EXHIBIT 4.2


 


POSTAL REALTY
TRUST, INC.


 


DESCRIPTION
OF SECURITIES REGISTERED PURSUANT TO SECTION 12


OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED


 


DESCRIPTION
OF STOCK


 


The following
is a summary of the material terms of securities of Postal Realty Trust, Inc. (referred to herein as “we”, “us”,
“our” or “our company”) registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). This summary does not purport to be complete and is subject to, and is qualified in its entirety
by reference to, our charter and bylaws and applicable provisions of the Maryland General Corporation Law (the “MGCL”).
We encourage you to read carefully our charter and bylaws and the applicable provisions of the MGCL for a more complete understanding
of our Common Stock. Each of our charter and bylaws is incorporated by reference as an exhibit to the Annual Report on Form 10-K to
which this exhibit is filed or incorporated by reference.


 


General


 


Our charter provides
that we may issue 500,000,000 shares of Class A common stock, $0.01 par value per share (our “Class A common stock), 27,206
shares of Class B common stock, $0.01 par value per share (our “Voting Equivalency stock,” and together with our Class
A common stock, our “Common Stock”), and 100,000,000 shares of preferred stock, $0.01 par value per share. Our
charter authorizes our board of directors to amend our charter to increase or decrease the aggregate number of authorized shares
of common stock or preferred stock or the number of shares of capital stock of any class or series without stockholder approval;
provided that our board of directors may not increase the number of shares of Voting Equivalency stock that we have authority to
issue or reclassify any shares of our capital stock as Voting Equivalency stock without the approval of the holders of a majority
of the outstanding shares of Class A common stock (voting as a separate class).


 


Under Maryland law, stockholders generally
are not personally liable for our debts or obligations solely as a result of their status as stockholders.


 


Common Stock


 


Voting Rights of Common Stock


 


Subject to the provisions of our charter
regarding the restrictions on transfer and ownership of shares of our Common Stock and except as may otherwise be specified in
the terms of any class or series of common stock, each outstanding share of Class A common stock entitles the holder to one
vote and each outstanding share of Voting Equivalency stock entitles the holder to fifty (50) votes on all matters submitted to
a vote of stockholders, including the election of directors, and, except as provided with respect to any other class or series
of capital stock, the holders of shares of Class A common stock and Voting Equivalency stock vote together as a single class,
and possess the exclusive voting power, provided that the holders of Voting Equivalency stock have exclusive voting power with
respect to an amendment to the charter that would materially and adversely affect any right or voting power of the Voting Equivalency
stock. There is no cumulative voting in the election of our company’s directors, which means that the stockholders entitled
to cast a majority of the votes of the outstanding shares of Common Stock can elect all of the directors then standing for election,
and the holders of the remaining shares will not be able to elect any directors.


 


Under the MGCL, a Maryland corporation
generally cannot dissolve, amend its charter, merge, convert, sell all or substantially all of its assets, engage in a statutory
share exchange or engage in similar transactions outside the ordinary course of business unless declared advisable by a majority
of its board of directors and approved by the affirmative vote of stockholders holding at least two-thirds of the shares entitled
to vote on the matter unless a lesser percentage (but not less than a majority of all the votes entitled to be cast on the matter)
is set forth in the corporation’s charter. Our charter provides that these actions (other than certain amendments to the
provisions of our charter related to the removal of directors and the restrictions on ownership and transfer of our shares of capital
stock and the vote required to amend those provisions, which require two-thirds of the votes entitled to be cast) may be taken
if declared advisable by a majority of our board of directors and approved by the vote of stockholders holding at least a majority
of the votes entitled to be cast on the matter. However, Maryland law permits a corporation to transfer all or substantially all
of its assets without the approval of the stockholders of the corporation to one or more persons if all of the equity interests
of the person or persons are owned, directly or indirectly, by the corporation. In addition, because assets may be held by a corporation’s
subsidiaries, as is the case with our company, these subsidiaries may be able to transfer all or substantially all of such assets
without a vote of our stockholders.


 






     


     


    

 


Dividends, Distributions, Liquidation
and Other Rights


 


Subject to the preferential rights of any
other class or series of our capital stock and to the provisions of our charter regarding the restrictions on transfer of shares
of stock, holders of shares of Common Stock are entitled to receive dividends on such shares of Common Stock if, as and when authorized
by our board of directors and declared by us out of assets legally available therefor. Such holders are also entitled to share
ratably in the assets of our company legally available for distribution to our stockholders in the event of our liquidation, dissolution
or winding up after payment or establishment of reserves for all debts and liabilities of our company and any shares with preferential
rights thereto.


