Series D Convertible Cumulative
Preferred Stock
ARTICLES SUPPLEMENTARY
HOME PROPERTIES OF NEW YORK, INC.
Articles Supplementary
Classifying and Designating a Series of
Preferred Stock as
Series D Convertible Cumulative
Preferred Stock and
Fixing Distribution and Other Preferences
and Rights of Such Series
Dated as of June 2, 2000
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HOME PROPERTIES OF NEW YORK, INC.
Articles Supplementary Classifying and Designating a Series of
Preferred Stock as
Series D Convertible Cumulative
Preferred Stock and
Fixing Distribution and Other Preferences
and Rights of Such Series
Home Properties of New York, Inc., a Maryland corporation (the
"CORPORATION"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, pursuant to section 2-602(b) of the Annotated Code of
Maryland, that:
FIRST: Pursuant to authority granted by the Articles of Amendment and
Restatement of Articles of Incorporation of the Corporation, as amended, the
Board of Directors adopted a resolution at a meeting held on April 25, 2000
designating and classifying 500,000 unissued and undesignated shares of
preferred stock as Series D Convertible Cumulative Preferred Stock.
SECOND: The following is a description of the Series D Convertible
Cumulative Preferred Stock, including the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption thereof:
Section . Number of Shares and Designation. This class of preferred
stock shall be designated as Series D Convertible Cumulative Preferred Stock
and the number of shares which shall constitute such series shall not be more
than 500,000 shares, par value $0.01 per share, which number may be decreased
(but not below the number thereof then outstanding) from time to time by the
Board of Directors or increased by the Board of Directors only upon the
approval of the holders of at least two-thirds of the Series D Preferred Stock
outstanding at that time.
Section . Definitions. For purposes of the Series D Preferred Stock, the
following terms shall have the meanings indicated:
"Authorized LP Distributions" shall have the meaning set forth in
Section 3(f).
"Authorized Preferred Unit DistriBUTIONS" shall have the meaning set
forth in Section 3(f).
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to
perform any of its responsibilities with respect to the Series D Preferred
Stock.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York
City, New York are not required to be open.
"CALL DATE" shall mean the date fixed for the redemption of the
Series D Preferred Stock that is specified in the notice to holders
required under Section 5(e) as the Call Date.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations of the
Corporation, the Operating Partnership or any Subsidiary under any capital
lease which under GAAP are required to be reflected as a liability on a
consolidated balance sheet of the Corporation.
"CHANGE OF CONTROL" shall mean each occurrence of any of the
following:
(i) the acquisition, directly or indirectly, by any individual or
entity or group (as such term is used in Section 13(d)(3) of the
Exchange Act) of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act, except that such individual or entity shall
be deemed to have beneficial ownership of all shares that any such
individual or entity has the right to acquire, whether such right is
exercisable immediately or only after passage of time) of (A) more
than 25% of the value of the Corporation's outstanding capital
stock, (B) more than 25% of the voting power to elect directors of
the Corporation (excluding the voting power of any series of
preferred stock to elect directors pursuant to Section 10 herein) or
(C) more than 25% of the value of the equity interests in the
Operating Partnership;
(ii)(A) the Corporation consolidates with or merges into another
entity or conveys, transfers, or leases outside the ordinary course
of business all or substantially all of its assets (including, but
not limited to, real property investments) to any individual or
entity, or (B) any entity consolidates with or merges into the
Corporation which, in the case of a merger or consolidation under
(A) or (B) is pursuant to a transaction in which the outstanding
Common Stock is reclassified or changed into or exchanged for cash,
securities or other property; PROVIDED, HOWEVER, that the events
described in this clause (ii) shall not be deemed to be a Change of
Control if the sole purpose of such event is that the Corporation is
seeking to change its domicile or to change its form of organization
from a corporation to a statutory business trust; or
(iii) other than with respect to the election, resignation or
replacement of any director designated, appointed or elected by the
holders of the Series A Preferred Stock or any other series of
preferred stock of the Corporation (each a "PREFERRED DIRECTOR"), if
during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the
Corporation (together with any new directors whose election by such
Board of Directors or whose nomination for election by the
stockholders of the Corporation was approved by a vote of a majority
of the directors of the Corporation (excluding Preferred Directors)
then still in office who were either directors at the beginning of
such period, or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office.
"CHANGE OF CONTROL PRICE" shall mean: (i) from the Issue Date
through the day preceding the fifth anniversary of the Issue Date, an
amount per share of Series D Preferred Stock equal to the Liquidation
Preference plus an amount equal to a 15% annual return thereon from the
Issue Date until the date of redemption of such share of Series D
Preferred Stock, compounded annually, less an amount equal to the sum of
the aggregate amount of cash dividends theretofore paid or payable
concurrently with such redemption on such share of Series D Preferred
Stock, plus an amount equal to a 15% annual return on such cash dividends
from the date of payment until the date of redemption of such share of
Series D Preferred Stock and (ii) beginning on the fifth anniversary of
the Issue Date, an amount equal to 100% of the Liquidation Preference,
plus all accumulated, accrued and unpaid dividends to the date of
repurchase.
"CHANGE OF CONTROL RATE" shall have the meaning set forth in Section
3(d).
"CHARTER" shall mean the Articles of Amendment and Restatement of
the Articles of Incorporation of the Corporation, as amended.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" shall mean the shares of Common Stock, par value
$0.01 per share, of the Corporation.
"CONSOLIDATED BUSINESSES" means the Corporation, the Operating
Partnership, Home Properties Management, Inc., Conifer Realty Corporation
and each of their direct and indirect majority-owned Subsidiaries.
"CONSTITUENT PERSON" shall have the meaning set forth in Section
7(e).
"CONVERSION ADJUSTMENT PRICE" shall mean the price per share of
Common Stock which is the lesser of: (i) $29.70 (which shall be adjusted
in the case of any combination (by reverse stock split or otherwise) of
its outstanding shares of Common Stock into smaller number of shares); or
(ii) the Conversion Price.
"CONVERSION PRICE" shall mean the conversion price per share of
Common Stock into which the shares of Series D Preferred Stock are
convertible, as such Conversion Price may be adjusted pursuant to Section
7. The initial conversion price shall be $30.00 (equivalent to a
conversion rate of 3.33333 shares of Common Stock for each share of Series
D Preferred Stock).
"CONVERTIBLE SECURITIES" shall have the meaning set forth in Section
7(d)(v).
"CURRENT MARKET PRICE" of publicly traded shares of Common Stock or
any other class of shares of capital stock or other security of the
Corporation or any other issuer for any day shall mean the last reported
sale price or, if no sale takes place on such day, the average of the
reported closing bid and asked prices on such day in either case as
reported on the New York Stock Exchange ("NYSE") or, if such security is
not listed or admitted for trading on the NYSE, on the principal national
securities exchange on which such security is listed or admitted for
trading or, if not listed or admitted for trading on any national
securities exchange, on the NASDAQ Stock Market ("NASDAQ") National Market
System or, if such security is not quoted on such National Market System,
the average of the closing bid and asked prices on such day in the over-
the-counter market as reported by NASDAQ or, if bid and asked prices for
such security on such day shall not have been reported through NASDAQ, the
average of the bid and asked prices on such day as furnished by any NYSE
member firm regularly making a market in such security selected for such
purpose by the Board of Directors in accordance with the terms hereof and
applicable laws.
"DIVIDEND PAYMENT DATE" shall mean (i) for any Dividend Period with
respect to which the Corporation pays a dividend on the Common Stock, the
date on which such dividend is paid, or (ii) for any Dividend Period
ending December 31, March 31, June 30 or September 30 with respect to
which the Corporation does not pay a dividend on the Common Stock, the
25{th} day of February, May, August and November, respectively, or, if
such date is not a Business Day, the next succeeding Business Day.
"DIVIDEND PAYMENT RECORD DATE" shall mean the date on which record
is to be taken for purposes of determining the stockholders entitled to
receive a dividend payment to be made on the Series D Preferred Stock with
respect to a Dividend Period, which shall be the same date on which record
is to be taken for purposes of determining the stockholders entitled to
receive a dividend payment to be made on the Common Stock with respect to
such Dividend Period, or if a dividend is not to be paid on the Common
Stock with respect to such Dividend Period, then a date selected by the
Board of Directors in accordance with the terms hereof and applicable
laws.
"DIVIDEND PERIODS" shall mean quarterly dividend periods commencing
on January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period (other than the initial Dividend Period, which shall commence on
the Issue Date and end on and include the last calendar day of the
calendar quarter containing the Issue Date, and other than the Dividend
Period during which any shares of Series D Preferred Stock shall be
redeemed pursuant to Section 5 or repurchased pursuant to Section 6, which
shall end on and include the Call Date with respect to the shares of
Series D Preferred Stock being redeemed or the Repurchase Date for the
shares being repurchased, as the case may be).
"EBITDA" means, for any period, the Consolidated Businesses'
earnings before giving effect to expenses for interest, taxes,
depreciation and amortization.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXPIRATION TIME" shall have the meaning set forth in Section
7(d)(iv).
