Exhibit 3.1
Exhibit 3.1
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ARTICLES OF RESTATEMENT
APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation, having its principal
office in Baltimore City, Maryland (hereinafter referred to as the “Corporation” or “AIMCO”),
hereby certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: The Corporation desires to and does hereby restate its Charter as currently in effect.
SECOND: The Charter of the Corporation as restated in its entirety is as follows:
* * * * * *
ARTICLE I
NAME
The name of the corporation (the “Corporation”) is Apartment Investment and Management
Company.
ARTICLE II
PURPOSE
The purpose for which the Corporation is formed is to engage in any lawful act or activity for
which corporations may be organized under the general laws of the State of Maryland authorizing the
formation of corporations as now or hereafter in force.
ARTICLE III
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
The post office address of the principal office of the Corporation in the State of Maryland is
c/o The Prentice-Hall Corporation System, Maryland, 7 St. Paul Street, Suite 1660, Baltimore,
Maryland 21202. The name and address of the resident agent of the Corporation in the State of
Maryland is c/o The Prentice-Hall Corporation System, Maryland, 7 St. Paul Street, Suite 1660,
Baltimore, Maryland 21202. The resident agent is a Maryland corporation located in the State of
Maryland.
ARTICLE IV
STOCK
Section 1. Authorized Shares
1.1 Class and Number of Shares. The total number of shares of stock that the Corporation
from time to time shall have authority to issue is 510,587,500 shares of capital stock having a par
value of $.01 per share, amounting to an aggregate par value of $5,105,875, consisting of
485,687,260 shares currently classified as Class A Common Stock, par value $.01 per share (the
“Class A Common Stock”) (the Class A Common Stock and all other classes or series of common stock
hereafter classified being referred to collectively herein as the “Common Stock”), 6,000,000 shares
currently classified as Class T Cumulative Convertible Preferred Stock, par value $.01 per share
(the “Class T Preferred Stock”), 12,000,000 shares currently classified as Class U Cumulative
Preferred Stock, par value $.01 per share (the “Class U Preferred Stock”), 3,450,000 shares
currently classified as Class V Cumulative Preferred Stock, par value $.01 per share (the “Class V
Preferred Stock”), 3,450,000 shares currently classified as Class Y Cumulative Preferred Stock, par
value $.01 per share (the “Class Y Preferred Stock”), and 240 shares currently classified as Series
A Community Reinvestment Act Preferred Stock, par value $.01 per share (the “CRA Preferred Stock”)
(the Class T Preferred Stock, the Class U Preferred Stock, the Class V Preferred Stock, the Class Y
Preferred Stock, the CRA Preferred Stock, and all other classes or series of preferred stock
hereafter classified being referred to collectively herein as the “Preferred Stock”).
1.2 Changes in Classification and Preferences. The Board of Directors by resolution or
resolutions from time to time may classify and reclassify any unissued shares of capital stock by
setting or changing in any one or more respects the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications or terms or conditions of
redemption of such shares of capital stock, including, but not limited to, ownership restrictions
consistent with the Ownership Restrictions with respect to each such class or subclass of capital
stock, and the number of shares constituting each such class or subclass, and to increase or
decrease the number of shares of any such class or subclass.
Section 2. No Preemptive Rights. No holder of shares of stock of the Corporation shall, as
such holder, have any preemptive right to purchase or subscribe for any additional shares of the
stock of the Corporation or any other security of the Corporation that it may issue or sell.
Section 3. Common Stock.
3.1 Dividend Rights. The holders of shares of Common Stock shall be entitled to receive such
dividends as may be declared by the Board of Directors of the Corporation out of funds legally
available therefor.
3.2 Rights Upon Liquidation. Subject to the preferential rights of Preferred Stock, if any,
as may be determined by the Board of Directors pursuant to Section 1 of this Article IV, in the
event of any voluntary or involuntary liquidation, dissolution or winding up of,
or any distribution of the assets of the Corporation, each holder of shares of Common Stock
shall be entitled to receive, ratably with each other holder of Common Stock, that portion of the
assets of the Corporation available for distribution to its shareholders as the number of shares of
the Common Stock held by such holder bears to the total number of shares of Common Stock then
outstanding.
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3.3 Voting Rights. The holders of shares of Common Stock shall be entitled to vote on all
matters (on which a holder of shares of Common Stock shall be entitled to vote) at the meetings of
the shareholders of the Corporation, and shall be entitled to one vote for each share of Common
Stock entitled to vote at such meeting.
3.4 Restriction on Ownership and Transfers. The Beneficial Ownership and Transfer of Common
Stock shall be subject to the restrictions set forth in this Section 3.4 of this Article IV.
3.4.1 Restrictions.
(A) Limitation on Beneficial Ownership. Except as provided in Section 3.4.8 of this Article
IV, from and after the date of the Initial Public Offering, no Person (other than the Initial
Holder or a Look-Through Entity) shall Beneficially Own shares of Common Stock in excess of the
Ownership Limit, the Initial Holder shall not Beneficially Own shares of Common Stock in excess of
the Initial Holder Limit and no Look-Through Entity shall Beneficially Own shares of Common Stock
in excess of the Look-Through Ownership Limit.
(B) Transfers in Excess of Ownership Limit. Except as provided in Section 3.4.8 of this
Article IV, from and after the date of the Initial Public Offering (and subject to Section 3.4.12
of this Article IV), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system) that, if effective, would result in any Person (other than the
Initial Holder or a Look-Through Entity) Beneficially Owning shares of Common Stock in excess of
the Ownership Limit shall be void ab initio as to the Transfer of such shares of Common Stock that
would be otherwise Beneficially Owned by such Person in excess of the Ownership Limit, and the
intended transferee shall acquire no rights in such shares of Common Stock.
(C) Transfers in Excess of Initial Holder Limit. Except as provided in Section 3.4.8 of this
Article IV, from and after the date of the Initial Public Offering (and subject to Section 3.4.12
of this Article IV), any Transfer (whether or not such Transfer is the result of transactions
entered into through the facilities of the NYSE or other securities exchange or an automated
inter-dealer quotation system) that, if effective, would result in the Initial Holder Beneficially
Owning shares of Common Stock in excess of the Initial Holder Limit shall be void ab initio as to
the Transfer of such shares of Common Stock that would be otherwise Beneficially Owned by the
Initial Holder in excess of the Initial Holder Limit, and the Initial Holder shall acquire no
rights in such shares of Common Stock.
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(D) Transfers in Excess of Look-Through Ownership Limit. Except as provided in Section 3.4.8
of this Article IV, from and after the date of the Initial Public Offering (and subject to Section
3.4.12 of this Article IV), any Transfer (whether or not such Transfer is the result of
transactions entered into through the facilities of the NYSE or other securities exchange or an
automated inter-dealer quotation system) that, if effective, would result in any Look-Through
Entity Beneficially Owning shares of Common Stock in excess of the Look-Through Ownership Limit
shall be void ab initio as to the Transfer of such shares of Common Stock that would be otherwise
Beneficially Owned by such Look-Through Entity in excess of the Look-Through Ownership Limit, and
such Look-Through Entity shall acquire no rights in such shares of Common Stock.
(E) Transfers Resulting in Ownership by Fewer than 100 Persons. Except as provided in
Section 3.4.8 of this Article IV, from and after the date of the Initial Public Offering (and
subject to Section 3.4.12 of this Article IV), any Transfer (whether or not such Transfer is the
result of transactions entered into through the facilities of the NYSE or other securities exchange
or an automated inter-dealer quotation system) that, if effective, would result in the Common Stock
being Beneficially Owned by less than 100 Persons (determined without reference to any rules of
attribution) shall be void ab initio as to the Transfer of such shares of Common Stock that would
be otherwise Beneficially Owned by the transferee, and the intended transferee shall acquire no
rights in such shares of Common Stock.
(F) Transfers Resulting in “Closely Held” Status. From and after the date of the Initial
Public Offering, any Transfer that, if effective, would result in the Corporation being “closely
held” within the meaning of Section 856(h) of the Code, or would otherwise result in the
Corporation failing to qualify as a REIT (including, without limitation, a Transfer or other event
that would result in the Corporation owning (directly or constructively) an interest in a tenant
that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation from
such tenant would cause the Corporation to fail to satisfy any of the gross income requirements of
Section 856(c) of the Code) shall be void ab initio as to the Transfer of shares of Common Stock
that would cause the Corporation (i) to be “closely held” within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and the intended
transferee shall acquire no rights in such shares of Common Stock.
(G) Severability on Void Transactions. A Transfer of a share of Common Stock that is null
and void under Sections 3.4.1(B), (C), (D), (E) or (F) of this Article IV because it would, if
effective, result in (i) the ownership of Common Stock in excess of the Initial Holder Limit, the
Ownership Limit, or the Look-Through Ownership Limit, (ii) the Common Stock being Beneficially
Owned by less than 100 Persons (determined without reference to any rules of attribution), (iii)
the Corporation being “closely held” within the meaning of Section 856(h) of the Code or (iv) the
Corporation otherwise failing to qualify as a REIT, shall not adversely affect the validity of the
Transfer of any other share of Common Stock in the same or any other related transaction.
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3.4.2 Remedies for Breach. If the Board of Directors or a committee thereof shall at any
time determine in good faith that a Transfer or other event has taken place in violation of Section
3.4.1 of this Article IV or that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Common Stock in violation of Section 3.4.1 of this Article IV (whether
or not such violation is intended), the Board of Directors or a committee thereof shall be
empowered to take any action as it deems advisable to refuse to give effect to or to prevent such
Transfer or other event, including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem such shares at the
then current Market Price and upon such terms and conditions as may be specified by the Board of
Directors in its sole discretion (including, but not limited to, by means of the issuance of
long-term indebtedness for the purpose of such redemption), demanding the repayment of any
distributions received in respect of shares of Common Stock acquired in violation of Section 3.4.1
of this Article IV or instituting proceedings to enjoin such Transfer or to rescind such Transfer
or attempted Transfer; provided, however, that any Transfers or attempted Transfers (or in the case
of events other than a Transfer, Beneficial Ownership) in violation of Section 3.4.1 of this
Article IV, regardless of any action (or non-action) by the Board of Directors or such committee,
(a) shall be void ab initio or (b) shall automatically result in the transfer described in Section
3.4.3 of this Article IV; provided, further, that the provisions of this Section 3.4.2 shall be
subject to the provisions of Section 3.4.12 of this Article IV; provided, further, that neither the
Board of Directors nor any committee thereof may exercise such authority in a manner that
interferes with any ownership or transfer of Common Stock that is expressly authorized pursuant to
Section 3.4.8(D) of this Article IV.
3.4.3. Transfer in Trust.
(A) Establishment of Trust. If, notwithstanding the other provisions contained in this
Article IV, at any time after the date of the Initial Public Offering there is a purported Transfer
(an “Excess Transfer”) (whether or not such Transfer is the result of transactions entered into
through the facilities of the NYSE or other securities exchange or an automated inter-dealer
quotation system) or other change in the capital structure of the Corporation (including, but not
limited to, any redemption of Preferred Stock) or other event such that (a) any Person (other than
the Initial Holder or a Look-Through Entity) would Beneficially Own shares of Common Stock in
excess of the Ownership Limit, or (b) the Initial Holder would Beneficially Own shares of Common
Stock in excess of the Initial Holder Limit, or (c) any Person that is a Look-Through Entity would
Beneficially Own shares of Common Stock in excess of the Look-Through Ownership Limit (in any such
event, the Person, Initial Holder or Look-Through Entity that would Beneficially Own shares of
Common Stock in excess of the Ownership Limit, the Initial Holder Limit or the Look-Through Entity
Limit is referred to as a “Prohibited Transferee”), then, except as otherwise provided in Section
3.4.8 of this Article IV, such shares of Common Stock in excess of the Ownership Limit, the Initial
Holder Limit or the Look-Through Ownership Limit, as the case may be, (rounded up to the nearest
whole share) shall be automatically transferred to a Trustee in his capacity as trustee of a Trust
for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee
shall be deemed to be effective as of the close of business on the business day prior to the date
of the
Excess Transfer, change in capital structure or another event giving rise to a potential
violation of the Ownership Limit, the Initial Holder Limit or the Look Through Entity Ownership
Limit.
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(B) Appointment of Trustee. The Trustee shall be appointed by the Corporation and shall be a
Person unaffiliated with either the Corporation or any Prohibited Transferee. The Trustee may be
an individual or a bank or trust company duly licensed to conduct a trust business.
(C) Status of Shares Held by the Trustee. Shares of Common Stock held by the Trustee shall
be issued and outstanding shares of capital stock of the Corporation. Except to the event provided
in Section 3.4.3(E), the Prohibited Transferee shall have no rights in the Common Stock held by the
Trustee, and the Prohibited Transferee shall not benefit economically from ownership of any shares
held in trust by the Trustee, shall have no rights to dividends and shall not possess any rights to
vote or other rights attributable to the shares held in the Trust.
(D) Dividend and Voting Rights. The Trustee shall have all voting rights and rights to
dividends with respect to shares of Common Stock held in the Trust, which rights shall be exercised
for the benefit of the Charitable Beneficiary. Any dividend or distribution paid prior to the
discovery by the Corporation that the shares of Common Stock have been transferred to the Trustee
shall be repaid to the Corporation upon demand, and any dividend or distribution declared but
unpaid shall be rescinded as void ab initio with respect to such shares of Common Stock. Any
dividends or distributions so disgorged or rescinded shall be paid over to the Trustee and held in
trust for the Charitable Beneficiary. Any vote cast by a Prohibited Transferee prior to the
discovery by the Corporation that the shares of Common Stock have been transferred to the Trustee
will be rescinded as void ab initio and shall be recast in accordance with the desires of the
Trustee acting for the benefit of the Charitable Beneficiary. The owner of the shares at the time
of the Excess Transfer, change in capital structure or other event giving rise to a potential
violation of the Ownership Limit, Initial Holder Limit or Look-Through Entity Ownership Limit shall
be deemed to have given an irrevocable proxy to the Trustee to vote the shares of Common Stock for
the benefit of the Charitable Beneficiary.
(E) Restrictions on Transfer. The Trustee of the Trust may transfer the shares held in the
Trust to a person, designated by the Trustee, whose ownership of the shares will not violate the
Ownership Restrictions. If such a transfer is made, the interest of the Charitable Beneficiary
shall terminate and proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 3.4.3(E). The Prohibited Transferee shall
receive the lesser of (1) the price paid by the Prohibited Transferee for the shares or, if the
Prohibited Transferee did not give value for the shares (through a gift, devise or other
transaction), the Market Price of the shares on the day of the event causing the shares to be held
in the Trust and (2) the price per share received by the Trustee from the sale or other disposition
of the shares held in the Trust. Any proceeds in excess of the amount payable to the Prohibited
Transferee shall be payable to the Charitable Beneficiary. If any of the transfer restrictions set
forth in this Section 3.4.3(E) or any application thereof is determined in a final judgment to be
void, invalid or unenforceable by any court having jurisdiction over the issue, the
Prohibited Transferee may be deemed, at the option of the Corporation, to have acted as the
agent of the Corporation in acquiring the Common Stock as to which such restrictions would, by
their terms, apply, and to hold such Common Stock on behalf of the Corporation.
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(F) Purchase Right in Stock transferred to the Trustee. Shares of Common Stock transferred
to the Trustee shall be deemed to have been offered for sale to the Corporation, or its designee,
at a price per share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price at
the time of such devise or gift) and (ii) the Market Price on the date the Corporation, or its
designee, accepts such offer. The Corporation shall have the right to accept such offer for a
period of 90 days after the later of (i) the date of the Excess Transfer or other event resulting
in a transfer to the Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) Designation of Charitable Beneficiaries. By written notice to the Trustee, the
Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of
the interest in the Trust relating to such Prohibited Transferee if (i) the shares of Common Stock
held in the Trust would not violate the Ownership Restrictions in the hands of such Charitable
Beneficiary and (ii) each Charitable Beneficiary is an organization described in Sections
170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
3.4.4 Notice of Restricted Transfer. Any Person that acquires or attempts to acquire shares
of Common Stock in violation of Section 3.4.1 of this Article IV, or any Person that is a
Prohibited Transferee such that stock is transferred to the Trustee under Section 3.4.3 of this
Article IV, shall immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted Transfer or other event on the
Corporation’s status as a REIT. Failure to give such notice shall not limit the rights and
remedies of the Board of Directors provided herein in any way.
3.4.5 Owners Required to Provide Information. From and after the date of the Initial Public
Offering certain record and Beneficial Owners and transferees of shares of Common Stock will be
required to provide certain information as set out below.
(A) Annual Disclosure. Every record and Beneficial Owner of more than 5% (or such other
percentage between 0.5% and 5%, as provided in the applicable regulations adopted under the Code)
of the number of Outstanding shares of Common Stock shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name and address of such record or
Beneficial Owner, the number of shares of Common Stock Beneficially Owned, and a full description
of how such shares are held. Each such record or Beneficial Owner of Common Stock shall, upon
demand by the Corporation, disclose to the Corporation in writing such additional information with
respect to the Beneficial Ownership of the Common Stock as the Board of Directors, in its sole
discretion, deems appropriate or necessary to (i) comply with the provisions of the Code regarding
the qualification of the Corporation as a REIT under the Code and (ii) ensure compliance with the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit, as applicable. Each
shareholder of
record, including without limitation any Person that holds shares of Common Stock on behalf of
a Beneficial Owner, shall take all reasonable steps to obtain the written notice described in this
Section 3.4.5 from the Beneficial Owner.
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(B) Disclosure at the Request of the Corporation. Any Person that is a Beneficial Owner of
shares of Common Stock and any Person (including the shareholder of record) that is holding shares
of Common Stock for a Beneficial Owner, and any proposed transferee of shares, shall provide such
information as the Corporation, in its sole discretion, may request in order to determine the
Corporation’s status as a REIT, to comply with the requirements of any taxing authority or other
governmental agency, to determine any such compliance or to ensure compliance with the Ownership
Limit, the Initial Holder Limit and the Look-Through Ownership Limit, and shall provide a statement
or affidavit to the Corporation setting forth the number of shares of Common Stock already
Beneficially Owned by such shareholder or proposed transferee and any related persons specified,
which statement or affidavit shall be in the form prescribed by the Corporation for that purpose.
3.4.6 Remedies Not Limited. Nothing contained in this Article IV shall limit the authority
of the Board of Directors to take such other action as it deems necessary or advisable (subject to
the provisions of Section 3.4.12 of this Article IV) (i) to protect the Corporation and the
interests of its shareholders in the preservation of the Corporation’s status as a REIT and (ii) to
insure compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership
Limit.
3.4.7 Ambiguity. In the case of an ambiguity in the application of any of the provisions of
Section 3.4 of this Article IV, or in the case of an ambiguity in any definition contained in
Section 4 of this Article IV, the Board of Directors shall have the power to determine the
application of the provisions of this Article IV with respect to any situation based on its
reasonable belief, understanding or knowledge of the circumstances.
3.4.8 Exceptions. The following exceptions shall apply or may be established with respect to
the limitations of Section 3.4.1 of this Article IV.
(A) Waiver of Ownership Limit. The Board of Directors, upon receipt of a ruling from the
Internal Revenue Service or an opinion of tax counsel or other evidence or undertaking acceptable
to it, may waive the application, in whole or in part, of the Ownership Limit to a Person subject
to the Ownership Limit, if such person is not an individual for purpose of Section 542(a) of the
Code and is a corporation, partnership, estate or trust; provided, however, that in no event may
any such exception cause such Person’s ownership, direct or indirect (without taking into account
such Person’s ownership of interests in any partnership of which the Corporation is a partner), to
exceed 12% of the number of Outstanding shares of Common Stock. In connection with any such
exemption, the Board of Directors may require such representations and undertakings from such
Person and may impose such other conditions as the Board deems necessary, in its sole discretion,
to determine the effect, if any, of the proposed Transfer on the Corporation’s status as a REIT.
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(B) Pledge by Initial Holder. Notwithstanding any other provision of this Article IV, the
pledge by the Initial Holder of all or any portion of the Common Stock directly owned at any time
or from time to time shall not constitute a violation of Section 3.4.1 of this Article IV and the
pledgee shall not be subject to the Ownership Limit with respect to the Common Stock so pledged to
it either as a result of the pledge or upon foreclosure.
(C) Underwriters. For a period of 270 days following the purchase of Common Stock by an
underwriter that (i) is a corporation or a partnership and (ii) participates in an offering of the
Common Stock, such underwriter shall not be subject to the Ownership Limit with respect to the
Common Stock purchased by it as a part of or in connection with such offering and with respect to
any Common Stock purchased in connection with market making activities.
(D) Ownership and Transfers by the CMO Trustee. The Ownership Limit shall not apply to the
initial holding of Common Stock by the “CMO Trustee” (as that term is defined in the “Glossary” to
the Prospectus) for the benefit of “HF Funding Trust” (as that term is defined in the “Glossary” to
the Prospectus), to any subsequent acquisition of Common Stock by the CMO Trustee in connection
with any conversion of Preferred Stock or to any transfer or assignment of all or any part of the
legal or beneficial interest in the Common Stock to the CMO Trustee, “FSA” (as that term is defined
in the “Glossary” to the Prospectus), any entity controlled by FSA, or any direct or indirect
creditor of HF Funding Trust (including without limitation any reinsurer of any obligation of HF
Funding Trust) or any acquisition of Common Stock by any such person in connection with any
conversion of Preferred Stock.
3.4.9 Legend. Each certificate for Common Stock shall bear the following legend:
“The shares of Class A Common Stock represented by this certificate are subject
to restrictions on transfer. No person may Beneficially Own shares of Class A
Common Stock in excess of the Ownership Restrictions, as applicable, with certain
further restrictions and exceptions set forth in the Charter. Any Person that
attempts to Beneficially Own shares of Class A Common Stock in excess of the
applicable limitation must immediately notify the Corporation. All capitalized
terms in this legend have the meanings ascribed to such terms in the Charter, as the
same may be amended from time to time, a copy of which, including the restrictions
on transfer, will be sent without charge to each stockholder that so requests. If
the restrictions on transfer are violated, (i) the transfer of shares of Class A
Common Stock represented hereby will be void in accordance with the Charter or (ii)
the shares of Class A Common Stock represented hereby automatically be will
transferred to a Trustee of a Trust for the benefit of one or more Charitable
Beneficiaries.”
3.4.10 Severability. If any provision of this Article IV or any application of any such
provision is determined in a final and unappealable judgment to be void, invalid or unenforceable
by any Federal or state court having jurisdiction over the issues, the validity and
enforceability of the remaining provisions shall not be affected and other applications of
such provision shall be affected only to the extent necessary to comply with the determination of
such court.
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3.4.11 Board of Directors Discretion. Anything in this Article IV to the contrary
notwithstanding, the Board of Directors shall be entitled to take or omit to take such actions as
it in its discretion shall determine to be advisable in order that the Corporation maintain its
status as and continue to qualify as a REIT, including, but not limited to, reducing the Ownership
Limit, the Initial Holder Limit and the Look-Through Ownership Limit in the event of a change in
law.
3.4.12 Settlement. Nothing in this Section 3.4 of this Article IV shall be interpreted to
preclude the settlement of any transaction entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system.
Section 4. Definitions. The terms set forth below shall have the meanings specified below
when used in this Article IV or in Article V of the Charter.
4.1 Beneficial Ownership. The term “Beneficial Ownership” shall mean, with respect to any
Person, ownership of shares of Common Stock equal to the sum of (i) the shares of Common Stock
directly owned by such Person, (ii) the number of shares of Common Stock indirectly owned by such
Person (if such Person is an “individual” as defined in Section 542(a)(2) of the Code) taking into
account the constructive ownership rules of Section 544 of the Code, as modified by Section
856(h)(1)(B) of the Code, and (iii) the number of shares of Common Stock that such Person is deemed
to beneficially own pursuant to Rule 13d-3 under the Exchange Act or that is attributed to such
Person pursuant to Section 318 of the Code, as modified by Section 856(d)(5) of the Code, provided
that when applying this definition of Beneficial Ownership to the Initial Holder, clause (iii) of
this definition, and clause (b) of the definition of “Person” shall be disregarded. The terms
“Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative
meanings.
4.2 Charitable Beneficiary. The term “Charitable Beneficiary” shall mean one or more
beneficiaries of the Trust as determined pursuant to Section 3.4.3 of this Article IV, each of
which shall be an organization described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the
Code.
4.3 Code. The term “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute thereto. Reference to any provision of the Code shall mean such
provision as in effect from time to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative pronouncements as in effect from
time to time.
4.4 Common Stock. The term “Common Stock” shall mean all shares now or hereafter authorized
of any class of Common Stock of the Corporation and any other capital stock of the Corporation,
however designated, authorized after the Issue Date, that has the right
(subject always to prior rights of any class of Preferred Stock) to participate in the
distribution of the assets and earnings of the Corporation without limit as to per share amount.
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4.5 Excess Transfer. The term “Excess Transfer” has the meaning set forth in Section
3.4.3(A) of this Article IV.
4.6 Exchange Act. The term “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
4.7 Initial Holder. The term “Initial Holder” shall mean Terry Considine.
4.8 Initial Holder Limit. The term “Initial Holder Limit” shall mean 15% of the number of
Outstanding shares of Common Stock applied, in the aggregate, to the Initial Holder. From the date
of the Initial Public Offering, the secretary of the Corporation, or such other person as shall be
designated by the Board of Directors, shall upon request make available to the representative(s) of
the Initial Holder and the Board of Directors, a schedule that sets forth the then-current Initial
Holder Limit applicable to the Initial Holder.
4.9 Initial Public Offering. The term “Initial Public Offering” shall mean the first
underwritten public offering of Class A Common Stock registered under the Securities Act of 1933,
as amended, on a registration statement on Form S-11 filed with the Securities and Exchange
Commission.
4.10 Look-Through Entity. The term “Look-Through Entity” shall mean a Person that is either
(i) described in Section 401(a) of the Code as provided under Section 856(h)(3) of the Code or (ii)
registered under the Investment Company Act of 1940.
4.11 Look-Through Ownership Limit. The term “Look-Through Ownership Limit” shall mean 15% of
the number of Outstanding shares of Common Stock.
4.12 Market Price. The term “Market Price” on any date shall mean the Closing Price on the
Trading Day immediately preceding such date. The term “Closing Price” on any date shall mean the
last sale price, regular way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the NYSE
or, if the Common Stock is not listed or admitted to trading on the NYSE, as reported in the
principal consolidated transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Common Stock is listed or admitted to trading
or, if the Common Stock is not listed or admitted to trading on any national securities exchange,
the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the principal other automated
quotations system that may then be in use or, if the Common Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market
maker making a market in the Common Stock selected by the Board of Directors of the Company. The
term “Trading Day” shall mean a day on which the principal
national securities exchange on which the Common Stock is listed or admitted to trading is
open for the transaction of business or, if the Common Stock is not listed or admitted to trading
on any national securities exchange, shall mean any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of New York are authorized or obligated by law or executive
order to close.
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4.13 NYSE. The term “NYSE” shall mean the New York Stock Exchange, Inc.
4.14 Outstanding. The term “Outstanding” shall mean issued and outstanding shares of Common
Stock of the Corporation, provided that for purposes of the application of the Ownership Limit, the
Look-Through Ownership Limit or the Initial Holder Limit to any Person, the term “Outstanding”
shall be deemed to include the number of shares of Common Stock that such Person alone, at that
time, could acquire pursuant to any options or convertible securities.
4.15 Ownership Limit. The term “Ownership Limit” shall mean, for any Person other than the
Initial Holder or a Look-Through Entity, 8.7% of the number of the Outstanding shares of Common
Stock of the Corporation.
4.16 Ownership Restrictions. The term “Ownership Restrictions” shall mean collectively the
Ownership Limit as applied to Persons other than the Initial Holder or Look-Through Entities, the
Initial Holder Limit as applied to the Initial Holder and the Look-Through Ownership Limit as
applied to Look-Through Entities.
4.17 Person. The term “Person” shall mean (A) an individual, corporation, partnership,
estate, trust (including a trust qualifying under Section 401(a) or 501(c) of the Code),
association, private foundation within the meaning of Section 509(a) of the Code, joint stock
company or other entity, and (B) also includes a group as that term is used for purposes of Section
13(d)(3) of the Exchange Act.
4.18 Prohibited Transferee. The term “Prohibited Transferee” has the meaning set forth in
Section 3.4.3(A) of this Article IV.
4.19 REIT. The term “REIT” shall mean a “real estate investment trust” as defined in Section
856 of the Code.
4.20 Transfer. The term “Transfer” shall mean any sale, transfer, gift, assignment, devise
or other disposition of a share of Common Stock (including (i) the granting of an option or any
series of such options or entering into any agreement for the sale, transfer or other disposition
of Common Stock or (ii) the sale, transfer, assignment or other disposition of any securities or
rights convertible into or exchangeable for Common Stock), whether voluntary or involuntary,
whether of record or Beneficial Ownership, and whether by operation of law or otherwise (including,
but not limited to, any transfer of an interest in other entities that results in a change in the
Beneficial Ownership of shares of Common Stock). The term “Transfers” and “Transferred” shall have
correlative meanings.
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4.21 Trust. The term “Trust” shall mean the trust created pursuant to Section 3.4.3 of this
Article IV.
4.22 Trustee. The term “Trustee” shall mean the Person unaffiliated with either the
Corporation or the Prohibited Transferee that is appointed by the Corporation to serve as trustee
of the Trust.
4.23 Prospectus. The term “Prospectus” shall mean the prospectus that forms a part of the
registration statement filed with the Securities and Exchange Commission in connection with the
Initial Public Offering, in the form included in the registration statement at the time the
registration statement becomes effective; provided, however, that, if such prospectus is
subsequently supplemented or amended for use in connection with the Initial Public Offering,
“Prospectus” shall refer to such prospectus as so supplemented or amended.
ARTICLE V
GENERAL REIT PROVISIONS
Section 1. Termination of REIT Status. The Board of Directors shall take no action to
terminate the Corporation’s status as a REIT until such time as (i) the Board of Directors adopts a
resolution recommending that the Corporation terminate its status as a REIT, (ii) the Board of
Directors presents the resolution at an annual or special meeting of the shareholders and (iii)
such resolution is approved by the vote of a majority of the shares entitled to be cast on the
resolution.
Section 2. Exchange or Market Transactions. Nothing in Article IV or this Article V shall
preclude the settlement of any transaction entered into through the facilities of the NYSE or other
national securities exchange or an automated inter-dealer quotation system. The fact that the
settlement of any transaction is permitted shall not negate the effect of any other provision of
this Article V or any provision of Article IV, and the transferee, including but not limited to any
Prohibited Transferee, in such a transaction shall remain subject to all the provisions and
limitations of Article IV and this Article V.
Section 3. Severability. If any provision of Article IV or this Article V or any application
of any such provision is determined to be invalid by any federal or state court having jurisdiction
over the issues, the validity of the remaining provisions shall not be affected and other
applications of such provision shall be affected only to the extent necessary to comply with the
determination of such court.
Section 4. Waiver. The Corporation shall have authority at any time to waive the requirement
that the Corporation redeem shares of Preferred Stock if, in the sole discretion of the Board of
Directors, any such redemption would jeopardize the status of the Corporation as a REIT for federal
income tax purposes.
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ARTICLE VI
BOARD OF DIRECTORS
Section 1. Management. The business and the affairs of the Corporation shall managed under
the direction of its Board of Directors.
Section 2. Number. The number of directors that will constitute the entire Board of
Directors shall be fixed by, or in the manner provided in, the Bylaws but shall in no event be less
than three. Any increases or decreases in the size of the board shall be apportioned equally among
the classes of directors to prevent stacking in any one class of directors. There are currently
eight directors in office whose names are as follows: Terry Considine, James N. Bailey, Richard S.
Ellwood, Thomas L. Keltner, J. Landis Martin, Robert A. Miller, Kathleen M. Nelson and Michael A.
Stein.
Section 3. Intentionally deleted.
Section 4. Vacancies. Except as otherwise provided in the Charter, newly created
directorships resulting from any increase in the number of directors may be filled by the majority
vote of the Board of Directors, and any vacancies on the Board of Directors resulting from death,
resignation, removal or other cause shall be filled by the affirmative vote of a majority of the
remaining directors then in office, even if less than a quorum of the Board of Directors, or, if
applicable, by a sole remaining director. Any director elected in accordance with the preceding
sentence shall hold office until the next annual meeting of the Corporation at which time a
successor shall be elected to fill the remaining term of the position filled by such director.
Section 5. Removal. Except as otherwise provided in the Charter, any director may be removed
from office only for cause and only by the affirmative vote of two-thirds of the aggregate number
of votes then entitled to be cast generally in the election of directors. For purposes of this
Section 5, “cause” shall mean the willful and continuous failure of a director to substantially
perform the duties to the Corporation of such director (other than any such failure resulting from
temporary incapacity due to physical or mental illness) or the willful engaging by a director in
gross misconduct materially and demonstrably injurious to the Corporation.
Section 6. Bylaws. The Board of Directors shall have power to adopt, amend, alter, change
and repeal any Bylaws of the Corporation by vote of the majority of the Board of Directors then in
office. Any adoption, amendment, alteration, change or repeal of any Bylaws by the shareholders of
the Corporation shall require the affirmative vote of a majority of the aggregate number of votes
then entitled to be cast generally in the election of directors. Notwithstanding anything in this
Section 6 to the contrary, no amendment, alteration, change or repeal of any provision of the
Bylaws relating to the removal of directors or repeal of the Bylaws shall be effected without the
vote of two-thirds of the aggregate number of votes entitled be cast generally in the election of
Directors.
