**Exhibit 3.1**

**ARTICLES OF AMENDMENT AND RESTATEMENT**

**OF**

**KBS REAL ESTATE INVESTMENT TRUST, INC.**

FIRST: KBS Real Estate Investment Trust, Inc., a Maryland corporation, desires to amend and restate its charter as currently in effect and as hereinafter amended. 

SECOND: The following provisions are all the provisions of the charter currently in effect and as hereinafter amended: 

**ARTICLE I**

**NAME**

The name of the corporation is KBS Real Estate Investment Trust, Inc. (the “Corporation”). 

**ARTICLE II**

**PURPOSE**

The purposes for which the Corporation is formed are to engage in any lawful act or activity (including, without limitation or obligation, qualifyingas a real estate investment trust under Sections 856 through 860, or any successor sections, of the Internal Revenue Code of 1986, as amended (the “Code”)), for which corporations may be organized under the MGCL and the general laws of theState of Maryland as now or hereafter in force. 

**ARTICLE III**

**PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT**

The name and address of theresident agent for service of process of the Corporation in the State of Maryland is The Corporation Trust Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202. The address of the Corporation’s principal office in the State ofMaryland is 300 East Lombard Street, Baltimore, Maryland 21202. 

The Corporation may have such other offices and places of business within or outside the State of Maryland as the board may from time to time determine.

**ARTICLE IV**

**DEFINITIONS**

As used herein, the following terms shall have the following meanings unless the context otherwise requires:

Acquisition Expenses. Expenses including but not limited to legal fees and expenses, travel and communications expenses, cost ofappraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, title insurance and miscellaneous expenses related to selection and acquisition of properties, whether or not acquired. 

Acquisition Fees. The total of all fees and commissions paid by any party to any party in connection with making or investing in mortgage loans orthe purchase, development or construction of property by the Corporation. Included in the computation of such fees or commissions shall be any real estate commission, selection fee, Development Fee, Construction Fee, nonrecurring management fee,loan fees or points or any fee of a similar nature, however designated. Excluded shall be Development Fees and Construction Fees paid to any Person not affiliated with the Sponsor in connection with the actual development and construction of aproject. 

Advisor. The Person responsible for directing or performing the day-to-day business affairs of the Corporation, includinga Person to which an Advisor subcontracts substantially all such functions. 

Advisory Agreement. The agreement between theCorporation and the Advisor pursuant to which the Advisor will direct or perform the day-to-day business affairs of the Corporation. 

Affiliate. An Affiliate of another Person includes any of the following: 

(a) any Person directly orindirectly owning, controlling or holding, with power to vote, 10% or more of the outstanding voting securities of such other Person; 

(b) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with power to vote, by such other Person; 

(c) any Person directly or indirectly controlling, controlled by or under common control with such other Person; 

 

2 

(d) any executive officer, director, trustee or general partner of such other Person; and

(e) any legal entity for which such Person acts as an executive officer, director, trustee or general partner. 

AMEX. American Stock Exchange. 

Average Invested Assets. For a specified period, the average of the aggregate book value of the assets of the Corporation invested, directly or indirectly in equity interests in and loans secured by real estate, before deductingdepreciation, bad debts or other non-cash reserves, computed by taking the average of such values at the end of each month during such period. 

Capital Stock. All classes or series of stock of the Corporation, including, without limitation, Common Stock and Preferred Stock. 

Code. The term shall have the meaning as provided in Article II herein. 

Common Stock. The term shall have themeaning as provided in Section 5.1 herein. 

Common Stockholders. The registered holders of Common Stock. 

Conflicts Committee. The term shall have the meaning as provided in Section 10.1. 

Corporation. The term shall have the meaning as provided in Article I herein. 

Competitive Real Estate Commission. A real estate or brokerage commission paid for the purchase or sale of a property that is reasonable,customary and competitive in light of the size, type and location of the property. 

Construction Fee. A fee or other remunerationfor acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to provide major repairs or rehabilitations on a property. 

Contract Purchase Price. The amount actually paid or allocated in respect of the purchase, development, construction or improvement of a propertyexclusive of Acquisition Fees and Acquisition Expenses. 

Development Fee. A fee for the packaging of the Corporation’sproperty, including the negotiation and approval of plans and any assistance in obtaining zoning and necessary variances and financing for a specific property, either initially or at a later date. 

Equity Securities. Equity securities that are “publicly traded” as that term is used in Rule 10b-17 under the Exchange Act of 1934.

 

3 

Independent Directors. The directors of the Corporation who are not associated and have not beenassociated within the last two years, directly or indirectly, with the Sponsor or Advisor of the Corporation. 

(a) A director shall bedeemed to be associated with the Sponsor or Advisor if he or she: 

(i) owns an interest in the Sponsor, Advisor or any oftheir Affiliates; 

(ii) is employed by the Sponsor, Advisor or any of their Affiliates; 

(iii) is an officer or director of the Sponsor, Advisor or any of their Affiliates; 

(iv) performs services, other than as a director, for the Corporation; 

(v) is a director for more than three REITs organized by the Sponsor or advised by the Advisor; or 

(vi) has any material business or professional relationship with the Sponsor, Advisor or any of their Affiliates. 

(b) Notwithstanding the foregoing, and consistent with (a)(v) above, serving as a director of or receiving director fees from or owning an interest in aREIT or other real estate program organized by the Sponsor or advised or managed by the Advisor or its Affiliates shall not, by itself, cause a director to be deemed associated with the Sponsor or the Advisor. 

(c) For purposes of determining whether or not a business or professional relationship is material pursuant to (a)(vi) above, the gross revenue derivedby the director from the Sponsor, Advisor and their Affiliates (excluding fees for serving as a director of the Corporation or other REIT or real estate program organized or advised or managed by the Advisor or its Affiliates) shall be deemedmaterial *per se* if it exceeds 5% of the director’s: 

(i) annual gross revenue, derived from all sources, duringeither of the last two years; or 

(ii) net worth, on a fair market value basis. 

(d) An indirect relationship shall include circumstances in which a director’s spouse, parent, child, sibling, mother- or father-in-law, son- ordaughter-in-law or brother- or sister-in-law is or has been associated with the Sponsor, Advisor any of their Affiliates or the Corporation. 

Independent Expert. A Person (selected by the Conflicts Committee) with no material current or prior business or personal relationship with the Advisor or a director 

 

4 

who is engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by the Corporation. 

Initial Investment. An investment of $200,000 by the Advisor or an Affiliate thereof to acquire an equity interest in the Corporation.

Leverage. The aggregate amount of indebtedness of the Corporation for money borrowed (including purchase money mortgage loans)outstanding at any time, both secured and unsecured. 

Listed. Approved for trading on the NYSE, AMEX, Nasdaq/NMS, any successor tosuch entities or on any national securities exchange that has listing standards that the Securities and Exchange Commission determines by rule are substantially similar to the listing standards of the NYSE, AMEX or Nasdaq/NMS. The term“Listing” shall have the correlative meaning. 

MGCL. The Maryland General Corporation Law, as amended from time to time.

Nasdaq/NMS. National Market System of the Nasdaq Stock Market. 

Net Assets. The total assets of the Corporation (other than intangibles) at cost, before deducting depreciation or other non-cash reserves, lesstotal liabilities, calculated quarterly by the Corporation on a basis consistently applied. 

Net Income. For any period, totalrevenues applicable to such period less the expenses applicable to such period other than additions to reserves for depreciation or bad debts or other similar non-cash reserves. If the Advisor receives an incentive fee, Net Income, for purposes ofcalculating Total Operating Expenses in Section 8.8, shall exclude the gain from the sale of the Corporation’s assets. 

NYSE. New York Stock Exchange. 

Organization and Offering Expenses. All expenses incurred by and to be paid from theassets of the Corporation in connection with and in preparing the Corporation for registration of and subsequently offering and distributing its shares to the public, including, but not limited to, total underwriting and brokerage discounts andcommissions (including fees of the underwriters’ attorneys); any expense allowance granted by the Corporation to the underwriter or any reimbursement of expenses of the underwriter by the Corporation; expenses for printing, engraving andmailing; salaries of employees while engaged in sales activity; charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts; and expenses of qualification of the sale of the securities under Federal and State laws,including taxes and fees, accountants’ and attorneys’ fees. 

Person. An individual, corporation, association, businesstrust, estate, trust, partnership, limited liability company or other legal entity. 

 

5 

Preferred Stock. The term shall have the meaning as provided in Section 5.1 herein.

Prospectus. The term shall have the meaning as defined in Section 2(10) of the Securities Act of 1933, as amended (the“Securities Act”), including a preliminary prospectus, an offering circular as described in Rule 256 of the General Rules and Regulations under the Securities Act or, in the case of an intrastate offering, any document by whatever nameknown utilized for the purpose of offering and selling securities to the public. 

