**EXHIBIT 3.1**

**INDUSTRIAL INCOME TRUST INC.**

**SECONDARTICLES OF AMENDMENT AND RESTATEMENT**

FIRST: Industrial Income Trust Inc., a Maryland corporation (the“Corporation”), desires to amend and restate its charter as currently in effect and as hereinafter amended. 

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

**ARTICLE I**

**INCORPORATOR**

The undersigned, Troy J. Bloom, whose address is 17th Floor, 518 Seventeenth Street, Denver, Colorado 80202, being at least 18 years of age, does hereby form a corporation under the general laws of theState of Maryland. 

**ARTICLE II**

**NAME**

The name of the corporation (which is hereinafter called the“Corporation”) is: 

Industrial Income Trust Inc. 

**ARTICLE III**

**PURPOSES AND POWERS**

The purposes for which the Corporation is formed are to engage in any lawful act or activity (including, without limitation or obligation,engaging in business as a real estate investment trust under the Internal Revenue Code of 1986, as amended, or any successor statute (the “Code”)) for which corporations may be organized under the general laws of the State of Maryland asnow or hereafter in force. 

**ARTICLE IV**

**PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT**

The address of the principaloffice of the Corporation in the State of Maryland is c/o CSC – Lawyers Incorporating Service Company, 7 Saint Paul Street, Baltimore, Maryland 21202. The name and address of the resident agent of the Corporation are CSC – LawyersIncorporating Service Company, 7 Saint Paul Street, Baltimore, Maryland 21202. The resident agent is a Maryland corporation. 

**ARTICLE V**

**DEFINITIONS**

As used in the Charter, the followingterms shall have the following meanings unless the context otherwise requires: 

Acquisition Expenses. The term“Acquisition Expenses” shall mean any and all expenses, exclusive of Acquisition Fees, incurred by the Corporation, the Operating Partnership, the Advisor, or any of their Affiliates in connection with the selection, acquisition,development or origination of any Asset, whether or not acquired, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on property not acquired, accountingfees and expenses, title insurance, and the costs of performing due diligence. 

Acquisition Fee. The term“Acquisition Fee” shall mean any and all fees and commissions, exclusive of Acquisition Expenses, paid by any Person to any other Person (including any fees or commissions paid by or to any Affiliate of the Corporation, the OperatingPartnership or the Advisor) in connection with (i) the acquisition, development or construction of a Property, (ii) the acquisition of interests in a real estate related entity or (iii) making or investing in Mortgages or theorigination or acquisition of other debt or other investments, including real estate commissions, selection fees, Development Fees, Construction Fees, nonrecurring management fees, loan fees, points or any other fees of a similar nature. Excludedshall be Development Fees and Construction Fees paid to any Person not affiliated with the Sponsor in connection with the actual development and construction of a project. 

Advisor or Advisors. The term “Advisor” or “Advisors” shall mean the Person or Persons, if any, appointed,employed or contracted with by the Corporation pursuant to Section 9.1 hereof and responsible for directing or performing the day-to-day business affairs of the Corporation, including any Person to whom the Advisor subcontracts all orsubstantially all of such functions. 

Advisory Agreement. The term “Advisory Agreement” shall mean theagreement between the Corporation and the Advisor pursuant to which the Advisor will direct or perform the day-to-day business affairs of the Corporation. 

Affiliate or Affiliated. The term “Affiliate” or “Affiliated” shall mean, with respect to any Person, (i) any Person directly or indirectly owning, controlling or holding,with the power to vote, ten percent or more of the outstanding voting securities of such other Person; (ii) any Person ten percent or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with thepower to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person; (iv) any executive officer, director, trustee or general partner of such other Person;and (v) any legal entity for which such Person acts as an executive officer, director, trustee or general partner. 

 

-2- 

Aggregate Share Ownership Limit. The term “Aggregate Share Ownership Limit”shall mean not more than 9.8% in value of the aggregate of the outstanding Shares. 

Asset. The term “Asset”shall mean any Property, Mortgage, other debt or other investment (other than investments in bank accounts, money market funds or other current assets) owned by the Corporation, directly or indirectly through one or more of its Affiliates.

Asset Management Fee. The term “Asset Management Fee” shall mean the fee paid to the Advisor as compensationfor services rendered in connection with the management and disposition of the Corporation’s Assets. 

Average InvestedAssets. The term “Average Invested Assets” shall mean, for a specified period, the average of the aggregate book value of the Assets invested, directly or indirectly, in equity interests in and loans secured by or related to realestate (including, without limitation, equity interests in REITs, mortgage pools, commercial mortgage-backed securities, mezzanine loans and residential mortgage-backed securities), before deducting depreciation, bad debts or other non-cashreserves, computed by taking the average of such values at the end of each month during such period. 

BeneficialOwnership. The term “Beneficial Ownership” shall mean ownership of Shares by a Person, whether the interest in Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as ownedthrough the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlativemeanings. 

Board or Board of Directors. The term “Board” or “Board of Directors” shall mean theBoard of Directors of the Corporation. 

Business Day. The term “Business Day” shall mean any day, other thana Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close. 

Bylaws. The term “Bylaws” shall mean the Bylaws of the Corporation, as amended from time to time. 

Charitable Beneficiary. The term “Charitable Beneficiary” shall mean one or more beneficiaries of the Charitable Trust asdetermined pursuant to Section 7.2.6, provided that each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A),2055 and 2522 of the Code. 

Charitable Trust. The term “Charitable Trust” shall mean any trust provided forin Section 7.2.1. 

Charitable Trustee. The term “Charitable Trustee” shall mean the Person unaffiliatedwith the Corporation and a Prohibited Owner, that is appointed by the Corporation to serve as Trustee of the Charitable Trust. 

 

-3- 

Charter. The term “Charter” shall mean the charter of the Corporation.

Code. The term “Code” shall have the meaning as provided in Article III herein. 

Commencement of the Initial Public Offering. The term “Commencement of the Initial Public Offering” shall mean the datethat the Securities and Exchange Commission declares effective the registration statement filed under the Securities Act for the Initial Public Offering. 

Common Share Ownership Limit. The term “Common Share Ownership Limit” shall mean not more than 9.8% (in value or in number of Shares, whichever is more restrictive) of the aggregate ofthe outstanding Common Shares. 

Common Shares. The term “Common Shares” shall have the meaning as provided inSection 6.1 herein. 

Competitive Real Estate Commission. The term “Competitive Real Estate Commission”shall mean 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. The term “Construction Fee” shall mean a fee or other remuneration for acting as general contractorand/or construction manager to construct improvements, supervise and coordinate projects or provide major repairs or rehabilitations on a Property. 

Constructive Ownership. The term “Constructive Ownership” shall mean ownership of Shares by a Person, whether the interest in Shares is held directly or indirectly (including by anominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “ConstructivelyOwns” and “Constructively Owned” shall have the correlative meanings. 

Contract Purchase Price. The term“Contract Purchase Price” shall mean (i) the amount actually paid or allocated in respect of the acquisition of a Property, (ii) the Corporation’s proportionate share of the amount actually paid or allocated in respect ofthe Real Property owned by any real estate related entity in which the Corporation acquires a majority economic interest or which the Corporation consolidates for financial reporting purposes in accordance with generally accepted accountingprincipals, (iii) the amount actually paid or allocated in respect of an investment in any other real estate related entity or (iv) the amount actually paid or allocated in respect of the origination or acquisition of Mortgages, other debtinvestments or other investments; in each case including any third party expenses, debt, whether borrowed or assumed and exclusive of Acquisition Fees and Acquisition Expenses. 

Corporation. The term “Corporation” shall have the meaning as provided in Article II herein. 

 

-4- 

Dealer Manager. The term “Dealer Manager” shall mean Dividend CapitalSecurities LLC, a Colorado limited liability company and an Affiliate of the Corporation, or such other Person selected by the Board to act as the dealer manager for an Offering. 

Dealer Manager Fee. The term “Dealer Manager Fee” shall mean the fee from the sale of primary shares in the Offering (notincluding Shares sold pursuant to the Corporation’s distribution reinvestment plan) payable to the Dealer Manager for serving as the dealer manager of the Offering. 

Development Fee. The term “Development Fee” shall mean a fee for the packaging of a Property, including the negotiation and approval of plans, and any assistance in obtaining zoning andnecessary variances and financing for a specific Property, either initially or at a later date. 

Director. The term“Director” shall have the meaning as provided in Section 8.1 herein. 

Distributions. The term“Distributions” shall mean any distributions of money or other property, pursuant to Section 6.5 hereof, by the Corporation to owners of Shares, including distributions that may constitute a return of capital for federal income taxpurposes. 

Excepted Holder. The term “Excepted Holder” shall mean a Stockholder for whom an Excepted HolderLimit is created by Article VII or by the Board of Directors pursuant to Section 7.1.7. 

Excepted Holder Limit.The term “Excepted Holder Limit” shall mean, provided that the affected Excepted Holder agrees to comply with the requirements established by the Board of Directors pursuant to Section 7.1.7 and subject to adjustment pursuant toSection 7.1.8, the percentage limit established by the Board of Directors pursuant to Section 7.1.7. 

ExcessAmount. The term “Excess Amount” shall have the meaning as provided in Section 9.10 herein. 

ExchangeAct. The term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto. 

Expense Year. The term “Expense Year” shall have the meaning as provided in Section 9.10 herein. 

General Partner. The term “General Partner” shall mean the Corporation and any Person who becomes a substitute or additional General Partner as provided under the Operating PartnershipAgreement, and any of their successors as General Partner. 

Gross Proceeds. The term “Gross Proceeds” shallmean the aggregate purchase price of all Shares sold for the account of the Corporation through an Offering, without deduction for Sales Commissions, Dealer Manager Fee, volume discounts, any marketing support and due diligence expense reimbursementor Organization and Offering Expenses. For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced Sales Commissions or a Dealer Manager Fee are paid to the Dealer Manager or a Soliciting Dealer (where net proceedsto the Corporation are not reduced) shall be deemed to be the full amount of the offering price per Share pursuant to the Prospectus for such Offering without reduction. 

 

-5- 

Indemnitee. The term “Indemnitee” shall have the meaning as provided inSection 13.2(b) herein. 

Independent Appraiser. The term “Independent Appraiser” shall mean a Personwith no material current or prior business or personal relationship with the Advisor or the Directors and who is engaged to a substantial extent in the business of rendering opinions regarding the value of Real Property and/or other Assets of thetype held by the Corporation. Membership in a nationally recognized appraisal society such as the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers shall be conclusive evidence of being engaged to a substantialextent in the business of rendering opinions regarding the value of Real Property. 

Independent Director. The term“Independent Director” shall mean a Director who is not on the date of determination, and within the last two years from the date of determination has not been, directly or indirectly associated with the Sponsor or the Advisor by virtue of(i) ownership of an interest in the Sponsor, the Advisor or any of their Affiliates, (ii) employment by the Sponsor, the Advisor or any of their Affiliates, (iii) service as an officer or director of the Sponsor, the Advisor or any oftheir Affiliates, (iv) performance of services, other than as a Director, for the Corporation, (v) service as a director or trustee of more than three real estate investment trusts organized by the Sponsor or advised by the Advisor,or (vi) maintenance of a material business or professional relationship with the Sponsor, the Advisor or any of their Affiliates. A business or professional relationship is considered “material” if the aggregate gross revenue derivedby the Director from the Sponsor, the Advisor and their Affiliates exceeds five percent of either the Director’s annual gross revenue during either of the last two years or the Director’s net worth on a fair market value basis. An indirectassociation with the Sponsor or the Advisor shall include circumstances in which a Director’s spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law is or has been associated with theSponsor, the Advisor, any of their Affiliates or the Corporation. 

Initial Date. The term “Initial Date”shall mean the date on which Shares are first issued in the Initial Public Offering. 

Initial Investment. The term“Initial Investment” shall mean that portion of the initial capitalization of the Corporation and the Operating Partnership contributed by the Sponsor or its Affiliates pursuant to Section II.A. of the NASAA REIT Guidelines. 

