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EXHIBIT 3.1
AMB PROPERTY CORPORATION
ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF 8.00% SERIES I CUMULATIVE
REDEEMABLE PREFERRED STOCK
AMB Property Corporation, a corporation organized and existing under the
laws of the State of Maryland (the "Corporation"), certifies to the State
Department of Assessments and Taxation of Maryland (the "Department") that:
FIRST: Pursuant to the authority expressly vested in the Board of
Directors of the Corporation (sometimes referred to herein as the "Board") by
Article IV of the Articles of Incorporation of the Corporation filed with the
Department on November 24, 1997, which comprises, together with the Articles
Supplementary filed by the Corporation on July 23, 1998 establishing a class of
Preferred Stock of the Corporation, par value $0.01 per share (the "Preferred
Stock"), designated as the "8 1/2% Series A Cumulative Redeemable Preferred
Stock" (the "Series A Preferred Stock"), the Articles Supplementary filed by the
Corporation on November 12, 1998 establishing a class of Preferred Stock
designated as the "8 5/8% Series B Cumulative Redeemable Preferred Stock" (the
"Series B Preferred Stock"), the Articles Supplementary filed by the Corporation
on November 25, 1998 establishing a class of Preferred Stock designated as the
"8.75% Series C Cumulative Redeemable Preferred Stock" (the "Series C Preferred
Stock"), the Certificate of Correction filed by the Corporation on March 18,
1999, the Articles Supplementary filed by the Corporation on May 5, 1999
establishing a class of Preferred Stock designated as the "7.75% Series D
Cumulative Redeemable Preferred Stock" (the "Series D Preferred Stock"), the
Articles Supplementary filed by the Corporation on August 31, 1999 establishing
a class of Preferred Stock designated as the "7.75% Series E Cumulative
Redeemable Preferred Stock" (the "Series E Preferred Stock"), the Articles
Supplementary filed by the Corporation on March 23, 2000 establishing a class of
Preferred Stock designated as the "7.95% Series F Cumulative Redeemable
Preferred Stock" (the "Series F Preferred Stock"), the Articles Supplementary
filed by the Corporation on August 30, 2000 establishing a class of Preferred
Stock designated as the "7.95% Series G Cumulative Redeemable Preferred Stock"
(the "Series G Preferred Stock"), the Articles Supplementary filed by the
Corporation on September 1, 2000 establishing a class of Preferred Stock
designated as the "8.125% Series H Cumulative Redeemable Preferred Stock" (the
"Series H Preferred Stock"), and these Articles Supplementary, the charter (the
"Charter") of the Corporation, and Section 2-105 of the Maryland General
Corporation Law (the "MGCL"), the Board of Directors of the Corporation, on
December 1, 2000, adopted resolutions authorizing the Corporation, among other
things, to issue up to a stated maximum number of shares of Preferred Stock of
the Corporation, having a stated maximum aggregate liquidation preference and
dividend rate and certain other stated terms applicable to the issuance thereof,
and appointing, pursuant to the MGCL and the powers contained in the Bylaws of
the Corporation, a committee (the "Committee") of the Board of Directors
comprised of Hamid R. Moghadam and delegating to the Committee, to the fullest
extent permitted by Maryland law and the Charter and Bylaws of the Corporation,
all powers of the Board of Directors with respect to classifying, authorizing,
approving, ratifying and/or
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confirming the terms of the Preferred Stock to be issued, including, without
limitation, the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption, and determining the
consideration per share to be received in respect of the issuance and sale of
each share of Preferred Stock to be issued and sold, and the number of shares of
Preferred Stock to be so classified or reclassified and issued by the
Corporation, subject to the limitations set forth in the resolutions of the
Board of Directors adopted on December 1, 2000.
SECOND: Pursuant to the authority conferred upon the Committee as
aforesaid, the Committee has, on March 20, 2001, adopted resolutions classifying
and designating a separate class of Preferred Stock as the 8.00% Series I
Cumulative Redeemable Preferred Stock, with the preferences, conversions and
other rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption and other
terms and conditions of such 8.00% Series I Cumulative Redeemable Preferred
Stock (within the limitations set by the Board of Directors in the resolutions
adopted on December 1, 2000, and referred to in Article First of these Articles
Supplementary) and establishing 510,000 as the number of shares to be so
classified and designated, and authorizing the issuance of up to 510,000 shares
of 8.00% Series I Cumulative Redeemable Preferred Stock.
THIRD: The separate class of Preferred Stock of the Corporation created
by the resolutions duly adopted by the Board of Directors of the Corporation and
by the Committee and referred to in Articles First and Second of these Articles
Supplementary shall have the designation, number of shares, preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications, terms and conditions of redemption and other terms
and conditions as follows (and which, upon any restatement of the Charter, may
be made a part of Article IV thereof, with any necessary or appropriate changes
to the numeration or lettering of the sections or subsections hereof):
(1) DESIGNATION AND NUMBER. A class of Preferred Stock, designated the
"8.00% Series I Cumulative Redeemable Preferred Stock" (the "Series I Preferred
Stock"), is hereby established. The number of shares of Series I Preferred Stock
shall be 510,000 (the "Series I Preferred Shares").
(2) RANK. The Series I Preferred Shares will rank, with respect to
dividend rights and rights upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, (a) senior to all classes or
series of Common Stock (as defined in the Charter) and to all equity securities
of the Corporation the terms of which provide that such equity securities shall
rank junior to such Series I Preferred Shares; (b) on a parity with the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the
Series D Preferred Stock, the Series E Preferred Stock, the Series F Preferred
Stock, the Series G Preferred Stock, the Series H Preferred Stock and all equity
securities issued by the Corporation other than those referred to in clauses (a)
and (c) (it being the intent of the Corporation that the Series I Preferred
Stock be on a parity with the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock, the Series D Preferred Stock, the Series E
Preferred Stock, the Series F Preferred Stock, the Series G Preferred Stock and
the Series H Preferred Stock with respect to dividend rights and
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rights upon voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, notwithstanding any provision contained in these Articles
Supplementary, which, if given effect, would make the Series I Preferred Stock
not in parity with the Series A Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock, the Series D Preferred Stock, the Series E
Preferred Stock, the Series F Preferred Stock, the Series G Preferred Stock and
the Series H Preferred Stock; and any such provision contained in these Articles
Supplementary shall be of no force or effect); and (c) junior to all equity
securities issued by the Corporation which rank senior to the Series I Preferred
Shares in accordance with Section 6(d) of this Article Third. The term "equity
securities" does not include convertible debt securities, until the same are
converted into equity securities.
(3) DIVIDENDS.