REIT. Real estate investment trust under Sections856 through 860 of the Code. 

Roll-Up Entity. A partnership, real estate investment trust, corporation, trust or similar entity thatwould be created or would survive after the successful completion of a proposed Roll-Up Transaction. 

Roll-Up Transaction. Atransaction involving the acquisition, merger, conversion or consolidation, either directly or indirectly, of the Corporation and the issuance of securities of a Roll-Up Entity to the stockholders of the Corporation. 

Such term does not include: 

(a) atransaction involving securities of the Corporation that have been Listed for at least 12 months; or 

(b) a transaction involving theconversion to corporate, trust or association form of only the Corporation, if, as a consequence of the transaction, there will be no significant adverse change in any of the following: 

(i) the voting rights of Common Stockholders; 

(ii) the term of existence of the Corporation; 

(iii) Sponsor or Advisor compensation; or 

(iv) the Corporation’s investment objectives. 

SDAT. The State Department of Assessments andTaxation of Maryland. 

Sponsor. Any Person directly or indirectly instrumental in organizing, wholly or in part, the Corporation orany Person who will control, manage or participate in the management of the Corporation, and any Affiliate of such Person. Not included is any Person whose only relationship with the Corporation is as that of an independent property manager of theCorporation’s assets and whose only compensation is as such. Sponsor does not include wholly independent third parties such as attorneys, accountants and underwriters whose only compensation is for professional services. A Person may also bedeemed a Sponsor of the Corporation (as to be determined by the Conflicts Committee) by: 

(a) taking the initiative, directly orindirectly, in founding or organizing the business or enterprise of the Corporation, either alone or in conjunction with one or more other Persons; 

 

6 

(b) receiving a material participation in the Corporation in connection with the founding or organizingof the business of the Corporation, in consideration of services or property, or both services and property; 

(c) having a substantialnumber of relationships and contacts with the Corporation; 

(d) possessing significant rights to control the Corporation’s properties;

(e) receiving fees for providing services to the Corporation which are paid on a basis that is not customary in the industry; or

(f) providing goods or services to the Corporation on a basis which was not negotiated at arms length with the Corporation. 

Total Operating Expenses. All expenses paid or incurred by the Corporation, as determined under generally accepted accounting principles, that arein any way related to the operation of the Corporation or to Corporation business, including advisory fees, but excluding (a) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting,brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of the Capital Stock; (b) interest payments;(c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) incentive fees paid in compliance with Section 8.6, notwithstanding the next succeeding clause (f); and (f) Acquisition Fees,Acquisition Expenses, real estate commissions on the resale of property and other expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property (including the costs offoreclosure, insurance premiums, legal services, maintenance, repair and improvement of property). 

Unimproved Real Property. Thereal property of the Corporation that has the following three characteristics: 

(a) such property was not acquired for the purpose ofproducing rental or other operating income; 

(b) there is no development or construction in progress on such land; and 

(c) no development or construction on such land is planned in good faith to commence on such land within one year. 

 

7 

**ARTICLE V**

**STOCK**

Section 5.1. Authorized Shares. The Corporation has authority to issue1,000,000,000 shares of common stock, $0.01 par value per share (“Common Stock”), and 10,000,000 shares of preferred stock, $0.01 par value per share (“Preferred Stock”). The aggregate par value of all authorized shares ofCapital Stock having par value is $10,100,000. The board of directors, with the approval of a majority of the directors and without any action by the stockholders of the Corporation, may amend the charter from time to time to increase or decreasethe aggregate number of shares of Capital Stock or the number of shares of Capital Stock of any class or series that the Corporation has the authority to issue. 

Section 5.2. Common Stock. Subject to the provisions of Article VI, each share of Common Stock shall entitle the holder thereof to one vote. The board of directors may reclassify any unissued sharesof Common Stock from time to time in one or more classes or series of Capital Stock. 

Section 5.3. Preferred Stock. Theboard 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 series of Capital Stock. 

Section 5.4. Classified or Reclassified Shares. Prior to the issuance of classified or reclassified shares of any class or series, theboard of directors by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of Capital 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 VI and subject to the express terms of any class or series of Capital 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 SDAT. Any of the terms ofany class or series of Capital Stock set or changed pursuant to clause (c) of this Section 5.4 may be made dependent upon facts or events ascertainable outside the charter (including determinations by the board of directors or other factsor 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 Capital Stock is clearly and expresslyset forth in the articles supplementary filed with the SDAT. 

Section 5.5. Charter and Bylaws. All Persons who shallacquire Capital Stock in the Corporation shall acquire the same subject to the provisions of the charter and the bylaws. 

Section 5.6. No Preemptive Rights. No holder of shares of Capital Stock of any class shall have any preemptive right to subscribe to or purchase any additional shares of any class, or any bonds or convertible securities ofany nature; provided, however, that 

 

8 

the board of directors may, in authorizing the issuance of shares of Capital Stock of any class, confer any preemptive right that the board or directors maydeem advisable in connection with such issuance. 

Section 5.7. Issuance of Shares Without Certificates. The board ofdirectors may authorize the issuance of shares of Capital Stock without certificates. The Corporation shall continue to treat the holder of uncertificated Capital Stock registered on its stock ledger as the owner of the shares noted therein untilthe new owner delivers a properly executed form provided by the Corporation for that purpose. 

Section 5.8. Suitability andMinimum Investment of Stockholders. Until the Common Stock is Listed, the following provisions shall apply: 

(a) Topurchase Common Stock, the purchaser must represent to the Corporation: 

(i) that such purchaser (or, in the case of salesto fiduciary accounts, that the beneficiary, the fiduciary account or the grantor or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) has a minimum annual gross income of $45,000and a net worth (excluding home, furnishings and automobiles) of not less than $45,000; or 

(ii) that such purchaser (or, inthe case of sales to fiduciary accounts, that the beneficiary, the fiduciary account or the grantor or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) has a net worth (excludinghome, furnishings and automobiles) of not less than $150,000. 

(b) The Sponsor and each Person selling shares on behalf ofthe Sponsor or the Corporation shall make every reasonable effort to determine that the purchase of shares is a suitable and appropriate investment for each Common Stockholder. In making this determination, the Sponsor or each Person selling shareson behalf of the Sponsor or the Corporation shall ascertain that the prospective Common Stockholder: (i) meets the minimum income and net worth standards set forth in Section 5.8; (ii) can reasonably benefit from the Corporation basedon the prospective stockholder’s overall investment objectives and portfolio structure; (iii) is able to bear the economic risk of the investment based on the prospective stockholder’s overall financial situation; and (iv) hasapparent understanding of (1) the fundamental risks of the investment; (2) the risk that the stockholder may lose the entire investment; (3) the lack of liquidity of the shares; (4) the restrictions on transferability of theshares; (5) the background and qualifications of the Sponsor or the Advisor; and (6) the tax consequences of the investment. The Sponsor or each Person selling shares on behalf of the Sponsor or the Corporation shall make thisdetermination on the basis of information it has obtained from a prospective stockholder, including information indirectly obtained from a prospective stockholder through such stockholder’s investment adviser, financial advisor or bank actingas a fiduciary. Relevant information for this purpose will include at least the age, investment objectives, investment experience, income, net worth, 

 

9 

financial situation and other investments of the prospective stockholder, as well as any other pertinent factors. The Sponsor or each Person selling shareson behalf of the Sponsor or the Corporation shall use best efforts to cause to be maintained for at least six years records of the information used to determine that an investment in shares is suitable and appropriate for a Common Stockholder.

(c) Each issuance or transfer of shares of Common Stock shall comply with the requirements regarding minimum initial andsubsequent cash investment amounts set forth in the Corporation’s Registration Statement (No. 333-126087) on Form S-11 as such registration statement has been amended or supplemented as of the date of such issuance or transfer or any lowerapplicable state requirements with respect to minimum initial and subsequent cash investment amounts in effect as of the date of the issuance or transfer. 

Section 5.9. Dividend Reinvestment Plans. The board may establish, from time to time, a dividend reinvestment plan or plans. Under any dividend reinvestment plan, (a) all material informationregarding dividends to the Common Stockholders and the effect of reinvesting such dividends, including the tax consequences thereof, shall be provided to the Common Stockholders not less often than annually, and (b) each Common Stockholderparticipating in such plan shall have a reasonable opportunity to withdraw from the plan not less often than annually after receipt of the information required in clause (a) above. 

Section 5.10. Distributions. Only the board of directors may authorize payments to stockholders in connection with their stock. Thedecision to authorize a distribution, like all other board decisions, shall be made in good faith, in a manner reasonably believed to be in the best interest of the corporation and with the care that an ordinarily prudent person in a like positionwould use under similar circumstances. Until the board of directors determines that it is no longer in the best interest of the Corporation to qualify as a REIT, the board of directors are to authorize dividends to the extent necessary to preservethe status of the Corporation as a REIT. 