Initial Public Offering. The term “Initial Public Offering” shall mean the first Offering pursuant to an effectiveregistration statement filed under the Securities Act. 

Joint Ventures. The term “Joint Ventures” shall meanthose joint venture, co-investment, co-ownership or partnership arrangements in which the Corporation or any of its subsidiaries is a co-venturer or general partner established to acquire or hold Assets. 

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

 

-6- 

Liquidity Event. The term “Liquidity Event” shall include, but shall not belimited to, (i) a Listing, (ii) a sale, merger or other transaction in which the Stockholders either receive, or have the option to receive, cash, securities redeemable for cash, and/or securities of a publicly traded company, and(iii) the sale of all or substantially all of the Corporation’s Assets where Stockholders either receive, or have the option to receive, cash or other consideration. 

Listing. The term “Listing” shall mean the listing of the Common Shares on a national securities exchange or the receipt bythe Stockholders of securities that are listed on a national securities exchange. Upon such Listing, the Common Shares shall be deemed Listed. 

Market Price. The term “Market Price” on any date shall mean, with respect to any class or series of outstanding Shares, the Closing Price for such Shares on such date. The “ClosingPrice” on any date shall mean the last sale price for such Shares, 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 Shares, in either case as reported in theprincipal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE or, if such Shares are not listed or admitted to trading on the NYSE, as reported on the principal consolidated transactionreporting system with respect to securities listed on the principal national securities exchange on which such Shares are listed or admitted to trading or, if such Shares are not listed or admitted to trading on any national securities exchange, thelast quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longerin use, the principal other automated quotation system that may then be in use or, if such Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market insuch Shares selected by the Board of Directors or, in the event that no trading price is available for such Shares, the then current offering price or, if no offering is then taking place (and provided that the most recent offering terminated noearlier than January 1 of the year prior to the then current year), the most recent offering price and, thereafter, the fair market value of the Shares, as determined in good faith by the Board of Directors. 

MGCL. The term “MGCL” shall mean the Maryland General Corporation Law, as amended from time to time. 

Mortgages. The term “Mortgages” shall mean, in connection with mortgage financing provided, invested in, participated in orpurchased by the Corporation, all of the notes, deeds of trust, security interests or other evidences of indebtedness or obligations, which are secured or collateralized by Real Property owned by the borrowers under such notes, deeds of trust,security interests or other evidences of indebtedness or obligations. 

NASAA REIT Guidelines. The term “NASAA REITGuidelines” shall mean the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association on May 7, 2007. 

Net Assets. The term “Net Assets” shall mean the total Assets (other than intangibles) at cost, before deductingdepreciation, reserves for bad debts or other non-cash

 

-7- 

reserves, less total liabilities, calculated quarterly by the Corporation on a basis consistently applied. 

Net Income. The term “Net Income” shall mean for any period, the Corporation’s total revenues applicable to such period, less the total expenses applicable to such period other thanadditions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Assets. 

Net Sales Proceeds. The term “Net Sales Proceeds” shall mean in the case of a transaction described in clause (i)(A) of the definition of Sale, the proceeds of any such transaction lessthe amount of selling expenses incurred by or on behalf of the Corporation or the Operating Partnership, including all real estate commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(B) ofsuch definition, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Corporation or the Operating Partnership, including any legal fees and expenses and other sellingexpenses incurred in connection with such transaction. In the case of a transaction described in clause (i)(C) of such definition, Net Sales Proceeds means the proceeds of any such transaction actually distributed to the Corporation or the OperatingPartnership from the Joint Venture less the amount of any selling expenses, including legal fees and expenses incurred by or on behalf of the Corporation (other than those paid by the Joint Venture). In the case of a transaction or series oftransactions described in clause (i)(D) of such definition, Net Sales Proceeds means the proceeds of any such transaction (including the aggregate of all payments under a Mortgage or in satisfaction thereof other than regularly scheduled interestpayments) less the amount of selling expenses incurred by or on behalf of the Corporation or the Operating Partnership, including all commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(E) ofsuch definition, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Corporation or the Operating Partnership, including any legal fees and expenses and other sellingexpenses incurred in connection with such transaction. In the case of a transaction described in clause (ii) of the definition of Sale, Net Sales Proceeds means the proceeds of such transaction or series of transactions less all amountsgenerated thereby which are reinvested in one or more Assets within 180 days thereafter and less the amount of any real estate commissions, closing costs, and legal fees and expenses and other selling expenses incurred by or allocated to theCorporation or the Operating Partnership in connection with such transaction or series of transactions. Net Sales Proceeds shall also include any amounts that the Corporation determines, in its discretion, to be economically equivalent to proceedsof a Sale. Net Sales Proceeds shall not include any reserves established by the Corporation in its sole discretion. 

Non-Compliant Tender Offer. The term “Non-Compliant Tender Offer” shall have the meaning as provided in Section 12.7 herein. 

NYSE. The term “NYSE” shall mean the New York Stock Exchange. 

Offering. The term “Offering” shall mean any offering and sale of Shares. 

 

-8- 

OP Units. The term “OP Units” shall mean units of partnership interest inthe Operating Partnership. 

Operating Partnership. The term “Operating Partnership” shall mean IndustrialIncome Operating Partnership LP, a Delaware limited partnership, through which the Corporation may own Assets. 

OperatingPartnership Agreement. The Operating Partnership Agreement among the Corporation, the Advisor, and Industrial Income Advisors Group LLC. 

Organization and Offering Expenses. The term “Organization and Offering Expenses” shall mean any and all costs and expenses, other than the Sales Commission and the Dealer Manager Fee,incurred in connection with the formation of the Corporation and the qualification and registration of an Offering, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts andcommissions (including fees of the underwriters’ attorneys), expenses for printing and amending registration statements or supplementing prospectuses, mailing and distributing costs, salaries of employees while engaged in sales activity,telephone and other telecommunications costs, all advertising and marketing expenses (including the costs related to investor and broker-dealer sales meetings), charges of transfer agents, registrars, trustees, escrow holders, depositories andexperts and fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including accountants’ and attorneys’ fees. 

Person. The term “Person” shall mean an individual, corporation, partnership, limited liability company, estate, trust(including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundationwithin the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Exchange Act and a group to which an Excepted Holder Limitapplies. 

Preferred Shares. The term “Preferred Shares” shall have the meaning as provided inSection 6.1 herein. 

Prohibited Owner. The term “Prohibited Owner” shall mean, with respect to anypurported Transfer, any Person who, but for the provisions of Section 7.1.1, would Beneficially Own or Constructively Own Shares, and if appropriate in the context, shall also mean any Person who would have been the record owner of Shares thatthe Prohibited Owner would have so owned. 

Property or Properties. The term “Property” or“Properties” shall mean, as the context requires, all or a portion of each Real Property acquired by the Corporation, directly or indirectly through joint venture or co-ownership arrangements or other partnership or investment entities.

Prospectus. The term “Prospectus” shall mean the same as that term is defined in Section 2(10) of theSecurities 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

 

-9- 

case of an intrastate offering, any document by whatever name known, utilized for the purpose of offering and selling Securities to the public. 

Real Property. The term “Real Property” shall mean land, rights in land (including leasehold interests), and any buildings,structures, improvements, furnishings, fixtures and equipment located on or used in connection with land and rights or interests in land. 

Reinvestment Plan. The term “Reinvestment Plan” shall have the meaning as provided in Section 6.10 herein. 

REIT. The term “REIT” shall mean a corporation, trust, association or other legal entity (other than a real estatesyndication) that qualifies as a real estate investment trust under the REIT Provisions of the Code. 

REIT Provisions ofthe Code. The term “REIT Provisions of the Code” shall mean Sections 856 through 860 of the Code and any successor or other provisions of the Code relating to real estate investment trusts (including provisions as to the attribution ofownership of beneficial interests therein) and the regulations promulgated thereunder. 

Restriction Termination Date.The term “Restriction Termination Date” shall mean the first day after the Initial Date on which the Board of Directors determines that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as aREIT or that compliance with the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of Shares set forth herein is no longer required in order for the Corporation to qualify as a REIT. 

Roll-Up Entity. The term “Roll-Up Entity” shall mean a partnership, real estate investment trust, corporation, trust orsimilar entity that would be created or would survive after the successful completion of a proposed Roll-Up Transaction. 

Roll-Up Transaction. The term “Roll-Up Transaction” shall mean a transaction involving the acquisition, merger, conversion or consolidation either directly or indirectly of the Corporation and the issuance of securities ofa Roll-Up Entity to the holders of Common Shares. Such term does not include: 

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

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

 
 (i)voting rights of the holders of Common Shares; 
 
 (ii)the term of existence of the Corporation; 
 
 (iii)Sponsor or Advisor compensation; or 
 

-10- 

 (iv)the Corporation’s investment objectives. 
Sale or Sales. The term “Sale” or “Sales” shall mean (i) any transaction or series of transactions whereby: (A) the Corporation or the Operating Partnership directlyor indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including the lease of any Property consisting of a building only, andincluding any event with respect to any Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the Corporation or the Operating Partnership directly or indirectly (except as described in othersubsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Corporation or the Operating Partnership in any Joint Venture in which it is a co-venturer orpartner; (C) any Joint Venture directly or indirectly (except as described in other subsections of this definition) in which the Corporation or the Operating Partnership as a co-venturer or partner sells, grants, transfers, conveys, orrelinquishes its ownership of any Property or portion thereof, including any event with respect to any Property which gives rise to insurance claims or condemnation awards; (D) the Corporation or the Operating Partnership directly or indirectly(except as described in other subsections of this definition) sells, grants, conveys or relinquishes its interest in any Mortgage or portion thereof (including with respect to any Mortgage, all payments thereunder or in satisfaction thereof otherthan regularly scheduled interest payments) of amounts owed pursuant to such Mortgage and any event which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Corporation or the Operating Partnership directlyor indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other Asset not previously described in this definition or any portion thereof, but (ii) notincluding any transaction or series of transactions specified in clause (i) (A) through (E) above in which the proceeds of such transaction or series of transactions are reinvested by the Corporation in one or more Assets within 180days thereafter. 

Sales Commissions. The term “Sales Commissions” shall mean any and all commissions payableto underwriters, dealer managers or other broker-dealers in connection with the sale of Shares, including, without limitation, commissions payable to the Dealer Manager. 

SDAT. The term “SDAT” shall mean the State Department of Assessments and Taxation of Maryland. 

Securities. The term “Securities” shall mean any of the following issued by the Corporation, as the text requires: Shares, any other stock, shares or other evidences of equity orbeneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as“securities” or any certificates of interest, shares or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.

Securities Act. The term “Securities Act” shall mean the Securities Act of 1933, as amended from time totime, or any successor statute thereto. Reference to any provision of the Securities Act shall mean such provision as in effect from time to time, as the same may be

 

-11- 

amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time. 

Shares. The term “Shares” shall mean shares of stock of the Corporation of any class or series, including Common Shares orPreferred Shares. 

Soliciting Dealers. The term “Soliciting Dealers” shall mean those broker-dealers that aremembers of the Financial Industry Regulatory Authority, Inc., or that are exempt from broker-dealer registration, and that, in either case, enter into selected dealer or other agreements with the Dealer Manager to sell Shares. 

Special OP Units. The term “Special OP Units” shall have the meaning as provided in Section 9.7 herein. 

Sponsor. The term “Sponsor” shall mean any Person which (i) is directly or indirectly instrumental in organizing,wholly or in part, the Corporation, (ii) will control, manage or participate in the management of the Corporation, and any Affiliate of any such Person, (iii) takes the initiative, directly or indirectly, in founding or organizing theCorporation, either alone or in conjunction with one or more other Persons, (iv) receives a material participation in the Corporation in connection with the founding or organizing of the business of the Corporation, in consideration of servicesor property, or both services and property, (v) has a substantial number of relationships and contacts with the Corporation, (vi) possesses significant rights to control Properties, (vii) receives fees for providing services to theCorporation which are paid on a basis that is not customary in the industry, or (viii) provides goods or services to the Corporation on a basis which was not negotiated at arm’s-length with the Corporation. “Sponsor” does notinclude any Person whose only relationship with the Corporation is that of an independent property manager and whose only compensation is as such, or wholly independent third parties such as attorneys, accountants and underwriters whose onlycompensation is for professional services. 

