Common use of Excess Shares Clause in Contracts

Excess Shares. (A) If, at any time, a person (as defined in (C) below only for purposes of this Article XII) shall be or become an Owner (as defined in (C) below) of Shares of the Trust in excess of 9.8% of the outstanding Shares entitled to vote (the "Limit"), those Shares of the Trust most recently acquired by such Person which are in excess of the Limit, including for this purpose Shares deemed owned through attribution, shall constitute "Excess Shares". Excess Shares shall have the following characteristics: (1) holders of Excess Shares shall not be entitled to exercise any voting rights with respect to such Excess Shares; (2) Excess Shares shall not be deemed to be outstanding for the purpose of determining a quorum at the annual meeting or any special meeting of Shareholders or for determining the number of outstanding Shares for purposes of determining a "majority of the outstanding Shares" in connection with a Shareholders' vote without a meeting; (3) any dividends or other distributions with respect to Excess Shares which would have been payable in respect of Shares had they not constituted "Excess Shares" shall be accumulated by the Trust and deposited in a savings account in a bank (which may be the Trust's dividend disbursing agent) for the benefit of, and be payable to, the holder or holders of such Shares at such time as such Excess Shares shall cease to be Excess Shares; (4) Excess Shares shall be deemed to have been offered for sale to the Trust or its designee at their fair market value for a period of one hundred twenty (120) days from the date of (i) the transfer of Shares which made the Shares Excess Shares if the Trust has actual knowledge that such transfer creates Excess Shares or (ii) if such transfer is not actually known to the Trust, the determination by the Trustees in good faith by resolution duly adopted that a transfer creating Excess Shares has taken place (the "Offer Period"). Fair market value shall be determined as of the date of (i) or (ii) above, and shall be the price as determined in good faith by the Trustees, provided, however, (y) if the Shares are listed on a national stock exchange, the fair market value shall be the closing price on that national stock exchange, or, (z) if the Shares are not listed on a national stock exchange but publicly quoted on the National Quotation Bureau Incorporated's "pink sheets" or the NASDAQ National Quotation System, then the fair market value shall be the closing bid price on the applicable system. The Trust may accept the deemed offer for Excess Shares by mailing by registered or certified mail (return receipt requested) a written notice to the record holder of Excess Shares at the address appearing on the Trust's stock transfer records stating the Trust's acceptance of the offer within the Offer Period. Payment for Excess Shares shall be made by the Trust by check, subject to collection, within 30 days after acknowledgement of receipt of the above described notice. After notice has been sent, Excess Shares shall have no further rights beyond the right to receive payment pursuant to this paragraph. (B) Each Person who becomes the Owner of Excess Shares is obliged immediately to give or cause to be given written notice thereof to the Trust and to give to the Trust such other information as the Trust may reasonably require of such person (1) with respect to identifying all Owners and amount of ownership of its outstanding Shares held directly or by distribution by such Person, and (2) such other information as may be necessary to determine the Trust's status under the Code. (C) For the purpose of determination to be made under this Article, (a) A Person shall be considered to "Own", be the "Owner" or have "Ownership" of Shares if he is treated as owner of such Shares for purposes of part 11, subchapter M of the Code, including the attribution of ownership provisions of Sections 542 and 544 of the Code, or if such Person would have beneficial ownership of such Shares as defined under Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "Act") (all as in effect on the date of the formation of the Trust);

Excess Shares. (Aa) If, notwithstanding the other provisions contained in this Article Thirteenth, at any time prior to the Restriction Termination Date, there is a purported Transfer such that one or more Covered Persons, who or which Beneficially Own outstanding shares of MeriStar REIT Equity Stock in excess of 34.9% of the total outstanding shares of MeriStar REIT Equity Stock, would Beneficially Own Shares in excess of the Ownership Limit (a "Prohibited Transfer"), then Shares Beneficially Owned by the Covered Person or Persons who or which would otherwise be the Beneficial Owner of Shares as a result of the Prohibited Transfer shall be automatically designated as Excess Shares (without reclassification) until no one or more Covered Persons, who or which Beneficially Own outstanding shares of MeriStar REIT Equity Stock in excess of 34.9% of the total outstanding shares of MeriStar REIT Equity Stock, Beneficially Own Shares in excess of the Ownership Limit. The designation of such Shares as Excess Shares shall be effective as of the close of business on the business day prior to the date of the purported Transfer. If, after designation of such Shares owned directly by a Covered Person as Excess Shares, one or more Covered Persons still Beneficially Own Shares in excess of the Ownership Limit, Shares Beneficially Owned constructively by such Covered Person as a result of the Prohibited Transfer shall be designated as Excess Shares until no one or more Covered Person or Persons, who or which Beneficially Own outstanding shares of MeriStar REIT Equity Stock in excess of 34.9% of the total outstanding shares of MeriStar REIT Equity Stock, Beneficially Own Shares in