"FAIR MARKET VALUE" shall mean the average of the daily Current
Market Prices of a share of Common Stock on the 20 Trading Days
immediately preceding the day in question.
"FIXED CHARGES" means with respect to any fixed period, the sum of
(1) Total Interest Expense; and (2) the aggregate of all dividends
declared and payable on the Corporation's preferred stock and partnership
preferred units (other than those partnership preferred units held on
behalf of the Corporation's preferred stockholders in an amount equal to
the number of outstanding shares of preferred stock and having, in all
material respects, the same distribution and liquidation preferences with
respect to the Operating Partnership as the preferred stock has with
respect to the Corporation).
"FULLY JUNIOR STOCK" shall mean the Common Stock and any other class
or series of capital stock of the Corporation now or hereafter issued and
outstanding over which the Series D Preferred Stock has preference or
priority in both (i) the payment of dividends and (ii) the distribution of
assets on any liquidation, dissolution or winding up of the Corporation.
"FUNDAMENTAL CHANGE" shall mean each occurrence of any of the
following:
(i) the acquisition, directly or indirectly, by any Person of
Beneficial Ownership (as defined in the Charter) of (A) more than
25% of the value of the Corporation's outstanding capital stock, (B)
more than 25% of the voting power to elect directors of the
Corporation (excluding the voting power of any series of preferred
stock to elect directors pursuant to Section 10) or (C) more than
25% of the value of the equity interests in the Operating
Partnership;
(ii) other than with respect to the election, resignation or
replacement of any Preferred Director or the election of a new
director in replacement of any director who has died or resigned
(each a "Replacement Director"), during any period of two
consecutive years, the Board of Directors fails to nominate for
election by the stockholders of the Corporation a majority of the
individuals who at the beginning of such period constitute the Board
of Directors (together with any new directors whose election by
such Board of Directors or whose nomination for election by the
stockholders of the Corporation was approved by a vote of a majority
of the directors of the Corporation (excluding Preferred Directors
and Replacement Directors) then still in office who were either
directors at the beginning of such period, or whose election or
nomination for election was previously so approved);
(iii) the Corporation or one of its Subsidiaries is not the sole
general partner of the Operating Partnership;
(iv) the Corporation or any direct or indirect subsidiary of the
Corporation, in one transaction or a series of related transactions,
sells all or substantially all of the assets of the Corporation and
its direct and indirect subsidiaries on a consolidated basis,
acquires from any individual or entity, whether by way of merger,
consolidation, purchase of stock or assets, lease or other form of
business combination, any entity, assets or business for aggregate
consideration payable in cash, securities, other property or any
combination of the foregoing, with a fair market value (as
determined in good faith by the Board of Directors) exceeding 50% of
Total Market Capitalization determined prior to giving effect to the
transaction or series of related transactions described in this
clause (iv) or in exchange for a number of shares of Common Stock or
common equity interests of the Operating Partnership (or securities
convertible into, exercisable for or exchangeable for such
securities) representing, in the aggregate, more than 40% of the
combined sum of the shares outstanding immediately prior to such
transaction or series of related transactions of Common Stock and
the common equity interests in the Operating Partnership not held by
the Corporation or any direct or indirect subsidiary immediately
prior to such transaction or series of related transactions;
(v) the Corporation effects any recapitalization or restructuring as
a result of which more than 25% of the Common Stock is reclassified
into shares of preferred stock or changed into or exchanged for
cash, a different class of common stock, preferred stock, evidences
of indebtedness, other property or any combination of the
foregoing;
(vi) the Corporation shall have incurred or suffered to exist
Indebtedness exceeding 65% of Total Value and such condition
continues to exist for 30 days; or
(vii) the de-listing by the Corporation or failure by the
Corporation to take reasonable actions within its control to not
maintain the listing of its Common Stock on the New York Stock
Exchange.
"FUNDS FROM OPERATIONS" shall mean net income (loss) (computed in
accordance with generally accepted accounting principles) excluding gains
(or losses) from debt restructuring, and distributions in excess of
earnings allocated to other Operating Partnership interests or minority
interests (as reflected in the financial statements of the Corporation)
plus depreciation and amortization of assets unique to the real estate
industry, all computed in a manner consistent with the revised definition
of Funds From Operations adopted by the National Association of Real
Estate Investment Trusts (NAREIT), in its White Paper dated October, 1999,
as such definitions may be modified from time to time, as determined by
the Corporation in good faith.
"GAAP" shall mean generally accepted accounting principles as
applied in the United States.
"GUARANTEES" of the Corporation, the Operating Partnership or any
Subsidiary shall mean (without duplication on a consolidated basis) all
obligations (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) of the Corporation, the
Operating Partnership or any Subsidiary guaranteeing, any Indebtedness,
dividend or other obligation of any other person (the "primary obligor")
in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by the Corporation, the Operating Partnership or any
Subsidiary : (i) to purchase such Indebtedness or obligation or any
property or assets constituting security therefor, (ii) to advance or
supply funds: (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance sheet
condition or otherwise to advance or make available funds for the purchase
or payment of such Indebtedness or obligation, (iii) to lease property or
to purchase securities or other property or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation of the
ability of the primary obligor to make payment of such Indebtedness or
obligation, or (iv) otherwise to assure the owner of the Indebtedness or
obligation of the primary obligor against loss in respect thereof,
PROVIDED, HOWEVER, that the term "Guarantees" shall not include
(y) guarantees of completion unless and until a claim for payment has been
made thereunder, at which time such completion guarantee shall be deemed
Indebtedness to the extent of the claim, and (z) Low Income Housing Credit
Guarantees, unless and until a claim for payment is made thereunder. For
the purposes of any computations made under these Articles Supplementary,
a Guarantee in respect of any Indebtedness for borrowed money shall be
deemed to be Indebtedness equal to the principal amount of the
Indebtedness for borrowed money which has been guaranteed, and a Guarantee
in respect of any other obligation or liability or any dividend shall be
deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend.
"INDEBTEDNESS" shall mean, without duplication on a consolidated
basis (i) all obligations of the Corporation, the Operating Partnership or
any Subsidiary for borrowed money, (ii) all obligations of the
Corporation, the Operating Partnership or any Subsidiary evidenced by
bonds, debentures, notes or similar instruments, (iii) all obligations of
the Corporation, the Operating Partnership or any Subsidiary under
conditional sale or other title retention agreements relating to property
purchased by the Corporation, the Operating Partnership or any Subsidiary,
(iv) all obligations of the Corporation, the Operating Partnership or any
Subsidiary issued or assumed as the deferred purchase price of property or
services (other than accounts payable to suppliers and similar accrued
liabilities incurred in the ordinary course of business and paid in a
manner consistent with industry practice), (v) all other obligations,
contingent or otherwise, which, in accordance with GAAP, should be
classified on the Corporation's, Operating Partnership's or any
Subsidiary's balance sheets as liabilities, whether or not so classified,
(vi) all liabilities secured by any mortgage, pledge, security interest,
lien charge or other encumbrance existing on any property or asset now
owned by, or acquired by, the Corporation, the Operating Partnership, or
any of their Subsidiaries (vii) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any lien or security interest
on property owned or acquired by the Corporation, the Operating
Partnership or any Subsidiary whether or not the obligations secured
thereby have been assumed, (viii) all Capitalized Lease Obligations of the
Corporation, the Operating Partnership or any Subsidiary, (ix) all
Guarantees of the Corporation, the Operating Partnership or any
Subsidiary, (x) all obligations (including but not limited to
reimbursement obligations) relating to the issuance of letters of credit
for the account of the Corporation, the Operating Partnership or any
Subsidiary, (xi) all obligations arising out of foreign exchange
contracts, and (xii) all obligations arising out of interest rate and
currency swap agreements, cap, floor and collar agreements, interest rate
insurance, currency spot and forward contracts and other agreements or
arrangements designed to provide protection against fluctuations in
interest or currency exchange rates, as valued in accordance with GAAP
consistently applied.
"ISSUE DATE" shall mean the date on which the shares of Series D
Preferred Stock are issued.
"JUNIOR STOCK" shall mean the Common Stock and any other class or
series of capital stock of the Corporation now or hereafter issued and
outstanding over which the Series D Preferred Stock has preference or
priority in (i) the payment of dividends or (ii) the distribution of
assets on any liquidation, dissolution or winding up of the Corporation.
"LIQUIDATION PREFERENCE" shall have the meaning set forth in Section
4(a).
"LOW INCOME HOUSING CREDIT GUARANTEES" means assurances by the
Corporation or the Operating Partnership to limited partners of certain
affiliates of the Corporation that the properties developed and operated
by such affiliates will be kept in compliance with applicable provisions
of the Code to avoid loss or recapture of low income housing tax credits.
"NON-ELECTING SHARE" shall have the meaning set forth in Section
7(e).
"OPERATING PARTNERSHIP" shall mean Home Properties of New York,
L.P., a New York limited partnership.
"OPERATING PARTNERSHIP AGREEMENT" shall mean the Second Amended and
Restated Agreement of Limited Partnership of the Operating Partnership, as
amended.