Stockholder List. The term “Stockholder List” shall have themeaning as provided in Section 12.5 herein. 

Stockholders. The term “Stockholders” shall mean theholders of record of the Shares as maintained in the books and records of the Corporation or its transfer agent. 

TenderedShares. The term “Tendered Shares” shall have the meaning as provided in Section 12.7 herein. 

Termination Event. The term “Termination Event” means the termination or nonrenewal of the Advisory Agreement (i) in connection with a merger, sale of Assets or other transaction involving the Corporation pursuant towhich a majority of the Directors then in office are replaced or removed, (ii) by the Advisor for “good reason” (as defined in the Advisory Agreement), or (iii) by the Corporation and/or Operating Partnership other than for“cause” (as defined in the Advisory Agreement). 

Total Operating Expenses. The term “Total OperatingExpenses” shall mean all costs and expenses paid or incurred by the Corporation, as determined under generally accepted

 

-12- 

accounting principles, that are in any way related to the operation of the Corporation or to corporate business, including Asset Management Fees and other operating fees paid to the Advisor, butexcluding (i) the expenses of raising capital such as Organization and Offering Expenses, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves,(v) incentive fees; (vi) Acquisition Fees and Acquisition Expenses, (vii) real estate commissions on the Sale of Property, (viii) distributions made with respect to interests in the Operating Partnership, and (ix) other feesand expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair, andimprovement of property). Notwithstanding the definition set forth above, any expense of the Corporation which is not part of Total Operating Expenses under the NASAA REIT Guidelines shall not be treated as part of Total Operating Expenses forpurposes hereof. 

Total Project Cost. With regard to any Real Property acquired prior to or during the development,construction, improvement or acquisition stages, all hard and soft costs and expenses paid or incurred by the Corporation that are in any way related to the development of such Real Property, including, but not limited to, any debt, whether borrowedor assumed, land and construction costs. 

Transfer. The term “Transfer” shall mean any issuance, sale,transfer, gift, assignment, devise or other disposition, as well as any other event that causes any Person to acquire Beneficial Ownership or Constructive Ownership, or any agreement to take any such actions or cause any such events, of Shares orthe right to vote or receive dividends on Shares, including (i) the granting or exercise of any option (or any disposition of any option), (ii) any disposition of any securities or rights convertible into or exchangeable for Shares or anyinterest in Shares or any exercise of any such conversion or exchange right and (iii) Transfers of interests in other entities that result in changes in Beneficial or Constructive Ownership of Shares; in each case, whether voluntary orinvoluntary, 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. 

2%/25% Guidelines. The term “2%/25% Guidelines” shall have the meaning as provided in Section 9.10 herein. 

Unimproved Real Property. The term “Unimproved Real Property” shall mean Property in which the Corporation has an equityinterest that was not acquired for the purpose of producing rental or other operating income, that has no development or construction in process and for which no development or construction is planned, in good faith, to commence within one year.

**ARTICLE VI**

**STOCK**

Section 6.1     Authorized Shares. TheCorporation has authority to issue 1,200,000,000 Shares, consisting of 1,000,000,000 shares of Common Stock, $.01 par value per 

 

-13- 

share (“Common Shares”), and 200,000,000 shares of Preferred Stock, $.01 par value per share (“Preferred Shares”). The aggregate par value of all authorized Shares having parvalue is $12,000,000. All Shares shall be fully paid and nonassessable when issued. If Shares of one class are classified or reclassified into Shares of another class pursuant to this Article VI, the number of authorized Shares of the former classshall be automatically decreased and the number of Shares of the latter class shall be automatically increased, in each case by the number of Shares so classified or reclassified, so that the aggregate number of Shares of all classes that theCorporation has authority to issue shall not be more than the total number of Shares set forth in the first sentence of this paragraph. The Board of Directors, with the approval of a majority of the entire Board and without any action by theStockholders, may amend the Charter from time to time to increase or decrease the aggregate number of Shares or the number of Shares of any class or series that the Corporation has authority to issue. 

Section 6.2     Common Shares. 

Section 6.2.1   Common Shares Subject to Terms of Preferred Shares. The Common Shares shall be subject to the express terms of any series of Preferred Shares. 

Section 6.2.2   Description. Subject to the provisions of Article VII and except as may otherwise be specified in theterms of any class or series of Common Shares, each Common Share shall entitle the holder thereof to one vote per share on all matters upon which Stockholders are entitled to vote pursuant to Section 12.2 hereof. The Board may classify orreclassify any unissued Common Shares from time to time in one or more classes or series of Shares; provided, however, that the voting rights per Share (other than any publicly held Share) sold in a private offering shall not exceed the votingrights which bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Corporation for each privately offered Share bears to the book value of each outstanding publicly held Share. 

Section 6.2.3   Rights Upon Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or windingup, or any distribution of the Assets, the aggregate Assets available for distribution to holders of the Common Shares shall be determined in accordance with applicable law. Each holder of Common Shares of a particular class shall be entitled toreceive, ratably with each other holder of Common Shares of such class, that portion of such aggregate Assets available for distribution as the number of outstanding Common Shares of such class held by such holder bears to the total number ofoutstanding Common Shares of such class then outstanding. 

Section 6.2.4   Voting Rights. Except as may beprovided otherwise in the Charter, and subject to the express terms of any series of Preferred Shares, the holders of the Common Shares shall have the exclusive right to vote on all matters (as to which a common stockholder shall be entitled to votepursuant to applicable law) at all meetings of the Stockholders. 

Section 6.3     Preferred Shares.The Board may classify any unissued Preferred Shares and reclassify any previously classified but unissued Preferred Shares of any series from time to time, in one or more classes or series of Shares; provided, however, that the voting rights perShare (other than any publicly held Share) sold in a private offering shall not exceed the 

 

-14- 

voting rights which bear the same relationship to the voting rights of a publicly held Share as the consideration paid to the Corporation for each privately offered Share bears to the book valueof each outstanding publicly held Share. The issuance of Preferred Shares must be approved by a majority of the Independent Directors who do not have an interest in the transaction and who have access, at the Corporation’s expense, to theCorporation’s legal counsel or to independent legal counsel. 

Section 6.4     Classified orReclassified Shares. Prior to issuance of classified or reclassified Shares of any class or series, the Board by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of Shares;(b) specify the number of Shares to be included in the class or series; (c) set or change, subject to the provisions of Article VII and subject to the express terms of any class or series of Shares 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 articlessupplementary with the SDAT. Any of the terms of any class or series of Shares set or changed pursuant to clause (c) of this Section 6.4 may be made dependent upon facts or events ascertainable outside the Charter (including determinationsby the Board or other facts or events within the control of the Corporation) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of Shares isclearly and expressly set forth in the articles supplementary or other charter document. 

Section 6.5    Dividends and Distributions. The Board of Directors may from time to time authorize the Corporation to declare and pay to Stockholders such dividends or other Distributions, in cash or other assets of the Corporation or in Securities of theCorporation or from any other source as the Board of Directors in its discretion shall determine. The Board of Directors shall endeavor to authorize the Corporation to declare and pay such dividends and other Distributions as shall be necessary forthe Corporation to qualify as a REIT under the Code; however, Stockholders shall have no right to any dividend or other Distribution unless and until authorized by the Board and declared by the Corporation. The exercise of the powers and rights ofthe Board of Directors pursuant to this Section 6.5 shall be subject to the provisions of any class or series of Shares at the time outstanding. The receipt by any Person in whose name any Shares are registered on the records of the Corporationor by his or her duly authorized agent shall be a sufficient discharge for all dividends or other Distributions payable or deliverable in respect of such Shares and from all liability to see to the application thereof. Distributions in kind shallnot be permitted, except for distributions of readily marketable securities, distributions of beneficial interests in a liquidating trust established for the dissolution of the Corporation and the liquidation of its Assets in accordance with theterms of the Charter or distributions in which (a) the Board advises each Stockholder of the risks associated with direct ownership of the property, (b) the Board offers each Stockholder the election of receiving such in-kinddistributions, and (c) in-kind distributions are made only to those Stockholders that accept such offer. 

Section 6.6    Charter and Bylaws. The rights of all Stockholders and the terms of all Shares are subject to the provisions of the Charter and the Bylaws. 

Section 6.7     No Issuance of Share Certificates. Unless otherwise provided by the Board of Directors, the Corporation shall not issue stock certificates. A Stockholder’sinvestment shall be recorded on the books of the Corporation. To transfer his or her Shares, a Stockholder shall submit an executed form to the Corporation, which form shall be provided by 

 

-15- 

the Corporation upon request. Such transfer will also be recorded on the books of the Corporation. Upon issuance or transfer of Shares, the Corporation will provide the Stockholder withinformation concerning his or her rights with regard to such Shares, as required by the Bylaws and the MGCL or other applicable law. 

Section 6.8     Suitability of Stockholders. Upon the Commencement of the Initial Public Offering and until Listing, the following provisions shall apply: 

Section 6.8.1   Investor Suitability Standards. Subject to suitability standards established by individual states andamendments to the suitability standards set forth in the NASAA REIT Guidelines, to become a Stockholder, if such prospective Stockholder is an individual (including an individual beneficiary of a purchasing Individual Retirement Account), or if theprospective Stockholder is a fiduciary (such as a trustee of a trust or corporate pension or profit sharing plan, or other tax-exempt organization, or a custodian under a Uniform Gifts to Minors Act), such individual or fiduciary, as the case maybe, must represent to the Corporation, among other requirements as the Corporation may require from time to time: 

(a)         that such individual (or, in the case of a fiduciary, that the fiduciary account or the donor who directly or indirectly supplies the funds to purchase the Shares) has a minimumannual gross income of $70,000 and a net worth (excluding home, furnishings and automobiles) of not less than $70,000; or 

(b)         that such individual (or, in the case of a fiduciary, that the fiduciary account or the donor who directly or indirectly supplies the funds to purchase the Shares) has a net worth(excluding home, furnishings and automobiles) of not less than $250,000. 

Section 6.8.2   Determination ofSuitability of Sale. The Sponsor and each Person selling Common Shares on behalf of the Corporation shall make every reasonable effort to determine that the purchase of Common Shares by a Stockholder is a suitable and appropriate investment forsuch Stockholder. In making this determination, each Person selling Common Shares on behalf of the Corporation shall ascertain that the prospective Stockholder: (a) meets the minimum income and net worth standards established for theCorporation; (b) can reasonably benefit from the Corporation based on the prospective Stockholder’s overall investment objectives and portfolio structure; (c) is able to bear the economic risk of the investment based on theprospective Stockholder’s overall financial situation; and (d) has apparent understanding of (i) the fundamental risks of the investment; (ii) the risk that the Stockholder may lose the entire investment; (iii) the lack ofliquidity of the Common Shares; (iv) the restrictions on transferability of the Common Shares; (v) the tax consequences of the investment; and (vi) the background of the Advisor. 

Each Person selling Common Shares on behalf of the Corporation shall make this determination on the basis of information it has obtainedfrom a prospective Stockholder. Relevant information for this purpose will include at least the age, investment objectives, investment experiences, income, net worth, financial situation, and other investments of the prospective Stockholder, as wellas any other pertinent factors. 

 

-16- 

Each Person selling Common Shares on behalf of the Corporation shall maintain records ofthe information used to determine that an investment in Common Shares is suitable and appropriate for a Stockholder. Each Person selling Common Shares on behalf of the Corporation shall maintain these records for at least six years. 

Section 6.8.3   Minimum Investment and Transfer. Subject to certain individual state requirements and except with respectto the issuance of Common Shares under the Reinvestment Plan, no sale or transfer of Common Shares will be permitted of less than $2,000, unless such amount is adjusted by the Board. 