(a) Holders of Series I Preferred Shares shall be entitled to receive,
if, when and as authorized by the Board, out of funds legally available for the
payment of dividends, cumulative preferential cash dividends at the rate of
8.00% of the $50.00 liquidation preference per annum (equivalent to $4.00 per
annum per share). Such dividends shall accumulate on a daily basis computed on
the basis of a 360-day year consisting of twelve 30-day months and be
cumulative, shall accrue from the original date of issuance and shall be payable
quarterly (such quarterly periods for purposes of payment and accrual will be
the quarterly periods ending on the dates specified in this sentence and not
calendar year quarters) in equal amounts in arrears on the 15th day of each
January, April, July and October or, if not a business day, the next succeeding
business day (each a "Dividend Payment Date"). Dividends shall be payable to
holders of record as they appear in the share records of the Corporation at the
close of business on the applicable record date (each, a "Dividend Record
Date"), which shall be the date designated by the Board for the payment of
dividends that is not more than 30 nor less than 10 days prior to the applicable
payment date therefor. Any dividend payable on the Series I Preferred Shares for
any partial dividend period shall be prorated and computed on the basis of a
360-day year consisting of twelve 30-day months. If any date on which
distributions are to be made on the Series I Preferred Stock is not a Business
Day (as defined herein), then payment of the distribution to be made on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Notwithstanding any provision to the contrary
contained herein, each outstanding share of Series I Preferred Stock shall be
entitled to receive, and shall receive, a dividend with respect to any Dividend
Record Date equal to the dividend paid with respect to each other share of
Series I Preferred Stock which is outstanding on such date which shall be equal
to the greatest dividend per share payable on any such share on such date. In
addition, notwithstanding anything to the contrary set forth herein, each share
of Series I Preferred Stock shall also continue to accrue all accrued and unpaid
distributions up to the exchange date on any Series I Preferred Unit (as defined
in the Ninth Amended and Restated Agreement of Limited Partnership of AMB
Property II, L.P., dated as of March 21, 2001, as amended and supplemented from
time to time (the "Subsidiary Partnership Agreement")) validly exchanged into
such share of Series I Preferred Stock in accordance with the provisions of the
Subsidiary Partnership Agreement.
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(b) No dividend on the Series I Preferred Shares shall be authorized by
the Board or be paid or set apart for payment by the Corporation at such time as
the terms and provisions of any agreement of the Corporation, including any
agreement relating to its indebtedness, prohibits such authorization, payment or
setting apart for payment or provides that such authorization, payment or
setting apart for payment would constitute a breach thereof, or a default
thereunder, or if such authorization or payment shall be restricted or
prohibited by law.
(c) Notwithstanding anything to the contrary contained herein, dividends
on the Series I Preferred Shares shall accumulate whether or not restrictions
exist in respect thereof, whether or not there are funds legally available for
the payment thereof and whether or not such dividends are declared or
authorized. Accrued but unpaid dividends on the Series I Preferred Shares will
accumulate as of the Dividend Payment Date on which they first become payable or
on the date of redemption, as the case may be.
(d) If any Series I Preferred Shares are outstanding, no full dividends
will be declared or paid or set apart for payment on any other equity securities
of the Corporation of any other class or series ranking, as to distributions or
upon voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, junior to or on a parity with the Series I Preferred Shares
(including the Series A Preferred Stock, the Series B Preferred Stock, the
Series C Preferred Stock, the Series D Preferred Stock, the Series E Preferred
Stock, the Series F Preferred Stock, the Series G Preferred Stock and the Series
H Preferred Stock) unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof irrevocably set apart in trust for such payment on the Series I
Preferred Shares for all dividend periods. When dividends are not paid in full
(or a sum sufficient for such full payment is not so set apart) upon the Series
I Preferred Shares and any other equity securities ranking as to distributions
on a parity with the Series I Preferred Shares (including the Series A Preferred
Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock, the Series F Preferred Stock, the
Series G Preferred Stock and the Series H Preferred Stock), all dividends
declared upon the Series I Preferred Shares and any other equity securities of
the Corporation ranking on a parity with the Series I Preferred Stock as to
distributions and upon voluntary or involuntary liquidation, dissolution or
winding up of the Corporation (including the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock, the Series E Preferred Stock, the Series F Preferred Stock, the Series G
Preferred Stock and the Series H Preferred Stock) shall be declared pro rata so
that the amount of dividends declared per Series I Preferred Share and each such
other equity securities shall in all cases bear to each other the same ratio
that accumulated dividends per Series I Preferred Share and such other equity
securities (which shall not include any accumulation in respect of unpaid
dividends for prior dividend periods if such other equity securities do not have
a cumulative dividend) bear to each other. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
Series I Preferred Shares which may be in arrears.
(e) Except as provided in the immediately preceding paragraph, unless
full cumulative dividends on the Series I Preferred Shares have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is irrevocably set apart
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in trust for payment for all dividend periods, no dividends (other than in
Common Stock or other equity securities of the Corporation ranking junior to the
Series I Preferred Shares as to distributions and upon voluntary or involuntary
liquidation, dissolution and winding up of the Corporation) shall be declared or
paid or set aside for payment nor shall any other dividend be declared or made
upon the Common Stock or any other equity securities of the Corporation ranking
as to distributions or upon voluntary or involuntary liquidation, dissolution or
winding up of the Corporation junior to or on a parity with the Series I
Preferred Stock (including the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock, the Series D Preferred Stock, the Series E
Preferred Stock, the Series F Preferred Stock, the Series G Preferred Stock and
the Series H Preferred Stock), nor shall any Common Stock or any other equity
securities of the Corporation ranking junior to or on a parity with the Series I
Preferred Stock as to distributions or upon voluntary or involuntary
liquidation, dissolution or winding up of the Corporation (including the Series
A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock,
the Series D Preferred Stock, the Series E Preferred Stock, the Series F
Preferred Stock, the Series G Preferred Stock and the Series H Preferred Stock)
be redeemed, purchased or otherwise acquired for any consideration (or any
monies be paid to or made available for a sinking fund for the redemption of any
such securities) by the Corporation (except by conversion into or exchange for
other equity securities of the Corporation ranking junior to the Series I
Preferred Stock as to distributions and upon voluntary and involuntary
liquidation, dissolution and winding up of the Corporation, and except pursuant
to Section 7 of this Article Third to ensure the Corporation's continued status
as a real estate investment trust (a "REIT") for Federal income tax purposes or
comparable Charter provisions with respect to other classes or series of the
Corporation's stock).
(f) Accumulated but unpaid dividends on the Series I Preferred Shares
will not bear interest and holders of Series I Preferred Shares shall not be
entitled to any dividend in excess of full cumulative dividends as described
above. Any dividend payment made on the Series I Preferred Shares shall first be
credited against the earliest accumulated but unpaid dividend due with respect
to such shares which remains payable.
(g) If, for any taxable year, the Corporation elects to designate as a
"capital gain dividend" (as defined in Section 857 of the Internal Revenue Code
of 1986, as amended (the "Code")), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders of every class or
series of stock of the Corporation, the portion of the Capital Gains Amount that
shall be allocable to holders of the Series I Preferred Stock shall be the
amount that the total dividends (as determined for Federal income tax purposes)
paid or made available to the holders of the Series I Preferred Stock for the
year bears to the aggregate amount of dividends (as determined for Federal
income tax purposes) paid or made available to the holders of all classes or
series of stock of the Corporation for such year.
(4) LIQUIDATION PREFERENCE.
