ARTICLES OF AMENDMENT AND RESTATEMENT
OF
CNL AMERICAN PROPERTIES FUND, INC.
CNL American Properties Fund, Inc., a Maryland corporation having its
principal office at 300 East Lombard Street, Baltimore, Maryland 21202
(hereinafter, the "Company"), hereby certifies to the Department of Assessments
and Taxation of the State of Maryland, that:
FIRST: The Company desires to amend and restate its articles of
incorporation as currently in effect.
SECOND: The provisions of the articles of incorporation which are now in
effect and as amended hereby, dated as of July 20, 2000 in
accordance with the Maryland General Corporation Law (the
"MGCL"), are as follows.
SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
CNL AMERICAN PROPERTIES FUND, INC.
* * * * * *
Article I :
THE COMPANY; DEFINITIONS
1.1 Name.
The name of the corporation (the "Company") is:
CNL American Properties Fund, Inc.
So far as may be practicable, the business of the Company shall be
conducted and transacted under that name, which name, and the word "Company"
wherever used in these Second Amended and Restated Articles of Incorporation of
CNL American Properties Fund, Inc. (these "Articles of Incorporation"), except
where the context otherwise requires, shall refer to the Directors collectively
but not individually or personally and shall not refer to the Stockholders or to
any officers, employees or agents of the Company or of such Directors.
Under circumstances in which the Directors determine that the use of
the name "CNL American Properties Fund, Inc." is not practicable, they may use
any other designation or name for the Company.
1.2 Resident Agent.
The name and address of the resident agent for service of process of
the Company in the State of Maryland shall be The Corporation Trust
Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202. The Company
may have such principal office within the State of Maryland as the Directors may
from time to time determine. The Company may also have such other offices or
places of business within or without the State of Maryland as the Directors may
from time to time determine.
1.3 Nature of Company.
The Company is a Maryland corporation within the meaning of the MGCL.
1.4 Purposes.
The purposes for which the Company 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, the following: (i) to acquire, hold,
own, develop, construct, improve, maintain, operate, sell, lease, transfer,
encumber, convey, exchange and otherwise dispose of or deal with real and
personal property; (ii) to engage in the business of offering furniture,
fixture, and equipment financing to operators of Restaurant Chains; and (iii) to
enter into any partnership, joint venture or other similar arrangement to engage
in any of the foregoing.
1.5 Definitions.
As used in these Articles of Incorporation, the following terms shall
have the following meanings unless the context otherwise requires (certain other
terms used in Article V hereof are defined in Sections 5.2, 5.3, 5.6 and 5.7
hereof):
"Affiliate" or "Affiliated" means, as to any individual, corporation,
partnership, trust or other association (other than the Excess Shares Trust),
(i) any Person or entity directly or indirectly, through one or more
intermediaries controlling, controlled by, or under common control with another
person or entity; (ii) any Person or entity, directly or indirectly owning or
controlling ten percent (10%) or more of the outstanding voting securities of
another Person or entity; (iii) any officer, director, partner or trustee of
such Person or entity; (iv) any Person ten percent (10%) or more of whose
outstanding voting securities are directly or indirectly owned, controlled, or
held, with power to vote, by such other Person; and (v) if such other Person or
entity is an officer, director, partner, or trustee of a Person or entity, the
Person or entity for which such Person or entity acts in any such capacity.
"Bylaws" means the bylaws of the Company, as the same are in effect
from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto. Reference to any provision of the Code
shall mean such provision as in effect from time to time, as the same may be
amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.
"Company Property" means any and all property, real, personal or
otherwise, tangible or intangible, including without limitation mortgage loans,
interests in trust certificates and Secured Equipment Leases, which is
transferred or conveyed to the Company (including all rents, income, profits and
gains therefrom), which is owned or held by, or for the account of, the Company.
"Directors," "Board of Directors" or "Board" means, collectively, the
individuals named in Section 2.3 of these Articles of Incorporation so long as
they continue in office and all other individuals who have been duly elected and
qualify as Directors of the Company hereunder.
"Distributions" means any distributions of money or securities by the
Company to owners of Shares, including distributions that may constitute a
return of capital for federal income tax purposes. The Company will make no
distributions other than distributions of money or securities.
"Equity Shares" means transferable shares of beneficial interest of the
Company of any class or series, including Common Shares or Preferred Shares.
"Initial Public Offering" means the offering and sale of Common Shares
of the Company pursuant to the Company's first effective registration statement
covering such Common Shares filed under the Securities Act of 1933, as amended.
"Listing" means the listing of the Shares of the Company on a national
securities exchange or over-the-counter market.
"MGCL" means the Maryland General Corporation Law as contained in the
Corporations and Associations Article of the Annotated Code of Maryland.
"Mortgages" means mortgages, deeds of trust or other security interests
on or applicable to Real Property.
"Net Assets" means the total assets of the Company (other than
intangibles), at cost, before deducting depreciation or other non-cash reserves,
less total liabilities, calculated quarterly by the Company on a basis
consistently applied.
"Person" means an individual, corporation, partnership, estate, trust
(including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a
portion of a trust permanently set aside for or to be used exclusively for the
purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity, or any government or any agency or political subdivision
thereof, and also includes a group as that term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, but does not
include an underwriter that participates in a public offering of Equity Shares
for a period of sixty (60) days following the initial purchase by such
underwriter of such Equity Shares in such public offering, provided that the
foregoing exclusion shall apply only if the ownership of such Equity Shares by
an underwriter would not cause the Company to fail to qualify as a REIT by
reason of being "closely held" within the meaning of Section 856(a) of the Code
or otherwise cause the Company to fail to qualify as a REIT.
"Property" or "Properties" means (i) the real properties, including the
buildings located thereon, (ii) the real properties only, or (iii) the buildings
only, which are acquired by the Company, either directly or through joint
venture arrangements or other partnerships or similar arrangements.
"Real Property" or "Real Estate" means land, rights in land (including
leasehold interests), and any buildings, structures, improvements, furnishings,
fixtures and equipment located on or used in connection with land and rights or
interests in land.
"REIT" means a "real estate investment trust" as defined pursuant to
Sections 856 through 860 of the Code.
"REIT Provisions of the Code" means Sections 856 through 860 of the
Code and any successor or other provisions of the Code relating to real estate
investment trusts (including provisions as to the attribution of ownership of
beneficial interests therein) and the regulations promulgated thereunder.
"Restaurant Chains" shall mean the national and regional restaurant
chains, primarily fast-food, family-style, and casual dining chains who
themselves or through their franchisees will either (i) lease the Properties
purchased by the Company or (ii) become lessees of Secured Equipment Leases.
"Roll-Up Entity" shall mean a partnership, real estate investment
trust, corporation, trust or similar entity that would be created or would
survive after the successful completion of a proposed Roll-Up Transaction.
"Roll-Up Transaction" shall mean a transaction involving the
acquisition, merger, conversion, or consolidation, directly or indirectly, of
the Company and the issuance of securities of a Roll-Up Entity. Such term does
not include: (i) a transaction involving securities of the Company that have
been listed on a national securities exchange or included for quotation on the
National Market System of the National Association of Securities Dealers
Automated Quotation System for at least 12 months; or (ii) a transaction
involving the conversion to corporate, trust, or association form of only the
Company if, as a consequence of the transaction, there will be no significant
adverse change in Stockholder voting rights, the term of existence of the
Company or the investment objectives of the Company.
"Sale" or "Sales" (i) means any transaction or series of transactions
whereby: (A) the Company sells, grants, transfers, conveys, or relinquishes its
ownership of any Property or portion thereof, including the lease of any
Property consisting of the building only, and including any event with respect
to any Property which gives rise to a significant amount of insurance proceeds
or condemnation awards; (B) the Company sells, grants, transfers, conveys, or
relinquishes its ownership of all or substantially all of the interest of the
Company in any Joint Venture in which it is a co-venturer or partner; (C) any
Joint Venture in which the Company as a co-venturer or partner sells, grants,
transfers, conveys, or relinquishes its ownership of any Property or portion
thereof, including any event with respect to any Property which gives rise to
insurance claims or condemnation awards; or (D) the Company sells, grants,
conveys, or relinquishes its interest in any Secured Equipment Lease or portion
thereof, including any event with respect to any Secured Equipment Lease which
gives rise to a significant amount of insurance proceeds or similar awards, but
(ii) shall not include any transaction or series of transactions specified in
clause (i)(A), (i)(B), or (i)(C) above in which the proceeds of such transaction
or series of transactions are reinvested in one or more Properties or Secured
Equipment Leases within one hundred eighty (180) days thereafter.
"Secured Equipment Leases" means furniture, fixtures and equipment
financing made available by the Company.
"Securities" means Equity Shares, Excess Shares, any other stock,
shares or other evidences of equity or beneficial or other interests, voting
trust certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in, temporary or interim certificates for, receipts
for, guarantees of, or warrants, options or rights to subscribe to, purchase or
acquire, any of the foregoing.
"Shares" means shares of beneficial interest of the Company of any
class or series, including Common Shares, Preferred Shares and Excess Shares.
"Stockholders" means the registered holders of the Company's Equity Sha
Article II :
BOARD OF DIRECTORS
2.1 Number.
The number of Directors initially shall be five (5), which number may
be increased or decreased from time to time by resolution of the Directors then
in office or by a majority vote of the Stockholders entitled to vote; provided,
however, that the total number of Directors shall be not fewer than three (3)
and not more than fifteen (15), subject to the Bylaws and to any express rights
of any holders of any series of Preferred Shares to elect additional directors
under specified circumstances. No reduction in the number of Directors shall
cause the removal of any Director from office prior to the expiration of his
term. Any vacancy created by an increase in the number of Directors will be
filled, at any regular meeting or at any special meeting of the Directors called
for that purpose, by a majority of the Directors. Any other vacancy will be
filled at any annual meeting or at any special meeting of the Stockholders
called for that purpose, by a majority of the Common Shares outstanding and
entitled to vote. For the purposes of voting for directors, each Share of stock
may be voted for as many individuals as there are directors to be elected and
for whose election the Share is entitled to be voted, or as may otherwise be
required by the MGCL or other applicable law as in effect from time to time.
2.2 Committees.
Subject to the MGCL, the Directors may establish such committees as
they deem appropriate, in their discretion.
2.3 Initial Board; Term.
The initial Directors are James M. Seneff, Jr., Robert A. Bourne, G.
Richard Hostetter, J. Joseph Kruse and Richard C. Huseman. Each Director shall
hold office for one (1) year, until the next annual meeting of Stockholders and
until his successor shall have been duly elected and shall have qualified.
Directors may be elected to an unlimited number of successive terms.
The names and address of the initial Directors are as follows:
Name Address
James M. Seneff, Jr. CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
Robert A. Bourne CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
G. Richard Hostetter CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
J. Joseph Kruse CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
Richard C. Huseman CNL Center at City Commons
450 South Orange Avenue
Orlando, Florida 32801
2.4 Fiduciary Obligations.
The Directors serve in a fiduciary capacity to the Company and have a
fiduciary duty to the Stockholders of the Company.