Distributions in kind shall not be permitted, except for distributions of readily marketablesecurities, distributions of beneficial interests in a liquidating trust established for the dissolution of the Corporation and the liquidation of its assets in accordance with the terms of the charter or distributions that meet all of the followingconditions: (a) the board of directors advises each Common Stockholder of the risks associated with direct ownership of the property, (b) the board of directors offers each Common Stockholder the election of receiving such in-kinddistributions and (c) in-kind distributions are made only to those Common Stockholders who accept such offer. 

Section 5.11. Actions Required if Common Stock Not Listed. If by November, 2012 the shares of Common Stock are not Listed, then the board of directors must adopt a resolution that declares a proposed liquidation isadvisable on substantially the terms and conditions set forth in the resolution and direct that the proposed liquidation be submitted for consideration at either an annual or special meeting of the stockholders; provided, however, that such boardaction may be postponed if the Conflicts Committee determines 

 

10 

by a majority vote that a liquidation is not then in the best interest of the Corporation’s stockholders. If such board action is so postponed, theConflicts Committee shall revisit the issue of liquidation at least annually and further postponement of such board action would only be permitted if the Conflicts Committee again determined by a majority vote that a liquidation would not then be inthe best interest of the Corporation’s stockholders. 

**ARTICLE VI**

**RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES**

Section 6.1. Definitions. As used in this Article VI, the following terms shall have the following meanings: 

Aggregate Stock Ownership Limit. 9.8% 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 in good faith, whichdetermination shall be conclusive for all purposes hereof. 

Beneficial Ownership. Ownership of Capital Stock by a Person, whetherthe 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 bySection 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns,” “Beneficially Owning” and “Beneficially Owned” shall have the correlative meanings. 

Business Day. Any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York Cityare authorized or required by law, regulation or executive order to close. 

Charitable Beneficiary. One or more beneficiaries of theTrust as determined pursuant to Section 6.3.6, 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 Sections170(b)(1)(A), 2055 and 2522 of the Code. 

Common Stock Ownership Limit. 9.8% (in value or in number of shares, whichever is morerestrictive) of the aggregate of the outstanding shares of Common Stock of the Corporation. The number and value of outstanding shares of Common Stock of the Corporation shall be determined by the board of directors in good faith, whichdetermination shall be conclusive for all purposes hereof. 

Constructive Ownership. Ownership of Capital Stock by a Person, whetherthe 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 bySection 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns,” “Constructively Owning” and “Constructively Owned” shall have the correlative meanings. 

 

11 

Excepted Holder. A stockholder of the Corporation for whom an Excepted Holder Limit is created bythis charter or by the board of directors pursuant to Section 6.2.7. 

Excepted Holder Limit. The percentage limit establishedby the board of directors pursuant to Section 6.2.7 provided that the affected Excepted Holder agrees to comply with the requirements established by the board of directors pursuant to Section 6.2.7, and subject to adjustment pursuant toSection 6.2.8. 

Initial Date. The date upon which the charter containing this Article VI is filed with the SDAT. 

Market Price. With respect to any class or series of outstanding shares of Capital Stock, the Closing Price for such Capital Stock on such date.The “Closing Price” on any date shall mean the last sale price for such Capital 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 such Capital Stock, ineither case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which such Capital Stock is listed or admitted to tradingor, if such Capital Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by theNational 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 such Capital Stock is not quoted by any suchorganization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Capital Stock selected by the board of directors or, in the event that no trading price is available for such CapitalStock, the fair market value of the Capital Stock, as determined in good faith by the board of directors. 

Prohibited Owner. Withrespect to any purported Transfer, any Person who but for the provisions of Section 6.2.1 would Beneficially Own or Constructively Own shares of Capital Stock and, if appropriate in the context, shall also mean any Person who would have beenthe record owner of the shares that the Prohibited Owner would have so owned. 

Restriction Termination Date. The first day on whichthe Corporation determines pursuant to Section 7.7 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 onBeneficial 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. Any issuance, sale, transfer, gift, assignment, devise or other disposition as well as any other event that causes any Person to acquireBeneficial 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 distributions on 

 

12 

`Capital Stock, including (a) the granting or exercise of any option (or any disposition of any option), (b) any disposition of any securities orrights 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 Ownershipor 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. Any trust provided for in Section 6.3.1. 

Trustee. The Person unaffiliated with the Corporation and a Prohibited Owner that is appointed by the Corporation to serve as trustee of theTrust. 

Section 6.2. Capital Stock. 

Section 6.2.1. Ownership Limitations. Prior to the Restriction Termination Date: 

(a)Basic Restrictions. 

(i) (1) No Person, other than an Excepted Holder, shall Beneficially Own or ConstructivelyOwn shares of Capital Stock in excess of the Aggregate Stock Ownership Limit, (2) no Person, other than an Excepted Holder, shall Beneficially Own or Constructively Own shares of Common Stock in excess of the Common Stock Ownership Limit and(3) no Excepted Holder shall Beneficially Own or Constructively Own shares of Capital Stock in excess of the Excepted Holder Limit for such Excepted Holder. 

(ii) No Person shall Beneficially Own or Constructively Own shares of Capital Stock to the extent that such Beneficial Ownership orConstructive Ownership of Capital Stock would result in the Corporation (1) 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 ataxable year), or (2) otherwise failing to qualify as a REIT (including, but not limited to, Beneficial Ownership or Constructive Ownership that would result in the Corporation owning (actually or Constructively) an interest in a tenant that isdescribed 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); provided,however, that this Section 6.2.1(a)(ii)(1) shall not apply to the Corporation’s first taxable year for which a REIT election is made. 

(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 any nationalsecurities 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 bevoid ab initio, and the intended transferee shall acquire no rights in such shares of Capital Stock; provided, however, that 

 

13 

(1) this Section 6.2.1(a)(iii) shall not apply to a Transfer of shares of Capital Stock occurring in the Corporation’s first taxable year forwhich a REIT election is made and (2) the board of directors may waive this Section 6.2.1(a)(iii) if, in the opinion of the board of directors, such Transfer would not adversely affect the Corporation’s ability to qualify as a REIT.

(b) Transfer in Trust. If any Transfer of shares of Capital Stock (whether or not such Transfer is the result of a transactionentered into through the facilities of any national securities exchange or automated inter-dealer quotation system) occurs that, if effective, would result in any Person Beneficially Owning or Constructively Owning shares of Capital Stock inviolation of Section 6.2.1(a)(i) or Section 6.2.1(a)(ii), 

(i) then that number of shares of Capital Stock theBeneficial Ownership or Constructive Ownership of which otherwise would cause such Person to violate Section 6.2.1(a)(i) or Section 6.2.1(a)(ii) (rounded to the nearest whole share) shall be automatically transferred to a Trust for thebenefit of a Charitable Beneficiary, as described in Section 6.3, 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; provided, however,

(ii) if the transfer to the Trust described in clause (i) of this sentence would not be effective for any reason toprevent the violation of Section 6.2.1(a)(i) or Section 6.2.1(a)(ii), then the Transfer of that number of shares of Capital Stock that otherwise would cause any Person to violate Section 6.2.1(a)(i) or Section 6.2.1(a)(ii) shallbe void abinitio and the intended transferee shall acquire no rights in such shares of Capital Stock. 

Section 6.2.2. Remedies for Breach. If the board of directors shall at any time determine in good faith that a Transfer or other event has taken place that results in a violation of Section 6.2.1(a) or that a Personintends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any shares of Capital Stock in violation of Section 6.2.1(a) (whether or not such violation is intended), the board of directors or a committeethereof 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 thebooks of the Corporation or instituting proceedings to enjoin such Transfer or other event; provided, however, that any Transfers or attempted Transfers or other events in violation of Section 6.2.1(a) shall automatically resultin the transfer to the Trust described above and, where applicable, such Transfer (or other event) shall be void abinitio as provided above irrespective of any action (or non-action) by the board of directors. 

Section 6.2.3. Notice of Restricted Transfer. Any Person who acquires or attempts or intends to acquire Beneficial Ownership orConstructive Ownership of shares of Capital Stock that will or may violate Section 6.2.1(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 6.2.1(b)shall immediately give written notice to the Corporation of 

 

14 

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 suchother 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 6.2.4. Owners Required to Provide Information. Prior to the Restriction Termination Date: 

(a) every owner of 5% or more (or such higher 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 givewritten 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 suchowner 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 theAggregate Stock Ownership Limit. 