(a) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the holders of Series I Preferred Shares then
outstanding shall be entitled to receive out of the assets of the Corporation
legally available for distribution to its stockholders
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remaining after payment or provision for payment of all debts and liabilities of
the Corporation, a liquidation preference in cash of $50.00 per share, plus an
amount equal to any accumulated or accrued and unpaid dividends to the date of
such payment, before any distribution of assets is made to holders of Common
Stock or any other equity securities of the Corporation that rank junior to the
Series I Preferred Shares as to liquidation rights.
(b) If, upon any such voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation are insufficient
to make full payment to holders of Series I Preferred Shares and the
corresponding amounts payable on all shares of other classes or series of equity
securities of the Corporation ranking on a parity with the Series I Preferred
Shares as to liquidation rights (including the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock, the Series E Preferred Stock, the Series F Preferred Stock, the Series G
Preferred Stock and the Series H Preferred Stock), then the holders of the
Series I Preferred Shares and all other such classes or series of equity
securities shall share ratably in any such distribution of assets in proportion
to the full liquidating distributions to which they would otherwise be
respectively entitled.
(c) Written notice of any such liquidation, dissolution or winding up of
the Corporation, stating the payment date or dates when, and the place or places
where, the amounts distributable in such circumstances shall be payable, shall
be given by first class mail, postage pre-paid, not less than 30 nor more than
60 days prior to the payment date stated therein, to each record holder of the
Series I Preferred Shares at the respective addresses of such holders as the
same shall appear on the stock transfer records of the Corporation.
(d) After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Series I Preferred Shares will have no
right or claim to any of the remaining assets of the Corporation.
(e) The consolidation or merger of the Corporation with or into any other
entity, a merger of another entity with or into the Corporation, a statutory
share exchange by the Corporation or a sale, lease, transfer or conveyance of
all or substantially all of the property or business of the Corporation shall
not be deemed to constitute a liquidation, dissolution or winding up of the
Corporation.
(f) In determining whether a distribution (other than upon voluntary or
involuntary liquidation, dissolution or winding up of the Corporation) by
dividend, redemption or other acquisition of shares of stock of the Corporation
or otherwise is permitted under the MGCL, no effect shall be given to amounts
that would be needed, if the Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of holders of
the Series I Preferred Shares whose preferential rights upon dissolution are
superior to those receiving the distribution.
(5) OPTIONAL REDEMPTION.
(a) The Series I Preferred Shares are not redeemable prior to March 21,
2006. To ensure that the Corporation remains a qualified REIT for Federal income
tax purposes, however,
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the Series I Preferred Shares shall be subject to the provisions of Section 7 of
this Article Third pursuant to which Series I Preferred Shares owned by a
stockholder in excess of the Ownership Limit (as defined in Section 7 of this
Article Third) or certain other limitations shall automatically be transferred
to a Trust for the benefit of a Charitable Beneficiary (as defined in Section 7
of this Article Third) and the Corporation shall have the right to purchase such
shares, as provided in Section 7 of this Article Third. On and after March 21,
2006, the Corporation, at its option, upon giving notice as provided below, may
redeem the Series I Preferred Shares, in whole or from time to time in part, for
cash, at a redemption price of $50.00 per share, plus all accumulated and unpaid
dividends on such Series I Preferred Shares to the date fixed for redemption.
(b) The redemption price of the Series I Preferred Shares (other than any
portion thereof consisting of accumulated and unpaid dividends) is payable
solely from the sale proceeds of other equity securities of the Corporation, and
not from any other source. For purposes of the preceding sentence, "equity
securities" means any equity securities (including Common Stock and Preferred
Stock (as defined in the Charter), depositary shares in respect of any of the
foregoing, interests, participations or other ownership interests (however
designated) and any rights (other than debt securities convertible into or
exchangeable for equity securities) or options to purchase any of the foregoing.
(c) If fewer than all of the outstanding Series I Preferred Shares are to
be redeemed, the shares to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional shares).
(d) Notwithstanding anything to the contrary contained herein, unless
full cumulative dividends on all Series I Preferred Shares shall have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period, no Series I Preferred Shares shall be redeemed unless
all outstanding Series I Preferred Shares are simultaneously redeemed; provided,
however, that the foregoing shall not prevent the purchase by the Corporation of
Series I Preferred Shares pursuant to Section 7 of this Article Third or
otherwise in order to ensure that the Corporation remains qualified as a REIT
for Federal or state income tax purposes or the purchase or acquisition of
Series I Preferred Shares pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Series I Preferred Shares. In addition,
unless full cumulative dividends on all outstanding Series I Preferred Shares
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof irrevocably set apart in trust for payment
for all dividend periods, the Corporation shall not purchase or otherwise
acquire directly or indirectly any Series I Preferred Shares or any equity
securities of the Corporation ranking junior to or on a parity with the Series I
Preferred Shares as to dividends or upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (including the Series A Preferred
Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock, the Series F Preferred Stock, the
Series G Preferred Stock and the Series H Preferred Stock) (except by conversion
into or exchange for equity securities of the Corporation ranking junior to the
Series I Preferred Shares as to dividends and upon voluntary or involuntary
liquidation, dissolution or
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winding up of the Corporation and except pursuant to Section 7 of this Article
Third or comparable Charter provisions with respect to other classes or series
of the Corporation's stock).
(e) The holders of shares of Series I Preferred Stock at the close of
business on a Dividend Record Date will be entitled to receive the dividend
payable with respect to the shares of Series I Preferred Stock held on the
corresponding Dividend Payment Date notwithstanding the redemption thereof
between such Dividend Record Date and the corresponding Dividend Payment Date or
the Corporation's default in the payment of the dividend due. Except as provided
herein, the Corporation will make no payment or allowance for unpaid dividends,
whether or not in arrears, on Series I Preferred Shares to be redeemed.
(f) The following provisions set forth the procedures for Redemption:
(i) Notice of redemption will be given by publication in a
newspaper of general circulation in the City of New York, such publication to be
made once a week for two successive weeks commencing not less than 30 nor more
than 60 days prior to the redemption date. A similar notice will be (i) faxed
and (ii) mailed by the Corporation, postage prepaid, not less than 30 nor more
than 60 days prior to the redemption date, addressed to the respective holders
of record of the Series I Preferred Shares to be redeemed at their respective
addresses as they appear on the share records of the Corporation. No failure to
give such notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for the redemption of any Series I Preferred
Shares except as to the holder to whom notice was defective or not given.
(ii) In addition to any information required by law or by the
applicable rules of any exchange upon which the Series I Preferred Shares may be
listed or admitted to trading, such notice shall state: (A) the redemption date;
(B) the redemption price; (C) the number of Series I Preferred Shares to be
redeemed; (D) the place or places where the certificates evidencing shares of
Series I Preferred Shares are to be surrendered for payment of the redemption
price; and (E) that dividends on the Series I Preferred Shares to be redeemed
will cease to accumulate on such redemption date. If fewer than all of the
Series I Preferred Shares held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of Series I Preferred Shares
to be redeemed from such holder.