2.5 Resignation, Removal or Death.
Any Director may resign by written notice to the Board of Directors,
effective upon execution and delivery to the Company of such written notice or
upon any future date specified in the notice. A Director may be removed from
office with or without cause only at a meeting of the Stockholders called for
that purpose, by the affirmative vote of the holders of not less than a majority
of the Common Shares then outstanding and entitled to vote in the election of
the Directors, subject to the rights of any Preferred Shares to vote for such
Directors. The notice of such meeting shall indicate that the purpose, or one of
the purposes, of such meeting is to determine if a Director should be removed.
Upon the resignation or removal of any Director, or his otherwise ceasing to be
a Director, he shall automatically cease to have any such right, title or
interest in and to the Company Property and shall execute and deliver such
documents as the remaining Directors require for the conveyance of any Company
Property held in his name, and shall account to the remaining Directors as they
require for all property which he holds as Director. Upon the incapacity or
death of any Director, his legal representative shall perform the acts described
in the foregoing sentence.
2.6 Business Combination Statute.
Notwithstanding any other provision of these Articles of Incorporation
or any contrary provision of law, the Maryland Business Combination Statute,
found in Title 3, subtitle 6 of the MGCL, as amended from time to time, or any
successor statute thereto, shall not apply to any "business combination" (as
defined in Section 3-601(e) of the MGCL, as amended from time to time, or any
successor statute thereto) of the Company and any Person.
2.7 Control Share Acquisition Statute.
Notwithstanding any other provision of these Articles of Incorporation
or any contrary provision of law, the Maryland Control Share Acquisition
Statute, found in Title 3, subtitle 7 of the MGCL, as amended from time to time,
or any successor statute thereto shall not apply to any acquisition of
Securities of the Company by any Person.
Article III :
POWERS OF DIRECTORS
3.1 General.
Subject to the express limitations herein or in the Bylaws and to the
general standard of care required of directors under the MGCL and other
applicable law, (i) the business and affairs of the Company shall be managed
under the direction of the Board of Directors and (ii) the Directors shall have
full, exclusive and absolute power, control and authority over the Company
Property and over the business of the Company as if they, in their own right,
were the sole owners thereof, except as otherwise limited by these Articles of
Incorporation. The Directors have established the written policies on
investments set forth in Article IV hereof and shall monitor the administrative
procedures, investment operations, and performance of the Company to assure that
such policies are carried out. The Directors may take any actions that, in their
sole judgment and discretion, are necessary or desirable to conduct the business
of the Company. A majority of the Board of Directors has approved these Articles
of Incorporation, which shall be construed with a presumption in favor of the
grant of power and authority to the Directors. Any construction of these
Articles of Incorporation or determination made in good faith by the Directors
concerning their powers and authority hereunder shall be conclusive. The
enumeration and definition of particular powers of the Directors included in
this Article III shall in no way be limited or restricted by reference to or
inference from the terms of this or any other provision of these Articles of
Incorporation or construed or deemed by inference or otherwise in any manner to
exclude or limit the powers conferred upon the Directors under the general laws
of the State of Maryland as now or hereafter in force.
3.2 Specific Powers and Authority.
Subject only to the express limitations herein, and in addition to all
other powers and authority conferred by these Articles of Incorporation or by
law, the Directors, without any vote, action or consent by the Stockholders,
shall have and may exercise, at any time or times, in the name of the Company or
on its behalf the following powers and authorities:
(i) Investments. Subject to Article IV and Section 7.5 hereof, to invest
in, purchase or otherwise acquire and to hold real, personal or mixed,
tangible or intangible, property of any kind wherever located, or
rights or interests therein or in connection therewith, all without
regard to whether such property, interests or rights are authorized by
law for the investment of funds held by trustees or other fiduciaries,
or whether obligations the Company acquires have a term greater or
lesser than the term of office of the Directors, for such
consideration as the Directors may deem proper (including cash,
property of any kind or Securities of the Company); provided, however,
that the Directors shall take such actions as they deem necessary and
desirable to comply with any requirements of the MGCL relating to the
types of assets held by the Company.
(ii) REIT Qualification. The Board of Directors shall use its best efforts
to cause the Company and its Stockholders to qualify for U.S. federal
income tax treatment in accordance with the provisions of the Code
applicable to REITs (as those terms are defined in Section 1.5
hereof). In furtherance of the foregoing, the Board of Directors shall
use its best efforts to take such actions as are necessary, and may
take such actions as it deems desirable (in its sole discretion) to
preserve the status of the Company as a REIT; provided, however, that
in the event that the Board of Directors determines, by vote of at
least two-thirds (2/3) of the Directors, that it no longer is in the
best interests of the Company to qualify as a REIT, the Board of
Directors shall take such actions as are required by the Code, the
MGCL and other applicable law, to cause the matter of termination of
qualification as a REIT to be submitted to a vote of the Stockholders
of the Company pursuant to Section 6.2.
(iii) Sale, Disposition and Use of Property. Subject to Article IV and
Sections 7.5 and 8.3 hereof, to sell, rent, lease, hire, exchange,
release, partition, assign, mortgage, grant security interests in,
encumber, negotiate, dedicate, grant easements in and options with
respect to, convey, transfer (including transfers to entities wholly
or partially owned by the Company or the Directors) or otherwise
dispose of any or all of the Company Property by deeds (including
deeds in lieu of foreclosure with or without consideration), trust
deeds, assignments, bills of sale, transfers, leases, mortgages,
financing statements, security agreements and other instruments for
any of such purposes executed and delivered for and on behalf of the
Company or the Directors by one or more of the Directors or by a duly
authorized officer, employee, agent or nominee of the Company, on such
terms as they deem appropriate; to give consents and make contracts
relating to the Company Property and its use or other property or
matters; to develop, improve, manage, use, alter or otherwise deal
with the Company Property; and to rent, lease or hire from others
property of any kind; provided, however, that the Company may not use
or apply land for any purposes not permitted by applicable law.
(iv) Financings. To borrow or, in any other manner, raise money for the
purposes and on the terms they determine, which terms may (i) include
evidencing the same by issuance of Securities of the Company and (ii)
may have such provisions as the Directors determine; to reacquire such
Securities of the Excess Shares Trust; to enter into other contracts
or obligations on behalf of the Excess Shares Trust; to guarantee,
indemnify or act as surety with respect to payment or performance of
obligations of any Person; to mortgage, pledge, assign, grant security
interests in or otherwise encumber the Company Property to secure any
such Securities of the Company, contracts or obligations (including
guarantees, indemnifications and suretyships); and to renew, modify,
release, compromise, extend, consolidate or cancel, in whole or in
part, any obligation to or of the Company or participate in any
reorganization of obligors to the Company.
(v) Lending. Subject to the provisions of Section 7.5 hereof, to lend money
or other Company Property on such terms, for such purposes and to such
Persons as they may determine.
(vi) Secured Equipment Leases. To engage in the business of offering
furniture, fixture, and equipment financing to the operators of
Restaurant Chains, provided, however, that the Company shall use its
best efforts to ensure that the total value of Secured Equipment
Leases, in the aggregate will not exceed 25% of the Company's total
assets and that Secured Equipment Leases to a single lessee, in the
aggregate, will not exceed 5% of the Company's total assets.
(vii) Issuance of Securities. Subject to the provisions of Article V hereof,
to create and authorize and direct the issuance (on either a pro rata
or a non-pro rata basis) by the Company, in shares, units or amounts
of one or more types, series or classes, of Securities of the Company,
which may have such voting rights, dividend or interest rates,
preferences, subordinations, conversion or redemption prices or
rights; maturity dates, distribution, exchange, or liquidation rights
or other rights as the Directors may determine, without vote of or
other action by the Stockholders, to such Persons for such
consideration, at such time or times and in such manner and on such
terms as the Directors determine, to list any of the Securities of the
Company on any securities exchange; and to purchase or otherwise
acquire, hold, cancel, reissue, sell and transfer any Securities of
the Company.
(viii) Expenses and Taxes. To pay any charges, expenses or liabilities
necessary or desirable, in the sole discretion of the Directors, for
carrying out the purposes of these Articles of Incorporation and
conducting business of the Company, including compensation or fees to
Directors, officers, employees and agents of the Company, and to
Persons contracting with the Company, and any taxes, levies, charges
and assessments of any kind imposed upon or chargeable against the
Company, the Company Property or the Directors in connection
therewith; and to prepare and file any tax returns, reports or other
documents and take any other appropriate action relating to the
payment of any such charges, expenses or liabilities.
(ix) Collection and Enforcement. To collect, sue for and receive money or
other property due to the Company; to consent to extensions of the
time for payment, or to the renewal, of any Securities or obligations;
to engage or to intervene in, prosecute, defend, compound, enforce,
compromise, release, abandon or adjust any actions, suits,
proceedings, disputes, claims, demands, security interests or things
relating to the Company, the Company Property or the Company's
affairs; to exercise any rights and enter into any agreements and take
any other action necessary or desirable in connection with the
foregoing.
(x) Deposits. To deposit funds or Securities constituting part of the
Company Property in banks, trust companies, savings and loan
associations, financial institutions and other depositories, whether
or not such deposits will draw interest, subject to withdrawal on such
terms and in such manner as the Directors determine.
(xi) Allocation; Accounts. To determine whether moneys, profits or other
assets of the Company shall be charged or credited to, or allocated
between, income and capital, including whether or not to amortize any
premium or discount and to determine in what manner any expenses or
disbursements are to be borne as between income and capital
(regardless of how such items would normally or otherwise be charged
to or allocated between income and capital without such
determination); to treat any dividend or other distribution on any
investment as, or apportion it between, income and capital; in their
discretion to provide reserves for depreciation, amortization,
obsolescence or other purposes in respect of any Company Property in
such amounts and by such methods as they determine; to determine what
constitutes net earnings, profits or surplus; to determine the method
or form in which the accounts and records of the Company shall be
maintained; and to allocate to the Stockholders' equity account less
than all of the consideration paid for Securities and to allocate the
balance to paid-in capital or capital surplus.
(xii) Valuation of Property. To determine the value of all or any part of
the Company Property and of any services, Securities, property or
other consideration to be furnished to or acquired by the Company, and
to revalue all or any part of the Company Property, all in accordance
with such appraisals or other information as are reasonable, in their
sole judgment.
(xiii) Ownership and Voting Powers. To exercise all of the rights, powers,
options and privileges pertaining to the ownership of any Mortgages,
Securities, Real Estate, Secured Equipment Leases and other Company
Property to the same extent that an individual owner might, including
without limitation to vote or give any consent, request or notice or
waive any notice, either in person or by proxy or power of attorney,
which proxies and powers of attorney may be for any general or special
meetings or action, and may include the exercise of discretionary
powers.
(xiv) Officers, Etc.; Delegation of Powers. To elect, appoint or employ such
officers for the Company and such committees of the Board of Directors
with such powers and duties as the Directors may determine, the
Company's Bylaws provide or the MGCL requires; to engage, employ or
contract with and pay compensation to any Person (including subject to
Section 7.5 hereof, any Director and Person who is an Affiliate of any
Director) as agent, representative, member of an advisory board,
employee or independent contractor (including advisors, consultants,
transfer agents, registrars, underwriters, accountants,
attorneys-at-law, real estate agents, property and other managers,
appraisers, brokers, architects, engineers, construction managers,
general contractors or otherwise) in one or more capacities, to
perform such services on such terms as the Directors may determine; to
delegate to one or more Directors, officers or other Persons engaged
or employed as aforesaid or to committees of Directors, the
performance of acts or other things (including granting of consents),
the making of decisions and the execution of such deeds, contracts,
leases or other instruments, either in the names of the Company, the
Directors or as their attorneys or otherwise, as the Directors may
determine; and to establish such committees as they deem appropriate.
