Attached files
Exhibit
3.1
PACIFIC
OFFICE PROPERTIES TRUST, INC.
ARTICLES
OF AMENDMENT AND RESTATEMENT
FIRST: Pacific Office
Properties Trust, Inc., a Maryland corporation (the “Corporation”), desires to
amend and restate its charter as currently in effect and as hereinafter
amended.
SECOND: The following
provisions are all the provisions of the charter currently in effect and as
hereinafter amended:
ARTICLE
I
NAME
The name
of the corporation (the “Corporation”) is:
Pacific
Office Properties Trust, Inc.
ARTICLE
II
PURPOSES
The
purpose for which the Corporation is formed is to engage in any lawful business
or other activity (including, without limitation or obligation, engaging in
business as a REIT) for which corporations may be organized under the general
laws of the State of Maryland as now or hereafter in force. For purposes of this
charter of the Corporation (as amended from time to time, the “Charter”), the term “REIT” shall mean a real estate
investment trust under Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended from time to time, or any successor statute (the “Code”).
ARTICLE
III
PRINCIPAL
OFFICE IN MARYLAND
The
address of the principal office of the Corporation in Maryland is c/o CSC
Lawyers Incorporating Service Company, whose post office address is 7 St. Paul
Street, Suite 1660, Baltimore, Maryland 21202.
ARTICLE
IV
RESIDENT
AGENT
The name
of the resident agent of the Corporation in the State of Maryland is CSC Lawyers
Incorporating Service Company, whose post office address is 7 St. Paul Street,
Suite 1660, Baltimore, Maryland 21202. The resident agent is a Maryland
corporation.
ARTICLE
V
PROVISIONS
FOR DEFINING, LIMITING
AND
REGULATING CERTAIN POWERS OF THE
CORPORATION
AND OF THE STOCKHOLDERS AND DIRECTORS
Section 5.1Number of
Directors. The
business and affairs of the Corporation shall be managed under the direction of
the Board of Directors. The number of directors of the Corporation is currently
seven (7), which number may be increased or decreased pursuant to the bylaws of
the Corporation (the “Bylaws”) but shall never be
less than the minimum number required by the Maryland General Corporation Law,
as amended from time to time (the “MGCL”) and shall never be less
than four (4) or more than nine (9) members.
The
directors of the Corporation shall be divided into three classes, Class I,
Class II and Class III, as nearly equal in number as the then total
number of directors constituting the entire board of directors permits with the
term of office of one class expiring each year. At each annual meeting of
stockholders, the successors to the class of directors whose term shall then
expire shall be elected to hold office for a term expiring at the third
succeeding annual meeting of stockholders. The Corporation elects that, except
as may be provided by the Board of Directors in setting the terms of any class
or series of stock, any vacancies in the Board of Directors for any reason,
including any directorships resulting from any increase in the number of
directors, may be filled only by the Board of Directors, acting by a majority of
the directors then in office, although less than a quorum, and any directors so
chosen shall hold office until the next election of the class for which such
directors shall have been chosen and until their successors shall be elected and
qualify. If the number of directors is changed, any increase or decrease in the
number of directors shall be apportioned among the classes so as to maintain all
classes as equal in number as possible.
The names
and classes of the persons who are to serve as directors until their successors
are elected and qualify are:
|
Name
|
Class
|
|
|
Robert
L. Denton
|
Class
I
|
|
|
Thomas
R. Hislop
|
Class
I
|
|
|
Clay
W. Hamlin
|
Class
II
|
|
|
Paul
M. Higbee
|
Class
II
|
|
|
Michael
W. Brennan
|
Class
III
|
|
|
Jay
H. Shidler
|
Class
III
|
Section 5.2Informal
Action by Stockholders. Any action required or
permitted to be taken at a meeting of stockholders may be taken without a
meeting if there is filed with the records of the stockholders’ meetings a
consent in writing or by electronic transmission which sets forth the action and
is given by stockholders entitled to cast not less than the minimum number of
votes that would be necessary to authorize or take the action at a stockholders
meeting. The Corporation shall give notice of any such action to each holder of
each class of stock that is entitled to vote on such matter not later than
10 days after the effective time of the action.
Section 5.3Other
Matters.
Notwithstanding any provision of law permitting or requiring any action to be
taken or approved by the affirmative vote of the holders of shares entitled to
cast a greater number of votes, any such action shall be effective and valid if
taken or approved by the affirmative vote of holders of shares entitled to cast
a majority of all the votes entitled to be cast on the matter.
Section 5.4Authorization
by Board of Stock Issuance. The Board of Directors may
authorize the issuance from time to time of shares of stock of the Corporation
of any class or series, whether now or hereafter authorized, or securities or
rights convertible into shares of its stock of any class or series, whether now
or hereafter authorized, for such consideration as the Board of Directors may
deem advisable (or without consideration in the case of a stock split or stock
dividend), subject to such restrictions or limitations, if any, as may be set
forth in the Charter or the Bylaws.
Section 5.5No
Preemptive Rights. Except as may be provided by
the Board of Directors in setting the terms of classified or reclassified shares
of stock pursuant to Section 6.4 or as may
otherwise be provided by contract approved by the Board of Directors, 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 stock of the
Corporation or any other security of the Corporation which it may issue or
sell.
Section 5.6Indemnification.
5.6.1
Indemnification. The
Corporation: (1) shall indemnify each of its current and former Directors
and officers, whether serving the Corporation or at the request of the
Corporation serving any other entity, including, without limitation, any
subsidiary or other affiliate of the Corporation, including the advancement of
expenses (without requiring a preliminary determination of the ultimate
entitlement to indemnification), unless it is established under the MGCL that
(i) his act or omission was material to the matter giving rise to the
proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty, (ii) he actually received an improper personal
benefit in money, property or services or (iii) in the case of a criminal
proceeding, he had reasonable cause to believe that his act or omission was
unlawful (but in the event any amendment to the MGCL permits the Corporation to
provide broader indemnification rights than are set forth herein to its officers
and directors, the Corporation shall provide such rights to the fullest extent
required or permitted by the MGCL as so amended), and to the fullest extent
permitted by applicable law; and (2) may indemnify (including the
advancement of expenses without requiring a preliminary determination of the
ultimate entitlement to indemnification) current and former employees and agents
of the Corporation as may be authorized by the Board of Directors in the
specific case and permitted by applicable law or the Bylaws of the Corporation;
provided, however, that, except
as provided in
Section 5.6.2 with respect to proceedings to enforce rights to
indemnification or in a contract approved by the Board of Directors pursuant to
a resolution approved by a majority of Directors then in office, the Corporation
shall not indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee unless such proceeding (or part thereof)
was authorized by the Board of Directors pursuant to a resolution approved by a
majority of the Directors then in office.
5.6.2
Procedure. If a
claim under
Section 5.6.1 is not paid in full by the Corporation within sixty
(60) days after a written claim has been received by the Corporation,
except in the case of a claim for an advancement of expenses, in which case the
applicable period shall be thirty (30) days, the indemnitee may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim. If successful in whole or in part in any such suit, the indemnitee
shall also be entitled to be reimbursed the expense of prosecuting or defending
such suit against the Corporation. It shall be a defense to any action for
advancement of expenses that the Corporation has not received both: (1) an
undertaking as required by law to repay such advances in the event it shall
ultimately be determined that the standard of conduct for indemnification has
not been met; and (2) a written affirmation by the indemnitee or on the
indemnitee’s behalf of his or her good faith belief that the standard of conduct
necessary for indemnification by the Corporation has been met. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the MGCL, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by an
indemnitee to whom the Corporation has not agreed to advance expenses, be a
defense to such suit. In any suit brought by the indemnitee to enforce any right
to indemnification or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this Section 5.6 or
otherwise, shall be on the Corporation.
