Document:

EXHIBIT 4.1

 Exhibit 4.1 
  

HIGHLAND HOSPITALITY CORPORATION 
  
 ARTICLES SUPPLEMENTARY 
  
 ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF 
 7.875% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK, 
 $.01 PAR VALUE PER SHARE 
  
 Highland Hospitality Company, a Maryland corporation (the
“Company”), hereby certifies that, pursuant to the authority conferred upon the Board of Directors of the Company by Section 5.3 of the Company’s Articles of Amendment and Restatement, as amended to the date hereof and as the same may
be amended hereafter from time to time (the “Charter”), and in accordance with Section 2-208(b) of the Maryland General Corporation Law, the Board of Directors, acting through a duly appointed pricing committee thereof, on September 22,
2005 duly classified unissued shares of preferred stock of the Company, and the terms of such series of shares of preferred stock, including the preferences, voting powers, restrictions, limitations as to dividends, qualifications, and terms or
conditions of redemption thereof, as set by the pricing committee, are as follows: 
  
 Section 1. Number of Shares and Designation. 
  
 The shares of such series shall be designated “7.875% Series A Cumulative Redeemable Preferred Stock” (the “Series A Preferred Stock”) and the number of shares constituting such series shall be
3,450,000. The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions, of the Series A Preferred Stock shall be subject in all cases to the provisions of
Article VII of the Charter containing limitations on beneficial ownership of the Company’s capital stock. 
  
 Section 2. Definitions. 
  
 “Board of Directors” shall mean the Board of Directors of the Company or any committee authorized by such Board of Directors to perform any of
its responsibilities with respect to the Series A Preferred Stock. 
  
 “Business Day” shall mean any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open. 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended.

  
 “Common Stock” shall mean the Common Stock, par
value $.01 per share, of the Company. 
  
 “Dividend Payment
Date” shall mean the 15th day (or, if such day is not a Business Day, the next Business Day thereafter) of each February, May, August, and November, commencing on November 15, 2005. 

 “Dividend Period” shall mean the respective periods commencing on and including February 2, May
2, August 2 and November 2 of each year and ending on and including the day preceding the first day of the next succeeding Dividend Period (other than the initial Dividend Period, which shall commence on (and include) the Original Issue Date and end
on and include November 1, 2005, and other than the Dividend Period during which any shares of Series A Preferred Stock shall be redeemed pursuant to Section 5, which shall end on and include the call date with respect to the shares of Series A
Preferred Stock being redeemed). 
  
 “Dividend Record
Date” shall mean the first day of the calendar month in which the applicable dividend falls, or such other date as designated by our Board of Directors for the payment of dividends that is not more than 90 days nor less than 10 days prior to
the Dividend Payment Date. 
  
 “Original Issue Date”
shall mean September 28, 2005. 
  
 “Parity Preferred”
shall have the meaning set forth in Section 6 hereof. 
  
 “Preferred Directors” shall have the meaning set forth in Section 6 hereof. 
  
 “Preferred Dividend Default” shall have the meaning set forth in Section 6 hereof. 
  
 “Transfer Agent” shall mean Wachovia Bank, National Association, or such other agent or agents of the Company as may be designated by the Board
of Directors or their designee as the transfer agent, registrar and dividend disbursing agent for the Series A Preferred Stock. 
  
 “Trust” shall mean any trust created pursuant to Article VII of the Charter. 
  
 Section 3. Dividends and Distributions. 
  
 (a) Subject to the preferential rights of the holders of any class or series of capital stock of the Company ranking senior
to the Series A Preferred Stock as to dividends, the holders of the Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends, cumulative
cash dividends at the rate of 7.875% per annum of the $25.00 liquidation preference per share of the Series A Preferred Stock (equivalent to the annual rate of $1.96875 per share of the Series A Preferred Stock). Such dividends shall accrue and be
cumulative from (and include) the Original Issue Date and shall be payable quarterly in arrears on each Dividend Payment Date; provided, however, that if any Dividend Payment Date is not a Business Day, then the dividend which would otherwise have
been payable on such Dividend Payment Date may be paid on the next succeeding Business Day with the same force and effect as if paid on such Dividend Payment Date, and no interest or additional dividends or other sums shall accrue on the amount so
payable from such Dividend Payment Date to such next succeeding Business Day. The amount of any dividend payable on the Series A Preferred Stock for each full Dividend Period shall be computed by dividing the annual dividend by four (4). The amount
of any dividend payable on the Series A Preferred Stock for any partial Dividend Period shall be prorated and computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear
in the stockholder records of the Company at the close of business on the applicable Dividend Record Date. Notwithstanding any provision to the contrary 