Section 7. Powers. The enumeration and definition of particular powers of the Board of
Directors included elsewhere in the Charter shall in no way be limited or restricted by reference
to or inference from the terms of any other clause of this or any other Article of the Charter, or
construed as excluding or limiting, or deemed by inference or otherwise in any manner to
exclude or limit, the powers conferred upon the Board of Directors under the Maryland General
Corporation Law (“MGCL”) as now or hereafter in force.
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ARTICLE VII
LIMITATION OF LIABILITY
No director or officer of the Corporation shall be liable to the Corporation or its
shareholders for money damages to the maximum extent that Maryland law in effect from time to time
permits limitation of the liability of directors and officers. Neither the amendment nor repeal of
this Article VII, nor the adoption or amendment of any other provision of the charter or Bylaws of
the Corporation inconsistent with this Article VII, shall apply to or affect in any respect the
applicability of the preceding sentence with respect to any act or failure to act that occurred
prior to such amendment, repeal or adoption.
ARTICLE VIII
INDEMNIFICATION
The Corporation shall indemnify, to the fullest extent permitted by Maryland law, as
applicable from time to time, all persons who at any time were or are directors or officers of the
Corporation for any threatened, pending or completed action, suit or proceeding (whether civil,
criminal, administrative or investigative) relating to any action alleged to have been taken or
omitted in such capacity as a director or an officer. The Corporation shall pay or reimburse all
reasonable expenses incurred by a present or former director or officer of the Corporation in
connection with any threatened, pending or completed action, suit or proceeding (whether civil,
criminal, administrative or investigative) in which the present or former director or officer is a
party, in advance of the final disposition of the proceeding, to the fullest extent permitted by,
and in accordance with the applicable requirements of, Maryland law, as applicable from time to
time. The Corporation may indemnify any other persons permitted but not required to be indemnified
by Maryland law, as applicable from time to time, if and to extent indemnification is authorized
and determined to be appropriate, in each case in accordance with applicable law, by the Board of
Directors, the majority of the shareholders of the Corporation entitled to vote thereon or special
legal counsel appointed by the Board of Directors. No amendment of the Charter of the Corporation
or repeal of any of its provisions shall limit or eliminate any of the benefits provided to
directors and officers under this Article VIII in respect of any act or omission that occurred
prior to such amendment or repeal.
ARTICLE IX
WRITTEN CONSENT OF SHAREHOLDERS
Any corporate action upon which a vote of shareholders is required or permitted may be taken
without a meeting or vote of shareholders with the unanimous written consent of shareholders
entitled to vote thereon.
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ARTICLE X
AMENDMENT
The Corporation reserves the right to amend, alter or repeal any provision contained in this
charter upon (i) adoption by the Board of Directors of a resolution recommending such amendment,
alteration, or repeal, (ii) presentation by the Board of Directors to the shareholders of a
resolution at an annual or special meeting of the shareholders and (iii) approval of such
resolution by the affirmative vote of the holders of a majority (or, as applicable, a two-thirds
vote) of the aggregate number of votes entitled to be case generally in the election of directors.
All rights conferred upon shareholders herein are subject to this reservation.
ARTICLE XI
EXISTENCE
The Corporation is to have a perpetual existence.
ARTICLE XII
CLASS T PREFERRED STOCK
The terms of the Class T Preferred Stock (including the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of Directors are as set
forth in Exhibit T hereto.
ARTICLE XIII
CLASS U PREFERRED STOCK
The terms of the Class U Preferred Stock (including the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of Directors are as set
forth in Exhibit U hereto.
ARTICLE XIV
CLASS V PREFERRED STOCK
The terms of the Class V Preferred Stock (including the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of Directors are as set
forth in Exhibit V hereto.
ARTICLE XV
CLASS Y PREFERRED STOCK
The terms of the Class Y Preferred Stock (including the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of Directors are as
set forth in Exhibit Y hereto.
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ARTICLE XVI
CRA PREFERRED STOCK
The terms of the CRA Preferred Stock (including the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends and other distributions, qualifications,
or terms or conditions of redemption) as set by the Board of Directors are as set forth in Exhibit
CRA hereto.
* * * * * *
THIRD: The Board of Directors of the Corporation at a meeting or by a unanimous consent in
writing in lieu of a meeting under § 2-408 of the Maryland General Corporation Law adopted a
resolution that set forth and approved the foregoing restatement of the Charter.
FOURTH: The Charter of the Corporation is not amended by these Articles of Restatement;
provided, however, that consistent with § 2-608(b)(7) of the Maryland General Corporation Law, the
current number and names of directors are provided in the last sentence of Section 2 of Article VI
of the restated Charter of the Corporation.
FIFTH: The current address of the principal office of the Corporation is 4582 South Ulster
Street Parkway, Suite 1100, Denver, Colorado 80237. The current address of the principal office of
the Corporation in the State of Maryland is c/o The Prentice-Hall Corporation System, Maryland, 7
St. Paul Street, Suite 1660, Baltimore, Maryland 21202.
SIXTH: The name and address of the Corporation’s resident agent in the State of Maryland is
The Prentice-Hall Corporation System, Maryland, 7 St. Paul Street, Suite 1660, Baltimore, Maryland
21202.
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IN WITNESS WHEREOF, APARTMENT INVESTMENT AND MANAGEMENT COMPANY has caused these presents to
be signed in its name and on its behalf by its Executive Vice President and Chief Financial Officer
and witnessed by its Secretary on April 27, 2011.
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY |
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/s/ Lisa R. Cohn
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By:
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/s/ Ernest M. Freedman |
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Ernest M. Freedman,
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Secretary
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Executive Vice President and |
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Chief Financial Officer |
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THE UNDERSIGNED, Executive Vice President and Chief Financial Officer of APARTMENT INVESTMENT
AND MANAGEMENT COMPANY, who executed on behalf of the Corporation the foregoing Articles of
Restatement of which this certificate is made a part, hereby acknowledges in the name and on behalf
of said Corporation the foregoing Articles of Restatement to be the corporate act of said
Corporation and hereby certifies that to the best of his knowledge, information, and belief the
matters and facts set forth therein with respect to the authorization and approval thereof are true
in all material respects under the penalties of perjury.
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/s/ Ernest M. Freedman
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Ernest M. Freedman, |
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Executive Vice President and
Chief Financial Officer |
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Exhibit T
ARTICLE XII
Class T Cumulative Preferred Stock
Par Value $.01 Per Share
The terms of the Class T Cumulative Preferred Stock (including the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of Directors are as
follows:
1. Number of Shares and Designation.
This class of Preferred Stock shall be designated as Class T Cumulative Preferred Stock (the
“Class T Preferred Stock”) and Six Million (6,000,000) shall be the authorized number of shares of
such Class T Preferred Stock constituting such class.
2. Definitions.
For purposes of the Class T Preferred Stock, the following terms shall have the meanings
indicated:
“Act” shall mean the Securities Act of 1933, as amended.
“affiliate” of a Person means a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, the Person
specified.
“Aggregate Value” shall mean, with respect to any block of Equity Stock, the product of (i)
the number of shares of Equity Stock within such block and (ii) the corresponding Market
Price of one share of Equity Stock of such class.
“Beneficial Ownership” shall mean, with respect to any Person, ownership of shares of Equity
Stock equal to the sum of (without duplication) (i) the number of shares of Equity Stock
directly owned by such Person, (ii) the number of shares of Equity Stock indirectly owned by
such Person (if such Person is an “individual” as defined in Section 542(a)(2) of the Code)
taking into account the constructive ownership rules of Section 544 of the Code, as modified
by Section 856(h)(1)(B) of the Code, and (iii) the number of shares of Equity Stock that
such Person is deemed to beneficially own pursuant to Rule 13d-3 under the Exchange Act, or
that is attributed to such Person pursuant to Section 318 of the Code, as modified by
Section 856(d)(5) of the Code, provided that when applying this definition of Beneficial
Ownership to the Initial Holder, clause (iii) of this definition, and clause (ii) of the
definition of “Person” shall be disregarded. The terms “Beneficial
Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.
T-1
“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 Class T Preferred Stock; provided that, for purposes of paragraph (a) of Section 8 of
this Article, the term “Board of Directors” shall not include any such committee.
“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, New York are not required to be open.
“Charitable Beneficiary” shall mean one or more beneficiaries of the Trust as determined
pursuant to Section 10.3(G) of this Article, each of which shall be an organization
described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
“Class A Common Stock” shall mean the Class A Common Stock, par value $.01 per share, of the
Corporation, and such other shares of the Corporation’s capital stock into which outstanding
shares of such Class A Common Stock shall be reclassified.
“Class T Preferred Stock” shall have the meaning set forth in Section 1 of this Article.
“Closing Price” shall mean, when used with respect to a share of any Equity Stock and for
any date, the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity Stock is not listed
or admitted to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading or, if the Equity Stock
is not listed or admitted to trading on any national securities exchange, the last quoted
price, or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if the Equity Stock is not quoted by
any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected by the Board of
Directors of the Corporation or, if the Equity Stock is not publicly traded, the fair value
of a share of such Equity Stock as reasonably determined in good faith by the Board of
Directors.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision
as in effect from time to time, as the same may be amended, and any successor
thereto, as interpreted by any applicable regulations or other administrative pronouncements
as in effect from time to time.
T-2
“Dividend Payment Date” shall mean January 15, April 15, July 15, and October 15 of each
year; provided, that if any Dividend Payment Date falls on any day other than a Business
Day, the dividend payment payable on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date and no interest shall accrue
on such dividend from such date to such Dividend Payment Date.
“Dividend Periods” shall mean the Initial Dividend Period and each subsequent quarterly
dividend period commencing on and including January 15, April 15, July 15, and October 15 of
each year and ending on and including the day preceding the first day of the next succeeding
Dividend Period, other than the Dividend Period during which any Class T Preferred Stock
shall be redeemed pursuant to Section 5 hereof, which shall end on and include the
Redemption Date with respect to the Class T Preferred Stock being redeemed.
“Equity Stock” shall mean one or more shares of any class of capital stock of the
Corporation.
“Excess Transfer” has the meaning set forth in Section 10.3(A) of this Article.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Issue Date” shall mean July 31, 2003.
“Initial Dividend Period” shall mean the period commencing on and including the Issue Date
and ending on and including October 14, 2003.
“Initial Holder” shall mean Terry Considine.
“Initial Holder Limit” shall mean a number of the Outstanding shares of Class T Preferred
Stock of the Corporation having an Aggregate Value not in excess of the excess of (x) 15% of
the Aggregate Value of all Outstanding shares of Equity Stock over (y) the Aggregate Value
of all shares of Equity Stock other than Class T Preferred Stock that are Beneficially Owned
by the Initial Holder. From the Issue Date, the secretary of the Corporation, or such other
person as shall be designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of Directors, a schedule that
sets forth the then-current Initial Holder Limit applicable to the Initial Holder.
“Junior Stock” shall have the meaning set forth in paragraph (c) of Section 7 of this
Article.
“Liquidation Preference” shall have the meaning set forth in paragraph (a) of Section 4 of
this Article.
T-3
“Look-Through Entity” shall mean a Person that is either (i) described in Section 401(a) of
the Code as provided under Section 856(h)(3) of the Code or (ii) registered under the
Investment Company Act of 1940.
“Look-Through Ownership Limit” shall mean, for any Look-Through Entity, a number of the
Outstanding shares of Class T Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 15% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other than Class T
Preferred Stock that are Beneficially Owned by the Look-Through Entity.
“Market Price” on any date shall mean, with respect to any share of Equity Stock, the
Closing Price of a share of that class of Equity Stock on the Trading Day immediately
preceding such date.
“NYSE” shall mean The New York Stock Exchange, Inc.
“Operating Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.
“Outstanding” shall mean issued and outstanding shares of Equity Stock of the Corporation;
provided, however, that for purposes of the application of the Ownership Limit, the
Look-Through Ownership Limit or the Initial Holder Limit to any Person, the term
“Outstanding” shall be deemed to include the number of shares of Equity Stock that such
Person alone, at that time, could acquire pursuant to any options or convertible securities.
“Ownership Limit” shall mean, for any Person other than the Initial Holder or a Look-Through
Entity, a number of the Outstanding shares of Class T Preferred Stock of the Corporation
having an Aggregate Value not in excess of the excess of (x) 8.7% of the Aggregate Value of
all Outstanding shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class T Preferred Stock that are Beneficially Owned by the Person.
“Ownership Restrictions” shall mean, collectively, the Ownership Limit, as applied to
Persons other than the Initial Holder or Look-Through Entities, the Initial Holder Limit, as
applied to the Initial Holder, and the Look-Through Ownership Limit, as applied to
Look-Through Entities.
“Parity Stock” shall have the meaning set forth in paragraph (b) of Section 7 of this
Article.
“Person” shall mean (a) for purposes of Section 10 of this Article, (i) an individual,
corporation, partnership, estate, trust (including a trust qualifying under Section 401(a)
or 501(c) of the Code), association, “private foundation,” within the meaning of Section
509(a) of the Code, joint stock company or other entity, and (ii) a “group,” as that term is
used for purposes of Section 13(d)(3) of the Exchange Act, and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of such entity.
T-4
“Prohibited Transferee” shall have the meaning set forth in Section 10.3(A) of this Article.
“Record Date” shall have the meaning set forth in paragraph (a) of Section 3 of this
Article.
“Redemption Date” shall mean, in the case of any redemption of any shares of Class T
Preferred Stock, the date fixed for redemption of such shares.
“Redemption Price” shall mean, with respect to any share of Class T Preferred Stock to be
redeemed, 100% of the Liquidation Preference thereof, plus all accumulated, accrued and
unpaid dividends (whether or not earned or declared), if any, to the Redemption Date.
“REIT” shall mean a “real estate investment trust,” as defined in Section 856 of the Code.
“Senior Stock” shall have the meaning set forth in paragraph (a) of Section 7 of this
Article.
“set apart for payment” shall be deemed to include, without any action other than the
following, the recording by the Corporation in its accounting ledgers of any accounting or
bookkeeping entry which indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be so paid on any series
or class of capital stock of the Corporation; provided, however, that if any funds for any
class or series of Junior Stock or any class or series of Parity Stock are placed in a
separate account of the Corporation or delivered to a disbursing, paying or other similar
agent, then “set apart for payment” with respect to the Class T Preferred Stock shall mean
placing such funds in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
“Trading Day” shall mean, when used with respect to any Equity Stock, (i) if the Equity
Stock is listed or admitted to trading on the NYSE, a day on which the NYSE is open for the
transaction of business, (ii) if the Equity Stock is not listed or admitted to trading on
the NYSE but is listed or admitted to trading on another national securities exchange or
automated quotation system, a day on which the principal national securities exchange or
automated quotation system, as the case may be, on which the Equity Stock is listed or
admitted to trading is open for the transaction of business, or (iii) if the Equity Stock is
not listed or admitted to trading on any national securities exchange or automated quotation
system, any day other than a Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to close.
T-5
“Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of a
share of Class T Preferred Stock (including (i) the granting of an option or any series of
such options or entering into any agreement for the sale, transfer or other disposition of
Class T Preferred Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Class T Preferred Stock), whether
voluntary or involuntary, whether of record ownership or Beneficial Ownership, and whether
by operation of law or otherwise (including, but not limited to, any transfer of an interest
in other entities that results in a change in the Beneficial Ownership of shares of Class T
Preferred Stock). The term “Transfers” and “Transferred” shall have correlative meanings.
“Transfer Agent” means such transfer agent as may be designated by the Board of Directors or
their designee as the transfer agent for the Class T Preferred Stock; provided, that if the
Corporation has not designated a transfer agent then the Corporation shall act as the
transfer agent for the Class T Preferred Stock.
“Trust” shall mean the trust created pursuant to Section 10.3(A) of this Article.
“Trustee” shall mean the Person unaffiliated with either the Corporation or the Prohibited
Transferee that is appointed by the Corporation to serve as trustee of the Trust.
“Voting Preferred Stock” shall have the meaning set forth in Section 8 of this Article.
3. Dividends.
(a) The holders of Class T Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors, out of funds legally available for that purpose, quarterly cash
dividends on the Class T Preferred Stock in an amount per share equal to $0.50. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period or Periods such
dividends shall be declared or there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing on October 15, 2003. Each such dividend shall be payable in arrears to the holders of
record of the Class T Preferred Stock, as they appear on the stock records of the Corporation at
the close of business on January 1, April 1, July 1 or October 1 (each a “Record Date”), as the
case may be, immediately preceding such Dividend Payment Date. Accumulated, accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date, which date shall not precede
by more than 45 days the payment date thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable per share of Class T Preferred Stock for the Initial
Dividend Period, or any other period shorter than a full Dividend Period, shall be computed ratably
on the basis of twelve 30-day months and a 360-day year. Holders of Class T Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Class T Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Class T Preferred Stock that may be in arrears.
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(c) So long as any of the shares of Class T Preferred Stock are outstanding, except as
described in the immediately following sentence, no dividends shall be declared or paid or set
apart for payment by the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of accumulated, accrued and
unpaid dividends have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, on
the Class T Preferred Stock for all Dividend Periods terminating on or prior to the date such
dividend or distribution is declared, paid, set apart for payment or made, as the case may be, with
respect to 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 the Class T
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, accrued and
unpaid on the Class T Preferred Stock and accumulated, accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class T Preferred Stock are outstanding, no dividends
(other than dividends or distributions paid in shares of or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock) shall be declared or paid or set apart for
payment by the Corporation and no other distribution of cash or other property shall be declared or
made, directly or indirectly, by the Corporation with respect to any shares of Junior Stock, nor
shall any shares of Junior Stock be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Class A 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 shares of any such
stock) directly or indirectly by the Corporation (except by conversion into or exchange for shares
of, or options, warrants, or rights to subscribe for or purchase shares of, Junior Stock), nor
shall any other cash or other property otherwise be paid or distributed to or for the benefit of
any holder of shares of Junior Stock in respect thereof, directly or indirectly, by the Corporation
unless, in each case, dividends equal to the full amount of all accumulated, accrued and unpaid
dividends on all outstanding shares of Class T Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has been set apart for
such payment, on all outstanding shares of Class T Preferred Stock for all Dividend Periods ending
on or prior to the date such dividend or distribution is declared, paid, set apart for payment or
made with respect to such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available for any sinking fund
for such redemption, or the date any such cash or other property is paid or distributed to or for
the benefit of any holders of Junior Stock in respect thereof, as the case may be.
Notwithstanding the provisions of this Section 3, the Corporation shall not be prohibited from
(i) declaring or paying or setting apart for payment any dividend or distribution on any
shares of Parity Stock or (ii) redeeming, purchasing or otherwise acquiring any Parity Stock,
in each case, if such declaration, payment, redemption, purchase or other acquisition is necessary
in order to maintain the continued qualification of the Corporation as a REIT under Section 856 of
the Code.
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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 by the Corporation (whether of
capital, surplus or otherwise) shall be made to or set apart for the holders of Junior Stock, the
holders of shares of Class T Preferred Stock shall be entitled to receive Twenty-Five Dollars ($25)
per share of Class T Preferred Stock (the “Liquidation Preference”), plus an amount equal to all
dividends (whether or not earned or 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. Until the holders of the Class T Preferred Stock have been paid the Liquidation
Preference in full, plus an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to such holders, no
payment will be made to any holder of Junior Stock upon the liquidation, dissolution or winding up
of the Corporation. If, upon any liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation, or proceeds thereof, distributable among the holders of Class T
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 Class T Preferred Stock and any
such other Parity Stock ratably in the same proportion as the respective amounts that would be
payable on such Class T 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, (ii) a sale or transfer of all or substantially all
of the Corporation’s assets, 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) Upon any liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of Class T Preferred Stock and any Parity Stock, as provided
in Section 4(a), any other series or class or classes of Junior Stock shall, subject to the
respective terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class T Preferred Stock and any Parity Stock shall not be
entitled to share therein.
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5. Redemption at the Option of the Corporation.
(a) Shares of Class T Preferred Stock shall not be redeemable by the Corporation prior to July
31, 2008, except as set forth in Section 10.2 of this Article. On and after July 31, 2008, the
Corporation, at its option, may redeem shares of Class T Preferred Stock, in whole or from time to
time in part, at a redemption price payable in cash equal to the Redemption Price applicable
thereto. In the event of a redemption of shares of Class T Preferred Stock, if the Redemption Date
occurs after a Record Date and on or prior to the related Dividend Payment Date, the dividend payable on such Dividend Payment Date in respect of such shares
called for redemption shall be payable on such Dividend Payment Date the holders of record at the
close of business on such Record Date, notwithstanding the redemption of such shares, and shall not
be payable as part of the redemption price for such shares. In connection with any redemption
pursuant to this Section 5(a), the redemption price of the Class T Preferred Stock (other than any
portion thereof consisting of accumulated, accrued and unpaid dividends) shall be payable solely
with the proceeds from the sale by the Corporation or the Operating Partnership of other capital
shares of the Corporation or the Operating Partnership (whether or not such sale occurs
concurrently with such redemption). For purposes of the preceding sentence, “capital shares” means
any common stock, preferred stock, depositary shares, partnership or other interests,
participations or other ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for equity securities
(unless and to the extent such debt securities are subsequently converted into capital shares)) or
options to purchase any of the foregoing of or in the Corporation or the Operating Partnership.
(b) The Redemption Date shall be selected by the Corporation, shall be specified in the notice
of redemption and shall be not less than 30 days nor more than 60 days after the date notice of
redemption is sent by the Corporation.
(c) If full cumulative dividends on all outstanding shares of Class T Preferred Stock have not
been declared and paid, or declared and set apart for payment, no shares of Class T Preferred Stock
may be redeemed unless all outstanding shares of Class T Preferred Stock are simultaneously
redeemed and neither the Corporation nor any affiliate of the Corporation may purchase or acquire
shares of Class T Preferred Stock, other than pursuant to a purchase or exchange offer made on the
same terms to all holders of shares of Class T Preferred Stock.
(d) If the Corporation shall redeem shares of Class T Preferred Stock pursuant to paragraph
(a) of this Section 5, notice of such redemption shall be given to each holder of record of the
shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such
holder’s address as the same appears on the stock records of the Corporation. Neither the failure
to mail any notice required by this paragraph (d), nor any defect therein or in the mailing thereof
to any particular holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the date mailed whether
or not the holder receives the notice. Each such notice shall state, as appropriate: (i) the
Redemption Date; (ii) the number of shares of Class T Preferred Stock to be redeemed and, if fewer
than all such shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the place or places at which certificates for such shares are to
be surrendered; and (iv) the Redemption Price payable on such Redemption Date, including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid dividends will be
payable as part of the Redemption Price, or payable on the next Dividend Payment Date to the record
holder at the close of business on the relevant record date as described in the next sentence.
Notice having been mailed as aforesaid, from and after
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the Redemption Date (unless the Corporation
shall fail to make available the amount of cash necessary to effect such redemption), (i) dividends on the shares of Class T Preferred Stock
so called for redemption shall cease to accumulate or accrue on the shares of Class T Preferred
Stock called for redemption, (ii) said shares shall no longer be deemed to be outstanding, and
(iii) all rights of the holders thereof as holders of Class T Preferred Stock of the Corporation
shall cease (except the right to receive the cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so required); provided, however,
that if the Redemption Date for any shares of Class T Preferred Stock occurs after any dividend
record date and on or prior to the related Dividend Payment Date, the full dividend payable on such
Dividend Payment Date in respect of such shares of Class T Preferred Stock called for redemption
shall be payable on such Dividend Payment Date to the holders of record of such shares at the close
of business on the corresponding dividend record date notwithstanding the prior redemption of such
shares. The Corporation’s obligation to make available the cash necessary to effect the redemption
in accordance with the preceding sentence shall be deemed fulfilled if, on or before the applicable
Redemption Date, the Corporation shall irrevocably deposit in trust with a bank or trust company
(which may not be an affiliate of the Corporation) that has, or is an affiliate of a bank or trust
company that has, a capital and surplus of at least $50,000,000, such amount of cash as is
necessary for such redemption plus, if such Redemption Date occurs after any dividend record date
and on or prior to the related Dividend Payment Date, such amount of cash as is necessary to pay
the dividend payable on such Dividend Payment Date in respect of such shares of Class T Preferred
Stock called for redemption, with irrevocable instructions that such cash be applied to the
redemption of the shares of Class T Preferred Stock so called for redemption and, if applicable,
the payment of such dividend. No interest shall accrue for the benefit of the holders of shares of
Class T 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 two years from the Redemption Date
shall revert to the general funds of the Corporation, after which reversion the holders of shares
of Class T Preferred Stock 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 of Class T Preferred Stock to be so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and the notice shall so state), such
certificates shall be exchanged for cash (without interest thereon). If fewer than all the
outstanding shares of Class T Preferred Stock are to be redeemed, shares to be redeemed shall be
selected by the Corporation from outstanding shares of Class T Preferred Stock not previously
called for redemption by lot or, with respect to the number of shares of Class T Preferred Stock
held of record by each holder of such shares, pro rata (as nearly as may be) or by any other method
as may be determined by the Board of Directors in its discretion to be equitable. If fewer than
all the shares of Class T Preferred Stock represented by any certificate are redeemed, then a new
certificate representing the unredeemed shares shall be issued without cost to the holders thereof.
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6. Status of Reacquired Stock.
All shares of Class T Preferred Stock that have been issued and reacquired in any manner by
the Corporation shall be returned to the status of authorized but unissued shares of Class T
Preferred Stock.
7. Ranking.
Any class or series of capital stock of the Corporation shall be deemed to rank:
(a) prior or senior to the Class T Preferred Stock, as to the payment of dividends and as to
distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or
series shall be entitled to the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the holders of Class T
Preferred Stock (“Senior Stock”);
(b) on a parity with the Class T Preferred Stock, as to the payment of dividends and as to
distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per share thereof be different
from those of the Class T Preferred Stock, if (i) such capital stock is Class B Cumulative
Convertible Preferred Stock, Class C Cumulative Preferred Stock, Class D Cumulative Preferred
Stock, Class G Cumulative Preferred Stock, Class H Cumulative Preferred Stock, Class I Cumulative
Preferred Stock, Class J Cumulative Convertible Preferred Stock, Class K Convertible Cumulative
Preferred Stock, Class L Convertible Cumulative Preferred Stock, Class M Convertible Cumulative
Preferred Stock, Class N Convertible Cumulative Preferred Stock, Class O Cumulative Convertible
Preferred Stock, Class P Convertible Cumulative Preferred Stock, Class Q Cumulative Preferred
Stock Class R Cumulative Preferred Stock or Class S Cumulative Redeemable Preferred Stock of the
Corporation, or (ii) the holders of such class of stock or series and the Class T Preferred Stock
shall be entitled to the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued and unpaid dividends
per share or liquidation preferences, without preference or priority of one over the other (the
capital stock referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to,
collectively, as “Parity Stock”); and
(c) junior to the Class T Preferred Stock, as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, if (i) such capital stock or
series shall be Class A Common Stock or (ii) the holders of Class T Preferred Stock shall be
entitled to receipt of dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of shares of such class or
series (the capital stock referred to in clauses (i) and (ii) of this paragraph being hereinafter
referred to, collectively, as “Junior Stock”).
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8. Voting.
(a) If and whenever six quarterly dividends (whether or not consecutive) payable on the Class
T 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 earned or declared, the number of directors then constituting
the Board of Directors shall be increased by two if not already increased by reason of similar
types of provisions with respect to shares of any other class or series of Parity Stock which is
entitled to similar voting rights (the “Voting Preferred Stock”) and the holders of shares of Class
T Preferred Stock, together with the holders of shares of all other Voting Preferred Stock then
entitled to exercise similar voting rights, 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 Class T Preferred Stock and the Voting Preferred Stock called as hereinafter
provided. Whenever all arrears in dividends on the Class T 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 declared and paid, or declared and set apart for payment, then the
right of the holders of the Class T 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 arrearages), and the terms of office of all
persons elected as directors by the holders of the Class T Preferred Stock and the Voting Preferred
Stock shall forthwith terminate and the number of directors constituting the Board of Directors
shall be reduced accordingly. At any time after such voting power shall have been so vested in the
holders of Class T Preferred Stock and the Voting Preferred Stock, if applicable, the Secretary of
the Corporation may, and upon the written request of any holder of Class T Preferred Stock
(addressed to the Secretary at the principal office of the Corporation) shall, call a special
meeting of the holders of the Class T Preferred Stock and of the Voting Preferred Stock for the
election of the two directors to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws 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 Class T Preferred Stock may call such meeting, upon the notice above provided,
and for that purpose shall have access to the stock books 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 Class T 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 Class T 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.
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(b) So long as any shares of Class T Preferred Stock are outstanding, in addition to any other
vote or consent of stockholders required by law or by the Charter of the Corporation, the
affirmative vote of at least 66-2/3% of the votes entitled to be cast by the holders of the Class T
Preferred Stock voting as a single class with the holders of all other classes or series of Parity
Stock entitled to vote on such matters, 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:
(i) any amendment, alteration or repeal of any of the provisions of, or the addition of any
provision to, these Articles Supplementary, the Charter or the By-Laws of the Corporation that
materially adversely affects the voting powers, rights or preferences of the holders of the Class T
Preferred Stock; provided, however, that the amendment of the provisions of the Charter so as to
increase the authorized amount of Class T Preferred Stock, or to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of any class of Parity
Stock, shall not be deemed to materially adversely affect the voting powers, rights or preferences
of the holders of Class T Preferred Stock; or
(ii) the authorization, creation of, increase in the authorized amount of, or issuance of any
shares of any class or series of Senior Stock or any security convertible into shares of any class
or series of Senior Stock (whether or not such class or series of Senior Stock is currently
authorized);
provided, however, that no such vote of the holders of Class T 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 Senior Stock or convertible or exchangeable security is to be made, as the
case may be, provision is made for the redemption of all shares of Class T Preferred Stock at the
time outstanding to the extent such redemption is authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights under these Articles
Supplementary, each share of Class T Preferred Stock shall have one (1) vote per share, except that
when any other class or series of preferred stock of the Corporation shall have the right to vote
with the Class T Preferred Stock as a single class on any matter, then the Class T Preferred Stock
and such other class or series shall have with respect to such matters one quarter of one vote per
$25 of stated liquidation preference. Except as otherwise required by applicable law or as set
forth herein or in the Charter, the Class T 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 corporate
action.
9. Record Holders.
The Corporation and the Transfer Agent may deem and treat the record holder of any share of
Class T 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.
10.1. Restrictions on Ownership and Transfers.
(A) Limitation on Beneficial Ownership. Except as provided in Section 10.8, from and after
the Issue Date, no Person (other than the Initial Holder or a Look-Through Entity) shall
Beneficially Own shares of Class T Preferred Stock in excess of the Ownership Limit, the Initial
Holder shall not Beneficially Own shares of Class T Preferred Stock in excess
of the Initial Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class
T Preferred Stock in excess of the Look-Through Ownership Limit.
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(B) Transfers in Excess of Ownership Limit. Except as provided in Section 10.8, from and
after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially Owning shares of Class
T Preferred Stock in excess of the Ownership Limit shall be void ab initio as to the Transfer of
such shares of Class T Preferred Stock that would be otherwise Beneficially Owned by such Person in
excess of the Ownership Limit, and the intended transferee shall acquire no rights in such shares
of Class T Preferred Stock.
(C) Transfers in Excess of Initial Holder Limit. Except as provided in Section 10.8, from and
after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class T Preferred Stock in excess of the Initial
Holder Limit shall be void ab initio as to the Transfer of such shares of Class T Preferred Stock
that would be otherwise Beneficially Owned by the Initial Holder in excess of the Initial Holder
limit, and the Initial Holder shall acquire no rights in such shares of Class T Preferred Stock.
(D) Transfers in Excess of Look-Through Ownership Limit. Except as provided in Section 10.8
from and after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such
Transfer is the result of transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if effective, would result
in any Look-Through Entity Beneficially Owning shares of Class T Preferred Stock in excess of the
Look-Through Ownership limit shall be void ab initio as to the Transfer of such shares of Class T
Preferred Stock that would be otherwise Beneficially Owned by such Look-Through Entity in excess of
the Look-Through Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class T Preferred Stock.
(E) Transfers Resulting in “Closely Held” Status. From and after the Issue Date, any Transfer
that, if effective would result in the Corporation being “closely held” within the meaning of
Section 856(h) of the Code, or would otherwise result in the Corporation failing to qualify as a
REIT (including, without limitation, a Transfer or other event that would result in the Corporation
owning (directly or constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the
Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code)
shall be void ab initio as to the Transfer of shares of Class T Preferred Stock that would cause
the Corporation (i) to be “closely held” within the meaning of Section 856(h) of the Code or (ii)
otherwise fail to qualify as a REIT, as the case may be, and the intended transferee shall acquire
no rights in such shares of Class T Preferred Stock.
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(F) Severability on Void Transactions. A Transfer of a share of Class T Preferred Stock that
is null and void under Sections 10.1(B), (C), (D), or (E) of this Article because it would, if
effective, result in (i) the ownership of Class T Preferred Stock in excess of the Initial Holder
Limit, the Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation being
“closely held” within the meaning of Section 856(h) of the Code or (iii) the Corporation otherwise
failing to qualify as a REIT, shall not adversely affect the validity of the Transfer of any other
share of Class T Preferred Stock in the same or any other related transaction.
