusted
retroactively as provided below so that the Conversion Price thereafter
shall be determined by multiplying the Conversion Price at which the
shares of the Series B Preferred Stock were theretofore convertible by
a fraction of which the denominator shall be the number of shares of
Common Stock outstanding immediately following such action and of which
the numerator shall be the number of shares of Common Stock outstanding
immediately prior thereto. Such adjustment shall be made whenever any
event listed above shall occur and shall become effective retroactively
immediately after the record date in the case of a dividend and
immediately after the effective date in the case of a subdivision,
combination or reclassification. Notwithstanding anything to the
contrary in this Section 10 (f) (i), Common Stock issued pursuant to
the Corporation's dividend reinvestment plan shall not result in any
adjustment to the Conversion Price.
(ii) In case the Corporation shall issue rights or
warrants to all holders of its Common Stock entitling them (for a
Period expiring within forty-five (45) days after the record date
therefor) to subscribe for or purchase shares of Common Stock at a
price per share less than the current market price per share of Common
Stock (as determined in accordance with the provisions of Section 10(f)
(iv) below) at the record date therefor (the "CURRENT MARKET PRICE"),
or in case the Corporation shall issue other securities convertible
into or exchangeable for Common Stock for a consideration per share of
Common Stock deliverable upon conversion or exchange thereof less than
the Current Market Price, then the Conversion Price in effect
immediately prior thereto shall be adjusted retroactively as provided
below so that the Conversion Price thereafter shall
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be determined by multiplying (A) the Conversion Price at which shares
of the Series B Preferred Stock were theretofore convertible by (B) a
fraction of which the denominator shall be the sum of (1) the number of
shares of Common Stock outstanding on the date of issuance of the
convertible or exchangeable securities, rights or warrants and (2) the
number of additional shares of Common Stock offered for subscription or
purchase, and of which the numerator shall be the sum of (l) the number
of shares of Common Stock outstanding on the date of issuance of such
convertible or exchangeable securities, rights or warrants and (2) the
number of additional shares of Common Stock which the aggregate
offering price of the number of shares of Common Stock so offered would
purchase at the Current Market Price per share of Common Stock (as
determined in accordance with the provisions of Section 10 (f) (iv)
below). Such adjustment shall be made whenever such convertible or
exchangeable securities, rights or warrants are issued, and shall
become effective retroactively immediately after the record date for
the determination of stockholders entitled to receive such securities.
However, upon the expiration of any right or warrant to purchase Common
Stock, the issuance of which resulted in an adjustment in the
Conversion Price pursuant to this Section 10 (f) (ii), if any such
right or warrant shall expire and shall not have been exercised, the
Conversion Price shall be recomputed immediately upon such expiration
and effective immediately upon such expiration shall be increased to
the price it would have been (but reflecting any other adjustments to
the Conversion Price made pursuant to the provisions of Section 10 (f)
after the issuance of such rights or warrants) had the adjustment of
the Conversion Price made upon the issuance of such rights or warrants
been made on the basis of offering for subscription or purchase only
that number of shares of Common Stock actually purchased upon the
exercise of such rights or warrants actually exercised.
(iii) In case the Corporation shall pay a dividend or
make a distribution to all holders of its Common Stock (including any
such distribution made in connection with a consolidation or merger in
which the Corporation is the continuing corporation) of any shares of
capital stock of the Corporation or its subsidiaries (other than Common
Stock) or evidences of its indebtedness or assets (excluding cash
dividends payable solely in cash that may from time to time be fixed by
the Board of Directors, or dividends or distributions in connection
with the liquidation, dissolution or winding up of the Corporation) or
rights to subscribe for or purchase any of its securities or those of
its Subsidiaries (excluding those referred to in Sections 10 (f) (i)
and 10 (f) (ii) above), then in each such case the number of shares of
Common Stock into which each share of the Series B Preferred Stock
shall thereafter be convertible shall be determined by multiplying (A)
the Conversion Price in effect on the record date mentioned below by
(B) a fraction, the numerator of which shall be the Current Market
price per share of Common Stock on the record date mentioned below less
the then fair market value (as determined by the Board of Directors,
whose good faith determination shall be conclusive) as of such record
date of the portion of the Capital Stock or assets or evidences of
indebtedness so distributed or of such rights or warrants applicable to
one share of Common Stock, and the denominator of which shall be the
Current Market Price per share of Common Stock on such record date;
PROVIDED, HOWEVER, that in the event the then fair market value (as so
determined) of the portion of securities so distributed applicable to
one share of Common Stock is equal to or greater than the Current
Market
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Price per share of Common Stock on the record date mentioned above, in
lieu of the foregoing adjustment, adequate provision shall be made so
that each holder of shares of the Series B Preferred Stock shall have
the right to receive the amount and kind of securities such holder
would have received had such holder converted each such share of the
Series B Preferred Stock immediately prior to the record date for the
distribution of the securities. Such adjustment shall be made whenever
any such payment or distribution is made, and shall become effective
retroactively immediately after the record date for the determination
of stockholders entitled to receive the distribution.
(iv) For the purpose of any computation under
Sections 10 (f) (ii) and 10 (f) (iii) above, the Current Market Price
per share of Common Stock at any date shall be deemed to be the average
Sale Price for the thirty (30) consecutive trading days commencing
forty-five (45) trading days before the day in question.
(v) No adjustment in the Conversion Price shall be
required unless the adjustment would require an increase or decrease of
at least 1% of the Conversion Price then in effect; PROVIDED, HOWEVER,
that any adjustment that by reason of this Section 10 (f) is not
required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 10 (f)
shall be made to the nearest cent.
(vi) In the event that, at any time as a result of an
adjustment made pursuant to Section 10 (f) (i) or 10 (f) (iii) above,
the holder of any share of the Series B Preferred Stock thereafter
surrendered for conversion shall become entitled to receive any shares
of the Corporation other than shares of the Common Stock, thereafter
the number of such other shares so receivable upon conversion of any
share of the Series B Preferred Stock shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock
contained in Section 10 (f) (i) through 10 (f) (v) above, and the other
provisions of this Section 10 with respect to the Common Stock shall
apply on like terms to any such other shares.
(vii) In the event of a distribution of evidence of
indebtedness or other assets (as described in Section 10 (f) (iii)) or
a dividend to all holders of Common Stock of rights to subscribe for
additional shares of Capital Stock (other than those referred to in
Section 10 (f) (ii)), the Corporation may, instead of making an
adjustment of the Conversion Price, make prior provision so that each
holder who converts such shares of Series B Preferred Stock will be
entitled to receive upon such conversion, in addition to shares of
Common Stock, an appropriate number of such rights, warrants, evidences
of indebtedness or other assets.
(viii) Whenever the Conversion Price is adjusted, as
herein provided, the Corporation shall promptly file with the transfer
agent for the Series B Preferred Stock a certificate of an officer of
the Corporation setting forth the Conversion Price after the adjustment
and setting forth a brief statement of the facts requiring such
adjustment and a computation thereof. The certificate shall be
conclusive evidence of the correctness of the adjustment. The
Corporation shall promptly cause a notice of the adjusted Conversion
Price to be mailed to each registered holder of shares of the Series B
Preferred Stock.
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(ix) In case of any reclassification of the Common
Stock, any consolidation of the Corporation with, or merger of the
Corporation into, any other entity, any merger of another entity into
the Corporation (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock of the Corporation), any sale or transfer of all
or substantially all of the assets of the Corporation or any compulsory
share exchange, pursuant to which share exchange the Common Stock is
converted into other securities, cash or other property, then lawful
provision shall be made as part of the terms of such transaction
whereby the holder of each share of the Series B Preferred Stock then
outstanding shall have the right thereafter, during the period such
share shall be convertible, to convert such share only into the kind
and amount of securities, cash and other property receivable upon the
reclassification, consolidation, merger, sale, transfer or share
exchange by a holder of the number of shares of Common Stock of the
Corporation into which a share of the Series B Preferred Stock would
have been convertible immediately prior to the reclassification,
consolidation, merger, sale, transfer or share exchange. The
Corporation, the Person formed by the consolidation or resulting from
the merger or which acquires such assets or which acquires the
Corporation's shares, as the case may be, shall make provisions in its
certificate or articles of incorporation or other constituent document
to establish such rights. The certificate or articles of incorporation
or other constituent document shall provide for adjustments, which, for
events subsequent to the effective date of the certificate or articles
of incorporation or other constituent document, shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this Section 10. The provisions of this Section 10(f) (ix) shall
similarly apply to successive reclassification, consolidations,
mergers, sales, transfers or share exchanges.
(g) The Corporation from time to time may reduce the Conversion Price
by any amount for any period of time if the period is at least twenty (20) days
and if the reduction is irrevocable during the period. Whenever the Conversion
Price is so reduced, the Corporation shall mail to holders of record of the
Series B Preferred Stock a notice of the reduction at least fifteen (15) days
before the date the reduced Conversion Price takes effect, stating the reduced
Conversion Price and the period it will be in effect. A voluntary reduction of
the Conversion Price does not change or adjust the Conversion Price otherwise in
effect for purposes of Section 10(f) above.
11. MANDATORY REDEMPTION. The shares of the Series B Preferred Stock
are not subject to mandatory redemption or sinking fund requirements.
12. REIT STATUS. Nothing contained in the Articles of Amendment and
Restatement of the Corporation, including these Series B Preferred Stock
Articles shall limit the authority of the Board of Directors to take such other
action as it deems necessary or advisable to protect the Corporation and the
interests of the stockholders by preservation of the Corporation's qualification
as a REIT under the REIT Provisions (as defined in the Articles of Amendment and
Restatement of the Corporation), including, without limitation, the enforcement
of the provisions of Article XI of the Articles of Amendment and Restatement of
the Corporation.
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EXHIBIT B TO ARTICLES OF AMENDMENT AND RESTATEMENT
(THE "SERIES E PREFERRED STOCK ARTICLES")(1)
The Series E Cumulative Convertible Preferred Stock shall be subject
to all of the provisions of the Articles of Amendment and Restatement of the
Corporation relating to the Capital Stock of the Corporation generally and
shall, as set by the Board of Directors, have the following preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption:
1. DEFINITIONS. For the purposes of these Series E Preferred Stock
Articles, the following terms shall have the meanings indicated:
"Applicable Rate" shall mean (a) for the period commencing on the date
of issuance of the Series E Preferred Stock and ending on the Effective Date,
for each Quarterly Dividend Period the sum of (i) 75 basis points plus (ii)
LIBOR as of the second LIBOR Market Day preceding the commencement of such
Quarterly Dividend Period, and (b) for the period commencing on the Effective
Date, such rate as shall be provided in the Corporation's plan of reorganization
as in effect on the Effective Date, and these Series E Preferred Stock Articles
shall be deemed so amended and supplemented to so provide.