(xv) Associations. Subject to Section 7.5 hereof, to cause the Company to
enter into joint ventures, general or limited partnerships,
participation or agency arrangements or any other lawful combinations,
relationships or associations of any kind.
(xvi) Reorganizations, Etc. Subject to Sections 8.2 and 8.3 hereof, to cause
to be organized or assist in organizing any Person under the laws of
any jurisdiction to acquire all or any part of the Company Property,
carry on any business in which the Company shall have an interest or
otherwise exercise the powers the Directors deem necessary, useful or
desirable to carry on the business of the Company or to carry out the
provisions of these Articles of Incorporation, to merge or consolidate
the Company with any Person; to sell, rent, lease, hire, convey,
negotiate, assign, exchange or transfer all or any part of the Company
Property to or with any Person in exchange for Securities of such
Person or otherwise; and to lend money to, subscribe for and purchase
the Securities of, and enter into any contracts with, any Person in
which the Company holds, or is about to acquire, Securities or any
other interests.
(xvii) Insurance. To purchase and pay for out of Company Property insurance
policies insuring the Company and the Company Property against any and
all risks, and insuring the Stockholders, Directors, officers,
Affiliates, employees and agents of the Company individually (each an
"Insured") against all claims and liabilities of every nature arising
by reason of holding or having held any such status, office or
position or by reason of any action alleged to have been taken or
omitted by the Insured in such capacity, whether or not the Company
would have the power to indemnify against such claim or liability,
provided that such insurance be limited to the indemnification
permitted by Section 7.3 hereof in regard to any liability or loss
resulting from negligence, gross negligence, misconduct, willful
misconduct or an alleged violation of federal or state securities
laws. Nothing contained herein shall preclude the Company from
purchasing and paying for such types of insurance, including extended
coverage liability and casualty and workers' compensation, as would be
customary for any Person owning comparable assets and engaged in a
similar business, or from naming the Insured as an additional insured
party thereunder, provided that such addition does not add to the
premiums payable by the Company.
(xviii) Executive Compensation, Pension and Other Plans. To adopt and
implement executive compensation, pension, profit sharing, share
option, share bonus, share purchase, share appreciation rights,
restricted share, savings, thrift, retirement, incentive or benefit
plans, trusts or provisions, applicable to any or all Directors,
officers, employees or agents of the Company, or to other Persons who
have benefited the Company, all on such terms and for such purposes as
the Directors may determine or the Bylaws provide.
(xix) Distributions. To declare and pay dividends or other distributions to
Stockholders, subject to the provisions of Section 5.4 hereof.
(xx) Indemnification. To the extent permitted by Section 7.3 hereof, to
indemnify any Person with whom the Company has dealings. (xxi)
Charitable Contributions. To make donations for the public welfare or
for community, charitable, religious, educational, scientific, civic
or similar purposes, regardless of any direct benefit to the Company.
(xxii) Discontinue Operations; Bankruptcy. To discontinue the operations of
the Company (subject to Section 8.2 hereof); to petition or apply for
relief under any provision of federal or state bankruptcy, insolvency
or reorganization laws or similar laws for the relief of debtors; to
permit any Company Property to be foreclosed upon without raising any
legal or equitable defenses that may be available to the Company or
the Directors or otherwise defending or responding to such
foreclosure; to confess judgment against the Excess Shares Trust; or
to take such other action with respect to indebtedness or other
obligations of the Directors, the Company Property or the Company as
the Directors, in such capacity, and in their discretion may
determine.
(xxiii) Termination of Status. To terminate the status of the Company as a
real estate investment trust under the REIT Provisions of the Code;
provided, however, that the Board of Directors shall take no action to
terminate the Company's status as a real estate investment trust under
the REIT Provisions of the Code until such time as (i) the Board of
Directors adopts a resolution recommending that the Company terminate
its status as a real estate investment trust under the REIT Provisions
of the Code, (ii) the Board of Directors presents the resolution at an
annual or special meeting of the Stockholders and (iii) such
resolution is approved by the holders of two-thirds (2/3) of the
issued and outstanding Common Shares (as defined in Section 5.2
hereof).
(xxiv) Fiscal Year. Subject to the Code, to adopt, and from time to time
change, a fiscal year for the Company.
(xxv) Seal. To adopt and use a seal, but the use of a seal shall not be
required for the execution of instruments or obligations
of the Company.
(xxvi) Bylaws. To adopt, implement and from time to time alter, amend or
repeal the Bylaws of the Company relating to the business and
organization of the Company, provided that such amendments are not
inconsistent with the provisions of these Articles of Incorporation,
and further provided that the Directors may not amend the Bylaws,
without the affirmative vote of a majority of the Equity Shares, to
the extent that such amendments adversely affect the rights,
preferences and privileges of Stockholders.
(xxvii) Listing Shares. To cause the listing of the Shares at any time, but in
no event shall such Listing occur more than ten (10) years after
completion of the Initial Public Offering.
(xxviii) Further Powers. To do all other acts and things and execute and
deliver all instruments incident to the foregoing powers, and to
exercise all powers which they deem necessary, useful or desirable to
carry on the business of the Company or to carry out the provisions of
these Articles of Incorporation, even if such powers are not
specifically provided hereby.
3.3 Determination of Best Interest of Company.
In determining what is in the best interest of the Company, a Director
shall consider the interests of the Stockholders of the Company and, in his or
her sole and absolute discretion, may consider (i) the interests of the
Company's employees, suppliers, creditors and customers, (ii) the economy of the
nation, (iii) community and societal interests, and (iv) the long-term as well
as short-term interests of the Company and its Stockholders, including the
possibility that these interests may be best served by the continued
independence of the Company.
Article IV :
INVESTMENT OBJECTIVES AND OPERATING RESTRICTIONS
4.1 Investment Objectives.
The Company's primary investment objectives are to preserve, protect,
and enhance the Company's assets; while (i) distributing dividends commencing in
the initial year of Company operations; (ii) obtaining fixed income through the
receipt of base rent on leased properties and interest on mortgage loans, and
increasing the Company's income (and dividends) and providing protection against
inflation through automatic increases in base rent and receipt of percentage
rent, and obtaining fixed income through the receipt of payments on Secured
Equipment Leases; (iii) qualifying and remaining qualified as a REIT for federal
income tax purposes; and (iv) providing Stockholders of the Company with
liquidity of their investment within five (5) to ten (10) years after
commencement of the offering, either in whole or in part, through (a) Listing,
or, (b) the commencement of orderly Sales of the Company's Properties and
Secured Equipment Leases, (outside the ordinary course of business and
consistent with its objective of qualifying as a REIT) and distribution of the
proceeds thereof. The sheltering from tax of income from other sources is not an
objective of the Company. Subject to Sections 3.2(ii) and (xxiii) hereof and to
the restrictions set forth herein, the Directors will use their best efforts to
conduct the affairs of the Company in such a manner as to continue to qualify
the Company for the tax treatment provided in the REIT Provisions of the Code;
provided, however, no Director, officer, employee or agent of the Company shall
be liable for any act or omission resulting in the loss of tax benefits under
the Code, except to the extent provided in Section 7.2 hereof.
4.2 Operating Restrictions.
In addition to other investment restrictions imposed by the Directors
from time to time, consistent with the Company's objective of qualifying as a
REIT, the following shall apply to the Company's investments:
(i) The Company shall not operate so as to be classified as an "investment
company" under the Investment Company Act of 1940, as amended.
(ii) The Company will not make any investment that the Company believes will
be inconsistent with its objectives of qualifying and remaining
qualified as a REIT.
The foregoing objectives may not be modified or eliminated without the
approval of Stockholders owning a majority of the outstanding Common Shares.
Article V :
SHARES
5.1 Authorized Shares.
The capital stock of the Company shall be divided into Shares. The
total number of Shares which the Company is authorized to issue is one hundred
forty three million five hundred thousand (143,500,000) Shares, consisting of
sixty two million five hundred thousand (62,500,000) Common Shares (as defined
and described in Section 5.2 hereof), three million (3,000,000) Preferred Shares
(as defined and described in Section 5.3 hereof) and seventy-eight million
(78,000,000) Excess Shares (as defined and described in Section 5.7 hereof). All
Shares shall be fully paid and nonassessable when issued. Shares may be issued
for such consideration as the Directors determine or, if issued as a result of a
Share dividend or Share split, without any consideration.
5.2 Common Shares.
(i) Common Shares Subject to Terms of Preferred Shares. The Common Shares
shall be subject to the express terms of any series of Preferred
Shares.
(ii) Description. Common Shares (herein so called) shall have a par value of
$.01 per share and shall entitle the holders to one (1) vote per share
on all matters upon which Stockholders are entitled to vote pursuant to
Section 6.2 hereof, and shares of a particular class of issued Common
Shares shall have equal dividend, distribution, liquidation and other
rights, and shall have no preference, cumulative, preemptive,
appraisal, conversion or exchange rights. The Directors may classify or
reclassify any unissued Common Shares by setting or changing the
number, designation, preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications or
terms or conditions of redemption of any such Common Shares and, in
such event, the Company shall file for record with the State Department
of Assessments and Taxation of the State of Maryland amended articles
in substance and form as prescribed by Title 2 of the MGCL.
(iii) Distribution Rights. The holders of Common Shares shall be entitled to
receive such Distributions as may be declared by the Board of Directors
of the Company out of funds legally available therefor.
(iv) Dividend or Distribution Rights. The Directors from time to time may
declare and pay to Stockholders such dividends or Distributions in cash
or securities as the Directors in their discretion shall determine. The
Directors shall endeavor to declare and pay such dividends and
Distributions as shall be necessary for the Company to qualify as a
real estate investment trust under the REIT Provisions of the Code;
provided, however, Stockholders shall have no right to any dividend or
Distribution unless and until declared by the Directors. The exercise
of the powers and rights of the Directors pursuant to this Section
5.2(iv) shall be subject to the provisions of any class or series of
Equity Shares at the time outstanding. The receipt by any Person in
whose name any Equity Shares are registered on the records of the
Company or by his duly authorized agent shall be a sufficient discharge
for all dividends or Distributions payable or deliverable in respect of
such Equity Shares and from all liability to see to the application
thereof. Distributions in kind shall not be permitted, except for
distributions of readily marketable securities; distributions of
beneficial interests in a liquidating trust established for the
dissolution of the Company and the liquidation of its assets in
accordance with the terms of these Articles of Incorporation; or
distributions of in-kind property as long as the Directors (i) advise
each Stockholder of the risks associated with direct ownership of the
property; (ii) offer each Stockholder the election of receiving in-kind
property distributions; and (iii) distribute in-kind property only to
those Stockholders who accept the Directors' offer.
