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 General
Corporation Law of Maryland, 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 REMOVAL OF DIRECTORS. Subject to the rights of holders of
one or more classes or series of Preferred Stock 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 or active and deliberate dishonesty.
Section 5.9 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 5.10 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 on the Board of Directors ("Designee"), shall be required to (i)
hold a meeting of the Board of Directors which is not attended by Carl E.
Berg or his Designee, (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 5.11 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 (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, as the case may be, 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), 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)
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Secretary President