  

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contained herein, each outstanding share of Series A Preferred Stock shall be entitled to receive a dividend with respect to any Dividend Record Date equal
to the dividend paid with respect to each other share of Series A Preferred Stock that is outstanding on such date. 
  
 (b) No dividends on the Series A Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Company at such time
as the terms and provisions of any agreement of the Company, 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 or setting apart for payment shall be restricted or prohibited by law. 
  
 (c) Notwithstanding anything contained herein to the contrary, dividends on the Series A Preferred Stock shall accrue
whether or not any agreement the Company is party to prohibits it, whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared.

  
 (d) Except as provided in Section 3(e) below, no dividends
shall be declared or paid or set apart for payment and no other distribution of cash or other property may be declared or made, directly or indirectly, on or with respect to any shares of Common Stock or shares of any other class or series of
capital stock of the Company ranking, as to dividends, on a parity with or junior to the Series A Preferred Stock (other than a dividend paid in shares of Common Stock or in shares of any other class or series of capital stock ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation) for any period, nor shall any shares of Common Stock or any other shares of any other class or series of capital stock of the Company ranking, as to dividends or upon liquidation, on a
parity with or junior to the Series A Preferred Stock be redeemed, purchased or otherwise acquired for any consideration and no other distribution of cash or other property may be made, directly or indirectly, on or with respect thereto (or any
moneys be paid to or made available for a sinking fund for the redemption of any such shares) by the Company (except by conversion into or exchange for other shares of any class or series of capital stock of the Company ranking junior to the Series
A Preferred Stock as to dividends and upon liquidation and except for the acquisition of shares made pursuant to the provisions of Article VII of the Charter), unless full cumulative dividends on the Series A Preferred Stock for all past Dividend
Periods and the then current Dividend Period shall have been or contemporaneously are (i) declared and paid in cash, or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment. 
  
 (e) 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 Stock and the shares of any other class or series of capital stock ranking, as to dividends, on a parity with the Series A Preferred Stock, all dividends declared upon the Series A Preferred
Stock and each such other class or series of capital stock ranking, as to dividends, on a parity with the Series A Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series A Preferred Stock and such
other class or series of capital stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Stock and such other class or series of capital stock (which shall not include any accrual in
respect of unpaid dividends on such other class or series of capital stock for prior dividend periods if such other class or series of capital stock does not 

  

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have a cumulative dividend) bear to each other. 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 Preferred Stock which may be in arrears. 
  
 (f) Holders of shares of Series A Preferred Stock shall not be entitled to any dividend, whether payable in cash, property or shares of stock, in excess of full cumulative dividends on the Series A Preferred Stock as provided herein. Any
dividend payment made on the Series A Preferred Stock shall first be credited against the earliest accrued but unpaid dividends due with respect to such shares which remains payable. Accrued but unpaid distributions on the Series A Preferred Stock
will accumulate as of the Dividend Payment Date on which they first become payable. 
  
 (g) If, for any taxable year, the Company elects to designate as “capital gains” (as defined in Section 857 of the Code or any successor revenue code or section) any portion (the “Capital Gains
Amount”) of the total dividends (as determined for United States federal income tax purposes) paid or made available for such taxable year to holders of all classes and series of capital stock (the “Total Dividends”), then the portion
of the Capital Gains Amount that shall be allocable to holders of Series A Preferred Stock shall be in the same proportion that the Total Dividends paid or made available to the holders of Series A Preferred Stock for such taxable year bears to the
Total Dividends for such taxable year made with respect to all classes or series of capital stock outstanding. 
  
 Section 4. Liquidation Preference. 
  
 Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Company, before any distribution or payment shall be made
to holders of shares of Common Stock or any other class or series of capital stock of the Company ranking, as to liquidation rights, junior to the Series A Preferred Stock, the holders of shares of Series A Preferred Stock shall be entitled to be
paid out of the assets of the Company legally available for distribution to its stockholders a liquidation preference of $25.00 per share, plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared). In
the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Company are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series A Preferred Stock
and the corresponding amounts payable on all shares of other classes or series of capital stock of the Company ranking, as to liquidation rights, on a parity with the Series A Preferred Stock in the distribution of assets, then the holders of the
Series A Preferred Stock and each such other class or series of shares of capital stock ranking, as to liquidation rights, on a parity with the Series A Preferred Stock shall share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively entitled. Written notice of any such liquidation, dissolution or winding up of the Company, 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 days prior to the payment date stated therein, to each record holder of shares of Series A Preferred Stock
at the respective addresses of such holders as the same shall appear on the stock transfer records of the Company. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series A Preferred Stock
will have no right or claim to any of the remaining assets of the Company. The 

  

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consolidation or merger of the Company with or into any other corporation, trust or entity, or the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Company, shall not be deemed to constitute a liquidation, dissolution or winding-up of the affairs of the Company. 
  
 Section 5. Redemption. 
  
 (a) Shares of Series A Preferred Stock shall not be redeemable prior to September 28, 2010, except to preserve the status of
the Company as a qualified real estate investment trust (“REIT”) for United States federal income tax purposes. 
  
 (b) On or after September 28, 2010, the Company, at its option upon not less than 30 nor more than 60 days’ written notice, may redeem the Series A
Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends (whether or not declared) thereon to and including the date fixed for redemption,
without interest, to the extent the Company has funds legally available therefor. If fewer than all of the outstanding shares of Series A Preferred Stock are to be redeemed, the shares of Series A Preferred Stock to be redeemed shall be redeemed pro
rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method determined by the Company. Holders of Series A Preferred Stock to be redeemed shall surrender such Series A Preferred Stock at the place
designated in such notice and shall be entitled to the redemption price of $25.00 per share and any accrued and unpaid dividends payable upon such redemption following such surrender. If (i) notice of redemption of any shares of Series A Preferred
Stock has been given, (ii) the funds necessary for such redemption have been set aside by the Company in trust for the benefit of the holders of any shares of Series A Preferred Stock so called for redemption and (iii) irrevocable instructions have
been given to pay the redemption price and all accrued and unpaid dividends, then from and after the redemption date dividends shall cease to accrue on such shares of Series A Preferred Stock, such shares of Series A Preferred Stock shall no longer
be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price plus any accrued and unpaid dividends payable upon such redemption, without interest. So long as no dividends are in
arrears, nothing herein shall prevent or restrict the Company’s right or ability to purchase, from time to time either at a public or a private sale, all or any part of the Series A Preferred Stock at such price or prices as the Company may
determine, subject to the provisions of applicable law, including the repurchase of shares of Series A Preferred Stock in open-market transactions duly authorized by the Board of Directors. 
  
 (c) In the event of any redemption of the Series A Preferred Stock in order
to preserve the status of the Company as a qualified REIT, such redemption shall be made in accordance with the terms and conditions set forth in this Section 5 of these Articles Supplementary. If the Company calls for redemption any shares of
Series A Preferred Stock pursuant to and in accordance with this Section 5(c), then, the redemption price for such shares will be an amount in cash equal to $25.00 per share together with all accrued and unpaid dividends to and including the date
fixed for redemption. 
  
 (d) Unless full cumulative dividends on
all Series A Preferred Stock shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the 

  

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payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period, no Series A Preferred Stock shall be
redeemed unless all outstanding shares of Series A Preferred Stock are simultaneously redeemed and the Company shall not purchase or otherwise acquire directly or indirectly any shares of Series A Preferred Stock or any class or series of capital
stock of the Company ranking, as to dividends or upon liquidation, on a parity with or junior to the Series A Preferred Stock (except by exchange for shares of capital stock of the Company ranking, as to dividends and upon liquidation, junior to the
Series A Preferred Stock); provided, however, that the foregoing shall not prevent the purchase of Series A Preferred Stock by the Company in accordance with the terms of Section 5(c) hereof or Article VII of the Charter or otherwise
in order to ensure that the Company remains qualified as a REIT for United States federal income tax purposes or the purchase or acquisition of Series A Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding shares of Series A Preferred Stock. 
  