(v) Rights Upon Liquidation. In the event of any voluntary or involuntary
liquidation, dissolution or winding up, or any distribution of the
assets of the Company, the aggregate assets available for distribution
to holders of the Common Shares (including holders of Excess Shares
resulting from the exchange of Common Shares pursuant to Section
5.6(iii) hereof) shall be determined in accordance with applicable law.
Except as provided below as a consequence of the limitations on
distributions to holders of Excess Shares, each holder of Common Shares
shall be entitled to receive, ratably with (i) each other holder of
Common Shares and (ii) each holder of Excess Shares resulting from the
exchange of Common Shares, that portion of such aggregate assets
available for distribution as the number of the outstanding Common
Shares held by such holder bears to the total number of outstanding
Common Shares and Excess Shares resulting from the exchange of Common
Shares then outstanding. Anything herein to the contrary
notwithstanding, in no event shall the amount payable to a holder of
Excess Shares exceed (i) the price per share such holder paid for the
Common Shares in the purported Transfer or Acquisition (as those terms
are defined in Section 5.6(i) or change in capital structure or other
transaction or event that resulted in the Excess Shares or (ii) if the
holder did not give full value for such Excess Shares (as through a
gift, a devise or other event or transaction), a price per share equal
to the Market Price (as that term is defined in Section 5.6(i) for the
Common Shares on the date of the purported Transfer, Acquisition,
change in capital structure or other transaction or event that resulted
in such Excess Shares. Any amount available for distribution in excess
of the foregoing limitations shall be paid ratably to the holders of
Common Shares and other holders of Excess Shares resulting from the
exchange of Common Shares to the extent permitted by the foregoing
limitations.
(vi) Voting Rights. Except as may be provided in these Articles of
Incorporation, and subject to the express terms of any series of
Preferred Shares, the holders of the Common Shares shall have the
exclusive right to vote on all matters (as to which a holder of common
stock shall be entitled to vote pursuant to applicable law) at all
meetings of the Stockholders of the Company, and shall be entitled to
one (1) vote for each Common Share entitled to vote at such meeting.
5.3 Preferred Shares.
The Directors are hereby expressly granted the authority to authorize
from time to time the issuance of one or more series of Preferred Shares. Prior
to the issuance of each such series, the Board of Directors, by resolution,
shall fix the number of shares to be included in each series, and the terms,
rights, restrictions and qualifications of the shares of each series, however,
the voting rights for each share of the Preferred Shares shall not exceed voting
rights which bear the same relationship to the voting rights of the Common
Shares as the consideration paid to the Company for each of Preferred Shares
bears to the book value of the Common Shares or the date that such Preferred
Shares are issued. The authority of the Board of Directors with respect to each
series shall include, but not be limited to, determination of the following:
(i) The designation of the series, which may be by distinguishing number,
letter or title.
(ii) The dividend rate on the shares of the series, if any, whether any
dividends shall be cumulative and, if so, from which date or dates, and
the relative rights of priority, if any, of payment of dividends on
shares of the series.
(iii) The redemption rights, including conditions and the price or prices, if
any, for shares of the series.
(iv) The terms and amounts of any sinking fund for the purchase or
redemption of shares of the series.
(v) The rights of the shares of the series in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of
the Company, and the relative rights of priority, if any, of payment of
shares of the series.
(vi) Whether the shares of the series shall be convertible into shares of
any other class or series, or any other security, of the Company or any
other corporation or other entity, and, if so, the specification of
such other class or series of such other security, the conversion price
or prices or rate or rates, any adjustments thereof, the date or dates
on which such shares shall be convertible and all other terms and
conditions upon which such conversion may be made.
(vii) Restrictions on the issuance of shares of the same series or of any
other class or series.
(viii) The voting rights of the holders of shares of the series subject to the
limitations contained in this Section 5.3.
(ix) Any other relative rights, preferences and limitations on that series.
Subject to the express provisions of any other series of Preferred
Shares then outstanding, and notwithstanding any other provision of these
Articles of Incorporation, the Board of Directors may increase or decrease (but
not below the number of shares of such series then outstanding) the number of
shares, or alter the designation or classify or reclassify any unissued shares
of a particular series of Preferred Shares, by fixing or altering, in one or
more respects, from time to time before issuing the shares, the terms, rights,
restrictions and qualifications of the shares of any such series of Preferred
Shares.
5.4 General Nature of Shares.
All Shares shall be personal property entitling the Stockholders only
to those rights provided in these Articles of Incorporation, the MGCL or in the
resolution creating any class or series of Shares. The legal ownership of the
Company Property and the right to conduct the business of the Company are vested
exclusively in the Directors; the Stockholders shall have no interest therein
other than the beneficial interest in the Company conferred by their Shares and
shall have no right to compel any partition, division, dividend or Distribution
of the Company or any of the Company Property. The death of a Stockholder shall
not terminate the Company or give his legal representative any rights against
other Stockholders, the Directors or the Company Property, except the right,
exercised in accordance with applicable provisions of the Bylaws, to require the
Company to reflect on its books the change in ownership of the Shares. Holders
of Shares shall not have any preemptive or other right to purchase or subscribe
for any class of securities of the Company which the Company may at any time
issue or sell.
5.5 No Issuance Of Share Certificates.
The Company shall not issue share certificates. A Stockholder's
investment shall be recorded on the books of the Company. To transfer his or her
Shares a Stockholder shall submit an executed form to the Company, which form
shall be provided by the Company upon request. Such transfer will also be
recorded on the books of the Company. Upon issuance or transfer of shares, the
Company will provide the Stockholder with information concerning his or her
rights with regard to such stock, in a form substantially similar to Section
5.6(xii), and required by the Bylaws and the MGCL or other applicable law.
5.6 Restrictions On Ownership and Transfer.
(i) Definitions. For purposes of Sections 5.6 and 5.7, the following terms
shall have the following meanings:
"Acquire" means the acquisition of Beneficial or Constructive Ownership
of Equity Shares by any means, including, without limitation, the exercise of
any rights under any option, warrant, convertible security, pledge or other
security interest or similar right to acquire shares, but shall not include the
acquisition of any such rights unless, as a result, the acquiror would be
considered a Beneficial Owner or Constructive Owner. The terms "Acquires" and
"Acquisition" shall have correlative meanings.
"Beneficial Ownership" means ownership of Shares by an individual who
would be treated as an owner of such Shares 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. For purposes of this
definition, the term "individual" shall include any organization, trust, or
other entity that is treated as an individual for purposes of Section 542(a)(2)
of the Code. The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially
Owned" shall have correlative meanings.
"Beneficiary" means a beneficiary of the Excess Shares Trust as
determined pursuant to Section 5.7(i) hereof.
"Closing Price" on any day shall mean the last sale price, regular way
on such day, or, if no such sale takes place on that day, the average of the
closing bid and asked prices, regular way, in either case as reported on the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange, or if the affected
class or series of Equity Shares are not so listed or admitted to trading, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange (including
the National Market System of the National Association of Securities Dealers,
Inc. Automated Quotation System) on which the affected class or series of Equity
Shares are listed or admitted to trading, or, if the affected class or series of
Equity Shares are not so listed or admitted to trading, the last quoted price
or, if not quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or, if such system is no longer in use,
the principal automated quotation system then in use, or, if the affected class
or series of Equity Shares are not so quoted by any such system, the average of
the closing bid and asked prices as furnished by a professional market maker
selected by the Board of Directors making a market in the affected class or
series of Equity Shares, or, if there is no such market maker or such closing
prices otherwise are not available, the fair market value of the affected class
or series of Equity Shares as of such day, as determined by the Board of
Directors in its discretion.
"Common Share Ownership Limit" means, with respect to the Common
Shares, nine point eight percent (9.8%) of the outstanding Common Shares,
subject to adjustment pursuant to Section 5.6(x) (but not more than nine point
nine percent (9.9%) of the outstanding Common Shares, as so adjusted) and to the
limitations contained in Section 5.6(xi).
"Constructive Ownership" means ownership of Equity Shares by a Person
who would be treated as an owner of such Equity Shares, either actually or
constructively, directly or indirectly, through the application of Section 318
of the Code, as modified by Section 856(d)(5) thereof. The terms "Constructive
Owner," "Constructively Owns" and "Constructively Owned" shall have correlative
meanings.
"Excess Shares Trust" means the trust created pursuant to Section 5.7
(i) hereof.
"Excess Shares Trustee" means the Company as trustee for the Excess
Shares Trust, and any successor trustee appointed by the Company.
"Market Price" means, until the Equity Shares are listed for trading on
an exchange or market, a price determined on the basis of the quarterly
valuation of the Company's assets. Upon listing of the Shares, market price
shall mean the average of the Closing Prices for the ten (10) consecutive
Trading Days immediately preceding such day (or those days during such ten (10)
Trading Day period for which Closing Prices are available).
"Ownership Limit" means the Common Share Ownership Limit or the
Preferred Share Ownership Limit, or both, as the context may require.
"Preferred Share Ownership Limit" means, with respect to the Preferred
Shares, nine point eight percent (9.8%) of the outstanding shares of a
particular series of Preferred Shares of the Company, subject to adjustment
pursuant to Section 5.6(x) (but not more than nine point nine percent (9.9%) of
the outstanding Preferred Shares, as so adjusted) and to the limitations
contained in this Section 5.6.
"Purported Beneficial Holder" means, with respect to any event or
transaction other than a purported Transfer or Acquisition which results in
Excess Shares, the Person for whom the applicable Purported Record Holder held
the Equity Shares that were, pursuant to Section 5.6(iii), automatically
exchanged for Excess Shares upon the occurrence of such event or transaction.
The Purported Beneficial Holder and the Purported Record Holder may be the same
Person.
"Purported Beneficial Transferee" means, with respect to any purported
Transfer or Acquisition which results in Excess Shares, the purported beneficial
transferee for whom the Purported Record Transferee would have acquired Equity
Shares if such Transfer or Acquisition which results in Excess Shares had been
valid under Section 5.6(ii). The Purported Beneficial Transferee and the
Purported Record Transferee may be the same Person.
"Purported Record Holder" means, with respect to any event or
transaction other than a purported Transfer or Acquisition which results in
Excess Shares, the record holder of the Equity Shares that were, pursuant to
Section 5.6(iii), automatically exchanged for Excess Shares upon the occurrence
of such an event or transaction. The Purported Record Holder and the Purported
Beneficial Holder may be the same Person.
"Purported Record Transferee" means, with respect to any purported
Transfer or Acquisition which results in Excess Shares, the record holder of the
Equity Shares if such Transfer or Acquisition which results in Excess Shares had
been valid under Section 5.6(ii). The Purported Record Transferee and the
Purported Beneficial Transferee may be the same Person.
"Restriction Termination Date" means the first day on which the Board
of Directors of the Company determines, pursuant to Section 3.2(xxiii) hereof,
that it is no longer in the best interests of the Company to attempt or continue
to qualify as REIT.
"Trading Day" means a day on which the principal national securities
exchange on which the affected class or series of Equity Shares are listed or
admitted to trading is open for the transaction of business or, if the affected
class or series of Equity Shares are not listed or admitted to trading, shall
mean any day other than a Saturday, Sunday or other day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
"Transfer" means any sale, transfer, gift, hypothecation, assignment,
devise or other disposition of a direct or indirect interest in Equity Shares or
the right to vote or receive dividends on Equity Shares (including (i) the
granting of any option (including any option to acquire an option or any series
of such options) or entering into any agreement for the sale, transfer or other
disposition of Equity Shares or the right to vote or receive dividends on Equity
Shares or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Equity Shares, whether
voluntary or involuntary, of record, constructively or beneficially, and whether
by operation of law or otherwise. The terms "Transfers," "Transferred" and
"Transferable" shall have correlative meanings.