(b) each Person who is a Beneficial Owner or Constructive Owner of Capital Stock and each Person(including the stockholder of record) who is holding Capital Stock for a Beneficial Owner or Constructive Owner shall provide to the Corporation such information as the Corporation may request, in good faith, in order to determine theCorporation’s status as a REIT and to comply with requirements of any taxing authority or governmental authority or to determine such compliance. 

Section 6.2.5. Remedies Not Limited. Subject to Section 7.7, nothing contained in this Section 6.2 shall limit the authority of the board of directors to take such other action as it deemsnecessary or advisable to protect the Corporation and the interests of its stockholders in preserving the Corporation’s status as a REIT. 

Section 6.2.6. Ambiguity. In the case of an ambiguity in the application of any of the provisions of this Section 6.2, Section 6.3 or any definition contained in Section 6.1, the board of directors shall havethe power to determine the application of the provisions of this Section 6.2 or Section 6.3 with respect to any situation based on the facts known to it. In the event Section 6.2 or Section 6.3 requires an action by the board ofdirectors 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 6.1, 6.2or 6.3. 

Section 6.2.7. Exceptions. 

(a) Subject to Section 6.2.1(a)(ii), the board of directors, in its sole discretion, may exempt a Person from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit, as the case may be, and mayestablish or increase an Excepted Holder Limit for such Person if: 

(i) the board of directors obtains such representationsand undertakings from such Person as are reasonably necessary to ascertain that no Person’s Beneficial 

 

15 

Ownership or Constructive Ownership of such shares of Capital Stock will violate Section 6.2.1(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 (ora 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 ofdirectors 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 isexpected to continue to derive) a sufficiently small amount of revenue such that, in the opinion of the board of directors, rent from such tenant would not adversely affect the Corporation’s ability to qualify as a REIT shall not be treated asa tenant of the Corporation); and 

(iii) such Person agrees that any violation or attempted violation of suchrepresentations or undertakings (or other action which is contrary to the restrictions contained in Sections 6.2.1 through 6.2.6) will result in such shares of Capital Stock being automatically transferred to a Trust in accordance withSection 6.2.1(b) and Section 6.3. 

(b) Prior to granting any exception pursuant to Section 6.2.7(a), the board of directorsmay 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 orensure 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 6.2.1(a)(ii), an underwriter which participates in a public offering or a private placement of Capital Stock (orsecurities convertible into or exchangeable for Capital Stock) may Beneficially Own or Constructively Own shares of Capital Stock (or securities convertible into or exchangeable for Capital Stock) in excess of the Aggregate Stock Ownership Limit,the Common Stock Ownership Limit or both such limits, but only to the extent necessary to facilitate such public offering or private placement. 

(d) The board of directors may only reduce the Excepted Holder Limit for an Excepted Holder: (i) with the written consent of such Excepted Holder at any time or (ii) pursuant to the terms and conditions of the agreements andundertakings 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 Common Stock OwnershipLimit. 

Section 6.2.8. Increase in Aggregate Stock Ownership Limit and Common Stock Ownership Limit. The board ofdirectors may from time to time increase the Common Stock Ownership Limit and the Aggregate Stock Ownership Limit. 

 

16 

Section 6.2.9. Legend. Each certificate for shares of Capital Stock shall bearsubstantially the following legend: 

The shares represented by this certificate are subject to restrictions on Beneficial Ownership,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 furtherrestrictions and except as expressly provided in the Corporation’s charter: (a) no Person may Beneficially Own or Constructively Own shares of the Corporation’s Common Stock in excess of 9.8% (in value or number of shares) of theoutstanding shares of Common Stock of the Corporation unless such Person is an Excepted Holder (in which case the Excepted Holder Limit for such Excepted Holder shall be applicable); (b) no Person may Beneficially Own or Constructively Ownshares of Capital Stock of the Corporation in excess of 9.8% of the value of the total outstanding shares of Capital Stock of the Corporation, unless such Person is an Excepted Holder (in which case the Excepted Holder Limit for such Excepted Holdershall be applicable); (c) no Person may Beneficially Own or Constructively Own Capital Stock that would result in the Corporation being “closely held” under Section 856(h) of the Code or otherwise cause the Corporation to fail toqualify as a REIT; and (d) other than as provided in the Corporation’s charter, 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. AnyPerson who Beneficially Owns or Constructively Owns or attempts to Beneficially Own or Constructively Own shares of Capital Stock which causes or will cause a Person to Beneficially Own or Constructively Own shares of Capital Stock in excess or inviolation 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 Trustfor 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 abinitio. 

Until the Common Stock is Listed, to purchase Common Stock, the purchaser must represent to the Corporation: (i) that such purchaser (or, in the caseof sales to fiduciary accounts, that the beneficiary, fiduciary account or grantor or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) has a minimum annual gross income of $45,000and a net worth (excluding home, furnishings and automobiles) of not less than $45,000; or (ii) that such purchaser (or, in the case of sales to fiduciary accounts, that the beneficiary, fiduciary account or grantor 

 

17 

or donor who directly or indirectly supplies the funds to purchase the shares if the grantor or donor is the fiduciary) has a net worth (excluding home,furnishings and automobiles) of not less than $150,000. Until the Common Stock is Listed, each transfer of shares of Common Stock shall comply with the requirements regarding minimum initial and subsequent cash investment amounts set forth in theCorporation’s Registration Statement (No. 333-126087) on Form S-11 as such registration statement has been amended or supplemented as of the date of such issuance or transfer or any lower applicable state requirements with respect to minimuminitial and subsequent cash investment amounts in effect as of the date of the issuance or transfer. 

All capitalized terms in this legendhave 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 onrequest and without charge. 

Instead of the foregoing legend, the certificate may state that the Corporation will furnish a full statementabout certain restrictions on transferability to a stockholder on request and without charge. Such statement shall also be sent on request and without charge to stockholders who are issued shares without a certificate. 

Section 6.3. Transfer of Capital Stock in Trust. 

Section 6.3.1. Ownership in Trust. Upon any purported Transfer or other event described in Section 6.2.1(b) that would result in a transfer of shares of Capital Stock to a Trust, such shares ofCapital 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 businesson the Business Day prior to the purported Transfer or other event that results in the transfer to the Trust pursuant to Section 6.2.1(b). The Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporationand any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Corporation as provided in Section 6.3.6. 

Section 6.3.2. Status of Shares Held by the Trustee. Shares of Capital Stock held by the Trustee shall be issued and outstanding shares of Capital Stock of the Corporation. The Prohibited Owner shall have no rights in theshares held by the Trustee. The Prohibited Owner shall not benefit economically from ownership of any shares held in trust by the Trustee and shall have no rights to dividends or other distributions attributable to the shares held in the Trust.

Section 6.3.3. Distributions and Voting Rights. The Trustee shall have all voting rights and rights to distributions withrespect to shares of Capital Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. 

 

18 

Any 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 therecipient of such distribution to the Trustee upon demand, and any distribution authorized but unpaid shall be paid when due to the Trustee. Any distribution so paid to the Trustee shall be held in trust for the Charitable Beneficiary. TheProhibited 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 authoritywith respect to the shares held in the Trust (at the Trustee’s sole discretion) (a) 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 tothe Trustee and (b) 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 theTrustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article VI, until the Corporation has received notification that shares of Capital Stock have been transferred into a Trust, the Corporationshall 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 ofstockholders. 

Section 6.3.4. Sale of Shares by Trustee. Within 20 days of receiving notice from the Corporation thatshares 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 forthin Section 6.2.1(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 asprovided in this Section 6.3.4. The Prohibited Owner shall receive the lesser of (a) 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 causingthe 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 or (b) the price per share received bythe Trustee from the sale or other disposition of the shares held in the Trust. Any net sale 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 theCorporation 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 theProhibited Owner received an amount for such shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 6.3.4, such excess shall be paid to the Trustee upon demand. 

Section 6.3.5. Purchase Right in Stock Transferred to the Trustee. Shares of Capital Stock transferred to the Trustee shall be deemed tohave been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (a) 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 MarketPrice at the time of such devise or gift) or (b) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation shall 

 

19 

have the right to accept such offer until the Trustee has sold the shares held in the Trust pursuant to Section 6.3.4. Upon such a sale to theCorporation, 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 6.3.6. Designation of Charitable Beneficiaries. By written notice to the Trustee, the Corporation shall designate one or morenonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that (a) the shares of Capital Stock held in the Trust would not violate the restrictions set forth in Section 6.2.1(a) in the hands of suchCharitable Beneficiary and (b) 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 theCode. 

Section 6.4. Settlement. Nothing in this Article VI shall preclude the settlement of any transaction entered intothrough the facilities of any national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction is so permitted shall not negate the effect of any other provision of this Article VI and anytransferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VI. 

Section 6.5. Enforcement. The Corporation is authorized specifically to seek equitable relief, including injunctive relief, to enforce the provisions of this Article VI. 