Section 6.9     Repurchase of Shares. The Board may establish, from time to time, a program or programs by whichthe Corporation voluntarily repurchases Shares from its Stockholders; provided, however, that such repurchase does not impair the capital or operations of the Corporation. The Sponsor, Advisor, members of the Board or any Affiliates thereof may notreceive any fees arising out of the repurchase of Shares by the Corporation. 

Section 6.10   DistributionReinvestment Plans. The Board may establish, from time to time, a Distribution reinvestment plan or plans (each, a “Reinvestment Plan”). Under any such Reinvestment Plan, (a) all material information regarding Distributions to theStockholders and the effect of reinvesting such Distributions, including the tax consequences thereof, shall be provided to the Stockholders not less often than annually, and (b) each Stockholder participating in such Reinvestment Plan shallhave a reasonable opportunity to withdraw from the Reinvestment Plan not less often than annually after receipt of the information required in clause (a) above. 

**ARTICLE VII**

**RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES**

Section 7.1     Shares. 

Section 7.1.1   Ownership Limitations. During the period commencing on the Initial Date and prior to the RestrictionTermination Date, but subject to Section 7.3: 

(a)         BasicRestrictions. 

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

   (ii)      No Person shall Beneficially or Constructively Own Shares to the extent that such Beneficial or Constructive Ownership of Shares would result in the Corporation being “closelyheld” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise failing to qualify as a REIT (including, but not limited to, Beneficialor Constructive Ownership that would result in the Corporation owning (actually or Constructively) an interest in

 

-17- 

a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Corporation from such tenant would cause the Corporation to fail to satisfy any of the grossincome requirements of Section 856(c) of the Code). 

   (iii)      Anypurported Transfer of Shares that, if effective, would result in Shares being beneficially owned by less than 100 Persons (determined under the principles of Section 856(a)(5) of the Code) shall be void abinitio, and the intendedtransferee shall acquire no rights in such Shares. 

(b)         Transfer inTrust. If any purported Transfer of Shares occurs which, if effective, would result in any Person Beneficially Owning or Constructively Owning Shares in violation of Section 7.1.1(a)(i) or (ii), 

   (i)      then that number of Shares the Beneficial or Constructive Ownership of whichotherwise would cause such Person to violate Section 7.1.1(a)(i) or (ii) (rounded up to the nearest whole share) shall be automatically transferred to a Charitable Trust for the benefit of a Charitable Beneficiary, as described inSection 7.2, effective as of the close of business on the Business Day prior to the date of such purported Transfer, and such Person shall acquire no rights in such Shares; or 

   (ii)      if the transfer to the Charitable Trust described in clause (i) of thissentence would not be effective for any reason to prevent the violation of Section 7.1.1(a)(i) or (ii), then the purported Transfer of that number of Shares that otherwise would cause any Person to violate Section 7.1.1(a)(i) or(ii) shall be void abinitio, and the intended transferee shall acquire no rights in such Shares. 

Section7.1.2   Remedies for Breach. If the Board of Directors or its designee (including, any duly authorized committee of the Board) shall at any time determine in good faith that a Transfer or other event has taken place that results ina violation of Section 7.1.1 or that a Person intends to acquire or has attempted to acquire Beneficial or Constructive Ownership of any Shares in violation of Section 7.1.1 (whether or not such violation is intended), the Board ofDirectors or its designee 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 suchTransfer on the books 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 7.1.1 shallautomatically result in the transfer to the Charitable 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 ofDirectors or its designee. 

Section 7.1.3   Notice of Restricted Transfer. Any Person who acquires orattempts or intends to acquire Beneficial Ownership or Constructive Ownership of Shares that will or may violate Section 7.1.1(a), or any Person who would have owned Shares that resulted in a transfer to the Charitable Trust pursuant to theprovisions of Section 7.1.1(b), shall immediately give written notice to the Corporation of such event, or in the case of such a proposed or attempted transaction, give at least 10 Business Days prior written notice, and shall provide to

 

-18- 

the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer on the Corporation’s status as a REIT. 

Section 7.1.4   Owners Required To Provide Information. From the Initial Date and prior to the Restriction TerminationDate: 

(a)        every owner of more than five percent (or such lower percentage asrequired by the Code or the Treasury Regulations promulgated thereunder or as may be requested by the Board of Directors in its sole discretion) of the outstanding Shares, within 30 days after the end of each calendar year, shall give written noticeto the Corporation stating the name and address of such owner, the number of Shares and other Shares Beneficially Owned and a description of the manner in which such Shares are held. Each such owner shall provide to the Corporation such additionalinformation as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation’s status as a REIT and to ensure compliance with the Aggregate Share Ownership Limit, the Common ShareOwnership Limit and the other restrictions set forth herein. 

(b)        each Personwho is a Beneficial or Constructive Owner of Shares and each Person (including the Stockholder of record) who is holding Shares for a Beneficial or Constructive Owner shall provide to the Corporation such information as the Corporation may request,in good faith, in order to determine the Corporation’s status as a REIT, to comply with requirements of any taxing authority or governmental authority or to determine such compliance or to ensure compliance with the Aggregate Share OwnershipLimit, the Common Share Ownership Limit and the other restrictions set forth herein. 

Section 7.1.5   RemediesNot Limited. Subject to Section 8.10 of the Charter, nothing contained in this Section 7.1 shall limit the ability of the Corporation to implement or enforce compliance with the terms of this Section 7.1 or the authority of theBoard of Directors to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its Stockholders in preserving the Corporation’s status as a REIT and to ensure compliance with the Aggregate ShareOwnership Limit, the Common Share Ownership Limit and the other restrictions set forth herein, including, without limitation, refusal to give effect to a transaction on the books of the Corporation. 

Section 7.1.6   Ambiguity. In the case of an ambiguity in the application of any of the provisions of thisSection 7.1, Section 7.2 or any definition contained in Article V, the Board of Directors shall have the power to determine the application of the provisions of this Section 7.1 or Section 7.2 with respect to any situation basedon the facts known to it. In the event Section 7.1 or 7.2 requires an action by the Board of Directors and the Charter fails to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine theaction to be taken so long as such action is not contrary to the provisions of Article V or Sections 7.1 or 7.2. Absent a decision to the contrary by the Board of Directors (which the Board may make in its sole and absolute discretion), if a Personwould have (but for the remedies set forth in Section 7.1.2) acquired Beneficial or Constructive Ownership of Shares in violation of Section 7.1.1, such remedies (as applicable) shall apply first to the Shares which, but for such remedies,would have been Beneficially Owned or Constructively Owned (but not 

 

-19- 

actually owned) by such Person, pro rata among the Persons who actually own such Shares based upon the relative number of the Shares held by each such Person. 

Section 7.1.7   Exceptions. 

(a)         Subject to Section 7.1.1(a)(ii), the Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a Person from theAggregate Share Ownership Limit and the Common Share Ownership Limit, as the case may be, and may establish or increase an Excepted Holder Limit for such Person if: 

   (i)      the Board of Directors obtains such representations and undertakings from such Person as are reasonably necessary to ascertain that noindividual’s Beneficial or Constructive Ownership of such Shares will violate Section 7.1.1(a)(ii); 

   (ii)      such Person does not and represents that it will not own, actually or Constructively, an interest in a tenant of the Corporation (or a tenant of any entity owned or controlled by theCorporation) that would cause the Corporation to own, actually or Constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant and the Board of Directors obtains such representations andundertakings from such Person as are reasonably necessary to ascertain this fact (for this purpose, a tenant from whom the Corporation (or an entity owned or controlled by the Corporation) derives (and is expected to continue to derive) asufficiently small amount of revenue such that, in the opinion of the Board of Directors, rent from such tenant would not adversely affect the Corporation’s ability to qualify as a REIT, shall not be treated as a tenant of the Corporation); and

   (iii)      such Person agrees that any violation or attempted violation ofsuch representations or undertakings (or other action which is contrary to the restrictions contained in Sections 7.1.1 through 7.1.6) will result in such Shares being automatically transferred to a Charitable Trust in accordance with Sections7.1.1(b) and 7.2. 

(b)         Prior to granting any exception pursuant toSection 7.1.7(a), the Board of Directors may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory to the Board of Directors in its sole discretion, as it may deemnecessary or advisable in order to determine or ensure the Corporation’s status as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board of Directors may impose such conditions or restrictions as it deems appropriate inconnection with granting such exception. 

(c)         Subject toSection 7.1.1(a)(ii), an underwriter which participates in a public offering or a private placement of Shares (or securities convertible into or exchangeable for Shares) may Beneficially Own or Constructively Own Shares (or securitiesconvertible into or exchangeable for Shares) in excess of the Aggregate Share Ownership Limit, the Common Share 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 Limitfor 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 and undertakings entered into with

 

-20- 

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 theCommon Share Ownership Limit. 

Section 7.1.8   Increase in Aggregate Share Ownership and Common Share OwnershipLimits. Subject to Section 7.1.1(a)(ii), the Board of Directors may from time to time increase the Common Share Ownership Limit and the Aggregate Share Ownership Limit for one or more Persons and decrease the Common Share Ownership Limitand the Aggregate Share Ownership Limit for all other Persons; provided, however, that the decreased Common Share Ownership Limit and/or Aggregate Share Ownership Limit will not be effective for any Person whose percentage ownership in Shares is inexcess of such decreased Common Share Ownership Limit and/or Aggregate Share Ownership Limit until such time as such Person’s percentage of Shares equals or falls below the decreased Common Share Ownership Limit and/or Aggregate Share OwnershipLimit, but any further acquisition of Shares in excess of such percentage ownership of Shares will be in violation of the Common Share Ownership Limit and/or Aggregate Share Ownership Limit and, provided further, that the new Common Share OwnershipLimit and/or Aggregate Share Ownership Limit would not allow five or fewer Persons to Beneficially Own more than 49.9% in value of the outstanding Shares. 

Section 7.1.9   Legend. Any certificate representing Shares shall bear substantially the following legend: 

 
 The Shares represented by this certificate are subject to restrictions on Beneficial and Constructive Ownership and Transfer for the purpose, among others, of the Corporation’smaintenance of its status as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in theCorporation’s charter, (i) no Person may Beneficially or Constructively Own Common Shares in excess of 9.8% (in value or number of Shares) of the outstanding Common Shares unless such Person is an Excepted Holder (in which case theExcepted Holder Limit shall be applicable); (ii) no Person may Beneficially or Constructively Own Shares in excess of 9.8% of the value of the total outstanding Shares, unless such Person is an Excepted Holder (in which case the Excepted HolderLimit shall be applicable); (iii) no Person may Beneficially or Constructively Own Shares 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 (including, but not limited to, Beneficial or Constructive Ownership that would result in the Corporation owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if theincome 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); and (iv) no Person may Transfer or attempt to Transfer Shares if suchTransfer would result in Shares 
 

-21- 

 being owned by fewer than 100 Persons. Any Person who Beneficially or Constructively Owns or attempts to Beneficially or Constructively Own Shares which cause or will cause a Personto Beneficially or Constructively Own Shares in excess or in violation of the above limitations must immediately notify the Corporation. If any of the restrictions on Transfer or ownership are violated, the Shares represented hereby will beautomatically transferred to a Charitable Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may redeem Shares upon the terms and conditions specified by the Board of Directors in its sole discretion if theBoard of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may bevoid abinitio. All capitalized terms in this legend have the meanings defined in the Corporation’s charter, as the same may be amended from time to time, a copy of which, including the restrictions on Transfer and ownership, willbe furnished to each holder of Shares on request and without charge. Requests for such a copy may be directed to the Secretary of the Corporation at its principal office. 
Instead of the foregoing legend, the certificate may state that the Corporation will furnish a fullstatement about certain restrictions on transferability to a Stockholder on request and without charge. In the case of uncertificated Shares, the Corporation will send the holder of such Shares, on request and without charge, a written statement ofthe information otherwise required on certificates. 