10.2 Remedies for Breach. If the Board of Directors or a committee thereof shall at any time
determine in good faith that a Transfer or other event has taken place in violation of Section 10.1
of this Article or that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Class T Preferred Stock in violation of Section 10.1 of this Article
(whether or not such violation is intended), the Board of Directors or a committee thereof shall be
empowered to take any action as it deems advisable to refuse to give effect to or to prevent such
Transfer or other event, including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem such shares at the
then current Market Price and upon such terms and conditions as may be specified by the Board of
Directors in its sole discretion (including, but not limited to, by means of the issuance of
long-term indebtedness for the purpose of such redemption), demanding the repayment of any
distributions received in respect of shares of Class T Preferred Stock acquired in violation of
Section 10.1 of this Article or instituting proceedings to enjoin such Transfer or to rescind such
Transfer or attempted Transfer; provided, however, that any Transfers or attempted Transfers (or in
the case of events other than a Transfer, Beneficial Ownership) in violation of Section 10.1 of
this Article, regardless of any action (or non-action) by the Board of Directors or such committee,
(a) shall be void ab initio or (b) shall automatically result in the transfer described in Section
10.3 of this Article; provided, further, that the provisions of this Section 10.2 shall be subject
to the provisions of Section 10.12 of this Article; provided, further, that neither the Board of
Directors nor any committee thereof may exercise such authority in a manner that interferes with
any ownership or transfer of Class T Preferred Stock that is expressly authorized pursuant to
Section 10.8(C) of this Article.
10.3 Transfer in Trust.
(A) Establishment of Trust. If, notwithstanding the other provisions contained in this
Article, at any time after the Issue Date there is a purported Transfer (an “Excess Transfer”)
(whether or not such Transfer is the result of transactions entered into through the facilities of
the NYSE or other securities exchange or an automated inter-dealer quotation system) or other
change in the capital structure of the Corporation (including, but not limited to, any redemption
of Equity Stock) or other event (including, but not limited to, any acquisition of any share of
Equity Stock) such that (a) any Person (other than the Initial Holder or a Look-Through Entity)
would Beneficially Own shares of Class T Preferred Stock in excess of the Ownership Limit, or (b)
the Initial Holder would Beneficially Own shares of Class T Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through
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Entity would Beneficially Own shares
of Class T Preferred Stock in excess of the Look-Through Ownership Limit (in any such event, the Person, Initial Holder or Look-Through Entity that
would Beneficially Own shares of Class T Preferred Stock in excess of the Ownership Limit, the
Initial Holder Limit or the Look-Through Entity Limit, respectively, is referred to as a
“Prohibited Transferee”), then, except as otherwise provided in Section 10.8 of this Article, such
shares of Class T Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership Limit, as the case may be, (rounded up to the nearest whole share) shall be
automatically transferred to a Trustee in his capacity as trustee of a Trust for the exclusive
benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to
be effective as of the close of business on the Business Day prior to the Excess Transfer, change
in capital structure or another event giving rise to a potential violation of the Ownership Limit,
the Initial Holder Limit or the Look Through Entity Ownership Limit.
(B) Appointment of Trustee. The Trustee shall be appointed by the Corporation and shall be a
Person unaffiliated with either the Corporation or any Prohibited Transferee. The Trustee may be
an individual or a bank or trust company duly licensed to conduct a trust business.
(C) Status of Shares Held by the Trustee. Shares of Class T Preferred Stock held by the
Trustee shall be issued and outstanding shares of capital stock of the Corporation. Except to the
extent provided in Section 10.3(E), the Prohibited Transferee shall have no rights in the Class T
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights to dividends and
shall not possess any rights to vote or other rights attributable to the shares held in the Trust.
(D) Dividend and Voting Rights. The Trustee shall have all voting rights and rights to
dividends with respect to shares of Class T Preferred Stock held in the Trust, which rights shall
be exercised for the benefit of the Charitable Beneficiary. Any dividend or distribution paid
prior to the discovery by the Corporation that the shares of Class T Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and any dividend or
distribution declared but unpaid shall be rescinded as void ab initio with respect to such shares
of Class T Preferred Stock. Any dividends or distributions so disgorged or rescinded shall be paid
over to the Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares of Class T
Preferred Stock have been transferred to the Trustee will be rescinded as void ab initio and shall
be recast in accordance with the desires of the Trustee acting for the benefit of the Charitable
Beneficiary. The owner of the shares at the time of the Excess Transfer, change in capital
structure or other event giving rise to a potential violation of the Ownership Limit, Initial
Holder Limit or Look-Through Entity Ownership Limit shall be deemed to have given an irrevocable
proxy to the Trustee to vote the shares of Class T Preferred Stock for the benefit of the
Charitable Beneficiary.
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(E) Restrictions on Transfer. The Trustee of the Trust may sell the shares held in the Trust
to a Person, designated by the Trustee, whose ownership of the shares will not violate the
Ownership Restrictions. If such a sale is made, the interest of the Charitable
Beneficiary shall terminate and proceeds of the sale shall be payable to the Prohibited
Transferee and to the Charitable Beneficiary as provided in this Section 10.3(E). The Prohibited
Transferee shall receive the lesser of (1) the price paid by the Prohibited Transferee for the
shares or, if the Prohibited Transferee did not give value for the shares (through a gift, devise
or other transaction), the Market Price of the shares on the day of the event causing the shares to
be held in the Trust and (2) the price per share received by the Trustee from the sale or other
disposition of the shares held in the Trust. Any proceeds in excess of the amount payable to the
Prohibited Transferee shall be payable to the Charitable Beneficiary. If any of the transfer
restrictions set forth in this Section 10.3(E) or any application thereof is determined in a final
judgment to be void, invalid or unenforceable by any court having jurisdiction over the issue, the
Prohibited Transferee may be deemed, at the option of the Corporation, to have acted as the agent
of the Corporation in acquiring the Class T Preferred Stock as to which such restrictions would, by
their terms, apply, and to hold such Class T Preferred Stock on behalf of the Corporation.
(F) Purchase Right in Stock Transferred to the Trustee. Shares of Class T Preferred Stock
transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its
designee, at a price per share equal to the lesser of (i) the price per share in the transaction
that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price
at the time of such devise or gift) and (ii) the Market Price on the date the Corporation, or its
designee, accepts such offer. The Corporation shall have the right to accept such offer for a
period of 90 days after the later of (i) the date of the Excess Transfer or other event resulting
in a transfer to the Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) Designation of Charitable Beneficiaries. By written notice to the Trustee, the
Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of
the interest in the Trust relating to such Prohibited Transferee if (i) the shares of Class T
Preferred Stock held in the Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
10.4 Notice of Restricted Transfer. Any Person that acquires or attempts to acquire shares of
Class T Preferred Stock in violation of Section 10.1 of this Article, or any Person that is a
Prohibited Transferee such that stock is transferred to the Trustee under Section 10.3 of this
Article, shall immediately give written notice to the Corporation of such event and shall provide
to the Corporation such other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or attempted Transfer or other event on the Corporation’s status
as a REIT. Failure to give such notice shall not limit the rights and remedies of the Board of
Directors provided herein in any way.
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10.5 Owners Required to Provide Information. From and after the Issue Date certain record and
Beneficial Owners and transferees of shares of Class T Preferred Stock will be required to provide
certain information as set out below.
(A) Annual Disclosure. Every record holder or Beneficial Owner of more than 5% (or such other
percentage between 0.5% and 5%, as provided in the applicable
regulations adopted under the Code) of the number of Outstanding shares of Class T Preferred
Stock shall, within 30 days after January 1 of each year, give written notice to the Corporation
stating the name and address of such record holder or Beneficial Owner, the number of shares of
Class T Preferred Stock Beneficially Owned, and a full description of how such shares are held.
Each such record holder or Beneficial Owner of Class T Preferred Stock shall, upon demand by the
Corporation, disclose to the Corporation in writing such additional information with respect to the
Beneficial Ownership of the Class T Preferred Stock as the Board of Directors, in its sole
discretion, deems appropriate or necessary to (i) comply with the provisions of the Code regarding
the qualification of the Corporation as a REIT under the Code and (ii) ensure compliance with the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit, as applicable. Each
stockholder of record, including without limitation any Person that holds shares of Class T
Preferred Stock on behalf of a Beneficial Owner, shall take all reasonable steps to obtain the
written notice described in this Section 10.5 from the Beneficial Owner.
(B) Disclosure at the Request of the Corporation. Any Person that is a Beneficial Owner of
shares of Class T Preferred Stock and any Person (including the stockholder of record) that is
holding shares of Class T Preferred Stock for a Beneficial Owner, and any proposed transferee of
shares, shall provide such information as the Corporation, in its sole discretion, may request in
order to determine the Corporation’s status as a REIT, to comply with the requirements of any
taxing authority or other governmental agency, to determine any such compliance or to ensure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit,
and shall provide a statement or affidavit to the Corporation setting forth the number of shares of
Class T Preferred Stock already Beneficially Owned by such stockholder or proposed transferee and
any related persons specified, which statement or affidavit shall be in the form prescribed by the
Corporation for that purpose.
10.6 Remedies Not Limited. Nothing contained in this Article shall limit the authority of the
Board of Directors to take such other action as it deems necessary or advisable (subject to the
provisions of Section 10.12 of this Article) (i) to protect the Corporation and the interests of
its stockholders in the preservation of the Corporation’s status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit.
10.7 Ambiguity. In the case of an ambiguity in the application of any of the provisions of
Section 10 of this Article, or in the case of an ambiguity in any definition contained in Section
10 of this Article, the Board of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
10.8 Exceptions. The following exceptions shall apply or may be established with respect to
the limitations of Section 10.1 of this Article.
(A) Waiver of Ownership Limit. The Board of Directors, upon receipt of a ruling from the
Internal Revenue Service or an opinion of tax counsel or other evidence or undertaking acceptable
to it, may waive the application, in whole or in part, of the Ownership Limit to a Person subject
to the Ownership Limit, if such person is not an individual for purposes
of Section 542(a) of the Code (as modified to exclude qualified trusts from treatment as
individuals pursuant to Section 856(h)(3) of the Code) and is a corporation, partnership, limited
liability company, estate or trust. In connection with any such exemption, the Board of Directors
may require such representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion, to determine the
effect, if any, of the proposed Transfer on the Corporation’s status as a REIT.
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(B) Pledge by Initial Holder. Notwithstanding any other provision of this Article, the pledge
by the Initial Holder of all or any portion of the Class T Preferred Stock directly owned at any
time or from time to time shall not constitute a violation of Section 10.1 of this Article and the
pledgee shall not be subject to the Ownership Limit with respect to the Class T Preferred Stock so
pledged to it either as a result of the pledge or upon foreclosure.
(C) Underwriters. For a period of 270 days (or such longer period of time as any underwriter
described below shall hold an unsold allotment of Class T Preferred Stock) following the purchase
of Class T Preferred Stock by an underwriter that (i) is a corporation, partnership or other legal
entity and (ii) participates in an offering of the Class T Preferred Stock, such underwriter shall
not be subject to the Ownership Limit with respect to the Class T Preferred Stock purchased by it
as a part of or in connection with such offering and with respect to any Class T Preferred Stock
purchased in connection with market making activities.
10.9 Legend. Each certificate for Class T Preferred Stock shall bear substantially the
following legend:
“The shares of Class T Cumulative Preferred Stock represented by this certificate are
subject to restrictions on transfer. No person may Beneficially Own shares of Class T
Cumulative Preferred Stock in excess of the Ownership Restrictions, as applicable, with
certain further restrictions and exceptions set forth in the Charter (including the Articles
Supplementary setting forth the terms of the Class T Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class T Cumulative Preferred Stock in
excess of the applicable limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed to such terms in the Charter
(including the Articles Supplementary setting forth the terms of the Class T Cumulative
Preferred Stock), as the same may be amended from time to time, a copy of which, including
the restrictions on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated, (i) the transfer of the shares of
Class T Cumulative Preferred Stock represented hereby will be void in accordance with the
Charter (including the Articles Supplementary setting forth the terms of the Class T
Cumulative Preferred Stock) or (ii) the shares of Class T Cumulative Preferred Stock
represented hereby will automatically be transferred to a Trustee of a Trust for the benefit
of one or more Charitable Beneficiaries.”
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10.10 Severability. If any provision of this Article or any application of any such provision
is determined in a final and unappealable judgment to be void, invalid or unenforceable by any
Federal or state court having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such
provision shall be affected only to the extent necessary to comply with the determination of
such court.
10.11 Board of Directors Discretion. Anything in this Article to the contrary notwithstanding,
the Board of Directors shall be entitled to take or omit to take such actions as it in its
discretion shall determine to be advisable in order that the Corporation maintain its status as and
continue to qualify as a REIT, including, but not limited to, reducing the Ownership Limit, the
Initial Holder Limit and the Look-Through Ownership Limit in the event of a change in law.
10.12 Settlement. Nothing in this Section 10 of this Article shall be interpreted to preclude
the settlement of any transaction entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system.
T-20
Exhibit U
ARTICLE XIII
Class U Cumulative Preferred Stock
Par Value $.01 Per Share
The terms of the Class U Cumulative Preferred Stock (including the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of Directors are as
follows:
1. Number of Shares and Designation.
This class of Preferred Stock shall be designated as Class U Cumulative Preferred Stock (the
“Class U Preferred Stock”) and Twelve Million (12,000,000) shall be the authorized number of shares
of such Class U Preferred Stock constituting such class.
2. Definitions.
For purposes of the Class U Preferred Stock, the following terms shall have the meanings
indicated:
“Act” shall mean the Securities Act of 1933, as amended.
“affiliate” of a Person means a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, the Person
specified.
“Aggregate Value” shall mean, with respect to any block of Equity Stock, the product of (i)
the number of shares of Equity Stock within such block and (ii) the corresponding Market
Price of one share of Equity Stock of such class.
“Beneficial Ownership” shall mean, with respect to any Person, ownership of shares of Equity
Stock equal to the sum of (without duplication) (i) the number of shares of Equity Stock
directly owned by such Person, (ii) the number of shares of Equity Stock indirectly owned by
such Person (if such Person is an “individual” as defined in Section 542(a)(2) of the Code)
taking into account the constructive ownership rules of Section 544 of the Code, as modified
by Section 856(h)(1)(B) of the Code, and (iii) the number of shares of Equity Stock that
such Person is deemed to beneficially own pursuant to Rule 13d-3 under the Exchange Act, or
that is attributed to such Person pursuant to Section 318 of the Code, as modified by
Section 856(d)(5) of the Code, provided that when applying this definition of Beneficial
Ownership to the Initial Holder, clause (iii) of this definition, and clause (ii) of the
definition of “Person” shall be disregarded. The terms “Beneficial
Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.
U-1
“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 Class U Preferred Stock; provided that, for purposes of paragraph (a) of Section 8 of
this Article, the term “Board of Directors” shall not include any such committee.
“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, New York are not required to be open.
“Charitable Beneficiary” shall mean one or more beneficiaries of the Trust as determined
pursuant to Section 10.3(G) of this Article, each of which shall be an organization
described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
“Class A Common Stock” shall mean the Class A Common Stock, par value $.01 per share, of the
Corporation, and such other shares of the Corporation’s capital stock into which outstanding
shares of such Class A Common Stock shall be reclassified.
“Class U Preferred Stock” shall have the meaning set forth in Section 1 of this Article.
“Closing Price” shall mean, when used with respect to a share of any Equity Stock and for
any date, the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity Stock is not listed
or admitted to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading or, if the Equity Stock
is not listed or admitted to trading on any national securities exchange, the last quoted
price, or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if the Equity Stock is not quoted by
any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected by the Board of
Directors of the Corporation or, if the Equity Stock is not publicly traded, the fair value
of a share of such Equity Stock as reasonably determined in good faith by the Board of
Directors.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision
as in effect from time to time, as the same may be amended, and any successor
thereto, as interpreted by any applicable regulations or other administrative pronouncements
as in effect from time to time.
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“Dividend Payment Date” shall mean January 15, April 15, July 15, and October 15 of each
year; provided, that if any Dividend Payment Date falls on any day other than a Business
Day, the dividend payment payable on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date and no interest shall accrue
on such dividend from such date to such Dividend Payment Date.
“Dividend Periods” shall mean the Initial Dividend Period and each subsequent quarterly
dividend period commencing on and including January 15, April 15, July 15, and October 15 of
each year and ending on and including the day preceding the first day of the next succeeding
Dividend Period, other than the Dividend Period during which any Class U Preferred Stock
shall be redeemed pursuant to Section 5 hereof, which shall end on and include the
Redemption Date with respect to the Class U Preferred Stock being redeemed.
“Equity Stock” shall mean one or more shares of any class of capital stock of the
Corporation.
“Excess Transfer” has the meaning set forth in Section 10.3(A) of this Article.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Issue Date” shall mean March 24, 2004.
“Initial Dividend Period” shall mean the period commencing on and including the Issue Date
and ending on and including July 14, 2004.
“Initial Holder” shall mean Terry Considine.
“Initial Holder Limit” shall mean a number of the Outstanding shares of Class U Preferred
Stock of the Corporation having an Aggregate Value not in excess of the excess of (x) 15% of
the Aggregate Value of all Outstanding shares of Equity Stock over (y) the Aggregate Value
of all shares of Equity Stock other than Class U Preferred Stock that are Beneficially Owned
by the Initial Holder. From the Issue Date, the secretary of the Corporation, or such other
person as shall be designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of Directors, a schedule that
sets forth the then-current Initial Holder Limit applicable to the Initial Holder.
“Junior Stock” shall have the meaning set forth in paragraph (c) of Section 7 of this
Article.
“Liquidation Preference” shall have the meaning set forth in paragraph (a) of Section 4 of
this Article.
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“Look-Through Entity” shall mean a Person that is either (i) described in Section 401(a) of
the Code as provided under Section 856(h)(3) of the Code or (ii) registered under the
Investment Company Act of 1940.
“Look-Through Ownership Limit” shall mean, for any Look-Through Entity, a number of the
Outstanding shares of Class U Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 15% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other than Class U
Preferred Stock that are Beneficially Owned by the Look-Through Entity.
“Market Price” on any date shall mean, with respect to any share of Equity Stock, the
Closing Price of a share of that class of Equity Stock on the Trading Day immediately
preceding such date.
“NYSE” shall mean The New York Stock Exchange, Inc.
“Operating Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.
“Outstanding” shall mean issued and outstanding shares of Equity Stock of the Corporation;
provided, however, that for purposes of the application of the Ownership Limit, the
Look-Through Ownership Limit or the Initial Holder Limit to any Person, the term
“Outstanding” shall be deemed to include the number of shares of Equity Stock that such
Person alone, at that time, could acquire pursuant to any options or convertible securities.
“Ownership Limit” shall mean, for any Person other than the Initial Holder or a Look-Through
Entity, a number of the Outstanding shares of Class U Preferred Stock of the Corporation
having an Aggregate Value not in excess of the excess of (x) 8.7% of the Aggregate Value of
all Outstanding shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class U Preferred Stock that are Beneficially Owned by the Person.
“Ownership Restrictions” shall mean, collectively, the Ownership Limit, as applied to
Persons other than the Initial Holder or Look-Through Entities, the Initial Holder Limit, as
applied to the Initial Holder, and the Look-Through Ownership Limit, as applied to
Look-Through Entities.
“Parity Stock” shall have the meaning set forth in paragraph (b) of Section 7 of this
Article.
“Person” shall mean (a) for purposes of Section 10 of this Article, (i) an individual,
corporation, partnership, estate, trust (including a trust qualifying under Section 401(a)
or 501(c) of the Code), association, “private foundation,” within the meaning of Section
509(a) of the Code, joint stock company or other entity, and (ii) a “group,” as that term is
used for purposes of Section 13(d)(3) of the Exchange Act, and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of such entity.
U-4
“Prohibited Transferee” shall have the meaning set forth in Section 10.3(A) of this Article.
“Record Date” shall have the meaning set forth in paragraph (a) of Section 3 of this
Article.
“Redemption Date” shall mean, in the case of any redemption of any shares of Class U
Preferred Stock, the date fixed for redemption of such shares.
“Redemption Price” shall mean, with respect to any share of Class U Preferred Stock to be
redeemed, 100% of the Liquidation Preference thereof, plus all accumulated, accrued and
unpaid dividends (whether or not earned or declared), if any, to the Redemption Date.
“REIT” shall mean a “real estate investment trust,” as defined in Section 856 of the Code.
“Senior Stock” shall have the meaning set forth in paragraph (a) of Section 7 of this
Article.
“set apart for payment” shall be deemed to include, without any action other than the
following, the recording by the Corporation in its accounting ledgers of any accounting or
bookkeeping entry which indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be so paid on any series
or class of capital stock of the Corporation; provided, however, that if any funds for any
class or series of Junior Stock or any class or series of Parity Stock are placed in a
separate account of the Corporation or delivered to a disbursing, paying or other similar
agent, then “set apart for payment” with respect to the Class U Preferred Stock shall mean
placing such funds in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
“Trading Day” shall mean, when used with respect to any Equity Stock, (i) if the Equity
Stock is listed or admitted to trading on the NYSE, a day on which the NYSE is open for the
transaction of business, (ii) if the Equity Stock is not listed or admitted to trading on
the NYSE but is listed or admitted to trading on another national securities exchange or
automated quotation system, a day on which the principal national securities exchange or
automated quotation system, as the case may be, on which the Equity Stock is listed or
admitted to trading is open for the transaction of business, or (iii) if the Equity Stock is
not listed or admitted to trading on any national securities exchange or automated quotation
system, any day other than a Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to close.
U-5
“Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of a
share of Class U Preferred Stock (including (i) the granting of an option or any series of
such options or entering into any agreement for the sale, transfer or other disposition of
Class U Preferred Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Class U Preferred Stock), whether
voluntary or involuntary, whether of record ownership or Beneficial Ownership, and whether
by operation of law or otherwise (including, but not limited to, any transfer of an interest
in other entities that results in a change in the Beneficial Ownership of shares of Class U
Preferred Stock). The term “Transfers” and “Transferred” shall have correlative meanings.
“Transfer Agent” means such transfer agent as may be designated by the Board of Directors or
their designee as the transfer agent for the Class U Preferred Stock; provided, that if the
Corporation has not designated a transfer agent then the Corporation shall act as the
transfer agent for the Class U Preferred Stock.
“Trust” shall mean the trust created pursuant to Section 10.3(A) of this Article.
“Trustee” shall mean the Person unaffiliated with either the Corporation or the Prohibited
Transferee that is appointed by the Corporation to serve as trustee of the Trust.
“Voting Preferred Stock” shall have the meaning set forth in Section 8 of this Article.
3. Dividends.
(a) The holders of Class U Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors, out of funds legally available for that purpose, quarterly cash
dividends on the Class U Preferred Stock in an amount per share equal to $0.484375. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period or Periods such
dividends shall be declared or there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing on July 15, 2004. Each such dividend shall be payable in arrears to the holders of
record of the Class U Preferred Stock, as they appear on the stock records of the Corporation at
the close of business on January 1, April 1, July 1 or October 1 (each a “Record Date”), as the
case may be, immediately preceding such Dividend Payment Date. Accumulated, accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date, which date shall not precede
by more than 45 days the payment date thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable per share of Class U Preferred Stock for the Initial
Dividend Period, or any other period shorter than a full Dividend Period, shall be computed ratably
on the basis of twelve 30-day months and a 360-day year. Holders of Class U Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Class U Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Class U Preferred Stock that may be in arrears.
U-6
(c) So long as any of the shares of Class U Preferred Stock are outstanding, except as
described in the immediately following sentence, no dividends shall be declared or paid or set
apart for payment by the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of accumulated, accrued and
unpaid dividends have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, on
the Class U Preferred Stock for all Dividend Periods terminating on or prior to the date such
dividend or distribution is declared, paid, set apart for payment or made, as the case may be, with
respect to 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 the Class U
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, accrued and
unpaid on the Class U Preferred Stock and accumulated, accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class U Preferred Stock are outstanding, no dividends
(other than dividends or distributions paid in shares of or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock) shall be declared or paid or set apart for
payment by the Corporation and no other distribution of cash or other property shall be declared or
made, directly or indirectly, by the Corporation with respect to any shares of Junior Stock, nor
shall any shares of Junior Stock be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Class A 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 shares of any such
stock) directly or indirectly by the Corporation (except by conversion into or exchange for shares
of, or options, warrants, or rights to subscribe for or purchase shares of, Junior Stock), nor
shall any other cash or other property otherwise be paid or distributed to or for the benefit of
any holder of shares of Junior Stock in respect thereof, directly or indirectly, by the Corporation
unless, in each case, dividends equal to the full amount of all accumulated, accrued and unpaid
dividends on all outstanding shares of Class U Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has been set apart for
such payment, on all outstanding shares of Class U Preferred Stock for all Dividend Periods ending
on or prior to the date such dividend or distribution is declared, paid, set apart for payment or
made with respect to such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available for any sinking fund
for such redemption, or the date any such cash or other property is paid or distributed to or for
the benefit of any holders of Junior Stock in respect thereof, as the case may be.
U-7
Notwithstanding the provisions of this Section 3, the Corporation shall not be prohibited from
(i) declaring or paying or setting apart for payment any dividend or distribution on any
shares of Parity Stock or (ii) redeeming, purchasing or otherwise acquiring any Parity Stock,
in each case, if such declaration, payment, redemption, purchase or other acquisition is necessary
in order to maintain the continued qualification of the Corporation as a REIT under Section 856 of
the Code.
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 by the Corporation (whether of
capital, surplus or otherwise) shall be made to or set apart for the holders of Junior Stock, the
holders of shares of Class U Preferred Stock shall be entitled to receive Twenty-Five Dollars ($25)
per share of Class U Preferred Stock (the “Liquidation Preference”), plus an amount equal to all
dividends (whether or not earned or 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. Until the holders of the Class U Preferred Stock have been paid the Liquidation
Preference in full, plus an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to such holders, no
payment will be made to any holder of Junior Stock upon the liquidation, dissolution or winding up
of the Corporation. If, upon any liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation, or proceeds thereof, distributable among the holders of Class U
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 Class U Preferred Stock and any
such other Parity Stock ratably in the same proportion as the respective amounts that would be
payable on such Class U 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, (ii) a sale or transfer of all or substantially all
of the Corporation’s assets, 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) Upon any liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of Class U Preferred Stock and any Parity Stock, as provided
in Section 4(a), any other series or class or classes of Junior Stock shall, subject to the
respective terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class U Preferred Stock and any Parity Stock shall not be
entitled to share therein.
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5. Redemption at the Option of the Corporation.
(a) Shares of Class U Preferred Stock shall not be redeemable by the Corporation prior to
March 24, 2009, except as set forth in Section 10.2 of this Article. On and after March 24, 2009
the Corporation, at its option, may redeem shares of Class U Preferred Stock, in whole or from time
to time in part, at a redemption price payable in cash equal to the Redemption Price applicable
thereto. In the event of a redemption of shares of Class U Preferred Stock, if the Redemption Date
occurs after a Record Date and on or prior to the related Dividend
Payment Date, the dividend payable on such Dividend Payment Date in respect of such shares
called for redemption shall be payable on such Dividend Payment Date the holders of record at the
close of business on such Record Date, notwithstanding the redemption of such shares, and shall not
be payable as part of the redemption price for such shares. In connection with any redemption
pursuant to this Section 5(a), the redemption price of the Class U Preferred Stock (other than any
portion thereof consisting of accumulated, accrued and unpaid dividends) shall be payable solely
with the proceeds from the sale by the Corporation or the Operating Partnership of other capital
shares of the Corporation or the Operating Partnership (whether or not such sale occurs
concurrently with such redemption). For purposes of the preceding sentence, “capital shares” means
any common stock, preferred stock, depositary shares, partnership or other interests,
participations or other ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for equity securities
(unless and to the extent such debt securities are subsequently converted into capital shares)) or
options to purchase any of the foregoing of or in the Corporation or the Operating Partnership.
(b) The Redemption Date shall be selected by the Corporation, shall be specified in the notice
of redemption and shall be not less than 30 days nor more than 60 days after the date notice of
redemption is sent by the Corporation.
(c) If full cumulative dividends on all outstanding shares of Class U Preferred Stock have not
been declared and paid, or declared and set apart for payment, no shares of Class U Preferred Stock
may be redeemed unless all outstanding shares of Class U Preferred Stock are simultaneously
redeemed and neither the Corporation nor any affiliate of the Corporation may purchase or acquire
shares of Class U Preferred Stock, other than pursuant to a purchase or exchange offer made on the
same terms to all holders of shares of Class U Preferred Stock.
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(d) If the Corporation shall redeem shares of Class U Preferred Stock pursuant to paragraph
(a) of this Section 5, notice of such redemption shall be given to each holder of record of the
shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such
holder’s address as the same appears on the stock records of the Corporation. Neither the failure
to mail any notice required by this paragraph (d), nor any defect therein or in the mailing thereof
to any particular holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the date mailed whether
or not the holder receives the notice. Each such notice shall state, as appropriate: (i) the
Redemption Date; (ii) the number of shares of Class U Preferred Stock to be redeemed and, if fewer
than all such shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the place or places at which certificates for such shares are to
be surrendered; and (iv) the Redemption Price payable on such Redemption Date, including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid dividends will be
payable as part of the Redemption Price, or payable on the next Dividend Payment Date to the record
holder at the close of business on the relevant record date as described in the next sentence.
Notice having been mailed as aforesaid, from and after the Redemption Date (unless the Corporation
shall fail to make available the amount of cash
necessary to effect such redemption), (i) dividends on the shares of Class U Preferred Stock
so called for redemption shall cease to accumulate or accrue on the shares of Class U Preferred
Stock called for redemption, (ii) said shares shall no longer be deemed to be outstanding, and
(iii) all rights of the holders thereof as holders of Class U Preferred Stock of the Corporation
shall cease (except the right to receive the cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so required); provided, however,
that if the Redemption Date for any shares of Class U Preferred Stock occurs after any dividend
record date and on or prior to the related Dividend Payment Date, the full dividend payable on such
Dividend Payment Date in respect of such shares of Class U Preferred Stock called for redemption
shall be payable on such Dividend Payment Date to the holders of record of such shares at the close
of business on the corresponding dividend record date notwithstanding the prior redemption of such
shares. The Corporation’s obligation to make available the cash necessary to effect the redemption
in accordance with the preceding sentence shall be deemed fulfilled if, on or before the applicable
Redemption Date, the Corporation shall irrevocably deposit in trust with a bank or trust company
(which may not be an affiliate of the Corporation) that has, or is an affiliate of a bank or trust
company that has, a capital and surplus of at least $50,000,000, such amount of cash as is
necessary for such redemption plus, if such Redemption Date occurs after any dividend record date
and on or prior to the related Dividend Payment Date, such amount of cash as is necessary to pay
the dividend payable on such Dividend Payment Date in respect of such shares of Class U Preferred
Stock called for redemption, with irrevocable instructions that such cash be applied to the
redemption of the shares of Class U Preferred Stock so called for redemption and, if applicable,
the payment of such dividend. No interest shall accrue for the benefit of the holders of shares of
Class U 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 two years from the Redemption Date
shall revert to the general funds of the Corporation, after which reversion the holders of shares
of Class U Preferred Stock 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 of Class U Preferred Stock to be so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and the notice shall so state), such
certificates shall be exchanged for cash (without interest thereon). If fewer than all the
outstanding shares of Class U Preferred Stock are to be redeemed, shares to be redeemed shall be
selected by the Corporation from outstanding shares of Class U Preferred Stock not previously
called for redemption by lot or, with respect to the number of shares of Class U Preferred Stock
held of record by each holder of such shares, pro rata (as nearly as may be) or by any other method
as may be determined by the Board of Directors in its discretion to be equitable. If fewer than
all the shares of Class U Preferred Stock represented by any certificate are redeemed, then a new
certificate representing the unredeemed shares shall be issued without cost to the holders thereof.
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6. Status of Reacquired Stock.
All shares of Class U Preferred Stock that have been issued and reacquired in any manner by
the Corporation shall be returned to the status of authorized but unissued shares of Class U
Preferred Stock.
7. Ranking.
Any class or series of capital stock of the Corporation shall be deemed to rank:
(a) prior or senior to the Class U Preferred Stock, as to the payment of dividends and as to
distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or
series shall be entitled to the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the holders of Class U
Preferred Stock (“Senior Stock”);
(b) on a parity with the Class U Preferred Stock, as to the payment of dividends and as to
distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per share thereof be different
from those of the Class U Preferred Stock, if (i) such capital stock is Class B Cumulative
Convertible Preferred Stock, Class C Cumulative Preferred Stock, Class D Cumulative Preferred
Stock, Class G Cumulative Preferred Stock, Class H Cumulative Preferred Stock, Class I Cumulative
Preferred Stock, Class J Cumulative Convertible Preferred Stock, Class K Convertible Cumulative
Preferred Stock, Class L Convertible Cumulative Preferred Stock, Class M Convertible Cumulative
Preferred Stock, Class N Convertible Cumulative Preferred Stock, Class O Cumulative Convertible
Preferred Stock, Class P Convertible Cumulative Preferred Stock, Class Q Cumulative Preferred
Stock, Class R Cumulative Preferred Stock, Class S Cumulative Redeemable Preferred Stock or Class T
Cumulative Preferred Stock of the Corporation, or (ii) the holders of such class of stock or series
and the Class U Preferred Stock shall be entitled to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their respective amounts
of accrued and unpaid dividends per share or liquidation preferences, without preference or
priority of one over the other (the capital stock referred to in clauses (i) and (ii) of this
paragraph being hereinafter referred to, collectively, as “Parity Stock”); and
(c) junior to the Class U Preferred Stock, as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, if (i) such capital stock or
series shall be Class A Common Stock or (ii) the holders of Class U Preferred Stock shall be
entitled to receipt of dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of shares of such class or
series (the capital stock referred to in clauses (i) and (ii) of this paragraph being hereinafter
referred to, collectively, as “Junior Stock”).
