MISSION WEST PROPERTIES, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
FIRST: Mission West Properties, 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
INCORPORATOR
The undersigned, James J. Hanks, Jr., whose address is c/o Ballard
Spahr Andrews & Ingersoll, LLP, 300 East Lombard Street, Baltimore, Maryland
21202, being at least 18 years of age, does hereby form a corporation under
the general laws of the State of Maryland.
ARTICLE II
NAME
The name of the corporation (the "Corporation") is:
Mission West Properties, Inc.
ARTICLE III
PURPOSE
The purposes for which the Corporation is formed are to engage in any
lawful act or activity (including, without limitation or obligation, engaging in
business as a real estate investment trust under the Internal Revenue Code of
1986, as amended, or any successor statute (the "Code")) for which corporations
may be organized under the general laws of the State of Maryland as now or
hereafter in force. For purposes of these Articles, "REIT" means a real estate
investment trust under Sections 856 through 860 of the Code.
ARTICLE IV
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
The address of the principal office of the Corporation in the State
of Maryland is c/o Ballard Spahr Andrews & Ingersoll, LLP, 300 East Lombard
Street, Baltimore, Maryland 21202, Attention: James J. Hanks, Jr. The name of
the resident agent of the Corporation in the State of Maryland is James J.
Hanks, Jr., whose post address is c/o Ballard Spahr Andrews & Ingersoll, LLP,
300 East Lombard Street, Baltimore, Maryland 21202. The resident agent is a
citizen of and resides in the State of Maryland.
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS
Section 5.1 Number 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 shall be five, which number may be
increased or decreased pursuant to the Bylaws, but shall never be less than the
minimum number required nor more than the maximum number allowed by the Maryland
General Corporation Law.
Section 5.2 Extraordinary Actions. 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 5.3 Authorization by Board of Issuance of Stock, Debt
Securities. 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. To the fullest extent permissible under the Maryland General Corporation
Law, the Board of Directors may authorize the issuance from time to time of debt
securities convertible into other debt securities or into shares of the
Corporation within such time and upon the happening of one or more specified
events, and upon such terms and conditions as are fixed by the Board of
Directors.
Section 5.4 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, 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 5.5 Indemnification. The Corporation shall have the power, to
the maximum extent permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to, (a) any individual who is a
present or former director or officer of the Corporation or (b) any individual
who, while a director of the Corporation and at the request of the Corporation,
serves or has served as a director, officer, partner or trustee of another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or any other enterprise from and against any claim or
liability to which such person may become subject or which such person may incur
by reason of his status as a present or former director or officer of the
Corporation. The Corporation shall have the power, with the approval of the
Board of Directors, to provide such indemnification and advancement of expenses
to a person who served a predecessor of the Corporation in any of the capacities
described in (a) or (b) above and to any employee or agent of the Corporation or
a predecessor of the Corporation.
Section 5.6 Determinations 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 and in the absence of actual
receipt of an improper benefit in money, property or services or active and
deliberate dishonesty established by a court, shall be final and conclusive and
shall be binding upon the Corporation and every holder of shares of its stock:
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; the amount of
paid-in surplus, net assets, other surplus, annual or other net profit, net
assets in excess of capital, undivided profits or excess of profits over losses
on sales of assets; 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); 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; any matter relating to the acquisition,
holding and disposition of any assets by the Corporation; or any other matter
relating to the business and affairs of the Corporation.
Section 5.7 REIT Qualification. If the Corporation elects to qualify
for federal income tax treatment as a REIT, the Board of Directors shall use its
reasonable best efforts to take such actions as are necessary or appropriate to
preserve the status of the Corporation as a REIT; however, the Board of
Directors may revoke or otherwise terminate the Corporation's REIT election
pursuant to Section 856(g) of the Code and 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 upon the affirmative
vote of more than seventy-five percent (75%) of all directors then serving on
the Board of Directors.