excess of the Ownership Limit. Where a Covered Person Beneficially Owns Shares constructively through one or more Persons and the Shares held by such other Persons must be designated as Excess Shares, the designation of Shares held by such other Persons as Excess Shares shall be pro rata. (b) If, at any timetime prior to the Restriction Termination Date, an event other than a person purported Transfer (an "Event") occurs as defined in (C) below only for purposes a result of this Article XII) shall be which one or become an Owner (as defined in (C) below) more Covered Persons, who or which Beneficially Own outstanding shares of Shares of the Trust MeriStar REIT Equity Stock in excess of 9.834.9% of the total outstanding shares of MeriStar REIT Equity Stock, would Beneficially Own Shares entitled to vote (the "Limit"), those Shares of the Trust most recently acquired by such Person which are in excess of the LimitOwnership Limit (a "Prohibited Event"), including for this purpose then Shares deemed owned through attribution, Beneficially Owned by each such Covered Person who or which would be otherwise the Beneficial Owner of Shares as a result of the Prohibited Event shall constitute "Excess Shares". be automatically designated as Excess Shares shall have to the following characteristics: (1) holders of Excess Shares shall not be entitled extent necessary to exercise any voting rights with respect to eliminate such Excess Shares; (2) Excess Shares shall not be deemed to be outstanding for the purpose of determining a quorum at the annual meeting or any special meeting of Shareholders or for determining the number of outstanding Shares for purposes of determining a "majority of the outstanding Shares" in connection with a Shareholders' vote without a meeting; (3) any dividends or other distributions with respect to Excess Shares which would have been payable in respect excess ownership. The designation of Shares had they not constituted "Excess Shares" shall be accumulated by the Trust and deposited in a savings account in a bank (which may be the Trust's dividend disbursing agent) for the benefit of, and be payable to, the holder or holders of such Shares at such time as such Excess Shares shall cease to be Excess Shares; (4) Excess Shares shall be deemed effective as of the close of business on the business day prior to have been offered for sale to the Trust or its designee at their fair market value for a period of one hundred twenty (120) days from the date of (i) the transfer Event. In determining which Shares are designated as Excess Shares, Shares Beneficially Owned by any Covered Person who caused the Event to occur shall be designated as Excess Shares before any Shares not so held are designated. Where several similarly situated Covered Persons exist, the designation of Shares which made the Shares Excess Shares if the Trust has actual knowledge that such transfer creates Excess Shares or (ii) if such transfer is not actually known to the Trust, the determination by the Trustees in good faith by resolution duly adopted that a transfer creating Excess Shares has taken place (the "Offer Period"). Fair market value shall be determined as of the date of (i) or (ii) above, and shall be the price as determined in good faith by the Trustees, provided, however, (y) if the Shares are listed on a national stock exchange, the fair market value shall be the closing price on that national stock exchange, or, (z) if the Shares are not listed on a national stock exchange but publicly quoted on the National Quotation Bureau Incorporated's "pink sheets" or the NASDAQ National Quotation System, then the fair market value shall be the closing bid price on the applicable system. The Trust may accept the deemed offer for Excess Shares by mailing by registered or certified mail (return receipt requested) a written notice to the record holder of Excess Shares at the address appearing on the Trust's stock transfer records stating the Trust's acceptance of the offer within the Offer Period. Payment for Excess Shares shall be made pro rata. If Shares held by any Covered Person are required to be designated as Excess Shares pursuant to this clause (b) of this Section 3 of this Article Thirteenth, Shares beneficially held by such Covered Person shall first be designated before Shares Beneficially Owned constructively are designated. Where such Covered Person Beneficially Owns Shares constructively through one or more Persons and the Trust Shares held by checksuch other Persons must be designated as Excess Shares, subject to collection, within 30 days after acknowledgement the designation of receipt of the above described notice. After notice has been sent, Shares held by such other Persons as Excess Shares shall have no further rights beyond the right to receive payment pursuant to this paragraphbe pro rata. (B) Each Person who becomes the Owner of Excess Shares is obliged immediately to give or cause to be given written notice thereof to the Trust and to give to the Trust such other information as the Trust may reasonably require of such person (1) with respect to identifying all Owners and amount of ownership of its outstanding Shares held directly or by distribution by such Person, and (2) such other information as may be necessary to determine the Trust's status under the Code. (C) For the purpose of determination to be made under this Article, (a) A Person shall be considered to "Own", be the "Owner" or have "Ownership" of Shares if he is treated as owner of such Shares for purposes of part 11, subchapter M of the Code, including the attribution of ownership provisions of Sections 542 and 544 of the Code, or if such Person would have beneficial ownership of such Shares as defined under Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "Act") (all as in effect on the date of the formation of the Trust);