 (e) Notice
of redemption shall be mailed by the Company, postage prepaid, as of a date set by the Company not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the shares of Series A Preferred
Stock to be redeemed at their respective addresses as they appear on the share transfer records of the transfer agent of the Company. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the sufficiency of
notice or validity of the proceedings for the redemption of any Series A Preferred Stock except as to a holder to whom notice was defective or not given. A redemption notice which has been mailed in the manner provided herein shall be conclusively
presumed to have been duly given on the date mailed whether or not the holder received the redemption notice. Each notice shall state (i) the redemption date; (ii) the redemption price and accrued and unpaid dividends payable on the redemption date;
(iii) the number of shares of Series A Preferred Stock to be redeemed; (iv) the place or places where the shares of Series A Preferred Stock are to be surrendered for payment of the redemption price and accrued and unpaid dividends payable on the
redemption date; and (v) that dividends on the Series A Preferred Stock to be redeemed shall cease to accrue on such redemption date. If fewer than all of the shares of Series A Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series A Preferred Stock held by such holder to be redeemed. 
  
 (f) If a redemption date falls after a Dividend Record Date and on or prior to the corresponding Dividend Payment Date, each holder of Series A Preferred
Stock at the close of business of such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares on or prior to such Dividend Payment Date,
and each holder of Series A Preferred Stock that surrenders its shares on such redemption date will be entitled to the dividends accruing after the end of the Dividend Period to which such Dividend Payment Date relates up to an including the
redemption date. Except as provided herein, the Company shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Stock for which a notice of redemption has been given. 
  
 (g) All shares of the Series A Preferred Stock redeemed or repurchased
pursuant to this Section 5 shall be retired and shall be restored to the status of authorized but unissued shares of Preferred Stock, without designation as to series or class. 
  

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 (h) The Series A Preferred Stock shall have no stated maturity and shall not be subject to any sinking
fund or mandatory redemption. 
  
 Section 6. Voting
Rights. 
  
 (a) Holders of the Series A Preferred Stock shall
not have any voting rights, except as provided by applicable law and as set forth in this Section 6. 
  
 (b) Whenever dividends on any shares of Series A Preferred Stock shall be in arrears for six or more consecutive or non-consecutive quarterly periods (a
“Preferred Dividend Default”), the holders of such Series A Preferred Stock (voting as a single class with all other classes or series of parity preferred stock of the Company upon which like voting rights have been conferred and are
exercisable (“Parity Preferred”)) shall be entitled to vote for the election of a total of two additional directors of the Company (the “Preferred Directors”) at the next annual meeting of stockholders and at each subsequent
meeting until all dividends accumulated on such Series A Preferred Stock and Parity Preferred for the past dividend periods and the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set
aside for payment. In such case, the entire Board of Directors will be increased by two directors. If and when all accumulated dividends shall have been paid on such Series A Preferred Stock and all classes or series of Parity Preferred, the right
of the holders of Series A Preferred Stock and the Parity Preferred to elect such additional two directors shall immediately cease (subject to revesting in the event of each and every Preferred Dividend Default), and the term of office of each
Preferred Director so elected shall terminate and the entire Board of Directors shall be reduced accordingly. So long as a Preferred Dividend Default shall continue, any vacancy in the office of a Preferred Director may be filled by written consent
of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding Series A Preferred Stock when they have the voting rights described above (voting as a single class with
all other classes or series of Parity Preferred). Each of the Preferred Directors shall be entitled to one vote on any matter. 
  
 (c) So long as any shares of Series A Preferred Stock remain outstanding, the affirmative vote or consent of the holders of two-thirds of the shares of
Series A Preferred Stock and each other class or series of Parity Preferred, outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting as a single class) will be required to: (i) authorize, create or issue, or
increase the authorized or issued amount of, any class or series of capital stock ranking senior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding-up of the
affairs of the Company or reclassify any authorized shares of capital stock of the Company into such capital stock, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such capital stock;
or (ii) amend, alter or repeal our Charter, whether by merger, consolidation or otherwise (an “Event”) in a manner that materially and adversely affects the rights of the holders of shares of Series A Preferred Stock; provided
however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series A Preferred Stock remains outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence of an
Event, the Company may not be the surviving entity, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series A Preferred Stock, and in such case
such holders shall not 