(ii) Ownership and Transfer Limitations.
(a) Notwithstanding any other provision of these Articles of
Incorporation, except as provided in Section 5.6(ix) and Section
5.8, prior to the Restriction Termination Date, no Person shall
Beneficially or Constructively Own Equity Shares in excess of the
Common or Preferred Share Ownership Limit.
(b) Notwithstanding any other provision of these Articles of
Incorporation, except as provided in Section 5.6(ix) and Section
5.8, prior to the Restriction Termination Date, any Transfer,
Acquisition, change in the capital structure of the Company,
other purported change in Beneficial or Constructive Ownership of
Equity Shares or other event or transaction that, if effective,
would result in any Person Beneficially or Constructively Owning
Equity Shares in excess of the Common or Preferred Share
Ownership Limit shall be void ab initio as to the Transfer,
Acquisition, change in the capital structure of the Company,
other purported change in Beneficial or Constructive Ownership or
other event or transaction with respect to that number of Equity
Shares which would otherwise be Beneficially or Constructively
Owned by such Person in excess of the Common or Preferred Share
Ownership Limit, and none of the Purported Beneficial Transferee,
the Purported Record Transferee, the Purported Beneficial Holder
or the Purported Record Holder shall acquire any rights in that
number of Equity Shares.
(c) Notwithstanding any other provision of these Articles of
Incorporation, and except as provided in Section 5.8, prior to
the Restriction Termination Date, any Transfer, Acquisition,
change in the capital structure of the Company, or other
purported change in Beneficial or Constructive Ownership
(including actual ownership) of Equity Shares or other event or
transaction that, if effective, would result in the Equity Shares
being actually owned by fewer than 100 Persons (determined
without reference to any rules of attribution) shall be void ab
initio as to the Transfer, Acquisition, change in the capital
structure of the Company, other purported change in Beneficial or
Constructive Ownership (including actual ownership) with respect
to that number of Equity Shares which otherwise would be owned by
the transferee, and the intended transferee or subsequent owner
(including a Beneficial Owner or Constructive Owner) shall
acquire no rights in that number of Equity Shares.
(d) Notwithstanding any other provision of these Articles of
Incorporation, except as provided in Section 5.8, prior to the
Restriction Termination Date, any Transfer, Acquisition, change
in the capital structure of the Company, other purported change
in Beneficial or Constructive Ownership of Equity Shares or other
event or transaction that, if effective, would cause the Company
to fail to qualify as a REIT by reason of being "closely held"
within the meaning of Section 856(h) of the Code or otherwise,
directly or indirectly, would cause the Company to fail to
qualify as a REIT shall be void ab initio as to the Transfer,
Acquisition, change in the capital structure of the Company,
other purported change in Beneficial or Constructive Ownership or
other event or transaction with respect to that number of Equity
Shares which would cause the Company to be "closely held" within
the meaning of Section 856(h) of the Code or otherwise, directly
or indirectly, would cause the Company to fail to qualify as a
REIT, and none of the Purported Beneficial Transferee, the
Purported Record Transferee, the Purported Beneficial Holder or
the Purported Record Holder shall acquire any rights in that
number of Equity Shares.
(e) Notwithstanding any other provision of these Articles of
Incorporation, except as provided in Section 5.8, prior to the
Restriction Termination Date, any Transfer, Acquisition, change
in capital structure of the Company, or other purported change in
Beneficial or Constructive Ownership of Equity Shares or other
event or transaction that, if effective, would (i) cause the
Company to own (directly or Constructively) an interest in a
tenant that is described in Section 856(d)(2)(B) of the Code and
(ii) cause the Company to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code, shall be void ab
initio as to the Transfer, Acquisition, change in capital
structure of the Company, other purported change in Beneficial or
Constructive Ownership or other event or transaction with respect
to that number of Equity Shares which would cause the Company to
own an interest (directly or Constructively) in a tenant that is
described in Section 856(d)(2)(B) of the Code, and none of the
Purported Beneficial Transferee, the Purported Record Transferee,
the Purported Beneficial Holder or the Purported Record Holder
shall acquire any rights in that number of Equity Shares.
(iii) Exchange for Excess Shares.
(a) If, notwithstanding the other provisions contained in this
Article V, at any time prior to the Restriction Termination Date,
there is a purported Transfer, Acquisition, change in the capital
structure of the Company, other purported change in the
Beneficial or Constructive Ownership of Equity Shares or other
event or transaction such that any Person would either
Beneficially or Constructively Own Equity Shares in excess of the
Common or Preferred Share Ownership Limit, then, except as
otherwise provided in Section 5.6(ix), such Equity Shares
(rounded up to the next whole number of shares) in excess of the
Common or Preferred Share Ownership Limit automatically shall be
exchanged for an equal number of Excess Shares having terms,
rights, restrictions and qualifications identical thereto, except
to the extent that this Article V requires different terms. Such
exchange shall be effective as of the close of business on the
business day next preceding the date of the purported Transfer,
Acquisition, change in capital structure, other change in
purported Beneficial or Constructive Ownership of Equity Shares,
or other event or transaction.
(b) If, notwithstanding the other provisions contained in this
Article V, at any time prior to the Restriction Termination Date,
there is a purported Transfer, Acquisition, change in the capital
structure of the Company, other purported change in the
Beneficial or Constructive Ownership of Equity Shares or other
event or transaction which, if effective, would result in a
violation of any of the restrictions described in subparagraphs
(b), (c), (d) and (e) of Section 5.6(ii) or, directly or
indirectly, would cause the Company for any reason to fail to
qualify as a REIT by reason of being "closely held" within the
meaning of Section 856(h) of the Code, or otherwise, directly or
indirectly, would cause the Company to fail to qualify as a REIT,
then the Equity Shares (rounded up to the next whole number of
shares) being Transferred or which are otherwise affected by the
change in capital structure or other purported change in
Beneficial or Constructive Ownership and which, in any case,
would cause the Company to be "closely held" within the meaning
of such Section 856(h) or otherwise would cause the Company to
fail to qualify as a REIT automatically shall be exchanged for an
equal number of Excess Shares having terms, rights, restrictions
and qualifications identical thereto, except to the extent that
this Article V requires different terms. Such exchange shall be
effective as of the close of business on the business day prior
to the date of the purported Transfer, Acquisition, change in
capital structure, other purported change in Beneficial or
Constructive Ownership or other event or transaction.
(iv) Remedies For Breach. If the Board of Directors or its designee shall
at any time determine in good faith that a Transfer, Acquisition,
change in the capital structure of the Company or other purported
change in Beneficial or Constructive Ownership or other event or
transaction has taken place in violation of Section 5.6(ii) or that a
Person intends to Acquire or has attempted to Acquire Beneficial or
Constructive Ownership of any Equity Shares in violation of this
Section 5.6, 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, Acquisition, change in the capital structure of the
Company, other attempt to Acquire Beneficial or Constructive Ownership
of any Equity Shares or other event or transaction, including, but not
limited to, refusing to give effect thereto on the books of the
Company or instituting injunctive proceedings with respect thereto;
provided, however, that any Transfer, Acquisition, change in the
capital structure of the Company, attempted Transfer or other attempt
to Acquire Beneficial or Constructive Ownership of any Equity Shares
or other event or transaction in violation of subparagraphs (b), (c),
(d) and (e) of Section 5.6(ii) (as applicable) shall be void ab initio
and where applicable automatically shall result in the exchange
described in Section 5.6(iii), irrespective of any action (or
inaction) by the Board of Directors or its designee.
(v) Notice of Restricted Transfer. Any Person who acquires or attempts to
Acquire Beneficial or Constructive Ownership of Equity Shares in
violation of Section 5.6(ii) and any Person who Beneficially or
Constructively Owns Excess Shares as a transferee of Equity Shares
resulting in an exchange for Excess Shares, pursuant to Section
5.6(iii), or otherwise shall immediately give written notice to the
Company, or, in the event of a proposed or attempted Transfer,
Acquisition, or purported change in Beneficial or Constructive
Ownership, shall give at least fifteen (15) days prior written notice
to the Company, of such event and shall promptly provide to the
Company such other information as the Company, in its sole discretion,
may request in order to determine the effect, if any, of such
Transfer, attempted Transfer, Acquisition, Attempted Acquisition or
purported change in Beneficial or Constructive Ownership on the
Company's status as a REIT.
(vi) Owners Required To Provide Information. Prior to the Restriction
Termination Date:
(a) Every Beneficial or Constructive Owner of more than five percent
(5%), or such lower percentages as determined pursuant to
regulations under the Code or as may be requested by the Board of
Directors, in its sole discretion, of the outstanding shares of
any class or series of Equity Shares of the Company shall
annually, no later than January 31 of each calendar year, give
written notice to the Company stating (i) the name and address of
such Beneficial or Constructive Owner; (ii) the number of shares
of each class or series of Equity Shares Beneficially or
Constructively Owned; and (iii) a description of how such shares
are held. Each such Beneficial or Constructive Owner promptly
shall provide to the Company such additional information as the
Company, in its sole discretion, may request in order to
determine the effect, if any, of such Beneficial or Constructive
Ownership on the Company's status as a REIT and to ensure
compliance with the Common or Preferred Share Ownership Limit and
other restrictions set forth herein.
(b) Each Person who is a Beneficial or Constructive Owner of Equity
Shares and each Person (including the Stockholder of record) who
is holding Equity Shares for a Beneficial or Constructive Owner
promptly shall provide to the Company such information as the
Company, in its sole discretion, may request in order to
determine the Company's status as a REIT, to comply with the
requirements of any taxing authority or other governmental
agency, to determine any such compliance or to ensure compliance
with the Common or Preferred Share Ownership Limit and other
restrictions set forth herein.
(vii) Remedies Not Limited. Nothing contained in this Article V except
Section 5.8 shall limit scope or application of the provisions of this
Section 5.6, the ability of the Company to implement or enforce
compliance with the terms thereof or the authority of the Board of
Directors to take any such other action or actions as it may deem
necessary or advisable to protect the Company and the interests of its
Stockholders by preservation of the Company's status as a REIT and to
ensure compliance with the Ownership Limits for each class or series of
Equity Shares and other restrictions set forth herein, including,
without limitation, refusal to give effect to a transaction on the
books of the Company.
(viii) Ambiguity. In the case of an ambiguity in the application of any of the
provisions of this Section 5.6, including any definition contained in
Sections 1.5 and 5.6(i), the Board of Directors shall have the power
and authority, in its sole discretion, to determine the application of
the provisions of this Section 5.6 with respect to any situation based
on the facts known to it.
(ix) Exception. The Board of Directors, upon receipt of a ruling from the
Internal Revenue Service, an opinion of counsel or other evidence
satisfactory to the Board of Directors, in its sole discretion, in each
case to the effect that the restrictions contained in subparagraphs
(c), (d) and (e) of Section 5.6(ii) will not be violated, may waive or
change, in whole or in part, the application of the Common or Preferred
Share Ownership Limit with respect to any Person that is not an
individual, as such term is defined in Section 542(a)(2) of the Code.