"Average Closing Trade Price" shall mean the quotient of (a) the sum of
the Closing Trade Prices for all of the Valid Trading Days during the applicable
Conversion Pricing Period divided by (b) the number of Valid Trading Days in
such Conversion Pricing Period.
"Business Day" shall mean any day other than a Saturday, Sunday or the
Friday after Thanksgiving or a day on which banking institutions in the State of
New York or Maryland are authorized or obligated by law or executive order to
close.
"Closing Trade Price" for a given Trading Day shall mean (a) the last
traded price for the Common Stock or the Survivor Common Stock, as the case may
be, for such Trading Day as reported on the stock exchange composite tape or (b)
if the Common Stock is traded over-the-counter, the last reported bid quotation
for the Common Stock or the Survivor Common Stock, as the case may be, for such
Trading Day.
"Common Stock" shall mean the common stock, par value $.01 per share,
of the Corporation.
"Conversion Pricing Period" shall mean a period of twenty-one (or such
fewer number as shall be mutually agreed upon in writing by the Corporation and
the holder of the Series E Preferred Stock being converted) consecutive Trading
Days immediately preceding the date of delivery of a Holder Conversion Notice or
the Mandatory Conversion Date, as the case may be.
--------------------------------
(1) These Series E Preferred Stock Articles shall be amended and modified
on the Effective Date consistent with the terms and conditions set forth in
Exhibit 3 to the Plan relating to the Series E Preferred Stock.
<PAGE>
"Dividend Parity Stock" shall have the meaning ascribed thereto in
Section 3(b) hereof.
"Effective Date" shall mean the first day, other than a Saturday,
Sunday, or a "legal holiday" (as defined in Rule 9005(a) of the Federal Rules of
Bankruptcy Procedure), that is not less than eleven (11) days after the date on
which the clerk of the U.S. Bankruptcy Court for the District of Maryland,
Greenbelt Division, or such other court that exercises jurisdiction over the
Corporation's bankruptcy case, enters the Order confirming the Corporation's
plan of reorganization as such may be amended, modified or supplemented from
time to time, and on which day, as determined by the Corporation (i) all
conditions to the Effective Date as set forth in the Corporation's plan of
reorganization have been satisfied or waived by the Corporation, and (ii) no
stay of the Order confirming the Corporation's plan of reorganization is in
effect.
"Event" shall have the meaning ascribed thereto in Section 4(b) hereof.
"Holder Conversion Notice" shall have the meaning ascribed thereto in
Section 9(d) hereof.
"LIBOR" shall mean the arithmetic mean of the offered rates for 3 month
deposits in United States dollars which appear on the display designated as
"Page 3750" on the Telerate Service (or such other page as may replace Page 3750
on that service for the purpose of displaying London interbank offered rates of
major banks) (the "Telerate Screen Page 3750") as of 11:00 A.M., London time, on
the specified LIBOR Market Day; PROVIDED, HOWEVER, if at the specified time on
the specified LIBOR Market Day fewer than two such offered rates so appear on
the Telerate Screen Page 3750, LIBOR shall mean the arithmetic mean of three
offered rates to prime banks for 3 month deposits in United States dollars by
three major banks in the London interbank market, as selected by the
Corporation, at approximately 11:00 A.M., London time, on the specified LIBOR
Market Day; PROVIDED, FURTHER, if fewer than three major banks in the London
interbank market are quoting rates to prime banks for 3 month deposits in United
States dollars, LIBOR shall be the LIBOR in effect for the previous Quarterly
Dividend Period.
"LIBOR Market Day" shall mean any day on which commercial banks are
open for business (including dealings in foreign exchange and foreign currency
deposits) in London, England.
"Liquidation Value" with respect to a share of Series E Preferred Stock
shall mean $100.
"Mandatory Conversion Date" shall have the meaning ascribed thereto in
the Corporation's plan of reorganization as in effect on the Effective Date, and
these Series E Preferred Stock Articles shall be deemed so amended and
supplemented to so provide.
"Minimum Daily Price" shall mean either (a) 75% of the Closing Trade
Price for the Trading Day immediately preceding either the date of delivery of
the Holder Conversion Notice to the Corporation or the Mandatory Conversion
Date, as the case may be, or (b) such price as shall be mutually agreed in
writing by the Corporation and the holder of the Series E Preferred Stock that
has requested conversion thereof.
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<PAGE>
"Person" shall mean any individual, firm, corporation, or other entity,
and shall include any successor (by merger or otherwise) of such entity.
"Qualified Person" shall mean any Person that, immediately after giving
effect to the applicable Transaction, (i) is a solvent corporation or other
entity organized under the laws of any State of the United States of America
having its common stock or, in the case of an entity other than a corporation,
equivalent equity securities, listed on the New York Stock Exchange or the
American Stock Exchange or quoted by the NASDAQ National Market System or any
successor thereto, and such common stock or equivalent equity security continues
to meet the requirements for such listing or quotation and (ii) is required to
file, and in each of the three fiscal years immediately preceding the
consummation of the applicable Transaction (or, if shorter, since its inception)
has filed, reports with the Securities and Exchange Commission pursuant to
Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as
amended.
"Quarterly Dividend Payment Date" shall have the meaning ascribed
thereto in Section 3(a) hereof.
"Quarterly Dividend Period" shall mean with respect to any Quarterly
Dividend Payment Date, the period commencing on the day succeeding the prior
Quarterly Dividend Payment Date (or, with respect to the first Quarterly
Dividend Payment Date for a share of Series E Preferred Stock, the date of
issuance of such share of Series E Preferred Stock) to and including such
Quarterly Dividend Payment Date.
"Redemption Price" shall have the meaning ascribed thereto in Section
6(a) hereof.
"Series B Preferred Stock" shall mean the Corporation's Series B
Cumulative Convertible Preferred Stock.
"Series F Preferred Stock" shall mean the Corporation's Series F
Redeemable Cumulative Dividend Preferred Stock (convertible during the period of
ten (10) business days after the fifth business day after the initial issue date
and during the period of ten (10) business days ending ninety (90) calendar days
after the initial issue date or the first business day thereafter).
"Subsidiary" of any Person means any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
"Surviving Person" shall mean the continuing or surviving Person of a
merger, consolidation or other corporate combination, the Person receiving a
transfer of all or substantially all of the properties and assets of the
Corporation, or the Person consolidating with or merging into the Corporation in
a merger, consolidation or other corporate combination in which the Corporation
is the continuing or surviving Person, but in connection with which the Series E
Preferred Stock or Common Stock of the Corporation is exchanged, converted or
reinstated into the securities of any other Person or cash or any other
property; provided,
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however, if such Surviving Person is a direct or indirect Subsidiary of a
Qualified Person, the parent entity that is a Qualified Person shall be the
Surviving Person.
"Survivor Common Stock" with respect to any Person shall mean any
shares of such Person of any class or series which has no preference or priority
in the payment of dividends or in the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of such Person and which
is not subject to redemption by such Person; provided, however, that if at any
time there shall be more than one such class or series, the shares of each such
class and series issuable upon conversion of the Series E Preferred Stock then
being converted shall be substantially in the proportion to the total number of
shares of each such class and series.
"Trading Day" shall mean any day on which the principal national
securities exchange on which the Common Stock or Survivor Common Stock, as the
case may be, is listed or admitted to trading is open for the transaction of
business or, if the Common Stock or Survivor Common Stock, as the case may be,
is not listed or admitted to trading on any national securities exchange, a
Business Day.
"Transaction" shall have the meaning ascribed thereto in Section 9(b)
hereof.
"Transfer Agent" shall have the meaning ascribed thereto in Section
9(d) hereof.
"Valid Trading Day" shall mean any Trading Day during a Conversion
Pricing Period in which either (a) the Closing Trade Price for such Trading Day
exceeds the Minimum Daily Price or (b) the Closing Trade Price for such Trading
Day does not exceed the Minimum Daily Price and the Corporation and the holder
of the Series E Preferred Stock that has requested conversion thereof agree in
writing to include such day as a Valid Trading Day in such Conversion Pricing
Period.
2. DESIGNATION AND NUMBER, RANK. (a) The shares of such series of
preferred stock shall be designated as "Series E Cumulative Convertible
Preferred Stock" (the "SERIES E PREFERRED STOCK"). The number of shares
initially constituting the Series E Preferred Stock shall be 203,000 which
number may be decreased (but not increased) by the Board of Directors without a
vote of the holders of Series E Preferred Stock; PROVIDED, HOWEVER, that such
number may not be decreased below the number of then outstanding shares of
Series E Preferred Stock.
(b) The Series E Preferred Stock shall, with respect to dividend rights
and rights upon liquidation, dissolution or winding up, rank (i) senior to the
common stock, par value $.01 per share of the Corporation (the "COMMON STOCK"),
the Series F Preferred Stock and to all other Capital Stock of the Corporation
the terms of which specifically provide that such Capital Stock ranks junior to
the Series E Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Corporation, (ii) on a parity with
all Capital Stock of the Corporation the terms of which specifically provide
that such Capital Stock ranks on a parity with the Series E Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Corporation and (iii) junior to the Corporation's Series B Preferred
Stock and all other Capital Stock of the Corporation the terms of which
specifically
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provide that such Capital Stock ranks senior to the Series E Preferred Stock
with respect to dividend rights or rights upon liquidation, dissolution or
winding up of the Corporation.