Section 5.8 Advisor 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 (limited or general) or
other organization whereby, subject to the supervision and control of the Board
of Directors, any such other person, corporation, association, company, trust,
partnership (limited or general) or other organization shall render or make
available to the Corporation managerial, investment, 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 5.9 Protective Provisions. Until such time as Carl E. Berg,
Clyde J. Berg, the members of their respective immediate families and certain
entities controlled by Carl E. Berg and/or Clyde J. Berg which are Berg & Berg
Enterprises, Inc., Baccarat Cambrian Partnership, Baccarat Fremont Developers
LLC, and DeAnza Office Partners (collectively, the "Berg Group") and their
affiliates (other than the Corporation and Mission West Properties, L.P.,
Mission West Properties, L.P. I, Mission West Properties, L.P. II or Mission
West Properties, L.P. III (collectively, the "Operating Partnership"), in the
aggregate, own less than fifteen percent (15%) of the voting stock of the
Corporation (including without limitation upon the exercise of all outstanding
warrants, options, convertible securities and other rights to acquire voting
stock of the Corporation, and all units of limited partnership interest
exchangeable or redeemable for Common Stock or other voting stock of the
Corporation without regard to any ownership limit set forth in the charter, the
Bylaws or by agreement), a majority of the directors, including Carl E. Berg or
an individual whom he designates to replace him as a director on the Board of
Directors (the "Berg Designee"), shall be required to (i) hold a meeting of the
Board of Directors which is not attended by Carl E. Berg or the Berg Designee
(unless Mr. Berg or the Berg Designee consent in writing to the holding of such
meeting), (ii) approve an amendment to the Corporation's charter or Bylaws, or
(iii) approve any merger, consolidation or sale of all or substantially all of
the assets of the Corporation or the Operating Partnership.
Section 5.10 Removal of Directors. Subject to the rights of holders
of one or more classes or series of Preferred Stock or the rights of the Berg
Group to elect or remove one or more directors, any director, or the entire
Board of Directors, may be removed from office at any time, but only for cause
and then only by the affirmative vote of the holders of at least a majority of
the votes entitled to be cast 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 or a final judgment of a court of competent
jurisdiction holding that such director caused demonstrable, material harm to
the Corporation through bad faith conduct or active and deliberate dishonesty.
Section 5.11 Conflict of Interest. No director shall be prohibited
from voting or taking any action as a director because of any actual or apparent
conflict of interest between the director and the Corporation, and no action
taken by the board of directors will be void or voidable because (i) a majority
of directors are affiliated with the Berg Group or (ii) an action is beneficial
to the Berg Group, to the extent permitted by the Maryland General Corporation
Law.
ARTICLE VI
STOCK
Section 6.1 Authorized Shares. The Corporation has authority to issue
200,000,000 shares of Common Stock, $.001 par value per share ("Common Stock"),
and 20,000,000 shares of Preferred Stock, $.001 par value per share ("Preferred
Stock). The aggregate par value of all authorized shares of stock having par
value is $220,000. 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. To the extent
permitted by Maryland law, the Board of Directors, 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 6.2 Common Stock. Subject to the provisions of Article VII,
each share of Common Stock shall entitle the holder thereof to one vote.
Section 6.3 Preferred 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.
Section 6.4 Classified or Reclassified Shares. Prior to issuance of
classified or reclassified shares of any class or series, the Board of Directors
by resolution shall: (a) designate that class or series to distinguish it from
all other classes and series of stock of the Corporation; (b) specify the number
of shares to be included in the class or series; (c) 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 (d) 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 (c) 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 6.5 Charter and Bylaws. All persons who shall acquire stock
in the Corporation shall acquire the same subject to the provisions of the
charter and the Bylaws.
ARTICLE VII
RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES
Section 7.1 Definitions. For the purpose of this Article VII, the
following terms shall have the following meanings:
AMEX. The term "AMEX" shall mean the American Stock Exchange.
Beneficial Ownership. The term "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)(1)(B) of the Code. The
terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall
have the correlative meanings.
Business Day. The term "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 New York City are authorized or required by law, regulation or
executive order to close.
Capital Stock. The term "Capital Stock" shall mean all classes or
series of stock of the Corporation, including, without limitation, Common Stock
and Preferred Stock and any equity security of the Company convertible into or
exchangeable for Common Stock or Preferred Stock.
Charitable Beneficiary. The term "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.
Charter. The term "Charter" shall mean the charter of the
Corporation, as that term is defined in the MGCL.
Code. The term "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
Constructive Ownership. The term "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. The
terms "Constructive Owner," "Constructively Owns" and "Constructively Owned"
shall have the correlative meanings.