  

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have any voting rights with respect to the occurrence of any of the Events set forth in (ii) above. Holders of shares of Series A Preferred Stock shall not
be entitled to vote with respect to (A) any increase in the total number of authorized shares of Common Stock or Preferred Stock of the Company, or (B) any increase in the amount of the authorized Series A Preferred Stock or the creation or issuance
of any other class or series of capital stock, or (C) any increase in the number of authorized shares of Series A Preferred Stock or any other class or series of capital stock, in each case referred to in clause (A) or (B) above ranking on a parity
with or junior to the Series A Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up. Except as set forth herein, holders of the Series A Preferred Stock shall not have
any voting rights with respect to, and the consent of the holders of the Series A Preferred Stock shall not be required for, the taking of any corporate action, including an Event, regardless of the effect that such corporate action or Event may
have upon the powers, preferences, voting power or other rights or privileges of the Series A Preferred Stock. 
  
 (d) The foregoing voting provisions of this Section 6 shall not apply if, at or prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding shares of Series A Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such
redemption. 
  
 (e) In any matter in which the Series A Preferred
Stock may vote (as expressly provided herein or as may be required by law), each share of Series A Preferred Stock shall be entitled to one vote per $25.00 of liquidation preference. 
  
 Section 7. Conversion. 
  
 The shares of Series A Preferred Stock shall not be convertible into or exchangeable for any other property or securities of
the Company or any other entity. 
  
 Section 8.
Ranking. 
  
 In respect of rights to the payment of
dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the affairs of the Company, the Series A Preferred Stock shall rank (i) senior to all classes or series of the Company’s Common Stock and to
any other class or series of capital stock of the Company other than any class or series referred to in clauses (ii) and (iii) of this sentence, (ii) on a parity with all equity securities issued by the Company in the future the terms of which
specifically provide that such equity securities rank on a parity with the Series A Preferred Stock as to the payment of dividends and the distribution of assets in the event of any liquidation, dissolution or winding up of the Company, and (iii)
junior to all equity securities issued by the Company in the future the terms of which specifically provide that such equity securities rank senior to the Series A Preferred Stock as to the payment of dividends and the distribution of assets in the
event of any liquidation, dissolution or winding up of the Company. For avoidance of doubt, debt securities of the Company which are convertible into or exchangeable for shares of capital stock of the Company shall not constitute a class or series
of capital stock of the Company. 
  

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 Section 9. Restrictions on Transfer, Acquisition and Redemption of Shares. 
  
 The Series A Preferred Stock is governed by and issued subject to all of the
limitations, terms and conditions of the Company’s Charter, including but not limited to the terms and conditions (including exceptions and exemptions) of Article VII of the Charter. The foregoing sentence shall not be construed to limit to the
Series A Preferred Stock the applicability of any other term or provision of the Charter. In addition to the legend contemplated by Article VII, Section 7.2.9 of the Charter, each certificate for Series A Preferred Stock shall bear substantially the
following legend: 
  
 “The Corporation will
furnish to any stockholder, on request and without charge, a full statement of the information required by Section 2-211(b) of the Maryland General Corporation Law with respect to the designations and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemptions of the stock of each class which the Corporation has authority to issue and, if the Corporation is authorized
to issue any preferred or special class in series, (i) the difference in the relative rights and preferences between the shares of each series to the extent set, and (ii) the authority of the Board of Directors to set such rights and preferences of
subsequent series and classes. The foregoing summary does not purport to be complete and is subject to and qualified in its entirety by reference to the charter of the Corporation (the “Charter”), a copy of which will be sent without
charge to each stockholder who so requests. Such request must be made to the Secretary of the Corporation at its principal office or to the Transfer Agent.” 
  
 Section 10. Shares of Stock To Be Retired. 
  
 All shares of Series A Preferred Stock which shall have been issued and reacquired in any manner by the Company shall be
restored to the status of authorized but unissued shares of Preferred Stock of the Company, without designation as to class or series. 
  
 Section 11. Record Holders. 
  
 The Company and the Transfer Agent may deem and treat the record holder of any Series A Preferred Stock as the true and lawful owner thereof for all
purposes, and neither the Company nor the Transfer Agent shall be affected by any notice to the contrary. 
  