3. DIVIDENDS AND DISTRIBUTION. (a) The holders of shares of Series E
Preferred Stock, in preference to the holders of shares of Common Stock, Series
F Preferred Stock and of any other shares of Capital Stock of the Corporation
ranking junior to the Series E Preferred Stock as to payment of dividends, shall
be entitled to receive, when, as and if declared by the Board of Directors, out
of the assets of the Corporation legally available therefor, cumulative
dividends at the Applicable Rate, payable in quarterly installments on the last
Business Day of each calendar quarter (March 31, June 30, September 30, December
31) in each year (each such date being referred to herein as a "QUARTERLY
DIVIDEND PAYMENT DATE"). Each such quarterly dividend shall be fully cumulative,
to the extent not paid, and, with respect to each share of Series E Preferred
Stock, shall accrue (whether or not earned or declared) on a daily basis with
additional cumulative dividends on any accrued but unpaid dividends accruing
daily (whether or not earned or declared) and compounding quarterly at the
Applicable Rate, from the date of issuance of such share of Series E Preferred
Stock, and thereafter from the first day of the quarterly period in which such
dividend may be payable as herein provided. Quarterly dividends payable with
respect to calendar quarters and any partial quarter in the period commenced on
the date of issuance of the Series E Preferred Stock and ending with the
Effective Date shall be payable in Common Stock. No quarterly dividends payable
prior to the Effective Date shall be paid until the Effective Date. After the
Effective Date, quarterly dividends shall be payable as provided in the
Corporation's plan of reorganization as in effect on the Effective Date, and
these Series E Preferred Stock Articles shall be deemed so amended and
supplemented to so provide.
(b) With respect to dividends payable in Common Stock, pursuant to
Section 3(a) above, the calculation of the number of shares of Common Stock
issuable by the Corporation shall be based on (i) the cash amount which would be
payable if cash dividends were to be paid on the Quarterly Dividend Payment Date
divided by (ii) the average of the Closing Trade Prices for the five (5) Trading
Days prior to the Quarterly Dividend Payment Date. No fractional shares shall be
issued.
(c) Dividends paid on the shares of the Series E Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated among all such shares of Series E
Preferred Stock and all other shares of Capital Stock of the Corporation ranking
on a parity as to dividends with the Series E Preferred Stock "DIVIDEND PARITY
STOCK") at the time outstanding pro rata so that the amount of dividends
declared per share of Series E Preferred Stock and the Dividend Parity Stock
shall in all cases bear to each other the same ratio that accrued dividends per
share on the Series E Preferred Stock and the Dividend Parity Stock bear to each
other. The Board of Directors may fix a record date for the determination of
holders of shares of the Series E Preferred Stock entitled to receive payment of
a dividend declared thereon, which record date shall be no more than sixty days
nor less than ten days prior to the date fixed for the payment thereof.
(d) Any dividend payment made on shares of the Series E Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due
with respect to shares of the Series E Preferred Stock which remains payable.
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(e) The holders of shares of the Series E Preferred Stock shall not be
entitled to receive any dividends or other distributions except as expressly
provided herein.
4. VOTING RIGHTS. So long as the Series E Preferred Stock remains
outstanding, the holders of shares of the Series E Preferred Stock shall have
the following voting rights:
(a) The holders of shares of Series E Preferred Stock shall have no
voting rights except as set forth below or as otherwise from time to time
required by law.
(b) The affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series E Preferred Stock, voting separately as a class,
shall be necessary to (i) authorize, create or increase the authorized or issued
amount of any class or series of the Corporation's Capital Stock ranking prior
to the Series E Preferred Stock with respect to payment of dividends or
distribution of assets upon liquidation, dissolution or winding up or reclassify
any authorized Capital Stock of the Corporation into any such Capital Stock, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such Capital Stock or (ii) amend, alter or
repeal any of the provisions of the Articles of Amendment and Restatement of the
Corporation, including these Series E Preferred Stock Articles, whether by
merger, consolidation or otherwise (an "EVENT"), so as to materially and
adversely affect any right, preference, privilege or voting power of the Series
E Preferred Stock or the holders thereof; PROVIDED, HOWEVER, with respect to any
amendment, alteration, waiver or repeal of any provision of the Series E
Preferred Stock Articles no consent, approval or vote of the holders of Common
Stock or any other Capital Stock of the Corporation shall be necessary or
required; PROVIDED, FURTHER with respect to the occurrence of any of the Events
set forth in (ii) above, so long as the Series E Preferred Stock remains
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event, the Corporation may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of holders
of the Series E Preferred Stock; and PROVIDED, FURTHER, that (x) any increase in
the amount of authorized Common Stock or Series E Preferred Stock or the
authorization, creation or issuance of any other class or series of Capital
Stock or (y) any increase in the amount of authorized shares of any other class
or series of Capital Stock, in each case ranking on a parity with or junior to
the Series E Preferred Stock with respect to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers.
(c) During any period in which dividends on the Series E Preferred
Stock are cumulatively in arrears for six or more quarterly dividend payments
(whether or not consecutive), then the number of directors constituting the
Board of Directors shall, without further action, be increased by two and the
holders of shares of the Series E Preferred Stock, voting separately as a single
class (together with any other series of Preferred Stock as provided in Section
4(d)(iii)), shall have, in addition to the other voting rights expressly set
forth herein, the right to elect the directors of the Corporation to fill such
newly created directorships, the remaining directors to be elected by the other
classes of Capital Stock entitled to vote therefor at each meeting of
stockholders held for the purpose of electing such remaining directors. Such
additional voting rights shall continue until such time as all dividends
accumulated on the Series
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E Preferred Stock shall have been paid in full, at which time such additional
directors shall cease to be directors, subject to the rights of any other series
of Preferred Stock to vote for the election of such additional directors (as
described in Section 4(d)(iii)), and such additional voting right of the holders
of Series E Preferred Stock shall terminate, subject to revesting in the event
of each and every subsequent event of the character indicated above. In no event
shall the holders of Series E Preferred Stock voting separately as a class be
entitled to elect a total of more than two directors to the Board of Directors
pursuant to this Section 4.
(d)(i) The foregoing rights of holders of shares of Series E Preferred
Stock to take any actions as provided in this Section 4 may be exercised at any
annual meeting of stockholders or at a special meeting of stockholders held for
such purpose as hereinafter provided or at any adjournment thereof, or by the
written consent, delivered to the Secretary of the Corporation, of all of the
holders of the Series E Preferred Stock. So long as such right to vote continues
(and unless such right has been exercised by written consent of all of the
holders of the Series E Preferred Stock), the Chairman of the Board of Directors
may call, and upon the written request of holders of record of twenty (20)% of
the outstanding shares of Series E Preferred Stock addressed to the Secretary of
the Corporation at the principal office of the Corporation, shall call, a
special meeting of the holders of shares entitled to vote as provided herein.
Such meeting shall be held within sixty (60) days after delivery of such request
to the Secretary, at the place and upon the notice provided by law and in the
by-laws of the Corporation for the holding of meetings of stockholders.
(ii) Except as provided in paragraph (d)(iii) of this Section 4, at
each meeting of stockholders at which the holders of shares of Series E
Preferred Stock shall have the right, voting separately as a single class, to
elect directors of the Corporation as provided in this Section 4 or to take any
action, the presence in person or by proxy of the holders of record of a
majority of the total number of shares of Series E Preferred Stock then
outstanding and entitled to vote on the matter shall be necessary and sufficient
to constitute a quorum. At any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of Series
E Preferred Stock shall not prevent the election of directors other
than those to be elected by the holders of shares of Series E Preferred
Stock and the absence of a quorum of the holders of shares of any other
class or series of Capital Stock shall not prevent the election of
directors to be elected by the holders of shares of Series E Preferred
Stock or the taking of any action as provided in this Section 4; and
(B) in the absence of a quorum of the holders of shares of
Series E Preferred Stock, a majority of the holders of such shares
present in person or by proxy shall have the power to adjourn the
meeting as to the actions to be taken by the holders of shares of
Series E Preferred Stock from time to time and place to place without
notice other than announcement at the meeting until a quorum shall be
present.
(iii) If, at any time when the holders of Series E Preferred Stock are
entitled to elect directors pursuant to the provisions of Section 4(c), the
holders of any one or more other series of Preferred Stock are entitled to elect
directors by reason of any default or event specified in the
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Corporation's Articles of Amendment and Restatement of the Corporation (or any
articles supplementary thereto), as in effect at the time, or the articles
supplementary for such series, and if the terms for such other additional series
so permit, then the voting rights of the two or more series then entitled to
vote shall be combined (with each series having a number of votes proportional
to the aggregate liquidation preference of its outstanding shares). In such
case, the holders of Series E Preferred Stock and of all such other series then
entitled so to vote, voting together as one class, shall elect such directors.
At each meeting of stockholders at which the holders of shares of Series E
Preferred Stock shall have the right, voting together with such other series as
a single class, to elect directors of the Corporation as provided in this
Section 4 or to take any action, the presence in person or by proxy of the
holders of record of a majority of the total number of shares of such two or
more series then outstanding and entitled to vote on the matter shall be
necessary and sufficient to constitute a quorum. At any such meeting or at any
adjournment thereof:
(A) the absence of a quorum of the holders of shares of such
two or more series shall not prevent the election of directors other
than those to be elected by the holders of shares of such two or more
series and the absence of a quorum of the holders of shares of any
other class or series of Capital Stock shall not prevent the election
of directors to be elected by the holders of shares of such two or more
series or the taking of any action as provided in this Section 4; and
(B) in the absence of a quorum of the holders of shares of
such two or more series a majority of the holders of such shares
present in person or by proxy shall have the power to adjourn the
meeting as to the actions to be taken by the holders of shares of such
two or more series from time to time and place to place without notice
other than announcement at the meeting until a quorum shall be present.
If the holders of any such other series have elected such directors
prior to the happening of the default or event permitting the holders of Series
E Preferred Stock to elect directors, or prior to a written request for the
holding of a special meeting being received by the Secretary of the Corporation
as elsewhere required in Section 4(d) above, then a new election shall be held
with all such other series of Preferred Stock and the Series E Preferred Stock
voting together as a single class for such directors, resulting in the election
of such new directors. If the holders of any such other series are entitled to
elect in excess of two directors, the Series E Preferred Stock shall not
participate in the election of more than such directors, and those directors
whose terms first expire shall be deemed to be the directors elected by the
holders of Series E Preferred Stock; provided that, if at the expiration of such
terms, the holders of Series E Preferred Stock are entitled to vote in the
election of directors pursuant to the provisions of this Section 4, then the
Secretary of the Corporation shall call a meeting (which meeting may be the
annual meeting or special meeting of stockholders) of holders of Series E
Preferred Stock for the purpose of electing replacement directors (in accordance
with the provisions of this Section 4) to be held on or prior to the time of
expiration of the expiring terms referred to above.