(iii) On or after the redemption date, each holder of Series I
Preferred Shares to be redeemed shall present and surrender the certificates
representing such holder's Series I Preferred Shares to the Corporation at the
place designated in the notice of redemption and shall be entitled to the
redemption price and any accrued or accumulated and unpaid dividends payable
upon such redemption upon such surrender and thereupon the redemption price of
such shares (including all accumulated and unpaid dividends up to the redemption
date) shall be paid to or on the order of the person whose name appears on such
certificate representing Series I Preferred Shares as the owner thereof and each
surrendered certificate shall be canceled. If fewer than all the shares
represented by any such certificate representing Series I Preferred Shares are
to be redeemed, a new certificate shall be issued representing the unredeemed
shares.
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(iv) If notice of redemption of any Series I Preferred Shares has
been given and if the funds necessary for such redemption have been irrevocably
set aside by the Corporation in trust for the benefit of the holders thereof,
then from and after the redemption date all dividends on such Series I Preferred
Shares shall cease to accumulate and any such Series I Preferred Shares will no
longer be deemed outstanding and all rights of the holders thereof will
terminate, except the right to receive the redemption price (including all
accrued or accumulated and unpaid dividends up to the redemption date) and such
shares shall not thereafter be transferred (except with the consent of the
Corporation) on the Corporation's stock transfer records. At its election, the
Corporation, prior to a redemption date, may irrevocably deposit the redemption
price (including accumulated and unpaid dividends to the redemption date) of the
Series I Preferred Shares so called for redemption in trust for the holders
thereof with a bank or trust company, in which case the redemption notice to
holders of the Series I Preferred Shares to be redeemed shall (A) state the date
of such deposit, (B) specify the office of such bank or trust company as the
place of payment of the redemption price and (C) require such holders to
surrender the certificates representing such shares at such place on or about
the date fixed in such redemption notice (which may not be later than the
redemption date) against payment of the redemption price (including all accrued
or accumulated and unpaid dividends to the redemption date). Any monies so
deposited which remain unclaimed by the holders of the Series I Preferred Shares
at the end of two years after the redemption date shall be returned by such bank
or trust company to the Corporation.
(g) Any Series I Preferred Shares that shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued Preferred Stock, without further designation as to series or class
until such shares are once more designated as part of a particular series or
class by the Board.
(6) VOTING RIGHTS.
(a) Holders of the Series I Preferred Shares will not have any voting
rights, except as set forth below.
(b) (i) Whenever dividends on any Series I Preferred Shares shall remain
unpaid for six or more quarterly periods (whether or not consecutive) (a
"Preferred Dividend Default"), the holders of such Series I Preferred Shares
(voting as a single class with all other equity securities of the Corporation
ranking on a parity with the Series I Preferred Shares as to dividends and upon
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation upon which like voting rights have been conferred and are
exercisable, including the Series A Preferred Stock, the Series B Preferred
Stock, the Series C Preferred Stock, the Series D Preferred Stock, the Series E
Preferred Stock, the Series F Preferred Stock, the Series G Preferred Stock and
the Series H Preferred Stock ("Parity Preferred Stock")) will be entitled to
vote for the election of two additional directors of the Corporation (the
"Preferred Stock Directors"), who will be elected by a plurality of the votes
cast in such election for a one-year term and until their successors are duly
elected and shall qualify (or until such director's right to hold such office
terminates as provided herein, whichever occurs earlier, subject to such
director's earlier death, disqualification, resignation or removal), at a
special meeting called by
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the holders of at least 20% of the outstanding Series I Preferred Shares or the
holders of shares of any other class or series of Parity Preferred Stock with
respect to which dividends are so unpaid (unless such request is received less
than 90 days before the date fixed for the next annual or special meeting of
stockholders) or, if the request for a special meeting is received by the
Corporation less than 90 days before the date fixed for the next annual or
special meeting of stockholders, at the next annual or special meeting of
stockholders, and at each subsequent annual meeting until all dividends
accumulated on the Series I Preferred Shares for all past dividend periods and
the dividend for the then current dividend period shall have been fully paid or
declared and a sum sufficient for the payment thereof irrevocably set aside in
trust for payment in full.
(ii) At any time when the voting rights described in Section 6(b)(i)
above shall have vested, a proper officer of the Corporation shall call or cause
to be called, a special meeting of the holders of Series I Preferred Stock and
all the series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable (collectively, the "Parity Securities") by mailing
or causing to be mailed to such holders a notice of such special meeting to be
held not less than ten and not more than 45 days after the date such notice is
given. The record date for determining holders of the Parity Securities entitled
to notice of and to vote at such special meeting will be the close of business
on the third business day preceding the day on which such notice is mailed. At
any such special meeting, all of the holders of the Parity Securities, by
plurality vote, voting together as a single class without regard to series will
be entitled to elect two directors on the basis of one vote per $25.00 of
liquidation preference to which such Parity Securities are entitled by their
terms (excluding amounts in respect of accumulated and unpaid dividends) and not
cumulatively. Notice of all meetings at which holders of the Series I Preferred
Shares shall be entitled to vote will be given to such holders at their
addresses as they appear in the transfer records. If a Preferred Dividend
Default shall terminate after the notice of a special meeting has been given but
before such special meeting has been held, the Corporation shall, as soon as
practicable after such termination, mail or cause to be mailed notice of such
termination to holders of the Series I Preferred Shares that would have been
entitled to vote at such special meeting.
(c) If and when all accumulated dividends and the dividend for the then
current dividend period on the Series I Preferred Shares shall have been paid in
full or declared by the Corporation and irrevocably set aside in trust for
payment in full, the holders of Series I Preferred Shares shall be divested of
the voting rights set forth in Section 6(b) of this Article Third (subject to
revesting in the event of each and every Preferred Dividend Default) and, if all
accumulated dividends have been paid in full or declared by the Corporation and
irrevocably set aside in trust for payment in full on all other classes or
series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable, the term of office of each Preferred Stock
Director so elected shall forthwith terminate. Any Preferred Stock Director
elected by the holders of Series I Preferred Shares and any other such Parity
Preferred Shares may be removed at any time with or without cause by the vote
of, and shall not be removed otherwise than by the vote of, the holders of a
majority of the outstanding Series I Preferred Shares when they only have the
voting rights set forth, or like those set forth, in Section 6(b) of this
Article Third, and by the majority vote of the Series I Preferred Shares and all
other classes
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or series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable (voting as a single class) when the Series I
Preferred Shares and such Parity Preferred Stock is entitled to vote thereon. So
long as a Preferred Dividend Default shall continue, any vacancy in the office
of a Preferred Stock Director so elected may be filled by written consent of the
Preferred Stock Director so elected remaining in office or, if none remains in
office, by a vote of the holders of a majority of the outstanding Series I
Preferred Shares when they only have the voting rights set forth, or like those
set forth, in Section 6(b) of this Article Third, and by the majority vote of
the Series I Preferred Shares and other classes or series of Parity Preferred
Stock upon which like voting rights have been conferred and are exercisable
(voting as a single class) when the Series I Preferred Shares and such Parity
Preferred Stock is entitled to vote thereon.