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8. Voting.
(a) If and whenever six quarterly dividends (whether or not consecutive) payable on the Class
U 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 earned or declared, the number of directors then constituting the Board of Directors
shall be increased by two if not already increased by reason of similar types of provisions with
respect to shares of any other class or series of Parity Stock which is entitled to similar voting
rights (the “Voting Preferred Stock”) and the holders of shares of Class U Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then entitled to exercise
similar voting rights, 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 Class U Preferred Stock and the Voting Preferred Stock called as hereinafter provided. Whenever
all arrears in dividends on the Class U 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 declared and paid, or declared and set apart for payment, then the right of the
holders of the Class U 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 arrearages), and the terms of office of all persons
elected as directors by the holders of the Class U Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of Directors shall be
reduced accordingly. At any time after such voting power shall have been so vested in the holders
of Class U Preferred Stock and the Voting Preferred Stock, if applicable, the Secretary of the
Corporation may, and upon the written request of any holder of Class U Preferred Stock (addressed
to the Secretary at the principal office of the Corporation) shall, call a special meeting of the
holders of the Class U Preferred Stock and of the Voting Preferred Stock for the election of the
two directors to be elected by them as herein provided, such call to be made by notice similar to
that provided in the Bylaws 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 Class
U Preferred Stock may call such meeting, upon the notice above provided, and for that purpose shall
have access to the stock books 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 Class U 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 Class U 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.
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(b) So long as any shares of Class U Preferred Stock are outstanding, in addition to any other
vote or consent of stockholders required by law or by the Charter of the
Corporation, the affirmative vote of at least 66-2/3% of the votes entitled to be cast by the
holders of the Class U Preferred Stock voting as a single class with the holders of all other
classes or series of Parity Stock entitled to vote on such matters, 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:
(i) any amendment, alteration or repeal of any of the provisions of, or the addition of any
provision to, these Articles Supplementary, the Charter or the By-Laws of the Corporation that
materially adversely affects the voting powers, rights or preferences of the holders of the Class U
Preferred Stock; provided, however, that the amendment of the provisions of the Charter so as to
increase the authorized amount of Class U Preferred Stock, or to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of any class of Parity
Stock, shall not be deemed to materially adversely affect the voting powers, rights or preferences
of the holders of Class U Preferred Stock; or
(ii) the authorization, creation of, increase in the authorized amount of, or issuance of any
shares of any class or series of Senior Stock or any security convertible into shares of any class
or series of Senior Stock (whether or not such class or series of Senior Stock is currently
authorized);
provided, however, that no such vote of the holders of Class U 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 Senior Stock or convertible or exchangeable security is to be made, as the
case may be, provision is made for the redemption of all shares of Class U Preferred Stock at the
time outstanding to the extent such redemption is authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights under these Articles
Supplementary, each share of Class U Preferred Stock shall have one (1) vote per share, except that
when any other class or series of preferred stock of the Corporation shall have the right to vote
with the Class U Preferred Stock as a single class on any matter, then the Class U Preferred Stock
and such other class or series shall have with respect to such matters one quarter of one vote per
$25 of stated liquidation preference. Except as otherwise required by applicable law or as set
forth herein or in the Charter, the Class U 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 corporate
action.
9. Record Holders.
The Corporation and the Transfer Agent may deem and treat the record holder of any share of
Class U 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.
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10.1 Restrictions on Ownership and Transfers.
(A) Limitation on Beneficial Ownership. Except as provided in Section 10.8, from and after
the Issue Date, no Person (other than the Initial Holder or a Look-Through
Entity) shall Beneficially Own shares of Class U Preferred Stock in excess of the Ownership
Limit, the Initial Holder shall not Beneficially Own shares of Class U Preferred Stock in excess of
the Initial Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class U
Preferred Stock in excess of the Look-Through Ownership Limit.
(B) Transfers in Excess of Ownership Limit. Except as provided in Section 10.8, from and
after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially Owning shares of Class
U Preferred Stock in excess of the Ownership Limit shall be void ab initio as to the Transfer of
such shares of Class U Preferred Stock that would be otherwise Beneficially Owned by such Person in
excess of the Ownership Limit, and the intended transferee shall acquire no rights in such shares
of Class U Preferred Stock.
(C) Transfers in Excess of Initial Holder Limit. Except as provided in Section 10.8, from and
after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class U Preferred Stock in excess of the Initial
Holder Limit shall be void ab initio as to the Transfer of such shares of Class U Preferred Stock
that would be otherwise Beneficially Owned by the Initial Holder in excess of the Initial Holder
limit, and the Initial Holder shall acquire no rights in such shares of Class U Preferred Stock.
(D) Transfers in Excess of Look-Through Ownership Limit. Except as provided in Section 10.8
from and after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such
Transfer is the result of transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if effective, would result
in any Look-Through Entity Beneficially Owning shares of Class U Preferred Stock in excess of the
Look-Through Ownership limit shall be void ab initio as to the Transfer of such shares of Class U
Preferred Stock that would be otherwise Beneficially Owned by such Look-Through Entity in excess of
the Look-Through Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class U Preferred Stock.
(E) Transfers Resulting in “Closely Held” Status. From and after the Issue Date, any Transfer
that, if effective would result in the Corporation being “closely held” within the meaning of
Section 856(h) of the Code, or would otherwise result in the Corporation failing to qualify as a
REIT (including, without limitation, a Transfer or other event that would result in the Corporation
owning (directly or constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the
Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code)
shall be void ab initio as to the Transfer of shares of Class U Preferred Stock that would cause
the Corporation (i) to be “closely held” within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and the intended
transferee shall acquire no rights in such shares of Class U Preferred Stock.
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(F) Severability on Void Transactions. A Transfer of a share of Class U Preferred Stock that
is null and void under Sections 10.1(B), (C), (D), or (E) of this Article because it would, if
effective, result in (i) the ownership of Class U Preferred Stock in excess of the Initial Holder
Limit, the Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation being
“closely held” within the meaning of Section 856(h) of the Code or (iii) the Corporation otherwise
failing to qualify as a REIT, shall not adversely affect the validity of the Transfer of any other
share of Class U Preferred Stock in the same or any other related transaction.
10.2 Remedies for Breach. If the Board of Directors or a committee thereof shall at any time
determine in good faith that a Transfer or other event has taken place in violation of Section 10.1
of this Article or that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Class U Preferred Stock in violation of Section 10.1 of this Article
(whether or not such violation is intended), the Board of Directors or a committee thereof shall be
empowered to take any action as it deems advisable to refuse to give effect to or to prevent such
Transfer or other event, including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem such shares at the
then current Market Price and upon such terms and conditions as may be specified by the Board of
Directors in its sole discretion (including, but not limited to, by means of the issuance of
long-term indebtedness for the purpose of such redemption), demanding the repayment of any
distributions received in respect of shares of Class U Preferred Stock acquired in violation of
Section 10.1 of this Article or instituting proceedings to enjoin such Transfer or to rescind such
Transfer or attempted Transfer; provided, however, that any Transfers or attempted Transfers (or in
the case of events other than a Transfer, Beneficial Ownership) in violation of Section 10.1 of
this Article, regardless of any action (or non-action) by the Board of Directors or such committee,
(a) shall be void ab initio or (b) shall automatically result in the transfer described in Section
10.3 of this Article; provided, further, that the provisions of this Section 10.2 shall be subject
to the provisions of Section 10.12 of this Article; provided, further, that neither the Board of
Directors nor any committee thereof may exercise such authority in a manner that interferes with
any ownership or transfer of Class U Preferred Stock that is expressly authorized pursuant to
Section 10.8(C) of this Article.
10.3 Transfer in Trust.
(A) Establishment of Trust. If, notwithstanding the other provisions contained in this
Article, at any time after the Issue Date there is a purported Transfer (an “Excess Transfer”)
(whether or not such Transfer is the result of transactions entered into through the facilities of
the NYSE or other securities exchange or an automated inter-dealer quotation system) or other
change in the capital structure of the Corporation (including, but not limited to, any redemption
of Equity Stock) or other event (including, but not limited to, any acquisition of any share of
Equity Stock) such that (a) any Person (other than the Initial Holder or a Look-Through Entity)
would Beneficially Own shares of Class U Preferred Stock in excess
of the Ownership Limit, or (b) the Initial Holder would Beneficially Own shares of Class U
Preferred Stock in excess of the Initial Holder Limit, or (c) any Person that is a Look-Through
Entity would Beneficially Own shares of Class U Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through Entity that would
Beneficially Own shares of Class U Preferred Stock in excess of the Ownership Limit, the Initial
Holder Limit or the Look-Through Entity Limit, respectively, is referred to as a “Prohibited
Transferee”), then, except as otherwise provided in Section 10.8 of this Article, such shares of
Class U Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership Limit, as the case may be, (rounded up to the nearest whole share) shall be
automatically transferred to a Trustee in his capacity as trustee of a Trust for the exclusive
benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to
be effective as of the close of business on the Business Day prior to the Excess Transfer, change
in capital structure or another event giving rise to a potential violation of the Ownership Limit,
the Initial Holder Limit or the Look Through Entity Ownership Limit.
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(B) Appointment of Trustee. The Trustee shall be appointed by the Corporation and shall be a
Person unaffiliated with either the Corporation or any Prohibited Transferee. The Trustee may be
an individual or a bank or trust company duly licensed to conduct a trust business.
(C) Status of Shares Held by the Trustee. Shares of Class U Preferred Stock held by the
Trustee shall be issued and outstanding shares of capital stock of the Corporation. Except to the
extent provided in Section 10.3(E), the Prohibited Transferee shall have no rights in the Class U
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights to dividends and
shall not possess any rights to vote or other rights attributable to the shares held in the Trust.
(D) Dividend and Voting Rights. The Trustee shall have all voting rights and rights to
dividends with respect to shares of Class U Preferred Stock held in the Trust, which rights shall
be exercised for the benefit of the Charitable Beneficiary. Any dividend or distribution paid
prior to the discovery by the Corporation that the shares of Class U Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and any dividend or
distribution declared but unpaid shall be rescinded as void ab initio with respect to such shares
of Class U Preferred Stock. Any dividends or distributions so disgorged or rescinded shall be paid
over to the Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares of Class U
Preferred Stock have been transferred to the Trustee will be rescinded as void ab initio and shall
be recast in accordance with the desires of the Trustee acting for the benefit of the Charitable
Beneficiary. The owner of the shares at the time of the Excess Transfer, change in capital
structure or other event giving rise to a potential violation of the Ownership Limit, Initial
Holder Limit or Look-Through Entity Ownership Limit shall be deemed to have given an irrevocable
proxy to the Trustee to vote the shares of Class U Preferred Stock for the benefit of the
Charitable Beneficiary.
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(E) Restrictions on Transfer. The Trustee of the Trust may sell the shares held in the Trust
to a Person, designated by the Trustee, whose ownership of the shares will not violate the
Ownership Restrictions. If such a sale is made, the interest of the Charitable Beneficiary shall
terminate and proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 10.3(E). The Prohibited Transferee shall
receive the lesser of (1) the price paid by the Prohibited Transferee for the shares or, if the
Prohibited Transferee did not give value for the shares (through a gift, devise or other
transaction), the Market Price of the shares on the day of the event causing the shares to be held
in the Trust and (2) the price per share received by the Trustee from the sale or other disposition
of the shares held in the Trust. Any proceeds in excess of the amount payable to the Prohibited
Transferee shall be payable to the Charitable Beneficiary. If any of the transfer restrictions set
forth in this Section 10.3(E) or any application thereof is determined in a final judgment to be
void, invalid or unenforceable by any court having jurisdiction over the issue, the Prohibited
Transferee may be deemed, at the option of the Corporation, to have acted as the agent of the
Corporation in acquiring the Class U Preferred Stock as to which such restrictions would, by their
terms, apply, and to hold such Class U Preferred Stock on behalf of the Corporation.
(F) Purchase Right in Stock Transferred to the Trustee. Shares of Class U Preferred Stock
transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its
designee, at a price per share equal to the lesser of (i) the price per share in the transaction
that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price
at the time of such devise or gift) and (ii) the Market Price on the date the Corporation, or its
designee, accepts such offer. The Corporation shall have the right to accept such offer for a
period of 90 days after the later of (i) the date of the Excess Transfer or other event resulting
in a transfer to the Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) Designation of Charitable Beneficiaries. By written notice to the Trustee, the
Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of
the interest in the Trust relating to such Prohibited Transferee if (i) the shares of Class U
Preferred Stock held in the Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
10.4 Notice of Restricted Transfer. Any Person that acquires or attempts to acquire shares of
Class U Preferred Stock in violation of Section 10.1 of this Article, or any Person that is a
Prohibited Transferee such that stock is transferred to the Trustee under Section 10.3 of this
Article, shall immediately give written notice to the Corporation of such event and shall provide
to the Corporation such other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or attempted Transfer or other event on the Corporation’s status
as a REIT. Failure to give such notice shall not limit the rights and remedies of the Board of
Directors provided herein in any way.
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10.5 Owners Required to Provide Information. From and after the Issue Date certain record and
Beneficial Owners and transferees of shares of Class U Preferred Stock will be required to provide
certain information as set out below.
(A) Annual Disclosure. Every record holder or Beneficial Owner of more than 5% (or such other
percentage between 0.5% and 5%, as provided in the applicable regulations adopted under the Code)
of the number of Outstanding shares of Class U Preferred Stock shall, within 30 days after January
1 of each year, give written notice to the Corporation stating the name and address of such record
holder or Beneficial Owner, the number of shares of Class U Preferred Stock Beneficially Owned, and
a full description of how such shares are held. Each such record holder or Beneficial Owner of
Class U Preferred Stock shall, upon demand by the Corporation, disclose to the Corporation in
writing such additional information with respect to the Beneficial Ownership of the Class U
Preferred Stock as the Board of Directors, in its sole discretion, deems appropriate or necessary
to (i) comply with the provisions of the Code regarding the qualification of the Corporation as a
REIT under the Code and (ii) ensure compliance with the Ownership Limit, the Initial Holder Limit
or the Look-Through Ownership Limit, as applicable. Each stockholder of record, including without
limitation any Person that holds shares of Class U Preferred Stock on behalf of a Beneficial Owner,
shall take all reasonable steps to obtain the written notice described in this Section 10.5 from
the Beneficial Owner.
(B) Disclosure at the Request of the Corporation. Any Person that is a Beneficial Owner of
shares of Class U Preferred Stock and any Person (including the stockholder of record) that is
holding shares of Class U Preferred Stock for a Beneficial Owner, and any proposed transferee of
shares, shall provide such information as the Corporation, in its sole discretion, may request in
order to determine the Corporation’s status as a REIT, to comply with the requirements of any
taxing authority or other governmental agency, to determine any such compliance or to ensure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit,
and shall provide a statement or affidavit to the Corporation setting forth the number of shares of
Class U Preferred Stock already Beneficially Owned by such stockholder or proposed transferee and
any related persons specified, which statement or affidavit shall be in the form prescribed by the
Corporation for that purpose.
10.6 Remedies Not Limited. Nothing contained in this Article shall limit the authority of the
Board of Directors to take such other action as it deems necessary or advisable (subject to the
provisions of Section 10.12 of this Article) (i) to protect the Corporation and the interests of
its stockholders in the preservation of the Corporation’s status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit.
10.7 Ambiguity. In the case of an ambiguity in the application of any of the provisions of
Section 10 of this Article, or in the case of an ambiguity in any definition contained in Section
10 of this Article, the Board of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
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10.8 Exceptions. The following exceptions shall apply or may be established with respect to
the limitations of Section 10.1 of this Article.
(A) Waiver of Ownership Limit. The Board of Directors, upon receipt of a ruling from the
Internal Revenue Service or an opinion of tax counsel or other evidence or undertaking acceptable
to it, may waive the application, in whole or in part, of the Ownership Limit to a Person subject
to the Ownership Limit, if such person is not an individual for purposes of Section 542(a) of the
Code (as modified to exclude qualified trusts from treatment as individuals pursuant to Section
856(h)(3) of the Code) and is a corporation, partnership, limited liability company, estate or
trust. In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other conditions as the Board
of Directors deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation’s status as a REIT.
(B) Pledge by Initial Holder. Notwithstanding any other provision of this Article, the pledge
by the Initial Holder of all or any portion of the Class U Preferred Stock directly owned at any
time or from time to time shall not constitute a violation of Section 10.1 of this Article and the
pledgee shall not be subject to the Ownership Limit with respect to the Class U Preferred Stock so
pledged to it either as a result of the pledge or upon foreclosure.
(C) Underwriters. For a period of 270 days (or such longer period of time as any underwriter
described below shall hold an unsold allotment of Class U Preferred Stock) following the purchase
of Class U Preferred Stock by an underwriter that (i) is a corporation, partnership or other legal
entity and (ii) participates in an offering of the Class U Preferred Stock, such underwriter shall
not be subject to the Ownership Limit with respect to the Class U Preferred Stock purchased by it
as a part of or in connection with such offering and with respect to any Class U Preferred Stock
purchased in connection with market making activities.
10.9 Legend. Each certificate for Class U Preferred Stock shall bear substantially the
following legend:
“The shares of Class U Cumulative Preferred Stock represented by this certificate are
subject to restrictions on transfer. No person may Beneficially Own shares of Class U
Cumulative Preferred Stock in excess of the Ownership Restrictions, as applicable, with
certain further restrictions and exceptions set forth in the Charter (including the Articles
Supplementary setting forth the terms of the Class U Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class U Cumulative Preferred Stock in
excess of the applicable limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed to such terms in the Charter
(including the Articles Supplementary setting forth the terms of the Class U Cumulative
Preferred Stock), as the same may be amended from time to time, a copy of which, including
the restrictions on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated, (i) the transfer of the shares of
Class U Cumulative Preferred Stock represented hereby will be void in accordance with the
Charter (including the Articles Supplementary setting forth the terms of the Class U
Cumulative Preferred Stock) or (ii) the shares of Class U
Cumulative Preferred Stock represented hereby will automatically be transferred to a
Trustee of a Trust for the benefit of one or more Charitable Beneficiaries.”
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10.10 Severability. If any provision of this Article or any application of any such provision
is determined in a final and unappealable judgment to be void, invalid or unenforceable by any
Federal or state court having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such provision shall be
affected only to the extent necessary to comply with the determination of such court.
10.11 Board of Directors Discretion. Anything in this Article to the contrary notwithstanding,
the Board of Directors shall be entitled to take or omit to take such actions as it in its
discretion shall determine to be advisable in order that the Corporation maintain its status as and
continue to qualify as a REIT, including, but not limited to, reducing the Ownership Limit, the
Initial Holder Limit and the Look-Through Ownership Limit in the event of a change in law.
10.12 Settlement. Nothing in this Section 10 of this Article shall be interpreted to preclude
the settlement of any transaction entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system.
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Exhibit V
ARTICLE XIV
Class V Cumulative Preferred Stock
Par Value $.01 Per Share
The terms of the Class V Cumulative Preferred Stock (including the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of Directors are as
follows:
1. Number of Shares and Designation.
This class of Preferred Stock shall be designated as Class V Cumulative Preferred Stock (the
“Class V Preferred Stock”) and Three Million, Four Hundred and Fifty Thousand (3,450,000) shall be
the authorized number of shares of such Class V Preferred Stock constituting such class.
2. Definitions.
For purposes of the Class V Preferred Stock, the following terms shall have the meanings
indicated:
“Act” shall mean the Securities Act of 1933, as amended.
“affiliate” of a Person means a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, the Person
specified.
“Aggregate Value” shall mean, with respect to any block of Equity Stock, the product of (i)
the number of shares of Equity Stock within such block and (ii) the corresponding Market
Price of one share of Equity Stock of such class.
“Beneficial Ownership” shall mean, with respect to any Person, ownership of shares of Equity
Stock equal to the sum of (without duplication) (i) the number of shares of Equity Stock
directly owned by such Person, (ii) the number of shares of Equity Stock indirectly owned by
such Person (if such Person is an “individual” as defined in Section 542(a)(2) of the Code)
taking into account the constructive ownership rules of Section 544 of the Code, as modified
by Section 856(h)(1)(B) of the Code, and (iii) the number of shares of Equity Stock that
such Person is deemed to beneficially own pursuant to Rule 13d-3 under the Exchange Act, or
that is attributed to such Person pursuant to Section 318 of the Code, as modified by
Section 856(d)(5) of the Code, provided that when applying this definition of Beneficial
Ownership to the Initial Holder, clause (iii) of this definition, and clause (ii) of the
definition of “Person” shall be disregarded. The terms “Beneficial
Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.
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“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 Class V Preferred Stock; provided that, for purposes of paragraph (a) of Section 8 of
this Article, the term “Board of Directors” shall not include any such committee.
“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, New York are not required to be open.
“Charitable Beneficiary” shall mean one or more beneficiaries of the Trust as determined
pursuant to Section 10.3(G) of this Article, each of which shall be an organization
described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
“Class A Common Stock” shall mean the Class A Common Stock, par value $.01 per share, of the
Corporation, and such other shares of the Corporation’s capital stock into which outstanding
shares of such Class A Common Stock shall be reclassified.
“Class V Preferred Stock” shall have the meaning set forth in Section 1 of this Article.
“Closing Price” shall mean, when used with respect to a share of any Equity Stock and for
any date, the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity Stock is not listed
or admitted to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading or, if the Equity Stock
is not listed or admitted to trading on any national securities exchange, the last quoted
price, or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if the Equity Stock is not quoted by
any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected by the Board of
Directors of the Corporation or, if the Equity Stock is not publicly traded, the fair value
of a share of such Equity Stock as reasonably determined in good faith by the Board of
Directors.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision
as in effect from time to time, as the same may be amended, and any successor
thereto, as interpreted by any applicable regulations or other administrative pronouncements
as in effect from time to time.
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“Dividend Payment Date” shall mean January 15, April 15, July 15, and October 15 of each
year; provided, that if any Dividend Payment Date falls on any day other than a Business
Day, the dividend payment payable on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date and no interest shall accrue
on such dividend from such date to such Dividend Payment Date.
“Dividend Periods” shall mean the Initial Dividend Period and each subsequent quarterly
dividend period commencing on and including January 15, April 15, July 15, and October 15 of
each year and ending on and including the day preceding the first day of the next succeeding
Dividend Period, other than the Dividend Period during which any Class V Preferred Stock
shall be redeemed pursuant to Section 5 hereof, which shall end on and include the
Redemption Date with respect to the Class V Preferred Stock being redeemed.
“Equity Stock” shall mean one or more shares of any class of capital stock of the
Corporation.
“Excess Transfer” has the meaning set forth in Section 10.3(A) of this Article.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Issue Date” shall mean September 29, 2004.
“Initial Dividend Period” shall mean the period commencing on and including the Issue Date
and ending on and including January 14, 2005.
“Initial Holder” shall mean Terry Considine.
“Initial Holder Limit” shall mean a number of the Outstanding shares of Class V Preferred
Stock of the Corporation having an Aggregate Value not in excess of the excess of (x) 15% of
the Aggregate Value of all Outstanding shares of Equity Stock over (y) the Aggregate Value
of all shares of Equity Stock other than Class V Preferred Stock that are Beneficially Owned
by the Initial Holder. From the Issue Date, the secretary of the Corporation, or such other
person as shall be designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of Directors, a schedule that
sets forth the then-current Initial Holder Limit applicable to the Initial Holder.
“Junior Stock” shall have the meaning set forth in paragraph (c) of Section 7 of this
Article.
“Liquidation Preference” shall have the meaning set forth in paragraph (a) of Section 4 of
this Article.
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“Look-Through Entity” shall mean a Person that is either (i) described in Section 401(a) of
the Code as provided under Section 856(h)(3) of the Code or (ii) registered under the
Investment Company Act of 1940.
“Look-Through Ownership Limit” shall mean, for any Look-Through Entity, a number of the
Outstanding shares of Class V Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 15% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other than Class V
Preferred Stock that are Beneficially Owned by the Look-Through Entity.
“Market Price” on any date shall mean, with respect to any share of Equity Stock, the
Closing Price of a share of that class of Equity Stock on the Trading Day immediately
preceding such date.
“NYSE” shall mean The New York Stock Exchange, Inc.
“Operating Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.
“Outstanding” shall mean issued and outstanding shares of Equity Stock of the Corporation;
provided, however, that for purposes of the application of the Ownership Limit, the
Look-Through Ownership Limit or the Initial Holder Limit to any Person, the term
“Outstanding” shall be deemed to include the number of shares of Equity Stock that such
Person alone, at that time, could acquire pursuant to any options or convertible securities.
“Ownership Limit” shall mean, for any Person other than the Initial Holder or a Look-Through
Entity, a number of the Outstanding shares of Class V Preferred Stock of the Corporation
having an Aggregate Value not in excess of the excess of (x) 8.7% of the Aggregate Value of
all Outstanding shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class V Preferred Stock that are Beneficially Owned by the Person.
“Ownership Restrictions” shall mean, collectively, the Ownership Limit, as applied to
Persons other than the Initial Holder or Look-Through Entities, the Initial Holder Limit, as
applied to the Initial Holder, and the Look-Through Ownership Limit, as applied to
Look-Through Entities.
“Parity Stock” shall have the meaning set forth in paragraph (b) of Section 7 of this
Article.
“Person” shall mean (a) for purposes of Section 10 of this Article, (i) an individual,
corporation, partnership, estate, trust (including a trust qualifying under Section 401(a)
or 501(c) of the Code), association, “private foundation,” within the meaning of Section
509(a) of the Code, joint stock company or other entity, and (ii) a “group,” as that term is
used for purposes of Section 13(d)(3) of the Exchange Act, and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of such entity.
V-4
“Prohibited Transferee” shall have the meaning set forth in Section 10.3(A) of this Article.
“Record Date” shall have the meaning set forth in paragraph (a) of Section 3 of this
Article.
“Redemption Date” shall mean, in the case of any redemption of any shares of Class V
Preferred Stock, the date fixed for redemption of such shares.
“Redemption Price” shall mean, with respect to any share of Class V Preferred Stock to be
redeemed, 100% of the Liquidation Preference thereof, plus all accumulated, accrued and
unpaid dividends (whether or not earned or declared), if any, to the Redemption Date.
“REIT” shall mean a “real estate investment trust,” as defined in Section 856 of the Code.
“Senior Stock” shall have the meaning set forth in paragraph (a) of Section 7 of this
Article.
“set apart for payment” shall be deemed to include, without any action other than the
following, the recording by the Corporation in its accounting ledgers of any accounting or
bookkeeping entry which indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be so paid on any series
or class of capital stock of the Corporation; provided, however, that if any funds for any
class or series of Junior Stock or any class or series of Parity Stock are placed in a
separate account of the Corporation or delivered to a disbursing, paying or other similar
agent, then “set apart for payment” with respect to the Class V Preferred Stock shall mean
placing such funds in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
“Trading Day” shall mean, when used with respect to any Equity Stock, (i) if the Equity
Stock is listed or admitted to trading on the NYSE, a day on which the NYSE is open for the
transaction of business, (ii) if the Equity Stock is not listed or admitted to trading on
the NYSE but is listed or admitted to trading on another national securities exchange or
automated quotation system, a day on which the principal national securities exchange or
automated quotation system, as the case may be, on which the Equity Stock is listed or
admitted to trading is open for the transaction of business, or (iii) if the Equity Stock is
not listed or admitted to trading on any national securities exchange or automated quotation
system, any day other than a Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to close.
V-5
“Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of a
share of Class V Preferred Stock (including (i) the granting of an option or any series of
such options or entering into any agreement for the sale, transfer or other disposition of
Class V Preferred Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Class V Preferred Stock), whether
voluntary or involuntary, whether of record ownership or Beneficial Ownership, and whether
by operation of law or otherwise (including, but not limited to, any transfer of an interest
in other entities that results in a change in the Beneficial Ownership of shares of Class V
Preferred Stock). The term “Transfers” and “Transferred” shall have correlative meanings.
“Transfer Agent” means such transfer agent as may be designated by the Board of Directors or
their designee as the transfer agent for the Class V Preferred Stock; provided, that if the
Corporation has not designated a transfer agent then the Corporation shall act as the
transfer agent for the Class V Preferred Stock.
“Trust” shall mean the trust created pursuant to Section 10.3(A) of this Article.
“Trustee” shall mean the Person unaffiliated with either the Corporation or the Prohibited
Transferee that is appointed by the Corporation to serve as trustee of the Trust.
“Voting Preferred Stock” shall have the meaning set forth in Section 8 of this Article.
3. Dividends.
(a) The holders of Class V Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors, out of funds legally available for that purpose, quarterly cash
dividends on the Class V Preferred Stock in an amount per share equal to $0.50. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period or Periods such
dividends shall be declared or there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing on January 15, 2005. Each such dividend shall be payable in arrears to the holders of
record of the Class V Preferred Stock, as they appear on the stock records of the Corporation at
the close of business on January 1, April 1, July 1 or October 1 (each a “Record Date”), as the
case may be, immediately preceding such Dividend Payment Date. Accumulated, accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date, which date shall not precede
by more than 45 days the payment date thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable per share of Class V Preferred Stock for the Initial
Dividend Period, or any other period shorter than a full Dividend Period, shall be computed ratably
on the basis of twelve 30-day months and a 360-day year. Holders of Class V Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Class V Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Class V Preferred Stock that may be in arrears.
V-6
(c) So long as any of the shares of Class V Preferred Stock are outstanding, except as
described in the immediately following sentence, no dividends shall be declared or paid or set
apart for payment by the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of accumulated, accrued and
unpaid dividends have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, on
the Class V Preferred Stock for all Dividend Periods terminating on or prior to the date such
dividend or distribution is declared, paid, set apart for payment or made, as the case may be, with
respect to 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 the Class V
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, accrued and
unpaid on the Class V Preferred Stock and accumulated, accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class V Preferred Stock are outstanding, no dividends
(other than dividends or distributions paid in shares of or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock) shall be declared or paid or set apart for
payment by the Corporation and no other distribution of cash or other property shall be declared or
made, directly or indirectly, by the Corporation with respect to any shares of Junior Stock, nor
shall any shares of Junior Stock be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Class A 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 shares of any such
stock) directly or indirectly by the Corporation (except by conversion into or exchange for shares
of, or options, warrants, or rights to subscribe for or purchase shares of, Junior Stock), nor
shall any other cash or other property otherwise be paid or distributed to or for the benefit of
any holder of shares of Junior Stock in respect thereof, directly or indirectly, by the Corporation
unless, in each case, dividends equal to the full amount of all accumulated, accrued and unpaid
dividends on all outstanding shares of Class V Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has been set apart for
such payment, on all outstanding shares of Class V Preferred Stock for all Dividend Periods ending
on or prior to the date such dividend or distribution is declared, paid, set apart for payment or
made with respect to such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available for any sinking fund
for such redemption, or the date any such cash or other property is paid or distributed to or for
the benefit of any holders of Junior Stock in respect thereof, as the case may be.
V-7
Notwithstanding the provisions of this Section 3, the Corporation shall not be prohibited from
(i) declaring or paying or setting apart for payment any dividend or distribution on any
shares of Parity Stock or (ii) redeeming, purchasing or otherwise acquiring any Parity Stock,
in each case, if such declaration, payment, redemption, purchase or other acquisition is necessary
in order to maintain the continued qualification of the Corporation as a REIT under Section 856 of
the Code.
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 by the Corporation (whether of
capital, surplus or otherwise) shall be made to or set apart for the holders of Junior Stock, the
holders of shares of Class V Preferred Stock shall be entitled to receive Twenty-Five Dollars ($25)
per share of Class V Preferred Stock (the “Liquidation Preference”), plus an amount equal to all
dividends (whether or not earned or 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. Until the holders of the Class V Preferred Stock have been paid the Liquidation
Preference in full, plus an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to such holders, no
payment will be made to any holder of Junior Stock upon the liquidation, dissolution or winding up
of the Corporation. If, upon any liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation, or proceeds thereof, distributable among the holders of Class V
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 Class V Preferred Stock and any
such other Parity Stock ratably in the same proportion as the respective amounts that would be
payable on such Class V 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, (ii) a sale or transfer of all or substantially all
of the Corporation’s assets, 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) Upon any liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of Class V Preferred Stock and any Parity Stock, as provided
in Section 4(a), any other series or class or classes of Junior Stock shall, subject to the
respective terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class V Preferred Stock and any Parity Stock shall not be
entitled to share therein.
V-8
5. Redemption at the Option of the Corporation.
(a) Shares of Class V Preferred Stock shall not be redeemable by the Corporation prior to
September 29, 2009, except as set forth in Section 10.2 of this Article. On and after September
29, 2009 the Corporation, at its option, may redeem shares of Class V Preferred Stock, in whole or
from time to time in part, at a redemption price payable in cash equal to the Redemption Price
applicable thereto. In the event of a redemption of shares of Class V Preferred Stock, if the
Redemption Date occurs after a Record Date and on or prior to the
related Dividend Payment Date, the dividend payable on such Dividend Payment Date in respect
of such shares called for redemption shall be payable on such Dividend Payment Date the holders of
record at the close of business on such Record Date, notwithstanding the redemption of such shares,
and shall not be payable as part of the redemption price for such shares. In connection with any
redemption pursuant to this Section 5(a), the redemption price of the Class V Preferred Stock
(other than any portion thereof consisting of accumulated, accrued and unpaid dividends) shall be
payable solely with the proceeds from the sale by the Corporation or the Operating Partnership of
other capital shares of the Corporation or the Operating Partnership (whether or not such sale
occurs concurrently with such redemption). For purposes of the preceding sentence, “capital
shares” means any common stock, preferred stock, depositary shares, partnership or other interests,
participations or other ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable at the option of the holder for equity securities
(unless and to the extent such debt securities are subsequently converted into capital shares)) or
options to purchase any of the foregoing of or in the Corporation or the Operating Partnership.