(iv) Except as otherwise specifically provided in paragraph (d)(iii) of
this Section 4:
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(A) for the taking of any action as provided in paragraphs (b)
and (c) of this Section 4 by the holders of Series E Preferred Stock,
each such holder shall have one vote for each share of such stock
standing in such holder's name on the transfer books of the Corporation
as of any record date fixed for such purpose or, if no such date be
fixed, at the close of business on the Business Day next preceding the
day on which notice is given, or if notice is waived, at the close of
business on the Business Day next preceding the day on which the
meeting is held; and
(B) each director elected by the holders of shares of Series E
Preferred Stock as provided in this Section 4 shall, unless his or her
term shall expire earlier upon payment in full by the Corporation of
all accumulated dividends on the Series E Preferred Stock, hold office
until the annual meeting of stockholders next succeeding his election
and until his successor, if any, is elected and qualified.
(v) In case any vacancy shall occur among the directors elected by the
holders of shares of Series E Preferred Stock (and any other series of Preferred
Stock, if any) as provided in this Section 4, such vacancy may be filled for the
unexpired portion of the term by vote of the remaining director theretofore
elected by such holders (if there is a remaining director), or such director's
successor in office. If any such vacancy is not so filled within 20 days after
the creation thereof or if both directors so elected by the holders of Series E
Preferred Stock (and any other series of Preferred Stock, if any, as provided in
Section 4(d)(iii)) shall cease to serve as directors before their terms shall
expire, the holders of the Series E Preferred Stock (and any other series of
Preferred Stock, if any, as provided in Section 4(d)(iii)) then outstanding and
entitled to vote for such directors may, by written consent of all of the
holders of Series E Preferred Stock, or at a special meeting of such holders
called in accordance with the provisions of Section 4(d)(i), elect successors to
hold office for the unexpired terms of such directors whose places shall be
vacant.
(vi) Any director elected by the holders of shares of Series E
Preferred Stock voting separately as a single class (together with any other
series of Preferred Stock, if any, as provided in Section 4(d)(iii)) may be
removed from office with or without cause by the affirmative vote of the holders
of at least a majority of the outstanding shares of Series E Preferred Stock or
written consent of all of the holders of Series E Preferred Stock (together with
any other series of Preferred Stock, if any, as provided in Section 4(d)(iii)).
A special meeting of the holders of Series E Preferred Stock (together with
holders of any other series of Preferred Stock, if any, as provided in Section
4(d)(iii) may be called in accordance with the provisions of Section 4(d)(i).
5. CERTAIN RESTRICTIONS. (a) If shares of Series E Preferred Stock are
outstanding unless, full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for such payment on the Series E Preferred Stock for past dividend periods
and the then current dividend period, other than pursuant to Section 3(c), the
Corporation will not declare, make, pay or set apart for payment or distribution
any dividends or other distributions (other than in Common Stock or other
Capital Stock ranking junior to the Series E Preferred Stock as to dividends and
upon liquidation, dissolution or winding up) on the Common Stock, Series F
Preferred Stock or any other series or class of
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Capital Stock ranking as to dividends, on a parity with or junior to the Series
E Preferred Stock for any period.
(b) If shares of Series E Preferred Stock are outstanding, unless full
cumulative dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such payment
on the Series E Preferred Stock for all past dividend periods and the then
current dividend period, the Corporation shall not redeem, purchase or otherwise
acquire for any consideration (or pay or make available money for a sinking fund
for the redemption of) any Common Stock, Series F Preferred Stock or any other
series or class of Capital Stock ranking, as to dividends or upon liquidation,
dissolution or winding up, on a parity with or junior to the Series E Preferred
Stock (except by conversion into or exchange for Common Stock or other Capital
Stock of the Corporation ranking junior to the Series E Preferred Stock as to
dividends and upon liquidation, dissolution or winding up); PROVIDED, HOWEVER,
the foregoing shall not prevent the purchase or acquisition of any shares of
Capital Stock of the Corporation by the Corporation (i) in order to preserve the
status of the Corporation as a real estate investment trust ("REIT") or (ii)
pursuant to a purchase or exchange offer made on comparable terms to all holders
of outstanding shares of Capital Stock of the Corporation.
(c) The Corporation shall not permit any Subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of Capital Stock
of the Corporation unless the Corporation could, pursuant to paragraph (b) of
this Section 5, purchase or otherwise acquire such shares at such time and in
such manner.
6. REDEMPTION. (a) The Series E Preferred Stock shall be redeemable in
whole or in part, at the option of the Company, at any time and from time to
time after the date of issuance of the Series E Preferred Stock, to the extent
the Corporation shall have funds legally available therefore, in cash, at $106
per share (the "REDEMPTION PRICE"), together in each case with an amount equal
to accrued and unpaid dividends to (and including) the date fixed for
redemption. On and after the date fixed for redemption, provided that the
Redemption Price (including any accrued and unpaid dividends to (and including)
the date fixed for redemption) has been duly paid or deposited in trust for the
benefit of the holders of the Series E Preferred Stock, dividends shall cease to
accrue on the Series E Preferred Stock called for redemption, such shares shall
no longer be deemed to be outstanding and all rights of the holders of such
shares as stockholders of the Corporation shall cease, except the right to
receive the moneys payable upon such redemption, without interest thereon, upon
surrender of the certificates evidencing such shares. Any moneys deposited in
trust by the Corporation, which shall not be required for redemption because of
the exercise of any right of conversion by the holders of the Series E Preferred
Stock, shall be repaid to the Corporation forthwith. Any moneys deposited in
trust by the Corporation and unclaimed at the end of two years from the date
fixed for such redemption shall be repaid to the Corporation upon its written
request, after which repayment the holders of the shares of Series E Preferred
Stock so called for redemption shall look only to the Corporation for the
payment thereof.
(b) Notice of any redemption pursuant to Section 6(a) shall be given to
the holders of shares of Series E Preferred Stock once not less than forty-five
(45) or more than sixty (60) days
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prior to the date fixed for redemption. Notice of redemption shall be given by
first class mail to each such holder's address as shown on the stock books of
the Corporation and will specify (i) the date fixed for redemption, (ii) the
number of shares of Series E Preferred Stock to be redeemed, (iii) the
Redemption Price, (iv) the place or places where certificates for shares of
Series E Preferred Stock are to be surrendered for payment of the Redemption
Price, (v) that dividends on the shares of Series E Preferred Stock to be
redeemed will cease to accrue on the dated fixed for redemption, (vi) the date
upon which the holders' conversion rights will terminate (which date shall be
determined in accordance with Section 9(g)). If less than all shares of Series E
Preferred Stock then outstanding are to be redeemed, the shares of Series E
Preferred Stock will be redeemed PRO RATA from among the holders of shares of
Series E Preferred Stock then outstanding.
7. REACQUIRED SHARES. Any shares of Series E Preferred Stock converted,
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares of Series E Preferred Stock shall upon their cancellation, and
upon the filing of an appropriate certificate with the Maryland State Department
of Assessments and Taxation, become authorized but unissued shares of Preferred
Stock and may be reissued as part of another series of Preferred Stock subject
to the conditions or restrictions on issuance set forth herein, to the extent
any Series E Preferred Stock remains outstanding.
8. LIQUIDATION, DISSOLUTION OR WINDING UP. (a) Upon any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation then, before any distribution or payment shall be made to the
holders of any shares of Common Stock or any other class or series of Capital
Stock of the Corporation ranking junior to the Series E Preferred Stock in the
distribution of assets upon any liquidation, dissolution or winding up of the
Corporation, the holders of Series E Preferred Stock shall be entitled to
receive out of assets of the Corporation legally available for distribution to
stockholders, liquidating distributions in the amount of the Liquidation Value
per share, plus an amount equal to all dividends accrued and unpaid thereon as
of the date of liquidation dissolution or winding up. After payment of the full
amount of the liquidating distributions to which they are entitled, the holders
of Series E Preferred Stock will have no right or claim to any of the remaining
assets of the Corporation. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up, the available assets of the
Corporation are insufficient to pay the amount of the liquidation distributions
on all outstanding shares of Series E Preferred Stock and the corresponding
amounts payable on all shares of other classes or series of Capital Stock of the
Corporation ranking on a parity with the Series E Preferred Stock in the
distribution of assets upon liquidation, dissolution or winding up, then the
holders of the Series E Preferred Stock and all other such classes or series of
capital stock shall share ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they would otherwise
be respectively entitled.
(b) Neither the consolidation, merger or other business combination of
the Corporation with or into any other Person, nor the sale, lease or conveyance
of all or substantially all of the property or business of the Corporation shall
be deemed to constitute a liquidation, dissolution or winding up of the
Corporation for purposes of this Section 8.
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9. CONVERSION. (a)(i) Shares of Series E Preferred Stock shall become
convertible at the option of the holder thereof into fully paid and
non-assessable shares of Common Stock beginning after the Effective Date in
accordance with the terms and conditions to be provided in the Corporation's
plan of reorganization as in effect on the Effective Date, and these Series E
Preferred Stock Articles shall be deemed so amended and supplemented to so
provide. Notwithstanding the preceding, if the Effective Date has not occurred
by December 31, 2000, then the shares of Series E Preferred Stock shall become
convertible at the option of the holder thereof into fully paid and
non-assessable shares of Common Stock in increments of 10,000 shares of Series E
Preferred Stock per calendar month commencing with January 2001.
(ii) Notwithstanding anything in this Section 9(a) to the contrary, the
holders of the Series E Preferred Stock shall not be permitted to convert (i)
more than 10,000 shares (or less than 1,000 shares at any one time) of Series E
Preferred Stock during any calendar month or (ii) any shares of Series E
Preferred Stock into shares of Common Stock if such conversion would result in
the holder of Series E Preferred Stock requesting such conversion owning 5% or
more of the Corporation's then outstanding Common Stock.
Determination of which holders shall be entitled to convert during any
applicable period shall be based upon the holders which first deliver to the
Corporation the conversion notice and certificates of Series E Preferred Stock
specified in paragraph (d) below, with any allocation between holders delivering
the required conversion notice and certificates of Series E Preferred Stock on
the same day to be made PRO RATA based upon the number of shares of Series E
Preferred Stock submitted for conversion.
In the event a holder of Series E Preferred Stock cannot effect a
requested conversion of such holder's Series E Preferred Stock at the time
requested, the Corporation shall, without further action on the part of such
holder, convert such shares of Series E Preferred Stock into Common Stock on the
earliest date that such conversion is possible under the terms of these Series E
Preferred Stock Articles.