Excepted Holder. The term "Excepted Holder" shall mean a stockholder
of the Corporation for whom an Excepted Holder Limit is created by these
Articles or by the Board of Directors pursuant to Section 7.2.7.
Excepted Holder Limit. The term "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,
and subject to adjustment pursuant to Section 7.2.8, the percentage limit
established by the Board of Directors pursuant to Section 7.2.7.
Initial Date. The term "Initial Date" shall mean the date upon which
the Articles of Amendment containing this Article VII are filed with the SDAT.
Market Price. The term "Market Price" on any date shall mean, with
respect to outstanding shares of Common Stock, the Closing Price for the Common
Stock on such date. The "Closing Price" on any date shall mean the last sale
price for the Common Stock, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, for the
Common Stock, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the AMEX or, if the Common Stock is not listed or admitted to trading
on the AMEX, as reported on the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or,
if such system is no longer in use, the principal other automated quotation
system that may then be in use or, if the Common Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Corporation or, in the event that no trading price is
available for the Common Stock, the fair market value of the Common Stock, as
determined in good faith by the Board of Directors of the Corporation.
MGCL. The term "MGCL" shall mean the Maryland General Corporation
Law, as amended from time to time.
Ownership Limit. The term "Ownership Limit" shall mean not more than
nine percent (9%) in value of the aggregate of the outstanding shares of Capital
Stock. The value of the outstanding shares of Capital Stock shall be determined
by the Board of Directors of the Corporation in good faith, which determination
shall be conclusive for all purposes hereof.
Person. The term "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. The term "Prohibited Owner" shall mean, with
respect to any purported Transfer, any Person who, but for the provisions of
Section 7.2.1(b), would Beneficially Own or Constructively Own shares of Capital
Stock in violation of Section 7.2.1(a), 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. The term "Restriction Termination Date"
shall mean the first day after the Initial Date on which the Corporation
determines pursuant to Section 5.7 of the Charter 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. The term "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 Beneficial Ownership or Constructive
Ownership, or any agreement to take any such actions or cause any such events,
of Capital Stock or the right to vote or receive dividends on Capital Stock,
including (a) the granting or exercise of any option (or any disposition of any
option), (b) 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 (c) transfers of interests in other
entities that result in changes in Beneficial or Constructive Ownership of
Capital Stock; in each case, whether voluntary or involuntary, whether owned of
record, Constructively Owned or Beneficially Owned and whether by operation of
law or otherwise. The terms "Transferring" and "Transferred" shall have the
correlative meanings.
Trust. The term "Trust" shall mean any trust provided for in
Section 7.3.1.
Trustee. The term "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.
Section 7.2.1 Ownership Limitations. During the period
commencing on the Initial Date and prior to the Restriction Termination Date:
(a) Basic Restrictions.
(i) (1) No Person, other than any Person in the
Berg Group or an Excepted Holder, shall Beneficially Own or Constructively Own
shares of Capital Stock in excess of the Ownership Limit, and (2) 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) No Person, including all of the Persons in the
Berg Group, shall Beneficially or Constructively Own shares of Capital Stock to
the extent that such Beneficial 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 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) Notwithstanding any other provisions
contained herein, 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 AMEX or any other national securities exchange or automated inter-dealer
quotation system) that, if effective, would result in the Capital Stock being
beneficially owned by less than 100 Persons (determined under the principles of
Section 856(a)(5) of the Code) shall be void ab initio, and the intended
transferee shall acquire no rights in such shares of Capital Stock.
(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 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 Section 7.2.1(a)(i) or (ii),
(i) then that number of shares of the Capital Stock
the Beneficial or Constructive Ownership of which otherwise would cause such
Person to violate Section 7.2.1(a)(i) or (ii)(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 the transfer to the Trust described in
clause (i) of this sentence would not be effective for any reason to prevent the
violation of Section 7.2.1(a)(i) or (ii), then the Transfer of that number of
shares of Capital Stock that otherwise would cause any Person to violate Section
7.2.1(a)(i) or (ii) shall be void ab initio, and the intended transferee shall
acquire no rights in such shares of Capital Stock.
Section 7.2.2 Remedies for Breach. If the Board of Directors of
the Corporation 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 Section 7.2.1 or that a Person intends to acquire or
has attempted to acquire Beneficial or Constructive Ownership of any shares of
Capital Stock in violation of Section 7.2.1 (whether or not such violation is
intended), 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.