(b) The Redemption Date shall be selected by the Corporation, shall be specified in the notice
of redemption and shall be not less than 30 days nor more than 60 days after the date notice of
redemption is sent by the Corporation.
(c) If full cumulative dividends on all outstanding shares of Class V Preferred Stock have not
been declared and paid, or declared and set apart for payment, no shares of Class V Preferred Stock
may be redeemed unless all outstanding shares of Class V Preferred Stock are simultaneously
redeemed and neither the Corporation nor any affiliate of the Corporation may purchase or acquire
shares of Class V Preferred Stock, other than pursuant to a purchase or exchange offer made on the
same terms to all holders of shares of Class V Preferred Stock.
V-9
(d) If the Corporation shall redeem shares of Class V Preferred Stock pursuant to paragraph
(a) of this Section 5, notice of such redemption shall be given to each holder of record of the
shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such
holder’s address as the same appears on the stock records of the Corporation. Neither the failure
to mail any notice required by this paragraph (d), nor any defect therein or in the mailing thereof
to any particular holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the date mailed whether
or not the holder receives the notice. Each such notice shall state, as appropriate: (i) the
Redemption Date; (ii) the number of shares of Class V Preferred Stock to be redeemed and, if fewer
than all such shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the place or places at which certificates for such shares are to
be surrendered; and (iv) the Redemption Price payable on such Redemption Date, including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid dividends will be
payable as part of the Redemption Price, or payable on the next Dividend Payment Date to the record
holder at the close of business on the relevant record date as described in the next sentence.
Notice having been mailed as aforesaid, from and after the Redemption Date (unless the Corporation
shall fail to make available the amount of cash
necessary to effect such redemption), (i) dividends on the shares of Class V Preferred Stock
so called for redemption shall cease to accumulate or accrue on the shares of Class V Preferred
Stock called for redemption, (ii) said shares shall no longer be deemed to be outstanding, and
(iii) all rights of the holders thereof as holders of Class V Preferred Stock of the Corporation
shall cease (except the right to receive the cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so required); provided, however,
that if the Redemption Date for any shares of Class V Preferred Stock occurs after any dividend
record date and on or prior to the related Dividend Payment Date, the full dividend payable on such
Dividend Payment Date in respect of such shares of Class V Preferred Stock called for redemption
shall be payable on such Dividend Payment Date to the holders of record of such shares at the close
of business on the corresponding dividend record date notwithstanding the prior redemption of such
shares. The Corporation’s obligation to make available the cash necessary to effect the redemption
in accordance with the preceding sentence shall be deemed fulfilled if, on or before the applicable
Redemption Date, the Corporation shall irrevocably deposit in trust with a bank or trust company
(which may not be an affiliate of the Corporation) that has, or is an affiliate of a bank or trust
company that has, a capital and surplus of at least $50,000,000, such amount of cash as is
necessary for such redemption plus, if such Redemption Date occurs after any dividend record date
and on or prior to the related Dividend Payment Date, such amount of cash as is necessary to pay
the dividend payable on such Dividend Payment Date in respect of such shares of Class V Preferred
Stock called for redemption, with irrevocable instructions that such cash be applied to the
redemption of the shares of Class V Preferred Stock so called for redemption and, if applicable,
the payment of such dividend. No interest shall accrue for the benefit of the holders of shares of
Class V 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 two years from the Redemption Date
shall revert to the general funds of the Corporation, after which reversion the holders of shares
of Class V Preferred Stock 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 of Class V Preferred Stock to be so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and the notice shall so state), such
certificates shall be exchanged for cash (without interest thereon). If fewer than all the
outstanding shares of Class V Preferred Stock are to be redeemed, shares to be redeemed shall be
selected by the Corporation from outstanding shares of Class V Preferred Stock not previously
called for redemption by lot or, with respect to the number of shares of Class V Preferred Stock
held of record by each holder of such shares, pro rata (as nearly as may be) or by any other method
as may be determined by the Board of Directors in its discretion to be equitable. If fewer than
all the shares of Class V Preferred Stock represented by any certificate are redeemed, then a new
certificate representing the unredeemed shares shall be issued without cost to the holders thereof.
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6. Status of Reacquired Stock.
All shares of Class V Preferred Stock that have been issued and reacquired in any manner by
the Corporation shall be returned to the status of authorized but unissued shares of Class V
Preferred Stock.
7. Ranking.
Any class or series of capital stock of the Corporation shall be deemed to rank:
(a) prior or senior to the Class V Preferred Stock, as to the payment of dividends and as to
distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or
series shall be entitled to the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the holders of Class V
Preferred Stock (“Senior Stock”);
(b) on a parity with the Class V Preferred Stock, as to the payment of dividends and as to
distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per share thereof be different
from those of the Class V Preferred Stock, if (i) such capital stock is Class B Cumulative
Convertible Preferred Stock, Class C Cumulative Preferred Stock, Class D Cumulative Preferred
Stock, Class G Cumulative Preferred Stock, Class H Cumulative Preferred Stock, Class I Cumulative
Preferred Stock, Class J Cumulative Convertible Preferred Stock, Class K Convertible Cumulative
Preferred Stock, Class L Convertible Cumulative Preferred Stock, Class M Convertible Cumulative
Preferred Stock, Class N Convertible Cumulative Preferred Stock, Class O Cumulative Convertible
Preferred Stock, Class P Convertible Cumulative Preferred Stock, Class Q Cumulative Preferred
Stock, Class R Cumulative Preferred Stock, Class S Cumulative Redeemable Preferred Stock, Class T
Cumulative Preferred Stock or Class U Cumulative Preferred Stock of the Corporation, or (ii) the
holders of such class of stock or series and the Class V Preferred Stock shall be entitled to the
receipt of dividends and of amounts distributable upon liquidation, dissolution or winding up in
proportion to their respective amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority of one over the other (the capital stock referred to in
clauses (i) and (ii) of this paragraph being hereinafter referred to, collectively, as “Parity
Stock”); and
(c) junior to the Class V Preferred Stock, as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, if (i) such capital stock or
series shall be Class A Common Stock or (ii) the holders of Class V Preferred Stock shall be
entitled to receipt of dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of shares of such class or
series (the capital stock referred to in clauses (i) and (ii) of this paragraph being hereinafter
referred to, collectively, as “Junior Stock”).
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8. Voting.
(a) If and whenever six quarterly dividends (whether or not consecutive) payable on the Class
V 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 earned or declared, the number of directors then constituting the Board of Directors
shall be increased by two if not already increased by reason of similar types of provisions with
respect to shares of any other class or series of Parity Stock which is entitled to similar voting
rights (the “Voting Preferred Stock”) and the holders of shares of Class V Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then entitled to exercise
similar voting rights, 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 Class V Preferred Stock and the Voting Preferred Stock called as hereinafter provided. Whenever
all arrears in dividends on the Class V 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 declared and paid, or declared and set apart for payment, then the right of the
holders of the Class V 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 arrearages), and the terms of office of all persons
elected as directors by the holders of the Class V Preferred Stock and the Voting Preferred Stock
shall forthwith terminate and the number of directors constituting the Board of Directors shall be
reduced accordingly. At any time after such voting power shall have been so vested in the holders
of Class V Preferred Stock and the Voting Preferred Stock, if applicable, the Secretary of the
Corporation may, and upon the written request of any holder of Class V Preferred Stock (addressed
to the Secretary at the principal office of the Corporation) shall, call a special meeting of the
holders of the Class V Preferred Stock and of the Voting Preferred Stock for the election of the
two directors to be elected by them as herein provided, such call to be made by notice similar to
that provided in the Bylaws 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 Class
V Preferred Stock may call such meeting, upon the notice above provided, and for that purpose shall
have access to the stock books 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 Class V 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 Class V 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.
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(b) So long as any shares of Class V Preferred Stock are outstanding, in addition to any other
vote or consent of stockholders required by law or by the Charter of the
Corporation, the affirmative vote of at least 66-2/3% of the votes entitled to be cast by the
holders of the Class V Preferred Stock voting as a single class with the holders of all other
classes or series of Parity Stock entitled to vote on such matters, 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:
(i) any amendment, alteration or repeal of any of the provisions of, or the addition of any
provision to, these Articles Supplementary, the Charter or the By-Laws of the Corporation that
materially adversely affects the voting powers, rights or preferences of the holders of the Class V
Preferred Stock; provided, however, that the amendment of the provisions of the Charter so as to
increase the authorized amount of Class V Preferred Stock, or to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of any class of Parity
Stock, shall not be deemed to materially adversely affect the voting powers, rights or preferences
of the holders of Class V Preferred Stock; or
(ii) the authorization, creation of, increase in the authorized amount of, or issuance of any
shares of any class or series of Senior Stock or any security convertible into shares of any class
or series of Senior Stock (whether or not such class or series of Senior Stock is currently
authorized);
provided, however, that no such vote of the holders of Class V 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 Senior Stock or convertible or exchangeable security is to be made, as the
case may be, provision is made for the redemption of all shares of Class V Preferred Stock at the
time outstanding to the extent such redemption is authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights under these Articles
Supplementary, each share of Class V Preferred Stock shall have one (1) vote per share, except that
when any other class or series of preferred stock of the Corporation shall have the right to vote
with the Class V Preferred Stock as a single class on any matter, then the Class V Preferred Stock
and such other class or series shall have with respect to such matters one quarter of one vote per
$25 of stated liquidation preference. Except as otherwise required by applicable law or as set
forth herein or in the Charter, the Class V 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 corporate
action.
9. Record Holders.
The Corporation and the Transfer Agent may deem and treat the record holder of any share of
Class V 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.
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10.1 Restrictions on Ownership and Transfers.
(A) Limitation on Beneficial Ownership. Except as provided in Section 10.8, from and after
the Issue Date, no Person (other than the Initial Holder or a Look-Through
Entity) shall Beneficially Own shares of Class V Preferred Stock in excess of the Ownership
Limit, the Initial Holder shall not Beneficially Own shares of Class V Preferred Stock in excess of
the Initial Holder Limit and no Look-Through Entity shall Beneficially Own shares of Class V
Preferred Stock in excess of the Look-Through Ownership Limit.
(B) Transfers in Excess of Ownership Limit. Except as provided in Section 10.8, from and
after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially Owning shares of Class
V Preferred Stock in excess of the Ownership Limit shall be void ab initio as to the Transfer of
such shares of Class V Preferred Stock that would be otherwise Beneficially Owned by such Person in
excess of the Ownership Limit, and the intended transferee shall acquire no rights in such shares
of Class V Preferred Stock.
(C) Transfers in Excess of Initial Holder Limit. Except as provided in Section 10.8, from and
after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class V Preferred Stock in excess of the Initial
Holder Limit shall be void ab initio as to the Transfer of such shares of Class V Preferred Stock
that would be otherwise Beneficially Owned by the Initial Holder in excess of the Initial Holder
limit, and the Initial Holder shall acquire no rights in such shares of Class V Preferred Stock.
(D) Transfers in Excess of Look-Through Ownership Limit. Except as provided in Section 10.8
from and after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such
Transfer is the result of transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if effective, would result
in any Look-Through Entity Beneficially Owning shares of Class V Preferred Stock in excess of the
Look-Through Ownership limit shall be void ab initio as to the Transfer of such shares of Class V
Preferred Stock that would be otherwise Beneficially Owned by such Look-Through Entity in excess of
the Look-Through Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class V Preferred Stock.
(E) Transfers Resulting in “Closely Held” Status. From and after the Issue Date, any Transfer
that, if effective would result in the Corporation being “closely held” within the meaning of
Section 856(h) of the Code, or would otherwise result in the Corporation failing to qualify as a
REIT (including, without limitation, a Transfer or other event that would result in the Corporation
owning (directly or constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the
Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code)
shall be void ab initio as to the Transfer of shares of Class V Preferred Stock that would cause
the Corporation (i) to be “closely held” within the meaning of Section 856(h) of
the Code or (ii) otherwise fail to qualify as a REIT, as the case may be, and the intended
transferee shall acquire no rights in such shares of Class V Preferred Stock.
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(F) Severability on Void Transactions. A Transfer of a share of Class V Preferred Stock that
is null and void under Sections 10.1(B), (C), (D), or (E) of this Article because it would, if
effective, result in (i) the ownership of Class V Preferred Stock in excess of the Initial Holder
Limit, the Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation being
“closely held” within the meaning of Section 856(h) of the Code or (iii) the Corporation otherwise
failing to qualify as a REIT, shall not adversely affect the validity of the Transfer of any other
share of Class V Preferred Stock in the same or any other related transaction.
10.2 Remedies for Breach. If the Board of Directors or a committee thereof shall at any time
determine in good faith that a Transfer or other event has taken place in violation of Section 10.1
of this Article or that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Class V Preferred Stock in violation of Section 10.1 of this Article
(whether or not such violation is intended), the Board of Directors or a committee thereof shall be
empowered to take any action as it deems advisable to refuse to give effect to or to prevent such
Transfer or other event, including, but not limited to, refusing to give effect to such Transfer or
other event on the books of the Corporation, causing the Corporation to redeem such shares at the
then current Market Price and upon such terms and conditions as may be specified by the Board of
Directors in its sole discretion (including, but not limited to, by means of the issuance of
long-term indebtedness for the purpose of such redemption), demanding the repayment of any
distributions received in respect of shares of Class V Preferred Stock acquired in violation of
Section 10.1 of this Article or instituting proceedings to enjoin such Transfer or to rescind such
Transfer or attempted Transfer; provided, however, that any Transfers or attempted Transfers (or in
the case of events other than a Transfer, Beneficial Ownership) in violation of Section 10.1 of
this Article, regardless of any action (or non-action) by the Board of Directors or such committee,
(a) shall be void ab initio or (b) shall automatically result in the transfer described in Section
10.3 of this Article; provided, further, that the provisions of this Section 10.2 shall be subject
to the provisions of Section 10.12 of this Article; provided, further, that neither the Board of
Directors nor any committee thereof may exercise such authority in a manner that interferes with
any ownership or transfer of Class V Preferred Stock that is expressly authorized pursuant to
Section 10.8(C) of this Article.
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10.3 Transfer in Trust.
(A) Establishment of Trust. If, notwithstanding the other provisions contained in this
Article, at any time after the Issue Date there is a purported Transfer (an “Excess Transfer”)
(whether or not such Transfer is the result of transactions entered into through the facilities of
the NYSE or other securities exchange or an automated inter-dealer quotation system) or other
change in the capital structure of the Corporation (including, but not limited to, any redemption
of Equity Stock) or other event (including, but not limited to, any acquisition of any share of
Equity Stock) such that (a) any Person (other than the Initial Holder or a Look-Through Entity)
would Beneficially Own shares of Class V Preferred Stock in excess
of the Ownership Limit, or (b) the Initial Holder would Beneficially Own shares of Class V
Preferred Stock in excess of the Initial Holder Limit, or (c) any Person that is a Look-Through
Entity would Beneficially Own shares of Class V Preferred Stock in excess of the Look-Through
Ownership Limit (in any such event, the Person, Initial Holder or Look-Through Entity that would
Beneficially Own shares of Class V Preferred Stock in excess of the Ownership Limit, the Initial
Holder Limit or the Look-Through Entity Limit, respectively, is referred to as a “Prohibited
Transferee”), then, except as otherwise provided in Section 10.8 of this Article, such shares of
Class V Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership Limit, as the case may be, (rounded up to the nearest whole share) shall be
automatically transferred to a Trustee in his capacity as trustee of a Trust for the exclusive
benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to
be effective as of the close of business on the Business Day prior to the Excess Transfer, change
in capital structure or another event giving rise to a potential violation of the Ownership Limit,
the Initial Holder Limit or the Look Through Entity Ownership Limit.
(B) Appointment of Trustee. The Trustee shall be appointed by the Corporation and shall be a
Person unaffiliated with either the Corporation or any Prohibited Transferee. The Trustee may be
an individual or a bank or trust company duly licensed to conduct a trust business.
(C) Status of Shares Held by the Trustee. Shares of Class V Preferred Stock held by the
Trustee shall be issued and outstanding shares of capital stock of the Corporation. Except to the
extent provided in Section 10.3(E), the Prohibited Transferee shall have no rights in the Class V
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights to dividends and
shall not possess any rights to vote or other rights attributable to the shares held in the Trust.
(D) Dividend and Voting Rights. The Trustee shall have all voting rights and rights to
dividends with respect to shares of Class V Preferred Stock held in the Trust, which rights shall
be exercised for the benefit of the Charitable Beneficiary. Any dividend or distribution paid
prior to the discovery by the Corporation that the shares of Class V Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and any dividend or
distribution declared but unpaid shall be rescinded as void ab initio with respect to such shares
of Class V Preferred Stock. Any dividends or distributions so disgorged or rescinded shall be paid
over to the Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares of Class V
Preferred Stock have been transferred to the Trustee will be rescinded as void ab initio and shall
be recast in accordance with the desires of the Trustee acting for the benefit of the Charitable
Beneficiary. The owner of the shares at the time of the Excess Transfer, change in capital
structure or other event giving rise to a potential violation of the Ownership Limit, Initial
Holder Limit or Look-Through Entity Ownership Limit shall be deemed to have given an irrevocable
proxy to the Trustee to vote the shares of Class V Preferred Stock for the benefit of the
Charitable Beneficiary.
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(E) Restrictions on Transfer. The Trustee of the Trust may sell the shares held in the Trust
to a Person, designated by the Trustee, whose ownership of the shares will not violate the
Ownership Restrictions. If such a sale is made, the interest of the Charitable Beneficiary shall
terminate and proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 10.3(E). The Prohibited Transferee shall
receive the lesser of (1) the price paid by the Prohibited Transferee for the shares or, if the
Prohibited Transferee did not give value for the shares (through a gift, devise or other
transaction), the Market Price of the shares on the day of the event causing the shares to be held
in the Trust and (2) the price per share received by the Trustee from the sale or other disposition
of the shares held in the Trust. Any proceeds in excess of the amount payable to the Prohibited
Transferee shall be payable to the Charitable Beneficiary. If any of the transfer restrictions set
forth in this Section 10.3(E) or any application thereof is determined in a final judgment to be
void, invalid or unenforceable by any court having jurisdiction over the issue, the Prohibited
Transferee may be deemed, at the option of the Corporation, to have acted as the agent of the
Corporation in acquiring the Class V Preferred Stock as to which such restrictions would, by their
terms, apply, and to hold such Class V Preferred Stock on behalf of the Corporation.
(F) Purchase Right in Stock Transferred to the Trustee. Shares of Class V Preferred Stock
transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its
designee, at a price per share equal to the lesser of (i) the price per share in the transaction
that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price
at the time of such devise or gift) and (ii) the Market Price on the date the Corporation, or its
designee, accepts such offer. The Corporation shall have the right to accept such offer for a
period of 90 days after the later of (i) the date of the Excess Transfer or other event resulting
in a transfer to the Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) Designation of Charitable Beneficiaries. By written notice to the Trustee, the
Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of
the interest in the Trust relating to such Prohibited Transferee if (i) the shares of Class V
Preferred Stock held in the Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
10.4 Notice of Restricted Transfer. Any Person that acquires or attempts to acquire shares of
Class V Preferred Stock in violation of Section 10.1 of this Article, or any Person that is a
Prohibited Transferee such that stock is transferred to the Trustee under Section 10.3 of this
Article, shall immediately give written notice to the Corporation of such event and shall provide
to the Corporation such other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or attempted Transfer or other event on the Corporation’s status
as a REIT. Failure to give such notice shall not limit the rights and remedies of the Board of
Directors provided herein in any way.
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10.5 Owners Required to Provide Information. From and after the Issue Date certain record and
Beneficial Owners and transferees of shares of Class V Preferred Stock will be required to provide
certain information as set out below.
(A) Annual Disclosure. Every record holder or Beneficial Owner of more than 5% (or such other
percentage between 0.5% and 5%, as provided in the applicable regulations adopted under the Code)
of the number of Outstanding shares of Class V Preferred Stock shall, within 30 days after January
1 of each year, give written notice to the Corporation stating the name and address of such record
holder or Beneficial Owner, the number of shares of Class V Preferred Stock Beneficially Owned, and
a full description of how such shares are held. Each such record holder or Beneficial Owner of
Class V Preferred Stock shall, upon demand by the Corporation, disclose to the Corporation in
writing such additional information with respect to the Beneficial Ownership of the Class V
Preferred Stock as the Board of Directors, in its sole discretion, deems appropriate or necessary
to (i) comply with the provisions of the Code regarding the qualification of the Corporation as a
REIT under the Code and (ii) ensure compliance with the Ownership Limit, the Initial Holder Limit
or the Look-Through Ownership Limit, as applicable. Each stockholder of record, including without
limitation any Person that holds shares of Class V Preferred Stock on behalf of a Beneficial Owner,
shall take all reasonable steps to obtain the written notice described in this Section 10.5 from
the Beneficial Owner.
(B) Disclosure at the Request of the Corporation. Any Person that is a Beneficial Owner of
shares of Class V Preferred Stock and any Person (including the stockholder of record) that is
holding shares of Class V Preferred Stock for a Beneficial Owner, and any proposed transferee of
shares, shall provide such information as the Corporation, in its sole discretion, may request in
order to determine the Corporation’s status as a REIT, to comply with the requirements of any
taxing authority or other governmental agency, to determine any such compliance or to ensure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit,
and shall provide a statement or affidavit to the Corporation setting forth the number of shares of
Class V Preferred Stock already Beneficially Owned by such stockholder or proposed transferee and
any related persons specified, which statement or affidavit shall be in the form prescribed by the
Corporation for that purpose.
10.6 Remedies Not Limited. Nothing contained in this Article shall limit the authority of the
Board of Directors to take such other action as it deems necessary or advisable (subject to the
provisions of Section 10.12 of this Article) (i) to protect the Corporation and the interests of
its stockholders in the preservation of the Corporation’s status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit.
10.7 Ambiguity. In the case of an ambiguity in the application of any of the provisions of
Section 10 of this Article, or in the case of an ambiguity in any definition contained in Section
10 of this Article, the Board of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
V-18
10.8 Exceptions. The following exceptions shall apply or may be established with respect to
the limitations of Section 10.1 of this Article.
(A) Waiver of Ownership Limit. The Board of Directors, upon receipt of a ruling from the
Internal Revenue Service or an opinion of tax counsel or other evidence or undertaking acceptable
to it, may waive the application, in whole or in part, of the Ownership Limit to a Person subject
to the Ownership Limit, if such person is not an individual for purposes of Section 542(a) of the
Code (as modified to exclude qualified trusts from treatment as individuals pursuant to Section
856(h)(3) of the Code) and is a corporation, partnership, limited liability company, estate or
trust. In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other conditions as the Board
of Directors deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation’s status as a REIT.
(B) Pledge by Initial Holder. Notwithstanding any other provision of this Article, the pledge
by the Initial Holder of all or any portion of the Class V Preferred Stock directly owned at any
time or from time to time shall not constitute a violation of Section 10.1 of this Article and the
pledgee shall not be subject to the Ownership Limit with respect to the Class V Preferred Stock so
pledged to it either as a result of the pledge or upon foreclosure.
(C) Underwriters. For a period of 270 days (or such longer period of time as any underwriter
described below shall hold an unsold allotment of Class V Preferred Stock) following the purchase
of Class V Preferred Stock by an underwriter that (i) is a corporation, partnership or other legal
entity and (ii) participates in an offering of the Class V Preferred Stock, such underwriter shall
not be subject to the Ownership Limit with respect to the Class V Preferred Stock purchased by it
as a part of or in connection with such offering and with respect to any Class V Preferred Stock
purchased in connection with market making activities.
10.9 Legend. Each certificate for Class V Preferred Stock shall bear substantially the
following legend:
“The shares of Class V Cumulative Preferred Stock represented by this certificate are
subject to restrictions on transfer. No person may Beneficially Own shares of Class V
Cumulative Preferred Stock in excess of the Ownership Restrictions, as applicable, with
certain further restrictions and exceptions set forth in the Charter (including the Articles
Supplementary setting forth the terms of the Class V Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class V Cumulative Preferred Stock in
excess of the applicable limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed to such terms in the Charter
(including the Articles Supplementary setting forth the terms of the Class V Cumulative
Preferred Stock), as the same may be amended from time to time, a copy of which, including
the restrictions on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated, (i) the transfer of the shares of
Class V Cumulative Preferred Stock represented hereby will be void in accordance with the
Charter (including the Articles Supplementary setting forth the terms of the Class V
Cumulative Preferred Stock) or (ii) the shares of Class V Cumulative Preferred Stock represented hereby will automatically be transferred to a
Trustee of a Trust for the benefit of one or more Charitable Beneficiaries.”
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10.10 Severability. If any provision of this Article or any application of any such provision
is determined in a final and unappealable judgment to be void, invalid or unenforceable by any
Federal or state court having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such provision shall be
affected only to the extent necessary to comply with the determination of such court.
10.11 Board of Directors Discretion. Anything in this Article to the contrary notwithstanding,
the Board of Directors shall be entitled to take or omit to take such actions as it in its
discretion shall determine to be advisable in order that the Corporation maintain its status as and
continue to qualify as a REIT, including, but not limited to, reducing the Ownership Limit, the
Initial Holder Limit and the Look-Through Ownership Limit in the event of a change in law.
10.12 Settlement. Nothing in this Section 10 of this Article shall be interpreted to preclude
the settlement of any transaction entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system.
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Exhibit Y
ARTICLE XV
Class Y Cumulative Preferred Stock
Par Value $.01 Per Share
The terms of the Class Y Cumulative Preferred Stock (including the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the Board of Directors are as
follows:
1. Number of Shares and Designation.
This class of Preferred Stock shall be designated as Class Y Cumulative Preferred Stock (the
“Class Y Preferred Stock”) and Three Million Four Hundred and Fifty Thousand (3,450,000) shall be
the authorized number of shares of such Class Y Preferred Stock constituting such class.
2. Definitions.
For purposes of the Class Y Preferred Stock, the following terms shall have the meanings
indicated:
“Act” shall mean the Securities Act of 1933, as amended.
“affiliate” of a Person means a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, the Person
specified.
“Aggregate Value” shall mean, with respect to any block of Equity Stock, the product of (i)
the number of shares of Equity Stock within such block and (ii) the corresponding Market
Price of one share of Equity Stock of such class.
“Beneficial Ownership” shall mean, with respect to any Person, ownership of shares of Equity
Stock equal to the sum of (without duplication) (i) the number of shares of Equity Stock
directly owned by such Person, (ii) the number of shares of Equity Stock indirectly owned by
such Person (if such Person is an “individual” as defined in Section 542(a)(2) of the Code)
taking into account the constructive ownership rules of Section 544 of the Code, as modified
by Section 856(h)(1)(B) of the Code, and (iii) the number of shares of Equity Stock that
such Person is deemed to beneficially own pursuant to Rule 13d-3 under the Exchange Act, or
that is attributed to such Person pursuant to Section 318 of the Code, as modified by
Section 856(d)(5) of the Code, provided that when applying this definition of Beneficial
Ownership to the Initial Holder, clause (iii) of this definition, and clause (ii) of the
definition of “Person” shall be disregarded. The terms “Beneficial
Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.
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“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 Class Y Preferred Stock; provided that, for purposes of paragraph (a) of Section 8 of
this Article, the term “Board of Directors” shall not include any such committee.
“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, New York are not required to be open.
“Charitable Beneficiary” shall mean one or more beneficiaries of the Trust as determined
pursuant to Section 10.3(G) of this Article, each of which shall be an organization
described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
“Class A Common Stock” shall mean the Class A Common Stock, par value $.01 per share, of the
Corporation, and such other shares of the Corporation’s capital stock into which outstanding
shares of such Class A Common Stock shall be reclassified.
“Class Y Preferred Stock” shall have the meaning set forth in Section 1 of this Article.
“Closing Price” shall mean, when used with respect to a share of any Equity Stock and for
any date, the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity Stock is not listed
or admitted to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading or, if the Equity Stock
is not listed or admitted to trading on any national securities exchange, the last quoted
price, or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if the Equity Stock is not quoted by
any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected by the Board of
Directors of the Corporation or, if the Equity Stock is not publicly traded, the fair value
of a share of such Equity Stock as reasonably determined in good faith by the Board of
Directors.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision
as in effect from time to time, as the same may be amended, and any successor
thereto, as interpreted by any applicable regulations or other administrative pronouncements
as in effect from time to time.
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“Dividend Payment Date” shall mean January 15, April 15, July 15, and October 15 of each
year; provided, that if any Dividend Payment Date falls on any day other than a Business
Day, the dividend payment payable on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date and no interest shall accrue
on such dividend from such date to such Dividend Payment Date.
“Dividend Periods” shall mean the Initial Dividend Period and each subsequent quarterly
dividend period commencing on and including January 15, April 15, July 15, and October 15 of
each year and ending on and including the day preceding the first day of the next succeeding
Dividend Period, other than the Dividend Period during which any Class Y Preferred Stock
shall be redeemed pursuant to Section 5 hereof, which shall end on and include the
Redemption Date with respect to the Class Y Preferred Stock being redeemed.
“Equity Stock” shall mean one or more shares of any class of capital stock of the
Corporation.
“Excess Transfer” has the meaning set forth in Section 10.3(A) of this Article.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Initial Dividend Period” shall mean the period commencing on and including the Issue Date
and ending on and including April 14, 2005.
“Initial Holder” shall mean Terry Considine.
“Initial Holder Limit” shall mean a number of the Outstanding shares of Class Y Preferred
Stock of the Corporation having an Aggregate Value not in excess of the excess of (x) 15% of
the Aggregate Value of all Outstanding shares of Equity Stock over (y) the Aggregate Value
of all shares of Equity Stock other than Class Y Preferred Stock that are Beneficially Owned
by the Initial Holder. From the Issue Date, the secretary of the Corporation, or such other
person as shall be designated by the Board of Directors, shall upon request make available
to the representative(s) of the Initial Holder and the Board of Directors, a schedule that
sets forth the then-current Initial Holder Limit applicable to the Initial Holder.
“Issue Date” shall mean December 21, 2004.
“Junior Stock” shall have the meaning set forth in paragraph (c) of Section 7 of this
Article.
“Liquidation Preference” shall have the meaning set forth in paragraph (a) of Section 4 of
this Article.
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“Look-Through Entity” shall mean a Person that is either (i) described in Section 401(a) of
the Code as provided under Section 856(h)(3) of the Code or (ii) registered under the
Investment Company Act of 1940.
“Look-Through Ownership Limit” shall mean, for any Look-Through Entity, a number of the
Outstanding shares of Class Y Preferred Stock of the Corporation having an Aggregate Value
not in excess of the excess of (x) 15% of the Aggregate Value of all Outstanding shares of
Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other than Class Y
Preferred Stock that are Beneficially Owned by the Look-Through Entity.
“Market Price” on any date shall mean, with respect to any share of Equity Stock, the
Closing Price of a share of that class of Equity Stock on the Trading Day immediately
preceding such date.
“NYSE” shall mean The New York Stock Exchange, Inc.
“Operating Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.
“Outstanding” shall mean issued and outstanding shares of Equity Stock of the Corporation;
provided, however, that for purposes of the application of the Ownership Limit, the
Look-Through Ownership Limit or the Initial Holder Limit to any Person, the term
“Outstanding” shall be deemed to include the number of shares of Equity Stock that such
Person alone, at that time, could acquire pursuant to any options or convertible securities.
“Ownership Limit” shall mean, for any Person other than the Initial Holder or a Look-Through
Entity, a number of the Outstanding shares of Class Y Preferred Stock of the Corporation
having an Aggregate Value not in excess of the excess of (x) 8.7% of the Aggregate Value of
all Outstanding shares of Equity Stock over (y) the Aggregate Value of all shares of Equity
Stock other than Class Y Preferred Stock that are Beneficially Owned by the Person.
“Ownership Restrictions” shall mean, collectively, the Ownership Limit, as applied to
Persons other than the Initial Holder or Look-Through Entities, the Initial Holder Limit, as
applied to the Initial Holder, and the Look-Through Ownership Limit, as applied to
Look-Through Entities.
“Parity Stock” shall have the meaning set forth in paragraph (b) of Section 7 of this
Article.
“Person” shall mean (a) for purposes of Section 10 of this Article, (i) an individual,
corporation, partnership, estate, trust (including a trust qualifying under Section 401(a)
or 501(c) of the Code), association, “private foundation,” within the meaning of Section
509(a) of the Code, joint stock company or other entity, and (ii) a “group,” as that term is
used for purposes of Section 13(d)(3) of the Exchange Act, and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of such entity.
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“Prohibited Transferee” shall have the meaning set forth in Section 10.3(A) of this Article.
“Record Date” shall have the meaning set forth in paragraph (a) of Section 3 of this
Article.
“Redemption Date” shall mean, in the case of any redemption of any shares of Class Y
Preferred Stock, the date fixed for redemption of such shares.