"PARITY STOCK" shall have the meaning set forth in Section 9(b).
"PERSON" shall mean any individual, firm, partnership, corporation,
limited liability company or other entity, and shall include any successor
(by merger or otherwise) of such entity.
"PURCHASED SHARES" shall have the meaning set forth in Section
7(d)(iv).
"PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement dated
as of June 5, 2000 by and among the Corporation, the Operating Partnership
and The Equitable Life Assurance Society of the United States.
"RECORD DATE" shall have the meaning set forth in Section 7(f).
"REIT TERMINATION EVENT" shall mean the earliest to occur of:
(i) the filing of a federal income tax return by the Corporation
for any taxable year on which the Corporation does not elect to
be taxed as a real estate investment trust;
(ii) the approval by the stockholders of the Corporation of a
proposal for the Corporation to cease to qualify as a real
estate investment trust;
(iii) the public announcement by the Corporation that it has ceased
to qualify as a real estate investment trust;
(iv) a determination by the Board of Directors of the Corporation,
based on the advice of counsel, that the Corporation has ceased
to qualify as a real estate investment trust; or
(v) the Corporation or its duly authorized representatives shall
receive a determination or conclusion, whether in proposed or
final form, from the Internal Revenue Service or one of its
representatives that the Corporation has failed to meet the
requirements for REIT qualification and taxation as a REIT
under Sections 856-860 of the Code for one or more taxable
years, occurring from and after January 1, 1994, including,
without limitation, a statutory notice of deficiency, a notice
of proposed deficiency, a proposed or final revenue agent's
report, a Field Service Advice, Technical Advice Memorandum, or
similar conclusion; PROVIDED, HOWEVER, that if the
determination or conclusion is in proposed or draft form, such
receipt shall not constitute a "REIT Termination Event" unless
such determination or conclusion is not withdrawn or otherwise
terminated within 270 days following such receipt, or if the
Company receives an opinion of its independent counsel or
accountants that the Company's REIT status should be upheld.
"REPURCHASE DATE" shall mean the date of repurchase of the shares of
Series D Preferred Stock or the date such payment is made available as
provided in Section 6(a)(iii).
"REPURCHASE OFFER" shall have the meaning set forth in Section
6(a)(ii).
"REPURCHASE PRICE" shall have the meaning set forth in Section
6(a)(i).
"SECURITIES" and "SECURITY" shall have the meanings set forth in
Section 7(d)(iii).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SENIOR STOCK" shall mean any class or series of capital stock of
the Corporation hereafter issued and outstanding which has preference or
priority over the Series D Preferred Stock (i) in the payment of dividends
or (ii) in the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.
"SERIES A PREFERRED STOCK" shall mean the shares of Series A Senior
Convertible Preferred Stock issued by the Corporation.
"SERIES D PREFERRED STOCK" shall mean the shares of Series D
Convertible Cumulative Preferred Stock.
"SET APART FOR PAYMENT" shall mean that funds for the payment of
dividends or other distributions are irrevocably delivered to a
disbursing, paying or other similar agent for the sole purpose of
satisfying the Corporation's obligation to make a required dividend
payment or other distribution.
"SHARES" shall have the meaning set forth in Section 12.
"STATED VALUE" shall mean $100.00 per share of Series D Preferred
Stock.
"SUBSIDIARIES" shall mean any entities that would be treated as
consolidated subsidiaries of the Corporation or the Operating Partnership
for financial accounting purposes under GAAP.
"TOTAL INTEREST EXPENSE" means, for any period, the sum of: (i)
interest expense of the Consolidated Businesses paid during such period;
and (ii) interest expense of the Consolidated Businesses accrued and/or
capitalized for such period, in each case including any participating
interest expense, the amortization of loan fees, original issue discount,
non-cash interest payment, the interest component of Capitalized Lease
Obligations and hedging costs, but excluding any extraordinary interest
expense and net of amortization of deferred costs associated with new
financings or refinancings of existing Indebtedness.
"TOTAL VALUE" shall mean, as of any date, the sum of: (i) the
Undepreciated Real Estate Assets; and (ii) all other assets of the
Corporation and its Subsidiaries on a consolidated basis determined in
accordance with GAAP (but excluding intangibles and accounts receivable).
"TRADING DAY" shall mean any day on which the securities in question
are traded on the NYSE, or if such securities are not listed or admitted
for trading on the NYSE, on the principal national securities exchange on
which such securities are listed or admitted, or if not listed or admitted
for trading on any national securities exchange, on the National Market
System of NASDAQ, or if such securities are not quoted on such National
Market System, in the securities market in which the securities are
traded.
"TRANSACTION" shall have the meaning set forth in Section 7(e).
"TRANSFER AGENT" shall mean Chase Manhattan Shareholder Services or
such other agent or agents of the Corporation as may be designated by the
Board of Directors or their designee as the transfer agent, registrar and
dividend disbursing agent for the Series D Preferred Stock.
"UNDEPRECIATED REAL ESTATE ASSETS" shall mean, as of any date, the
cost (original cost plus capital improvements) of real estate assets of
the Corporation and its Subsidiaries on such date, before depreciation,
amortization, or other market value adjustments (as such market value
adjustments would otherwise be required by GAAP) determined on a
consolidated basis in accordance with GAAP.
"UNITS" shall mean Partnership Units as that term is defined in the
Second Amended and Restated Agreement of Limited Partnership of the
Operating Partnership, as amended.
"VOTING PREFERRED STOCK" shall have the meaning set forth in Section
10.
Section 3. DIVIDENDS.
(a) The holders of record of shares of Series D Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, cash dividends which
are cumulative; preferential over the dividends paid on the
Corporation's Common Stock and pari passu with the dividends paid on the
Corporation's Parity Stock; and payable in arrears in an amount per share
equal to the greatest of: (i) 8.775% of the Liquidation Preference per
annum (equivalent to $8.775 per share of Series D Preferred Stock) subject
to adjustment in accordance with Section 3(d), (ii) the ordinary cash
dividends (determined on each Dividend Payment Date) on the shares of
Common Stock, or portion thereof, into which a share of Series D Preferred
Stock is convertible, or (iii) the rate set forth in Section 3(c) if
Section 3(c) is applicable. The dividends referred to in clause (ii) of
the preceding sentence shall equal the number of shares of Common Stock,
or portion thereof, into which a share of Series D Preferred Stock is
convertible, multiplied by the most current quarterly dividend on a share
of Common Stock declared on or before the applicable Dividend Payment
Date. If the Corporation declares and pays an ordinary cash dividend on
the Common Stock with respect to a Dividend Period after a Dividend
Payment Date is determined pursuant to clause (ii) of the definition of
Dividend Payment Date and the dividend calculated pursuant to clause (ii)
of this paragraph (a) with respect to such Dividend Period is greater than
the dividend previously declared on the Series D Preferred Stock with
respect to such Dividend Period, the Corporation shall pay an additional
dividend to the holders of the Series D Preferred Stock on the date on
which the dividend on the Common Stock is paid, in an amount equal to the
difference between (y) the dividend calculated pursuant to clause (ii) of
this paragraph (a) and (z) the amount of dividends previously declared on
the Series D Preferred Stock with respect to such Dividend Period.
The dividends shall begin to accrue and shall be fully cumulative
from the first day of the applicable Dividend Period, whether or not in
any Dividend Period or Periods there shall be funds of the Corporation
legally available for the payment of such dividends, and shall be payable
quarterly in arrears, when, as and if declared by the Board of Directors,
on Dividend Payment Dates. Each such dividend shall be payable in arrears
to the holders of record of shares of Series D Preferred Stock as they
appear in the records of the Corporation at the close of business on such
record dates, not fewer than 10 nor more than 50 days preceding such
Dividend Payment Dates thereof, as shall be fixed by the Board of
Directors. To the extent that a dividend required by this Section 3 is
not paid on any Dividend Payment Date, the amount not paid shall
accumulate and accrue interest at the annual rate of 8.775% compounded
quarterly on each Dividend Payment Date that it remains unpaid. Accrued
and unpaid dividends (and any interest thereon) for any past Dividend
Periods may be declared and paid at any time and for such interim periods,
without reference to any regular Dividend Payment Date, to holders of
record on such date, not fewer than 10 nor more than 50 days preceding the
payment date thereof, as may be fixed by the Board of Directors. Any
dividend payment made on Series D Preferred Stock shall first be credited
against the earliest accrued but unpaid dividend due with respect to
Series D Preferred Stock which remains payable.
(b) The amount of dividends referred to in clauses (i) and (iii) of
Section 3(a) payable for each full Dividend Period on the Series D
Preferred Stock shall be computed by dividing the annual dividend rate by
four. The initial Dividend Period will include a partial dividend for the
period from the Issue Date until the last calendar day of the calendar
quarter containing the Issue Date. The amount of dividends payable either
under clause (i), clause (ii) or clause (iii) for such period, or any
other period shorter than a full Dividend Period, on the Series D
Preferred Stock shall be computed ratably on the basis of a 360-day year
of twelve 30-day months and the amount of such dividend shall equal the
dividend payable with respect to the Dividend Period multiplied by a
fraction (x) the numerator of which is (i) the number of days from the
Issue Date to the end of the Dividend Period, or (ii) the number of days
from the beginning of the Dividend Period to the Call Date or the
Repurchase Date, as the case may be, and (y) the denominator of which is
90. Holders of shares of Series D Preferred Stock shall not be entitled
to any dividends, whether payable in cash, property or shares, in excess
of cumulative dividends, as herein provided, on the Series D Preferred
Stock.
