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ARTICLES SUPPLEMENTARY
RAIT INVESTMENT TRUST
7.75% SERIES A CUMULATIVE REDEEMABLE PREFERRED SHARES OF
BENEFICIAL
INTEREST
(PAR VALUE $0.01 PER SHARE)
RAIT
INVESTMENT TRUST, a Maryland real estate investment trust
(hereinafter called the "Trust"), hereby
certifies to the Department of
Assessments and Taxation of the State of
Maryland that:
FIRST:
Under the authority set forth in Article VI of the Declaration
of
Trust of the Trust, as amended (which, as
hereinafter amended, restated or
supplemented from time to time is herein
called the "Declaration of Trust"), the
Board of Trustees of the Trust (the "Board
of Trustees") by unanimous consent in
writing dated March 8, 2004, designated and
classified 2,760,000 shares of the
authorized but unissued unclassified
preferred shares of beneficial interest,
par value $0.01 per share, of the Trust as
the "7.75% Series A Cumulative
Redeemable Preferred Shares of Beneficial
Interest," par value $0.01 per share,
and has provided for the issuance of such
series.
SECOND:
The classification increases the number of shares classified as
7.75% Series A Cumulative Redeemable
Preferred Shares of Beneficial Interest,
par value $0.01 per share, from 0 shares
immediately prior to the classification
to 2,760,000 shares immediately after the
classification. The classification
decreases the number of unclassified
preferred shares of beneficial interest,
par value $0.01 per share, from 25,000,000
shares immediately prior to the
classification to 22,240,000 shares
immediately after the classification.
THIRD: The
preferences, conversions and other rights, voting powers,
restrictions, limitations as to dividends
and other distributions,
qualifications and terms and conditions of
redemption of the 7.75% Series A
Cumulative Redeemable Preferred Shares of
Beneficial Interest are as follows:
(1) Designation and Number. A series of preferred shares of
beneficial
interest, par value $0.01 per share (the "Preferred Shares"),
designated
as the "7.75% Series A Cumulative Redeemable Preferred Shares
of
Beneficial Interest" (the "Series A Preferred Shares"), is
hereby
established. The number of Series A Preferred Shares shall be
2,760,000
shares.
The par value of Series A Preferred Shares shall be $0.01 per
share.
(2) Rank. The Series A Preferred Shares, will, with respect to
dividend rights, redemption rights
and rights upon any voluntary or
involuntary liquidation, dissolution or winding up of the Trust
(a
"Liquidation"), rank:
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(a) senior to all common shares of beneficial interest, par
value
$0.01 per share, of the Trust (the "Common Shares") and to all
equity securities issued or to be issued by the Trust the terms
of
which provide that such equity securities shall rank junior to
the
Series A Preferred Shares (sometimes the Common Shares and such
equity securities are collectively referred to as "Junior
Shares");
(b) on a parity with all equity securities issued or to be issued
by
the Trust other than those referred to in clauses (a) and (c)
(sometimes referred to as "Parity Shares"); and
(c) junior to all (i) equity securities issued or to be issued
by
the Trust the terms of which specifically provide that such
equity
securities rank senior to the Series A Preferred Shares and
(ii)
existing and future indebtedness of the Trust.
The term
"equity securities" does not include debt securities of the
Trust
that are
convertible into or exchangeable for equity securities of the
Trust,
which debt securities will rank senior to the Series A
Preferred
Shares
prior to conversion or exchange.
(3) Dividends. (a) Holders of Series A Preferred Shares shall
be
entitled
to receive, when, as and if authorized and declared by the
Board
of
Trustees, out of legally available funds of the Trust,
cumulative
preferential cash dividends at the rate of 7.75% of the
Liquidation
Preference
(as defined hereinafter) per Series A Preferred Share per annum
(which is
equivalent to a fixed annual amount of $1.9375 per Series A
Preferred
Share). Such dividends shall accrue and cumulate from the date
of
original issuance of such share and shall be payable quarterly
in
arrears on
March 31, June 30, September 30 and December 31 of each year
or, if not
a business day, the next succeeding business day (each a
"Dividend
Payment Date"), commencing, with respect to any Series A
Preferred
Share, on the Dividend Payment Date next succeeding the date of
original
issuance of such share. Any dividend payable on the Series A
Preferred
Shares for any partial dividend period shall be pro rated and
computed
on the basis of a 360-day year consisting of twelve 30-day
months.
Dividends shall be payable to holders of record as they appear
in
the stock
transfer records of the Trust at the close of business on the
applicable
dividend record date, which shall be the first day of the
calendar
month in which the applicable Dividend Payment Date falls or,
if
not a
business day, the next succeeding business day or such other
date
designated
by the Board of Trustees for the payment of dividends that is
not more
than 30 nor less than 10 calendar days immediately preceding
such
Dividend
Payment Date (each, a "Dividend Record Date").
(b) Notwithstanding anything to the contrary contained herein,
dividends
on the Series A Preferred Shares shall accrue and cumulate
whether or
not the Trust has earnings, whether or
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not there
are funds legally available for payment of such dividends and
whether or
not such dividends are authorized and declared by the Board of
Trustees.
Accumulated but unpaid dividends on the Series A Preferred
Shares
shall cumulate as of the Dividend Payment Date on which they
first
become
payable or on the date of redemption, as the case may be. No
interest,
or sum of money in lieu of interest, shall be payable in
respect
of any
dividend payment or payments on Series A Preferred Shares which
may
be in
arrears.