(b) On the Mandatory Conversion Date for each share of Series E
Preferred Stock, such share of Series E Preferred Stock shall be automatically
converted into fully paid and nonassessable shares of Common Stock.
(c) The number of shares of Common Stock deliverable upon conversion of
a share of Series E Preferred Stock shall be equal to a fraction (i) the
numerator of which is the Liquidation Value of the Series E Preferred Stock and
(ii) the denominator of which is a Closing Trade Price for a Trading Day
occurring within the Conversion Pricing Period mutually acceptable to the
Corporation and the holder, PROVIDED, HOWEVER, that if no Closing Trade Price is
mutually acceptable to the Corporation and the holder, then the denominator
shall be the Average Closing Trade Price for the applicable Conversion Pricing
Period.
(d) Prior to the Mandatory Conversion Date, the holders of Series E
Preferred Stock may convert such Series E Preferred Stock into Common Stock by
surrendering to the Corporation at the principal office of the Corporation in
the State of Maryland (the "TRANSFER AGENT"), or at the office of any agent or
agents of the Corporation, as may be designated by the Board of Directors, the
certificate of such Series E Preferred Stock to be converted accompanied
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<PAGE>
by a written notice stating that such holder elects to convert all or a
specified whole number of such shares in accordance with the provisions of this
Section 9 and specifying the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued (a "HOLDER
CONVERSION NOTICE"). In case a Holder Conversion Notice shall specify a name or
names other than that of such holder, such Holder Conversion Notice shall be
accompanied by payment of all transfer taxes, if any, payable upon the issuance
of shares of Common Stock in such name or names. Other than such taxes, the
Corporation will pay any and all issue and other taxes (other than taxes based
on income) that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of Series E Preferred Stock pursuant hereto.
(e) After the Mandatory Conversion Date, the holders of Series E
Preferred Stock may exchange certificates representing Series E Preferred Stock
for certificates representing Common Stock by surrendering to the Transfer Agent
such certificates representing Series E Preferred Stock. In case the holder of
Series E Preferred Stock requests the Common Stock to be registered in a name or
names other than that of such holder, the Series E Preferred Stock submitted for
conversion shall be accompanied by payment of all transfer taxes, if any,
payable upon the issuance of shares of Common Stock in such name or names. Other
than such taxes, the Corporation will pay any and all issue and other taxes
(other than taxes based on income) that may be payable in respect of any issue
or delivery of shares of Common Stock on conversion of Series E Preferred Stock
pursuant hereto.
(f) As promptly as practicable, and in any event within five Business
Days after the date of delivery of the shares of Series E Preferred Stock to be
converted (and, if prior to the Mandatory Conversion Date, the Holder Conversion
Notice), the Corporation shall deliver or cause to be delivered (i) certificates
representing the number of validly issued, fully paid and nonassessable full
shares of Common Stock to which the holder of shares of Series E Preferred Stock
being converted shall be entitled and (ii) if less than the full number of
shares of Series E Preferred Stock evidenced by the surrendered certificate or
certificates is being converted, a new certificate or certificates, of like
tenor, for the number of shares of Series E Preferred Stock evidenced by such
surrendered certificate or certificates less the number of shares being
converted. All conversions shall be deemed to have been made at the close of
business on the date of delivery of the Holder Conversion Notice or the
Mandatory Conversion Date, as the case may be, so that the rights of the holder
thereof as to the shares being converted shall cease except for the right to
receive shares of Common Stock in accordance herewith, and the Person entitled
to receive the shares of Common Stock shall be treated for all purposes as
having become the record holder of such shares of Common Stock at such time. The
Corporation shall not be required to convert, and no surrender of shares of
Series E Preferred Stock shall be effective for that purpose, while the transfer
books of the Corporation for the Common Stock are closed for any purpose (but
not for any period in excess of 10 calendar days); but the surrender of shares
of Series E Preferred Stock for conversion during any period while such books
are so closed shall become effective for conversion immediately upon the
reopening of such books, as if the conversion had been made on the date such
shares of Series E Preferred Stock were surrendered, and at a rate of conversion
which assumes the Conversion Pricing Period took place during the period
immediately prior to the closing of such books.
(g) In case any shares of Series E Preferred Stock are to be redeemed
pursuant to Section 6, the right of conversion set forth in this Section 9 shall
cease and terminate as to the
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shares of Series E Preferred Stock to be redeemed at the close of business,
Washington, D.C. time, on the date of delivery to the holders of Series E
Preferred Stock of notice of redemption in accordance with Section 6(b), unless
(i) the Corporation shall have received a Holder Conversion Notice in respect of
such shares of Series E Preferred Stock prior to such time or (ii) the
Corporation shall default in the payment of the amount payable upon such
redemption.
(h) Upon conversion of any shares of the Series E Preferred Stock, all
accrued and unpaid dividends up to (and including) the date of receipt by the
Corporation of the Holder Conversion Notice or the Mandatory Conversion Date, as
the case may be, whether or not declared, on each share of Series E Preferred
Stock being converted shall become immediately due and payable on the date of
the issuance and delivery by the Corporation of the certificate representing the
shares of Common Stock to which such holder of shares of the Series E Preferred
Stock being converted is entitled. In the event that the Corporation is legally
prohibited from paying such dividends on such date, the Corporation shall pay
such unpaid dividends to the holder of such shares as soon thereafter as it is
legally able to do so.
(i) In connection with the conversion of any shares of Series E
Preferred Stock, no fractions of shares of Common Stock shall be issued, but in
lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied by
the Average Closing Trade Price for the applicable Conversion Pricing Period. If
more than one share of Series E Preferred Stock shall be surrendered for
conversion by the same holder at the same time, the number of full shares of
Common Stock issuable on conversion thereof shall be computed on the basis of
the total number of shares of Series E Preferred Stock so surrendered.
(j) The Corporation shall at all times reserve and keep available for
issuance upon the conversion of the Series E Preferred Stock, such number of its
authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the conversion of all outstanding shares of Series E
Preferred Stock, and shall take all action required to increase the authorized
number of shares of Common Stock if necessary to permit the conversion of all
outstanding shares of Series E Preferred Stock.
(k) In case of any capital reorganization or reclassification of
outstanding shares of Common Stock, or in the case of any consolidation or
merger of the Corporation with or into another Person or in the case of any sale
or conveyance to another Person of the property of the Corporation as an
entirety or substantially as an entirety (each of the foregoing being referred
to as a "TRANSACTION"), at the option of the holder of any shares of Series E
Preferred Stock, (i) each share of Series E Preferred Stock then outstanding
shall thereafter be convertible into, in lieu of the Common Stock issuable upon
such conversion prior to consummation of such Transaction, the kind and amount
of shares of stock and other securities and property receivable (including cash)
upon the consummation of such Transaction by a holder of that number of shares
of Common Stock into which one share of Series E Preferred Stock was
convertible, assuming that the Conversion Pricing Period related thereto ended
on the day immediately preceding the consummation of such Transaction
(including, on a PRO RATA basis, in the case of securities or property received
by holders of Common Stock in any tender or exchange offer that is a step in
such Transaction, insofar as receipt of such cash, securities or property in
connection with any step in such Transaction does not result in the holders of
Series E Preferred Stock receiving in
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the aggregate more than such holders would otherwise be entitled to receive
pursuant to this clause (i)) or (ii) each share of Series E Preferred Stock
shall entitle the holder thereof to receive, upon presentation of the
certificate therefor to the Surviving Person subsequent to the consummation of
such Transaction (A) if the Surviving Person is a Qualified Person, that number
of shares of Survivor Common Stock of the Surviving Person determined by
multiplying the number of shares of Common Stock into which such share of Series
E Preferred Stock was convertible, assuming that the Conversion Pricing Period
related thereto ended on the day immediately preceding the consummation of such
Transaction by a fraction, the numerator of which is the Average Closing Trade
Price for the Common Stock for twenty-one Trading Days preceding the date of
consummation of such Transaction and the denominator of which is the Average
Closing Trade Price for the Survivor Common Stock for the twenty-one Trading
Days preceding the consummation of the transaction giving rise to the adjustment
in this paragraph (k) or (B) if the Surviving Person is not a Qualified Person,
$106 in cash per share of Series E Preferred Stock, payable in immediately
available funds. In any such case, if necessary, appropriate adjustment (as
determined by the Board of Directors) shall be made in the application of the
provisions set forth in this Section 9 with respect to the rights and interests
thereafter of the holders of shares of Series E Preferred Stock to the end that
the provisions set forth herein for the protection of the conversion rights of
the Series E Preferred Stock shall thereafter be applicable, as nearly as
reasonably may be, to any such other shares of stock and other securities and
property deliverable upon conversion of the shares of Series E Preferred Stock
remaining outstanding (with such adjustments in the conversion price and number
of shares issuable upon conversion and such other adjustments in the provisions
hereof as the Board of Directors shall determine to be appropriate). In case
securities or property other than Common Stock shall be issuable or deliverable
upon conversion as aforesaid, then all references to this Section 9 shall be
deemed to apply, so far as appropriate and as nearly as may be, to such other
securities or property.
10. REIT STATUS. Nothing contained in the Articles of Amendment and
Restatement of the Corporation, including these Series E Preferred Stock
Articles shall limit the authority of the Board of Directors to take such other
action as it deems necessary or advisable to protect the Corporation and the
interests of the stockholders by preservation of the Corporation's qualification
as a REIT under the REIT Provisions (as defined in the Articles of Amendment and
Restatement of the Corporation), including, without limitation, the enforcement
of the provisions of Article XI of the Articles of Amendment and Restatement of
the Corporation.
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EXHIBIT C TO ARTICLES OF AMENDMENT AND RESTATEMENT
(THE "SERIES F PREFERRED STOCK ARTICLES")(1)
The Series F Redeemable Cumulative Dividend Preferred Stock
(convertible during the period of ten (10) Business Days after the fifth
Business Day after the Initial Issue Date and during the period of ten (10)
Business Days ending ninety (90) calendar days after the Initial Issue Date or
the first Business Day thereafter) shall be subject to all of the provisions of
the Articles of Amendment and Restatement of the Corporation relating to the
Capital Stock of the Corporation generally and shall, as set by the Board of
Directors, have the following preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption:
1. DEFINITIONS. For the purposes of these Series F Preferred Stock
Articles, the following terms have the meanings indicated:
"Articles of Amendment and Restatement" means the Articles of Amendment
and Restatement of the Corporation as in effect from time to time (including any
and all amendments and supplements thereto and restatements thereof).