5.6.3
Non-Exclusivity. The
rights to indemnification and to the advancement of expenses conferred in
this Section 5.6
shall not be exclusive of any other right that any person may have or hereafter
acquire under any statute, this Charter, the Bylaws of the Corporation, any
contract, any agreement, any vote of stockholders or disinterested Directors, or
otherwise.
5.6.4
Insurance. The
Corporation may maintain insurance, at its expense, to protect itself or any
Director, officer, employee or agent of the Corporation or another corporation,
partnership, limited liability company, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the MGCL.
5.6.5
Miscellaneous.
The Corporation shall not be liable for any payment under this Section 5.6 in
connection with a claim made by any indemnitee to the extent such indemnitee has
otherwise actually and unconditionally received payment under any insurance
policy, agreement, or otherwise, of the amounts otherwise indemnifiable
hereunder. The rights to indemnification and to the advancement of expenses
conferred in
Sections 5.6.1 and
5.6.2 shall be contract rights, such rights shall vest immediately upon
election of a Director or officer and such rights shall continue as to an
indemnitee who has ceased to be a Director or officer of the Corporation and
shall inure to the benefit of the indemnitee’s heirs, executors and
administrators. Any repeal or modification of all or any portion of this Section 5.6 shall not in any
way diminish any rights of any person to indemnification or advancement of
expenses of or the obligations of the Corporation arising hereunder with respect
to events occurring, or claims made, while this Section 5.6 is in
force.
Section 5.7Determinations
by Board. The
determination as to any of the following matters, made in good faith by or
pursuant to the direction of the Board of Directors consistent with the Charter,
shall be final and conclusive and shall be binding upon the Corporation and
every holder of shares of its stock: (i) the amount of the net income of
the Corporation for any period and the amount of assets at any time legally
available for the payment of dividends, redemption of its stock or the payment
of other distributions on its stock; (ii) the amount of paid-in surplus,
net assets, other surplus, annual or other cash flow, funds from operations, net
profit, net assets in excess of capital, undivided profits or excess of profits
over losses on sales of assets; (iii) the amount, purpose, time of creation,
increase or decrease, alteration or cancellation of any reserves or charges and
the propriety thereof (whether or not any obligation or liability for which such
reserves or charges shall have been created shall have been paid or discharged);
(iv) any interpretation of the terms, preferences, conversion or other
rights, voting powers or rights, restrictions, limitations as to dividends or
other distributions, qualifications or terms or conditions of redemption of any
class or series of stock of the Corporation; (v) the fair value, or any
sale, bid or asked price to be applied in determining the fair value, of any
asset owned or held by the Corporation or of any shares of stock of the
Corporation; (vi) the number of shares of stock of any class of the
Corporation; (vii) any matter relating to the acquisition, holding and
disposition of any assets by the Corporation; or (viii) any other matter
relating to the business and affairs of the Corporation or required or permitted
by applicable law, the Charter or Bylaws or otherwise to be determined by the
Board of Directors.
Section 5.8REIT
Qualification. So
long as the Corporation has elected to qualify for federal income tax treatment
as a REIT, the Board of Directors shall use commercially reasonable efforts to
take such actions as are necessary or appropriate to preserve the status of the
Corporation as a REIT; provided, however, if the Board
of Directors determines that it is no longer in the best interests of the
Corporation to continue to be qualified as a REIT, the Board of Directors may
revoke or otherwise terminate the Corporation’s REIT election pursuant to
Section 856(g) of the Code. The Board of Directors also may determine that
compliance with any restriction or limitation on stock ownership and transfers
set forth in
Article VII is no longer required for REIT
qualification.
Section 5.9Removal
of Directors.
Subject to the rights of holders of one or more classes or series of stock of
the Corporation to elect or remove one or more directors, any director may be
removed from office at any time, but only for Cause, and then only by the
affirmative vote of at least a majority of the votes entitled to be cast by the
stockholders generally in the election of directors. For the purpose of this
paragraph, “Cause” shall
mean, with respect to any particular director, conviction of a felony involving
a crime of moral turpitude or a final judgment of a court of competent
jurisdiction holding that such director caused demonstrable, material financial
harm to the Corporation through bad faith or active and deliberate
dishonesty.
Section 5.10Rights of
Objecting Stockholders. Holders of shares of stock
of the Corporation shall not be entitled to exercise any rights of an objecting
stockholder provided for under Title 3, Subtitle 2 of the MGCL unless the Board
of Directors, upon the affirmative vote of a majority of the entire Board of
Directors, shall determine that such rights shall apply, with respect to all or
any classes or series of stock, to a particular transaction or all transactions
occurring after the date of such determination in connection with which holders
of such shares of stock of the Corporation would otherwise be entitled to
exercise such rights.
Section 5.11Advisor
Agreements.
Subject to such approval of stockholders and other conditions, if any, as may be
required by any applicable statute, rule or regulation, the Board of Directors
may authorize the execution and performance by the Corporation of one or more
agreements with any person, corporation, association, company, trust,
partnership or other organization (including, without limitation, any affiliate
of the Corporation and/or any of its directors) whereby, subject to the
supervision and control of the Board of Directors, any such other person,
corporation, association, company, trust, partnership or other organization
(including, without limitation, any affiliate of the Corporation and/or its
directors) shall render or make available to the Corporation managerial,
investment, property management, leasing, regulatory compliance, advisory and/or
related services, office space and other services and facilities (including, if
deemed advisable by the Board of Directors, the management or supervision of the
investments of the Corporation) upon such terms and conditions as may be
provided in such agreement or agreements (including, if deemed fair and
equitable by the Board of Directors, the compensation payable thereunder by the
Corporation).
Section 5.12Special
Resolutions. The
Board of Directors may designate any of its resolutions to be “Special Resolutions”.
Resolutions so designated may not be modified or revoked by the Board of
Directors subsequent to the Initial Date (as defined in Article VII) unless any such
modification or revocation is approved by the affirmative vote of at least
eighty percent (80%) of the Whole Board. For the purposes of the Charter, the
term “Whole Board” shall
mean the total number of Directors that the Corporation would have if there were
no vacancies on the Board of Directors at the time any such resolution is
presented to the Board of Directors for modification or revocation.
ARTICLE
VI
STOCK
Section 6.1Authorized
Shares. The
Corporation has authority to issue 300,200,000 shares of stock, consisting of
200,200,000 shares of Common Stock, $.0001 par value per share (“Common Stock”), 200,000,000 of
which shall be shares of Common Stock (“Listed Common Stock”) and
200,000 of which will be shares of Class B Common Stock, and 100,000,000
shares of Preferred Stock, $.0001 par value per share (“Preferred Stock”). The
aggregate par value of all authorized shares of stock having par value is
$30,200. If shares of one class of stock are classified or reclassified into
shares of another class of stock pursuant to this Article VI, the number
of authorized shares of the former class shall be automatically decreased and
the number of shares of the latter class shall be automatically increased, in
each case by the number of shares so classified or reclassified, so that the
aggregate number of shares of stock of all classes that the Corporation has
authority to issue shall not be more than the total number of shares of stock
set forth in the first sentence of this paragraph. The Board of Directors, with
the approval of a majority of the entire Board of Directors, and without any
action by the stockholders of the Corporation, may amend the Charter from time
to time to increase or decrease the aggregate number of shares of stock or the
number of shares of stock of any class or series that the Corporation has
authority to issue.