 Section 12. Sinking Fund. 
  
 The Series A Preferred Stock shall not be entitled to the benefits of any retirement or sinking fund. 
  
 Section 13. Exclusion of Other Rights. 
  
 The Series A Preferred Stock shall not have any preferences or other rights,
voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than expressly set forth in the Charter and these Articles Supplementary. 
  

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 Section 14. Headings of Subdivisions. 
  
 The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions hereof. 
  
 Section 15. Severability of Provisions. 
  
 If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock set forth in the
Charter and these Articles Supplementary are invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions,
qualifications or terms or conditions of redemption of Series A Preferred Stock set forth in the Charter which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect
and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock herein set forth shall be deemed dependent upon
any other provision thereof unless so expressed therein. 
  
 Section 16. No Preemptive Rights. 
  
 No
holder of Series A Preferred Stock shall be entitled to any preemptive rights to subscribe for or acquire any unissued shares of capital stock of the Company (whether now or hereafter authorized) or securities of the Company convertible into or
carrying a right to subscribe to or acquire shares of capital stock of the Company. 
  

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 IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to be signed in its name and on
its behalf by its President and Chief Executive Officer and attested to by its Secretary on this 26th day of September, 2005. 
  

	
	 HIGHLAND HOSPITALITY CORPORATION

	
	/S/    JAMES L.
FRANCIS        
	 James L. Francis
 President and Chief Executive Officer

  

	
	 ATTEST:

	
	/S/    TRACY M.J.
COLDEN        
	 Tracy M.J. Colden
 Secretary

  
 THE UNDERSIGNED,
President and Chief Executive Officer of Highland Hospitality Corporation, who executed on behalf of the Company the foregoing Articles Supplementary which this certificate is made a part, hereby acknowledges in the name and on behalf of said
Company the foregoing Articles Supplementary to be the duly authorized act of said Company and hereby certifies to the best of his knowledge, information and belief that the matters and facts set forth herein with respect to the authorization and
approval thereof are true in all material respects under the penalties of perjury. 
  

	
	
	/s/    JAMES L. FRANCIS        
	James L. Francis
	President and Chief Executive OfficerEXHIBIT 4.2

 Exhibit 4.2 
  

					
	 7.875% SERIES A
 CUMULATIVE REDEEMABLE
 PREFERRED STOCK
	  	[GRAPHIC OMITTED
HIGHLAND HOSPITALITY CORPORATION LOGO]	  	 SEE REVERSE FOR IMPORTANT NOTICE ON TRANSFER
 RESTRICTIONS AND OTHER INFORMATION

	  	 	  	  
 CUSIP 430141 20 0

  
 THIS CERTIFICATE IS
TRANSFERABLE IN THE STATES OF NEW YORK AND NORTH CAROLINA 
 HIGHLAND HOSPITALITY CORPORATION 
 A CORPORATION FORMED UNDER THE LAWS OF THE STATE OF MARYLAND 
  
 THIS CERTIFIES THAT 
  
 is the owner of 
  
 FULLY PAID AND
NONASSESSABLE SHARES OF 7.875% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK, $.01 PAR VALUE PER SHARE 
  

	
	-------------------------------------------------------------------HIGHLAND HOSPITALITY CORPORATION-------------------------------------------------------------------

  
 (the “Corporation”)
transferable on the books of the Corporation by the holder hereof in person or by its duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby are issued and shall be held
subject to all of the provisions of the charter and the bylaws of the Corporation and any amendments thereto. 
  
 This certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar. 
  
 IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed on its behalf by its duly authorized officers. 
  
 the facsimile signatures of the duly authorized officers of the Corporation. 
  
 Dated: 
  

					
	[Facsimile signature of the duly authorized officer of the Corporation]	 	 	  	[Facsimile signature of the duly authorized officer of the Corporation]
	SECRETARY	 	[Seal of the
Company]	  	 
	 	 	 	  	PRESIDENT AND CHIEF EXECUTIVE OFFICER

  

			
	COUNTERSIGNED AND REGISTERED:
	WACHOVIA BANK, N.A.
		