Section 7.2     Transfer of Shares in Trust.

Section 7.2.1   Ownership in Trust. Upon any purported Transfer or other event described inSection 7.1.1(b) that would result in a transfer of Shares to a Charitable Trust, such Shares shall be deemed to have been transferred to the Charitable Trustee as trustee of a Charitable Trust for the exclusive benefit of one or moreCharitable Beneficiaries. Such transfer to the Charitable Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or other event that results in the transfer to the Charitable Trustpursuant to Section 7.1.1(b). The Charitable Trustee shall be appointed by the Corporation and shall be a Person unaffiliated with the Corporation and any Prohibited Owner. Each Charitable Beneficiary shall be designated by the Corporation asprovided in Section 7.2.6. 

Section 7.2.2   Status of Shares Held by the Charitable Trustee. Sharesheld by the Charitable Trustee shall continue to be issued and outstanding Shares of the Corporation. The Prohibited Owner shall have no rights in the Shares held by the Charitable Trustee. The Prohibited Owner shall not benefit economically fromownership of any Shares held in trust by the Charitable Trustee, shall have no rights to dividends or other Distributions and shall not possess any rights to vote or other rights attributable to the Shares held in the Charitable Trust. 

 

-22- 

Section 7.2.3   Dividend and Voting Rights. The Charitable Trustee shallhave all voting rights and rights to dividends or other Distributions with respect to Shares held in the Charitable Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other Distributionpaid prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee shall be paid with respect to such Shares to the Charitable Trustee upon demand and any dividend or other Distribution authorized but unpaidshall be paid when due to the Charitable Trustee. Any dividends or other Distributions so paid over to the Charitable Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect toShares held in the Charitable Trust and, subject to Maryland law, effective as of the date that Shares have been transferred to the Charitable Trustee, the Charitable Trustee shall have the authority (at the Charitable Trustee’s solediscretion) (a) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee and (b) to recast such vote in accordance with the desires of theCharitable Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Corporation has already taken irreversible corporate action, then the Charitable Trustee shall not have the authority to rescind and recast suchvote. Notwithstanding the provisions of this Article VII, until the Corporation has received notification that Shares have been transferred into a Charitable Trust, the Corporation shall be entitled to rely on its share transfer and otherStockholder records for purposes of preparing lists of Stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of Stockholders. 

Section 7.2.4   Sale of Shares by Charitable Trustee. Within 20 days of receiving notice from the Corporation that Shareshave been transferred to the Charitable Trust, the Charitable Trustee shall sell the Shares held in the Charitable Trust to a Person, designated by the Charitable Trustee, whose ownership of the Shares will not violate the ownership limitations setforth in Section 7.1.1(a). Upon such sale, the interest of the Charitable Beneficiary in the Shares sold shall terminate and the Charitable Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the CharitableBeneficiary as provided in this Section 7.2.4. 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 theevent causing the Shares to be held in the Charitable 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 Charitable Trust and(b) the price per share received by the Charitable Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the Shares held in the Charitable Trust. The Charitable Trustee may reduce the amount payableto the Prohibited Owner by the amount of dividends and other Distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Charitable Trustee pursuant to Section 7.2.3 of this Article VII. Any net salesproceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by the Corporation that Shares have been transferred to the Charitable Trustee, such Shares are soldby a Prohibited Owner, then (i) such Shares shall be deemed to have been sold on behalf of the Charitable Trust and (ii) to the extent that the Prohibited Owner received an amount for such Shares that exceeds the amount that suchProhibited Owner was entitled to receive pursuant to this Section 7.2.4, such excess shall be paid to the Charitable Trustee upon demand. 

 

-23- 

Section 7.2.5   Purchase Right in Shares Transferred to the CharitableTrustee. Shares transferred to the Charitable Trustee shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per Share equal to the lesser of (a) the price per Share in the transaction that resulted insuch transfer to the Charitable Trust (or, in the case of a devise or gift, the Market Price at the time of such devise or gift) and (b) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation shallhave the right to accept such offer until the Charitable Trustee has sold the Shares held in the Charitable Trust pursuant to Section 7.2.4. Upon such a sale to the Corporation, the interest of the Charitable Beneficiary in the Shares soldshall terminate and the Charitable Trustee shall distribute the net proceeds of the sale to the Prohibited Owner. The Charitable Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and other Distributions whichhas been paid to the Prohibited Owner and is owed by the Prohibited Owner to the Charitable Trustee pursuant to Section 7.2.3 of this Article VII. The Charitable Trustee may pay the amount of such reduction to the Charitable Beneficiary.

Section 7.2.6   Designation of Charitable Beneficiaries. By written notice to the Charitable Trustee, theCorporation shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Charitable Trust such that (a) Shares held in the Charitable Trust would not violate the restrictions set forth inSection 7.1.1(a) in the hands of such Charitable 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 ofSections 170(b)(1)(A), 2055 and 2522 of the Code. 

Section 7.3     NYSE Transactions. Nothing inthis Article VII shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transactionoccurs shall not negate the effect of any other provision of this Article VII and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VII. 

Section 7.4     Enforcement. The Corporation is authorized specifically to seek equitable relief, includinginjunctive relief, to enforce the provisions of this Article VII. 

Section 7.5     Non-Waiver. Nodelay or failure on the part of the Corporation or the Board of Directors in exercising any right hereunder shall operate as a waiver of any right of the Corporation or the Board of Directors, as the case may be, except to the extent specificallywaived in writing. 

**ARTICLE VIII**

**PROVISIONS FOR DEFINING, LIMITING**

**AND REGULATING CERTAIN POWERS OF THE**

**CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS**

Section 8.1     Number of Directors. The business and affairs of the Corporation shall be managed under thedirection of the Board of Directors. The number of Directors of the Corporation (the “Directors”) shall be three, which number may be increased or decreased from 

 

-24- 

time to time pursuant to the Bylaws; provided, however, that, upon Commencement of the Initial Public Offering, the total number of Directors shall not be fewer than three. Upon Commencement ofthe Initial Public Offering, a majority of the Board will be Independent Directors except for a period of up to 60 days after the death, removal or resignation of an Independent Director pending the election of such Independent Director’ssuccessor. The names of the Directors who shall serve until the first annual meeting of Stockholders and until their successors are duly elected and qualify are*: 

John A. Blumberg 

Marshall M. Burton 

Charles B. Duke 

These Directorsmay increase the total number of Directors and fill any vacancy, whether resulting from an increase in the number of Directors or otherwise, on the Board of Directors prior to the first annual meeting of Stockholders in the manner provided in theBylaws. 

The Corporation elects, at such time as it becomes eligible to make the election provided for underSection 3-804(c) of the MGCL, that, except as may be provided by the Board of Directors in setting the terms of any class or series of Preferred Shares, any and all vacancies on the Board of Directors may be filled only by the affirmative voteof a majority of the remaining Directors in office, even if the remaining Directors do not constitute a quorum, and any Director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancyoccurred. Notwithstanding the foregoing sentence, Independent Directors shall nominate replacements for vacancies among the Independent Directors’ positions. 

Section 8.2     Experience. A Director, other than an Independent Director, shall have at least three years of relevant experience demonstrating the knowledge and experiencerequired to successfully acquire 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 8.3     Committees. The Board may establish such committees as it deems appropriate, in its discretion,provided that the majority of the members of each committee are Independent Directors. 

Section 8.4    Term. Except as may otherwise be provided in the terms of any Preferred Shares issued by the Corporation, each Director shall hold office for one year, until the next annual meeting of Stockholders and until his or hersuccessor is duly elected and qualifies. Directors may be elected to an unlimited number of successive terms. 

Section 8.5    Fiduciary Obligations. The Directors serve in a fiduciary capacity to the Corporation and have a fiduciary duty to the Stockholders, including a specific fiduciary duty to supervise the relationship of the Corporationwith the Advisor. 

 

-25- 

Section 8.6     Extraordinary Actions. Notwithstanding anyprovision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of Shares entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable by the Boardof Directors and taken or approved by the affirmative vote of Stockholders entitled to cast a majority of the votes entitled to be cast on the matter. 

Section 8.7     Authorization by Board of Stock Issuance. The Board of Directors may authorize the issuance from time to time of Shares of any class or series, whether now orhereafter authorized, or securities or rights convertible into Shares of any class or series, whether now or hereafter authorized, for such consideration as the Board of Directors may deem advisable (or without consideration in the case of a stocksplit or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the Charter or the Bylaws. 

Section 8.8     Preemptive Rights and Appraisal Rights. Except as may be provided by the Board of Directors in setting the terms of classified or reclassified Shares pursuant to Section 6.4 or as mayotherwise be provided by contract approved by the Board of Directors, no holder of Shares shall, as such holder, have any preemptive right to purchase or subscribe for any additional Shares or any other Security which the Corporation may issue orsell. Holders of Shares shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board of Directors, upon the affirmative vote of a majority ofthe Board of Directors, shall determine that such rights apply, with respect to all or any classes or series of Shares, to one or more transactions occurring after the date of such determination in connection with which holders of such Shares wouldotherwise be entitled to exercise such rights. 

Section 8.9     Determinations by Board. Thedetermination as to any of the following matters, made in good faith by or pursuant to the direction of the Board of Directors consistent with the Charter, shall be final and conclusive and shall be binding upon the Corporation and every holder ofShares: the amount of the net income for any period and the amount of assets at any time legally available for the payment of dividends, redemption of Shares or the payment of other Distributions on Shares; the amount of paid-in surplus, net assets,other surplus, annual or other cash flow, funds from operations, net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease,alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); any interpretation of theterms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other Distributions, qualifications or terms or conditions of redemption of any class or series of Shares; the fair value, or anysale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Corporation or any Shares; the number of Shares of any class of the Corporation; any matter relating to the acquisition, holding and dispositionof any assets by the Corporation; any conflict between the MGCL and the provisions set forth in the NASAA REIT Guidelines; or any other matter relating to the business and affairs of the Corporation or required or permitted by applicable law, theCharter or Bylaws or otherwise to be determined by the Board of Directors; provided, however, that any determination by the Board of Directors as to any of the preceding matters shall not render invalid or improper any action taken or omitted priorto such determination and no Director shall 

 

-26- 

be liable for making or failing to make such a determination; and provided, further, that to the extent the Board determines that the MGCL conflicts with the provisions set forth in the NASAAREIT Guidelines, the NASAA REIT Guidelines shall control to the extent any provisions of the MGCL are not mandatory. 

Section8.10    REIT Qualification. If the Corporation elects to qualify for federal income tax treatment as a REIT, the Board of Directors shall use its reasonable efforts to take such actions as are necessary or appropriate topreserve 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 otherwiseterminate the Corporation’s REIT election pursuant to Section 856(g) of the Code. The Board of Directors also may determine that compliance with any restriction or limitation on stock ownership and Transfers set forth in Article VII is nolonger required for REIT qualification. 

Section 8.11    Removal of Directors. Subject to therights of holders of one or more classes or series of Preferred Shares to elect or remove one or more Directors, any Director, or the entire Board of Directors, may be removed from office at any time, but only by the affirmative vote of at least amajority of the votes entitled to be cast generally in the election of Directors. 

Section8.12    Board Action with Respect to Certain Matters. A majority of the Independent Directors must approve any Board action to which the following sections of the NASAA REIT Guidelines apply: II.A., II.C., II.F., II.G.,IV.A., IV.B., IV.C., IV.D., IV.E., IV.F., IV.G., V.E., V.H., V.J., VI.A., VI.B.4, and VI.G. 

**ARTICLE IX**

**ADVISOR**

Section 9.1     Appointment and Initial Investment of Advisor. The Board is responsible for setting the general policies of the Corporation and for the general supervision of its business conducted by officers,agents, employees, advisors or independent contractors of the Corporation. However, the Board is not required personally to conduct the business of the Corporation, and it may (but need not) appoint, employ or contract with any Person (including aPerson Affiliated with any Director) as an Advisor and may grant or delegate such authority to the Advisor as the Board may, in its sole discretion, deem necessary or desirable. 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. Notwithstanding the foregoing, a Person hired or retained by the Advisor to perform the property or securities management and related services for theCorporation or the Operating Partnership that is not hired or retained to perform substantially all of the functions of the Advisor with respect to the Corporation or the Operating Partnership as a whole shall not be deemed to be an Advisor.