In connection with any such waiver or change, the Board of Directors
may require such representations and undertakings from such Person or
Affiliates and may impose such other conditions as the Board deems
necessary, advisable or prudent, in its sole discretion, to determine
the effect, if any, of the proposed transaction or ownership of Equity
Shares on the Company's status as a REIT.
(x) Increase in Common or Preferred Share Ownership Limit. Subject to the
limitations contained in Section 5.6(xi), the Board of Directors may
from time to time increase the Common or Preferred Share Ownership
Limit.
(xi) Limitations on Modifications.
(a) The Ownership Limit for a class or series of Equity Shares may
not be increased and no additional ownership limitations may be
created if, after giving effect to such increase or creation, the
Company would be "closely held" within the meaning of Section
856(h) of the Code (assuming ownership of shares of Equity Shares
by all Persons equal to the greatest of (A) the actual ownership,
(B) the Beneficial Ownership of Equity Shares by each Person, or
(C) the applicable Ownership Limit with respect to such Person.
(b) Prior to any modification of the Ownership Limit with respect to
any Person, the Board of Directors may require such opinions of
counsel, affidavits, undertakings or agreements as it may deem
necessary, advisable or prudent, in its sole discretion, in order
to determine or ensure the Company's status as a REIT.
(c) Neither the Preferred Share Ownership Limit nor the Common Share
Ownership Limit may be increased to a percentage that is greater
than nine point nine percent (9.9%).
(xii) Notice to Stockholders Upon Issuance or Transfer. Upon issuance or
transfer of Shares, the Company shall provide the recipient with a
notice containing information about the shares purchased or otherwise
transferred, in lieu of issuance of a share certificate, in a form
substantially similar to the following:
"The securities issued or transferred are subject to restrictions on
transfer and ownership for the purpose of maintenance of the Company's status as
a real estate investment trust (a "REIT") under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"). Except as otherwise
provided pursuant to the Articles of Incorporation of the Company, no Person may
(i) Beneficially or Constructively Own Common Shares of the Company in excess of
9.8% (or such greater percent as may be determined by the Board of Directors of
the Company) of the outstanding Common Shares; (ii) Beneficially or
Constructively Own shares of any series of Preferred Shares of the Company in
excess of 9.8% of the outstanding shares of such series of Preferred Shares; or
(iii) Beneficially or Constructively Own Common Shares or Preferred Shares (of
any class or series) which would result in the Company being "closely held"
under Section 856(h) of the Code or which otherwise would cause the Company to
fail to qualify as a REIT. Any Person who has Beneficial or Constructive
Ownership, or who Acquires or attempts to Acquire Beneficial or Constructive
Ownership of Common Shares and/or Preferred Shares in excess of the above
limitations and any Person who Beneficially or Constructively Owns Excess Shares
as a transferee of Common or Preferred Shares resulting in an exchange for
Excess Shares (as described below) immediately must notify the Company in
writing or, in the event of a proposed or attempted Transfer or Acquisition or
purported change in Beneficial or Constructive Ownership, must give written
notice to the Company at least 15 days prior to the proposed or attempted
transfer, transaction or other event. Any Transfer or Acquisition of Common
Shares and/or Preferred Shares or other event which results in violation of the
ownership or transfer limitations set forth in the Company's Articles of
Incorporation shall be void ab initio and the Purported Beneficial and Record
Transferee shall not have or acquire any rights in such Common Shares and/or
Preferred Shares. If the transfer and ownership limitations referred to herein
are violated, the Common Shares or Preferred Shares represented hereby
automatically will be exchanged for Excess Shares to the extent of violation of
such limitations, and such Excess Shares will be held in trust by the Company,
all as provided by the Articles of Incorporation of the Company. All defined
terms used in this legend have the meanings identified in the Company's Articles
of Incorporation, as the same may be amended from time to time, a copy of which,
including the restrictions on transfer, will be sent without charge to each
Stockholder who so requests."
5.7 Excess Shares.
(i) Ownership In Trust. Upon any purported Transfer, Acquisition, change in
the capital structure of the Company, other ---------------------------
purported change in Beneficial or Constructive Ownership or event or
transaction that results in Excess Shares pursuant to Section 5.6(iii),
such Excess Shares shall be deemed to have been transferred to the
Company, as Excess Shares Trustee of an Excess Shares Trust for the
benefit of such Beneficiary or Beneficiaries to whom an interest in
such Excess Shares may later be transferred pursuant to Section 5.6(v).
Excess Shares so held in trust shall be issued and outstanding stock of
the Company. The Purported Record Transferee (or Purported Record
Holder) shall have no rights in such Excess Shares except the right to
designate a transferee of such Excess Shares upon the terms specified
in Section 5.6(v). The Purported Beneficial Transferee shall have no
rights in such Excess Shares except as provided in Section 5.7(iii) and
(v).
(ii) Distribution Rights. Excess Shares shall not be entitled to any
dividends or Distributions (except as provided in Section 5.7(iii)).
Any dividend or Distribution paid prior to the discovery by the Company
that the Equity Shares have been exchanged for Excess Shares shall be
repaid to the Company upon demand, and any dividend or Distribution
declared but unpaid at the time of such discovery shall be void ab
initio with respect to such Excess Shares.
(iii) Rights Upon Liquidation.
(a) Except as provided below, in the event of any voluntary or
involuntary liquidation, dissolution or winding up, or any other
distribution of the assets, of the Company, each holder of Excess
Shares resulting from the exchange of Preferred Shares of any
specified series shall be entitled to receive, ratably with each
other holder of Excess Shares resulting from the exchange of
Preferred Shares of such series and each holder of Preferred
Shares of such series, such accrued and unpaid dividends,
liquidation preferences and other preferential payments, if any,
as are due to holders of Preferred Shares of such series. In the
event that holders of shares of any series of Preferred Shares
are entitled to participate in the Company's distribution of its
residual assets, each holder of Excess Shares resulting from the
exchange of Preferred Shares of any such series shall be entitled
to participate, ratably with (A) each other holder of Excess
Shares resulting from the exchange of Preferred Shares of all
series entitled to so participate; (B) each holder of Preferred
Shares of all series entitled to so participate; and (C) each
holder of Common Shares and Excess Shares resulting from the
exchange of Common Shares (to the extent permitted by Section
5.6(iii) hereof), that portion of the aggregate assets available
for distribution (determined in accordance with applicable law)
as the number of shares of such Excess Shares held by such holder
bears to the total number of (1) outstanding Excess Shares
resulting from the exchange of Preferred Shares of all series
entitled to so participate; (2) outstanding Preferred Shares of
all series entitled to so participate; and (3) outstanding Common
Shares and Excess Shares resulting from the exchange of Common
Shares. The Company, as holder of the Excess Shares in trust, or,
if the Company shall have been dissolved, any trustee appointed
by the Company prior to its dissolution, shall distribute ratably
to the Beneficiaries of the Excess Shares Trust, when determined,
any such assets received in respect of the Excess Shares in any
liquidation, dissolution or winding up, or any distribution of
the assets, of the Company. Anything to the contrary herein
notwithstanding, in no event shall the amount payable to a holder
with respect to Excess Shares resulting from the exchange of
Preferred Shares exceed (A) the price per share such holder paid
for the Preferred Shares in the purported Transfer, Acquisition,
change in capital structure or other transaction or event that
resulted in the Excess Shares or (B) if the holder did not give
full value for such Excess Shares (as through a gift, devise or
other event or transaction), a price per share equal to the
Market Price for the shares of Preferred Shares on the date of
the purported Transfer, Acquisition, change in capital structure
or other transaction or event that resulted in such Excess
Shares. Any amount available for distribution in excess of the
foregoing limitations shall be paid ratably to the holders of
Preferred Shares and Excess Shares resulting from the exchange of
Preferred Shares to the extent permitted by the foregoing
limitations.
(b) Except as provided below, in the event of any voluntary or
involuntary liquidation, dissolution or winding up, or any other
distribution of the assets, of the Company, each holder of Excess
Shares resulting from the exchange of Common Shares shall be
entitled to receive, ratably with (A) each other holder of such
Excess Shares and (B) each holder of Common Shares, that portion
of the aggregate assets available for distribution to holders of
Common Shares (including holders of Excess Shares resulting from
the exchange of Common Shares pursuant to Section 5.6(iii)),
determined in accordance with applicable law, as the number of
such Excess Shares held by such holder bears to the total number
of outstanding Common Shares and outstanding Excess Shares
resulting from the exchange of Common Shares then outstanding.
The Company, as holder of the Excess Shares in trust, or, if the
Company shall have been dissolved, any trustee appointed by the
Company prior to its dissolution, shall distribute ratably to the
Beneficiaries of the Excess Shares, when determined, any such
assets received in respect of the Excess Shares in any
liquidation, dissolution or winding up, or any distribution of
the assets, of the Company. Anything herein to the contrary
notwithstanding, in no event shall the amount payable to a holder
with respect to Excess Shares exceed (A) the price per share such
holder paid for the Equity Shares in the purported Transfer,
Acquisition, change in capital structure or other transaction or
event that resulted in the Excess Shares or (B) if the holder did
not give full value for such Equity Shares (as through a gift,
devise or other event or transaction), a price per share equal to
the Market Price for the Equity Shares on the date of the
purported Transfer, Acquisition, change in capital structure or
other transaction or event that resulted in such Excess Shares.
Any amount available for distribution in excess of the foregoing
limitations shall be paid ratably to the holders of Common Shares
and Excess Shares resulting from the exchange of Common Shares to
the extent permitted by the foregoing limitations.
(iv) Voting Rights. The holders of Excess Shares shall not be entitled to
vote on any matters (except as required by the MGCL).
(v) Restrictions on Transfer; Designation of Beneficiary.
(a) Excess Shares shall not be transferable. The Purported Record
Transferee (or Purported Record Holder) may freely designate a
Beneficiary of its interest in the Excess Shares Trust
(representing the number of Excess Shares held by the Excess
Shares Trust attributable to the purported Transfer or
Acquisition that resulted in the Excess Shares), if (A) the
Excess Shares held in the Excess Shares Trust would not be Excess
Shares in the hands of such Beneficiary and (B) the Purported
Beneficial Transferee (or Purported Beneficial Holder) does not
receive a price for designating such Beneficiary that reflects a
price per share for such Excess Shares that exceeds (1) the price
per share such Purported Beneficial Transferee (or Purported
Beneficial Holder) paid for the Equity Shares in the purported
Transfer, Acquisition, change in capital structure, or other
transaction or event that resulted in the Excess Shares or (2) if
the Purported Beneficial Transferee (or Purported Beneficial
Holder) did not give value for such Excess Shares (as through a
gift, devise or other event or transaction), a price per share
equal to the Market Price for the Equity Shares on the date of
the purported Transfer, Acquisition, change in capital structure,
or other transaction or event that resulted in the Excess Shares.