	 BY:
	 	 
	 	 	TRANSFER AGENT AND REGISTRAR
		
	 	 	AUTHORIZED SIGNATURE

 Exhibit 4.2 
  

IMPORTANT NOTICE 
  
 The Corporation will furnish to any stockholder, on request and without charge, a full statement of the information required by Section 2-211(b) of the
Maryland General Corporation Law with respect to the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of
redemption of the stock of each class which the Corporation has authority to issue and, if the Corporation is authorized to issue any preferred or special class in series, (i) the differences in the relative rights and preferences between the shares
of each series to the extent set, and (ii) the authority of the Board of Directors to set such rights and preferences of subsequent series. The foregoing summary does not purport to be complete and is subject to and qualified in its entirety by
reference to the charter of the Corporation (the “Charter”), a copy of which will be sent without charge to each stockholder who so requests. Such request must be made to the Secretary of the Corporation at its principal office or to the
Transfer Agent. 
  
 The shares represented by this certificate are
subject to restrictions on Beneficial and Constructive Ownership and Transfer. Subject to certain further restrictions and except as expressly provided in the Corporation’s Charter, (i) no Person may Beneficially or Constructively Own shares of
the Corporation’s Common Stock in excess of nine and nine-tenths percent (9.9%) of the outstanding shares of Common Stock of the Corporation unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable);
(ii) no Person may Beneficially or Constructively Own shares of Capital Stock of the Corporation in excess of nine and nine-tenths percent (9.9%) of the value of the total outstanding shares of Capital Stock of the Corporation, unless such Person is
an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (iii) no Person may Beneficially or Constructively Own Capital Stock that would result in the Corporation being “closely held” under Section 856(h) of the
Internal Revenue Code of 1986, as amended (the “Code”) or otherwise cause the Corporation to fail to qualify as a REIT; (iv) no Person may Beneficially Own Capital Stock that would result in the Capital Stock of the Corporation being
beneficially owned by fewer than one hundred (100) Persons (determined without reference to any rules of attribution) and (v) no person may Constructively Own shares of Capital Stock that would cause the Corporation to Constructively Own ten percent
(10%) or more of the ownership interests in a tenant of the Corporation’s real property, with the meaning of Section 856(d)(2)(B) of the Code. Any Person who Beneficially or Constructively Owns or attempts to Beneficially or Constructively Own
shares of Capital Stock which causes or will cause a Person to Beneficially or Constructively Own shares of Capital Stock in excess or in violation of the above limitations must immediately notify the Corporation. If any of the restrictions on
transfer or ownership are violated, the shares of Capital Stock represented hereby will be automatically transferred to a Trustee of a Charitable Trust for the benefit of one or more Charitable Beneficiaries. In addition, upon the occurrence of
certain events, attempted Transfers in violation of the restrictions described above may be void ab initio. All capitalized terms in this legend have the meanings defined in the Charter of the Corporation, as the same may be amended from time
to time, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Capital Stock of the Corporation on request and without charge. 
  
 KEEP THIS CERTIFICATE IN A SAFE PLACE, IF IT IS LOST, STOLEN, OR DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION
TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE. 
  
 The following
abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations: 
  

									
	 TEN COM
	 	–as tenants in common	 	        UNIF GIFT MIN ACT-	 	_________________Custodian_________________
	 TEN ENT
	 	–as tenants by the entireties	 	                            (Custodian)	  	    (Minor)
	 JT TEN
	 	–as joint tenants with right of	 	under Uniform Gifts to Minors Act of	  	 
	 	 	survivorship and not as tenants in common	 	 ______________________________
 (State)
	  	 

  
 Additional
abbreviations may also be used though not in the above list. 
  
 FOR VALUE RECEIVED,
                                        
                                 HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO 

 

					
	PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE	  	 	 	 
			
	 	  	 	 	 
	
	 
	PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE
	
	 
		
	 	 	shares of
	Preferred Stock of the Corporation represented by this Certificate and do hereby irrevocably constitute and appoint  	 	 
	 	 	attorney to transfer
	the said shares of Preferred Stock on the books of the Corporation, with full power of substitution in the premises.

  
 Dated
                         
  

					
	 	 	                                      
                                        
                                       
                                        
                       
	 	 	NOTICE: 	 	THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.

  

	
	Signature(s) Guaranteed
	
	  
	THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
	STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
	AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

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