"Average Price" for a given Pricing Period means (a) the Volume
Weighted Average Price of the Common Stock traded during such Pricing Period
utilizing the Bloomberg (Equity) HP function, or, if that information is not
available, (b) the average of the sum of the average daily high and low sale
prices for the Common Stock for each Trading Day during such Pricing Period, as
reported on the stock exchange composite tape, weighted by the number of shares
traded for that day or, (c) if the Common Stock is traded over-the-counter, the
average of the sum of the daily averages of the last reported high bid and low
asked quotations for the Common Stock for each Trading Day during such Pricing
Period.
"Board" and "Board of Directors" means the Board of Directors of the
Corporation.
"Business Day" means any day other than a Saturday, Sunday or the
Friday after Thanksgiving, or a day on which banking institutions in the State
of New York or Maryland are authorized or obligated by law or executive order to
close.
"Common Stock" means the common stock, par value $0.01 per share, of
the Corporation.
"Conversion Period" has the meaning ascribed thereto in Section 9(a).
---------------------------------
(1) This Exhibit C represents the relative rights and preferences of the
Corporation's Series F Preferred Stock, as amended by the Plan, which amendments
relate principally to the payment of dividends, consistent with the Plan, and
will be effected only if Holders of Series F Preferred Stock vote to accept the
Plan.
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"Corporation" means CRIIMI MAE Inc., a Maryland corporation.
"Dividend Average Price" means the Volume Weighted Average Price of the
Common Stock traded during the ten Trading Days beginning one Trading Day after
the Dividend Declaration Date (a "DIVIDEND PRICING PERIOD"), utilizing the
Bloomberg (Equity) VAP function, or, (x) if that information is not available,
the average of the sum of the average daily high and low sale prices for the
Common Stock for each day during a Dividend Pricing Period, as reported on the
stock exchange composite tape, weighted by the number of shares of Common Stock
traded for that day or, (y) if the Common Stock is traded over-the-counter, the
average of the sum of the daily averages of the last reported high bid and low
asked quotations for the Common Stock for each day during a Dividend Pricing
Period, weighted by the number of shares of Common Stock traded for that day.
"Dividend Declaration Date" means, with respect to any quarterly
dividend, the date on which the Board of Directors declares such dividend.
"Dividend Parity Stock" has the meaning ascribed thereto in Section
3(a)(ii).
"Dividend Payment Date" has the meaning ascribed thereto in Section
3(a)(i)
"Dividend Period" has the meaning ascribed thereto in Section 3(a)(i).
"Dividend Rate" means 12%.
"Effective Date" means the first day, other than a Saturday, Sunday, or
a "legal holiday" (as defined in Rule 9005(a) of the Federal Rules of Bankruptcy
Procedure), that is not less than eleven (11) days after the date on which the
clerk of the U.S. Bankruptcy Court for the District of Maryland, Greenbelt
Division, or such other court that exercises jurisdiction over the Corporation's
bankruptcy case, enters the Order confirming the Corporation's plan of
reorganization as such may be amended, modified or supplemented from time to
time, and on which day, as determined by the Corporation (i) all conditions to
the Effective Date as set forth in the Corporation's plan of reorganization have
been satisfied or waived by the Corporation, and (ii) no stay of the Order
confirming the Corporation's plan of reorganization is in effect.
"Holder Conversion Notice" has the meaning ascribed thereto in Section
9(d)(i).
"Initial Issue Date" has the meaning ascribed thereto in Section
3(a)(i).
"Junior Capital Stock" has the meaning ascribed thereto in Section
2(b).
"Liquidation Parity Stock" has the meaning ascribed thereto in Section
8(a).
"Liquidation Value" means, with respect to a share of Series F
Preferred Stock, $10.00.
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"MGCL" means the Maryland General Corporation Law, as amended, as the
same may be in effect from time to time.
"Parity Capital Stock" has the meaning ascribed thereto in Section
2(b).
"Person" means any individual, firm, corporation or other entity, and
includes any successor (by merger or otherwise) of such entity.
"Preferred Stock" means the preferred stock, par value $0.01 per share,
of the Corporation.
"Pricing Period" means the ten (10) Trading Days ending one day prior
to the date a holder of the Series F Dividend Preferred converts his or her
shares during a Conversion Period.
"Redemption Date" has the meaning ascribed thereto in Section 6(a).
"Redemption Price" means, with respect to a share of Series F Preferred
Stock, $10.00.
"REIT" means a real estate investment trust for federal income tax
purposes.
"Sale Price" has the meaning ascribed thereto in Section 9(d)(iii).
"Senior Capital Stock" has the meaning ascribed thereto in Section
2(b).
"Series B Preferred Stock" means the Corporation's Series B Cumulative
Convertible Preferred Stock par value $0.01 per share.
"Series E Preferred Stock" means the Corporation's Series E Cumulative
Convertible Preferred Stock, par value $0.01 per share.
"Series F Preferred Stock" has the meaning ascribed thereto in Section
2(a).
"Subsidiary" of any Person means any corporation or other entity of
which a majority of the voting power of the voting equity securities, or equity
interest, is owned, directly or indirectly, by such Person.
"Trading Day" means any day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, a Business Day.
"Volume Weighted Average Price of the Common Stock" for a given period
means the quotient of (i) the aggregate dollar value obtained by multiplying (a)
the
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number of shares of Common Stock traded at each given price during such period,
by (b) such price, divided by (ii) the total number of shares of Common Stock
traded during such period.
2. DESIGNATION AND NUMBER; RANK. (a) The shares of the series of
Preferred Stock designated pursuant hereto shall be designated as "Series F
Redeemable Cumulative Dividend Preferred Stock (convertible during the period of
ten (10) Business Days after the fifth Business Day after the Initial Issue Date
and during the period of ten (10) Business Days ending ninety (90) calendar days
after the Initial Issue Date or the first Business Day thereafter)" (the "SERIES
F PREFERRED STOCK"). The number of shares initially constituting the Series F
Preferred Stock shall be 1,610,000 which number may be decreased (but not
increased) by the Board of Directors without a vote of the holders of Series F
Preferred Stock; PROVIDED, HOWEVER, that such number may not be decreased below
the number of shares of Series F Preferred Stock outstanding at the effective
time of such reduction.
(b) The Series F Preferred Stock shall, with respect to dividend rights
and rights upon liquidation, dissolution or winding up, rank (i) senior to the
Common Stock and to all other Capital Stock of the Corporation the terms of
which specifically provide that such Capital Stock ranks junior to the Series F
Preferred Stock with respect to dividend rights and/or rights upon liquidation,
dissolution or winding up of the Corporation (collectively, such other Capital
Stock being referred to as the "JUNIOR CAPITAL STOCK"); (ii) PARI PASSU with all
Capital Stock of the Corporation the terms of which specifically provide that
such Capital Stock ranks PARI PASSU with the Series F Preferred Stock with
respect to dividend rights and/or rights upon liquidation, dissolution or
winding up of the Corporation (collectively, such Capital Stock being referred
to as the "PARITY CAPITAL STOCK"); and (iii) junior to (x) the Series B
Preferred Stock, (y) the Series E Preferred Stock, and (z) all other Capital
Stock of the Corporation the terms of which specifically provide that such
Capital Stock ranks senior to the Series F Preferred Stock with respect to
dividend rights and/or rights upon liquidation, dissolution or winding up of the
Corporation (collectively, such Capital Stock being referred to as the "SENIOR
CAPITAL STOCK").
(c) SAVINGS CLAUSE. Notwithstanding anything otherwise provided in
these Series F Preferred Stock Articles, none of the rights pertaining to
dividends and distributions, and rights upon liquidation, dissolution and
winding up attributable to the Series F Preferred Stock, may be exercised,
enjoyed or received unless the corresponding rights of the Senior Capital Stock
have been fully exercised, enjoyed or received.
3. DIVIDENDS AND DISTRIBUTIONS. (a)(i) The holders of shares of Series
F Preferred Stock, in preference to the holders of shares of Common Stock and of
shares of any Junior Capital Stock that ranks junior to the Series F Preferred
Stock as to the payment of dividends shall be entitled to receive, when, as and
if declared by the Board of Directors, out of the assets of the Corporation
legally available therefor, cumulative dividends at the Dividend Rate, payable
no more than sixty (60) calendar days following the Dividend Declaration Date.
Such dividends shall be declared at such intervals as the
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<PAGE>
Board of Directors, in its discretion, shall determine; PROVIDED, HOWEVER, that
payment of the first dividend on shares of Series F Preferred Stock shall be
paid no earlier than the end of the calendar quarter (March 31, June 30,
September 30, December 31) in which the Effective Date occurs and thereafter not
more than quarterly, as determined by the Board of Directors (each such period
being referred to as a "DIVIDEND PERIOD"). Notwithstanding the preceding, all or
any portion of the accrued and unpaid dividends as of the Effective Date may be
paid, at the Corporation's option, as early as the Effective Date. Dividends
shall be fully cumulative from the date of first issuance of any shares of
Series F Preferred Stock (the "INITIAL ISSUE DATE") and, after the payment of
the first dividend, payable not more than quarterly in arrears. Accrued
dividends will not be paid (a) to holders who exercise their conversion
privilege during a Conversion Period on shares so converted or (b) in respect of
shares called for redemption pursuant to Section 6(a) hereof from and after the
Dividend Declaration Date next preceding the Redemption Date with respect to
such shares. Dividends will be payable to holders of record as they appear in
the stock records of the Corporation at the close of business on the applicable
record date set by the Board of Directors. No interest shall be payable with
respect to any dividend payment on Series F Preferred Stock that may be in
arrears. Dividends shall be payable in cash or in Common Stock (or a combination
thereof), at the Corporation's option, including without limitation, all accrued
and unpaid dividends as of the Effective Date. If the dividends are paid in
Common Stock, the number of shares of Common Stock issuable by the Corporation
shall be determined by dividing the cash amount which would be payable if cash
dividends were to be paid on the payment date for the applicable Dividend Period
(the "DIVIDEND PAYMENT DATE") by the Dividend Average Price. No fractional
shares of Common Stock shall be issued. Instead of any fractional share of
Common Stock, the Corporation shall pay a cash adjustment in respect to such
fraction.