“Redemption Price” shall mean, with respect to any share of Class Y Preferred Stock to be
redeemed, 100% of the Liquidation Preference thereof, plus all accumulated, accrued and
unpaid dividends (whether or not earned or declared), if any, to the Redemption Date.
“REIT” shall mean a “real estate investment trust,” as defined in Section 856 of the Code.
“Senior Stock” shall have the meaning set forth in paragraph (a) of Section 7 of this
Article.
“set apart for payment” shall be deemed to include, without any action other than the
following, the recording by the Corporation in its accounting ledgers of any accounting or
bookkeeping entry which indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be so paid on any series
or class of capital stock of the Corporation; provided, however, that if any funds for any
class or series of Junior Stock or any class or series of Parity Stock are placed in a
separate account of the Corporation or delivered to a disbursing, paying or other similar
agent, then “set apart for payment” with respect to the Class Y Preferred Stock shall mean
placing such funds in a separate account or delivering such funds to a disbursing, paying or
other similar agent.
“Trading Day” shall mean, when used with respect to any Equity Stock, (i) if the Equity
Stock is listed or admitted to trading on the NYSE, a day on which the NYSE is open for the
transaction of business, (ii) if the Equity Stock is not listed or admitted to trading on
the NYSE but is listed or admitted to trading on another national securities exchange or
automated quotation system, a day on which the principal national securities exchange or
automated quotation system, as the case may be, on which the Equity Stock is listed or
admitted to trading is open for the transaction of business, or (iii) if the Equity Stock is
not listed or admitted to trading on any national securities exchange or automated quotation
system, any day other than a Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to close.
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“Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of a
share of Class Y Preferred Stock (including (i) the granting of an option or any series of
such options or entering into any agreement for the sale, transfer or other disposition of
Class Y Preferred Stock or (ii) the sale, transfer, assignment or other disposition of any
securities or rights convertible into or exchangeable for Class Y Preferred Stock), whether
voluntary or involuntary, whether of record ownership or Beneficial Ownership, and whether
by operation of law or otherwise (including, but not limited to, any transfer of an interest
in other entities that results in a change in the Beneficial Ownership of shares of Class Y
Preferred Stock). The term “Transfers” and “Transferred” shall have correlative meanings.
“Transfer Agent” means such transfer agent as may be designated by the Board of Directors or
their designee as the transfer agent for the Class Y Preferred Stock; provided, that if the
Corporation has not designated a transfer agent then the Corporation shall act as the
transfer agent for the Class Y Preferred Stock.
“Trust” shall mean the trust created pursuant to Section 10.3(A) of this Article.
“Trustee” shall mean the Person unaffiliated with either the Corporation or the Prohibited
Transferee that is appointed by the Corporation to serve as trustee of the Trust.
“Voting Preferred Stock” shall have the meaning set forth in Section 8 of this Article.
3. Dividends.
(a) The holders of Class Y Preferred Stock shall be entitled to receive, when and as declared
by the Board of Directors, out of funds legally available for that purpose, quarterly cash
dividends on the Class Y Preferred Stock in an amount per share equal to $0.49219. Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period or Periods such
dividends shall be declared or there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly in arrears on each Dividend Payment Date,
commencing on April 15, 2005. Each such dividend shall be payable in arrears to the holders of
record of the Class Y Preferred Stock, as they appear on the stock records of the Corporation at
the close of business on January 1, April 1, July 1 or October 1 (each a “Record Date”), as the
case may be, immediately preceding such Dividend Payment Date. Accumulated, accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date, which date shall not precede
by more than 45 days the payment date thereof, as may be fixed by the Board of Directors.
(b) The amount of dividends payable per share of Class Y Preferred Stock for the Initial
Dividend Period, or any other period shorter than a full Dividend Period, shall be computed ratably
on the basis of twelve 30-day months and a 360-day year. Holders of Class Y Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Class Y Preferred Stock. No
interest, or sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Class Y Preferred Stock that may be in arrears.
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(c) So long as any of the shares of Class Y Preferred Stock are outstanding, except as
described in the immediately following sentence, no dividends shall be declared or paid or set
apart for payment by the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of accumulated, accrued and
unpaid dividends have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, on
the Class Y Preferred Stock for all Dividend Periods terminating on or prior to the date such
dividend or distribution is declared, paid, set apart for payment or made, as the case may be, with
respect to 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 the Class Y
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, accrued and
unpaid on the Class Y Preferred Stock and accumulated, accrued and unpaid on such Parity Stock.
(d) So long as any of the shares of Class Y Preferred Stock are outstanding, no dividends
(other than dividends or distributions paid in shares of or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock) shall be declared or paid or set apart for
payment by the Corporation and no other distribution of cash or other property shall be declared or
made, directly or indirectly, by the Corporation with respect to any shares of Junior Stock, nor
shall any shares of Junior Stock be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Class A 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 shares of any such
stock) directly or indirectly by the Corporation (except by conversion into or exchange for shares
of, or options, warrants, or rights to subscribe for or purchase shares of, Junior Stock), nor
shall any other cash or other property otherwise be paid or distributed to or for the benefit of
any holder of shares of Junior Stock in respect thereof, directly or indirectly, by the Corporation
unless, in each case, dividends equal to the full amount of all accumulated, accrued and unpaid
dividends on all outstanding shares of Class Y Preferred Stock have been declared and paid, or such
dividends have been declared and a sum sufficient for the payment thereof has been set apart for
such payment, on all outstanding shares of Class Y Preferred Stock for all Dividend Periods ending
on or prior to the date such dividend or distribution is declared, paid, set apart for payment or
made with respect to such shares of Junior Stock, or the date such shares of Junior Stock are
redeemed, purchased or otherwise acquired or monies paid to or made available for any sinking fund
for such redemption, or the date any such cash or other property is paid or distributed to or for
the benefit of any holders of Junior Stock in respect thereof, as the case may be.
Y-7
Notwithstanding the provisions of this Section 3, the Corporation shall not be prohibited from
(i) declaring or paying or setting apart for payment any dividend or distribution on any
shares of Parity Stock or (ii) redeeming, purchasing or otherwise acquiring any Parity Stock,
in each case, if such declaration, payment, redemption, purchase or other acquisition is necessary
in order to maintain the continued qualification of the Corporation as a REIT under Section 856 of
the Code.
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 by the Corporation (whether of
capital, surplus or otherwise) shall be made to or set apart for the holders of Junior Stock, the
holders of shares of Class Y Preferred Stock shall be entitled to receive Twenty-Five Dollars ($25)
per share of Class Y Preferred Stock (the “Liquidation Preference”), plus an amount equal to all
dividends (whether or not earned or 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. Until the holders of the Class Y Preferred Stock have been paid the Liquidation
Preference in full, plus an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to such holders, no
payment will be made to any holder of Junior Stock upon the liquidation, dissolution or winding up
of the Corporation. If, upon any liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation, or proceeds thereof, distributable among the holders of Class Y
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 Class Y Preferred Stock and any
such other Parity Stock ratably in the same proportion as the respective amounts that would be
payable on such Class Y 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, (ii) a sale or transfer of all or substantially all
of the Corporation’s assets, 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) Upon any liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of Class Y Preferred Stock and any Parity Stock, as provided
in Section 4(a), any other series or class or classes of Junior Stock shall, subject to the
respective terms thereof, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Class Y Preferred Stock and any Parity Stock shall not be
entitled to share therein.
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5. Redemption at the Option of the Corporation.
(a) Shares of Class Y Preferred Stock shall not be redeemable by the Corporation prior to
December 21, 2009, except as set forth in Section 10.2 of this Article. On and after December 21,
2009 the Corporation, at its option, may redeem shares of Class Y Preferred Stock, in whole or from
time to time in part, at a redemption price payable in cash equal to the Redemption Price
applicable thereto. In the event of a redemption of shares of Class Y Preferred Stock, if the
Redemption Date occurs after a Record Date and on or prior to the
related Dividend Payment Date, the dividend payable on such Dividend Payment Date in respect
of such shares called for redemption shall be payable on such Dividend Payment Date the holders of
record at the close of business on such Record Date, notwithstanding the redemption of such shares,
and shall not be payable as part of the redemption price for such shares.
(b) The Redemption Date shall be selected by the Corporation, shall be specified in the notice
of redemption and shall be not less than 30 days nor more than 60 days after the date notice of
redemption is sent by the Corporation.
(c) If full cumulative dividends on all outstanding shares of Class Y Preferred Stock have not
been declared and paid, or declared and set apart for payment, no shares of Class Y Preferred Stock
may be redeemed unless all outstanding shares of Class Y Preferred Stock are simultaneously
redeemed and neither the Corporation nor any affiliate of the Corporation may purchase or acquire
shares of Class Y Preferred Stock, other than pursuant to a purchase or exchange offer made on the
same terms to all holders of shares of Class Y Preferred Stock.
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(d) If the Corporation shall redeem shares of Class Y Preferred Stock pursuant to paragraph
(a) of this Section 5, notice of such redemption shall be given to each holder of record of the
shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such
holder’s address as the same appears on the stock records of the Corporation. Neither the failure
to mail any notice required by this paragraph (d), nor any defect therein or in the mailing thereof
to any particular holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the date mailed whether
or not the holder receives the notice. Each such notice shall state, as appropriate: (i) the
Redemption Date; (ii) the number of shares of Class Y Preferred Stock to be redeemed and, if fewer
than all such shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the place or places at which certificates for such shares are to
be surrendered; and (iv) the Redemption Price payable on such Redemption Date, including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid dividends will be
payable as part of the Redemption Price, or payable on the next Dividend Payment Date to the record
holder at the close of business on the relevant record date as described in the next sentence.
Notice having been mailed as aforesaid, from and after the Redemption Date (unless the Corporation
shall fail to make available the amount of cash necessary to effect such redemption), (i) dividends
on the shares of Class Y Preferred Stock so called for redemption shall cease to accumulate or
accrue on the shares of Class Y Preferred Stock called for redemption, (ii) said shares shall no
longer be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of Class
Y Preferred Stock of the Corporation shall cease (except the right to receive the cash payable upon
such redemption, without interest thereon, upon surrender and endorsement of their certificates if
so required); provided, however, that if the Redemption Date for any shares of Class Y Preferred
Stock occurs after any dividend record date and on or prior to the related Dividend Payment Date,
the full dividend payable on such Dividend Payment Date in respect of such shares of Class Y
Preferred Stock called for redemption shall be payable on such Dividend Payment Date to the holders
of record of such shares at the close of business on the corresponding dividend record date
notwithstanding the
prior redemption of such shares. The Corporation’s obligation to make available the cash
necessary to effect the redemption in accordance with the preceding sentence shall be deemed
fulfilled if, on or before the applicable Redemption Date, the Corporation shall irrevocably
deposit in trust with a bank or trust company (which may not be an affiliate of the Corporation)
that has, or is an affiliate of a bank or trust company that has, a capital and surplus of at least
$50,000,000, such amount of cash as is necessary for such redemption plus, if such Redemption Date
occurs after any dividend record date and on or prior to the related Dividend Payment Date, such
amount of cash as is necessary to pay the dividend payable on such Dividend Payment Date in respect
of such shares of Class Y Preferred Stock called for redemption, with irrevocable instructions that
such cash be applied to the redemption of the shares of Class Y Preferred Stock so called for
redemption and, if applicable, the payment of such dividend. No interest shall accrue for the
benefit of the holders of shares of Class Y 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 two
years from the Redemption Date shall revert to the general funds of the Corporation, after which
reversion the holders of shares of Class Y Preferred Stock 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 of Class Y Preferred Stock to be so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and the notice shall so state), such
certificates shall be exchanged for cash (without interest thereon). If fewer than all the
outstanding shares of Class Y Preferred Stock are to be redeemed, shares to be redeemed shall be
selected by the Corporation from outstanding shares of Class Y Preferred Stock not previously
called for redemption by lot or, with respect to the number of shares of Class Y Preferred Stock
held of record by each holder of such shares, pro rata (as nearly as may be) or by any other method
as may be determined by the Board of Directors in its discretion to be equitable. If fewer than
all the shares of Class Y Preferred Stock represented by any certificate are redeemed, then a new
certificate representing the unredeemed shares shall be issued without cost to the holders thereof.
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6. Status of Reacquired Stock.
All shares of Class Y Preferred Stock that have been issued and reacquired in any manner by
the Corporation shall be returned to the status of authorized but unissued shares of Class Y
Preferred Stock.
7. Ranking.
Any class or series of capital stock of the Corporation shall be deemed to rank:
(a) prior or senior to the Class Y Preferred Stock, as to the payment of dividends and as to
distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or
series shall be entitled to the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the holders of Class Y
Preferred Stock (“Senior Stock”);
(b) on a parity with the Class Y Preferred Stock, as to the payment of dividends and as to
distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per share thereof be different
from those of the Class Y Preferred Stock, if (i) such capital stock is Class B Cumulative
Convertible Preferred Stock, Class C Cumulative Preferred Stock, Class D Cumulative Preferred
Stock, Class G Cumulative Preferred Stock, Class H Cumulative Preferred Stock, Class I Cumulative
Preferred Stock, Class J Cumulative Convertible Preferred Stock, Class K Convertible Cumulative
Preferred Stock, Class L Convertible Cumulative Preferred Stock, Class M Convertible Cumulative
Preferred Stock, Class N Convertible Cumulative Preferred Stock, Class O Cumulative Convertible
Preferred Stock, Class P Convertible Cumulative Preferred Stock, Class Q Cumulative Preferred
Stock, Class R Cumulative Preferred Stock, Class S Cumulative Redeemable Preferred Stock, Class T
Cumulative Preferred Stock, Class U Cumulative Preferred Stock, Class V Cumulative Preferred Stock,
Class W Cumulative Convertible Preferred Stock or Class X Cumulative Preferred Stock of the
Corporation, or (ii) the holders of such class of stock or series and the Class Y Preferred Stock
shall be entitled to the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued and unpaid dividends
per share or liquidation preferences, without preference or priority of one over the other (the
capital stock referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to,
collectively, as “Parity Stock”); and
(c) junior to the Class Y Preferred Stock, as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, if (i) such capital stock or
series shall be Class A Common Stock or (ii) the holders of Class Y Preferred Stock shall be
entitled to receipt of dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of shares of such class or
series (the capital stock referred to in clauses (i) and (ii) of this paragraph being hereinafter
referred to, collectively, as “Junior Stock”).
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8. Voting.
(a) If and whenever six quarterly dividends (whether or not consecutive) payable on the Class
Y 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 earned or declared, the number of directors then constituting the Board of Directors
shall be increased by two if not already increased by reason of similar types of provisions with
respect to shares of any other class or series of Parity Stock which is entitled to similar voting
rights (the “Voting Preferred Stock”) and the holders of shares of Class Y Preferred Stock,
together with the holders of shares of all other Voting Preferred Stock then entitled to exercise
similar voting rights, 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 Class Y Preferred Stock and the Voting Preferred Stock called as hereinafter provided. Whenever
all arrears in dividends on the Class Y 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 declared and paid, or declared and set apart for
payment, then the right of the holders of the Class Y 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 arrearages), and the terms
of office of all persons elected as directors by the holders of the Class Y Preferred Stock and the
Voting Preferred Stock shall forthwith terminate and the number of directors constituting the Board
of Directors shall be reduced accordingly. At any time after such voting power shall have been so
vested in the holders of Class Y Preferred Stock and the Voting Preferred Stock, if applicable, the
Secretary of the Corporation may, and upon the written request of any holder of Class Y Preferred
Stock (addressed to the Secretary at the principal office of the Corporation) shall, call a special
meeting of the holders of the Class Y Preferred Stock and of the Voting Preferred Stock for the
election of the two directors to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws 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 Class Y Preferred Stock may call such meeting, upon the notice above provided,
and for that purpose shall have access to the stock books 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 Class Y 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 Class Y 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.
(b) So long as any shares of Class Y Preferred Stock are outstanding, in addition to any other
vote or consent of stockholders required by law or by the Charter of the Corporation, the
affirmative vote of at least 66-2/3% of the votes entitled to be cast by the holders of the Class Y
Preferred Stock voting as a single class with the holders of all other classes or series of Parity
Stock entitled to vote on such matters, 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:
(i) any amendment, alteration or repeal of any of the provisions of, or the addition of any
provision to, these Articles Supplementary, the Charter or the By-Laws of the Corporation that
materially adversely affects the voting powers, rights or preferences of the holders of the Class Y
Preferred Stock; provided, however, that the amendment of the provisions of the Charter so as to
increase the authorized amount of Class Y Preferred Stock, or to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of any class of Parity
Stock, shall not be deemed to materially adversely affect the voting powers, rights or preferences
of the holders of Class Y Preferred Stock; or
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(ii) the authorization, creation of, increase in the authorized amount of, or issuance of any
shares of any class or series of Senior Stock or any security convertible into shares of any class
or series of Senior Stock (whether or not such class or series of Senior Stock is currently
authorized);
provided, however, that no such vote of the holders of Class Y 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 Senior Stock or convertible or exchangeable security is to be made, as the
case may be, provision is made for the redemption of all shares of Class Y Preferred Stock at the
time outstanding to the extent such redemption is authorized by Section 5 of this Article.
For purposes of the foregoing provisions and all other voting rights under these Articles
Supplementary, each share of Class Y Preferred Stock shall have one (1) vote per share, except that
when any other class or series of preferred stock of the Corporation shall have the right to vote
with the Class Y Preferred Stock as a single class on any matter, then the Class Y Preferred Stock
and such other class or series shall have with respect to such matters one quarter of one vote per
$25 of stated liquidation preference. Except as otherwise required by applicable law or as set
forth herein or in the Charter, the Class Y 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 corporate
action.
9. Record Holders.
The Corporation and the Transfer Agent may deem and treat the record holder of any share of
Class Y 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.
10.1 Restrictions on Ownership and Transfers.
(A) Limitation on Beneficial Ownership. Except as provided in Section 10.8, from and after
the Issue Date, no Person (other than the Initial Holder or a Look-Through Entity) shall
Beneficially Own shares of Class Y Preferred Stock in excess of the Ownership Limit, the Initial
Holder shall not Beneficially Own shares of Class Y Preferred Stock in excess of the Initial Holder
Limit and no Look-Through Entity shall Beneficially Own shares of Class Y Preferred Stock in excess
of the Look-Through Ownership Limit.
(B) Transfers in Excess of Ownership Limit. Except as provided in Section 10.8, from and
after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially Owning shares of Class
Y Preferred Stock in excess of the Ownership Limit shall be void ab initio as to the Transfer of
such shares of Class Y Preferred Stock that would be otherwise Beneficially Owned by such Person in
excess of the Ownership Limit, and the intended transferee shall acquire no rights in such shares
of Class Y Preferred Stock.
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(C) Transfers in Excess of Initial Holder Limit. Except as provided in Section 10.8, from and
after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Class Y Preferred Stock in excess of the Initial
Holder Limit shall be void ab initio as to the Transfer of such shares of Class Y Preferred Stock
that would be otherwise Beneficially Owned by the Initial Holder in excess of the Initial Holder
limit, and the Initial Holder shall acquire no rights in such shares of Class Y Preferred Stock.
(D) Transfers in Excess of Look-Through Ownership Limit. Except as provided in Section 10.8
from and after the Issue Date (and subject to Section 10.12), any Transfer (whether or not such
Transfer is the result of transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if effective, would result
in any Look-Through Entity Beneficially Owning shares of Class Y Preferred Stock in excess of the
Look-Through Ownership limit shall be void ab initio as to the Transfer of such shares of Class Y
Preferred Stock that would be otherwise Beneficially Owned by such Look-Through Entity in excess of
the Look-Through Ownership Limit and such Look-Through Entity shall acquire no rights in such
shares of Class Y Preferred Stock.
(E) Transfers Resulting in “Closely Held” Status. From and after the Issue Date, any Transfer
that, if effective would result in the Corporation being “closely held” within the meaning of
Section 856(h) of the Code, or would otherwise result in the Corporation failing to qualify as a
REIT (including, without limitation, a Transfer or other event that would result in the Corporation
owning (directly or constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the
Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code)
shall be void ab initio as to the Transfer of shares of Class Y Preferred Stock that would cause
the Corporation (i) to be “closely held” within the meaning of Section 856(h) of the Code or (ii)
otherwise fail to qualify as a REIT, as the case may be, and the intended transferee shall acquire
no rights in such shares of Class Y Preferred Stock.
(F) Severability on Void Transactions. A Transfer of a share of Class Y Preferred Stock that
is null and void under Sections 10.1(B), (C), (D), or (E) of this Article because it would, if
effective, result in (i) the ownership of Class Y Preferred Stock in excess of the Initial Holder
Limit, the Ownership Limit, or the Look-Through Ownership Limit, (ii) the Corporation being
“closely held” within the meaning of Section 856(h) of the Code or (iii) the Corporation otherwise
failing to qualify as a REIT, shall not adversely affect the validity of the Transfer of any other
share of Class Y Preferred Stock in the same or any other related transaction.
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10.2 Remedies for Breach. If the Board of Directors or a committee thereof shall at any time
determine in good faith that a Transfer or other event has taken place in violation of Section 10.1
of this Article or that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Class Y Preferred Stock in violation of Section 10.1 of this
Article (whether or not such violation is intended), the Board of Directors or a committee thereof
shall be empowered to take any action as it deems advisable to refuse to give effect to or to
prevent such Transfer or other event, including, but not limited to, refusing to give effect to
such Transfer or other event on the books of the Corporation, causing the Corporation to redeem
such shares at the then current Market Price and upon such terms and conditions as may be specified
by the Board of Directors in its sole discretion (including, but not limited to, by means of the
issuance of long-term indebtedness for the purpose of such redemption), demanding the repayment of
any distributions received in respect of shares of Class Y Preferred Stock acquired in violation of
Section 10.1 of this Article or instituting proceedings to enjoin such Transfer or to rescind such
Transfer or attempted Transfer; provided, however, that any Transfers or attempted Transfers (or in
the case of events other than a Transfer, Beneficial Ownership) in violation of Section 10.1 of
this Article, regardless of any action (or non-action) by the Board of Directors or such committee,
(a) shall be void ab initio or (b) shall automatically result in the transfer described in Section
10.3 of this Article; provided, further, that the provisions of this Section 10.2 shall be subject
to the provisions of Section 10.12 of this Article; provided, further, that neither the Board of
Directors nor any committee thereof may exercise such authority in a manner that interferes with
any ownership or transfer of Class Y Preferred Stock that is expressly authorized pursuant to
Section 10.8(C) of this Article.
10.3 Transfer in Trust.
(A) Establishment of Trust. If, notwithstanding the other provisions contained in this
Article, at any time after the Issue Date there is a purported Transfer (an “Excess Transfer”)
(whether or not such Transfer is the result of transactions entered into through the facilities of
the NYSE or other securities exchange or an automated inter-dealer quotation system) or other
change in the capital structure of the Corporation (including, but not limited to, any redemption
of Equity Stock) or other event (including, but not limited to, any acquisition of any share of
Equity Stock) such that (a) any Person (other than the Initial Holder or a Look-Through Entity)
would Beneficially Own shares of Class Y Preferred Stock in excess of the Ownership Limit, or (b)
the Initial Holder would Beneficially Own shares of Class Y Preferred Stock in excess of the
Initial Holder Limit, or (c) any Person that is a Look-Through Entity would Beneficially Own shares
of Class Y Preferred Stock in excess of the Look-Through Ownership Limit (in any such event, the
Person, Initial Holder or Look-Through Entity that would Beneficially Own shares of Class Y
Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or the Look-Through
Entity Limit, respectively, is referred to as a “Prohibited Transferee”), then, except as otherwise
provided in Section 10.8 of this Article, such shares of Class Y Preferred Stock in excess of the
Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit, as the case may be,
(rounded up to the nearest whole share) shall be automatically transferred to a Trustee in his
capacity as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries.
Such transfer to the Trustee shall be deemed to be effective as of the close of business on the
Business Day prior to the Excess Transfer, change in capital structure or another event giving rise
to a potential violation of the Ownership Limit, the Initial Holder Limit or the Look Through
Entity Ownership Limit.
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(B) Appointment of Trustee. The Trustee shall be appointed by the Corporation and shall be a
Person unaffiliated with either the Corporation or any Prohibited Transferee. The Trustee may be
an individual or a bank or trust company duly licensed to conduct a trust business.
(C) Status of Shares Held by the Trustee. Shares of Class Y Preferred Stock held by the
Trustee shall be issued and outstanding shares of capital stock of the Corporation. Except to the
extent provided in Section 10.3(E), the Prohibited Transferee shall have no rights in the Class Y
Preferred Stock held by the Trustee, and the Prohibited Transferee shall not benefit economically
from ownership of any shares held in trust by the Trustee, shall have no rights to dividends and
shall not possess any rights to vote or other rights attributable to the shares held in the Trust.
(D) Dividend and Voting Rights. The Trustee shall have all voting rights and rights to
dividends with respect to shares of Class Y Preferred Stock held in the Trust, which rights shall
be exercised for the benefit of the Charitable Beneficiary. Any dividend or distribution paid
prior to the discovery by the Corporation that the shares of Class Y Preferred Stock have been
transferred to the Trustee shall be repaid to the Corporation upon demand, and any dividend or
distribution declared but unpaid shall be rescinded as void ab initio with respect to such shares
of Class Y Preferred Stock. Any dividends or distributions so disgorged or rescinded shall be paid
over to the Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares of Class Y
Preferred Stock have been transferred to the Trustee will be rescinded as void ab initio and shall
be recast in accordance with the desires of the Trustee acting for the benefit of the Charitable
Beneficiary. The owner of the shares at the time of the Excess Transfer, change in capital
structure or other event giving rise to a potential violation of the Ownership Limit, Initial
Holder Limit or Look-Through Entity Ownership Limit shall be deemed to have given an irrevocable
proxy to the Trustee to vote the shares of Class Y Preferred Stock for the benefit of the
Charitable Beneficiary.
(E) Restrictions on Transfer. The Trustee of the Trust may sell the shares held in the Trust
to a Person, designated by the Trustee, whose ownership of the shares will not violate the
Ownership Restrictions. If such a sale is made, the interest of the Charitable Beneficiary shall
terminate and proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 10.3(E). The Prohibited Transferee shall
receive the lesser of (1) the price paid by the Prohibited Transferee for the shares or, if the
Prohibited Transferee did not give value for the shares (through a gift, devise or other
transaction), the Market Price of the shares on the day of the event causing the shares to be held
in the Trust and (2) the price per share received by the Trustee from the sale or other disposition
of the shares held in the Trust. Any proceeds in excess of the amount payable to the Prohibited
Transferee shall be payable to the Charitable Beneficiary. If any of the transfer restrictions set
forth in this Section 10.3(E) or any application thereof is determined in a final judgment to be
void, invalid or unenforceable by any court having jurisdiction over the issue, the Prohibited
Transferee may be deemed, at the option of the Corporation, to have acted as the agent of the
Corporation in acquiring the Class Y Preferred Stock as to which such restrictions would, by
their terms, apply, and to hold such Class Y Preferred Stock on behalf of the Corporation.
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(F) Purchase Right in Stock Transferred to the Trustee. Shares of Class Y Preferred Stock
transferred to the Trustee shall be deemed to have been offered for sale to the Corporation, or its
designee, at a price per share equal to the lesser of (i) the price per share in the transaction
that resulted in such transfer to the Trust (or, in the case of a devise or gift, the Market Price
at the time of such devise or gift) and (ii) the Market Price on the date the Corporation, or its
designee, accepts such offer. The Corporation shall have the right to accept such offer for a
period of 90 days after the later of (i) the date of the Excess Transfer or other event resulting
in a transfer to the Trust and (ii) the date that the Board of Directors determines in good faith
that an Excess Transfer or other event occurred.
(G) Designation of Charitable Beneficiaries. By written notice to the Trustee, the
Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of
the interest in the Trust relating to such Prohibited Transferee if (i) the shares of Class Y
Preferred Stock held in the Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
10.4 Notice of Restricted Transfer. Any Person that acquires or attempts to acquire shares of
Class Y Preferred Stock in violation of Section 10.1 of this Article, or any Person that is a
Prohibited Transferee such that stock is transferred to the Trustee under Section 10.3 of this
Article, shall immediately give written notice to the Corporation of such event and shall provide
to the Corporation such other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or attempted Transfer or other event on the Corporation’s status
as a REIT. Failure to give such notice shall not limit the rights and remedies of the Board of
Directors provided herein in any way.
10.5 Owners Required to Provide Information. From and after the Issue Date certain record and
Beneficial Owners and transferees of shares of Class Y Preferred Stock will be required to provide
certain information as set out below.
(A) Annual Disclosure. Every record holder or Beneficial Owner of more than 5% (or such other
percentage between 0.5% and 5%, as provided in the applicable regulations adopted under the Code)
of the number of Outstanding shares of Class Y Preferred Stock shall, within 30 days after January
1 of each year, give written notice to the Corporation stating the name and address of such record
holder or Beneficial Owner, the number of shares of Class Y Preferred Stock Beneficially Owned, and
a full description of how such shares are held. Each such record holder or Beneficial Owner of
Class Y Preferred Stock shall, upon demand by the Corporation, disclose to the Corporation in
writing such additional information with respect to the Beneficial Ownership of the Class Y
Preferred Stock as the Board of Directors, in its sole discretion, deems appropriate or necessary
to (i) comply with the provisions of the Code regarding the qualification of the Corporation as a
REIT under the Code and (ii) ensure compliance with the Ownership Limit, the Initial Holder Limit
or the Look-Through Ownership Limit, as applicable. Each stockholder of record, including without
limitation any Person that
holds shares of Class Y Preferred Stock on behalf of a Beneficial Owner, shall take all
reasonable steps to obtain the written notice described in this Section 10.5 from the Beneficial
Owner.
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(B) Disclosure at the Request of the Corporation. Any Person that is a Beneficial Owner of
shares of Class Y Preferred Stock and any Person (including the stockholder of record) that is
holding shares of Class Y Preferred Stock for a Beneficial Owner, and any proposed transferee of
shares, shall provide such information as the Corporation, in its sole discretion, may request in
order to determine the Corporation’s status as a REIT, to comply with the requirements of any
taxing authority or other governmental agency, to determine any such compliance or to ensure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit,
and shall provide a statement or affidavit to the Corporation setting forth the number of shares of
Class Y Preferred Stock already Beneficially Owned by such stockholder or proposed transferee and
any related persons specified, which statement or affidavit shall be in the form prescribed by the
Corporation for that purpose.
10.6 Remedies Not Limited. Nothing contained in this Article shall limit the authority of the
Board of Directors to take such other action as it deems necessary or advisable (subject to the
provisions of Section 10.12 of this Article) (i) to protect the Corporation and the interests of
its stockholders in the preservation of the Corporation’s status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit.
10.7 Ambiguity. In the case of an ambiguity in the application of any of the provisions of
Section 10 of this Article, or in the case of an ambiguity in any definition contained in Section
10 of this Article, the Board of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
10.8 Exceptions. The following exceptions shall apply or may be established with respect to
the limitations of Section 10.1 of this Article.
(A) Waiver of Ownership Limit. The Board of Directors, upon receipt of a ruling from the
Internal Revenue Service or an opinion of tax counsel or other evidence or undertaking acceptable
to it, may waive the application, in whole or in part, of the Ownership Limit to a Person subject
to the Ownership Limit, if such person is not an individual for purposes of Section 542(a) of the
Code (as modified to exclude qualified trusts from treatment as individuals pursuant to Section
856(h)(3) of the Code) and is a corporation, partnership, limited liability company, estate or
trust. In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other conditions as the Board
of Directors deems necessary, in its sole discretion, to determine the effect, if any, of the
proposed Transfer on the Corporation’s status as a REIT.
(B) Pledge by Initial Holder. Notwithstanding any other provision of this Article, the pledge
by the Initial Holder of all or any portion of the Class Y Preferred Stock directly owned at any
time or from time to time shall not constitute a violation of Section 10.1 of
this Article and the pledgee shall not be subject to the Ownership Limit with respect to the
Class Y Preferred Stock so pledged to it either as a result of the pledge or upon foreclosure.
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(C) Underwriters. For a period of 270 days (or such longer period of time as any underwriter
described below shall hold an unsold allotment of Class Y Preferred Stock) following the purchase
of Class Y Preferred Stock by an underwriter that (i) is a corporation, partnership or other legal
entity and (ii) participates in an offering of the Class Y Preferred Stock, such underwriter shall
not be subject to the Ownership Limit with respect to the Class Y Preferred Stock purchased by it
as a part of or in connection with such offering and with respect to any Class Y Preferred Stock
purchased in connection with market making activities.
10.9 Legend. Each certificate for Class Y Preferred Stock shall bear substantially the
following legend:
“The shares of Class Y Cumulative Preferred Stock represented by this certificate are
subject to restrictions on transfer. No person may Beneficially Own shares of Class Y
Cumulative Preferred Stock in excess of the Ownership Restrictions, as applicable, with
certain further restrictions and exceptions set forth in the Charter (including the Articles
Supplementary setting forth the terms of the Class Y Cumulative Preferred Stock). Any
Person that attempts to Beneficially Own shares of Class Y Cumulative Preferred Stock in
excess of the applicable limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed to such terms in the Charter
(including the Articles Supplementary setting forth the terms of the Class Y Cumulative
Preferred Stock), as the same may be amended from time to time, a copy of which, including
the restrictions on transfer, will be sent without charge to each stockholder that so
requests. If the restrictions on transfer are violated, (i) the transfer of the shares of
Class Y Cumulative Preferred Stock represented hereby will be void in accordance with the
Charter (including the Articles Supplementary setting forth the terms of the Class Y
Cumulative Preferred Stock) or (ii) the shares of Class Y Cumulative Preferred Stock
represented hereby will automatically be transferred to a Trustee of a Trust for the benefit
of one or more Charitable Beneficiaries.”