Section 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 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, give at least 15 days prior written
notice, and shall provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if any, of such
Transfer on the Corporation's status as a REIT.
Section 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 five percent (5%) (or such
lower percentage as required by the Code or the Treasury Regulations promulgated
thereunder) of the outstanding shares of Capital Stock, within 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 and
other shares of the Capital Stock Beneficially 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 on the
Corporation's status as a REIT and to ensure compliance with the Ownership
Limit; and
(b) each Person who is a Beneficial or Constructive
Owner of Capital Stock and each Person (including the stockholder of record) who
is holding Capital Stock for a Beneficial 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.
Section 7.2.5 Remedies Not Limited. Subject to Section 5.7 of
the Charter, nothing contained in this Section 7.2 shall limit the authority of
the Board of Directors of the Corporation 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.
Section 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 of the Corporation
shall have the power to determine the application of the provisions of this
Section 7.2 or Section 7.3 with respect to any situation based on the facts
known to it. In the event Section 7.2 or 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 Sections
7.1, 7.2 or 7.3.
Section 7.2.7 Exceptions.
(a) Subject to Section 7.2.1(a)(ii), the Board of
Directors of the Corporation, in its sole discretion, may exempt a Person from
the Ownership Limit and may establish or increase an Excepted Holder Limit for
such Person 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 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 of
the Corporation, 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 such representations or undertakings (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 Sections 7.2.1(b) and 7.3.
(b) Prior to granting any exception pursuant to
Section 7.2.7(a), the Board of Directors of the Corporation 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.
(c) 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 Ownership
Limit, but only to the extent necessary to facilitate such public offering or
private placement.
(d) 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, or (2) pursuant to the terms and conditions of the
agreements and undertakings 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 that is less than the
Ownership Limit.
Section 7.2.8 Increase in Ownership Limit. The Board of
Directors may from time to time increase the Ownership Limit.
Section 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 and Constructive Ownership and Transfer
for the purpose 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 or Constructively Own shares of Capital Stock
of the Corporation in excess of nine percent (9%) of the value of the
total outstanding shares of Capital Stock of the Corporation, unless
such Person is a member of the Berg Group, or an Excepted Holder (in
which case the Excepted Holder Limit shall be applicable); (ii) no
Person may Beneficially 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 (iii) 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 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 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.
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 7.2.10 Notwithstanding any other provision of this
Section 7.2, the restrictions set forth in this Section 7 other than the
restrictions set forth in Section 7.2.1(a)(ii) and the legend provided in
Section 7.9, shall not apply to shares of Capital Stock owned or acquired in
original issuance by members of the Berg Group.
Section 7.3 Transfer of Capital Stock in Trust.
Section 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.
Section 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 Company. 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.
Section 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 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 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.
Section 7.3.4 Sale of Shares by Trustee. Within 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.
Section 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.
Section 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 7.4 AMEX Transactions. Nothing in this Article VII shall
preclude the settlement of any transaction entered into through the facilities
of the AMEX 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 7.5 Enforcement. The Corporation is authorized
specifically to seek equitable relief, including injunctive relief, to enforce
the provisions of this Article VII.
Section 7.6 Non-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 its 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.
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.
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 IV 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 number of directors of the Corporation is as set forth
in Article V of the foregoing amendment and restatement of the charter. The
current directors of the Company are Carl E. Berg, Michael J. Anderson, John
Bolger, and Roger Kirk.
SEVENTH: The total number of shares of stock which the Corporation
had authority to issue immediately prior to this amendment and restatement was
100, consisting of 100 shares of Common Stock, $.001 par value per share. The
aggregate par value of all shares of stock having par value was $.10.
EIGHTH: The total number of shares of stock which the Corporation has
authority to issue pursuant to the foregoing amendment and restatement of the
charter is 220,000,000, consisting of 200,000,000 shares of Common Stock, $.001
par value per share, and 20,000,000 shares of Preferred Stock, $.001 par value
per share. The aggregate par value of all authorized shares of stock having par
value is $220,000.
NINTH: The undersigned President 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
President 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.
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
President and attested to by its Secretary on this _____ day of ____________,
1998.
ATTEST: MISSION WEST PROPERTIES, INC.
By:_________________________(SEAL) _________________________________
Secretary President