(ii) Dividends paid on shares of Series F Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated among all such shares of Series F Preferred Stock
and all other shares of Capital Stock of the Corporation ranking on parity as to
dividends with the Series F Preferred Stock ("DIVIDEND PARITY STOCK") at the
time outstanding PRO RATA, so that the dollar amount of the dividend declared
per share of Series F Preferred Stock and the Dividend Parity Stock shall in all
cases bear to each other the same ratio that accrued dividends per share on the
Series F Preferred Stock and the Dividend Parity Stock bear to each other.
(iii) The Board of Directors may fix a record date for the
determination of holders of shares of the Series F Preferred Stock entitled to
receive payment of a dividend declared thereon, which record date shall be no
more than sixty (60) calendar days nor less than ten (10) calendar days prior to
the date fixed for the payment thereof.
(iv) Any dividend payment made on shares of the Series F Preferred
Stock first shall be credited against the earliest accrued but unpaid dividend
due with respect to shares of the Series F Preferred Stock which remains
payable.
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(b) Holders of shares of the Series F Preferred Stock shall not be
entitled to receive any dividends or other distributions except as expressly
provided herein.
4. VOTING RIGHTS. So long as the Series F Preferred Stock remains
outstanding, the holders of shares of the Series F Preferred Stock shall have
the following voting rights:
(a) Holders of shares of Series F Preferred Stock shall have no voting
rights except as set forth below or as otherwise required by law.
(b) During any period in which dividends on the Series F Preferred
Stock are cumulatively in arrears for not less than six quarterly dividend
payments (whether or not consecutive), then the number of directors constituting
the Board of Directors shall, without further action, be increased by two and
the holders of shares of the Series F Preferred Stock shall have, in addition to
the other voting rights set forth herein, the exclusive right, voting separately
as a single class, to elect the directors of the Corporation to fill such newly
created directorships, the remaining directors to be elected by the other
classes of Capital Stock entitled to vote therefor at each meeting of
stockholders held for the purpose of electing directors. Such additional voting
rights shall continue until such time as all dividends accumulated on the Series
F Preferred Stock shall have been paid in full or non-cumulative dividends paid
regularly for one year, at which time such additional directors shall cease to
be directors and such additional voting right of the holders of Series F
Preferred Stock shall terminate subject to revesting in the event of each and
every subsequent cumulative arrearage for not less than six (6) quarterly
periods as contemplated by the first sentence of this Section. In no event shall
the holders of Series F Preferred Stock voting separately as a class be entitled
to elect a total of more than two directors to the Board of Directors pursuant
to this Section 4(b).
(c)(i) The voting rights of holders of shares of Series F Preferred
Stock set forth in Section 4(b) above may be exercised at any annual meeting of
stockholders or at a special meeting of stockholders held for such purpose as
hereinafter provided or at any adjournment thereof, or by the unanimous written
consent, delivered to the Secretary of the Corporation, of the holders of the
outstanding shares of Series F Preferred Stock. Unless such right has been
exercised by the unanimous written consent of the holders of Series F Preferred
Stock, the Chairman of the Board of Directors may call, and upon the written
request of holders of record of at least twenty percent (20%) of the outstanding
shares of Series F Preferred Stock, addressed to the Secretary of the
Corporation at the principal office of the Corporation, shall call, a special
meeting of the holders of shares entitled to vote as provided herein. Such
meeting shall be held not more than sixty (60) calendar days after delivery of
such request to the Secretary, at the place and upon the notice provided by law
and in the Bylaws of the Corporation for the holding of special meetings of
stockholders.
(ii) At each meeting of stockholders at which the holders of shares of
Series F Preferred Stock shall have the right, as provided in this Section 4, to
take any action, the
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<PAGE>
presence in person or by proxy of the holders of record of a majority of the
total number of shares of Series F Preferred Stock then outstanding and entitled
to vote on the matter shall be necessary and sufficient to constitute a quorum.
At any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of Series
F Preferred Stock shall not prevent the election of directors or the taking of
any other action by the holders of any other class(es) or series of the
Corporation's Capital Stock, and the absence of a quorum of the holders of
shares of any other class or series of the Corporation's Capital Stock shall not
prevent the taking of any action by the holders of Series F Preferred Stock as
provided in this Section 4; and
(B) in the absence of a quorum of the holders of shares of
Series F Preferred Stock, a majority of the holders of shares of Series F
Preferred Stock, present in person or by proxy, shall have the power to adjourn
the meeting as to the actions to be taken by the holders of shares of Series F
Preferred Stock from time to time and place to place without notice other than
announcement at the meeting until a quorum shall be present.
(iii) For the taking of any action as provided in this Section 4 by the
holders of Series F Preferred Stock, each such holder shall have one (1) vote
for each share of Series F Preferred Stock in such holder's name on the stock
transfer books of the Corporation as of any record date fixed for such purpose
or, if no such date be fixed, at the close of business on the Business Day next
preceding the day on which notice is given, or if notice is waived, at the close
of business on the Business Day next preceding the day on which the meeting is
held.
5. CERTAIN RESTRICTIONS. (a) If any shares of Series F Preferred Stock
are outstanding, then the Corporation shall not, other than pursuant to Section
3(a)(ii), declare, make, pay or set apart for payment or distribution any
dividends or other distributions for any period on the Common Stock, any series
or class of Dividend Parity Stock or any series or class of Junior Capital Stock
that ranks junior to the Series F Preferred Stock with respect to dividend
rights, unless full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient (in cash and/or Common Stock,
as applicable) for the payment thereof set apart for such payment on all shares
of Series F Preferred Stock entitled thereto.
(b) If any shares of Series F Preferred Stock are outstanding, the
Corporation shall not redeem, purchase or otherwise acquire for any
consideration (or pay or make available money for a sinking fund for the
redemption of) any Common Stock or any Junior Capital Stock (except by
conversion into or exchange for Common Stock or Junior Capital Stock) unless
full cumulative dividends have been or contemporaneously are declared and paid,
or declared and a sum sufficient (in cash and/or Common Stock, as applicable)
for the payment thereof set apart for such payment on the Series F Preferred
Stock for all past dividend periods through and including the date fixed for
redemption, purchase or acquisition, PROVIDED, HOWEVER, that the foregoing shall
not prevent the
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<PAGE>
purchase or acquisition of any shares of Capital Stock of the Corporation by the
Corporation (i) to the extent necessary, in the reasonable judgment of the Board
of Directors, in order to preserve the status of the Corporation as a REIT or
(ii) pursuant to a purchase or exchange offer made on comparable terms to all
holders of outstanding shares of Capital Stock of the Corporation. For purposes
of this Section 5(b), the date to be fixed for redemption, purchase or
acquisition shall be set by resolution of the Board of Directors.
(c) The Corporation shall not permit any Subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of Capital Stock
of the Corporation unless the Corporation could, pursuant to this Section 5(b),
purchase or otherwise acquire such shares at such time and in such manner.
6. REDEMPTION. (a) Shares of Series F Preferred Stock shall not be
redeemable in whole or in part prior to the first (1st) annual anniversary of
the Initial Issue Date. On or after such first (1st) annual anniversary, to the
extent the Corporation shall have funds legally available therefor, the Series F
Preferred Stock shall be subject to redemption in whole or in part, in cash or
shares of Parity Capital Stock, at the election of the Corporation in its sole
discretion, at any time or from time to time, at the Redemption Price, together,
in each case with an amount (in cash and/or Common Stock, as applicable) equal
to any accrued and unpaid dividends to (and including) the date fixed for
redemption (the "REDEMPTION DATE"). Notwithstanding the preceding, no dividends
shall be due and payable in respect of shares of Series F Preferred Stock called
for redemption pursuant to this Section 6(a) from and after the Dividend
Declaration Date next preceding the Redemption Date with respect to such shares.
On and after the Redemption Date, provided that the aggregate Redemption Price
(including any accrued and unpaid dividends to (and including) the date fixed
for redemption) for all shares of Series F Preferred Stock called for redemption
has been duly paid or deposited in trust for the benefit of the holders of the
Series F Preferred Stock, dividends shall cease to accrue on the Series F
Preferred Stock called for redemption, such shares shall no longer be deemed to
be outstanding and all rights of the holders of such shares shall cease, except
only the right to receive the monies (and Common Stock, if applicable) payable
upon such redemption, without interest thereon, upon surrender of the
certificates evidencing such shares. Any monies (and Common Stock, if
applicable) deposited in trust by the Corporation and unclaimed at the end of
two (2) years from the Redemption Date shall be repaid to the Corporation upon
its written request, after which repayment the holders of shares of Series F
Preferred Stock so called for redemption shall look only to the Corporation for
the payment thereof.
(b) Notice of any redemption pursuant to Section 6(a) shall be given to
the holders of shares of Series F Preferred Stock not less than thirty (30) or
more than forty-five (45) calendar days prior to the Redemption Date. Notice of
redemption shall be given by first class mail to each such holder's address as
shown on the stock transfer books of the Corporation and shall specify (i) the
Redemption Date; (ii) the total number of shares of Series F Preferred Stock to
be redeemed; (iii) the number of shares of Series F Preferred Stock to be
redeemed from such holder; (iv) the per share Redemption Price
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<PAGE>
and the aggregate Redemption Price for all shares to be redeemed from such
holder; (v) the place or places where certificates for shares of Series F
Preferred Stock are to be surrendered for payment of the Redemption Price; and
(vi) that dividends on the shares of Series F Preferred Stock to be redeemed
will cease to accrue on the Redemption Date. If less than all shares of Series F
Preferred Stock then outstanding are to be redeemed, shares of Series F
Preferred Stock will be redeemed PRO RATA from among the holders of shares of
Series F Preferred Stock then outstanding.
7. REACQUIRED SHARES. Any shares of Series F Preferred Stock converted,
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares of Series F Preferred Stock shall, upon their cancellation, and
upon the filing of appropriate articles supplementary with the Maryland State
Department of Assessments and Taxation, become authorized but unissued shares of
Preferred Stock and may be reissued as part of any series of Preferred Stock
subject to the conditions or restrictions on issuance set forth herein, to the
extent any Series F Preferred Stock remains outstanding.