Section 9.2     Supervision of Advisor. The Board shall review and evaluate the qualifications ofthe Advisor before entering into, and shall evaluate the performance of the Advisor before renewing an Advisory Agreement, and the criteria used in such evaluation shall 

 

-27- 

be reflected in the minutes of the meetings of the Board. The Board may exercise broad discretion in allowing the Advisor to administer and regulate the operations of the Corporation, to act asagent for the Corporation, to execute documents on behalf of the Corporation and to make executive decisions that conform to general policies and principles established by the Board. The Board shall monitor the Advisor to assure that theadministrative procedures, operations and programs of the Corporation are in the best interests of the Stockholders and are fulfilled. The Independent Directors are responsible for reviewing the fees and expenses of the Corporation at least annuallyor with sufficient frequency to determine that the expenses incurred are reasonable in light of the investment performance of the Corporation, its Net Assets, its Net Income and the fees and expenses of other comparable unaffiliated REITs. Each suchdetermination shall be reflected in the minutes of the meetings of the Board. The Independent Directors also will be responsible for reviewing, from time to time and at least annually, the performance of the Advisor and determining that compensationto be paid to the Advisor is reasonable in relation to the nature and quality of services performed. The Independent Directors shall also supervise the performance of the Advisor and the compensation paid to the Advisor by the Corporation in orderto determine that the provisions of the Advisory Agreement are being carried out. Specifically, the Independent Directors will consider factors such as (a) the amount of the fee paid to the Advisor in relation to the size, composition andperformance of the Assets, (b) the success of the Advisor in generating opportunities that meet the investment objectives of the Corporation, (c) rates charged to other REITs and to investors other than REITs by advisors performing thesame or similar services, (d) additional revenues realized by the Advisor and its Affiliates through their relationship with the Corporation, including loan administration, underwriting or broker commissions, servicing, engineering, inspectionand other fees, whether paid by the Corporation or by others with whom the Corporation does business, (e) the quality and extent of service and advice furnished by the Advisor, (f) the performance of the Assets, including income,conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations, and (g) the quality of the Assets relative to the investments generated by the Advisor for its own account. TheIndependent Directors may also consider all other factors that they deem relevant, and the findings of the Independent Directors on each of the factors considered shall be recorded in the minutes of the Board. The Board shall determine whether anysuccessor Advisor possesses sufficient qualifications to perform the advisory function for the Corporation and whether the compensation provided for in its contract with the Corporation is justified. 

Section 9.3     Fiduciary Obligations. The Advisor shall have a fiduciary responsibility and duty to theCorporation and to the Stockholders. 

Section 9.4     Affiliation and Functions. The Board, byresolution or in the Bylaws, may provide guidelines, provisions or requirements concerning the affiliation and functions of the Advisor. 

Section 9.5     Termination. Either a majority of the Independent Directors or the Advisor may terminate the Advisory Agreement on 60 days’ written notice without cause orpenalty, and, in such event, the Advisor will cooperate with the Corporation and the Board in making an orderly transition of the advisory function. 

 

-28- 

Section 9.6     Real Estate Commission on Sale of Property.Unless otherwise provided in any resolution adopted by the Board of Directors, the Corporation may pay the Advisor a real estate commission upon Sale of one or more Properties, in an amount equal to the lesser of (a) one-half of the CompetitiveReal Estate Commission, or (b) three percent of the Sale price of such Property or Properties. Payment of such fee may be made only if the Advisor provides a substantial amount of services in connection with the Sale of a Property orProperties, as determined by a majority of the Independent Directors. In addition, the amount paid when added to all other real estate commissions paid to unaffiliated parties in connection with such Sale shall not exceed the lesser of theCompetitive Real Estate Commission or an amount equal to six percent of the sales price of such Property or Properties. 

Section 9.7     Operating Partnership Interests. The Advisor made a capital contribution of $200,000 to the Operating Partnership in exchange for OP Units, which were subsequently exchanged for Common Shares. TheAdvisor or any Affiliate may not sell such Common Shares while the Advisor remains an Advisor but may transfer these Common Shares to other Affiliates. Industrial Income Advisors Group LLC, a Delaware limited liability company, or one or more of itsAffiliates, has made a capital contribution of $1,000 to the Operating Partnership in exchange for OP Units constituting a separate series of partnership interests (the “Special OP Units”). The holder of the Special OP Units will beentitled to distributions from the Operating Partnership in an amount equal to 15% of the Net Sales Proceeds after the General Partner (and the Stockholders) have received cumulative distributions from the Operating Partnership from operatingincome, sales proceeds or other sources equal to the capital contributions made by the General Partner (and the Stockholders) to the Operating Partnership plus a 6.5% cumulative, non-compounded annualized pre-tax return thereon. Redemptions of theSpecial OP Units will occur through the exchange of the Special OP Units for OP Units with a value at the time of exchange equal to the redemption value of the Special OP Units. Upon the earliest to occur of the termination or nonrenewal of theAdvisory Agreement for “cause” (as defined in the Advisory Agreement), a Termination Event or a Liquidity Event, all of the Special OP Units shall be redeemed by the Operating Partnership. Upon a redemption of Special OP Units inconnection with the Listing, the redemption value of the Special OP Units will be the amount that would have been distributed with respect to the Special OP Units as described above if the Operating Partnership had distributed to the holders of OPUnits upon liquidation an amount equal to the net implied value of the Operating Partnership’s Assets, determined with reference to the market value of the listed Shares based upon the average closing price or, if the average closing price isnot available, the average of bid and asked prices, for the 30 day period beginning 150 days after such Listing. Upon (i) a Liquidity Event other than a Listing or (ii) the occurrence of certain events that result in the termination ornon-renewal of the Advisory Agreement, including a Termination Event, the redemption value of the Special OP Units will be based on the consideration paid in connection with such Liquidity Event or on the amount that would have been distributed withrespect to the Special OP Units had the Operating Partnership sold all of its Assets for their then fair market values, as determined in good faith by the general partner in accordance with the terms of the Operating Partnership Agreement and withreference to the value of consideration received by holders of the Shares, to the extent applicable, paid all of its liabilities and distributed any remaining amounts to partners in liquidation of the Operating Partnership, in connection with suchother events. The redemption of the OP Units received in exchange for the Special OP Units (if requested by the holder(s) of such OP Units) upon a Termination Event or a Liquidity Event shall be paid in cash in connection with or upon suchTermination Event or Liquidity 

 

-29- 

Event; provided, however, that if the Board determines that such payment will impair the capital of the Corporation, such payment shall consist of a promissory note bearing interest at acompetitive market rate that will be repaid pursuant to the terms thereof, including using the entire net proceeds of each Sale of an Asset or Assets of the Operating Partnership in connection with or following the occurrence of the TerminationEvent or Liquidity Event. Such cash payments or payments under a promissory note, as applicable, may not be made until aggregate, cumulative distributions have been made (or have been deemed to have been made) to the General Partner (and theStockholders) from the Operating Partnership from operating income, sales proceeds and other sources in an amount equal to the capital contributions made by the General Partner (and the Stockholders) to the Operating Partnership plus a 6.5%cumulative non-compounded annual pre-tax return thereon. Notwithstanding anything to the contrary in this Section 9.7, in the case of any termination or non-renewal of the Advisory Agreement that is not in connection with a Liquidity Event or for“cause” as described below, the holder of the Special OP Units shall receive payment in the form of a promissory note, which shall be payable in 12 equal quarterly installments and will bear interest on the unpaid balance at a ratedetermined by the Board to be fair and reasonable; provided, however, that no payment shall be made in any quarter in which such payment would impair the Corporation’s capital or jeopardize its REIT status (and such deferred payments shall bedelayed until the next quarter in which payment would not impair the Corporation’s capital or jeopardize REIT status); further provided that the payment of the outstanding balance on any promissory note and all interest due on such note shallbe accelerated upon the occurrence of a Liquidity Event. If the Advisory Agreement is terminated or not renewed by the Corporation for “cause” (as defined in the Advisory Agreement), the redemption value of Special OP Units will be $1.There shall be a corresponding allocation of profits of the Operating Partnership made to the holder of the Special OP Units in connection with the amounts payable hereunder. 

Section 9.8     Organization and Offering Expenses Limitation. The Corporation shall reimburse the Advisor andits Affiliates for Organization and Offering Expenses incurred by the Advisor or its Affiliates; provided, however, that the total amount of all Organization and Offering Expenses shall be reasonable and, together with Sales Commissions and theDealer Manager Fee, shall in no event exceed 15% of the Gross Proceeds of each Offering. 

Section 9.9    Acquisition Fees. The Corporation may pay the Advisor and its Affiliates fees for the review and evaluation of potential investments in Assets; provided, however, that the total of all Acquisition Fees and AcquisitionExpenses shall be reasonable, and shall not exceed an amount equal to six percent of the Contract Purchase Price or Total Project Cost (as applicable), provided, however, that a majority of the Board of Directors (including a majority of theIndependent Directors) not otherwise interested in the transaction may approve fees and expenses in excess of this limit if they determine the transaction to be commercially competitive, fair and reasonable to the Corporation. 

Section 9.10    Reimbursement for Total Operating Expenses. For any year in which the Corporation qualifies as aREIT, the Corporation shall not reimburse the Advisor at the end of any fiscal quarter for Total Operating Expenses that, in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) thegreater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such year. Any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Corporation or, at the option of the Corporation,subtracted from the Total Operating Expenses reimbursed during the subsequent fiscal quarter unless a majority of the Independent Directors determine that such excess was justified based on unusual and nonrecurring factors which they deemsufficient, in which case the Excess Amount may be paid and within 60 days after the end of such Expense Year there shall be sent to the holders of Common Shares a written disclosure of such fact, together with an explanation of the factors theIndependent Directors considered in determining that such excess expenses were justified. Such determination shall be reflected in the minutes of the meetings of the Board of Directors. All figures used in the foregoing computation shall be

 

-30- 

determined in accordance with generally accepted accounting principles applied on a consistent basis. 

Section 9.11    Payment of Other Fees and Expenses and Reimbursement Limitation. The Corporation may pay to the Advisor and its Affiliates any additional fees and expenses thatare deemed fair and reasonable to the Corporation by the Board of Directors (including a majority of the Independent Directors). The Corporation shall not reimburse the Advisor or its Affiliates for services for which the Advisor or its Affiliatesare entitled to compensation in the form of a separate fee. 

**ARTICLE X**

**INVESTMENT POLICIES AND LIMITATIONS**

Section 10.1    Review of Policies. The Independent Directors shall review the investment policies of the Corporation with sufficient frequency (and, upon Commencement of theInitial Public Offering, not less often than annually) to determine that the policies being followed by the Corporation are in the best interests of its Stockholders. Each such determination and the basis therefor shall be set forth in the minutesof the meetings of the Board. 

Section 10.2    Certain Permitted Investments. Until such time asthe Common Shares are Listed, the following provisions shall apply: 

(a)      The Corporationmay invest in Assets. 

(b)      The Corporation may invest in Joint Ventures with the Sponsor,Advisor, one or more Directors or any Affiliate, only if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction, approve such investment as being fair and reasonable to the Corporation andon terms and conditions that are no less favorable than those that would be available to unaffiliated parties. 

(c)      Subject to any limitations in Section 10.3, the Corporation may invest in equity securities; provided that if such equity securities are not traded on a national securities exchange, suchinvestment shall only be permitted if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction approve such investment as being fair, competitive and commercially reasonable. 

Section 10.3    Investment Limitations. Until such time as the Common Shares are Listed, the following investmentlimitations shall apply. In addition to other investment restrictions imposed by the Board from time to time, consistent with the Corporation’s objective of qualifying as a REIT, the following shall apply to the Corporation’s investments:

(a)      Not more than ten percent of the Corporation’s total assets shall be invested inUnimproved Real Property or indebtedness secured by a deed of trust or mortgage loans on Unimproved Real Property. 