(c) If at the end of any calendar quarter the ratio of EBITDA to
Fixed Charges shall be less than 1.75 to 1.0 (a "Covenant Failure"), the
dividend rate payable upon the shares of Series D Preferred Stock pursuant
to paragraph (a)(i) of this Section 3 (as such dividend rate may be
increased in accordance with Section 3(d) below) shall be increased by
.50% per annum until the last day of the calendar quarter during which
such Covenant Failure shall have been cured and shall no longer be
continuing, subject to revesting in the event of any subsequent Covenant
Failure.
(d) If at any time a Change of Control shall occur, the dividend
rate payable upon the shares of Series D Preferred Stock pursuant to
subsection (a)(i) of this Section 3 shall be from and after the date of
such Change of Control a per annum rate equal to the sum of (A) 8.00% plus
(B) the then published (in the Wall Street Journal) rate for a U.S.
Treasury note maturing on the date closest to the five year anniversary of
the date the Change of Control occurs, such rate to be fixed as of the
date such Change of Control occurs (the "CHANGE OF CONTROL RATE");
provided, however, that in no event shall such rate be less than 8.775%.
(e) So long as any shares of Series D Preferred Stock are
outstanding, no dividends, except as described in the immediately
following sentence, shall be declared or paid or set apart for payment on
any class or series of Parity Stock for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payment on
the Series D Preferred Stock for all Dividend Periods terminating on or
prior to the dividend payment date on such class or series of Parity
Stock. When dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends declared upon Series
D Preferred Stock and all dividends declared upon any other class or
series of Parity Stock shall be declared ratably in proportion to the
respective amounts of dividends accumulated and unpaid on the Series D
Preferred Stock and accumulated and unpaid on such Parity Stock.
(f) So long as any shares of Series D Preferred Stock are
outstanding, (i) no dividends (other than dividends or distributions paid
solely in shares of, or options, warrants or rights to subscribe for or
purchase shares of, Fully Junior Stock) shall be declared or paid or set
apart for payment and no other distribution shall be declared or made or
set apart for payment upon Junior Stock; (ii) no shares of any Junior
Stock shall be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or
any Subsidiary) for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any Junior Stock) by
the Corporation, directly or indirectly (except by conversion into or
exchange for Fully Junior Stock); and (iii) the Corporation shall not
authorize, take or cause or permit to be taken or caused any action of the
general partner of the Operating Partnership, that will result in (A) the
declaration or payment by the Operating Partnership of any distribution to
its partners (other than distributions made concurrently with
distributions payable to the Corporation in respect of its partnership
interest or preferred units in each case that will be used by the
Corporation to fund the payment in full of all accrued dividends (such
distributions to the Corporation in respect of its partnership interest
being referred to as "Authorized LP Distributions" and such distributions
to the Corporation in respect of its preferred units being referred to as
"Authorized Preferred Unit Distributions"), or the setting aside of any
funds or assets for payment of any distributions to its partners (other
than those made concurrently with Authorized LP Distributions or
Authorized Preferred Unit Distributions) or (B) the redemption or purchase
(directly or indirectly, including, without limitation, through the
Operating Partnership or any Subsidiaries), or the setting aside of any
funds or other assets for the redemption or purchase of any partnership
interests in the Operating Partnership, except for exchange or conversions
of partnership interests in the Operating Partnership in the ordinary
course into shares of Common Stock, or the payment of cash by the
Operating Partnership upon the exercise by any partner of the Operating
Partnership to a Limited Partner, upon such partner's exercise of its
Purchase Rights (as defined in the Operating Partnership Agreement), in
accordance with Section 6.08 of the Operating Partnership Agreement,
unless in each case (i) the full cumulative dividends (and interest
thereon) on all outstanding Senior Stock, Series D Preferred Stock and any
other Parity Stock of the Corporation shall have been or contemporaneously
are declared and paid or declared and set apart for payment for all past
dividend periods with respect to the Senior Stock, all past Dividend
Periods with respect to the Series D Preferred Stock and all past dividend
periods with respect to such Parity Stock, and (ii) sufficient funds shall
have been or contemporaneously are set apart for payment in full of any
obligations of the Corporation in respect of Series D Preferred Stock
called for redemption by the Corporation pursuant to Section 5 or required
to be repurchased from any holder pursuant to Section 6.
(g) No distributions on Series D Preferred Stock shall be declared
by the Board of Directors or paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of
the Corporation, including any agreement relating to its Indebtedness,
prohibits such declaration, payment or setting apart for payment or
provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such
declaration or payment shall be restricted or prohibited by law.
Section 4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus)
shall be made to or set apart for the holders of Junior Stock, the holders
of shares of the Series D Preferred Stock shall be entitled to receive One
Hundred Dollars ($100.00) (the "LIQUIDATION PREFERENCE") per share of
Series D Preferred Stock plus an amount equal to all dividends (whether or
not declared) accumulated, accrued and unpaid thereon to the date of final
distribution to such holders; but such holders shall not be entitled to
any further payment; PROVIDED, that the dividend payable with respect to
the Dividend Period containing the date of final distribution shall be
equal to the greater of (i) the dividend provided in Section 3(a)(i) or
(iii), as applicable, or (ii) the dividend determined pursuant to Section
3(a)(ii) for the preceding Dividend Period. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of the
shares of Series D Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the
proceeds thereof, shall be distributed among the holders of Series D
Preferred Stock and any such other Parity Stock ratably in accordance with
the respective amounts that would be payable on such Series D Preferred
Stock and any such other Parity Stock if all amounts payable thereon were
paid in full. For the purposes of this Section 4, (i) a consolidation or
merger of the Corporation with one or more corporations, real estate
investment trusts or other entities, (ii) a sale, lease or conveyance of
all or substantially all of the Corporation's property or business, or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any series or
class or classes of shares of capital stock ranking on a parity with or
prior to the Series D Preferred Stock upon liquidation, dissolution or
winding up, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of
the Series D Preferred Stock, as provided in this Section 4, any other
series or class or classes of Junior Stock shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed, and the
holders of the Series D Preferred Stock shall not be entitled to share
therein.
Section 5. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) Except as provided in paragraph (b) below, the Series D Preferred
Stock shall not be redeemable by the Corporation prior to the fifth
anniversary of the Issue Date. The Series D Preferred Stock may be
redeemed, in whole but not in part, at the option of the Corporation at
any time on or after the fifth anniversary of the Issue Date out of funds
legally available therefor at a redemption price per share payable in cash
equal to the Liquidation Preference per share of Series D Preferred Stock
(plus all accumulated, accrued and unpaid dividends as provided below).
The Series D Preferred Stock shall be redeemed in whole by the Company on
the fiftieth anniversary of the Issue Date. In the event the Series D
Preferred Stock is redeemed on the fiftieth anniversary of the Issue Date,
then the redemption price per share of Series D Preferred Stock shall be
payable, at the option of the Corporation, either: (i) in cash in an
amount equal to the Liquidation Preference per share of Series D Preferred
Stock (plus all accumulated, accrued and unpaid dividends as provided
below); or (ii) by issuance of that number of fully paid and non-
assessable shares of Common Stock equal to the quotient obtained by
dividing (A) the Liquidation Preference per share of Series D Preferred
Stock (plus all accumulated, accrued and unpaid dividends) by (B) the
Conversion Price (as in effect at the time).
(b) If a Change of Control shall occur, the Corporation shall have
the right, to the extent that the Corporation shall have funds legally
available therefor, to redeem, in whole but not in part, the outstanding
shares of Series D Preferred Stock at a redemption price per share payable
in cash equal to the Change of Control Price, by notice in writing to the
holders of Series D Preferred Stock no later than 30 days following the
occurrence of such Change of Control.
(c) Concurrently with any redemption of shares of Series D Preferred
Stock pursuant to this Section 5, and except for dividends paid pursuant
to the next sentence, the Corporation shall pay all accumulated, accrued
and unpaid dividends (whether or not declared and including any interest
thereon), if any, thereon through and including the Call Date. If the
Call Date falls after a Dividend Payment Record Date and prior to the
corresponding Dividend Payment Date, then each holder of shares of Series
D Preferred Stock at the close of business on such Dividend Payment Record
Date shall be entitled to the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding any redemption of such
shares before such Dividend Payment Date or a default in the payment of
the dividend due.
(d) The Corporation may not purchase or acquire shares of Series D
Preferred Stock, otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of Series D Preferred Stock.