Section 6.2Common
Stock. In the
event of liquidation of the Corporation, the Class B Common Stock shall be
entitled to no portion of the Corporation’s assets that are allocated to holders
of Common Stock, all of which shall be distributed to the holders of Listed
Common Stock. Except with respect to the preference of liquidation accorded to
the Listed Common Stock in the immediately preceding sentence, Listed Common
Stock and Class B Common Stock shall be identical in all respects. Subject
to the provisions of
Article VII and to any preferences of any class or series of stock
hereafter classified or reclassified, each share of Common Stock shall entitle
the holder thereof to one vote on all matters to be voted upon by the
stockholders. The Board of Directors may reclassify any unissued shares of
Common Stock from time to time in one or more classes or series of
stock.
Section 6.3Preferred
Stock. The Board
of Directors may classify any unissued shares of Preferred Stock and reclassify
any previously classified but unissued shares of Preferred Stock of any series
from time to time in one or more classes or series of stock by setting or
changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
or terms or conditions of redemption of the stock.
Section 6.4Classified
or Reclassified Shares. Prior to issuance of
classified or reclassified shares of any class or series, the Board of Directors
by resolution shall: (i) designate that class or series to distinguish it from
all other classes and series of stock of the Corporation; (ii) specify the
number of shares to be included in the class or series; (iii) set or
change, subject to the provisions of Article VII and subject
to the express terms of any class or series of stock of the Corporation
outstanding at the time, the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of redemption for each class or series;
and (iv) cause the Corporation to file articles supplementary with the
State Department of Assessments and Taxation of Maryland (“SDAT”). Any of the terms of
any class or series of stock set or changed pursuant to clause (iii) of
this Section 6.4
may be made dependent upon facts or events ascertainable outside the Charter
(including determinations by the Board of Directors or other facts or events
within the control of the Corporation) and may vary among holders thereof,
provided that the manner in which such facts, events or variations shall operate
upon the terms of such class or series of stock is clearly and expressly set
forth in the articles supplementary filed with the SDAT.
Section 6.5Charter
and Bylaws. The
rights of all stockholders and the terms of all stock are subject to the
provisions of the Charter and the Bylaws.
ARTICLE
VII
RESTRICTION
ON TRANSFER AND OWNERSHIP OF SHARES
Section 7.1Definitions. For the purpose of this Article VII, the
following terms shall have the following meanings:
“Aggregate Stock Ownership
Limit” shall mean not more than 4.9% in economic value of the aggregate
of the outstanding shares of Capital Stock. The economic value of the
outstanding shares of Capital Stock shall be determined by the Board of
Directors in good faith, which determination shall be conclusive for all
purposes hereof.
“Beneficial Ownership” shall
mean ownership of Capital Stock by a Person, whether the interest in the shares
of Capital Stock is held directly or indirectly (including by a nominee), and
shall include interests that would be treated as owned through the application
of Section 544 of the Code, as modified by Section 856(h) of the Code. For
the avoidance of doubt, neither a central depository nor its nominee shall be
deemed to have Beneficial Ownership over Capital Stock that it holds for a
Beneficial Owner. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have
the correlative meanings.
“Business Day” shall mean any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which banking institutions in California are authorized or required by law,
regulation or executive order to close.
“Capital Stock” shall mean all
classes or series of stock of the Corporation, including, without limitation,
Common Stock and Preferred Stock.
“Charitable Beneficiary” shall
mean one or more beneficiaries of the Trust as determined pursuant to Section 7.3.6, provided
that each such organization must be described in Section 501(c)(3) of the Code
and contributions to each such organization must be eligible for deduction under
each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.
“Common Stock Ownership Limit”
shall mean not more than 4.9% (in economic value or in number of shares,
whichever is more restrictive) of the aggregate of the outstanding shares of
Common Stock of the Corporation. The number and economic value of outstanding
shares of Common Stock of the Corporation shall be determined by the Board of
Directors in good faith, which determination shall be conclusive for all
purposes hereof.
“Constructive Ownership” shall
mean ownership of Capital Stock by a Person, whether the interest in the shares
of Capital Stock is held directly or indirectly (including by a nominee), and
shall include interests that would be treated as owned through the application
of Section 318(a) of the Code, as modified by Section 856(d)(5) of the
Code. For the avoidance of doubt, neither a central depository nor its nominee
shall be deemed to have Constructive Ownership over Capital Stock that it holds
for a Constructive Owner. The terms “Constructive Owner,” “Constructively Owns” and
“Constructively Owned”
shall have the correlative meanings.
“Excepted Holder” shall mean
any of Jay H. Shidler, James Reynolds, Lawrence Taff, Matthew Root and James
Ingebritsen (including any entities controlled by such Persons) and any
individual stockholder of the Corporation for whom an exception from the
Aggregate Stock Ownership Limit and/or the Common Stock Ownership Limit is
granted pursuant to
Section 7.2.7.
“Excepted Holder Limit” shall
mean, provided that the affected Excepted Holder agrees to comply with the
requirements established by the Board of Directors pursuant to Section 7.2.7, the limit
established by the Board of Directors pursuant to (and subject to adjustment as
provided in)
Section 7.2.7, which limit may be expressed, in the discretion of
the Board of Directors, as one or more percentages and/or numbers of shares of
stock of the Corporation, and may apply with respect to one or more classes of
stock, or to all classes of stock in the aggregate.
“Initial Date” shall mean the
date on which the Reincorporation (as defined in the Master Formation and
Contribution Agreement) is consummated.
“Market Price” shall mean, on
any date, with respect to any class or series of outstanding shares of Capital
Stock, the Closing Price for such Capital Stock on such date. The “Closing Price” shall mean, on
any date, the last transaction price for such Capital Stock, or, in case no such
transaction takes place on such day, the average of the closing bid and asked
prices for such Capital Stock, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE Amex or, if such Capital Stock is not listed or
admitted to trading on the NYSE Amex, as reported in Nasdaq or NYSE or, if such
Capital Stock is not listed or admitted to trading on the NYSE Amex, Nasdaq or
NYSE, on the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which such
Capital Stock is listed or admitted to trading or, if such Capital 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 on the principal automated quotation
system that may then be in use or, if such Capital 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 such Capital Stock selected by
the Board of Directors or, in the event that no trading price is available for
such Capital Stock, the fair market value of the Capital Stock, as determined in
good faith by the Board of Directors.
“Master Formation and Contribution
Agreement” shall have the meaning given to such term in Article X of this
Charter.
“Nasdaq” shall mean any market
of the Nasdaq Stock Market LLC.
“NYSE” shall mean the New York
Stock Exchange.
“NYSE Amex” shall mean NYSE
Amex Equities (formerly known as the American Stock Exchange).
“Person” shall mean an
individual, corporation, partnership, estate, trust (including a trust qualified
under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust
permanently set aside for or to be used exclusively for the purposes described
in Section 642(c) of the Code, association, private foundation within the
meaning of Section 509(a) of the Code, joint stock company or other entity and
also includes a group as that term is used for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, and a group to which an
Excepted Holder Limit applies.
“Prohibited Owner” shall mean,
with respect to any purported Transfer, any Person who, but for the provisions
of Section 7.2.1,
would Beneficially Own or Constructively Own shares of Capital Stock, and if
appropriate in the context, shall also mean any Person who would have been the
record owner of the shares that the Prohibited Owner would have so
owned.