8. LIQUIDATION, DISSOLUTION OR WINDING UP. (a) Upon any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, before any distribution or payment shall be made to the holders of
any shares of Common Stock or any class or series of Junior Capital Stock that
ranks junior to the Series F Preferred Stock as to distribution of assets upon
any liquidation, dissolution or winding up of the Corporation, the holders of
Series F Preferred Stock shall be entitled to receive, out of assets of the
Corporation legally available for distribution to stockholders, liquidating
distributions in the amount of the Liquidation Value, plus an amount equal to
any dividends accrued and unpaid thereon as of the date of liquidation,
dissolution or winding up. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series F Preferred
Stock will have no right or claim to any of the remaining assets of the
Corporation. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Corporation
are insufficient to pay the amount of the liquidating distributions on all
outstanding shares of Series F Preferred Stock and the corresponding amounts
payable on all shares of Parity Capital Stock that ranks PARI PASSU with the
Series F Preferred Stock as to the distribution of assets upon liquidation,
dissolution or winding up ("LIQUIDATION PARITY STOCK"), then the holders of
Series F Preferred Stock and all other such classes or series of Liquidation
Parity Stock shall share ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they would otherwise
be respectively entitled.
(b) Neither the consolidation, merger or other business combination of
the Corporation with or into any other Person, nor the sale, lease or conveyance
of all or substantially all of the property or business of the Corporation shall
be deemed to constitute a liquidation, dissolution or winding up of the
Corporation for purposes of this Section 8.
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9. CONVERSION. (a) During the period of ten (10) Business Days after
the fifth Business Day after the Initial Issue Date and during the period of ten
(10) Business Days ending ninety (90) calendar days after the Initial Issue Date
or the first Business Day thereafter (each, a "CONVERSION PERIOD"), each
outstanding share of Series F Preferred Stock shall be convertible, at the sole
option of the holder thereof, into fully paid and nonassessable shares of Common
Stock; PROVIDED, HOWEVER, that in no event may a holder of Series F Preferred
Stock convert a share of Series F Preferred Stock into Common Stock if such
conversion would result in violation of Article XI of the Articles of Amendment
and Restatement of the Corporation.
(b) The number of shares of Common Stock deliverable upon conversion of
a share of Series F Preferred Stock during a Conversion Period shall be equal to
a fraction (i) the numerator of which is the Liquidation Value of the Series F
Preferred Stock and (ii) the denominator of which, subject to Section 9(c), is
the Average Price for the Pricing Period.
(c) Anything to the contrary contained in Section 9(b) or Section
9(d)(v) notwithstanding, in no event shall the Average Price used to compute the
number of shares of Common Stock issuable upon conversion be less than fifty
percent (50%) of the Volume Weighted Average Price of the Common Stock on the
Initial Issue Date. In the event that the Average Price is less than the floor
set forth in the preceding sentence, then the number of shares of Common Stock
issuable upon conversion shall be computed by reference to such floor.
(d)(i) During either Conversion Period, holders of Series F Preferred
Stock may convert their shares of Series F Preferred Stock into Common Stock by
surrendering to the Corporation's transfer agent, Registrar and Transfer Company
(the "TRANSFER AGENT"), at its offices in Cranford, New Jersey, the
certificate(s) of such Series F Preferred Stock to be converted, properly
endorsed and medallion certified, and accompanied by a written notice stating
that such holder elects to convert all or a specified whole number of such
shares in accordance with the provisions of this Section 9 and specifying the
name or names in which such holder wishes the certificate or certificates for
shares of Common Stock to be issued (a "HOLDER CONVERSION NOTICE"). In case a
Holder Conversion Notice shall specify a name or names other than that of such
holder, such Holder Conversion Notice shall be accompanied by payment of all
transfer taxes, if any, payable upon the issuance of shares of Common Stock in
such name or names. Other than fees to the Transfer Agent, the Corporation will
not pay any issue or other taxes that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of Series F Preferred Stock
pursuant hereto.
(ii) As promptly as practicable, and in any event within five (5)
Business Days after the date of delivery of the certificate(s) representing
shares of Series F Preferred Stock to be converted, together with a Holder
Conversion Notice (or, if the share certificate(s) and Holder Conversion Notice
are delivered separately, then within five (5) Business Days after the date of
delivery of the later document(s) to be so delivered), the Corporation shall
deliver or cause to be delivered (i) one or more certificates representing
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the number of validly issued, fully paid and nonassessable full shares of Common
Stock to which the holder of shares of Series F Preferred Stock being converted
shall be entitled and (ii) if less than the full number of shares of Series F
Preferred Stock evidenced by the surrendered certificate(s) is being converted,
a new certificate or certificates, of like tenor, for the number of shares of
Series F Preferred Stock evidenced by such surrendered certificate(s), less the
number of shares being converted. All conversions shall be deemed to have been
made at the close of business on the later of the date of delivery of the Holder
Conversion Notice or the date of delivery of the certificate(s) representing the
shares being converted (if different), or if such date is not a Business Day, as
of the close of business on the next succeeding Business Day, so that the rights
of the holder thereof as to the shares being converted shall cease, except only
the right to receive shares of Common Stock in accordance herewith, and the
Person entitled to receive the shares of Common Stock shall be treated for all
purposes as having become the record holder of such shares of Common Stock at
the close of business on such date. The Corporation shall not be required to
convert, and no surrender of shares of Series F Preferred Stock shall be
effective for that purpose, while the stock transfer books of the Corporation
for the Common Stock are closed for any purpose (but not for any period in
excess of ten (10) calendar days); PROVIDED that the surrender of shares of
Series F Preferred Stock for conversion during any period while such books are
so closed shall become effective for conversion immediately upon the reopening
of such books, as if the conversion had been made on the date such shares of
Series F Preferred Stock were surrendered, or if such date is not a Business
Day, as of the close of business on the next succeeding Business Day.
(iii) No fractions of shares of Common Stock shall be issued in
connection with the conversion of any shares of Series F Preferred Stock, but in
lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to the same fraction of Sale Price (as
defined below) of the Common Stock at the close of business on the day of
conversion. In the absence of a Sale Price, the Board of Directors shall in good
faith determine the current market price on the basis of such quotation as it
considers appropriate. As used herein, "SALE PRICE" means the closing sales
price of the Common Stock (or if no sales price is reported, the average of the
high bid and low asked prices) as reported by the principal national or regional
stock exchange on which the Common Stock is listed or, if the Common Stock is
not listed on a national or regional stock exchange, as reported by the Nasdaq
Stock Market and if not so reported, then as reported by the National Quotation
Bureau Incorporated. If more than one share of Series F Preferred Stock shall be
surrendered for conversion by the same holder during the same Conversion Period,
the number of full shares of Common Stock issuable on conversion thereof shall
be computed on the basis of the total number of shares of Series F Preferred
Stock so surrendered.
(iv) The Corporation shall at all times endeavor to reserve and keep
available for issuance upon the conversion of the Series F Preferred Stock such
number of its authorized but unissued shares of Common Stock as will from time
to time be sufficient to permit the conversion of all outstanding shares of
Series F Preferred Stock, and to take
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all action required to increase the authorized number of shares of Common Stock
if necessary to permit the conversion of all outstanding shares of Series F
Preferred Stock.
(v) In case of any reclassification of the Common Stock, any
consolidation of the Corporation with, or merger of the Corporation into, any
other entity, any merger of another entity into the Corporation (other than a
merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), any sale or transfer of all
or substantially all of the assets of the Corporation or any compulsory share
exchange, pursuant to which the Common Stock is converted into other securities,
cash or other property, then the Corporation (or successor entity), at its
election and in its sole discretion, may (i) notwithstanding Section 6(a),
redeem each share of the Series F Preferred Stock then outstanding at the
Redemption Price, together, in each case with an amount equal to any accrued and
unpaid dividends to (and including) the last Dividend Declaration Date preceding
the date fixed for redemption; or (ii) convert each share of the Series F
Preferred Stock then outstanding into the kind and amount of securities, cash
and other property receivable upon the reclassification, consolidation, merger,
sale, transfer or share exchange by a holder of the number of shares of Common
Stock into which such share of the Series F Preferred Stock would have been
convertible, which shall be a fraction (x) the numerator of which is the
Liquidation Value of the Series F Preferred Stock and (y) the denominator of
which, subject to Section 9(c), is the Volume Weighted Average Price of the
Common Stock on the Business Day immediately prior to the effectiveness of the
reclassification, consolidation, merger, sale, transfer or share exchange; or
(iii) notwithstanding Section 9(a) or anything to the contrary herein, permit
each share of the Series F Preferred Stock then outstanding to remain
outstanding with modified conversion rights, so that such shares may be
converted into the kind and amount of securities, cash and other property
receivable upon the reclassification, consolidation, merger, sale, transfer or
share exchange by a holder of the number of shares of Common Stock into which
such share of the Series F Preferred Stock would have been convertible had such
share been converted pursuant to this Section 9(d)(v)(ii). The Person formed by
the consolidation or resulting from the merger or which acquires such assets or
which acquires the Corporation's shares, as the case may be, shall make
provisions in its certificate or articles of incorporation or other constituent
document to establish such rights. The certificate or articles of incorporation
or other constituent document shall provide for adjustments, which, for events
subsequent to the effective date of the certificate or articles of incorporation
or other constituent document, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9. The provisions of
this Section 9(d)(v) shall similarly apply to successive reclassification,
consolidations, mergers, sales, transfers or share exchanges.
10. REIT STATUS. Nothing contained in the Articles of Amendment and
Restatement of the Corporation, including these Series F Preferred Stock
Articles, shall limit the authority of the Board of Directors to take such other
action as it deems necessary or advisable to protect the Corporation and the
interests of the stockholders by preservation of the Corporation's qualification
as a REIT under the REIT Provisions (as defined in the Articles of Amendment and
Restatement of the Corporation), including,
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without limitation, the enforcement of the provisions of Article XI of the
Articles of Amendment and Restatement of the Corporation and payment of
dividends in the form of Parity Capital Stock or Junior Capital Stock.
11. AMENDMENT. These Series F Preferred Stock Articles may be amended,
revised or otherwise altered by the consent, at a meeting or otherwise, of a
majority of the shares of the Series F Preferred Stock issued and outstanding at
the time of any such amendment, revision or alteration.
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 13TH day of July, 2000, copies
of the Praecipe Filing Amended Exhibit E (Including Exhibits Thereto) to the
Debtors' Second Amended Joint Disclosure Statement were sent via first-class
mail, postage prepaid (except as otherwise indicated), to the persons on the
attached service list.
/s/
--------------------------
Richard L. Wasserman
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