Section 6.6. Non-Waiver. No delay or failure on the part of the Corporation or the board of directors in exercising any right hereundershall 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 VII**

**BOARD OF DIRECTORS**

Section 7.1. Number of Directors. The number of directors of the Corporation shall be five, which number may be increased or decreasedfrom time to time pursuant to the bylaws but shall never be less than three. A majority of the seats on the board of directors will be for Independent Directors. The Conflicts Committee shall nominate replacements for vacancies amongst theIndependent Director positions. No reduction in the number of directors shall cause the removal of any director from office prior to the expiration of his term, except as may otherwise be provided in the terms of any Preferred Stock issued by theCorporation. The names of the directors who shall serve on the board until the next annual meeting of the stockholders and until their successors are duly elected and qualified are: 

Charles J. Schreiber, Jr. 

Peter McMillan,III 

Hank Adler 

Barbara Cambon

Stuart A. Gabriel, Ph.D 

 

20 

Section 7.2. Term of Directors. Each director shall hold office for one year, until thenext annual meeting of stockholders and until his successor is duly elected and qualified. Directors may be elected to an unlimited number of successive terms. 

Section 7.3. Experience. Each director who is not an Independent Director shall have at least three years of relevant experience demonstrating the knowledge and experience required to successfullyacquire and manage the type of assets being acquired by the Corporation. At least one of the Independent Directors shall have three years of relevant real estate experience. 

Section 7.4. Committees. The board may establish such committees as it deems appropriate, provided that the majority of the members ofeach committee are Independent Directors. 

Section 7.5. Fiduciary Obligations. The directors are fiduciaries of theCorporation and its stockholders. The directors have a fiduciary duty to the stockholders to supervise the relationship between the Corporation and the Advisor. 

Section 7.6. Ratification of Charter. At or before the first meeting of the board of directors following the date of this amendment and restatement of the charter, the board of directors and theConflicts Committee shall each review and ratify the charter by majority vote. 

Section 7.7. REIT Qualification. If theCorporation 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,if the board of directors determines that it is no longer in the best interests of the Corporation to continue to be qualified as a REIT, the board of directors may revoke or otherwise terminate the Corporation’s REIT election pursuant toSection 856(g) of the Code. The board of directors also may determine that compliance with any restriction or limitation on ownership and transfers of Capital Stock set forth in Article VI is no longer required for REIT qualification.

Section 7.8. Determinations by the Board. The determination as to any of the following matters, made in good faith by orpursuant 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 andconclusive and shall be binding upon the Corporation and every holder of shares of its Capital 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 Capital Stock or the payment of other distributions on its Capital 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 profitsover losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or 

 

21 

cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall havebeen 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; and any matters relating to the acquisition, holding anddisposition of any assets by the Corporation. 

**ARTICLE VIII**

**ADVISOR**

Section 8.1. Appointment and Initial Investment ofAdvisor. The term of retention of any Advisor shall not exceed one year, although there is no limit to the number of times that a particular Advisor may be retained. Before the initial public offering of the Corporation, the Advisor shall havemade the Initial Investment. The Advisor or any such Affiliate may not sell the equity interest acquired with its Initial Investment while the Advisor remains an Advisor but may transfer the interest in the Corporation acquired with its InitialInvestment to its Affiliates. 

Section 8.2. Supervision of Advisor. The board of directors shall evaluate the performanceof the Advisor before entering into or renewing an Advisory Agreement, and the criteria used in such evaluation shall be reflected in the minutes of the meetings of the board of directors. The board of directors may exercise broad discretion inallowing the Advisor to administer and regulate the operations of the Corporation, to act as agent for the Corporation, to execute documents on behalf of the Corporation and to make executive decisions that conform to general policies and principlesestablished by the board. The Conflicts Committee shall determine at least annually whether the expenses incurred by the Corporation are reasonable in light of the investment performance of the Corporation, its Net Assets, its Net Income and thefees and expenses of other comparable unaffiliated REITs. The Conflicts Committee shall determine from time to time and at least annually that the compensation to be paid to the Advisor is reasonable in relation to the nature and quality of servicesperformed and that such compensation is within the limits prescribed by the charter. Each such determination shall be reflected in the minutes of the meetings of the board. The Conflicts Committee shall also supervise the performance of the Advisorand the compensation paid to the Advisor by the Corporation to determine that the provisions of the Advisory Agreement are being met. Each such determination shall be based on factors such as (a) the amount of the fee paid to the Advisor inrelation to the size, composition and performance of the Corporation’s portfolio; (b) the success of the Advisor in generating opportunities that meet the investment objectives of the Corporation; (c) rates charged to other REITs andto investors other than REITs by advisors performing the same or similar services; (d) additional revenues realized by the Advisor and its Affiliates through their relationship with the Corporation, including loan administration, underwritingor broker commissions, servicing, engineering, inspection and other fees, whether paid by the Corporation or by others with whom the Corporation does business; (e) the quality and extent of service and 

 

22 

advice furnished by the Advisor; (f) the performance of the Corporation’s portfolio, including income, conservation or appreciation of capital,frequency of problem investments and competence in dealing with distress situations; and (g) the quality of the Corporation’s portfolio relative to the investments generated by the Advisor for its own account. The Conflicts Committee mayalso consider all other factors that it deems relevant, and its findings on each of the factors considered shall be recorded in the minutes of the board of directors. The Corporation may not enter into, renew or amend the Advisory Agreement withoutthe approval (by majority vote) of the Conflicts Committee. The board shall determine whether any successor Advisor possesses sufficient qualifications to perform the advisory function for the Corporation and whether the compensation provided for inits contract with the Corporation is justified. 

Section 8.3. Fiduciary Obligations. The Advisor is a fiduciary of theCorporation and its stockholders. 

Section 8.4. Termination. Either the Conflicts Committee (by majority vote) or theAdvisor may terminate the Advisory Agreement on 60 days written notice without cause or penalty, and, in such event, the Advisor will cooperate with the Corporation and the board of directors in making an orderly transition of the advisory function.

Section 8.5. Disposition Fee on Sale of Property. If the Advisor or a director or Sponsor or any Affiliate thereofprovides a substantial amount of the services in the effort to sell the property of the Corporation, that Person may receive an amount up to 3% of the sales price of such property or properties; provided, however, that the amount paid when added toall other real estate commissions paid to unaffiliated parties in connection with such sale shall not exceed the lesser of the Competitive Real Estate Commission or an amount equal to 6% of the sales price of such property or properties. 

Section 8.6. Incentive Fees. An interest in the gain from the sale of assets of the Corporation (as opposed to real estatecommissions, which are the subject of Section 8.5) may be paid to the Advisor or an entity affiliated with the Advisor provided that (a) the interest in the gain must be reasonable, and (b) if multiple Advisors are involved, incentivefees must be distributed by a proportional method reasonably designed to reflect the value added to the Corporation’s assets by each respective Advisor and its Affiliates. Such an interest in gain from the sale of assets of the Corporationshall be considered presumptively reasonable if it does not exceed 15% of the balance of such net proceeds remaining after payment to Common Stockholders, in the aggregate, of an amount equal to 100% of the original issue price of the Common Stock,plus an amount equal to 6% of the original issue price of the Common Stock per annum cumulative. Distribution of incentive fees to the Advisor or an entity affiliated with the Advisor in proportion to the length of time served as Advisor while suchproperty was held by the Corporation or in proportion to the fair market value of the asset at the time of the Advisor’s termination and the fair market value of the asset upon its disposition by the Corporation shall be considered reasonablemethods by which to apportion incentive fees. For purposes of this Section, the original issue price of the Common Stock shall be reduced by prior cash distributions to Common Stockholders of net proceeds from the sale of assets of the Corporation.

 

23 

Section 8.7. Acquisition Fees. The Corporation shall not purchase a property or investin or make a mortgage loan if the Acquisition Fees and Acquisition Expenses incurred in connection therewith are not reasonable or exceed 6% of the Contract Purchase Price or, in the case of a mortgage loan, 6% of the funds advanced unless theConflicts Committee approves (by majority vote) the Acquisition Fees and Acquisition Expenses and determines the transaction to be commercially competitive, fair and reasonable to the Corporation. The Corporation may pay Acquisition Fees andAcquisition Expenses in advance of property-acquisition services provided that the method of allocating such Acquisition Fees and Acquisition Expenses to subsequent property or mortgage investments for purposes of the limit set forth in thepreceding sentence is reasonable or has been approved by the Conflicts Committee. 