(d) So long as any Series I Preferred Stock remains outstanding, the
Corporation shall not, without the affirmative vote of the holders of at least
two-thirds of the Series I Preferred Stock outstanding at the time (i) authorize
or create, or increase the authorized or issued amount of, any class or series
of shares ranking senior to the Series I Preferred Stock with respect to payment
of distributions or rights upon liquidation, dissolution or winding-up or
reclassify any authorized shares of the Corporation into any such shares, or
create, authorize or issue any obligations or security convertible into or
evidencing the right to purchase any such shares, (ii) designate or create, or
increase the authorized or issued amount of, any Parity Preferred Stock or
reclassify any authorized shares of the Corporation into any such shares, or
create, authorize or issue any obligations or security convertible into or
evidencing the right to purchase any such shares, but only to the extent such
Parity Preferred Stock is issued to an affiliate of the Corporation, or (iii)
either (A) consolidate, merge into or with, or convey, transfer or lease its
assets substantially as an entirety, to any corporation or other entity, or (B)
amend, alter or repeal the provisions of the Corporation's Charter (including
these Articles Supplementary) or Bylaws, whether by merger, consolidation or
otherwise, in each case that would materially and adversely affect the powers,
special rights, preferences, privileges or voting power of the Series I
Preferred Stock or the holders thereof; provided, however, that with respect to
the occurrence of any event set forth in (iii) above, so long as (a) the
Corporation is the surviving entity and the Series I Preferred Stock remains
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a corporation, a business trust or like entity organized
under the laws of any state and substitutes for the Series I Preferred Stock
other preferred stock or preferred shares having substantially the same terms
and same rights as the Series I Preferred Stock, including with respect to
distributions, voting rights and rights upon liquidation, dissolution or
winding-up, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series I Preferred Stock and provided further that any increase
in the amount of authorized Preferred Stock or the creation or issuance of any
other class or series of Preferred Stock, or any increase in an amount of
authorized shares of each class or series, in each case ranking either (a)
junior to the Series I Preferred Stock with respect to payment of distributions
and the distribution of assets upon liquidation, dissolution or winding-up, or
(b) on a parity with the Series I Preferred Stock with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock is not issued to an affiliate of
the Corporation, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
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(e) The foregoing voting provisions shall not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding Series I Preferred Shares shall have
been redeemed or called for redemption upon proper notice and sufficient funds
shall have been irrevocably deposited in trust to effect such redemption.
(7) RESTRICTIONS ON OWNERSHIP AND TRANSFER TO PRESERVE TAX BENEFIT.
(a) Definitions. for the purposes of Section 7 of Article Third of these
Articles Supplementary, the following terms shall have the following meanings:
"Beneficial Ownership" shall mean ownership of Series I
Preferred Stock by a Person who is or would be treated as an owner
of such Series I Preferred Stock either actually or constructively
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.
"Charitable Beneficiary" shall mean one or more
beneficiaries of a Trust, as determined pursuant to Section
7(c)(vi) of these Articles Supplementary, each of which shall be
an organization described in Sections 170(b)(1)(A), 170(c)(2) and
501(c)(3) of the Code.
"Code" shall mean the Internal Revenue Code of 1986, as
amended. All section references to the Code shall include any
successor provisions thereof as may be adopted from time to time.
"Constructive Ownership" shall mean ownership of Series I
Preferred Stock by a Person who is or would be treated as an owner
of such Series I Preferred Stock either actually or constructively
through the application of Section 318 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.
"IRS" means the United States Internal Revenue Service.
"Market Price" shall mean the last reported sales price
reported on the New York Stock Exchange of the Series I Preferred
Stock on the trading day immediately preceding the relevant date,
or if the Series I Preferred Stock is not then traded on the New
York Stock Exchange, the last reported sales price of the Series I
Preferred Stock on the trading day immediately preceding the
relevant date as reported on any exchange or quotation system over
which the Series I Preferred Stock may be traded, or if the Series
I Preferred Stock is not then traded over any exchange or
quotation system, then the market price of the Series I Preferred
Stock on the relevant date as determined in good faith by the
Board of Directors of the Corporation.
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"MGCL" shall mean the Maryland General Corporation Law, as
amended from time to time, and any successor statute hereafter
enacted.
"Operating Partnership" shall mean AMB Property, L.P., a
Delaware limited partnership.
"Ownership Limit" shall mean 9.8% (by value) of the
outstanding shares of capital stock of the Corporation.
"Person" shall mean an individual, corporation,
partnership, limited liability company, estate, trust (including a
trust qualified under Section 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;
but does not include an underwriter acting in a capacity as such
in a public offering of shares of Series I Preferred Stock
provided that the ownership of such shares of Series I Preferred
Stock by such underwriter would not result in the Corporation
being "closely held" within the meaning of Section 856(h) of the
Code, or otherwise result in the Corporation failing to qualify as
a REIT.
"Purported Beneficial Transferee" shall mean, with respect
to any purported Transfer (or other event) which results in a
transfer to a Trust, as provided in Section 7(b)(ii) of these
Articles Supplementary, the Purported Record Transferee, unless
the Purported Record Transferee would have acquired or owned
shares of Series I Preferred Stock for another Person who is the
beneficial transferee or owner of such shares, in which case the
Purported Beneficial Transferee shall be such Person.
"Purported Record Transferee" shall mean, with respect to
any purported Transfer (or other event) which results in a
transfer to a Trust, as provided in Section 7(b)(ii) of these
Articles Supplementary, the record holder of the Series I
Preferred Stock if such Transfer had been valid under Section
7(b)(i) of these Articles Supplementary.
"REIT" shall mean a real estate investment trust under
Sections 856 through 860 of the Code and, for purposes of taxation
of the Corporation under applicable state law, comparable
provisions of the law of such state.
"Restriction Termination Date" shall mean the first day
after the date hereof on which the Board of Directors of the
Corporation determines that it is no longer in the best interests
of the Corporation to attempt to, or continue to, qualify as a
REIT.
"Subsidiary Operating Partnership" shall mean AMB Property
II, L.P., a Delaware limited partnership.
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"Subsidiary Partnership Agreement" shall mean the Ninth
Amended and Restated Agreement of Limited Partnership of AMB
Property II, L.P., dated as of March 21, 2001, as such agreement
may be amended from time to time.
"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Series I Preferred Stock, including
(i) the granting of any option or entering into any agreement for
the sale, transfer or other disposition of Series I Preferred
Stock or (ii) the sale, transfer, assignment or other disposition
of any securities (or rights convertible into or exchangeable for
Series I Preferred Stock), whether voluntary or involuntary,
whether such transfer has occurred of record or beneficially or
Beneficially or Constructively (including but not limited to
transfers of interests in other entities which result in changes
in Beneficial or Constructive Ownership of Series I Preferred
Stock), and whether such transfer has occurred by operation of law
or otherwise.
"Trust" shall mean each of the trusts provided for in
Section 7(c) of these Articles Supplementary.
"Trustee" shall mean any Person unaffiliated with the
Corporation, or a Purported Beneficial Transferee, or a Purported
Record Transferee, that is appointed by the Corporation to serve
as trustee of a Trust.
(b) Restriction on Ownership and Transfers.