Upon such transfer of an interest in the Excess Shares Trust, the
corresponding Excess Shares in the Excess Shares Trust
automatically shall be exchanged for an equal number of Equity
Shares (depending on the type and class of Shares that were
originally exchanged for such Excess Shares), and such Equity
Shares shall be transferred of record to the Beneficiary of the
interest in the Excess Shares Trust designated by the Purported
Record Transferee (or Purported Record Holder), as described
above, if such Equity Shares would not be Excess Shares in the
hands of such Beneficiary. Prior to any transfer of any interest
in the Excess Shares Trust, the Purported Record Transferee (or
Purported Record Holder) must give advance written notice to the
Company of the intended transfer and the Company must have waived
in writing its purchase rights under Section 5.7(vi).
(b) Notwithstanding the foregoing, if a Purported Beneficial
Transferee (or Purported Beneficial Holder) receives a price for
designating a Beneficiary of an interest in the Excess Shares
Trust that exceeds the amounts allowable under subparagraph (i)
of this Section 5.6(v), such Purported Beneficial Transferee (or
Purported Beneficial Holder) shall pay, or cause the Beneficiary
of the interest in the Excess Shares Trust to pay, such excess in
full to the Company.
(c) If any of the transfer restrictions set forth in this Section
5.6(v), or any application thereof, are determined to be void,
invalid or unenforceable by any court having jurisdiction over
the issue, the Purported Record Transferee (or Purported Record
Holder) may be deemed, at the option of the Company, to have
acted as the agent of the Company in acquiring the Excess Shares
as to which such restrictions would otherwise, by their terms,
apply and to hold such Excess Shares on behalf of the Company.
(vi) Purchase Right in Excess Shares. Excess Shares shall be deemed to have
been offered for sale to the Company, or its designee, at a price per
share equal to the lesser of (i) the price per share in the
transaction that created such Excess Shares (or, in the case of devise
or gift or event other than a Transfer or Acquisition which results in
the issuance of Excess Shares, the Market Price at the time of such
devise or gift or event other than a Transfer or Acquisition which
results in the issuance of Excess Shares) and (ii) the Market Price of
the Equity Shares exchanged for such Excess Shares on the date the
Company, or its designee, accepts such offer. The Company and its
assignees shall have the right to accept such offer for a period of
ninety (90) days after the later of (i) the date of the purported
Transfer, Acquisition, change in capital structure of the Company,
purported change in Beneficial Ownership or other event or transaction
which resulted in such Excess Shares and (ii) the date on which the
Board of Directors determines in good faith that a Transfer,
Acquisition, change in capital structure of the Company, purported
change in Beneficial or Constructive Ownership resulting in Excess
Shares has occurred, if the Company does not receive a notice pursuant
to Section 5.6(v), but in no event later than a permitted Transfer
pursuant to and in compliance with the terms of Section 5.7(v).
(vii) Remedies Not Limited. Nothing contained in this Article V except
Section 5.8 shall limit scope or application of the provisions of this
Section 5.7, the ability of the Company to implement or enforce
compliance with the terms hereof or the authority of the Board of
Directors to take any such other action or actions as it may deem
necessary or advisable to protect the Company and the interests of its
Stockholders by preservation of the Company's status as a REIT and to
ensure compliance with applicable Share Ownership Limits and the other
restrictions set forth herein, including, without limitation, refusal
to give effect to a transaction on the books of the Company.
(viii) Authorization. At such time as the Board of Directors authorizes a
series of Preferred Shares pursuant to Section 5.3 of this Article V,
without any further or separate action of the Board of Directors, there
shall be deemed to be authorized a series of Excess Shares consisting
of the number of shares included in the series of Preferred Shares so
authorized and having terms, rights, restrictions and qualifications
identical thereto, except to the extent that such Excess Shares are
already authorized or this Article V requires different terms.
5.8 Settlements.
Nothing in Sections 5.6 and 5.7 or in any other provision of these
Articles of Incorporation shall preclude the settlement of any transaction with
respect to the Common Shares entered into through the facilities of the New York
Stock Exchange or other national securities exchange on which the Common Shares
are listed.
5.9 Severability.
If any provision of this Article V 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 of this Article V 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.
5.10 Waiver.
The Company shall have authority at any time to waive the requirements
that Excess Shares be issued or be deemed outstanding in accordance with the
provisions of this Article V if the Company determines, based on an opinion of
nationally recognized tax counsel, that the issuance of such Excess Shares or
the fact that such Excess Shares are deemed to be outstanding, would jeopardize
the status of the Company as a REIT (as that term is defined in Section 1.5).
Article VI :
STOCKHOLDERS
6.1 Meetings of Stockholders.
There shall be an annual meeting of the Stockholders, to be held at
such time and place as shall be determined by or in the manner prescribed in the
Bylaws, at which the Directors shall be elected and any other proper business
may be conducted. The annual meeting will be held at a location convenient to
the Stockholders, on a date which is a reasonable period of time following the
distribution of the Company's annual report to Stockholders but not less than
thirty (30) days after delivery of such report. A majority of Stockholders
present in person or by proxy at an annual meeting at which a quorum is present,
may, without the necessity for concurrence by the Directors, vote to elect the
Directors. Special meetings of Stockholders may be called in the manner provided
in the Bylaws, including at any time by Stockholders holding, in the aggregate,
not less than ten percent (10%) of the outstanding Equity Shares entitled to be
cast on any issue proposed to be considered at any such special meeting. If
there are no Directors, the officers of the Company shall promptly call a
special meeting of the Stockholders entitled to vote for the election of
successor Directors. Any meeting may be adjourned and reconvened as the
Directors determine or as provided by the Bylaws.
6.2 Voting Rights of Stockholders.
Subject to the provisions of any class or series of Shares then
outstanding and the mandatory provisions of any applicable laws or regulations,
the Stockholders shall be entitled to vote only on the following matters; (a)
election or removal of Directors as provided in Sections 2.3, 2.5 and 6.1
hereof; (b) amendment of these Articles of Incorporation as provided in Section
8.1 hereof; (c) termination of the Company as provided in Section 9.2 hereof;
(d) reorganization of the Company as provided in Section 8.2 hereof; (e) merger,
consolidation or sale or other disposition of all or substantially all of the
Company Property, as provided in Section 8.3 hereof; and (f) termination of the
Company's status as a real estate investment trust under the REIT Provisions of
the Code, as provided in Section 3.2(xxiii) hereof. The Stockholders may
terminate the status of the Company as a REIT under the Code by a vote of
two-thirds of the Shares outstanding and entitled to vote. Except with respect
to the foregoing matters, no action taken by the Stockholders at any meeting
shall in any way bind the Directors.
6.3 Stockholder Action to be Taken by Meeting.
Any action required or permitted to be taken by the Stockholders of the
Company must be effected at a duly called annual or special meeting of
Stockholders of the Company and may not be effected by any consent in writing of
such Stockholders.
6.4 Right of Inspection.
Any Stockholder and any designated representative thereof shall be
permitted access to all records of the Company at all reasonable times, and may
inspect and copy any of them for a reasonable charge. Inspection of the Company
books and records by the office or agency administering the securities laws of a
jurisdiction shall be provided upon reasonable notice and during normal business
hours.
6.5 Access to Stockholder List.
An alphabetical list of the names, addresses and telephone numbers of
the Stockholders of the Company, along with the number of Shares held by each of
them (the "Stockholder List"), shall be maintained as part of the books and
records of the Company and shall be available for inspection by any Stockholder
or the Stockholder's designated agent at the home office of the Company upon the
request of the Stockholder. The Stockholder List shall be updated at least
quarterly to reflect changes in the information contained therein and a copy of
such list shall be mailed to any Stockholder so requesting within ten (10) days
of the request. The Company may impose a reasonable charge for expenses incurred
in reproduction pursuant to the Stockholder request. A Stockholder may request a
copy of the Stockholder List in connection with matters relating to
Stockholders' voting rights, and the exercise of Stockholder rights under
federal proxy laws. The Company may require the Stockholder requesting the
Stockholder List to represent that the list is not requested for a commercial
purpose unrelated to the Stockholder's interest in the Company. The Company may
impose a reasonable charge for expenses incurred in reproducing such Stockholder
List. The Stockholder List may not be used for commercial purposes.
If the Directors neglect or refuse to exhibit, produce or mail a copy
of the Stockholder List as requested, the Directors shall be liable to any
Stockholder requesting the list for the costs, including attorneys' fees,
incurred by that Stockholder for compelling the production of the Stockholder
List, and for actual damages suffered by any Stockholder by reason of such
refusal or neglect. It shall be a defense that the actual purpose and reason for
the requests for inspection or for a copy of the Stockholder List is to secure
such list of Stockholders or other information for the purpose of selling such
list or copies thereof, or of using the same for a commercial purpose other than
in the interest of the applicant as a Stockholder relative to the affairs of the
Company. The remedies provided hereunder to Stockholders requesting copies of
the Stockholder List are in addition, to and shall not in any way limit, other
remedies available to Stockholders under federal law, or the laws of any state.
6.6 Reports.
The Directors shall take reasonable steps to insure that the Company
shall cause to be prepared and mailed or delivered to each Stockholder as of a
record date after the end of the fiscal year and each holder of other publicly
held securities of the Company an annual report for each fiscal year in
accordance with the requirements of the Securities and Exchange Commission and
the national securities exchange or over-the-counter market on which the
Company's Securities are listed.
Article VII :
LIABILITY; TRANSACTIONS BETWEEN AFFILIATES AND THE COMPANY
7.1 Limitation of Stockholder Liability.
No Stockholder shall be liable for any debt, claim, demand, judgment or
obligation of any kind of, against or with respect to the Company by reason of
his being a Stockholder, nor shall any Stockholder be subject to any personal
liability whatsoever, in tort, contract or otherwise, to any Person in
connection with the Company Property or the affairs of the Company by reason of
his being a Stockholder. The Company shall include a clause in its contracts
which provides that Stockholders shall not be personally liable for obligations
entered into on behalf of the Company.
7.2 Exculpation.
To the maximum extent that Maryland law in effect from time to time
permits limitation of the liability of directors and officers, no director or
officer of the Company shall be liable to the Company or any of the Stockholders
for money damages. Neither the amendment nor repeal of this Section 7.2, nor the
adoption or amendment of any provision of these Articles of Incorporation
inconsistent with this Section 7.2, shall apply to or affect in any respect the
applicability of the preceding sentence with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.
7.3 Indemnification .
Each person who is or was or who agrees to become a director or officer
of the Company, or each person who, while a director of the Company, is or was
serving or who agrees to serve, at the request of the Company, as a director,
officer, partner, joint venture, employee or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
(including the heirs, executor, administrators or estate of such person), shall
be indemnified by the Company, and shall be entitled to have paid on his behalf
or be reimbursed for reasonable expenses in advance of final disposition of a
proceeding, in accordance with the Bylaws of the Company, to the full extent
permitted from time to time by the MGCL as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such amendment) or any other
applicable laws presently or hereafter in effect. The Company shall have the
power, with the approval of the Board of Directors, to provide such
indemnification and advancement of expenses to any employee or agent of the
Company, in accordance with the Bylaws of the Company. Without limiting the
generality or the effect of the foregoing, the Company may enter into one or
more agreements with any person which provide for indemnification greater or
different than that provided in this Article VII. Any amendment or repeal of
this Article VII shall not adversely affect any right or protection existing
hereunder immediately prior to such amendment or repeal.