(c) Except as provided in clause (d) below, if any Series A
Preferred
Shares are outstanding, no dividends (collectively, "Parity and
Junior
Dividends"), other than distributions in kind of Common Shares
or
other
shares of the Trust's equity securities ranking junior to the
Series
A
Preferred Shares as to dividends, may be paid or set apart for
payment
on the
Common Shares or any other shares of equity securities of the
Trust
of any
other class or series ranking, as to dividends, on a parity with
or
junior to
the Series A Preferred Shares unless full cumulative dividends
(the
"Dividend Preference Amount") due on any past or
contemporaneous
Dividend
Payment Date have been or contemporaneously are authorized and
declared
and paid as of the payment date of the relevant Parity or
Junior
Dividend.
Notwithstanding anything herein to the contrary, the Trust may
declare
and pay Parity and Junior Dividends without paying or setting
apart for
payment any amounts with respect to the dividend due on the
Series A
Preferred Shares for any dividend period the Dividend Payment
Date of
which has not occurred as of the date of the declaration or
payment of
the Parity and Junior Dividends so long as the full Dividend
Preference Amount has been
paid through the most recent Dividend Payment
Date for
the Series A Preferred Shares.
(d) When dividends are not paid in full (or a sum sufficient
for such
full payment is not so set apart) upon the Series A Preferred
Shares and
all other equity securities ranking on a parity, as to
dividends,
with the Series A Preferred Shares, all dividends authorized
and
declared upon the Series A Preferred Shares, shall be authorized
and
declared pro rata so that the
amount of dividends authorized and declared
per share
of Series A Preferred Shares and each such other equity
security
shall in
all cases bear to each other the same ratio that accumulated
dividends
per Series A Preferred Share and such other equity security
(which
shall not include any accumulation in respect of unpaid
dividends
for prior
dividend periods if such other equity securities do not have a
cumulative
dividend) bear to each other.
(e) Notwithstanding the above, the Trust shall not be
prohibited
from (i) declaring or paying or setting apart for payment any
dividend
or distribution on any Parity Shares or Junior Shares or (ii)
redeeming,
purchasing or otherwise acquiring any Parity Shares or Junior
Shares, in
each case, if such declaration, payment, redemption, purchase
or other
acquisition is necessary to
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maintain
the Trust's qualification as a real estate investment trust
under
Sections
856 through 860 of the Internal Revenue Code of 1986, as
amended
(the
"Code").
(f) No dividends on Series A Preferred Shares shall be
authorized
by the Board of Trustees or declared or paid or set apart for
payment by
the Trust at such time as the terms and provisions of any
agreement
of the Trust, including any agreement relating to its
indebtedness, prohibits such declaration, payment or setting apart
for
payment or
provides that such declaration, payment or setting apart for
payment
would constitute a breach thereof or a default thereunder, or
if
such
declaration or payment shall be restricted or prohibited by
law.
(g) If, for any taxable year, the Trust elects to designate as
"capital
gain dividends" (as defined in Section 857 of the Code) any
portion
(the "Capital Gains Amount") of the dividends (as determined
for
federal
income tax purposes) paid or made available for the year to
holders of
all classes of shares (the "Total Dividends"), then the portion
of the
Capital Gains Amount that shall be allocable to the holders of
Series A
Preferred Shares shall be the amount that the total dividends
(as
determined
for federal income tax purposes) paid or made available to the
holders of
the Series A Preferred Shares for the year bears to the Total
Dividends.
The Trust may elect to retain and pay income tax on its net
long-term
capital gains. In such a case, the holders of Series A
Preferred
Shares
would include in income their appropriate share of the Trust's
undistributed long-term capital gains, as designated by the
Trust.
(h) In determining
whether a distribution (other than upon a
Liquidation), by dividend, redemption or otherwise, is permitted,
amounts
that would
be needed, if the Trust were to be dissolved at the time of the
distribution, to satisfy the Liquidation Preference (as defined
below)
will not
be added to the Trust's total liabilities.
(i) Holders of Series A Preferred Shares shall not be entitled
to any
dividends, whether payable in cash, property or shares, in
excess
of full
cumulative dividends on the Series A Preferred Shares as
described
above. Any
dividend payment made on the Series A Preferred Shares shall
first be
credited against the earliest accumulated but unpaid dividend
due
with
respect to the Series A Preferred Shares which remains payable.
(4) Liquidation Preference. (a) In the event of any Liquidation,
the
holders of
Series A Preferred Shares then outstanding shall be entitled to
receive
out of the assets of the Trust available for distribution to
shareholders (after payment or provision for payment of all debts
and
other
liabilities of the Trust) an amount equal to $25.00 per share,
plus
any
accumulated and unpaid dividends thereon to the date of payment
(the
"Liquidation Preference"), whether or not authorized and declared,
before
any
distribution of assets is made to holders of Common Shares and
any
other
shares of equity securities of the Trust that rank
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junior to
the Series A Preferred Shares as to Liquidation rights.
(b) If, upon any such Liquidation, the assets of the Trust are
insufficient to make full payment to holders of the Series A
Preferred
Shares and
any shares of other classes or series of equity securities of
the Trust
ranking on a parity with the Series A Preferred Shares as to
Liquidation rights, then the holders of the Series A Preferred
Shares and
all other such
classes or series of equity securities ranking on a parity
with the
Series A Preferred Shares as to Liquidation rights shall share
ratably in
any distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be
respectively
entitled.
(c) Written notice of any such Liquidation, stating the
payment
date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be
given by
first
class mail, postage pre-paid, not less than 30 nor more than 60
calendar
days immediately preceding the payment date stated therein, to
each
record holder of the Series A Preferred Shares at the
respective
addresses
of such holders as the same shall appear on the share transfer
records of
the Trust.
(d) After payment of the full amount of the Liquidation
Preference, the holders of Series A Preferred Shares shall have no
right
or claim
to any of the remaining assets of the Trust.
(e) None of a consolidation or merger of the Trust with or
into
another entity, the merger of another entity