Section 8.8. Reimbursement for TotalOperating Expenses. The Conflicts Committee shall have the responsibility of limiting Total Operating Expenses to amounts that do not exceed the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”)for the four consecutive fiscal quarters then ended unless it has made a finding that, based on unusual and non-recurring factors that it deems sufficient, a higher level of expenses (an “Excess Amount”) is justified. Any such finding andthe reasons in support thereof shall be reflected in the minutes of the meetings. Within 60 days after the end of any fiscal quarter of the Corporation for which there is an Excess Amount for the 12 months then ended, there shall be sent to theCommon Stockholders a written disclosure of such fact, together with an explanation of the factors the Conflicts Committee considered in determining that such Excess Amount was justified. In the event that the Conflicts Committee does not determinethat excess expenses are justified, the Advisor shall reimburse the Corporation at the end of the 12-month period the amount by which the aggregate annual expenses paid or incurred by the Corporation exceeded the 2%/25% Guidelines. 

Section 8.9. Corporate Opportunities. For so long as the Corporation is externally advised by the Advisor or an Affiliate thereof, theCorporation has no interest in any opportunity known to the Advisor unless it has been recommended to the Corporation by the Advisor. The preceding sentence shall be of no consequence except in connection with the application of the corporateopportunity doctrine. 

**ARTICLE IX**

**INVESTMENT OBJECTIVES AND LIMITATIONS**

Section 9.1. Investment Objectives. Theboard of directors shall establish written policies on investments and borrowing and shall monitor the administrative procedures, investment operations and performance of the Corporation and the Advisor to assure that such policies are carried out.The Conflicts Committee shall review the investment policies of the Corporation with sufficient frequency (not less often than annually) to determine that the policies being followed by the Corporation are in the best interests of 

 

24 

the Common Stockholders. Each such determination and the basis therefore shall be set forth in the minutes of the meetings of the board of directors.

Section 9.2. Approval of Acquisitions. The Corporation may not purchase or lease any property without the approval of amajority of the board of directors or the approval of a majority of a committee of the board, provided that the members of the committee approving the transaction would also constitute a majority of the board. The consideration paid for any propertyacquired by the Corporation will ordinarily be based on the fair market value of such property. The Corporation may not purchase or lease properties in which the Advisor, a Sponsor, a director or an Affiliate thereof has an interest without adetermination by the Conflicts Committee (by majority vote) that such transaction is fair and reasonable to the Corporation and at a price to the Corporation no greater than the cost of the property to the Affiliated seller or lessor unless there issubstantial justification for the excess amount. Notwithstanding the preceding sentence, in no event may the Corporation acquire any such property at an amount in excess of its current appraised value as determined by an Independent Expert. Anappraisal is “current” for purposes of the preceding sentence if obtained within the prior year. If a property with a current appraisal is acquired indirectly from an Affiliated seller through the acquisition of securities in an entitythat directly or indirectly owns the property, a second appraisal on the value of the securities of the entity shall not be required if (i) the Conflicts Committee determines that such transaction is fair and reasonable to the Corporation,(ii) the transaction is at a price to the Corporation no greater than the cost of the securities to the Affiliated seller, (iii) the entity has conducted no business other than the financing, acquisition and ownership of the property and(iv) the price paid by the entity to acquire the property did not exceed the current appraised value as determined by an Independent Expert. 

Section 9.3. Limitations on Sales to Affiliates. The Corporation shall not transfer or lease assets to a Sponsor, the Advisor, a director or an Affiliate thereof unless approved by the Conflicts Committee (by majority vote)as being fair and reasonable to the Corporation. 

Section 9.4. Limitations on Other Transactions Involving Affiliates. TheConflicts Committee (by majority vote) must conclude that all other transactions, including joint ventures, between the Corporation and a Sponsor, the Advisor, a director or an Affiliate thereof are fair and reasonable to the Corporation and onterms and conditions not less favorable to the Corporation than those available from unaffiliated third parties. 

Section 9.5. Limitations on the Issuance of Options and Warrants. 

(a) The Corporation shall notissue options or warrants to purchase Capital Stock (i) with an exercise price that is less than the fair market value of such Capital Stock on the date of grant or (ii) for consideration (which may include services) that the ConflictsCommittee (by majority vote) concludes has a fair market value that is less than the value of such option or warrant on the date of grant. 

 

25 

(b) The Corporation shall not issue options or warrants to purchase Capital Stock to theAdvisor, a Sponsor, a director or an Affiliate thereof (i) on terms more favorable than the Corporation offers such options or warrants to the general public or (ii) in excess of an amount equal to 10% of the outstanding Capital Stock onthe date of grant. 

Section 9.6. Limitations on the Repurchase of Capital Stock. The Corporation may not pay a fee to theAdvisor, a Sponsor, a director or an Affiliate thereof in connection with the Corporation’s repurchase of shares of Capital Stock. 

Section 9.7. Limitations on Loans.**The Corporation will not make any loans to a Sponsor, the Advisor, a director or an Affiliate thereof except as provided in Section 9.11 or to wholly owned subsidiaries(directly or indirectly) of the Corporation. The Corporation will not borrow from such parties unless the Conflicts Committee (by majority vote) approves the transaction as being fair, competitive and commercially reasonable and no less favorable tothe Corporation than comparable loans between unaffiliated parties. These restrictions on loans apply to advances of cash that are commonly viewed as loans, as determined by the board of directors. By way of example only, the prohibition on loanswould not restrict advances of cash for legal expenses or other costs incurred as a result of any legal action for which indemnification is being sought nor would the prohibition limit the Corporation’s ability to advance reimbursable expensesincurred by directors or officers or the Advisor or its Affiliates. 

Section 9.8. Limitations on Leverage. The aggregateborrowings of the Corporation, secured and unsecured, shall be reviewed by the board of directors at least quarterly. The maximum amount of such borrowings in relation to the Net Assets shall not exceed 300% in the absence of a satisfactory showingthat a higher level of borrowings is appropriate. Any excess in borrowings over such 300% level shall be approved by the Conflicts Committee (by majority vote) and disclosed to the Common Stockholders in the next quarterly report of the Corporation,along with justification for such excess. 

Section 9.9. Limitations on Investments in Equity Securities. The Corporationmay not invest in Equity Securities unless the Conflicts Committee (by majority vote) approves such investment as being fair, competitive and commercially reasonable. 

Section 9.10. Limitations on Investments in Commodities Contracts. The Corporation may not invest in commodities or commodity futures contracts, except for futures contracts used solely for thepurpose of hedging in connection with the ordinary business of investing in real estate assets and mortgages. 

Section 9.11. Limitations Regarding Mortgage Loans. The Corporation may not make or invest in mortgage loans unless an appraisal is obtained concerning the underlying property, except for those mortgage loans insured orguaranteed by a government or government agency. In cases in which the Conflicts Committee (by majority vote) so determines, and in all cases in which the transaction is with the Advisor, a director, a Sponsor or an Affiliate thereof, such anappraisal must be obtained from an Independent Expert concerning the underlying property. The Corporation shall 

 

26 

keep the appraisal for at least five years and make it available for inspection and duplication by any Common Stockholder. The Corporation shall obtain amortgagee’s or owner’s title insurance policy or commitment as to the priority of the mortgage or the condition of the title. Further, the Advisor and the board of directors shall observe the following policies in connection with investingin or making mortgage loans: 

(a) The Corporation shall not invest in real estate contracts of sale, otherwise known as landsale contracts, unless such contracts of sale are in recordable form and appropriately recorded in the chain of title. 

(b)The Corporation shall not make or invest in mortgage loans, including construction loans, on any one property if the aggregate amount of all mortgage loans outstanding on the property, including the loans of the Corporation, would exceed an amountequal to 85% of the appraised value of the property as determined by appraisal unless the board determines that a substantial justification exists because of the presence of other underwriting criteria. For purposes of this subsection, the“aggregate amount of all mortgage loans outstanding on the property, including the loans of the Corporation,” shall include all interest (excluding contingent participation in income and/or appreciation in value of the mortgaged property),the current payment of which may be deferred pursuant to the terms of such loans, to the extent that deferred interest on each loan exceeds 5% per annum of the principal balance of the loan. 

(c) The Corporation may not make or invest in any mortgage loans that are subordinate to any mortgage or equity interest of the Advisor, aSponsor, a director or an Affiliate of the Corporation. 

Section 9.12. Limitations on Investments in Unimproved RealProperty. The Corporation may not make investments in Unimproved Real Property or mortgage loans on Unimproved Real Property in excess of 10% of the Corporation’s total assets. 

Section 9.13. Limitations on Issuances of Securities. The Corporation may not (a) issue equity securities on a deferred paymentbasis or other similar arrangement; (b) issue debt securities in the absence of adequate cash flow to cover debt service; (c) issue equity securities that are assessable; or (d) issue equity securities redeemable solely at the optionof the holder, which restriction has no affect on the Corporation’s ability to implement a share repurchase program. 