“Restriction Termination Date”
shall mean the first day after the Initial Date, if any, on which the Board of
Directors determines pursuant to Section 5.8 that it is
no longer in the best interests of the Corporation to attempt to, or continue
to, qualify as a REIT or that compliance with the restrictions and limitations
on Beneficial Ownership, Constructive Ownership and Transfers of shares of
Capital Stock set forth herein is no longer required in order for the
Corporation to qualify as a REIT.
“Transfer” shall mean any
issuance, sale, transfer, gift, assignment, devise or other disposition, as well
as any other event that causes any Person to acquire or change its level of
Beneficial Ownership or Constructive Ownership, or any agreement to take any
such action or cause any such event, of Capital Stock or the right to vote or
receive dividends on Capital Stock, including (i) the granting or exercise
of any option (or any disposition of any option), (ii) any disposition of
any securities or rights convertible into or exchangeable for Capital Stock or
any interest in Capital Stock or any exercise of any such conversion or exchange
right and (iii) Transfers of interests in other entities that result in changes
in Beneficial Ownership or Constructive Ownership of Capital Stock, in each
case, whether voluntary or involuntary, whether owned of record, Beneficially
Owned or Constructively Owned and whether by operation of law or otherwise. The
terms “Transferring” and
“Transferred” shall have
the correlative meanings.
“Trust” shall mean any trust
provided for in
Section 7.3.1.
“Trustee” shall mean the Person
unaffiliated with the Corporation and a Prohibited Owner that is appointed by
the Corporation to serve as trustee of the Trust.
Section 7.2
Capital
Stock.
7.2.1
Ownership
Limitations.
(a) Basic
Restrictions.
(i) During
the period commencing on the Initial Date and prior to the Restriction
Termination Date (1) no Person, other than an Excepted Holder, shall
Beneficially Own or Constructively Own shares of Capital Stock in excess of the
Aggregate Stock Ownership Limit, (2) no Person, other than an Excepted
Holder, shall Beneficially Own or Constructively Own shares of Common Stock in
excess of the Common Stock Ownership Limit and (3) no Excepted Holder shall
Beneficially Own or Constructively Own shares of Capital Stock in excess of the
Excepted Holder Limit for such Excepted Holder.
(ii) During
the period commencing on the Initial Date and prior to the Restriction
Termination Date, no Person shall Beneficially Own or Constructively Own shares
of Capital Stock to the extent that such Person’s Beneficial Ownership or
Constructive Ownership of Capital Stock would result in the Corporation being
“closely held” within the meaning of Section 856(h) of the Code (without regard
to whether the ownership interest is held during the last half of a taxable
year), or otherwise failing to qualify as a REIT (including, but not limited to,
Beneficial Ownership or Constructive Ownership that would result in the
Corporation owning (actually 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).
(iii) No
Person shall Transfer any Beneficial Ownership or Constructive Ownership of
shares of Capital Stock if, as a result of the Transfer, the Capital Stock would
be beneficially owned by less than 100 Persons (determined under the principles
of Section 856(a)(5) of the Code).
(b) Transfer in Trust. If
any Transfer of shares of Capital Stock (whether or not such Transfer is the
result of a transaction entered into through the facilities of the NYSE Amex or
any other national securities exchange or automated inter-dealer quotation
system) occurs which, if effective, would result in any Person Beneficially
Owning or Constructively Owning shares of Capital Stock in violation of any
provision of
Section 7.2.1(a),
(i) then
that number of shares of Capital Stock the Beneficial Ownership or Constructive
Ownership of which otherwise would cause such Person to violate Section 7.2.1(a)
(rounded to the nearest whole share) shall be automatically transferred to a
Trust for the benefit of a Charitable Beneficiary, as described in Section 7.3, effective
as of the close of business on the Business Day prior to the date of such
Transfer, and such Person shall acquire no rights in such shares;
or
(ii) if,
after giving effect to the provisions of Section 7.2.1(b)(iv),
the transfer to a Trust referenced in clause (i) of this sentence would not
be effective for any reason to prevent a violation of Section 7.2.1(a), then
the Transfer of that number of shares of Capital Stock that otherwise would
cause any Person to violate
Section 7.2.1(a) shall be void ab initio, and the
intended transferee shall acquire no rights in such shares of Capital
Stock.
(iii) In
determining which shares of Capital Stock are to be transferred to a Trust in
accordance with this
Section 7.2.1(b) and Section 7.3 hereof,
shares shall be so transferred to a Trust in such manner as minimizes the
aggregate value of the shares that are transferred to the Trust (except to the
extent that the Board of Directors determines that the shares to be transferred
to the Trust are those directly or indirectly held or Beneficially Owned or
Constructively Owned by a Person or Persons that caused or contributed to the
application of this
Section 7.2.1(b)), and to the extent not inconsistent therewith, on
a pro rata basis.
(iv) To
the extent that, upon a transfer of shares of Capital Stock pursuant to
this Section 7.2.1(b), a
violation of any provision of
Section 7.2.1(a) would nonetheless be continuing (for example where
the ownership of shares of Capital Stock by a single Trust would result in the
Capital Stock being Beneficially Owned by less than 100 persons), then shares of
Capital Stock shall be transferred to that number of Trusts, each having a
distinct Trustee and a Charitable Beneficiary or Beneficiaries that are distinct
from those of each other Trust, such that there is no violation of any provision
of
Section 7.2.1(a).
7.2.2
Remedies for
Breach. If the Board of Directors or any duly authorized committee
thereof shall at any time determine in good faith that a Transfer or other event
has taken place that results in a violation of any provision of Section 7.2.1 or that a
Person intends to acquire or has attempted to acquire Beneficial Ownership or
Constructive Ownership of any shares of Capital Stock in violation of any
provision of
Section 7.2.1 (whether or not such violation is intended), then the
Board of Directors or a committee thereof shall take such action as it deems
advisable to refuse to give effect to or to prevent such Transfer or other
event, including, without limitation, causing the Corporation to redeem shares,
refusing to give effect to such Transfer on the books of the Corporation or
instituting proceedings to enjoin such Transfer or other event; provided, however, that any
Transfer or attempted Transfer or other event in violation of Section 7.2.1 shall
automatically result in the transfer to the Trust described above, and, where
applicable, such Transfer (or other event) shall be void ab initio as provided
above irrespective of any action (or non-action) by the Board of Directors or a
committee thereof.
7.2.3
Notice of Restricted
Transfer. Any Person who acquires or attempts or intends to acquire
Beneficial Ownership or Constructive Ownership of shares of Capital Stock that
will or may violate any provision of Section 7.2.1(a) or any
Person who would have owned shares of Capital Stock that resulted in a transfer
to the Trust pursuant to the provisions of Section 7.2.1(b) shall
immediately give written notice to the Corporation of such event, or in the case
of such a proposed or attempted transaction, shall give at least fifteen
(15) days prior written notice, and, in either case, shall provide to the
Corporation such other information as the Corporation may request in order to
determine the effect, if any, of such Transfer on the Corporation’s status as a
REIT.