(e) Notice of the redemption of shares of Series D Preferred Stock
under this Section 5 shall be mailed by certified mail, return receipt
requested, to each holder of record of shares of Series D Preferred Stock
to be redeemed at the address of each such holder as shown on the
Corporation's records, not fewer than 30 nor more than 60 days prior to
the Call Date. No failure to give such notice or any defect therein or in
the mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series D Preferred Stock except as to the
holder to whom notice was defective or not given. In addition to any
information required by law, each such mailed notice shall state, as
appropriate: (1) the Call Date; (2) the redemption price; (3) the place
or places at which certificates for such shares are to be surrendered; (4)
the then-current Conversion Price; and (5) that dividends on the shares to
be redeemed shall cease to accrue on such Call Date except as otherwise
provided herein. Notice having been mailed as aforesaid, from and after
the Call Date (unless the Corporation shall fail to make available an
amount of cash necessary to effect such redemption), (i) except as
otherwise provided herein, dividends on the shares of Series D Preferred
Stock so called for redemption shall cease to accrue, (ii) such shares
shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of shares of Series D Preferred Stock of the
Corporation shall cease (except the rights to convert and to receive the
redemption price, without interest thereon, upon surrender and endorsement
of their certificates if so required and to receive any dividends accrued
and payable thereon through and including the Call Date). The
Corporation's obligation to provide cash in accordance with the preceding
sentence shall be deemed fulfilled if, on or before the Call Date, the
Corporation shall: (i) deposit with a bank or trust company (which may be
an affiliate of the Corporation) that has an office in the Borough of
Manhattan, City of New York, and that has, or is an affiliate of a bank or
trust company that has, capital and surplus of at least $500,000,000, the
funds in cash necessary for such redemption (including amounts sufficient
to pay all accumulated, accrued and unpaid dividends through the Call
Date), in trust, with irrevocable instructions that such cash be applied
to the redemption of the shares of Series D Preferred Stock so called for
redemption; and (ii) provide adequate notice of such arrangements to the
holders of Series D Preferred Stock for purpose of surrendering their
shares. No interest shall accrue for the benefit of the holders of shares
of Series D Preferred Stock to be redeemed on any cash so set aside by the
Corporation. Subject to applicable escheat laws, any such cash unclaimed
at the end of six months from the Call Date shall revert to the general
funds of the Corporation, after which reversion the holders of such shares
so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash.
As promptly as practicable after the surrender in accordance with
such notice of the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and
if the notice shall so state), such shares shall be exchanged for the
redemption price (without interest thereon) for which such shares have
been redeemed.
Section 6. REPURCHASE UPON FUNDAMENTAL CHANGE OR REIT TERMINATION EVENT.
(a) If a Fundamental Change or REIT Termination Event shall occur:
(i) Each holder of shares of Series D Preferred Stock shall have
the right to require the Corporation, to the extent that the
Corporation shall have funds legally available therefor, to
repurchase, in whole or in part, such holder's shares of Series
D Preferred Stock held on the date that such holder receives
the notice described in subsection 6(a)(ii) at a repurchase
price (the "REPURCHASE PRICE") payable in cash in an amount
equal to (x) in the case of a Fundamental Change, 100% of the
Liquidation Preference or (y) in the case of a REIT Termination
Event, 105% of the Liquidation Preference (plus, in the case of
each of (x) and (y), all accumulated, accrued and unpaid
dividends through and including the date of repurchase) in each
case as described below; PROVIDED, HOWEVER, that if a REIT
Termination Event occurs subsequent to five (5) years following
the Issue Date, the Repurchase Price shall equal 100% of the
Liquidation Preference plus all accumulated, accrued and unpaid
dividends (whether or not declared and including any interest
thereon) through and including the date of repurchase.
(ii) Upon occurrence of such Fundamental Change or REIT Termination
Event, the Corporation shall mail by certified mail, return
receipt requested, or deliver by overnight courier a notice
(the "REPURCHASE OFFER") to each holder of shares of Series D
Preferred Stock stating (A) that a Fundamental Change or REIT
Termination Event has occurred, describing in general terms the
nature of such event, and that such holder has the right to
require the Corporation to repurchase all shares of Series D
Preferred Stock then held by such holder in cash; (B) the
Repurchase Date (which shall be a Business Day, no earlier than
30 days and no later than 60 days from the occurrence of such
Fundamental Change or REIT Termination Event, or such later
date as may be necessary to comply with the requirements of the
Exchange Act); (C) the Repurchase Price; (D) the place or
places at which certificates for such shares are to be
surrendered; (E) that dividends on the shares to be repurchased
shall cease to accrue on such Repurchase Date except as
otherwise provided herein; and (F) the reasonable instructions
determined by the Corporation, consistent with this subsection,
that such holder must follow in connection with the repurchase
of its shares of Series D Preferred Stock.
(iii) On the Repurchase Date, the Corporation shall, to the extent
lawful (and to the extent any payment is unlawful, promptly
after the date on which such payment thereafter becomes
lawful), accept for payment the shares of Series D Preferred
Stock tendered pursuant to the Repurchase Offer described in
Subsection 6(a)(ii). The Corporation's obligation to provide
cash in accordance with Subsection 6(a)(ii) shall be deemed
fulfilled if, on or before the Repurchase Date, the Corporation
shall: (A) deposit with a bank or trust company (which may be
an affiliate of the Corporation) that has an office in the
Borough of Manhattan, City of New York, and that has, or is an
affiliate of a bank or trust company that has, capital and
surplus of at least $500,000,000, the funds in cash necessary
for such repurchase of all shares of Series D Preferred Stock
so tendered (including amounts sufficient to pay all
accumulated, accrued and unpaid dividends through the
Repurchase Date), in trust, with irrevocable instructions that
such cash be applied to the repurchase of the shares of Series
D Preferred Stock so tendered for repurchase; and (B) provide
adequate notice of such arrangements to the holders of Series D
Preferred Stock for purposes of surrendering their shares. No
interest shall accrue for the benefit of the holders of shares
of Series D Preferred Stock to be repurchased on any cash so
set aside by the Corporation. Subject to applicable escheat
laws, any such cash unclaimed at the end of six months from the
Repurchase Date shall revert to the general funds of the
Corporation, after which reversion the holders of such shares
so called for repurchase shall look only to the general funds
of the Corporation for the payment of such cash.
(iv) As promptly as practicable after the surrender in accordance
with such notice of the certificates for any such shares so
redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and if the notice shall so state),
such shares shall be exchanged for any cash (without interest
thereon) for which such shares have been repurchased.
(b) Notwithstanding anything else herein, to the extent they are
applicable to any such repurchase, the Corporation will comply with any
federal and state securities laws, rules and regulations and all time
periods and requirements shall be adjusted only as necessary to comply
with such laws, rules and regulations.
(c) The Corporation may, upon ten (10) Business Days' advance notice
to each holder of the Series D Preferred Stock of a Fundamental Change,
request a waiver of such holder's rights under this Section 6; PROVIDED,
HOWEVER, that the failure of any holder to respond to or otherwise act
upon such request shall not be deemed to create or imply a waiver or
otherwise affect such holder's rights under this Section 6.
Section 7. CONVERSION. Holders of shares of Series D Preferred Stock
shall have the right to convert all or a portion of such shares into shares of
Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7 and the provisions of Article VII of the Corporation's Amended
and Restated Articles of Incorporation, as amended, a holder of shares of
Series D Preferred Stock shall have the right, at any time, at his or her
option, to convert all or any part of such shares into the number of fully
paid and non-assessable shares of Common Stock obtained by dividing: (1)
the sum of (A) the aggregate Liquidation Preference of such shares plus
(B) the aggregate amount, if any, of all dividends (except for the quarter
in which the conversion occurred, whether or not declared) accumulated,
accrued and unpaid (and any interest thereon through the date of
conversion) on the Shares of Series D Preferred Stock to be converted by
(2) the Conversion Price (as in effect at the time and on the date
provided for in the last paragraph of paragraph (b) of this Section 7);
PROVIDED, HOWEVER, that the right to convert shares called for redemption
pursuant to Section 5 or to be repurchased pursuant to Section 6 shall
terminate at the close of business on the fifth Business Day prior to the
date fixed for such redemption or repurchase, unless the Corporation shall
default in making payment of the cash payable upon such redemption or
repurchase under Section 5 or Section 6, as the case may be.
(b) In order to exercise the conversion right, the holder of each
share of Series D Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Transfer Agent or if there
is no Transfer Agent, at the principal offices of the Corporation,
accompanied by written notice to the Corporation that the holder thereof
elects to convert such share of Series D Preferred Stock. Unless the
shares issuable on conversion are to be issued in the same name as the
name in which such Series D Preferred Stock is registered, each share
surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation or the Transfer Agent,
duly executed by the holder or such holder's duly authorized attorney and
an amount sufficient to pay any transfer or similar tax (or evidence
reasonably satisfactory to the Corporation demonstrating that such taxes
have been paid).
Holders of shares of Series D Preferred Stock at the close of
business on a Dividend Payment Record Date shall be entitled to receive
the dividend payable on such shares on the corresponding Dividend Payment
Date notwithstanding the conversion thereof following such Dividend
Payment Record Date and prior to such Dividend Payment Date. The
Corporation shall make no payment or allowance for undeclared dividends on
the shares of Series D Preferred Stock that would have accrued otherwise
in the quarter in which the conversion occurred.