Section 9.14. Limitations on Roll-Up Transactions. In connection with any proposed Roll-Up Transaction, an appraisal of all of the Corporation’s assets shall be obtained from a competent Independent Expert. Theappraisal shall be based on the evaluation of all relevant information and shall indicate the value of the assets as of a date immediately prior to the announcement of the proposed Roll-Up Transaction. The appraisal shall assume an orderlyliquidation of the assets over a 12-month period. The terms of the engagement of the Independent Expert shall clearly state that the engagement is for the benefit of the Corporation and its stockholders. A summary of the 

 

27 

appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to stockholders in connection with a proposed Roll-UpTransaction. In connection with a proposed Roll-Up Transaction, the Person sponsoring the Roll-Up Transaction shall offer to each Common Stockholder who votes against the proposed Roll-Up Transaction the choice of: 

(a) accepting the securities of the Roll-Up Entity offered in the proposed Roll-Up Transaction; or 

(b) one of the following: 

(i) remaining as a Common Stockholder of the Corporation and preserving its interests therein on the same terms and conditions as existed previously; or 

(ii) receiving cash in an amount equal to the stockholder’s pro rata share of the appraised value of the Net Assets of theCorporation. 

The Corporation is prohibited from participating in any proposed Roll-Up Transaction: 

(a) that would result in the Common Stockholders having voting rights in a Roll-Up Entity that are less than the rights set forth inArticle XI hereof; 

(b) that includes provisions that would operate as a material impediment to, or frustration of, theaccumulation of shares by any purchaser of the securities of the Roll-Up Entity (except to the minimum extent necessary to preserve the tax status of the Roll-Up Entity), or that would limit the ability of an investor to exercise the voting rightsof its securities of the Roll-Up Entity on the basis of the number of shares held by that investor; 

(c) in whichinvestors’ rights of access to the records of the Roll-Up Entity will be less than those described in Section 11.8 and Section 11.9 hereof; or 

(d) in which any of the costs of the Roll-Up Transaction would be borne by the Corporation if the Roll-Up Transaction is not approved bythe Common Stockholders. 

**ARTICLE X**

**CONFLICTS OF INTEREST**

Section 10.1. Conflicts Committee. During any time that theCorporation is advised by the Advisor, there shall be a committee (the “Conflicts Committee”) of the board of directors comprised of all of the Independent Directors. The Conflicts Committee is authorized to select and retain its own legaland financial advisors. In 

 

28 

addition to those other powers delegated to the Conflicts Committee by this charter or by the board of directors, the Conflicts Committee may act on anymatter that may be delegated to a committee under the MGCL if the Conflicts Committee determines that the matter at issue is such that the exercise of independent judgment by the directors who are not Independent Directors could reasonably becompromised. (Such determination shall be deemed to have been made even if not separately discussed by the Conflicts Committee or reflected in the minutes of its meeting if the Conflicts Committee acts on a matter that is not expressly delegated toit by this charter or the board of directors.) If a matter cannot be delegated to a committee under the MGCL but the Conflicts Committee has determined that the matter at issue is such that the exercise of independent judgment by the directors whoare not Independent Directors could reasonably be compromised, both the board of directors and the Conflicts Committee must approve the matter. Any board action regarding Organization and Offering Expenses or the selection of an Independent Expertor the matters covered in any of Sections 5.9, 7.6, 8.1, 8.2, 8.4, 8.5, 8.6, 8.7, 8.8, 9.1, 9.8, 10.1, 11.1, 12.2 or 12.3 shall require the approval of a majority of the Conflicts Committee. 

(b) The Conflicts Committee may create a subcommittee of the Conflicts Committee and delegate to the subcommittee any of the powers of theConflicts Committee. The members of any such subcommittee shall serve at the pleasure of the Conflicts Committee. 

Section 10.2. Voting by Conflicts Committee. For an action to be taken by the Conflicts Committee or a subcommittee thereof, the matter must be approved by a majority of the directors present for the purposes of determininga quorum at a meeting at which a quorum is present or such higher threshold as required by the charter. If any such director has an interest in the matter at issue other than in their role as a director, the matter must also be approved by amajority of those directors present at the meeting who have no other interest in the matter. 

**ARTICLE XI**

**STOCKHOLDERS**

Section 11.1. Meetings of Stockholders. There shall be an annual meeting of the stockholders, to be held at such time and place as shall be determined by or in the manner prescribed in the bylaws, at which the directorsshall be elected and any other proper business may be conducted. The annual meeting will be held on a date that is a reasonable period of time following the distribution of the Corporation’s annual report to stockholders but not less than 30days after delivery of such report; the board of directors and the Conflicts Committee shall take reasonable efforts to ensure that this requirement is met. A majority of the shares present in person or by proxy at an annual meeting of stockholdersat which a quorum is present may, without the necessity for concurrence by the board, vote to elect the directors. The presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at the meetingconstitutes a 

 

29 

quorum. Special meetings of stockholders may be called in the manner provided in the bylaws, including by the president or by a majority of the directors ora majority of the Independent Directors, and shall be called by an officer of the Corporation upon written request of Common Stockholders holding in the aggregate not less than 10% of the outstanding shares entitled to be cast on any issue proposedto be considered at any such special meeting. Upon receipt of a written request stating the purpose of such special meeting, the Advisor shall provide all stockholders within 10 days of receipt of said request notice, whether in person or by mail,of a special meeting and the purpose of such special meeting to be held on a date not less than 15 days nor more than 60 days after the delivery of such notice. If the meeting is called by written request of stockholders as described in thisSection 11.1, the special meeting shall be held at the time and place specified in the stockholder request; provided, however, that if none is so specified, at such time and place convenient to the stockholders. 

Section 11.2. Extraordinary Actions. Notwithstanding any provision of law permitting or requiring any action to be taken or approved bythe 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 votesentitled to be cast on the matter. 

Section 11.3. Business Combination Statute and Control Share Acquisition Statute.Notwithstanding any other provision of this charter or any contrary provision of law, (i) the Maryland Business Combination Statute, found in Title 3, Subtitle 6 of the MGCL, as amended from time to time, or any successor statute thereto, shallnot apply to any “business combination” (as defined in Section 3-601(e) of the MGCL, as amended from time to time, or any successor statute thereto) between the Corporation and any Person; and (ii) the Maryland Control ShareAcquisition Statute, found in Title 3, Subtitle 7 of the MGCL, as amended from time to time, or any successor statute thereto shall not apply to any acquisition of securities of the Corporation by any Person. 

Section 11.4. Unsolicited Takeover Statute. The Corporation may not take advantage of any of the permissive provisions of Title 3, Subtitle Iof the MGCL, as amended from time to time or any successor statute thereto. 

Section 11.5. Voting Rights of Stockholders.The concurrence of the board shall not be required in order for the stockholders to remove directors or to amend the charter or dissolve the corporation. Without the approval of a majority of the shares entitled to vote on the matter, the board ofdirectors may not (a) amend the charter to adversely affect the rights, preferences and privileges of the Common Stockholders; (b) amend charter provisions relating to director qualifications, fiduciary duties, liability andindemnification, conflicts of interest, investment policies or investment restrictions; (c) liquidate or dissolve the Corporation other than before the initial investment in property; (d) sell all or substantially all of theCorporation’s assets other than in the ordinary course of the Corporation’s business; or (e) cause the merger or reorganization of the Corporation. 

 

30 

Section 11.6. Voting Limitations on Shares Held by the Advisor, Directors andAffiliates. No shares of Common Stock may be transferred or issued to the Advisor, a director, or any Affiliate thereof unless such prospective stockholder agrees that it will not vote or consent on matters submitted to the stockholdersregarding (a) the removal of such Advisor, director or any of its Affiliates or (b) any transaction between the Corporation and any such Advisor, director or any of its Affiliates. To the extent permitted by the MGCL, in determining therequisite percentage in interest of shares necessary to approve a matter on which the Advisor, a director and any of their Affiliates may not vote or consent, any shares owned by any of them shall not be included. 

Section 11.7. Right of Inspection. Any stockholder and any designated representative thereof shall be permitted access to the records ofthe Corporation to which it is entitled under applicable law at all reasonable times and may inspect and copy any such records for a reasonable charge. Inspection of the Corporation’s books and records by the office or agency administering thesecurities laws of a jurisdiction shall be permitted upon reasonable notice and during normal business hours. 