(i) Prior to the Restriction Termination Date:
(A) except as provided in Section 7(i) of these Articles
Supplementary, no Person shall Beneficially Own Series I Preferred Stock which,
taking into account any other capital stock of the Corporation Beneficially
Owned by such Person, would cause such ownership to exceed the Ownership Limit;
(B) except as provided in Section 7(i) of these Articles
Supplementary, no Person shall Constructively Own Series I Preferred Stock
which, taking into account any other capital stock of the Corporation
Constructively Owned by such Person, would cause such ownership to exceed the
Ownership Limit;
(C) no Person shall Beneficially or Constructively Own
Series I Preferred Stock which, taking into account any other capital stock of
the Corporation Beneficially or Constructively Owned by such Person, would
result in the Corporation being "closely held" within the meaning of Section
856(h) of the Code, 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 (either directly or indirectly through one or more partnerships or
limited liability companies) from such tenant would cause the Corporation to
fail to satisfy any of the gross income requirements of Section 856(c) of the
Code or comparable provisions of state law).
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(ii) If, prior to the Restriction Termination Date, any Transfer
or other event occurs that, if effective, would result in any Person
Beneficially or Constructively Owning Series I Preferred Stock in violation of
Section 7(b)(i) of these Articles Supplementary, (1) then that number of shares
of Series I Preferred Stock that otherwise would cause such Person to violate
Section 7(b)(i) of these Articles Supplementary (rounded up to the nearest whole
share) shall be automatically transferred to a Trust for the benefit of a
Charitable Beneficiary, as described in Section 7(c), effective as of the close
of business on the business day prior to the date of such Transfer or other
event, and such Purported Beneficial Transferee shall thereafter have no rights
in such shares or (2) if, for any reason, the transfer to the Trust described in
clause (1) of this sentence is not automatically effective as provided therein
to prevent any Person from Beneficially or Constructively Owning Series I
Preferred Stock in violation of Section 7(b)(i) of these Articles Supplementary,
then the Transfer of that number of shares of Series I Preferred Stock that
otherwise would cause any Person to violate Section 7(b)(i) shall be void ab
initio, and the Purported Beneficial Transferee shall have no rights in such
shares.
(iii) Subject to Section 7(n) of this Article Third and
notwithstanding any other provisions contained herein, prior to the Restriction
Termination Date, any Transfer of Series I Preferred Stock that, if effective,
would result in the capital stock of the Corporation being beneficially owned by
less than 100 Persons (determined without reference to any rules of attribution)
shall be void ab initio, and the intended transferee shall acquire no rights in
such Series I Preferred Stock.
It is expressly intended that the restrictions on ownership and
Transfer described in this Section 7(b) shall apply to the exchange rights
provided in Section 24.8 of the Subsidiary Partnership Agreement.
Notwithstanding any of the provisions of the Subsidiary Partnership Agreement to
the contrary, a partner of the Subsidiary Operating Partnership shall not be
entitled to effect an exchange of an interest in the Subsidiary Operating
Partnership for Series I Preferred Stock if the actual or beneficial or
Beneficial or Constructive Ownership of Series I Preferred Stock would be
prohibited under the provisions of this Section 7.
(c) Transfers of Series I Preferred Stock in Trust.
(i) Upon any purported Transfer or other event described in
Section 7(b)(ii) of these Articles Supplementary, such Series I Preferred Stock
shall be deemed to have been transferred to the Trustee in his capacity 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 a transfer to the Trust pursuant to Section
7(b)(ii). The Trustee shall be appointed by the Corporation and shall be a
Person unaffiliated with the Corporation, any Purported Beneficial Transferee,
or any Purported Record Transferee. Each Charitable Beneficiary shall be
designated by the Corporation as provided in Section 7(c)(vi) of these Articles
Supplementary.
(ii) Series I Preferred Stock held by the Trustee shall be issued
and outstanding Series I Preferred Stock of the Corporation. The Purported
Beneficial Transferee or Purported Record Transferee shall have no rights in the
shares of Series I Preferred Stock held by
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the Trustee. The Purported Beneficial Transferee or Purported Record Transferee
shall not benefit economically from ownership of any shares held in trust by the
Trustee, shall have no rights to dividends and shall not possess any rights to
vote or other rights attributable to the shares of Series I Preferred Stock held
in the Trust.
(iii) The Trustee shall have all voting rights and rights to
dividends with respect to Series I Preferred Stock held in the Trust, which
rights shall be exercised for the exclusive benefit of the Charitable
Beneficiary. Any dividend or distribution paid prior to the discovery by the
Corporation that shares of Series I Preferred Stock have been transferred to the
Trustee shall be paid to the Trustee upon demand, and any dividend or
distribution declared but unpaid shall be paid when due to the Trustee with
respect to such Series I Preferred Stock. Any dividends or distributions so paid
over to the Trustee shall be held in trust for the Charitable Beneficiary.
The Purported Record Transferee and Purported Beneficial
Transferee shall have no voting rights with respect to the Series I Preferred
Stock held in the Trust and, subject to Maryland law, effective as of the date
the Series I Preferred Stock has 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 Purported Record Transferee with respect to such Series
I Preferred Stock prior to the discovery by the Corporation that the Series I
Preferred Stock has 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 any other provision
of these Articles Supplementary to the contrary, until the Corporation has
received notification that the Series I Preferred Stock has 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.
(iv) Within 20 days of receiving notice from the Corporation that
shares of Series I Preferred Stock have been transferred to the Trust, the
Trustee of the Trust shall sell the shares of Series I Preferred Stock held in
the Trust to a Person, designated by the Trustee, whose ownership of the shares
of Series I Preferred Stock will not violate the ownership limitations set forth
in Section 7(b)(i). Upon such sale, the interest of the Charitable Beneficiary
in the shares of Series I Preferred Stock sold shall terminate and the Trustee
shall distribute the net proceeds of the sale to the Purported Record Transferee
and to the Charitable Beneficiary as provided in this Section 7(c)(iv). The
Purported Record Transferee shall receive the lesser of (1) the price paid by
the Purported Record Transferee for the shares of Series I Preferred Stock in
the transaction that resulted in such transfer to the Trust (or, if the event
which resulted in the transfer to the Trust did not involve a purchase of such
shares of Series I Preferred Stock at Market Price, the Market Price of such
shares of Series I Preferred Stock on the day of the event which resulted in the
transfer of such shares of Series I Preferred Stock to the Trust) and (2) the
price per share received by the Trustee (net of any commissions and other
expenses of sale) from the sale or other disposition of the shares of Series I
Preferred Stock held in the Trust. Any net sales proceeds in excess of the
amount payable to the Purported Record Transferee shall be
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immediately paid to the Charitable Beneficiary together with any dividends or
other distributions thereon. If, prior to the discovery by the Corporation that
shares of such Series I Preferred Stock have been transferred to the Trustee,
such shares of Series I Preferred Stock are sold by a Purported Record
Transferee then (i) such shares of Series I Preferred Stock shall be deemed to
have been sold on behalf of the Trust and (ii) to the extent that the Purported
Record Transferee received an amount for such shares of Series I Preferred Stock
that exceeds the amount that such Purported Record Transferee was entitled to
receive pursuant to this Section 7(c)(iv), such excess shall be paid to the
Trustee upon demand.