As promptly as practicable after the surrender of certificates for
shares of Series D Preferred Stock as aforesaid (and in any event within
three business days following such surrender), the Corporation shall issue
and shall deliver at such office to such holder, or on his or her written
order, a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such shares in accordance
with provisions of this Section 7, and any fractional interest in respect
of a share of Common Stock arising upon such conversion shall be settled
as provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for
the shares of Series D Preferred Stock to be converted shall have been
surrendered and such notice shall have been received by the Corporation as
aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become the holder or holders
of record of the shares represented thereby at such time on such date and
such conversion shall be at the Conversion Price in effect at such time on
such date unless the share transfer books of the Corporation shall be
closed on that date, in which event such person or persons shall be deemed
to have become such holder or holders of record at the close of business
on the next succeeding day on which such share transfer books are open,
but such conversion shall be at the Conversion Price in effect on the date
on which such surrendered shares shall have been surrendered and such
notice is received by the Corporation.
(c) No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of the shares of Series D
Preferred Stock. Instead of any fractional interest in a share of Common
Stock that would otherwise be issuable upon the conversion of a share of
Series D Preferred Stock, the Corporation shall pay to the holder of such
share an amount in cash based upon the Current Market Price of the Common
Stock on the Trading Day immediately preceding the date of conversion. If
more than one share shall be surrendered for conversion at one time by the
same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number
of Series D Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as follows:
(i) If the Corporation shall, after the Issue Date: (A) pay a
dividend or make a distribution on its capital stock in shares of
Common Stock, (B) subdivide its outstanding shares of Common Stock
into a greater number of shares, (C) combine its outstanding shares
of Common Stock into a smaller number of shares or (D) issue any
shares of capital stock by reclassification of its shares of Common
Stock, the Conversion Price in effect at the opening of business on
the day following the date fixed for the determination of
stockholders entitled to receive such dividend or distribution or at
the opening of business on the Business Day next following the day
on which such subdivision, combination or reclassification becomes
effective, as the case may be, shall be adjusted so that the holder
of any shares of Series D Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares of
Common Stock that such holder would have owned or have been entitled
to receive after the happening of any of the events described above
as if such shares of Series D Preferred Stock had been converted
immediately prior to the record date in the case of a dividend or
distribution or the effective date in the case of a subdivision,
combination or reclassification. An adjustment made pursuant to
this subparagraph (i) shall become effective immediately after the
opening of business on the Business Day next following the record
date (except as provided in paragraph (h) below) in the case of a
dividend or distribution and shall become effective immediately
after the opening of business on the Business Day next following the
effective date in the case of a subdivision, combination or
reclassification.
(ii) If the Corporation shall issue, after the Issue Date,
rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Common Stock
at a price per share less than the Fair Market Value per share of
Common Stock on the record date for the determination of
stockholders entitled to receive such rights, options or warrants,
then the Conversion Price in effect at the opening of business on
the Business Day next following such record date shall be adjusted
to equal the price determined by multiplying (A) the Conversion
Price in effect immediately prior to the opening of business on the
Business Day next following the date fixed for such determination by
(B) a fraction, the numerator of which shall be the sum of (x) the
number of shares of Common Stock outstanding on the close of
business on the date fixed for such determination and (y) the number
of shares that the aggregate proceeds to the Corporation from the
exercise of such rights, options or warrants for shares of Common
Stock would purchase at Fair Market Value, and the denominator of
which shall be the sum of (x) the number of shares of Common Stock
outstanding on the close of business on the date fixed for such
determination and (y) the number of additional shares of Common
Stock offered for subscription or purchase pursuant to such rights,
options or warrants. Such adjustment shall become effective
immediately after the opening of business on the day next following
such record date (except as provided in paragraph (h) below). In
determining whether any rights, options or warrants entitle the
holders of shares of Common Stock to subscribe for or purchase
shares of Common Stock at less than Fair Market Value, there shall
be taken into account any consideration received by the Corporation
upon issuance and upon exercise of such rights, options or warrants,
the value of such consideration, if other than cash, to be
determined in good faith by the Board of Directors.
(iii) If the Corporation shall distribute to all holders of Common
Stock any securities of the Corporation (other than shares of Common
Stock) or evidence of its indebtedness or assets (excluding
cumulative cash dividends or distributions paid with respect to the
shares of Common Stock after December 31, 1999 which are not in
excess of the following: the sum of (A) the Corporation's
cumulative undistributed Funds from Operations at December 31, 1999,
plus (B) the cumulative amount of Funds from Operations, as
determined by the Board of Directors, after December 31, 1999, minus
(C) the cumulative amount of dividends accrued or paid in respect of
the Series D Preferred Stock or any other class or series of
preferred stock of the Corporation after the Issue Date) or rights,
options or warrants to subscribe for or purchase any of its
securities (excluding those rights, options and warrants issued to
all holders of shares of Common Stock entitling them for a period
expiring within 45 days after the record date referred to in
subparagraph (ii) above to subscribe for or purchase shares of
Common Stock, which rights and warrants are referred to in and
treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) collectively called the
"SECURITIES" and individually a "SECURITY"), then in each such case
the Conversion Price shall be adjusted so that it shall equal the
price determined by multiplying (x) the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution
by (y) a fraction, the numerator of which shall be the Fair Market
Value per share of Common Stock on the record date for the
determination of stockholders entitled to receive such distribution
less the then fair market value (as determined by the Board of
Directors, whose determination, if made in good faith, shall be
conclusive), of the portion of the Securities or assets or evidences
of indebtedness so distributed or of such rights, options or
warrants applicable to one share of Common Stock, and the
denominator of which shall be the Fair Market Value per share of
Common Stock on the record date for the determination of
stockholders entitled to receive such distribution. Such adjustment
shall become effective immediately at the opening of business on the
Business Day next following (except as provided in paragraph (h)
below) the record date for the determination of stockholders
entitled to receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the shares of Common Stock on
the date fixed for the determination of stockholders entitled to
such distribution of such Security, but also is distributed with
each share of Common Stock delivered to a Person converting a share
of Series D Preferred Stock after such determination date, shall not
require an adjustment of the Conversion Price pursuant to this
subparagraph (iii); PROVIDED that on the date, if any, on which a
person converting a share of Series D Preferred Stock would no
longer be entitled to receive such Security with a share of Common
Stock (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to
have occurred and the Conversion Price shall be adjusted as provided
in this subparagraph (iii) (and such day shall be deemed to be "the
date fixed for the determination of the stockholders entitled to
receive such distribution" and "the record date" within the meaning
of the two preceding sentences).
(iv) In case a tender or exchange offer (which term shall not
include open market repurchases by the Corporation) made by the
Corporation or any subsidiary of the Corporation for all or any
portion of the shares of Common Stock shall expire and such tender
or exchange offer shall involve the payment by the Corporation or
such subsidiary of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose
determination, if made in good faith, shall be conclusive and
described in a resolution of the Board of Directors), at the last
time (the "EXPIRATION TIME") tenders or exchanges may be made
pursuant to such tender or exchange offer, that exceeds the Current
Market Price per share of Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Price shall be
reduced to equal the price determined by multiplying the Conversion
Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subparagraph, by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time, multiplied by the Current Market
Price per share of Common Stock on the Trading Day next succeeding
the Expiration Time, and the denominator shall be the sum of (A) the
fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based upon the acceptance (up
to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any
maximum, being referred to as the "PURCHASED SHARES") and (B) the
product of the number of shares of Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the Current Market
Price per share of Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the Expiration
Time.
(v) If the Corporation shall, after the Issue Date, issue or
sell shares of its Common Stock or securities convertible or
exchangeable into Common Stock ("Convertible Securities") for a
gross consideration per share (including any gross consideration
payable upon conversion or exchange of the Convertible Securities)
less than the Conversion Adjustment Price in effect immediately
prior to the time of such issue or sale, then upon such issue or
sale, the Conversion Price shall be reduced to an amount determined
by dividing (a) the sum of (1) the product derived by multiplying
(i) the Conversion Price in effect immediately prior to such
issuance or sale by (ii) the number of outstanding shares of Common
Stock immediately prior to such issuance or sale, plus (2) the
gross proceeds, if any, received by the Corporation upon such
issuance or sale (including any gross consideration payable upon
conversion or exchange of the Convertible Securities), by (b) the
number of outstanding shares of Common Stock (assuming the full
conversion or exercise of all such Convertible Securities)
immediately after such issuance or sale.