7.2.4
Owners Required To
Provide Information. From the Initial Date and prior to the Restriction
Termination Date:
(a) every
owner of more than two percent (2%) (or such other percentage as required by the
Code or the Treasury Regulations promulgated thereunder) of the outstanding
shares of Capital Stock, within thirty (30) days after the end of each
taxable year, shall give written notice to the Corporation stating the name and
address of such owner, the number of shares of Capital Stock Beneficially Owned
and Constructively Owned and a description of the manner in which such shares
are held. Each such owner shall provide to the Corporation such additional
information as the Corporation may request in order to determine the effect, if
any, of such Beneficial Ownership and Constructive Ownership on the
Corporation’s status as a REIT and to ensure compliance with the Aggregate Stock
Ownership Limit, the Common Stock Ownership Limit and the Excepted Holder Limit;
and
(b) each
Person who is a Beneficial Owner or Constructive Owner of Capital Stock and each
Person (including the stockholder of record) who is holding Capital Stock for a
Beneficial Owner or Constructive Owner shall provide to the Corporation such
information as the Corporation may request, in good faith, in order to determine
the Corporation’s status as a REIT and to comply with requirements of any taxing
authority or governmental authority or to determine such
compliance.
7.2.5
Remedies Not
Limited. Subject to
Section 5.7, nothing contained in this Section 7.2 shall limit the
authority of the Board of Directors to take such other action as it deems
necessary or advisable to protect the Corporation and the interests of its
stockholders in preserving the Corporation’s status as a REIT.
7.2.6
Ambiguity. In
the case of an ambiguity in the application of any of the provisions of
this
Section 7.2,
Section 7.3, or any definition contained in Section 7.1, the Board
of Directors shall have the power to determine the application of the provisions
of this Section 7.2
or Section 7.3 or
any such definition with respect to any situation based on the facts known to
it. In the event
Section 7.2 or
Section 7.3 requires an action by the Board of Directors and the
Charter fails to provide specific guidance with respect to such action, the
Board of Directors shall have the power to determine the action to be taken so
long as such action is not contrary to the provisions of Section 7.1, Section 7.2 or
Section 7.3.
7.2.7
Exceptions.
(a) Subject
to
Section 7.2.1(a)(ii), the Board of Directors, in its sole
discretion, may exempt (prospectively or retroactively) a Person from the
Aggregate Stock Ownership Limit and the Common Stock Ownership Limit, as the
case may be, if:
(i) the
Board of Directors obtains such representations and undertakings from such
Person as are reasonably necessary to ascertain that no individual’s Beneficial
Ownership or Constructive Ownership of such shares of Capital Stock will
violate
Section 7.2.1(a)(ii);
(ii) such
Person does not and represents that it will not own, actually or Constructively,
an interest in a tenant of the Corporation (or a tenant of any entity owned or
controlled by the Corporation) that would cause the Corporation to own, actually
or Constructively, more than a 9.9% interest (as set forth in
Section 856(d)(2)(B) of the Code) in such tenant and the Board of Directors
obtains such representations and undertakings from such Person as are reasonably
necessary to ascertain this fact (for this purpose, a tenant from whom the
Corporation (or an entity owned or controlled by the Corporation) derives (and
is expected to continue to derive) a sufficiently small amount of revenue such
that, in the opinion of the Board of Directors, rent from such tenant would not
adversely affect the Corporation’s ability to qualify as a REIT, shall not be
treated as a tenant of the Corporation); and
(iii) such
Person agrees that any violation or attempted violation of any such
representation or undertaking (or other action which is contrary to the
restrictions contained in
Sections 7.2.1 through 7.2.6) will result in such
shares of Capital Stock being automatically transferred to a Trust in accordance
with
Section 7.2.1(b) and
Section 7.3.
(b) The
Board of Directors shall establish or increase, as the case may be, an Excepted
Holder Limit for each Excepted Holder.
(c) Prior
to granting any exception pursuant to Section 7.2.7(a), the
Board of Directors may require a ruling from the Internal Revenue Service, or an
opinion of counsel, in either case in form and substance satisfactory to the
Board of Directors in its sole discretion, as it may deem necessary or advisable
in order to determine or ensure the Corporation’s status as a REIT.
Notwithstanding the receipt of any ruling or opinion, the Board of Directors may
impose such conditions or restrictions as it deems appropriate in connection
with granting such exception.
(d) Subject
to
Section 7.2.1(a)(ii), an underwriter which participates in a public
offering or a private placement of Capital Stock (or securities convertible into
or exchangeable for Capital Stock) may Beneficially Own or Constructively Own
shares of Capital Stock (or securities convertible into or exchangeable for
Capital Stock) in excess of the Aggregate Stock Ownership Limit, the Common
Stock Ownership Limit, or both such limits, but only to the extent necessary to
facilitate such public offering or private placement.
(e) The
Board of Directors may only reduce the Excepted Holder Limit for an Excepted
Holder: (1) with the written consent of such Excepted Holder at any time;
(2) after any Transfer by such Excepted Holder, by the percentage of the
outstanding shares of Capital Stock so transferred; or (3) pursuant to the
terms and conditions of any agreement or undertaking entered into with such
Excepted Holder in connection with the establishment of the Excepted Holder
Limit for that Excepted Holder. No Excepted Holder Limit shall be reduced to a
percentage or amount that is less than the Common Stock Ownership
Limit.
7.2.8
Increase in Aggregate
Stock Ownership and Common Stock Ownership Limits. Subject to Section 7.2.1(a)(ii),
the Board of Directors may from time to time increase the Common Stock Ownership
Limit and the Aggregate Stock Ownership Limit, and may decrease the Common Stock
Ownership Limit and the Aggregate Stock Ownership Limit prospective as to
subsequent holders; provided, however, that the
decreased Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit
will not be effective for any Person whose percentage ownership in Stock is in
excess of such decreased Common Stock Ownership Limit and/or Aggregate Stock
Ownership Limit until such time as such Person’s percentage ownership of Common
Stock and/or Capital Stock equals or falls below the decreased Common Stock
Ownership Limit and/or Aggregate Stock Ownership Limit, but any further
acquisition of Capital Stock in excess of such percentage ownership of Common
Stock and/or Capital Stock will be in violation of the Common Stock Ownership
Limit and/or Aggregate Stock Ownership Limit and, provided further, that the new
Common Stock Ownership Limit and/or Aggregate Stock Ownership Limit would not
allow five or fewer Persons to Beneficially Own more than 49.9% in value of the
outstanding Capital Stock.
7.2.9
Legend. Each
certificate for shares of Capital Stock shall bear substantially the following
legend:
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL
OWNERSHIP AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE, AMONG OTHERS,
OF THE CORPORATION’S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST
UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). SUBJECT TO
CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE
CORPORATION’S CHARTER, (I) NO PERSON MAY BENEFICIALLY, CONSTRUCTIVELY OR OF
RECORD OWN SHARES OF THE CORPORATION’S COMMON STOCK IN EXCESS OF 4.9% (IN
ECONOMIC VALUE OR NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) 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, CONSTRUCTIVELY OR OF RECORD OWN SHARES OF
CAPITAL STOCK OF THE CORPORATION IN EXCESS OF 4.9% OF THE ECONOMIC 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 OWN OR CONSTRUCTIVELY OWN
CAPITAL STOCK THAT WOULD RESULT IN THE CORPORATION BEING “CLOSELY HELD” UNDER
SECTION 856(H) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO QUALIFY
AS A REIT; AND (IV) NO PERSON MAY TRANSFER SHARES OF CAPITAL STOCK IF SUCH
TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION BEING OWNED BY
FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OWNS OR CONSTRUCTIVELY OWNS
OR ATTEMPTS TO BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK
WHICH CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OWN 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 TRUST FOR THE BENEFIT OF ONE OR MORE
CHARITABLE BENEFICIARIES OR, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED
TRANSFERS IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. IN
ADDITION, THE CORPORATION MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS
SPECIFIED BY THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF
DIRECTORS DETERMINES THAT OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE
RESTRICTIONS DESCRIBED ABOVE. 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.