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10.10 Severability. If any provision of this Article or any application of any such provision
is determined in a final and unappealable judgment to be void, invalid or unenforceable by any
Federal or state court having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such provision shall be
affected only to the extent necessary to comply with the determination of such court.
10.11 Board of Directors Discretion. Anything in this Article to the contrary notwithstanding,
the Board of Directors shall be entitled to take or omit to take such actions as it in its
discretion shall determine to be advisable in order that the Corporation maintain its status as and
continue to qualify as a REIT, including, but not limited to, reducing the Ownership Limit, the
Initial Holder Limit and the Look-Through Ownership Limit in the event of a change in law.
10.12 Settlement. Nothing in this Section 10 of this Article shall be interpreted to preclude
the settlement of any transaction entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system.
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Exhibit CRA
ARTICLE XVI
Cumulative Perpetual Community Reinvestment Act Preferred Stock, Series A
Par Value $.01 Per Share
The terms of the Series A Community Reinvestment Act Perpetual Preferred Stock (including the
preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends
and other distributions, qualifications, or terms or conditions of redemption) as set by the Board
of Directors are as follows:
1. Number of Shares and Designation.
This class of Preferred Stock shall be designated as Series A Community Reinvestment Act
Perpetual Preferred Stock (the “Series A CRA Preferred Stock”) and Two Hundred Forty (240) shall be
the authorized number of shares of such Series A CRA Preferred Stock constituting such class.
2. Definitions.
For purposes of the Series A CRA Preferred Stock, the following terms shall have the meanings
indicated:
“Act” shall mean the Securities Act of 1933, as amended.
“affiliate” of a Person means a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, the Person
specified.
“Aggregate Value” shall mean, with respect to any block of Equity Stock, the product of (i)
the number of shares of Equity Stock within such block and (ii) the corresponding Market
Price of one share of Equity Stock of such class.
“Beneficial Ownership” shall mean, with respect to any Person, ownership of shares of Equity
Stock equal to the sum of (without duplication) (i) the number of shares of Equity Stock
directly owned by such Person, (ii) the number of shares of Equity Stock indirectly owned by
such Person (if such Person is an “individual” as defined in Section 542(a)(2) of the Code)
taking into account the constructive ownership rules of Section 544 of the Code, as modified
by Section 856(h)(1)(B) of the Code, and (iii) the number of shares of Equity Stock that
such Person is deemed to beneficially own pursuant to Rule 13d-3 under the Exchange Act, or
that is attributed to such Person pursuant to Section 318 of the Code, as modified by
Section 856(d)(5) of the Code, provided that when applying this definition of Beneficial
Ownership to the Initial Holder, clause (iii) of this definition, and
clause (ii) of the definition of “Person” shall be disregarded. The terms “Beneficial
Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.
CRA-1
“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 A CRA Preferred Stock; provided that, for purposes of paragraph (a) of Section 9
of this Article, the term “Board of Directors” shall not include any such committee.
“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, New York are not required to be open.
“Charitable Beneficiary” shall mean one or more beneficiaries of the Trust as determined
pursuant to Section 11.2(G) of this Article, each of which shall be an organization
described in Section 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
“Class A Common Stock” shall mean the Class A Common Stock, par value $.01 per share, of the
Corporation, and such other shares of the Corporation’s capital stock into which outstanding
shares of such Class A Common Stock shall be reclassified.
“Closing Price” shall mean, when used with respect to a share of any Equity Stock and for
any date, the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the NYSE or, if the Equity Stock is not listed
or admitted to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities
exchange on which the Equity Stock is listed or admitted to trading or, if the Equity Stock
is not listed or admitted to trading on any national securities exchange, the last quoted
price, or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if the Equity Stock is not quoted by
any such organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Equity Stock selected by the Board of
Directors of the Corporation or, if the Equity Stock is not publicly traded, the fair value
of a share of such Equity Stock as reasonably determined in good faith by the Board of
Directors.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision
as in effect from time to time, as the same may be amended, and any successor thereto, as
interpreted by any applicable regulations or other administrative pronouncements as in
effect from time to time.
CRA-2
“CRA” shall mean the Community Reinvestment Act of 1977, as amended from time to time.
“CRA Credit Value” shall mean, for any Investment with respect to which CRA Credits are
allocated to a holder of Series A CRA Preferred Stock, the book value of such Investment as
of the last day of the Corporation’s fiscal year immediately preceding the date on which a
determination is made by the Corporation to allocate CRA Credits with respect to such
Investment to such holder, multiplied by the Operating Partnership’s proportionate ownership
interest in the underlying Investment.
“CRA Credits” shall have the meaning set forth in paragraph (a) of Section 11 of this
Article.
“CRA Parity Securities” shall mean securities of the Corporation, other than the Series A
CRA Preferred Stock, which are entitled to receive allocations of CRA Credits.
“Default Rate” shall mean, for any Dividend Period, the applicable Three-Month Rate LIBOR
Rate plus 3.25%.
“Dividend Payment Date” shall mean March 31, June 30, September 30, and December 31 of each
year; provided, that if any Dividend Payment Date falls on any day other than a Business
Day, the dividend payment payable on such Dividend Payment Date shall be paid on the
Business Day immediately following such Dividend Payment Date and no interest shall accrue
on such dividend from such date to such Dividend Payment Date.
“Dividend Periods” shall mean the Initial Dividend Period and each subsequent quarterly
dividend period commencing on and including March 31, June 30, September 30, and December 31
of each year and ending on and including the day preceding the first day of the next
succeeding Dividend Period, other than the Dividend Period during which any Series A CRA
Preferred Stock shall be redeemed pursuant to Section 5 hereof, which shall end on and
include the Redemption Date with respect to the Series A CRA Preferred Stock being redeemed.
“Dividend Rate” shall mean, for any Dividend Period, a rate, expressed as a percentage of
the Liquidation Preference per annum, determined as follows:
for the Initial Dividend Period, a rate equal to 6.75%; and
for all other Dividend Periods, a rate equal to the Three-Month LIBOR Rate for such
Dividend Period plus 1.25%, or such other rate as shall be determined in connection with a
Remarketing pursuant to Section 7.
“Dividend Rate Calculation Agent” shall mean such financial institution (and any legal
successor thereto) from time to time as shall be selected by the Corporation to provide
information for calculation of the Dividend Rate.
CRA-3
“Election Notice” shall have the meaning set forth in paragraph (b) of Section 7 of this
Article.
“Eligible CRA Portfolio” shall mean Investments selected from time to time by the
Corporation to be made available for purposes of allocating CRA Credits to holders of Series
A CRA Preferred Stock.
“Equity Stock” shall mean one or more shares of any class of capital stock of the
Corporation.
“Excess Transfer” has the meaning set forth in Section 11.2(A) of this Article.
“Failed Remarketing” shall have the meaning set forth in paragraph (c) of Section 7 of this
Article.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Fully Allocated Stockholder” shall have the meaning set forth in paragraph (b) of Section
11 of this Article.
“Initial Dividend Period” shall mean the period commencing on and including the Issue Date
and ending on and including September 30, 2006.
“Initial Holder” shall mean Terry Considine.
“Initial Holder Limit” shall mean a number of the Outstanding shares of Series A CRA
Preferred Stock of the Corporation having an Aggregate Value not in excess of the excess of
(x) 15% of the Aggregate Value of all Outstanding shares of Equity Stock over (y) the
Aggregate Value of all shares of Equity Stock other than Series A CRA Preferred Stock that
are Beneficially Owned by the Initial Holder. From the Issue Date, the secretary of the
Corporation, or such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Initial Holder and the Board of
Directors, a schedule that sets forth the then-current Initial Holder Limit applicable to
the Initial Holder.
“Investments” shall have the meaning set forth in paragraph (a) of Section 11 of this
Article.
“Issue Date” shall mean June 29, 2006.
“Junior Stock” shall have the meaning set forth in paragraph (c) of Section 8 of this
Article.
“Liquidation Preference” shall have the meaning set forth in paragraph (a) of Section 4 of
this Article.
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“Look-Through Entity” shall mean a Person that is either (i) described in Section 401(a) of
the Code as provided under Section 856(h)(3) of the Code or (ii) registered under the
Investment Company Act of 1940.
“Look-Through Ownership Limit” shall mean, for any Look-Through Entity, a number of the
Outstanding shares of Series A CRA Preferred Stock of the Corporation having an Aggregate
Value not in excess of the excess of (x) 15% of the Aggregate Value of all Outstanding
shares of Equity Stock over (y) the Aggregate Value of all shares of Equity Stock other than
Series A CRA Preferred Stock that are Beneficially Owned by the Look-Through Entity.
“Market Price” on any date shall mean, with respect to any share of Equity Stock, the
Closing Price of a share of that class of Equity Stock on the Trading Day immediately
preceding such date.
“NYSE” shall mean The New York Stock Exchange, Inc.
“Operating Partnership” shall mean AIMCO Properties, L.P., a Delaware limited partnership.
“Outstanding” shall mean issued and outstanding shares of Equity Stock of the Corporation;
provided, however, that for purposes of the application of the Ownership Limit, the
Look-Through Ownership Limit or the Initial Holder Limit to any Person, the term
“Outstanding” shall be deemed to include the number of shares of Equity Stock that such
Person alone, at that time, could acquire pursuant to any options or convertible securities.
“Ownership Limit” shall mean, for any Person other than the Initial Holder or a Look-Through
Entity, a number of the Outstanding shares of Series A CRA Preferred Stock of the
Corporation having an Aggregate Value not in excess of the excess of (x) 8.7% of the
Aggregate Value of all Outstanding shares of Equity Stock over (y) the Aggregate Value of
all shares of Equity Stock other than Series A CRA Preferred Stock that are Beneficially
Owned by the Person.
“Ownership Restrictions” shall mean, collectively, the Ownership Limit, as applied to
Persons other than the Initial Holder or Look-Through Entities, the Initial Holder Limit, as
applied to the Initial Holder, and the Look-Through Ownership Limit, as applied to
Look-Through Entities.
“Parity Stock” shall have the meaning set forth in paragraph (b) of Section 8 of this
Article.
“Person” shall mean (a) for purposes of Section 11 of this Article, (i) an individual,
corporation, partnership, estate, trust (including a trust qualifying under Section 401(a)
or 501(c) of the Code), association, “private foundation,” within the meaning of Section
509(a) of the Code, joint stock company or other entity, and (ii) a “group,” as that term is
used for purposes of Section 13(d)(3) of the Exchange Act, and (b) for purposes of the
remaining Sections of this Article, any individual, firm, partnership, corporation or other
entity, including any successor (by merger or otherwise) of such entity.
CRA-5
“Prohibited Transferee” shall have the meaning set forth in Section 11.2(A) of this Article.
“Record Date” shall have the meaning set forth in paragraph (a) of Section 3 of this
Article.
“Redemption Date” shall mean, in the case of any redemption of any shares of Series A CRA
Preferred Stock, the date fixed for redemption of such shares.
“Redemption Price” shall mean, with respect to any share of Series A CRA Preferred Stock to
be redeemed, 100% of the Liquidation Preference thereof, plus all accumulated, accrued and
unpaid dividends (whether or not earned or declared), if any, to the Redemption Date.
“REIT” shall mean a “real estate investment trust,” as defined in Section 856 of the Code.
“Remarketing” shall mean a remarketing of the Series A CRA Preferred Stock pursuant to
Section 7 of this Article.
“Remarketing Agent” shall mean, with respect to any Remarketing, the Person selected by the
Corporation to act as its agent in effecting the Remarketing.
“Remarketing Date” shall mean, with respect to any Remarketing, the Dividend Payment Date
selected by the Board of Directors as the date on which the Remarketing is to be completed,
and the first of which shall be March 31, 2015.
“Self-Delineated Assessment Area” shall have the meaning set forth in paragraph (b) of
Section 11 of this Article.
“Senior Stock” shall have the meaning set forth in paragraph (a) of Section 8 of this
Article.
“Series A CRA Preferred Stock” shall have the meaning set forth in Section 1 of this
Article.
“set apart for payment” shall be deemed to include, without any action other than the
following, the recording by the Corporation in its accounting ledgers of any accounting or
bookkeeping entry which indicates, pursuant to a declaration of dividends or other
distribution by the Board of Directors, the allocation of funds to be so paid on any series
or class of capital stock of the Corporation; provided, however, that if any funds for any
class or series of Junior Stock or any class or series of Parity Stock are placed in a
separate account of the Corporation or delivered to a disbursing, paying or other similar
agent, then “set apart for payment” with respect to the Series A CRA Preferred Stock shall
mean placing such funds in a separate account or delivering such funds to a disbursing,
paying or other similar agent.
CRA-6
“Terminated Allocation” shall have the meaning set forth in paragraph (c) of Section 11 of
this Article.
“Three-Month LIBOR Rate” shall mean, for any Dividend Period, the rate (expressed as a
percentage per annum) for deposits in U.S. dollars having a term of three months, commencing
on the first day of such Dividend Period (a “Reset Date”), which appears on Page 3750 on
Moneyline Telerate Inc. or any successor page (the “Telerate LIBOR Page”) at approximately
11:00 a.m., London time, on the day that is two Business Days preceding such Reset Date. If
such rate does not appear on the Telerate LIBOR Page, the rate for such Reset Date will be
determined by reference to the rates at which deposits in U.S. dollars are offered by four
major banks in the London interbank market (the “Reference Banks”) at approximately 11:00
a.m., London time, on the day that is two Business Days preceding such Reset Date to prime
banks in the London interbank market for a period of three months commencing from such Reset
Date and in a representative amount. The Corporation shall (or cause its Dividend Rate
Calculation Agent to) request the principal London office of each of the Reference Banks to
provide a quotation of such rate. If at least two such quotations are provided, the rate
for such Reset Date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for such Reset Date will be the arithmetic
mean of the rates quoted by three major banks in New York City, selected by the Corporation
(or its Dividend Rate Calculation Agent) at approximately 11:00 a.m., New York City time, on
such Reset Date for loans in U.S. dollars to leading European banks for a period of three
months commencing on such Reset Date and in a representative amount. The Corporation shall
promptly (or shall cause its Dividend Rate Calculation Agent promptly to) notify any holder
of the Series A CRA Preferred Stock of the Dividend Rate for any Dividend Period upon
request. The Three-Month LIBOR Rate shall be rounded to the nearest one-hundredth of a
percent.
“Trading Day” shall mean, when used with respect to any Equity Stock, (i) if the Equity
Stock is listed or admitted to trading on the NYSE, a day on which the NYSE is open for the
transaction of business, (ii) if the Equity Stock is not listed or admitted to trading on
the NYSE but is listed or admitted to trading on another national securities exchange or
automated quotation system, a day on which the principal national securities exchange or
automated quotation system, as the case may be, on which the Equity Stock is listed or
admitted to trading is open for the transaction of business, or (iii) if the Equity Stock is
not listed or admitted to trading on any national securities exchange or automated quotation
system, any day other than a Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to close.
CRA-7
“Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of a
share of Series A CRA Preferred Stock (including (i) the granting of an option or any series
of such options or entering into any agreement for the sale, transfer or other disposition
of Series A CRA Preferred Stock or (ii) the sale, transfer, assignment or other disposition
of any securities or rights convertible into or exchangeable for Series A CRA Preferred
Stock), whether voluntary or involuntary, whether of record ownership or Beneficial
Ownership, and whether by operation of law or otherwise (including, but not limited to, any
transfer of an interest in other entities that results in a change in the Beneficial
Ownership of shares of Series A CRA Preferred Stock). The term “Transfers” and
“Transferred” shall have correlative meanings.
“Transfer Agent” means such transfer agent as may be designated by the Board of Directors or
their designee as the transfer agent for the Series A CRA Preferred Stock; provided, that if
the Corporation has not designated a transfer agent then the Corporation shall act as the
transfer agent for the Series A CRA Preferred Stock.
“Trust” shall mean the trust created pursuant to Section 11.2(A) of this Article.
“Trustee” shall mean the Person unaffiliated with either the Corporation or the Prohibited
Transferee that is appointed by the Corporation to serve as trustee of the Trust.
“Unallocated Stockholder” shall have the meaning set forth in paragraph (b) of Section 11 of
this Article.
“Voting Preferred Stock” shall have the meaning set forth in Section 9 of this Article.
3. Dividends.
(a) The holders of shares of Series A CRA Preferred Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of funds legally available for that purpose,
quarterly cash dividends on the Series A CRA Preferred Stock. Such dividends shall be cumulative
from the Issue Date, whether or not in any Dividend Period or Periods such dividends shall be
declared or there shall be funds of the Corporation legally available for the payment of such
dividends, and shall be payable quarterly in arrears on each Dividend Payment Date, commencing on
September 30, 2006. Each such dividend shall be payable in arrears to the holders of record of the
Series A CRA Preferred Stock, as they appear on the stock records of the Corporation at the close
of business on March 15, June 15, September 15 or December 15 (each a “Record Date”), as the case
may be, immediately preceding such Dividend Payment Date. Accumulated, accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date, which date shall not precede
by more than 45 days the payment date thereof, as may be fixed by the Board of Directors.
CRA-8
(b) The amount of dividends payable per share of Series A CRA Preferred Stock on each Dividend
Payment Date shall be equal to the sum of the daily amounts for each day actually elapsed during
such Dividend Period (with such sum rounded to the nearest $.01),
which daily amounts shall be computed by dividing (1) the product of (A) the Dividend Rate in
effect for such Dividend Period, and (B) the Liquidation Preference per share of Series A CRA
Preferred Stock by (2) 360. Any dividend payment made on shares of the Series A CRA Preferred
Stock shall first be credited against the earliest accumulated but unpaid dividend due with respect
to such shares. The Corporation shall determine the dividend payable on each Dividend Payment Date
in accordance with this Article, utilizing the Three-Month LIBOR Rate determined by the Corporation
(or supplied by the Dividend Rate Calculation Agent) in accordance with the definition of
“Three-Month LIBOR Rate” in this Article. Holders of shares of Series A CRA Preferred Stock shall
not be entitled to any dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Series A CRA Preferred Stock. No interest, or sum
of money in lieu of interest, shall be payable in respect of any dividend payment or payments on
the Series A CRA Preferred Stock that may be in arrears.
(c) So long as any of the shares of Series A CRA Preferred Stock are outstanding, except as
described in the immediately following sentence, no dividends shall be declared or paid or set
apart for payment by the Corporation and no other distribution of cash or other property shall be
declared or made, directly or indirectly, by the Corporation with respect to any class or series of
Parity Stock for any period unless dividends equal to the full amount of accumulated, accrued and
unpaid dividends have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof has been or contemporaneously is set apart for such payment, on
the Series A CRA Preferred Stock for all Dividend Periods terminating on or prior to the date such
dividend or distribution is declared, paid, set apart for payment or made, as the case may be, with
respect to 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 the Series
A CRA 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, accrued
and unpaid on the Series A CRA Preferred Stock and accumulated, accrued and unpaid on such Parity
Stock.
(d) So long as any of the shares of Series A CRA Preferred Stock are outstanding, no dividends
(other than dividends or distributions paid in shares of or options, warrants or rights to
subscribe for or purchase shares of, Junior Stock) shall be declared or paid or set apart for
payment by the Corporation and no other distribution of cash or other property shall be declared or
made, directly or indirectly, by the Corporation with respect to any shares of Junior Stock, nor
shall any shares of Junior Stock be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Class A 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 shares of any such
stock) directly or indirectly by the Corporation (except by conversion into or exchange for shares
of, or options, warrants, or rights to subscribe for or purchase shares of, Junior Stock), nor
shall any other cash or other property otherwise be paid or distributed to or for the benefit of
any holder of shares of Junior Stock in respect thereof, directly or indirectly, by the Corporation
unless, in each case, dividends equal to the full amount of all accumulated, accrued and unpaid
dividends on all outstanding shares of Series A CRA Preferred Stock have been declared and paid, or
such dividends have been declared and a sum sufficient for the
payment thereof has been set apart for such payment, on all outstanding shares of Series A CRA
Preferred Stock for all Dividend Periods ending on or prior to the date such dividend or
distribution is declared, paid, set apart for payment or made with respect to such shares of Junior
Stock, or the date such shares of Junior Stock are redeemed, purchased or otherwise acquired or
monies paid to or made available for any sinking fund for such redemption, or the date any such
cash or other property is paid or distributed to or for the benefit of any holders of Junior Stock
in respect thereof, as the case may be.
CRA-9
Notwithstanding the provisions of this Section 3, the Corporation shall not be prohibited from
(i) declaring or paying or setting apart for payment any dividend or distribution on any shares of
Parity Stock or (ii) redeeming, purchasing or otherwise acquiring any Parity Stock, in each case,
if such declaration, payment, redemption, purchase or other acquisition is necessary in order to
maintain the continued qualification of the Corporation as a REIT under Section 856 of the Code.
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 by the Corporation (whether of
capital, surplus or otherwise) shall be made to or set apart for the holders of Junior Stock, the
holders of shares of Series A CRA Preferred Stock shall be entitled to receive Five Hundred
Thousand Dollars ($500,000) per share of Series A CRA Preferred Stock (the “Liquidation
Preference”), plus an amount equal to all dividends (whether or not earned or 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. Until the holders of the Series A CRA
Preferred Stock have been paid the Liquidation Preference in full, plus an amount equal to all
dividends (whether or not earned or declared) accumulated, accrued and unpaid thereon to the date
of final distribution to such holders, no payment will be made to any holder of Junior Stock upon
the liquidation, dissolution or winding up of the Corporation. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Series A CRA 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 shares of Series A CRA Preferred Stock and any such other Parity Stock ratably
in the same proportion as the respective amounts that would be payable on such Series A CRA
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, (ii) a sale or transfer of all or substantially all of the Corporation’s assets,
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) Upon any liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of shares of Series A CRA Preferred Stock and any Parity
Stock, as provided in Section 4(a), any other series or class or classes of Junior
Stock shall, subject to the respective terms thereof, be entitled to receive any and all
assets remaining to be paid or distributed, and the holders of the Series A CRA Preferred Stock and
any Parity Stock shall not be entitled to share therein.
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5. Redemption at the Option of the Corporation.
(a) Shares of Series A CRA Preferred Stock shall not be redeemable by the Corporation prior to
June 30, 2011, except as set forth in Section 12.2 of this Article. On and after June 30, 2011 the
Corporation, at its option, may redeem shares of Series A CRA Preferred Stock, in whole or from
time to time in part, at a redemption price payable in cash equal to the Redemption Price
applicable thereto. In the event of a redemption of shares of Series A CRA Preferred Stock, if the
Redemption Date occurs after a Record Date and on or prior to the related Dividend Payment Date,
the dividend payable on such Dividend Payment Date in respect of such shares called for redemption
shall be payable on such Dividend Payment Date the holders of record at the close of business on
such Record Date, notwithstanding the redemption of such shares, and shall not be payable as part
of the Redemption Price for such shares.
(b) The Redemption Date shall be selected by the Corporation, shall be specified in the notice
of redemption and shall be not less than 30 days nor more than 60 days after the date notice of
redemption is sent by the Corporation.
(c) If full cumulative dividends on all outstanding shares of Series A CRA Preferred Stock
have not been declared and paid, or declared and set apart for payment, for all past Dividend
Periods, then (i) no shares of Series A CRA Preferred Stock may be redeemed unless all outstanding
shares of Series A CRA Preferred Stock are simultaneously redeemed, and (ii) neither the
Corporation nor any affiliate of the Corporation may purchase or acquire shares of Series A CRA
Preferred Stock, other than pursuant to a purchase or exchange offer made on the same terms to all
holders of shares of Series A CRA Preferred Stock.
(d) If the Corporation shall redeem shares of Series A CRA Preferred Stock pursuant to
paragraph (a) of this Section 5, notice of such redemption shall be given to each holder of record
of the shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid,
at such holder’s address as the same appears on the stock records of the Corporation. Neither the
failure to mail any notice required by this paragraph (d), nor any defect therein or in the mailing
thereof to any particular holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the date mailed whether
or not the holder receives the notice. Each such notice shall state, as appropriate: (i) the
Redemption Date; (ii) the number of shares of Series A CRA Preferred Stock to be redeemed and, if
fewer than all such shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the place or places at which certificates for such shares are to
be surrendered; and (iv) the Redemption Price payable on such Redemption Date, including, without
limitation, a statement as to whether or not accumulated, accrued and unpaid dividends will be
payable as part of the Redemption Price, or payable on the next Dividend Payment Date to the record
holder at the close of business on the relevant record date as described in the next sentence.
Notice having been mailed as
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aforesaid, from and after the Redemption Date (unless the Corporation shall fail to make available the amount of cash
necessary to effect such redemption), (i) dividends on the shares of Series A CRA Preferred Stock
so called for redemption shall cease to accumulate or accrue on the shares of Series A CRA
Preferred Stock called for redemption, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of shares of Series A CRA
Preferred Stock of the Corporation shall cease (except the right to receive the cash payable upon
such redemption, without interest thereon, upon surrender and endorsement of their certificates if
so required); provided, however, that if the Redemption Date for any shares of Series A CRA
Preferred Stock occurs after any dividend record date and on or prior to the related Dividend
Payment Date, the full dividend payable on such Dividend Payment Date in respect of such shares of
Series A CRA Preferred Stock called for redemption shall be payable on such Dividend Payment Date
to the holders of record of such shares at the close of business on the corresponding dividend
record date notwithstanding the prior redemption of such shares. The Corporation’s obligation to
make available the cash necessary to effect the redemption in accordance with the preceding
sentence shall be deemed fulfilled if, on or before the applicable Redemption Date, the Corporation
shall irrevocably deposit in trust with a bank or trust company (which may not be an affiliate of
the Corporation) that has, or is an affiliate of a bank or trust company that has, a capital and
surplus of at least $50,000,000, such amount of cash as is necessary for such redemption plus, if
such Redemption Date occurs after any dividend record date and on or prior to the related Dividend
Payment Date, such amount of cash as is necessary to pay the dividend payable on such Dividend
Payment Date in respect of such shares of Series A CRA Preferred Stock called for redemption, with
irrevocable instructions that such cash be applied to the redemption of the shares of Series A CRA
Preferred Stock so called for redemption and, if applicable, the payment of such dividend. No
interest shall accrue for the benefit of the holders of shares of Series A CRA 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 two years from the Redemption Date shall revert to the general
funds of the Corporation, after which reversion the holders of shares of Series A CRA Preferred
Stock 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 of Series A CRA Preferred Stock to be so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and the notice shall so
state), such certificates shall be exchanged for cash (without interest thereon). If fewer than
all the outstanding shares of Series A CRA Preferred Stock are to be redeemed, shares to be
redeemed shall be selected by the Corporation from outstanding shares of Series A CRA Preferred
Stock not previously called for redemption by lot or, with respect to the number of shares of
Series A CRA Preferred Stock held of record by each holder of such shares, pro rata (as nearly as
may be) or by any other method as may be determined by the Board of Directors in its discretion to
be equitable. If fewer than all the shares of Series A CRA Preferred Stock represented by any
certificate are redeemed, then a new certificate representing the unredeemed shares shall be issued
without cost to the holders thereof.
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6. Status of Reacquired Stock.
All shares of Series A CRA Preferred Stock that have been issued and reacquired in any manner
by the Corporation shall be returned to the status of authorized but unissued shares of Series A
CRA Preferred Stock.
7. Remarketing.
(a) Remarketing on Remarketing Date. Unless previously redeemed in full, on March 31, 2015,
and on each Remarketing Date thereafter, the Remarketing Agent will attempt to remarket the Series
A CRA Preferred Stock with the lowest Dividend Rate that, in the judgment of the Remarketing Agent,
will permit all outstanding shares of Series A CRA Preferred Stock to be sold at a price per share
equal to the Liquidation Preference. For each Remarketing, the Corporation shall notify the
Remarketing Agent at least 15 Business Days prior to the Remarketing Date as to (i) whether the new
Dividend Rate should be fixed or variable and, if variable, the index to be used to calculate the
variable Dividend Rate, and (ii) the period of time until the next Remarketing Date (unless there
is a Failed Remarketing). If the Corporation fails to so notify the Remarketing Agent, it will be
deemed to have selected (i) a variable rate for which the relevant index is the Three-Month LIBOR
Rate, and (ii) a period of time until the next Remarketing Date of five years. No later than 10
Business Days prior to a Remarketing Date, the Remarketing Agent will notify holders of the Series
A CRA Preferred Stock of the Dividend Rate that will become effective on such Remarketing Date and
the period of time until the next Remarketing Date.
(b) Tender on Remarketing Date. All shares of Series A CRA Preferred Stock must be tendered
for remarketing on each Remarketing Date unless a holder thereof affirmatively elects to continue
to hold all or a portion of its shares (such portion shall be in the liquidation amount of $500,000
per share or any integral multiple thereof) by delivering the following notice of non-tender to the
Corporation and the Remarketing Agent no later than five Business Days prior to such Remarketing
Date:
NOTICE OF ELECTION TO RETAIN
SERIES A COMMUNITY REINVESTMENT ACT
PERPETUAL PREFERRED STOCK OF
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
The undersigned owner of the shares of Series A Community Reinvestment Act Perpetual
Preferred Stock (“Series A CRA Preferred Stock”) of Apartment Investment and Management
Company described below does hereby irrevocably elect to retain such shares of Series A CRA
Preferred Stock in connection with the remarketing of the Series A CRA Preferred Stock to
occur on (the “Remarketing Date”). The undersigned understands that from and
after the Remarketing Date, the dividend rate with respect to the shares will be determined
as provided in the Articles Supplementary relating to the Series A CRA Preferred Stock.
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Non-Tendered Shares
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A holder who affirmatively elects to hold all or a portion of its shares by timely delivering
such notice of non-tender will not have its shares (or such portion) sold in the relevant
Remarketing and will continue to hold all or such portion of its shares (as indicated in such
notice), which will be subject to the new Dividend Rate determined in such Remarketing. Any notice
of non-tender delivered to the Corporation and the Remarketing Agent will be irrevocable and may
not be conditioned upon the new Dividend Rate established in the Remarketing. A holder that fails
to timely deliver such required notice of non-tender to the Corporation and the Remarketing Agent
at least five business days prior to the Remarketing Date shall be deemed to have elected to sell
all of its shares in the Remarketing, and all such shares shall be deemed tendered for purchase in
the Remarketing, notwithstanding any failure by such holder to properly deliver such shares to the
Remarketing Agent for purchase.
Unless a holder affirmatively elects to continue to hold its shares by timely delivering the
required notice of non-tender pursuant to this Section 7, all shares of CRA Preferred Stock shall
be deemed tendered for purchase in the Remarketing, notwithstanding any failure by any holder to
deliver its shares to the Remarketing Agent for purchase.
(c) Failed Remarketing. If, on any Remarketing Date, the Remarketing Agent is unable to sell
all of the tendered shares of Series A CRA Preferred Stock to investors (a “Failed Remarketing”),
the Dividend Rate shall be adjusted to equal the Default Rate for a period of one year, after which
another Remarketing will be attempted; provided, however, that no adjustment shall be made to the
Dividend Rate if it would result in a reduction in the Dividend Rate from that in effect
immediately prior to the Failed Remarketing. In such case, no shares shall be sold in such
Remarketing and each holder shall continue to hold its shares of CRA Preferred Stock, on which
dividends will be paid at the Default Rate until the next Remarketing Date. Neither the
Corporation nor the Remarketing Agent shall have any obligation to purchase any shares of Series A
CRA Preferred Stock in the event of a Failed Remarketing.
(d) Accumulated and Unpaid Dividends. If, on a Remarketing Date, there are any accumulated
and unpaid dividends relating to past Dividend Periods, then on such Remarketing Date, the
Corporation will pay to holders of the outstanding shares of Series A CRA Preferred Stock the
amount of such accumulated and unpaid dividends for past Dividend Periods.
(e) Selection of Remarketing Agent. The Corporation shall appoint a qualified firm to serve
as the Remarketing Agent in sufficient time to complete its obligations as described herein.
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8. Ranking.
Any class or series of capital stock of the Corporation shall be deemed to rank:
(a) prior or senior to the Series A CRA Preferred Stock, as to the payment of dividends and as
to distribution of assets upon liquidation, dissolution or winding up, if the holders of such class
or series shall be entitled to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or priority to the
holders of Series A CRA Preferred Stock (“Senior Stock”);
(b) on a parity with the Series A CRA Preferred Stock, as to the payment of dividends and as
to distribution of assets upon liquidation, dissolution or winding up, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per share thereof be different
from those of the Series A CRA Preferred Stock, if (i) such capital stock is Class B Cumulative
Convertible Preferred Stock, Class C Cumulative Preferred Stock, Class D Cumulative Preferred
Stock, Class G Cumulative Preferred Stock, Class H Cumulative Preferred Stock, Class I Cumulative
Preferred Stock, Class J Cumulative Convertible Preferred Stock, Class K Convertible Cumulative
Preferred Stock, Class L Convertible Cumulative Preferred Stock, Class M Convertible Cumulative
Preferred Stock, Class N Convertible Cumulative Preferred Stock, Class O Cumulative Convertible
Preferred Stock, Class P Convertible Cumulative Preferred Stock, Class Q Cumulative Preferred
Stock, Class R Cumulative Preferred Stock, Class S Cumulative Redeemable Preferred Stock, Class T
Cumulative Preferred Stock, Class U Cumulative Preferred Stock, Class V Cumulative Preferred Stock,
Class W Cumulative Convertible Preferred Stock, Class X Cumulative Preferred Stock or Class Y
Cumulative Preferred Stock of the Corporation, or (ii) the holders of such class of stock or series
and the Series A CRA Preferred Stock shall be entitled to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their respective amounts
of accrued and unpaid dividends per share or liquidation preferences, without preference or
priority of one over the other (the capital stock referred to in clauses (i) and (ii) of this
paragraph being hereinafter referred to, collectively, as “Parity Stock”); and
(c) junior to the Series A CRA Preferred Stock, as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, if (i) such capital stock or
series shall be Class A Common Stock or (ii) the holders of Series A CRA Preferred Stock shall be
entitled to receipt of dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of shares of such class or
series (the capital stock referred to in clauses (i) and (ii) of this paragraph being hereinafter
referred to, collectively, as “Junior Stock”).