(v) Series I Preferred 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 paid by the Purported
Record Transferee for the shares of Series I Preferred Stock in the transaction
that resulted in such transfer to the Trust (or, if the event which resulted in
the transfer to the Trust did not involve a purchase of such shares of Series I
Preferred Stock at Market Price, the Market Price of such shares of Series I
Preferred Stock on the day of the event which resulted in the transfer of such
shares of Series I Preferred Stock to the Trust) 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
of Series I Preferred Stock held in the Trust pursuant to Section 7(c)(iv). Upon
such a sale to the Corporation, the interest of the Charitable Beneficiary in
the shares of Series I Preferred Stock sold shall terminate and the Trustee
shall distribute the net proceeds of the sale to the Purported Record Transferee
and any dividends or other distributions held by the Trustee with respect to
such Series I Preferred Stock shall thereupon be paid to the Charitable
Beneficiary.
(vi) 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 the Series I Preferred Stock held in the
Trust would not violate the restrictions set forth in Section 7(b)(i) in the
hands of such Charitable Beneficiary.
(d) Remedies For Breach. If the Board of Directors or a committee thereof
or other designees if permitted by the MGCL shall at any time determine in good
faith that a Transfer or other event has taken place in violation of Section
7(b) of these Articles Supplementary or that a Person intends to acquire, has
attempted to acquire or may acquire beneficial ownership (determined without
reference to any rules of attribution), Beneficial Ownership or Constructive
Ownership of any shares of Series I Preferred Stock of the Corporation in
violation of Section 7(b) of these Articles Supplementary, the Board of
Directors or a committee thereof or other designees if permitted by the MGCL
shall take such action as it deems advisable to refuse to give effect or to
prevent such Transfer, including, but not limited to, causing the Corporation to
redeem shares of Series I Preferred Stock, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer; provided, however, that any Transfers (or, in the case of events
other than a Transfer, ownership or Constructive Ownership or Beneficial
Ownership) in violation of Section 7(b)(i) of these Articles Supplementary,
shall automatically result in the transfer to a Trust as described in Section
7(b)(ii) and any Transfer in violation of Section 7(b)(iii) shall automatically
be void ab initio irrespective of any action (or non-action) by the Board of
Directors.
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(e) Notice of Restricted Transfer. Any Person who acquires or attempts to
acquire shares of Series I Preferred Stock in violation of Section 7(b) of these
Articles Supplementary, or any Person who is a Purported Beneficial Transferee
such that an automatic transfer to a Trust results under Section 7(b)(ii) of
these Articles Supplementary, shall immediately give written notice to the
Corporation of such event 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 or attempted Transfer on the Corporation's status as a
REIT.
(f) Owners Required To Provide Information. Prior to the Restriction
Termination Date each Person who is a beneficial owner or Beneficial Owner or
Constructive Owner of Series I Preferred Stock and each Person (including the
shareholder of record) who is holding Series I Preferred Stock for a beneficial
owner or Beneficial Owner or Constructive Owner shall provide to the Corporation
such information that the Corporation may request, in good faith, in order to
determine the Corporation's status as a REIT.
(g) Remedies Not Limited. Nothing contained in these Articles
Supplementary (but subject to Section 7(n) of these Articles Supplementary)
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 shareholders by preservation of the Corporation's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this Section 7 of these Articles Supplementary, including any
definition contained in Section 7(a), the Board of Directors shall have the
power to determine the application of the provisions of this Section 7 with
respect to any situation based on the facts known to it (subject, however, to
the provisions of Section 7(n) of these Articles Supplementary). In the event
Section 7 requires an action by the Board of Directors and these Articles
Supplementary fail 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. Absent a
decision to the contrary by the Board of Directors (which the Board may make in
its sole and absolute discretion), if a Person would have (but for the remedies
set forth in Section 7(b)) acquired Beneficial or Constructive Ownership of
Series I Preferred Stock in violation of Section 7(b)(i), such remedies (as
applicable) shall apply first to the shares of Series I Preferred Stock which,
but for such remedies, would have been actually owned by such Person, and second
to shares of Series I Preferred Stock which, but for such remedies, would have
been Beneficially Owned or Constructively Owned (but not actually owned) by such
Person, pro rata among the Persons who actually own such shares of Series I
Preferred Stock based upon the relative number of the shares of Series I
Preferred Stock held by each such Person.
(i) Exceptions.
(i) Subject to Section 7(b)(i)(C), the Board of Directors, in its
sole discretion, may exempt a Person from the limitation on a Person
Beneficially Owning shares of Series I Preferred Stock in violation of Section
7(b)(i)(A) if the Board of Directors obtains any representations and
undertakings from such Person as are reasonably necessary in the opinion of the
Board of Directors to ascertain that no individual's Beneficial Ownership of
such shares of
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Series I Preferred Stock will violate Section 7(b)(i)(A) or that any such
violation will not cause the Corporation to fail to qualify as a REIT under the
Code, and that any violation of any representations or undertakings (or other
action which is contrary to the restrictions contained in Section 7(b) of these
Articles Supplementary) or attempted violation will result in such Series I
Preferred Stock being transferred to a Trust in accordance with Section 7(b)(ii)
of these Articles Supplementary.
(ii) Subject to Section 7(b)(i)(C), the Board of Directors, in its
sole discretion, may exempt a Person from the limitation on a Person
Constructively Owning Series I Preferred Stock in violation of Section
7(b)(i)(B), if the Corporation obtains such representations and undertakings
from such Person as are reasonably necessary in the opinion of the Board of
Directors to ascertain that such Person does not and will not own, actually or
Constructively, an interest in a tenant of the Corporation (or a tenant of any
entity owned in whole or in part by the Corporation) that would cause the
Corporation to own, actually or Constructively, more than a 9.8% interest (as
set forth in Section 856(d)(2)(B) of the Code) in such tenant and that any
violation or attempted violation will result in such Series I Preferred Stock
being transferred to a Trust in accordance with Section 7(b)(ii) of these
Articles Supplementary. Notwithstanding the foregoing, the inability of a Person
to make the certification described in this Section 7(i)(ii) shall not prevent
the Board of Directors, in its sole discretion, from exempting such Person from
the limitation on a Person Constructively Owning Series I Preferred Stock in
violation of Section 7(b)(i)(B) if the Board of Directors determines that the
resulting application of Section 856(d)(2)(B) of the Code would affect the
characterization of less than 0.5% of the gross income (as such term is used in
Section 856(c)(2) of the Code) of the Corporation in any taxable year, after
taking into account the effect of this sentence with respect to all other
capital stock of the Corporation to which this sentence applies.
(iii) Prior to granting any exception pursuant to Section 7(i)(i)
or (ii) of these Articles Supplementary, 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.