Instead
of the foregoing legend, the certificate may state that the Corporation will
furnish a full statement about certain restrictions on transferability to a
stockholder on request and without charge.
Section 7.3Transfer of Capital Stock in
Trust.
7.3.1
Ownership in
Trust. Upon any purported Transfer or other event described in Section 7.2.1(b) that
would result in a transfer of shares of Capital Stock to a Trust, such shares of
Capital Stock shall be deemed to have been transferred to the Trustee 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 purported Transfer or other event that
results in the transfer to the Trust pursuant to Section 7.2.1(b). The
Trustee shall be appointed by the Corporation and shall be a Person unaffiliated
with the Corporation and any Prohibited Owner. Each Charitable Beneficiary shall
be designated by the Corporation as provided in
Section 7.3.6.
7.3.2
Status of Shares Held
by the Trustee. Shares of Capital Stock held by the Trustee shall be
issued and outstanding shares of Capital Stock of the Corporation. The
Prohibited Owner shall have no rights in the shares held by the Trustee. The
Prohibited Owner shall not benefit economically from ownership of any shares
held in trust by the Trustee, shall have no rights to dividends or other
distributions and shall not possess any rights to vote or other rights
attributable to the shares held in the Trust.
7.3.3
Dividend and Voting
Rights. The Trustee shall have all voting rights and rights to dividends
or other distributions with respect to shares of Capital Stock held in the
Trust, which rights shall be exercised for the exclusive benefit of the
Charitable Beneficiary. Any dividend or other distribution paid prior to the
discovery by the Corporation that the shares of Capital Stock have been
transferred to the Trustee shall be paid by the recipient of such dividend or
other distribution to the Trustee upon demand and any dividend or other
distribution authorized but unpaid shall be paid when due to the Trustee. Any
dividend or other distribution so paid to the Trustee shall be held in trust for
the Charitable Beneficiary. The Prohibited Owner shall have no voting rights
with respect to shares held in the Trust and, subject to Maryland law, effective
as of the date that the shares of Capital Stock have been transferred to the
Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion)
(i) to rescind as void any vote cast by a Prohibited Owner prior to the
discovery by the Corporation that the shares of Capital Stock have been
transferred to the Trustee and (ii) to recast such vote in accordance with
the desires of the Trustee acting for the benefit of the Charitable Beneficiary;
provided, however, that if the
Corporation has already taken irreversible corporate action, then the Trustee
shall not have the authority to rescind and recast such vote. Notwithstanding
the provisions of this Article
VII, until the Corporation has received notification that shares of
Capital Stock have been transferred into a Trust, the Corporation shall be
entitled to rely on its share transfer and other stockholder records for
purposes of preparing lists of stockholders entitled to vote at meetings,
determining the validity and authority of proxies and otherwise conducting votes
of stockholders.
7.3.4
Sale of Shares by
Trustee. Within twenty (20) days of receiving notice from the
Corporation that shares of Capital Stock have been transferred to the Trust, the
Trustee of the Trust shall sell the shares held in the Trust to a person,
designated by the Trustee, whose ownership of the shares will not violate the
ownership limitations set forth in Section 7.2.1(a). Upon
such sale, the interest of the Charitable Beneficiary in the shares sold shall
terminate and the Trustee shall distribute the net proceeds of the sale to the
Prohibited Owner and to the Charitable Beneficiary as provided in this Section 7.3.4. The
Prohibited Owner shall receive the lesser of (1) the price paid by the
Prohibited Owner for the shares or, if the Prohibited Owner did not give value
for the shares in connection with the event causing the shares to be held in the
Trust (e.g., in the
case of a gift, devise or other such 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 net sales proceeds in excess of
the amount payable to the Prohibited Owner shall be immediately paid to the
Charitable Beneficiary. If, prior to the discovery by the Corporation that
shares of Capital Stock have been transferred to the Trustee, such shares are
sold by a Prohibited Owner, then (i) such shares shall be deemed to have
been sold on behalf of the Trust and (ii) to the extent that the Prohibited
Owner received an amount for such shares that exceeds the amount that such
Prohibited Owner was entitled to receive pursuant to this Section 7.3.4, such
excess shall be paid to the Trustee upon demand.
7.3.5
Purchase Right in
Stock Transferred to the Trustee. Shares of Capital 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
until the Trustee has sold the shares held in the Trust pursuant to Section 7.3.4. Upon such
a sale to the Corporation, the interest of the Charitable Beneficiary in the
shares sold shall terminate and the Trustee shall distribute the net proceeds of
the sale to the Prohibited Owner.
7.3.6
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 such that (i) the
shares of Capital Stock held in the Trust would not violate the restrictions set
forth in
Section 7.2.1(a) in the hands of such Charitable Beneficiary and
(ii) each such organization must be described in Section 501(c)(3) of
the Code and contributions to each such organization must be eligible for
deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the
Code.
Section 7.4Exchange
Transactions.
Nothing in this
Article VII shall preclude the settlement of any transaction entered
into through the facilities of the NYSE Amex, Nasdaq, NYSE or any other national
securities exchange or automated inter-dealer quotation system. The fact that
the settlement of any transaction occurs shall not negate the effect of any
other provision of this
Article VII and any transferee in such a transaction shall be
subject to all of the provisions and limitations set forth in this
Article VII.
Section 7.5Enforcement. The Corporation is
authorized specifically to seek equitable relief, including injunctive relief,
to enforce the provisions of this
Article VII.
Section 7.6Non-Waiver. No delay or failure on the
part of the Corporation or the Board of Directors in exercising any right
hereunder shall operate as a waiver of any right of the Corporation or the Board
of Directors, as the case may be, except to the extent specifically waived in
writing.
ARTICLE
VIII
AMENDMENTS
The
Corporation reserves the right from time to time to make any amendment to the
Charter, now or hereafter authorized by law, including any amendment altering
the terms or contract rights, as expressly set forth in the Charter, of any
shares of outstanding stock. All rights and powers conferred by the Charter on
stockholders, directors and officers are granted subject to this reservation.
Except as otherwise provided in the Charter and except for those amendments
permitted to be made without stockholder approval under Maryland law, any
amendment to the Charter shall be valid only if approved by the stockholders of
the Corporation by the affirmative vote of a majority of all the votes entitled
to be cast on the matter.
ARTICLE
IX
LIMITATION
OF LIABILITY
To the
maximum extent that Maryland law in effect from time to time permits limitation
of the liability of directors and officers of a corporation, no director or
officer of the Corporation shall be liable to the Corporation or its
stockholders for money damages. Neither the amendment nor repeal of this Article IX, nor the
adoption or amendment of any other provision of the Charter or Bylaws
inconsistent with this
Article IX, shall apply to or affect in any respect the
applicability of the preceding sentence with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.
ARTICLE
X
MARYLAND
BUSINESS COMBINATION STATUTE
The
Corporation elects to be governed by the provisions of Sections 3-601
through 3-604 of the MGCL (the “Maryland Business Combination Act”) as in effect
on the Initial Date, except that the Maryland Business Combination Act shall not
apply to any business combination (as defined in Section 3-601(e) of the
MGCL): (i) that is effected pursuant to the Master Formation and
Contribution Agreement dated October 3, 2006 (the “Master Formation and
Contribution Agreement”), between Arizona Land Income Corporation and POP
Venture, LLC or pursuant to any agreement that is executed and delivered
pursuant to the Master Formation and Contribution Agreement (collectively, the
“Formation Transactions”), (ii) that is comprised solely of the benefit,
directly or indirectly (except proportionately as a stockholder), of any loan,
advance, guarantee, pledge or other financial assistance or any tax credit or
other tax advantage provided by the Corporation or any of its subsidiaries in
any case with respect to any parcel of real property in which the Corporation
acquires a direct or indirect interest in the Formation Transactions, or
(iii) to the extent that the interested stockholder (as defined in
Section 3-601(j) of the MGCL) in such business combination is any of Jay H.