(vi) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or
decrease of at least 1% in such price; PROVIDED, HOWEVER, that any
adjustments that by reason of this subparagraph (vi) are not
required to be made shall be carried forward and taken into account
in any subsequent adjustment until made; and PROVIDED, FURTHER, that
any adjustment shall be required and made in accordance with the
provisions of this Section 7 (other than this subparagraph (vi)) not
later than such time as may be required in order to preserve the
tax-free nature of a distribution to the holders of shares of Common
Stock. Notwithstanding any other provisions of this Section 7, the
Corporation shall not be required to make any adjustment of the
Conversion Price: (a) for the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Corporation and
the investment of additional optional amounts of cash in shares of
Common Stock under such plan; (b) the issuance of options and the
shares of Common Stock issued upon exercise of such options pursuant
to an employee or director stock option program approved by the
Board of Directors of the Corporation; or (c) the issuance of
limited partnership interests in the Operating Partnership, or any
other equity or debt securities which are convertible, directly or
indirectly, into or exchangeable for Common Stock in connection with
the acquisition of property or real estate operating businesses or
equity interests in such businesses and the Common Stock issued upon
conversion thereof. All calculations under this Section 7 shall be
made to the nearest cent (with $.005 being rounded upward) or to the
nearest one-tenth of a share (with .05 of a share being rounded
upward), as the case may be. Anything in this paragraph (d) to the
contrary notwithstanding, the Corporation shall be entitled, to the
extent permitted by law, to make such reductions in the Conversion
Price, in addition to those required by this paragraph (d), as it in
its discretion shall determine to be advisable in order that any
share dividends, subdivision of shares, reclassification or
combination of shares, distribution of rights or warrants to
purchase shares or securities, or distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable.
(e) If the Corporation shall be a party to any transaction (including
without limitation a merger, consolidation, statutory share exchange, self
tender offer for all or substantially all of its Common Stock, sale of all
or substantially all of the Corporation's assets, either taken alone or on
a consolidated basis, or recapitalization of the shares of Common Stock
and excluding any transaction as to which subparagraph (d)(i) of this
Section 7 applies) (each of the foregoing being referred to herein as a
"TRANSACTION"), in each case as a result of which all or substantially all
of the shares of Common Stock are converted into the right to receive
shares, securities or other property (including cash or any combination
thereof), each share of Series D Preferred Stock which is not redeemed or
converted into the right to receive shares, securities or other property
prior to such Transaction shall upon consummation of such Transaction be
converted into the right to receive the kind and amount of shares,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that
number of shares of Common Stock into which one share of Series D
Preferred Stock was convertible immediately prior to such Transaction,
assuming such holder of Common Stock (i) is not a Person with which the
Corporation consolidated or into which the Corporation merged or which
merged into the Corporation or to which such sale or transfer was made, as
the case may be ("CONSTITUENT PERSON"), or an affiliate of a Constituent
Person and (ii) failed to exercise his rights of election, if any, as to
the kind or amount of shares, securities and other property (including
cash) receivable upon such Transaction (provided that if the kind or
amount of shares, securities and other property (including cash)
receivable upon such Transaction is not the same for each share of Common
Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such
rights of election shall not have been exercised ("NON-ELECTING SHARE"),
then for the purpose of this paragraph (e) the kind and amount of shares,
securities and other property (including cash) receivable upon such
Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the Non-Electing Shares).
The Corporation shall not be a party to any Transaction unless the terms
of such Transaction are consistent with the provisions of this paragraph
(e), and it shall not consent or agree to the occurrence of any
Transaction until the Corporation has entered into an agreement with the
successor or purchasing entity, as the case may be, for the benefit of the
holders of the shares of Series D Preferred Stock that will contain
provisions enabling the holders of the shares of Series D Preferred Stock
that remain outstanding after such Transaction to convert into the
consideration received by holders of shares of Common Stock at the
Conversion Price in effect immediately prior to such Transaction. The
provisions of this paragraph (e) shall similarly apply to successive
Transactions.
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock (other than cash dividends or
distributions paid with respect to the shares of Common Stock after
December 31, 1999 not in excess of the sum of the Corporation's
cumulative undistributed Funds from Operations at December 31, 1999,
plus the cumulative amount of Funds from Operations, as determined
by the Board of Directors, after December 31, 1999, minus the
cumulative amount of dividends accrued or paid in respect of the
shares of Series D Preferred Stock or any other class or series of
preferred stock of the Corporation after the Issue Date); or
(ii) the Corporation shall authorize the granting to all holders
of shares of Common Stock of rights, options or warrants to
subscribe for or purchase any shares of any class or any other
rights, options or warrants; or
(iii) there shall be any reclassification of the shares of Common
Stock (other than an event to which subparagraph (d)(i) of this
Section 7 applies) or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of
the Corporation is required, or a statutory share exchange, or a
self tender offer by the Corporation for all or substantially all of
its outstanding shares of Common Stock or the sale or transfer of
all or substantially all of the assets of the Corporation as an
entirety; or
(iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
then the Corporation shall cause to be filed with the Transfer Agent and
shall cause to be mailed to the holders of shares of Series D Preferred
Stock at their addresses as shown on the records of the Corporation a
notice stating (A) the date on which a record is to be taken (the "RECORD
DATE") for the purpose of such dividend, distribution or granting of
rights, options or warrants, or, if a record is not to be taken, the date
as of which the holders of shares of Common Stock of record to be entitled
to such dividend, distribution or rights, options or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution
or winding up is expected to become effective (the "EFFECTIVE DATE"), and
the date as of which it is expected that holders of shares of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, statutory share exchange, sale,
transfer, liquidation, dissolution or winding up. Such notice shall be
given to the holders of shares of Series D Preferred Stock as promptly as
possible, but in all cases at least 10 days prior to the Record Date for
purposes of clause (A) above and the Effective Date for purposes of clause
(B) above, as the case may be. Failure to give or receive such notice or
any defect therein to any holder of Series D Preferred Stock shall not
affect the legality or validity of the proceedings described in this
Section 7, except as to the holder to whom notice was defective or not
given.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly file with the Transfer Agent an officer's
certificate setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such
certificate, the Corporation shall prepare a notice of such adjustment of
the Conversion Price setting forth the adjusted Conversion Price and the
effective date of such adjustment and shall mail such notice of such
adjustment of the Conversion Price to the holder of each share of Series D
Preferred Stock at such holder's last address as shown on the records of
the Corporation.
(h) In any case in which paragraph (d) of this Section 7 provides
that an adjustment shall become effective on the day next following the
record date for an event, the Corporation may defer until the occurrence
of such event (A) issuing to the holder of any share of Series D Preferred
Stock converted after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the
shares of Common Stock issuable upon such conversion before giving effect
to such adjustment and (B) paying to such holder any amount of cash in
lieu of any fraction pursuant to paragraph (c) of this Section 7.
(i) There shall be no adjustment of the Conversion Price in case of
the issuance of any shares of capital stock of the Corporation in a
reorganization, acquisition or other similar transaction except as
specifically set forth in this Section 7. If any action or transaction
would require adjustment of the Conversion Price pursuant to more than one
paragraph of this Section 7, only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest absolute
value.
(j) If the Corporation shall take any action affecting the shares of
Common Stock, other than actions described in this Section 7, that in the
opinion of the Board of Directors would materially and adversely affect
the conversion rights of the holders of the shares of Series D Preferred
Stock, the Conversion Price for the shares of Series D Preferred Stock may
be adjusted, to the extent permitted by law, in such manner, if any, and
at such time, as the Board of Directors, in its sole discretion, may
determine to be equitable in the circumstances.
(k) The Corporation covenants that it will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock, for the purpose of
effecting conversion of the shares of Series D Preferred Stock, the full
number of shares of Common Stock issuable upon the conversion of all
outstanding shares of Series D Preferred Stock not theretofore converted.
For purposes of this paragraph (k), the number of shares of Common Stock
that shall be deliverable upon the conversion of all outstanding shares of
Series D Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock issued
upon conversion of the shares of Series D Preferred Stock shall be
validly issued, fully paid and non-assessable. Before taking any action
that would cause an adjustment reducing the Conversion Price below the
then-par value of the shares of Common Stock issuable upon conversion of
the shares of Series D Preferred Stock, the Corporation will take any
action that, in the opinion of its counsel, may be necessary in order that
the Corporation may validly and legally issue fully paid and non-
assessable shares of Common Stock at such adjusted Conversion Price.
The Corporation will cause to be listed the shares of Common Stock
required to be delivered upon conversion of the shares of Series D
Preferred Stock, prior to such delivery, upon each national securities
exchange, if any, upon which the outstanding shares of Common Stock are
listed at the time of such delivery.
The Corporation shall endeavor to comply with all federal and state
securities laws and regulations thereunder in connection with the issuance
and delivery of any securities that the Corporation shall be obligated to
deliver upon conversion of the shares of Series D Preferred Stock. The
certificates evidencing such securities shall bear such legends
restricting transfer thereof in the absence of registration under
applicable securities laws or an exemption therefrom as the Corporation
may in good faith deem appropriate.
(l) The Corporation will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of
the shares of Series D Preferred Stock pursuant hereto; PROVIDED, HOWEVER,
that the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or delivery of
shares of Common Stock or other securities or property in a name other
than that of the holder of the shares of Series D Preferred Stock to be
converted, and no such issue or delivery shall be made unless and until
the person requesting such issue or delivery has paid to the Corporation,
or provided for such payment to the reasonable satisfaction of the
Corporation, the amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
Section 8. SHARES TO BE RETIRED. All shares of Series D Preferred Stock
which shall have been issued and reacquired in any manner by the Corporation
shall be restored to the status of authorized but unissued shares of capital
stock of the Corporation, without designation as to class or series.