7.4 Express Exculpatory Clauses In Instruments.
Neither the Stockholders nor the Directors, officers, employees or
agents of the Company shall be liable under any written instrument creating an
obligation of the Company by reason of their being Stockholders, Directors,
officers, employees or agents of the Company, and all Persons shall look solely
to the Company Property for the payment of any claim under or for the
performance of that instrument. The omission of the foregoing exculpatory
language from any instrument shall not affect the validity or enforceability of
such instrument and shall not render any Stockholder, Director, officer,
employee or agent liable thereunder to any third party, nor shall the Directors
or any officer, employee or agent of the Company be liable to anyone as a result
of such omission.
7.5 Transactions with Affiliates.
The Company may engage in transactions with any Affiliates, subject to
any express restrictions in these Articles of Incorporation (including Article
IV and Section 5.7) or adopted by the Directors in the Bylaws or by resolution,
and further subject to the disclosure and ratification requirements of MGCL ss.
2-419 and other applicable law.
Article VIII :
AMENDMENT; REORGANIZATION; MERGER, ETC.
8.1 Amendment.
(i) These Articles of Incorporation may be amended, without the necessity
for concurrence by the Directors, by the affirmative vote of the
holders of not less than a majority of the Shares then outstanding and
entitled to vote thereon, except that (1) no amendment may be made
which would change any rights with respect to any outstanding class of
securities, by reducing the amount payable thereon upon liquidation, or
by diminishing or eliminating any voting rights pertaining thereto; and
(2) Section 8.2 hereof and this Section 8.1 shall not be amended (or
any other provision of these Articles of Incorporation be amended or
any provision of these Articles of Incorporation be added that would
have the effect of amending such sections), without the affirmative
vote of the holders of two-thirds (2/3) of the Shares then outstanding
and entitled to vote thereon.
(ii) The Directors, by a two-thirds (2/3) vote, may amend provisions of
these Articles of Incorporation from time to time as necessary to
enable the Company to qualify as a real estate investment trust under
the REIT Provisions of the Code. With the exception of the foregoing,
the Directors may not amend these Articles of Incorporation.
(iii) An amendment to these Articles of Incorporation shall become effective
as provided in Section 10.5.
(iv) These Articles of Incorporation may not be amended except as provided
in this Section 8.1.
8.2 Reorganization.
Subject to the provisions of any class or series of Shares at the time
outstanding, the Directors shall have the power (i) to cause the organization of
a corporation, association, trust or other organization to take over the Company
Property and to carry on the affairs of the Company, or (ii) merge the Company
into, or sell, convey and transfer the Company Property to any such corporation,
association, trust or organization in exchange for Securities thereof or
beneficial interests therein, and the assumption by the transferee of the
liabilities of the Company, and upon the occurrence of (i) or (ii) above
terminate the Company and deliver such Securities or beneficial interests
ratably among the Stockholders according to the respective rights of the class
or series of Shares held by them; provided, however, that any such action shall
have been approved, at a meeting of the Stockholders called for that purpose, by
the affirmative vote of the holders of not less than a majority of the Shares
then outstanding and entitled to vote thereon.
8.3 Merger, Consolidation or Sale of Company Property.
Subject to the provisions of any class or series of Shares at the time
outstanding, the Directors shall have the power to (i) merge the Company into
another entity, (ii) consolidate the Company with one (1) or more other entities
into a new entity; (iii) sell or otherwise dispose of all or substantially all
of the Company Property; or (iv) dissolve or liquidate the Company; provided,
however, that such action shall have been approved, at a meeting of the
Stockholders called for that purpose, by the affirmative vote of the holders of
not less than a majority of the Shares then outstanding and entitled to vote
thereon. Any such transaction involving an Affiliate of the Company also must be
approved by a majority of the Directors not otherwise interested in such
transaction as fair and reasonable to the Company and on terms and conditions
not less favorable to the Company than those available from unaffiliated third
parties.
In connection with any proposed Roll-Up Transaction, which, in general
terms, is any transaction involving the acquisition, merger, conversion, or
consolidation, directly or indirectly, of the Company and the issuance of
securities of a Roll-Up Entity that would be created or would survive after the
successful completion of the Roll-Up Transaction, an appraisal of all Properties
shall be obtained from a competent independent appraiser. The Properties shall
be appraised on a consistent basis, and the appraisal shall be based on the
evaluation of all relevant information and shall indicate the value of the
Properties as of a date immediately prior to the announcement of the proposed
Roll-Up Transaction. The appraisal shall assume an orderly liquidation of
Properties over a 12-month period. The terms of the engagement of the
independent appraiser shall clearly state that the engagement is for the benefit
of the Company and the Stockholders. A summary of the appraisal, indicating all
material assumptions underlying the appraisal, shall be included in a report to
Stockholders in connection with a proposed Roll-Up Transaction. In connection
with a proposed Roll-Up Transaction which has not been approved by vote of at
least two-thirds (2/3) of the Stockholders, the person sponsoring the Roll-Up
Transaction shall offer to Stockholders who vote against the proposed Roll-Up
Transaction the choice of:
(i) accepting the securities of a Roll-Up Entity offered in the proposed
Roll-Up Transaction; or
(ii) one of the following:
(a) remaining Stockholders of the Company and preserving their
interests therein on the same terms and conditions as existed
previously; or
(b) receiving cash in an amount equal to the Stockholder's pro rata
share of the appraised value of the net assets of the Company.
The Company is prohibited from participating in any proposed Roll-Up
Transaction:
(iii) which would result in the Stockholders having democracy rights in a
Roll-Up Entity that are less than the rights provided for in Sections
6.1, 6.2, 6.3, 6.4, 6.5, 6.6 and 7.1 of these Articles of
Incorporation;
(iv) which includes provisions that would operate as a material impediment
to, or frustration of, the accumulation of shares by any purchaser of
the securities of the Roll-Up Entity (except to the minimum extent
necessary to pre serve the tax status of the Roll-Up Entity), or which
would limit the ability of an investor to exercise the voting rights of
its Securities of the Roll-Up Entity on the basis of the number of
Shares held by that investor;
(v) in which investor's rights to access of records of the Roll-Up Entity
will be less than those described in Sections 6.4 and 6.5 hereof; or
(vi) in which any of the costs of the Roll-Up Transaction would be borne by
the Company if the Roll-Up Transaction is not approved by the
Stockholders.
Article IX :
DURATION OF COMPANY
9.1 Automatic Dissolution.
The Company automatically will terminate and dissolve on December 31,
2005, will undertake orderly liquidation and Sales of Company Properties and
Secured Equipment Leases, and will distribute any Net Sales Proceeds to
Stockholders, unless Listing occurs, in which event the Company shall continue
perpetually unless dissolved pursuant to the provisions contained herein or
pursuant to any applicable provision of the MGCL.
9.2 Dissolution of the Company by Stockholder Vote.
The Company may be terminated at any time, without the necessity for
concurrence by the Board of Directors, by the vote or written consent of a
majority of the outstanding Equity Shares.
Article X :
MISCELLANEOUS
10.1 Governing Law.
These Articles of Incorporation have been approved by the Directors
executing the Articles of Amendment in which they are included and delivered in
the State of Maryland with reference to the laws thereof, and the rights of all
parties and the validity, construction and effect of every provision hereof
shall be subject to and construed according to the laws of the State of Maryland
without regard to conflicts of laws provisions thereof.
10.2 Reliance by Third Parties.
Any certificate shall be final and conclusive as to any Persons dealing
with the Company if executed by an individual who, according to the records of
the Company or of any recording office in which these Articles of Incorporation
may be recorded, appears to be the Secretary or an Assistant Secretary of the
Company or a Director, and if certifying to: (i) the number or identity of
Directors, officers of the Company or Stockholders; (ii) the due authorization
of the execution of any document; (iii) the action or vote taken, and the
existence of a quorum, at a meeting of the Directors or Stockholders; (iv) a
copy of the Articles of Incorporation or of the Bylaws as a true and complete
copy as then in force; (v) an amendment to these Articles of Incorporation; (vi)
the dissolution of the Company; or (vii) the existence of any fact or facts
which relate to the affairs of the Company. No purchaser, lender, transfer agent
or other Person shall be bound to make any inquiry concerning the validity of
any transaction purporting to be made on behalf of the Company by the Directors
or by any duly authorized officer, employee or agent of the Company.
10.3 Provisions in Conflict with Law or Regulations.
(i) The provisions of these Articles of Incorporation are severable, and if
the Directors shall determine that any one or more of such provisions
are in conflict with the REIT Provisions of the Code, or other
applicable federal or state laws, the conflicting provisions shall be
deemed never to have constituted a part of these Articles of
Incorporation, even without any amendment of these Articles of
Incorporation pursuant to Section 8.1 hereof; provided, however, that
such determination by the Directors shall not affect or impair any of
the remaining provisions of these Articles of Incorporation or render
invalid or improper any action taken or omitted prior to such
determination. No Director shall be liable for making or failing to
make such a determination.
(ii) If any provision of these Articles of Incorporation shall be held
invalid or unenforceable in any jurisdiction, such holding shall not in
any manner affect or render invalid or unenforceable such provision in
any other jurisdiction or any other provision of these Articles of
Incorporation in any jurisdiction.
10.4 Construction.
In these Articles of Incorporation, unless the context otherwise
requires, words used in the singular or in the plural include both the plural
and singular and words denoting any gender include both genders. The title and
headings of different parts are inserted for convenience and shall not affect
the meaning, construction or effect of these Articles of Incorporation. In
defining or interpreting the powers and duties of the Company and its Directors
and officers, reference may be made, to the extent appropriate, to the Code and
to Titles 1 through 3 of the Corporations and Associations Article of the
Annotated Code of Maryland, referred to herein as the "MGCL."
10.5 Recordation.
These Articles of Incorporation and any amendment hereto shall be filed
for record with the State Department of Assessments and Taxation of Maryland and
may also be filed or recorded in such other places as the Directors deem
appropriate, but failure to file for record these Articles of Incorporation or
any amendment hereto in any office other than in the State of Maryland shall not
affect or impair the validity or effectiveness of these Articles of
Incorporation or any amendment hereto. A restated Articles of Incorporation
shall, upon filing, be conclusive evidence of all amendments contained therein
and may thereafter be referred to in lieu of the original Articles of
Incorporation and the various amendments thereto.
* * * * * * * * * *
THIRD: This amendment and restatement of the Articles of Incorporation
of the Company has been approved by a majority of the Directors
and approved by the Stockholders as required by law.
IN WITNESS WHEREOF, these Articles of Amendment and Restatement are
hereby executed by John T. Walker, the President of the Company, who hereby
acknowledges that the Articles of Amendment are the act of the Company, and who
does hereby state under the penalties of perjury that the matters and facts set
forth herein with respect to authorization and approval of such Articles are
true in all material respects to the best of his knowledge, information and
belief.
CNL American Properties Fund, Inc.
By: /s/ John T. Walker
Name: John T. Walker
Title: President
Date: July 20, 2000
ATTEST
By: /s/ Steven D. Shackelford
Name: Steven D. Shackelford
Title: Secretary
Date: July 20, 2000