 

-31- 

(b)      The Corporation shall not invest in commodities orcommodity future contracts. This limitation is not intended to apply to futures contracts, when used solely for hedging purposes in connection with the Corporation’s ordinary business. 

(c)      The Corporation shall not invest in or make any Mortgage (excluding any investment in mortgageprograms, commercial mortgage-backed securities or residential mortgage-backed securities) unless an appraisal is obtained concerning the underlying property, except for those Mortgages insured or guaranteed by a government or government agency. Incases in which a majority of Independent Directors so determine, and in all cases in which the transaction is with the Advisor, the Sponsor, any Directors, or any Affiliates thereof, such appraisal of the underlying property must be obtained from anIndependent Appraiser. Such appraisal shall be maintained in the Corporation’s records for at least five years and shall be available for inspection and duplication by any holder of Common Shares for a reasonable charge. In addition to theappraisal, a mortgagee’s or owner’s title insurance policy or commitment as to the priority of the Mortgage or condition of the title must be obtained. 

(d)      The Corporation shall not make or invest in any Mortgage (excluding any investment in mortgage programs, commercial mortgage-backed securities or residentialmortgage-backed securities), including a construction loan, on any one property if the aggregate amount of all mortgage loans secured by the property, including the Mortgages of the Corporation, would exceed an amount equal to 85% of the appraisedvalue of the property as determined by appraisal unless substantial justification exists because of the presence of other underwriting criteria. For purposes of this subsection, the “aggregate amount of all mortgage loans secured by theproperty, including the Mortgages 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 theterms of such loans, to the extent that deferred interest on each loan exceeds five percent per annum of the principal balance of the loan. 

(e)      The Corporation shall not invest in indebtedness secured by a Mortgage on Real Property which is subordinate to the lien or other indebtedness of the Advisor, anyDirector, the Sponsor or any Affiliate of the Corporation. 

(f)      The Corporation shall notissue (i) equity Securities redeemable solely at the option of the holder (except that Stockholders may offer their Common Shares to the Corporation pursuant to any repurchase plan adopted by the Board on terms outlined in the Prospectusrelating to any Offering, as such plan is thereafter amended in accordance with its terms); (ii) debt Securities unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes issufficient to properly service that higher level of debt as determined by the Board of Directors or a duly authorized officer of the Corporation; (iii) equity Securities on a deferred payment basis or under similar arrangements; or(iv) options or warrants to the Advisor, the Directors, the Sponsor or any Affiliate thereof except on the same terms as such options or warrants, if any, are sold to the general public. Options or warrants may be issued to Persons other thanthe Advisor, the Directors, the Sponsor or any Affiliate thereof, but not at exercise prices less than the fair market value of the underlying Securities on the date of grant and not for consideration (which may include services) that in thejudgment of the Independent Directors has a market value less than the value of such option or

 

-32- 

warrant on the date of grant. Options or warrants issuable to the Advisor, the Directors, the Sponsor or any Affiliate thereof shall not exceed ten percent of the outstanding Shares on the dateof grant. 

(g)      A majority of the Directors or of the members of a duly authorizedcommittee of the Board of Directors shall authorize the consideration to be paid for Real Property, ordinarily based on the fair market value of the Real Property. If a majority of the Independent Directors on the Board of Directors or such dulyauthorized committee determine, or if the Real Property is acquired from the Advisor, a Director, the Sponsor or their Affiliates, such fair market value shall be determined by a qualified Independent Appraiser selected by such IndependentDirectors. 

(h)      The aggregate Leverage shall be reasonable in relation to the Net Assetsand shall be reviewed by the Board at least quarterly. The maximum amount of such Leverage in relation to Net Assets shall not exceed 300%. Notwithstanding the foregoing, Leverage may exceed such limit if any excess in borrowing over such level isapproved by a majority of the Independent Directors. Any such excess borrowing shall be disclosed to Stockholders in the next quarterly report of the Corporation following such borrowing, along with justification for such excess. 

(i)       The Corporation will not make any investment that the Corporation believes will beinconsistent with its objectives of qualifying and remaining qualified as a REIT unless and until the Board determines, in its sole discretion, that REIT qualification is not in the best interests of the Corporation. 

(j)       The Corporation shall not invest in real estate contracts of sale unless such contracts ofsale are in recordable form and appropriately recorded in the chain of title. 

(k)      TheCorporation shall not engage in the business of trading. 

(l)       The Corporation shallnot engage in underwriting or the agency distribution of securities issued by others. 

(m)     TheCorporation shall not acquire interests or securities in any entity holding investments or engaging in activities prohibited by this Article X except for investments in which the Corporation holds a non-controlling interest or investments inpublicly-traded entities. For these purposes, a “publicly-traded entity” shall mean any entity having securities listed on a national securities exchange. 

**ARTICLE XI**

**CONFLICTS OF INTEREST**

Section 11.1    Sales and Leases to Corporation. The Corporation may purchase or lease an Asset or Assets fromthe Sponsor, the Advisor, a Director or any Affiliate thereof upon a finding by a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction that such transaction is fair and reasonable to the

 

-33- 

Corporation and at a price to the Corporation no greater than the cost of the Asset to such Sponsor, Advisor, Director or Affiliate, or, if the price to the Corporation is in excess of such cost,that substantial justification for such excess exists and such excess is reasonable. In no event shall the purchase price paid by the Corporation for any such Asset exceed the Asset’s current appraised value. 

Section 11.2     Sales and Leases to the Sponsor, Advisor, Directors or Affiliates. An Advisor, Sponsor, Directoror Affiliate thereof may purchase or lease Assets from the Corporation if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction determine that the transaction is fair and reasonable tothe Corporation. 

Section 11.3     Other Transactions. 

(a)       The Corporation shall not make loans to the Sponsor, the Advisor, a Director or any Affiliatesthereof except Mortgages pursuant to Section 10.3(c) hereof or loans to wholly owned subsidiaries of the Corporation. The Corporation may not borrow money from the Sponsor, the Advisor, a Director or any Affiliates thereof, unless a majority ofthe Directors (including a majority of the Independent Directors) not otherwise interested in such transaction approve such transaction as fair, competitive, and commercially reasonable, and no less favorable to the Corporation than comparable loansbetween unaffiliated parties. 

(b)       Except as otherwise provided in this Charter, theCorporation shall not engage in any other transaction with the Sponsor, the Advisor, a Director or any Affiliates thereof unless a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in suchtransaction approve such transaction as fair and reasonable to the Corporation and on terms and conditions no less favorable to the Corporation than those available from an unaffiliated third party. 

**ARTICLE XII**

**STOCKHOLDERS**

Section 12.1     Meetings. There shall be an annual meeting ofthe Stockholders, to be held on such date and at such time and place as shall be determined by or in the manner prescribed in the Bylaws, at which the Directors shall be elected and any other proper business may be conducted; provided that suchannual meeting will be held upon reasonable notice and within a reasonable period (not less than 30 days) following delivery of the annual report. The holders of a majority of Shares entitled to vote who are present in person or by proxy at anannual meeting at which a quorum is present, may, without the necessity for concurrence by the Board, vote to elect the Directors. A quorum shall be the presence in person or by proxy of Stockholders entitled to cast at least 50% of all the votesentitled to be cast at such meeting on any matter. Special meetings of Stockholders may be called in the manner provided in the Bylaws, including by the president or the chairman of the board or by a majority of the Directors or a majority of theIndependent Directors, and shall be called by the secretary of the Corporation upon the written request of the holders of shares entitled to cast not less than ten percent of all the votes entitled to be cast at such meeting. Notice of any specialmeeting of 

 

-34- 

Stockholders shall be given as provided in the Bylaws, and the special meeting shall be held not less than 15 days nor more than 60 days after the delivery of such notice. If the meeting iscalled by written request of Stockholders as described in this Section 12.1, notice of the special meeting shall be sent to all Stockholders within ten days of the receipt of the written request and the special meeting shall be held at the timeand place specified in the Stockholder request; provided, however, that if none is so specified, at such time and place convenient to the Stockholders. If there are no Directors, the officers of the Corporation shall promptly call a special meetingof the Stockholders entitled to vote for the election of successor Directors. Any meeting may be adjourned and reconvened as the Board may determine or as otherwise provided in the Bylaws. 

Section 12.2     Voting Rights of Stockholders.  Subject to the provisions of any class or series ofShares then outstanding and the mandatory provisions of any applicable laws or regulations, the Stockholders shall be entitled to vote only on the following matters: (a) election or removal of Directors, without the necessity for concurrence bythe Board, as provided in Sections 12.1, 8.4 and 8.11 hereof; (b) amendment of the Charter, as provided in Article XIV hereof; (c) dissolution of the Corporation; (d) merger or consolidation of the Corporation into another entity, orthe sale or other disposition of all or substantially all of the Corporation’s assets; and (e) such other matters with respect to which the Board of Directors has adopted a resolution declaring that a proposed action is advisable anddirecting that the matter be submitted to the Stockholders for approval or ratification. Except with respect to the foregoing matters, no action taken by the Stockholders at any meeting shall in any way bind the Board. Without the approval of amajority of the Shares entitled to vote on the matter, the Board may not (i) amend the Charter to materially and adversely affect the rights, preferences and privileges of the Stockholders; (ii) amend provisions of the Charter relating toDirector qualifications, fiduciary duties, liability and indemnification, conflicts of interest, investment policies or investment restrictions; (iii) liquidate or dissolve the Corporation other than before the initial investment in Property;(iv) sell all or substantially all of the Corporation’s assets other than in the ordinary course of business or as otherwise permitted by law; or (v) cause the merger or similar reorganization of the Corporation, except as permittedby law. 

Section 12.3     Voting Limitations on Shares Held by the Advisor, Directors andAffiliates.  With respect to Shares owned by the Advisor, any Director, or any of their Affiliates, neither the Advisor, nor such Director, nor any of their Affiliates may vote or consent on matters submitted to the Stockholdersregarding the removal of the Advisor, such Director or any of their Affiliates or any transaction between the Corporation and any of them. In determining the requisite percentage in interest of Shares necessary to approve a matter on which theAdvisor, such Director and any of their Affiliates may not vote or consent, any Shares owned by any of them shall not be included. 

Section 12.4     Right of Inspection.  Any Stockholder and any designated representative thereof shall be permitted access to the records of the Corporation to which it is entitled under applicable lawat all reasonable times, and may inspect and copy any of them. Inspection of the Corporation’s books and records by the office or agency administering the securities laws of a jurisdiction shall be provided upon reasonable notice and duringnormal business hours. 

 

-35- 

Section 12.5    Access to Stockholder List.  Analphabetical list of the names, addresses and telephone numbers of the Stockholders, along with the number of Shares held by each of them (the “Stockholder List”), shall be maintained as part of the books and records of the Corporation andshall be available for inspection by any Stockholder or the Stockholder’s designated agent at the home office of the Corporation upon the request of the Stockholder. The Stockholder List shall be updated at least quarterly to reflect changes inthe information contained therein. A copy of the Stockholder List shall be mailed to any Stockholder so requesting within ten 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 ten-point type). The Corporation may impose a reasonable charge for expenses incurred in reproduction pursuant to the Stockholder request. A Stockholder may request a copyof the Stockholder List in connection with matters relating to Stockholders’ voting rights, and the exercise of Stockholder rights under federal proxy laws. 