(j) Legends. Each certificate for Series I Preferred Stock shall bear
substantially the following legends in addition to any legends required to
comply with federal and state securities laws:
CLASSES OF STOCK
"THE CORPORATION IS AUTHORIZED TO ISSUE CAPITAL STOCK OF MORE THAN ONE
CLASS, CONSISTING OF COMMON STOCK AND ONE OR MORE CLASSES OF PREFERRED
STOCK. THE BOARD OF DIRECTORS IS AUTHORIZED TO DETERMINE THE PREFERENCES,
LIMITATIONS AND RELATIVE RIGHTS OF ANY CLASS OF PREFERRED STOCK BEFORE
THE ISSUANCE OF SHARES OF SUCH CLASS OF PREFERRED STOCK. THE CORPORATION
WILL FURNISH, WITHOUT
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CHARGE, TO ANY STOCKHOLDER MAKING A WRITTEN REQUEST THEREFOR, A COPY OF
THE CORPORATION'S CHARTER AND A WRITTEN STATEMENT OF THE DESIGNATIONS,
RELATIVE RIGHTS, PREFERENCES, CONVERSION OR OTHER RIGHTS, VOTING POWERS,
RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS AND OTHER DISTRIBUTIONS,
QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF
EACH CLASS WHICH THE CORPORATION HAS THE AUTHORITY TO ISSUE AND, IF THE
CORPORATION IS AUTHORIZED TO ISSUE ANY PREFERRED OR SPECIAL CLASS IN
SERIES, (i) THE DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES
BETWEEN THE SHARES OF EACH SERIES TO THE EXTENT SET, AND (ii) THE
AUTHORITY OF THE BOARD OF DIRECTORS TO SET SUCH RIGHTS AND PREFERENCES OF
SUBSEQUENT SERIES. REQUESTS FOR SUCH WRITTEN STATEMENT MAY BE DIRECTED TO
THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE."
RESTRICTION ON OWNERSHIP AND TRANSFER
"THE SHARES OF SERIES I PREFERRED STOCK 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 ARTICLES SUPPLEMENTARY FOR THE
SERIES I PREFERRED STOCK, (i) NO PERSON MAY BENEFICIALLY OWN SHARES OF
THE CORPORATION'S SERIES I PREFERRED STOCK WHICH, TAKING INTO ACCOUNT ANY
OTHER CAPITAL STOCK OF THE CORPORATION BENEFICIALLY OWNED BY SUCH PERSON,
WOULD CAUSE SUCH OWNERSHIP TO EXCEED THE OWNERSHIP LIMIT OF 9.8%; (ii) NO
PERSON MAY CONSTRUCTIVELY OWN SHARES OF THE CORPORATION'S SERIES I
PREFERRED STOCK WHICH, TAKING INTO ACCOUNT ANY OTHER CAPITAL STOCK OF THE
CORPORATION CONSTRUCTIVELY OWNED BY SUCH PERSON, WOULD CAUSE SUCH
OWNERSHIP TO EXCEED THE OWNERSHIP LIMIT OF 9.8%; (iii) NO PERSON MAY
BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF THE CORPORATION'S SERIES I
PREFERRED STOCK THAT, TAKING INTO ACCOUNT ANY OTHER CAPITAL STOCK OF THE
CORPORATION BENEFICIALLY OR CONSTRUCTIVELY OWNED BY SUCH PERSON, 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 SERIES I PREFERRED STOCK IF
SUCH
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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 SERIES I PREFERRED
STOCK WHICH CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OR
CONSTRUCTIVELY OWN SERIES I PREFERRED STOCK IN EXCESS OF THE ABOVE
LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION. IF ANY OF THE
RESTRICTIONS ON TRANSFER OR OWNERSHIP ARE VIOLATED, THE SERIES I
PREFERRED STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO
THE TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE
BENEFICIARIES. 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.
FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS
IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO.
ALL TERMS IN THIS LEGEND WHICH ARE DEFINED IN THE ARTICLES SUPPLEMENTARY
FOR THE SERIES I PREFERRED STOCK SHALL HAVE THE MEANINGS ASCRIBED TO THEM
IN SUCH ARTICLES SUPPLEMENTARY, 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 SERIES I PREFERRED STOCK
ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED
TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE."
(k) Exchange of Series I Preferred Units. The Corporation is hereby
expressly vested with authority (subject to the restrictions on ownership,
transfer and redemption of Series I Preferred Stock set forth in this Section 7)
to issue, and so long as AMB Property Holding Corporation, a Maryland
corporation, remains the general partner of the Subsidiary Operating
Partnership, and the Operating Partnership remains a limited partner of the
Subsidiary Operating Partnership, the Corporation shall issue to the extent
provided in the Subsidiary Partnership Agreement, Series I Preferred Stock in
exchange for Series I Preferred Units (as defined in the Subsidiary Partnership
Agreement).
(l) Reservation of Shares. Pursuant to the obligations of the Corporation
under the Subsidiary Partnership Agreement to issue Series I Preferred Stock in
exchange for Series I Preferred Units, the Board of Directors is hereby required
to reserve and authorize for issuance a number of authorized but unissued shares
of Series I Preferred Stock not less than the number of Series I Preferred Units
issued to permit the Corporation to issue Series I Preferred Stock in
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exchange for Series I Preferred Units that may be exchanged for or converted
into Series I Preferred Stock as provided in the Subsidiary Partnership
Agreement.
(m) Severability. If any provision of this Section 7 or any application
of any such provision is determined to be invalid by any Federal or state court
having jurisdiction over the issues, the validity of the remaining provisions
shall not be affected and other applications of such provision shall be affected
only to the extent necessary to comply with the determination of such court.
(n) New York Stock Exchange. Nothing in this Section 7 shall preclude the
settlement of any transaction entered into through the facilities of the New
York Stock Exchange. The shares of Series I Preferred Stock that are the subject
of such transaction shall continue to be subject to the provisions of this
Section 7 after such settlement.
(o) Applicability of Section 7. The provisions set forth in this Section
7 shall apply to the Series I Preferred Stock notwithstanding any contrary
provisions of the Series I Preferred Stock provided for elsewhere in these
Articles Supplementary.
(8) CONVERSION. The Series I Preferred Stock is not convertible into or
exchangeable for any other property or securities of the Corporation.
(9) NO SINKING FUND. No sinking fund shall be established for the
retirement or redemption of Series I Preferred Stock.
(10) NO PREEMPTIVE RIGHTS. No holder of the Series I Preferred Stock of
the Corporation shall, as such holder, have any preemptive rights to purchase or
subscribe for additional shares of stock of the Corporation or any other
security of the Corporation which it may issue or sell.
FOURTH: The Series I Preferred Stock has been classified and designated
by the Board under the authority contained in the Charter.
FIFTH: These Articles Supplementary have been approved by the Board in
the manner and by the vote required by law.
SIXTH: These Articles Supplementary shall be effective at the time the
State Department of Assessments and Taxation of Maryland accepts these Articles
Supplementary for record.
SEVENTH: The undersigned President of the Corporation acknowledges these
Articles Supplementary to be the 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.
(Signature Page Follows)
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IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
Executive Vice President and attested to by its Secretary on this 21st day of
March, 2001.
AMB PROPERTY CORPORATION
By: /s/ Michael A. Coke
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Michael A. Coke
Executive Vice President and
Chief Executive Officer
[SEAL]
ATTEST:
/s/ Tamra D. Browne
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Tamra D. Browne
Vice President, General Counsel and Secretary