Section 11.8. Access to Stockholder List. An alphabetical list of the names, addresses and telephone numbers of the Common Stockholders of the Corporation, along with the number of shares of Capital Stock held by each ofthem (the “Stockholder List”), shall be maintained as part of the books and records of the Corporation and shall be available for inspection by any Common Stockholder or the stockholder’s designated agent at the home office of theCorporation upon the request of the Common Stockholder. The Stockholder List shall be updated at least quarterly to reflect changes in the information contained therein. A copy of such list shall be mailed to any Common Stockholder so requestingwithin 10 days of receipt by the Corporation of the request. The copy of the Stockholder List shall be printed in alphabetical order, on white paper and in a readily readable type size (in no event smaller than 10-point type). The Corporation mayimpose a reasonable charge for expenses incurred in reproduction pursuant to the stockholder request. A Common Stockholder may request a copy of the Stockholder List in connection with matters relating to stockholders’ voting rights, theexercise of stockholder rights under federal proxy laws or for any other proper and legitimate purpose. If the Advisor or the board neglects or refuses to exhibit, produce or mail a copy of the Stockholder List as requested, the Advisor or theboard, as the case may be, shall be liable to any Common Stockholder requesting the list for the costs, including reasonable attorneys’ fees incurred by that stockholder for compelling the production of the Stockholder List and for actualdamages suffered by any Common Stockholder by reason of such refusal or neglect. It shall be a defense that the actual purpose and reason for the request for inspection or for a copy of the Stockholder List is to secure such list of stockholders orother information for the purpose of selling such list or copies thereof or using the same for a commercial purpose other than in the interest of the applicant as a stockholder relative to the affairs of the Corporation. The Corporation may requirethe stockholder requesting the Stockholder List to represent that the list is not requested for a commercial purpose unrelated to the stockholder’s interest in the Corporation. The remedies provided hereunder to stockholders requesting copiesof the Stockholder List are in addition to and shall not in any way limit other remedies available to stockholders under federal law or the laws of any state. 

 

31 

Section 11.9. Reports. The Corporation shall cause to be prepared and mailed ordelivered to each Common Stockholder as of a record date after the end of the fiscal year and each holder of other publicly held securities of the Corporation within 120 days after the end of the fiscal year to which it relates an annual report foreach fiscal year ending after the initial public offering of its securities that shall include: (a) financial statements prepared in accordance with generally accepted accounting principles that are audited and reported on by independentcertified public accountants; (b) the ratio of the costs of raising capital during the period to the capital raised; (c) the aggregate amount of advisory fees and the aggregate amount of other fees paid to the Advisor and any Affiliate ofthe Advisor by the Corporation, including fees or charges paid to the Advisor and any Affiliate of the Advisor by third parties doing business with the Corporation; (d) the Total Operating Expenses of the Corporation, stated as a percentage ofAverage Invested Assets and as a percentage of its Net Income; (e) a report from the Conflicts Committee that the policies being followed by the Corporation are in the best interests of its Common Stockholders and the basis for suchdetermination; and (f) separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving the Corporation and the Advisor, Sponsor, a director or any Affiliate thereof occurring inthe year for which the annual report is made, and the Conflicts Committee shall be specifically charged with a duty to examine and comment in the report on the fairness of such transactions. Alternatively, such information may be provided in a proxystatement delivered with the annual report. The board of directors, including the Independent Directors, shall take reasonable steps to ensure that the requirements of this Section 11.9 are met. The annual report may be delivered by anyreasonable means, including through an electronic medium. Electronic delivery of the annual report shall comply with any then-applicable rules of the U.S. Securities and Exchange Commission. 

Section 11.10. Rights of Objecting Stockholders. Holders of shares of Capital Stock shall not be entitled to exercise any rights of anobjecting stockholder provided for under Title 3, Subtitle 2 of the MGCL unless the board, upon the affirmative vote of a majority of the entire board, shall determine that such rights shall apply, with respect to all or any classes or series ofCapital Stock, to a particular transaction or all transactions occurring after the date of such approval in connection with which holders of such shares of Capital Stock would otherwise be entitled to exercise such rights. 

Section 11.11. Liability of Stockholders. The shares of Common Stock of the Corporation shall be non-assessable by the Corporation uponreceipt by the Corporation of the consideration for which the board of directors authorized their issuance. 

 

32 

**ARTICLE XII**

**LIABILITY OF DIRECTORS,**

**OFFICERS, ADVISORS AND OTHER AGENTS**

Section 12.1. Limitation of Director and Officer Liability. Except as prohibited by the restrictions provided in Section 12.3, nodirector or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. Neither the amendment nor repeal of this Section 12.1, nor the adoption or amendment of any other provision of the charter orbylaws inconsistent with this Section 12.1, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act that occurred prior to such amendment, repeal or adoption. 

Section 12.2. Indemnification. 

(a) Except as prohibited by the restrictions provided in Section 12.2(b), Section 12.3 and Section 12.4, the Corporation shall indemnify and pay or reimburse reasonable expenses in advance of the finaldisposition of a proceeding to (i) any individual who is a present or former director or officer of the Corporation; (ii) any individual who, while a director of the Corporation and at the request of the Corporation, serves or has servedas a director, officer, partner or trustee of another corporation, 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 personmay incur by reason of his service in such capacity; or (iii) the Advisor or any of its Affiliates acting as an agent of the Corporation. Except as provided in Section 12.2(b), Section 12.3 and Section 12.4, the Corporation shallhave the power with the approval of the board of directors to provide such indemnification and advancement of expenses to any employee or agent of the Corporation. 

(b) Notwithstanding the foregoing, the Corporation shall not indemnify the directors or the Advisors or its Affiliates or any Personacting as a broker-dealer for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successfuladjudication on the merits of each count involving alleged material securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to theparticular indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the courtconsidering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities of the Corporation were offered orsold as to indemnification for violations of securities laws. 

 

33 

(c) No amendment of the charter or repeal of any of its provisions shall limit oreliminate the right of indemnification or advancement of expenses provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal. 

Section 12.3 Limitation on Liability and Indemnification. Notwithstanding the foregoing, the Corporation shall not provide for indemnification of the directors or the Advisor or its Affiliates for anyliability or loss suffered by any of them, nor shall any of them be held harmless for any loss or liability suffered by the Corporation, unless all of the following conditions are met: 

 
 (1)The directors or the Advisor or its Affiliates have determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of theCorporation. 
 
 (2)The directors or the Advisor or its Affiliates were acting on behalf of or performing services for the Corporation. 
 
 (3)Such liability or loss was not the result of: 
(x)negligence or misconduct by the directors (excluding the Independent Directors) or the Advisor or its Affiliates; or 

(y) gross negligenceor willful misconduct by the Independent Directors. 

 
 (4)Such indemnification or agreement to hold harmless is recoverable only out of the Corporation’s Net Assets and not from its stockholders. 
Section 12.4. Limitation on Payment of Expenses. The Corporation shall pay or reimburse reasonable legal expenses and other costsincurred by the directors or the Advisors or its Affiliates in advance of the final disposition of a proceeding only if (in addition to the procedures required by the MGCL) all of the following are satisfied: (a) the proceeding relates to actsor omissions with respect to the performance of duties or services on behalf of the Corporation, (b) the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, acourt of competent jurisdiction approves such advancement and (c) the directors or the Advisor or its Affiliates undertake to repay the amount paid or reimbursed by the Corporation, together with the applicable legal rate of interest thereon,if it is ultimately determined that the particular indemnitee is not entitled to indemnification. 

 

34 

**ARTICLE XIII**

**AMENDMENT**

Subject to Section 11.5, the Corporation reserves the right from time to time tomake any amendment to the charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the charter, of any shares of outstanding Capital Stock. 

THIRD: The amendment and restatement of the charter of the Corporation as hereinabove set forth were duly advised by the board of directors andapproved by the stockholder of the Corporation as required by law. 

FOURTH: The current address of the principal office of theCorporation is as set forth in Article III of the foregoing amendment and restatement of the charter. 

FIFTH: The name and addressof the Corporation’s current resident agent are as set forth in Article III of the foregoing amendment and restatement of the charter. 

SIXTH: The number of directors of the Corporation and the names of those currently in office are as set forth in Section 7.1 of the foregoing amendment and restatement of the charter. 

SEVENTH: The undersigned Chief Executive Officer acknowledges the foregoing amendment and restatement of the charter to be the corporate act ofthe Corporation and as to all matters and facts required to be verified under oath, the undersigned Chief Executive Officer acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all materialrespects and that this statement is made under the penalties of perjury. 

[SIGNATURES ON FOLLOWING PAGE] 

 

35 

IN WITNESS WHEREOF, KBS Real Estate Investment Trust, Inc., has caused the foregoing amendment andrestatement of the charter to be signed in its name and on its behalf by its Chief Executive Officer and attested to by its Secretary on this 8th day of March, 2006. 

 

KBS REAL ESTATE INVESTMENT

TRUST,INC.
By: 
/s/ Charles J. Schreiber, Jr.
 
(SEAL)
 
Charles J. Schreiber, Jr.
  
Chief Executive Officer
 
 
ATTESTBy: 
/s/ Peter McMillan III
 
Peter McMillan III
 
Secretary

 

36