Section 9. RANKING. The Series D Preferred Stock shall, with respect to
the payment of dividends and rights upon liquidation, dissolution or winding up
of the Corporation, rank (a) senior to all classes or series of Common Stock of
the Corporation, and to all equity securities issued by the Corporation the
terms of which specifically provide that such equity securities rank junior to
such Series D Preferred Stock; (b) on a parity with the Corporation's Series B
Convertible Cumulative Preferred Stock and Series C Convertible Cumulative
Preferred Stock, and all other equity securities issued by the Corporation the
terms of which specifically provide that such equity securities rank on a
parity with the Series D Preferred Stock (such equity securities are herein
referred to as "Parity Stock"); and (c) junior to the Corporation's Series A
Preferred Stock, and to all equity securities issued by the Corporation the
terms of which specifically provide that such equity securities rank senior to
the Series D Preferred Stock. The term "equity securities" shall not include
convertible debt securities.
Section 10. VOTING. If and whenever six or more quarterly dividends
(whether or not consecutive) payable on the shares of Series D Preferred Stock
or any series or class of Parity Stock shall be in arrears (which shall, with
respect to any such quarterly dividend, mean that any such dividend has not
been paid in full), whether or not declared, the Board of Directors shall take
such action as may be necessary to increase the number of directors by two and
the holders of Series D Preferred Stock, together with the holders of shares of
every other series of Parity Stock (any such other series, the "VOTING
PREFERRED STOCK"), voting as a single class regardless of series, shall be
entitled to elect the two additional directors to serve on the Board of
Directors at any annual meeting of stockholders or special meeting held in
place thereof, or at a special meeting of the holders of the shares of Series D
Preferred Stock and the Voting Preferred Stock called as hereinafter provided.
Whenever all arrears in dividends on the shares of Series D Preferred Stock and
the Voting Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and a sum sufficient for the payment thereof set apart, then the
right of the holders of the shares of Series D Preferred Stock and the Voting
Preferred Stock to elect such additional two directors shall cease (but subject
always to the same provision for the vesting of such voting rights in the case
of any similar future arrearage in quarterly dividends), and the terms of
office of all persons elected as directors by the holders of the shares of
Series D Preferred Stock and the Voting Preferred Stock shall forthwith
terminate and the number of the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of shares of Series D Preferred Stock and the Voting Preferred
Stock, the Secretary of the Corporation may, and upon the written request of
any holder of shares of Series D Preferred Stock (addressed to the Secretary at
the principal office of the Corporation) shall, call a special meeting of the
holders of the shares of Series D Preferred Stock and of the Voting Preferred
Stock for the election of the directors to be elected by them as herein
provided, such call to be made by notice similar to that provided in the By-
laws of the Corporation for a special meeting of the stockholders or as
required by law. If any such special meeting required to be called as above
provided shall not be called by the Secretary within 20 days after receipt of
any such request, then any holder of shares of Series D Preferred Stock may
call such meeting at the expense of the Corporation, upon the notice above
provided, and for that purpose shall have access to the records of the
Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting
held in lieu thereof if such office shall not have previously terminated as
above provided. If any vacancy shall occur among the directors elected by the
holders of the shares of Series D Preferred Stock and the Voting Preferred
Stock, a successor shall be elected by the Board of Directors, upon the
nomination of the then-remaining director elected by the holders of the shares
of Series D Preferred Stock and the Voting Preferred Stock or the successor of
such remaining director, to serve until the next annual meeting of the
stockholders or special meeting held in place thereof if such office shall not
have previously terminated as provided above.
So long as any shares of Series D Preferred Stock are outstanding, in
addition to any other vote or consent of stockholders required by law or by the
Corporation's Amended and Restated Articles of Incorporation, as amended, the
approval of at least 66-2/3% of the votes entitled to be cast by the holders of
the shares of Series D Preferred Stock given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:
(a) Any amendment, alteration or repeal of any of the provisions of
the Charter, the Corporation's By-Laws, as amended, or these Articles
Supplementary that materially and adversely affects any of the voting
powers, rights, preferences or privileges of the holders of the shares of
Series D Preferred Stock; PROVIDED, HOWEVER, that the amendment of the
Charter, so as to authorize or create or increase the authorized amount of
any shares of Fully Junior Stock, any shares of Junior Stock that are not
senior in any respect to the Series D Preferred Stock, or any shares of
Parity Stock shall not be deemed to materially adversely affect the voting
powers, rights, preferences or privileges of the holders of shares of
Series D Preferred Stock; or
(b) A share exchange that affects the shares of Series D Preferred
Stock, a consolidation with or merger of the Corporation into another
entity, or a consolidation with or merger of another entity into the
Corporation, unless in each such case each share of Series D Preferred
Stock (i) shall remain outstanding without a material and adverse change
to its terms and rights or (ii) shall be converted into or exchanged for
convertible preferred stock of the surviving entity having preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms or conditions of redemption thereof
identical to that of a share of Series D Preferred Stock (except for
changes that do not materially and adversely affect the holders of the
shares of Series D Preferred Stock); or
(c) The authorization, reclassification or creation of, or the
increase in the authorized amount of, any shares of any class or series or
any security convertible into shares of any class ranking prior to the
shares of Series D Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation or in the
payment of dividends; or
(d) Any increase in the authorized amount of shares of Series D
Preferred Stock or decrease in the authorized amount of shares of Series D
Preferred Stock below the number of shares then issued and outstanding;
PROVIDED, HOWEVER, that no such vote of the holders of shares of Series D
Preferred Stock shall be required if, at or prior to the time when such
amendment, alteration or repeal is to take effect, or when the issuance of any
such prior shares or convertible security is to be made, as the case may be,
provision is made for the redemption or repurchase of all shares of Series D
Preferred Stock at the time outstanding to the extent such redemption or
repurchase is authorized by Sections 5 or 6 of these Articles Supplementary;
and PROVIDED, FURTHER, that except as otherwise required by law or provided in
the Charter, the holders of Common Stock shall not be entitled to vote on any
matter submitted to a vote of the holders of Series D Preferred Stock pursuant
to Section 10 hereof.
For purposes of the foregoing provisions of this Section 10, each share of
Series D Preferred Stock shall have one (1) vote per share, except that when
any other series of preferred stock shall have the right to vote with the
shares of Series D Preferred Stock as a single class on any matter, then the
shares of Series D Preferred Stock and such other series shall have with
respect to such matters one (1) vote per $100.00 of stated Liquidation
Preference. Except as otherwise required by applicable law or as set forth
herein, the shares of Series D Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers other than as
set forth herein, and the consent of the holders thereof shall not be required
for the taking of any Corporation action.
Section 11. RECORD HOLDERS. The Corporation and the Transfer Agent
may deem and treat the record holder of any shares of Series D Preferred Stock
as the true and lawful owner thereof for all purposes, and neither the
Corporation nor the Transfer Agent shall be affected by any notice to the
contrary.
Section 12. Ownership Limit. The acquisition and ownership of the
shares of Series D Preferred Stock and the shares of Common Stock into which
such shares may be converted (collectively, the "Shares") shall be exempt from
the Ownership Limit (as defined in Section 7.2 of the Charter) and shall not be
included when calculating whether a person has "Beneficial Ownership" of Stock
(as defined in Section 7.1 of the Charter) in excess of the Ownership Limit,
except, if the Beneficial Ownership of the Shares in excess of the Ownership
Limit would cause the Company to be disqualified as a REIT (as defined in the
Charter) under the REIT Provisions (as defined in the Charter), then the Shares
in excess of the Ownership Limit shall convert to Excess Shares in accordance
with Section 7.5 of the Charter. Except as provided above in this Section 12,
all restrictions on ownership and transferability of Preferred Stock and Common
Stock as set forth in the Charter shall apply to the Shares and to the holders
thereof and the exemption set forth above in this Section 12 shall only be
available to the initial holders who purchase their Series D Preferred Stock
directly from the Company and shall not automatically attach to the Shares or
be available automatically to any subsequent purchaser of the Shares.
Notwithstanding anything contained in the Charter, including, without
limitation, Section 7.7 thereof, the exemption provided for in this Section 12
shall be irrevocable and the Board of Directors shall not amend, modify, revoke
or rescind the exemption with respect to any such initial holder without their
prior written consent.
IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to
be signed its name and on its behalf by its authorized officers who acknowledge
that these Articles Supplementary are the act of the Corporation, that to the
best of their knowledge, information and belief, all matters and facts set
forth herein relating to the authorization and approval of this document are
true in all material respects and this statement is made under penalties of
perjury.
June 2, 2000
HOME PROPERTIES OF NEW YORK, INC.
By: /s/ Nelson B. Leenhouts
Name: Nelson B. Leenhouts
Its: President
I, Ann M. McCormick, Secretary, hereby acknowledge on behalf of Home
Properties of New York, Inc. that the foregoing Articles Supplementary are the
corporate act of said corporation under penalties of perjury.
Attest:
/s/ Ann M. McCormick
Name Ann M. McCormick
Secretary