If the Advisor or the Board neglects or refuses to exhibit, produce or mail a copy of the Stockholder List as requested, the Advisor and/or the Board, as the case may be, shall be liable to anyStockholder requesting the Stockholder List for the costs, including reasonable attorneys’ fees, incurred by that Stockholder for compelling the production of the Stockholder List, and for actual damages suffered by any Stockholder by reason ofsuch refusal or neglect. It shall be a defense that the actual purpose and reason for the requests for inspection or for a copy of the Stockholder List is to secure the Stockholder List or other information for the purpose of selling the StockholderList or copies thereof, or of using the same for a commercial purpose, including a tender offer or “mini-tender” offer for the Corporation’s Shares, other than in the interest of the applicant as a Stockholder relative to the affairsof the Corporation. The Corporation may require the Stockholder requesting the Stockholder List to represent that the Stockholder List is not requested for a commercial purpose unrelated to the Stockholder’s interest in the Corporation. Theremedies provided hereunder to Stockholders requesting copies of 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. 

Section 12.6    Reports.  The Directors, including the Independent Directors, shall take reasonablesteps to insure that the Corporation shall cause to be prepared and mailed or delivered to each Stockholder as of a record date after the end of the fiscal year and each holder of other publicly held Securities within 120 days after the end of thefiscal year to which it relates an annual report for each fiscal year ending after the Commencement of the Initial Public Offering that shall include: (a) financial statements prepared in accordance with generally accepted accounting principleswhich are audited and reported on by independent certified 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 ofother fees paid to the Advisor and any Affiliate of the Advisor by the Corporation and 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 OperatingExpenses of the Corporation, stated as a percentage of Average Invested Assets and as a percentage of its Net Income; (e) a report from the Independent Directors that the policies being followed by the Corporation are in the best interests ofits Stockholders and the basis for such determination; and (f) separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving the Corporation, Directors, Advisors, Sponsors andany Affiliate thereof occurring in the year for which the 

 

-36- 

annual report is made, and the Independent Directors shall be specifically charged with a duty to examine and comment in the report on the fairness of such transactions. 

Section 12.7    Tender Offers.  If any Person makes a tender offer, including, without limitation, a“mini-tender” offer, such Person must comply with all of the provisions set forth in Regulation 14D of the Exchange Act, including, without limitation, disclosure and notice requirements, that would be applicable if the tender offer wasfor more than five percent of the outstanding Shares; provided, however, that such documents are not required to be filed with the Securities and Exchange Commission. In addition, any such Person must provide notice to the Corporationat least ten business days prior to initiating any such tender offer. If any Person initiates a tender offer without complying with the provisions set forth above (a “Non-Compliant Tender Offer”), the Corporation, in its sole discretion,shall have the right, but not the obligation, to redeem such non-compliant Person’s Shares and any Shares acquired in such tender offer (collectively, the “Tendered Shares”) at the lesser of (i) the price then being paid perShare of Common Stock purchased in the Corporation’s latest Offering at full purchase price (not discounted for commission reductions or for reductions in sale price permitted pursuant to the Reinvestment Plan), (ii) the fair market valueof the Shares as determined by an independent valuation obtained by the Corporation or (iii) the lowest tender offer price offered in such Non-Compliant Tender Offer. The Corporation may purchase such Tendered Shares upon delivery of thepurchase price to the Person initiating such Non-Compliant Tender Offer and, upon such delivery, the Corporation may instruct any transfer agent to transfer such purchased Shares to the Corporation. In addition, any Person who makes a Non-CompliantTender Offer shall be responsible for all expenses incurred by the Corporation in connection with the enforcement of the provisions of this Section 12.7, including, without limitation, expenses incurred in connection with the review of alldocuments related to such tender offer and expenses incurred in connection with any purchase of Tendered Shares by the Corporation. The Corporation maintains the right to offset any such expenses against the dollar amount to be paid by theCorporation for the purchase of Tendered Shares pursuant to this Section 12.7. In addition to the remedies provided herein, the Corporation may seek injunctive relief, including, without limitation, a temporary or permanent restraining order,in connection with any Non-Compliant Tender Offer. This Section 12.7 shall be of no force or effect with respect to any Shares that are then Listed. 

**ARTICLE XIII**

**LIABILITY LIMITATION AND INDEMNIFICATION**

Section 13.1    Limitation of Stockholder Liability.  No Stockholder shall be liable for any debt,claim, demand, judgment or obligation of any kind of, against or with respect to the Corporation by reason of his being a Stockholder, nor shall any Stockholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to anyPerson in connection with the Assets or the affairs of the Corporation by reason of his being a Stockholder. 

Section13.2    Limitation of Director and Officer Liability.

(a)      Subject to any limitations set forth under Maryland law or in paragraph (b), no Director or officer of the Corporation shall be liable to the Corporation or its Stockholders for money damages. Neitherthe amendment nor repeal of this Section 13.2(a), nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this

 

-37- 

Section 13.2(a), shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repealor adoption. 

(b)     Notwithstanding anything to the contrary contained in paragraph (a) aboveor in Section 13.5 hereof, the Corporation shall not provide that a Director, the Advisor or any Affiliate of the Advisor (the “Indemnitee”) be held harmless for any loss or liability suffered by the Corporation, unless all of thefollowing conditions are met: 

(i)        The Indemnitee has determined, in goodfaith, that the course of conduct that caused the loss or liability was in the best interests of the Corporation. 

(ii)        The Indemnitee was acting on behalf of or performing services for the Corporation. 

(iii)        Such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnitee is a Director (other than anIndependent Director), the Advisor or an Affiliate of the Advisor or (B) gross negligence or willful misconduct, in the case that the Indemnitee is an Independent Director. 

(iv)        Such agreement to hold harmless is recoverable only out of Net Assets and not from theStockholders. 

Section 13.3   Indemnification. 

(a)     Subject to any limitations set forth under Maryland law or in paragraph (b) or (c) below, theCorporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is apresent or former Director or officer of the Corporation and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity, (ii) any individual who, while a Director or officer of theCorporation and at the request of the Corporation, serves or has served as a director, officer, partner or trustee of another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise andwho is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (iii) the Advisor of any of its Affiliates acting as an agent of the Corporation. The rights to indemnification and advance ofexpenses provided hereby shall vest immediately upon election of a Director or officer. The Corporation may, with the approval of the Board of Directors or any duly authorized committee thereof, provide such indemnification and advance for expensesto a Person who served a predecessor of the Corporation in any of the capacities described in (i) or (ii) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The Board may take such action as isnecessary to carry out this Section 13.3(a). No amendment of the Charter or repeal of any of its provisions shall limit or eliminate the right of indemnification provided hereunder with respect to acts or omissions occurring prior to suchamendment or repeal. 

 

-38- 

(b)     Notwithstanding anything to the contrary contained inparagraph (a) above or in Section 13.5 hereof, the Corporation shall not provide for indemnification of an Indemnitee for any liability or loss suffered by such Indemnitee, unless all of the following conditions are met: 

(i)        The Indemnitee has determined, in good faith, that the course of conduct that caused theloss or liability was in the best interests of the Corporation. 

(ii)        TheIndemnitee was acting on behalf of or performing services for the Corporation. 

(iii)        Such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnitee is a Director (other than an Independent Director), the Advisor or anAffiliate of the Advisor or (B) gross negligence or willful misconduct, in the case that the Indemnitee is an Independent Director. 

(iv)        Such indemnification or agreement to hold harmless is recoverable only out of Net Assets and not from the Stockholders. 

(c)     Notwithstanding anything to the contrary contained in paragraph (a) above, the Corporation shall notprovide indemnification 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 Indemnitee, (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or(iii) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnificationhas 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 were offered or sold as to indemnification for violations of securities laws.

Section 13.4    Payment of Expenses.  The Corporation may pay or reimburse reasonablelegal expenses and other costs incurred by an Indemnitee in advance of final disposition of a proceeding only if all of the following are satisfied: (a) the proceeding relates to acts or omissions with respect to the performance of duties orservices on behalf of the Corporation, (b) the Indemnitee provides the Corporation with written affirmation of the Indemnitee’s good faith belief that the Indemnitee has met the standard of conduct necessary for indemnification by theCorporation as authorized by Section 13.3 hereof, (c) the legal proceeding was initiated by a third party who is not a Stockholder or, if by a Stockholder of the Corporation acting in his or her capacity as such, a court of competentjurisdiction approves such advancement, and (d) the Indemnitee provides the Corporation with a written agreement to repay the amount paid or reimbursed by the Corporation, together with the applicable legal rate of interest thereon, if it isultimately determined that the Indemnitee did not comply with the requisite standard of conduct and is not entitled to indemnification. 

Section 13.5    Express Exculpatory Clauses in Instruments.  Neither the Stockholders nor the Directors, officers, employees or agents of the Corporation shall beliable 

 

-39- 

under any written instrument creating an obligation of the Corporation by reason of their being Stockholders, Directors, officers, employees or agents of the Corporation, and all Persons shalllook solely to the Corporation’s assets for the payment of any claim under or for the performance of that instrument. The omission of the foregoing exculpatory language from any instrument shall not affect the validity or enforceability of suchinstrument and shall not render any Stockholder, Director, officer, employee or agent liable thereunder to any third party, nor shall the Directors or any officer, employee or agent of the Corporation be liable to anyone as a result of suchomission. 

**ARTICLE XIV**

**AMENDMENTS**

The Corporation reserves the right from time to time to makeany 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. All rights and powers conferred by the Charter on Stockholders,Directors and officers are granted subject to this reservation. Except for those amendments permitted to be made without Stockholder approval under Maryland law or by specific provision in the Charter, any amendment to the Charter shall be validonly if approved by the affirmative vote of a majority of all votes entitled to be cast on the matter, including without limitation, (a) any amendment which would adversely affect the rights, preferences and privileges of the Stockholders and(b) any amendment to Sections 8.2, 8.5 and 8.11 of Article VIII, Article X, Article XI, Article XIII and Article XV hereof and this Article XIV (or any other amendment of the Charter that would have the effect of amending such sections).

**ARTICLE XV**

**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 Appraiser. If the appraisal will be included in a prospectus used to offer the securities of a Roll-Up Entity, the appraisal will be filed with theSecurities and Exchange Commission and the states in which the securities are being registered as an exhibit to the registration statement for the offering. The Corporation’s assets shall be appraised on a consistent basis, and the appraisalshall 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 orderly liquidation of theassets over a twelve-month period. The terms of the engagement of the Independent Appraiser shall clearly state that the engagement is for the benefit of the Corporation and the Stockholders. A summary of the appraisal, indicating all materialassumptions underlying the appraisal, shall be included in a report to Stockholders in connection with a proposed Roll-Up Transaction. In connection with a proposed Roll-Up Transaction, the Person sponsoring the Roll-Up Transaction shall offer toholders of Common Shares who vote against the proposed Roll-Up Transaction the choice of: 

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

(b)        one of the following: 

 

-40- 

(i)        remaining as Stockholders and preservingtheir 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. 

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

(a)        that would result in the holders of Common Shares having voting rights in a Roll-UpEntity that are less than the rights provided for in Sections 12.1 and 12.2 hereof; 

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

(c)        in which investor’s rights to access of records of theRoll-Up Entity will be less than those described in Sections 12.4 and 12.5 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 rejected by the holders of Common Shares. 

THIRD:  The amendment and restatement of the charter of the Corporation as hereinabove set forth has been duly advised bythe Board of Directors and approved by the stockholders of the Corporation as required by law. 

FOURTH:  Thecurrent address of the principal office of the Corporation is as set forth in Article IV of the foregoing amendment and restatement of the charter. 

FIFTH:  The name and address of the Corporation’s current resident agent is as set forth in Article IV of the foregoing amendment and restatement of the charter. 

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

 

-41- 

SEVENTH:          The undersignedacknowledges these Second Articles of Amendment and Restatement to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned acknowledges that to the best of his knowledge, informationand belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury. 

IN WITNESS WHEREOF, the Corporation has caused these Second Articles of Amendment and Restatement to be signed in its name and on its behalf by its President and attested to by its Secretary on this 9th day of February, 2010. 

 
ATTEST:   INDUSTRIAL INCOME TRUST INC.  
/s/ Joshua J. Widoff
    
/s/ Evan H. Zucker
  (SEAL)Name: Joshua J. Widoff   Name: Evan H. Zucker  Title: Secretary   Title: President  
 

-42-