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9. Voting.
(a) If and whenever six quarterly dividends (whether or not consecutive) payable on the Series
A CRA 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 earned or declared, the number of directors then constituting the Board of Directors
shall be increased by two if not already increased by reason
of similar types of provisions with respect to shares of any other class or series of Parity
Stock which is entitled to similar voting rights (the “Voting Preferred Stock”) and the holders of
shares of Series A CRA Preferred Stock, together with the holders of shares of all other Voting
Preferred Stock then entitled to exercise similar voting rights, 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 Series A CRA Preferred Stock and the Voting Preferred Stock
called as hereinafter provided. Whenever all arrears in dividends on the Series A CRA 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 declared and paid, or declared and set
apart for payment, then the right of the holders of the Series A CRA 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 arrearages), and
the terms of office of all persons elected as directors by the holders of the Series A CRA
Preferred Stock and the Voting Preferred Stock shall forthwith terminate and the number of
directors constituting 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 A CRA Preferred Stock and
the Voting Preferred Stock, if applicable, the Secretary of the Corporation may, and upon the
written request of any holder of Series A CRA Preferred Stock (addressed to the Secretary at the
principal office of the Corporation) shall, call a special meeting of the holders of the Series A
CRA Preferred Stock and of the Voting Preferred Stock for the election of the two directors to be
elected by them as herein provided, such call to be made by notice similar to that provided in the
Bylaws 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 Series A CRA Preferred Stock
may call such meeting, upon the notice above provided, and for that purpose shall have access to
the stock books 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 Series A CRA 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 Series A CRA 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.
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(b) So long as any shares of Series A CRA Preferred Stock are outstanding, in addition to any
other vote or consent of stockholders required by law or by the Charter of the Corporation, the
affirmative vote of at least 66-2/3% of the votes entitled to be cast by the holders of the Series
A CRA Preferred Stock voting as a single class with the holders of all other classes or series of
Parity Stock entitled to vote on such matters, 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:
(i) any amendment, alteration or repeal of any of the provisions of, or the addition of any
provision to, these Articles Supplementary, the Charter or the By-Laws of the Corporation that
materially adversely affects the voting powers, rights or preferences of the holders of the Series
A CRA Preferred Stock; provided, however, that the amendment of the provisions of the Charter so as
to increase the authorized amount of Series A CRA Preferred Stock, or to authorize or create, or to
increase the authorized amount of, or issue any Junior Stock or any shares of any class of Parity
Stock, shall not be deemed to materially adversely affect the voting powers, rights or preferences
of the holders of shares of Series A CRA Preferred Stock; or
(ii) the authorization, creation of, increase in the authorized amount of, or issuance of any
shares of any class or series of Senior Stock or any security convertible into shares of any class
or series of Senior Stock (whether or not such class or series of Senior Stock is currently
authorized);
provided, however, that no such vote of the holders of shares of Series A CRA 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 Senior Stock or convertible or exchangeable security is to
be made, as the case may be, provision is made for the redemption of all shares of Series A CRA
Preferred Stock at the time outstanding to the extent such redemption is authorized by Section 5 of
this Article.
For purposes of the foregoing provisions and all other voting rights under these Articles
Supplementary, each share of Series A CRA Preferred Stock shall have one (1) vote per share, except
that when any other class or series of preferred stock of the Corporation shall have the right to
vote with the Series A CRA Preferred Stock as a single class on any matter, then the Series A CRA
Preferred Stock and such other class or series shall have with respect to such matters one vote per
$100 of stated liquidation preference. Except as otherwise required by applicable law or as set
forth herein or in the Charter, the Series A CRA 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 corporate
action.
10. Record Holders.
The Corporation and any Remarketing Agent or Transfer Agent may deem and treat the record
holder of any share of Series A CRA Preferred Stock as the true and lawful owner thereof for all
purposes, and neither the Corporation, nor any Remarketing Agent or Transfer Agent, shall be
affected by any notice to the contrary.
CRA-17
11. Rights With Respect To CRA Credit Allocations.
(a) General. Holders of shares of Series A CRA Preferred Stock and other CRA Parity
Securities shall be entitled to an allocation of CRA Credits. “CRA Credits” are an allocation,
solely for CRA reporting purposes, of the value of assets owned directly or indirectly by the
Operating Partnership (“Investments”) which may be considered a “qualified investment”
under the CRA, for a holder of shares of Series A CRA Preferred Stock or other CRA Parity
Securities. Subject to the terms of this Section 11, each holder of a share of Series A CRA
Preferred Stock shall be entitled to an allocation of CRA Credits with respect to Investments in
the Eligible CRA Portfolio that have a CRA Credit Value equal to the Liquidation Preference for
such share of Series A CRA Preferred Stock. CRA Credit allocations shall be undertaken upon each
issuance of shares of Series A CRA Preferred Stock and changes in such allocations, if any, shall
be undertaken at the end of each quarter.
(b) Initial Allocations. Each holder of shares of Series A CRA Preferred Stock shall provide
to the Corporation a certification of its Self-Delineated Assessment Area. “Self-Delineated
Assessment Area” is, with respect to each holder of shares of Series A CRA Preferred Stock, such
holder’s geographic self-delineated assessment area or broader statewide or regional area that
includes such holder’s self-delineated assessment area for purposes of the CRA. The Corporation
shall notify each holder of shares of Series A CRA Preferred Stock of the Investments in the
Eligible CRA Portfolio with respect to which such holder will be allocated CRA Credits, which
Investments shall be located in such holder’s Self-Delineated Assessment Area. A holder of Shares
of Series A CRA Preferred Stock which is allocated CRA Credits with respect to Investments that
have a CRA Credit Value equal to the aggregate Liquidation Preference of such holder’s shares of
Series A CRA Preferred Stock is referred to herein as a “Fully Allocated Stockholder.” A holder of
shares of Series A CRA Stock Preferred that is not a Fully Allocated Stockholder is referred to
herein as an “Unallocated Stockholder.”
(c) Replacement Allocations. The determination of which Investments will be the basis for
allocating CRA Credits to a holder of shares of Series A CRA Preferred Stock shall not be revised
except as follows:
(i) Sale of Allocated Assets. If an Investment with respect to which CRA Credits have been
allocated to a holder of Series A CRA Preferred Stock is subsequently transferred (whether by sale
or other disposition, including a foreclosure) prior to June 30, 2008 (a “Terminated Allocation”),
then the Corporation shall (x) allocate to such holder available CRA Credits with respect to
another Investment in the Eligible CRA Portfolio that is within the same Self-Delineated Assessment
Area as the Investment that was transferred or another Self-Delineated Assessment Area certified in
writing by such holder, or (y) if the Corporation does not have sufficient available Investments in
the Eligible CRA Portfolio that is in such holder’s Self—Delineated Assessment Area, the
Corporation shall use its commercially reasonable efforts (which may include acquiring a new
Investment) to add to the Eligible CRA Portfolio a qualifying Investment in such holders’
Self-Delineated Assessment Area and allocate to such holder available CRA Credits with respect to
such Investment. If a Terminated Allocation occurs after June 30, 2008, the Corporation shall have
no obligation to add any Investment to the Eligible CRA Portfolio, but such holder may elect to
receive an allocation of available CRA Credits with respect to an existing Investment in the
Eligible CRA Portfolio, subject to the allocation priorities set forth in Section 11(d).
CRA-18
(ii) Reclassification Upon Transfer. If a Fully Allocated Stockholder transfers its shares of
Series A CRA Preferred Stock, the transferee shall receive the same
allocation of CRA Credits as the Fully Allocated Stockholder had prior to transfer. If an
Unallocated Stockholder transfers its shares of Series A CRA Preferred Stock, the transferee shall
receive (i) the same allocation of CRA Credits as the Unallocated Stockholder had prior to
transfer, and (ii) the same priority that the Unallocated Stockholder had prior to transfer with
respect to allocations of CRA Credits which the Unallocated Stockholder has properly requested from
the Corporation but had not received prior to transfer. Subject to the allocation priorities set
forth in Section 11(d), a transferee shall have a one-time option to obtain a new allocation of
available CRA Credits with respect to Investments in the Eligible CRA Portfolio.
(iii) Permissive Reallocations; Sources of Available CRA Credits. The Corporation, in its
sole discretion, may allow a holder of shares of Series A CRA Preferred Stock to request that CRA
Credits be allocated with respect to a different Investment in the Eligible CRA Portfolio, subject
to the allocation priorities set forth in Section 11(d).
(iv) Mechanics for Allocation. The Corporation shall adopt such procedures as it deems
necessary to implement the allocation of CRA Credits set forth in this Section 11.
(d) Allocation Priorities. CRA Credits with respect to all (or a portion) of a particular
Investment in the Eligible CRA Portfolio shall be available for allocation to a holder of shares of
Series A CRA Preferred Stock only if and to the extent that a holder of shares of Series A CRA
Preferred Stock or any CRA Parity Securities is not already entitled to receive allocations of CRA
Credit with respect to such Investment (or a portion thereof). Available CRA Credits shall be
allocated in accordance with the following priorities:
(i) first, to Unallocated Stockholders;
(ii) second, to holders of shares of Series A CRA Preferred Stock and holders of other CRA
Parity Securities with Terminated Allocations prior to June 30, 2008;
(iii) third, to holders of shares of Series A CRA Preferred Stock and holders of other CRA
Parity Securities with Terminated Allocations on and after June 30, 2008;
(iv) fourth, to a transferee of shares of Series A CRA Preferred Stock or other CRA Parity
Securities; and
(v) fifth, at the sole discretion of the Corporation, the balance to holders of shares of
Series A CRA Preferred Stock and holders of other CRA Parity Securities who request a change in the
Investment with respect to which they are allocated CRA Credits.
CRA-19
Within each category set forth above, the Corporation shall determine the order in which
holders of shares of Series A CRA Preferred Stock and holders of other CRA Parity Securities are
entitled to receive allocations of CRA Credits as follows:
(vi) for clause (i) above, priority shall be based on the order in which holders of shares of
Series A CRA Preferred Stock or holders of other CRA Parity Securities became Unallocated
Stockholders;
(vii) for clauses (ii) and (iii) above, priority shall be based on the order in which a holder
of shares of Series A CRA Preferred Stock or a holder of other CRA Parity Securities suffered a
Terminated Allocation;
(viii) for clause (iv) above, priority shall be based on the order in which a holder of shares
of Series A CRA Preferred Stock or other CRA Parity Securities were transferred; and
(ix) for clause (v) above, priority shall be based on the order in which the request for
reallocation is actually received by the Corporation.
(e) Allocations with Respect to Subsequent CRA Parity Securities. Stockholders who acquire
CRA Parity Securities issued by the Corporation after the Issue Date shall have the same rights to
initial allocation and a change in allocation of available CRA Credits as the holders of shares of
Series A CRA Preferred Stock and holders of other CRA Parity Securities who previously purchased
such securities, subject to the allocation priorities set forth in Section 11(d).
11.1 Restrictions on Ownership and Transfers.
(B) Generally. A holder of shares of Series A CRA Preferred Stock may not Transfer less than
(i) two (2) shares of Series A CRA Preferred Stock, or (ii) in the event that the Corporation
permitted a holder of Series A CRA Preferred Stock to purchase less than two (2) shares of Series A
CRA Preferred Stock, the number of shares so purchased. In all events, however, if a transferor
has not Transferred all of its shares of Series A CRA Preferred Stock, such transferor must retain
no less than two (2) shares of Series A CRA Preferred Stock or the number of shares of Series A CRA
Preferred Stock initially purchased.
(C) Limitation on Beneficial Ownership. Except as provided in Section 11.7, from and after
the Issue Date, no Person (other than the Initial Holder or a Look-Through Entity) shall
Beneficially Own shares of Series A CRA Preferred Stock in excess of the Ownership Limit, the
Initial Holder shall not Beneficially Own shares of Series A CRA Preferred Stock in excess of the
Initial Holder Limit and no Look-Through Entity shall Beneficially Own shares of Series A CRA
Preferred Stock in excess of the Look-Through Ownership Limit.
(D) Transfers in Excess of Ownership Limit. Except as provided in Section 11.7, from and
after the Issue Date (and subject to Section 11.11), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in any
Person (other than the Initial Holder or a Look-Through Entity) Beneficially Owning shares of
Series A CRA Preferred Stock in excess of the Ownership Limit shall be void ab initio
as to the Transfer of such shares of Series A CRA Preferred Stock that would be otherwise
Beneficially Owned by such Person in excess of the Ownership Limit, and the intended transferee
shall acquire no rights in such shares of Series A CRA Preferred Stock.
CRA-20
(E) Transfers in Excess of Initial Holder Limit. Except as provided in Section 11.7, from and
after the Issue Date (and subject to Section 11.11), any Transfer (whether or not such Transfer is
the result of transactions entered into through the facilities of the NYSE or other securities
exchange or an automated inter-dealer quotation system) that, if effective, would result in the
Initial Holder Beneficially Owning shares of Series A CRA Preferred Stock in excess of the Initial
Holder Limit shall be void ab initio as to the Transfer of such shares of Series A CRA Preferred
Stock that would be otherwise Beneficially Owned by the Initial Holder in excess of the Initial
Holder limit, and the Initial Holder shall acquire no rights in such shares of Series A CRA
Preferred Stock.
(F) Transfers in Excess of Look-Through Ownership Limit. Except as provided in Section 11.7
from and after the Issue Date (and subject to Section 11.11), any Transfer (whether or not such
Transfer is the result of transactions entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system) that, if effective, would result
in any Look-Through Entity Beneficially Owning shares of Series A Series A CRA Preferred Stock in
excess of the Look-Through Ownership limit shall be void ab initio as to the Transfer of such
shares of Series A CRA Preferred Stock that would be otherwise Beneficially Owned by such
Look-Through Entity in excess of the Look-Through Ownership Limit and such Look-Through Entity
shall acquire no rights in such shares of Series A CRA Preferred Stock.
(G) Transfers Resulting in “Closely Held” Status. From and after the Issue Date, any Transfer
that, if effective would result in the Corporation being “closely held” within the meaning of
Section 856(h) of the Code, or would otherwise result in the Corporation failing to qualify as a
REIT (including, without limitation, a Transfer or other event that would result in the Corporation
owning (directly or constructively) an interest in a tenant that is described in Section
856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the
Corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code)
shall be void ab initio as to the Transfer of shares of Series A CRA Preferred Stock that would
cause the Corporation (i) to be “closely held” within the meaning of Section 856(h) of the Code or
(ii) otherwise fail to qualify as a REIT, as the case may be, and the intended transferee shall
acquire no rights in such shares of Series A CRA Preferred Stock.
(H) Severability on Void Transactions. A Transfer of a share of Series A CRA Preferred Stock
that is null and void under Sections 11.1(B), (C), (D), (E) or (F) of this Article because it
would, if effective, result in (i) the ownership of Series A CRA Preferred Stock in excess of the
Initial Holder Limit, the Ownership Limit, or the Look-Through Ownership Limit, (ii) the
Corporation being “closely held” within the meaning of Section 856(h) of the Code or (iii) the
Corporation otherwise failing to qualify as a REIT, shall not adversely affect the validity of the
Transfer of any other share of Series A CRA Preferred Stock in the same or any other related
transaction.
CRA-21
(I) Remedies for Breach. If the Board of Directors or a committee thereof shall at any time
determine in good faith that a Transfer or other event has taken place in violation of Section 11.1
of this Article or that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of Series A CRA Preferred Stock in violation of Section 11.1 of this
Article (whether or not such violation is intended), the Board of Directors or a committee thereof
shall be empowered to take any action as it deems advisable to refuse to give effect to or to
prevent such Transfer or other event, including, but not limited to, refusing to give effect to
such Transfer or other event on the books of the Corporation, causing the Corporation to redeem
such shares at the then current Market Price and upon such terms and conditions as may be specified
by the Board of Directors in its sole discretion (including, but not limited to, by means of the
issuance of long-term indebtedness for the purpose of such redemption), demanding the repayment of
any distributions received in respect of shares of Series A CRA Preferred Stock acquired in
violation of Section 11.1 of this Article or instituting proceedings to enjoin such Transfer or to
rescind such Transfer or attempted Transfer; provided, however, that any Transfers or attempted
Transfers (or in the case of events other than a Transfer, Beneficial Ownership) in violation of
Section 11.1 of this Article, regardless of any action (or non-action) by the Board of Directors or
such committee, (a) shall be void ab initio or (b) shall automatically result in the transfer
described in Section 11.2 of this Article; provided, further, that the provisions of this Section
11.1(H) shall be subject to the provisions of Section 11.11 of this Article; provided, further,
that neither the Board of Directors nor any committee thereof may exercise such authority in a
manner that interferes with any ownership or transfer of Series A CRA Preferred Stock that is
expressly authorized pursuant to Section 11.7(C) of this Article.
11.2 Transfer in Trust.
(J) Establishment of Trust. If, notwithstanding the other provisions contained in this
Article, at any time after the Issue Date there is a purported Transfer (an “Excess Transfer”)
(whether or not such Transfer is the result of transactions entered into through the facilities of
the NYSE or other securities exchange or an automated inter-dealer quotation system) or other
change in the capital structure of the Corporation (including, but not limited to, any redemption
of Equity Stock) or other event (including, but not limited to, any acquisition of any share of
Equity Stock) such that (a) any Person (other than the Initial Holder or a Look-Through Entity)
would Beneficially Own shares of Series A CRA Preferred Stock in excess of the Ownership Limit, or
(b) the Initial Holder would Beneficially Own shares of Series A CRA Preferred Stock in excess of
the Initial Holder Limit, or (c) any Person that is a Look-Through Entity would Beneficially Own
shares of Series A CRA Preferred Stock in excess of the Look-Through Ownership Limit (in any such
event, the Person, Initial Holder or Look-Through Entity that would Beneficially Own shares of
Series A CRA Preferred Stock in excess of the Ownership Limit, the Initial Holder Limit or the
Look-Through Entity Limit, respectively, is referred to as a “Prohibited Transferee”), then, except
as otherwise provided in Section 11.7 of this Article, such shares of Series A CRA Preferred Stock
in excess of the Ownership Limit, the Initial Holder Limit or the Look-Through Ownership Limit, as
the case may be, (rounded up to the nearest whole share) shall be automatically transferred to a
Trustee in his capacity as trustee of a Trust for the exclusive benefit of one or more Charitable
Beneficiaries. Such transfer to the
Trustee shall be deemed to be effective as of the close of business on the Business Day prior
to the Excess Transfer, change in capital structure or another event giving rise to a potential
violation of the Ownership Limit, the Initial Holder Limit or the Look Through Entity Ownership
Limit.
CRA-22
(K) Appointment of Trustee. The Trustee shall be appointed by the Corporation and shall be a
Person unaffiliated with either the Corporation or any Prohibited Transferee. The Trustee may be
an individual or a bank or trust company duly licensed to conduct a trust business.
(L) Status of Shares Held by the Trustee. Shares of Series A CRA Preferred Stock held by the
Trustee shall be issued and outstanding shares of capital stock of the Corporation. Except to the
extent provided in Section 11.2(E), the Prohibited Transferee shall have no rights in the Series A
CRA Preferred Stock held by the Trustee, and the Prohibited Transferee shall not benefit
economically from ownership of any shares held in trust by the Trustee, shall have no rights to
dividends and shall not possess any rights to vote or other rights attributable to the shares held
in the Trust.
(M) Dividend and Voting Rights. The Trustee shall have all voting rights and rights to
dividends with respect to shares of Series A CRA Preferred Stock held in the Trust, which rights
shall be exercised for the benefit of the Charitable Beneficiary. Any dividend or distribution
paid prior to the discovery by the Corporation that the shares of Series A CRA Preferred Stock have
been transferred to the Trustee shall be repaid to the Corporation upon demand, and any dividend or
distribution declared but unpaid shall be rescinded as void ab initio with respect to such shares
of Series A CRA Preferred Stock. Any dividends or distributions so disgorged or rescinded shall be
paid over to the Trustee and held in trust for the Charitable Beneficiary. Any vote cast by a
Prohibited Transferee prior to the discovery by the Corporation that the shares of Series A CRA
Preferred Stock have been transferred to the Trustee will be rescinded as void ab initio and shall
be recast in accordance with the desires of the Trustee acting for the benefit of the Charitable
Beneficiary. The owner of the shares at the time of the Excess Transfer, change in capital
structure or other event giving rise to a potential violation of the Ownership Limit, Initial
Holder Limit or Look-Through Entity Ownership Limit shall be deemed to have given an irrevocable
proxy to the Trustee to vote the shares of Series A CRA Preferred Stock for the benefit of the
Charitable Beneficiary.
(N) Restrictions on Transfer. The Trustee of the Trust may sell the shares held in the Trust
to a Person, designated by the Trustee, whose ownership of the shares will not violate the
Ownership Restrictions. If such a sale is made, the interest of the Charitable Beneficiary shall
terminate and proceeds of the sale shall be payable to the Prohibited Transferee and to the
Charitable Beneficiary as provided in this Section 11.2(E). The Prohibited Transferee shall
receive the lesser of (1) the price paid by the Prohibited Transferee for the shares or, if the
Prohibited Transferee did not give value for the shares (through a gift, devise or other
transaction), the Market Price of the shares on the day of the event causing the shares to be held
in the Trust and (2) the price per share received by the Trustee from the sale or other disposition
of the shares held in the Trust. Any proceeds in excess of the amount payable to the Prohibited
Transferee shall be payable to the Charitable Beneficiary. If any of the transfer
restrictions set forth in this Section 11.2(E) or any application thereof is determined in a final
judgment to be void, invalid or unenforceable by any court having jurisdiction over the issue, the
Prohibited Transferee may be deemed, at the option of the Corporation, to have acted as the agent
of the Corporation in acquiring the Series A CRA Preferred Stock as to which such restrictions
would, by their terms, apply, and to hold such Series A CRA Preferred Stock on behalf of the
Corporation.
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(O) Purchase Right in Stock Transferred to the Trustee. Shares of Series A CRA Preferred
Stock transferred to the Trustee shall be deemed to have been offered for sale to the Corporation,
or its designee, at a price per share equal to the lesser of (i) the price per share in the
transaction that resulted in such transfer to the Trust (or, in the case of a devise or gift, the
Market Price at the time of such devise or gift) and (ii) the Market Price on the date the
Corporation, or its designee, accepts such offer. The Corporation shall have the right to accept
such offer for a period of 90 days after the later of (i) the date of the Excess Transfer or other
event resulting in a transfer to the Trust and (ii) the date that the Board of Directors determines
in good faith that an Excess Transfer or other event occurred.
(P) Designation of Charitable Beneficiaries. By written notice to the Trustee, the
Corporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of
the interest in the Trust relating to such Prohibited Transferee if (i) the shares of Series A CRA
Preferred Stock held in the Trust would not violate the Ownership Restrictions in the hands of such
Charitable Beneficiary and (ii) each Charitable Beneficiary is an organization described in
Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.
11.3 Notice of Restricted Transfer. Any Person that acquires or attempts to acquire shares of
Series A CRA Preferred Stock in violation of Section 11.1 of this Article, or any Person that is a
Prohibited Transferee such that stock is transferred to the Trustee under Section 11.2 of this
Article, shall immediately give written notice to the Corporation of such event and shall provide
to the Corporation such other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or attempted Transfer or other event on the Corporation’s status
as a REIT. Failure to give such notice shall not limit the rights and remedies of the Board of
Directors provided herein in any way.
11.4 Owners Required to Provide Information. From and after the Issue Date certain record and
Beneficial Owners and transferees of shares of Series A CRA Preferred Stock will be required to
provide certain information as set out below.
(Q) Annual Disclosure. Every record holder or Beneficial Owner of more than 5% (or such other
percentage between 0.5% and 5%, as provided in the applicable regulations adopted under the Code)
of the number of Outstanding shares of Series A CRA Preferred Stock shall, within 30 days after
January 1 of each year, give written notice to the Corporation stating the name and address of such
record holder or Beneficial Owner, the number of shares of Series A CRA Preferred Stock
Beneficially Owned, and a full description of how such shares are held. Each such record holder or
Beneficial Owner of Series A CRA Preferred Stock shall, upon demand by the Corporation, disclose to
the Corporation in writing such
additional information with respect to the Beneficial Ownership of the Series A CRA Preferred
Stock as the Board of Directors, in its sole discretion, deems appropriate or necessary to (i)
comply with the provisions of the Code regarding the qualification of the Corporation as a REIT
under the Code and (ii) ensure compliance with the Ownership Limit, the Initial Holder Limit or the
Look-Through Ownership Limit, as applicable. Each stockholder of record, including without
limitation any Person that holds shares of Series A CRA Preferred Stock on behalf of a Beneficial
Owner, shall take all reasonable steps to obtain the written notice described in this Section 11.4
from the Beneficial Owner.
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(R) Disclosure at the Request of the Corporation. Any Person that is a Beneficial Owner of
shares of Series A CRA Preferred Stock and any Person (including the stockholder of record) that is
holding shares of Series A CRA Preferred Stock for a Beneficial Owner, and any proposed transferee
of shares, shall provide such information as the Corporation, in its sole discretion, may request
in order to determine the Corporation’s status as a REIT, to comply with the requirements of any
taxing authority or other governmental agency, to determine any such compliance or to ensure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit,
and shall provide a statement or affidavit to the Corporation setting forth the number of shares of
Series A CRA Preferred Stock already Beneficially Owned by such stockholder or proposed transferee
and any related persons specified, which statement or affidavit shall be in the form prescribed by
the Corporation for that purpose.
11.5 Remedies Not Limited. Nothing contained in this Article shall limit the authority of the
Board of Directors to take such other action as it deems necessary or advisable (subject to the
provisions of Section 11.11 of this Article) (i) to protect the Corporation and the interests of
its stockholders in the preservation of the Corporation’s status as a REIT and (ii) to insure
compliance with the Ownership Limit, the Initial Holder Limit and the Look-Through Ownership Limit.
11.6 Ambiguity. In the case of an ambiguity in the application of any of the provisions of
Section 11 of this Article, or in the case of an ambiguity in any definition contained in Section
11 of this Article, the Board of Directors shall have the power to determine the application of the
provisions of this Article with respect to any situation based on its reasonable belief,
understanding or knowledge of the circumstances.
11.7 Exceptions. The following exceptions shall apply or may be established with respect to
the limitations of Section 11.1 of this Article.
(A) Waiver of Ownership Limit. The Board of Directors, upon receipt of a ruling from the
Internal Revenue Service or an opinion of tax counsel or other evidence or undertaking acceptable
to it, may waive the application, in whole or in part, of the Ownership Limit to a Person subject
to the Ownership Limit, if such person is not an individual for purposes of Section 542(a) of the
Code (as modified to exclude qualified trusts from treatment as individuals pursuant to Section
856(h)(3) of the Code) and is a corporation, partnership, limited liability company, estate or
trust. In connection with any such exemption, the Board of Directors may require such
representations and undertakings from such Person and may impose such other
conditions as the Board of Directors deems necessary, in its sole discretion, to determine the
effect, if any, of the proposed Transfer on the Corporation’s status as a REIT.
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(B) Pledge by Initial Holder. Notwithstanding any other provision of this Article, the pledge
by the Initial Holder of all or any portion of the Series A CRA Preferred Stock directly owned at
any time or from time to time shall not constitute a violation of Section 11.1 of this Article and
the pledgee shall not be subject to the Ownership Limit with respect to the Series A CRA Preferred
Stock so pledged to it either as a result of the pledge or upon foreclosure.
(C) Underwriters. For a period of 270 days (or such longer period of time as any underwriter
described below shall hold an unsold allotment of Series A CRA Preferred Stock) following the
purchase of Series A CRA Preferred Stock by an underwriter that (i) is a corporation, partnership
or other legal entity and (ii) participates in an offering of the Series A CRA Preferred Stock,
such underwriter shall not be subject to the Ownership Limit with respect to the Series A CRA
Preferred Stock purchased by it as a part of or in connection with such offering and with respect
to any Series A CRA Preferred Stock purchased in connection with market making activities.
11.8 Legend. Each certificate for Series A CRA Preferred Stock shall bear substantially the
following legend:
“THIS SECURITY, WHICH HAS BEEN ISSUED BY APARTMENT INVESTMENT AND MANAGEMENT COMPANY (THE
“CORPORATION”), HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ANY OTHER APPLICABLE JURISDICTION. BY ITS ACCEPTANCE HEREOF, THE HOLDER
(1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (A “QUALIFIED INSTITUTIONAL
BUYER”) (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)); AND (2) AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN,
ONLY (A) TO THE CORPORATION OR MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER AND TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE OF RULE 144A, OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO ANY
REQUIREMENT OF LAW THAT THE DISPOSITION OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION
BE AT ALL TIMES WITHIN ITS CONTROL, AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY OTHER
APPLICABLE JURISDICTION.
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ANY TRANSFER OF THIS SECURITY MUST BE IN AN AMOUNT OF NOT LESS THAN $500,000 AND INTEGRAL
MULTIPLES THEREOF, TO A TRANSFEREE PURCHASING FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO
OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT.
NO TRANSFER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN WILL BE PERMITTED IF
SUCH TRANSFER WOULD RESULT IN A VIOLATION OF THE “OWNERSHIP LIMIT” AS DEFINED IN THE
ARTICLES SUPPLEMENTARY OR OTHERWISE COULD ADVERSELY AFFECT THE STATUS OF THE CORPORATION AS
A REIT. ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE
VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,
NOTWITHSTANDING ANY INSTRUCTION TO THE RIGHTS TO THE CONTRARY TO THE CORPORATION OR ANY
INTERMEDIARY
THE SHARES OF SERIES A COMMUNITY REINVESTMENT ACT PERPETUAL PREFERRED STOCK (THE “CRA
PREFERRED STOCK”) REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER.
NO PERSON MAY BENEFICIALLY OWN SHARES OF CRA PREFERRED STOCK IN EXCESS OF THE OWNERSHIP
RESTRICTIONS, AS APPLICABLE, WITH CERTAIN FURTHER RESTRICTIONS AND EXCEPTIONS SET FORTH IN
THE CORPORATION’S CHARTER (INCLUDING THE ARTICLES SUPPLEMENTARY SETTING FORTH THE TERMS OF
THE CRA PREFERRED STOCK). ANY PERSON THAT ATTEMPTS TO BENEFICIALLY OWN SHARES OF CRA
PREFERRED STOCK IN EXCESS OF THE APPLICABLE LIMITATION MUST IMMEDIATELY NOTIFY THE
CORPORATION. ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS ASCRIBED TO SUCH TERMS
IN THE CHARTER (INCLUDING THE ARTICLES SUPPLEMENTARY SETTING FORTH THE TERMS OF THE CRA
PREFERRED STOCK), AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING
THE RESTRICTIONS ON TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH STOCKHOLDER THAT SO
REQUESTS. IF THE RESTRICTIONS ON TRANSFER ARE VIOLATED, (I) THE TRANSFER OF THE SHARES OF
CRA PREFERRED STOCK REPRESENTED HEREBY WILL BE VOID IN ACCORDANCE WITH THE CHARTER
(INCLUDING THE ARTICLES SUPPLEMENTARY SETTING FORTH THE TERMS OF THE CRA PREFERRED STOCK) OR
(II) THE SHARES OF CRA
PREFERRED STOCK REPRESENTED HEREBY WILL AUTOMATICALLY BE TRANSFERRED TO A TRUSTEE OF A TRUST
FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES.”
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11.9 Severability. If any provision of this Article or any application of any such provision
is determined in a final and unappealable judgment to be void, invalid or unenforceable by any
Federal or state court having jurisdiction over the issues, the validity and enforceability of the
remaining provisions shall not be affected and other applications of such provision shall be
affected only to the extent necessary to comply with the determination of such court.
11.10 Board of Directors Discretion. Anything in this Article to the contrary
notwithstanding, the Board of Directors shall be entitled to take or omit to take such actions as
it in its discretion shall determine to be advisable in order that the Corporation maintain its
status as and continue to qualify as a REIT, including, but not limited to, reducing the Ownership
Limit, the Initial Holder Limit and the Look-Through Ownership Limit in the event of a change in
law.
11.11 Settlement. Nothing in this Section 11 of this Article shall be interpreted to preclude
the settlement of any transaction entered into through the facilities of the NYSE or other
securities exchange or an automated inter-dealer quotation system.
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Consent of Resident Agent
THE UNDERSIGNED, hereby consents to act as resident agent in Maryland for the entity named in
the attached instrument.
The Prentice-Hall Corporation System, Maryland
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/s/ Harry B. Davis |
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Assistant Vice President |
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