Shidler, James Reynolds, Lawrence Taff, Matthew Root and James Ingebritsen or
any of their respective present or future associates or affiliates (as defined
in Section 3-601 of the MGCL) or any other person acting in concert or as a
group with Jay H. Shidler, James Reynolds, Lawrence Taff, Matthew Root and James
Ingebritsen. The Corporation elects not to be governed by any amendment to the
Maryland Business Combination Act after the Initial Date unless the Board of
Directors, pursuant to a resolution approved by a majority of the Directors then
in office, determines that such amendment shall apply to the Corporation. In the
event that the Maryland Business Combination Act is repealed or, in the sole
discretion of the Board of Directors, amended or substantially altered to the
detriment of the Corporation, the Corporation shall continue to be governed by
the provisions of the Maryland Business Combination Act in effect on the Initial
Date, together with any amendments to the Maryland Business Combination Act that
the Board of Directors has determined shall apply to the
Corporation.
ARTICLE
XI
PROPORTIONATE
VOTING PREFERRED STOCK
Section 11.1Designation
and Number. A class of
Preferred Stock designated as “Proportionate Voting Preferred
Stock” is hereby established. The number of shares
constituting such class shall be one (1). Such number of shares may
be increased only by resolution of the Board of Directors which is approved by
the affirmative vote of all of the Directors.
Section 11.2Definitions: For purposes of
the Proportionate Voting Preferred Stock, the following terms shall have the
following meanings:
“Board of Directors” shall mean
the Board of Directors of the Corporation or any committee authorized by such
Board of Directors, subject to applicable law, to perform any of its
responsibilities with respect to the Proportionate Voting Preferred
Stock.
“Capital Stock” shall mean all
classes or series of stock of the Corporation, including, without limitation,
Common Stock and Preferred Stock.
“Common Units” shall have the
meaning set forth in the Partnership Agreement.
“Class A Convertible Preferred
Units” shall have the meaning set forth in the Partnership
Agreement.
“Effective Date” shall mean
March 19, 2008.
“Effective Time” shall mean
11:59 p.m., Eastern Time, on the Effective Date, immediately following the
consummation of the Merger.
“Effective Time Units” shall
mean the Common Units and Class A Convertible Preferred Units that are not
held by the Corporation and are issued and outstanding as of the Effective
Time.
“Merger” shall mean the merger
of Arizona Land Income Corporation, an Arizona corporation, with and into the
Corporation.
“Operating Partnership” shall
mean Pacific Office Properties, L.P., a Delaware limited partnership of which
the Corporation is the sole general partner, and any successor
thereof.
“Partnership Agreement” shall
mean the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership, dated on or about the Effective Date as the same may be amended
from time to time.
“Redemption Date” shall mean
the date upon which a Redemption Event occurs.
“Redemption Event” shall mean
either of the following: (i) the consummation of a consolidation, merger,
combination or other transaction involving the Operating Partnership pursuant to
which all of the outstanding Class A Convertible Preferred Units and Common
Units are converted or changed into or exchanged for stock and/or other
securities of any other entity and/or cash or any other property; or
(ii) the Voting Amount is reduced to zero.
“Voting Amount” shall mean a
number initially equal to the number of shares of Common Stock for which
Effective Time Units are exchangeable, subject to automatic reduction (but not
increase) from time to time to the extent Effective Time Units are redeemed by
the Operating Partnership pursuant to Section 8.5.1 or 8.5.2 of the
Partnership Agreement or are acquired by the Corporation pursuant to
Section 8.5.5 of the
Partnership Agreement, and subject to further appropriate adjustment as set
forth in
Section 11.4.2 below. As permitted by Article VI of
the Charter and the MGCL, the Voting Amount, and therefore the voting power of
the Proportionate Voting Preferred Stock, as described in Section 11.4 below, are
dependent upon the number of outstanding Effective Time Units from time to time
which constitute “facts ascertainable outside of the charter” of the
Corporation.
Section 11.3Dividends
and Distributions. Except as set forth in Section 11.7 hereof, the
holders of shares of Proportionate Voting Preferred Stock shall not be entitled
to any regular or special dividend payments. Without limiting the
foregoing, the holders of shares of Proportionate Voting Preferred Stock shall
not be entitled to any dividends or other distributions declared or paid with
respect to the shares of Common Stock or any other class or series of stock of
the Corporation.
Section 11.4Voting
Rights.
11.4.1 With respect to all matters
submitted to a vote of the stockholders of the Corporation, each share of
Proportionate Voting Preferred Stock shall entitle the holder thereof to an
aggregate number of votes equal to the Voting Amount in effect on the record
date for determining the holders of stock of the Corporation entitled to vote on
such matter. For so long as the Voting Amount is greater than one
(1), each of the votes of a share of the Proportionate Voting Preferred Stock
may be voted in the manner determined by the holder of such share of
Proportionate Voting Preferred Stock, even if such vote differs from any other
vote of the Proportionate Voting Preferred Stock. The holders of
shares of Proportionate Voting Preferred Stock shall vote together with the
holders of shares of Common Stock as one class on all matters submitted to a
vote of stockholders of the Corporation, and, except as expressly set forth in
this Section 11.4,
the holders of shares of Proportionate Voting Preferred Stock shall have no
other voting rights, as a separate class or other otherwise, including any
rights to vote as a class with respect to any extraordinary corporate action
such as a merger, consolidation, dissolution, liquidation or the
like.
11.4.2 If the Corporation or the
Operating Partnership shall at any time after the Effective Date subdivide or
combine its outstanding shares of Common Stock or Common Units or Class A
Convertible Preferred Units, as the case may be, declare a dividend payable in
Common Stock or Common Units or Class A Convertible Preferred Units, as the
case may be, or effect any similar change in its capitalization structure, the
Voting Amount shall be adjusted appropriately (after any adjustments that may
occur pursuant to the terms of the Common Units or the Class A Convertible
Preferred Units) to allow the holders of the Proportionate Voting Preferred
Stock, as nearly as reasonably possible, to maintain the pro rata voting rights
in the Corporation that such holders possessed immediately prior to any such
subdivision, combination, stock dividend, reorganization, reclassification or
similar event.
11.4.3 Anything herein to the contrary
notwithstanding, if the number of shares of Proportionate Voting Preferred Stock
is increased and additional shares of Proportionate Voting Preferred Stock are
issued, then at any time during which more than one share of Proportionate
Voting Preferred Stock is issued and outstanding, each share of Proportionate
Voting Preferred Stock shall entitle the holder thereof to a number of votes
equal to the quotient of (A) the Voting Amount in effect on the record date
for determining the holders of shares of Common Stock entitled to vote on any
matter, divided by (B) the number of shares of Proportionate Voting
Preferred Stock which are issued and outstanding on such date (and fractional
voting rights resulting from such adjustment shall be permitted).
Section 11.5 Restrictions on
Transfer.
11.5.1 [Intentionally
deleted.]
11.5.2 Notwithstanding any terms or
provisions to the contrary contained herein, the Proportionate Voting Preferred
Stock shall constitute Capital Stock and shall be subject to the provisions of
Article VII of the Charter.
Section 11.6Reacquired
Shares. Any shares of
Proportionate Voting Preferred Stock redeemed, purchased or otherwise acquired
by the Corporation in any manner whatsoever shall cease to be outstanding and
shall become authorized but unissued shares of Preferred Stock, without
designation as to class or series until such shares are once more classified and
designated as part of a particular class or series by action of the Board of
Directors, and the former holder or holders thereof shall have no further rights
(hereunder or otherwise) with respect to such shares.
Section 11.7Liquidation,
Dissolution or Winding Up. In the event of
any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, before any assets of the Corporation shall be
distributed, paid or set aside for the holders of any equity securities ranking
junior to the Proportionate Voting Preferred Stock as to the distribution of
assets upon liquidation, dissolution or winding up of the Corporation, the
Corporation shall pay to the holders of shares of Proportionate Voting Preferred
Stock, out of assets of the Corporation legally available for distribution to
its stockholders, the sum of $.01 per share for each share of Proportionate
Voting Preferred Stock held by each such holder. After payment in
full to the holders of the Proportionate Voting Preferred Stock of the
above-described $.01 per share liquidation amount, the holders of the
Proportionate Voting Preferred Stock will have no right or claim to any of the
remaining assets of the Corporation.
If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or the proceeds
thereof, distributable among the holders of Proportionate Voting Preferred Stock
and the holders of Common Stock shall be insufficient to pay in full the
above-described liquidation amount per share to the holders of the Proportionate
Voting Preferred Stock and a like amount per share to the holders of the Common
Stock, then such assets, or the proceeds therefrom, shall be distributed among
the holders of the Proportionate Voting Preferred Stock and the Common Stock in
equal amounts per share.
For the purposes of this Section 11.7, (i) a
consolidation or merger of the Corporation with one or more entities,
(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.
In determining whether a distribution
(other than upon voluntary or involuntary liquidation), by dividend, redemption
or other acquisition of shares of stock of the Corporation or otherwise, is
permitted under the MGCL, amounts that would be needed, if the Corporation were
to be dissolved at the time of distribution, to satisfy the preferential rights
upon dissolution of holders of shares of the Proportionate Voting Preferred
Stock shall not be added to the Corporation’s total liabilities.
Section 11.8Redemption. Upon the
occurrence of a Redemption Event, effective concurrent with the Redemption
Event, the outstanding shares of Proportionate Voting Preferred Stock shall be
redeemed by the Corporation out of assets legally available therefor, at a
redemption price, payable in cash, equal to $.01 per share of Proportionate
Voting Preferred Stock (adjusted for any splits or
subdivisions). From and after the Redemption Date, the outstanding
shares of Proportionate Voting Preferred Stock shall no longer be deemed
outstanding and all rights of holders of such shares will terminate, except the
rights to receive the cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of the certificates representing the
shares of Proportionate Voting Preferred Stock, if so required.
Section 11.9Rank.
11.9.1 The Proportionate Voting
Preferred Stock will, with respect to rights upon liquidation, dissolution or
winding up of the Corporation, rank (a) senior to all equity securities
issued by the Corporation, the terms of which provide that such equity
securities rank junior to the Proportionate Voting Preferred Stock with respect
to rights upon liquidation, dissolution or winding up of the Corporation;
(b) junior to all equity securities issued by the Corporation, the terms of
which provide that such equity securities rank senior to the Proportionate
Voting Preferred Stock with respect to rights upon liquidation, dissolution or
winding up of the Corporation; and (c) on a parity with the Common Stock of
the Corporation and with all other equity securities issued by the Corporation,
other than those equity securities referred to in clauses (a) and
(b) hereof; provided, however, that after payment in full to the holders of
the Proportionate Voting Preferred Stock of the $.01 per share liquidation
amount described in Section
11.7 above, the holders of the Proportionate Voting Preferred
Stock will have no right or claim to any of the remaining assets of the
Corporation, and such remaining assets of the Corporation shall be distributed
among the holders of Common Stock and any other classes or series of stock
ranking on a parity with or junior to the Proportionate Voting Preferred Stock
as to rights upon liquidation, dissolution or winding up of the Corporation,
according to their respective rights and preferences and in each case according
to their respective number of shares, and the holders of the Proportionate
Voting Preferred Stock shall not be entitled to share therein.
11.9.2 The Proportionate Voting
Preferred Stock will, with respect to dividend rights, rank junior to the Common
Stock and to all other equity securities issued by the Corporation.
11.9.3 The term “equity securities” does not
include convertible debt securities or other debt securities of the Corporation
which will rank senior to the Proportionate Voting Preferred Stock prior to
conversion.
Section 11.10Conversion. The Proportionate
Voting Preferred Stock is not convertible into or exchangeable for any other
property or securities of the Corporation.
Section 11.11
[Intentionally deleted.]
Section 11.12No
Preemptive Rights. No holder of
shares of Proportionate Voting Preferred Stock shall have any preemptive or
preferential right to subscribe for, or to purchase, any additional shares of
capital stock of the Corporation of any class or series, or any other security
of the Corporation which the Corporation may issue or sell.
Section 11.13Severability
of Provisions. If any preference, right, voting power,
restriction, limitation as to dividends or other distributions, qualification or
term or condition of redemption of the Proportionate Voting Preferred Stock set
forth herein is invalid, unlawful or incapable of being enforced by reason of
any rule of law or public policy, all other preferences, rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
or terms or conditions of redemption of the Proportionate Voting Preferred Stock
set forth herein which can be given effect without the invalid, unlawful or
unenforceable provision thereof shall, nevertheless, remain in full force and
effect, and no preferences, rights, voting powers, restrictions, limitations as
to dividends or other distributions, qualifications or terms or conditions of
redemption of the Proportionate Voting Preferred Stock herein set forth shall be
deemed dependent upon any other provision thereof unless so expressed
therein.
THIRD: The amendment
to and restatement of the charter as hereinabove set forth have been duly
advised by the Board of Directors and approved by the stockholders of the
Corporation as required by law.
FOURTH: The current
address of the principal office of the Corporation is as set forth in Article III of the
foregoing amendment and restatement of the charter.
FIFTH: The name and
address of the Corporation’s current resident agent is as set forth in Article IV of the
foregoing amendment and restatement of the charter.
SIXTH: The
Corporation currently has six directors and one vacancy on its Board of
Directors. The names of the directors currently in office are:
Michael
W. Brennan
Robert L.
Denton
Clay W.
Hamlin
Paul M.
Higbee
Thomas R.
Hislop
Jay H.
Shidler
SEVENTH: The
undersigned Chairman of the Board acknowledges these Articles of Amendment and
Restatement to be the corporate act of the Corporation and as to all matters or
facts required to be verified under oath, the undersigned Chairman of the Board
acknowledges that, to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
- Signature page follows
-
IN WITNESS WHEREOF, the
Corporation has caused these Articles of Amendment and Restatement to be signed
in its name and on its behalf by its Chairman of the Board and attested to by
its Corporate Secretary on this 22nd day
of September, 2009.
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PACIFIC
OFFICE PROPERTIES TRUST, INC.
By: /s/ Jay H.
Shidler
Name: Jay
H. Shidler
Title: Chairman
of the Board
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ATTEST:
/s/ Tamara G.
Edwards
Tamara
G. Edwards
Corporate
Secretary
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