 


Holders of shares of Common Stock have
no preference, conversion (other than as described below with respect to the Voting Equivalency stock), exchange, sinking fund
or redemption rights, have no preemptive rights to subscribe for any securities of our company and have no appraisal rights. Subject
to the preferential rights of any other class or series of our capital stock and to the provisions of our charter regarding the
restrictions on transfer of shares of capital stock, shares of Common Stock have equal dividend, liquidation and other rights.
The Voting Equivalency stock is not transferable other than pursuant to the restrictions on ownership and transfer in our charter
and to members of Andrew Spodek’s, our chief executive officer and member of our board of directors, immediate family or
to entities beneficially owned by, controlled by, or for the charitable benefit of Mr. Spodek’s immediate family. For these
purposes, Class A common stock and Voting Equivalency stock have identical rights.


 


Conversion Rights


 


Shares of Voting Equivalency stock are
convertible into shares of Class A common stock, on a one-for-one basis, at the election of the holder at any time and will
automatically convert into shares of Class A common stock on a one-for-one basis upon an attempted transfer to anyone other
than a permitted transferee in accordance with the terms of our charter. In addition, shares of Voting Equivalency stock will automatically
convert into shares of Class A common stock upon certain direct or indirect transfers of beneficial ownership of the 1,333,112
common units of limited partnership interest in Postal Realty, LP, a Delaware limited partnership (the “OP Units”)
issued to Mr. Spodek and his affiliates as part of the transactions that occurred in connection with our company’s initial
public offering in May 2019 (the “Spodek Initial OP Units”) at a ratio of one share of Voting Equivalency stock convertible
to one share of Class A common stock for every 49 Spodek Initial OP Units transferred (including by the exercise of redemption
rights afforded holders of OP Units) to a person other than a permitted transferee.


 


Power to Reclassify Our Unissued Shares of Capital Stock


 


Our charter authorizes our board of directors
to classify and reclassify any unissued shares of common or preferred stock into other classes or series of shares of capital stock
and to establish the number of shares in each class or series and to set the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption for each
such class or series; provided that our board may not reclassify any shares of our capital stock as Voting Equivalency stock without
the approval of the holders of a majority of the outstanding shares of Class A common stock (voting as a separate class).
As a result, our board of directors could authorize the issuance of shares of preferred stock that have priority over the shares
of Common Stock with respect to dividends, distributions and rights upon liquidation and with other terms and conditions that could
have the effect of delaying, deterring or preventing a transaction or a change in control that might involve a premium price for
holders of shares of our Common Stock or otherwise might be in their best interest. No shares of preferred stock are presently
outstanding.


 






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Power to Increase or Decrease Authorized Capital Stock and
Issue Additional Shares of Our Common Stock and Preferred Stock


 


Our charter authorizes our board of directors,
with the approval of a majority of the entire board of directors, to amend our charter to increase or decrease the aggregate number
of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series without stockholder
approval; provided that our board of directors may not increase the number of shares of Voting Equivalency stock that we have the
authority to issue without the approval of the holders of a majority of the outstanding shares of Class A common stock (voting
as a separate class). We believe that the power of our board of directors to increase or decrease the number of authorized shares
of capital stock and to classify or reclassify unissued shares of our Common Stock or preferred stock and thereafter to cause us
to issue such shares of capital stock will provide us with increased flexibility in structuring possible future financings and
acquisitions and in meeting other needs which might arise. The additional classes or series, as well as the additional shares of
capital stock, will be available for future issuance without further action by our stockholders, unless such action is required
by applicable law, the terms of any other class or series of capital stock or the rules of any stock exchange or automated quotation
system on which our securities may be listed or traded. Our board of directors could authorize us to issue a class or series that
could, depending upon the terms of the particular class or series, delay, defer or prevent a transaction or a change in control
of our company that might involve a premium price for our stockholders or otherwise be in their best interests.


 


Restrictions on Ownership and Transfer


 


In order to qualify as a real estate investment
trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), our shares of capital
stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the
first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not
more than 50% of the value of our outstanding shares of capital stock may be owned, directly or indirectly, by five or fewer individuals
(as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which
an election to be a REIT has been made).


 


Because our board of directors believes
it is at present essential for us to qualify as a REIT, among other purposes, our charter, subject to certain exceptions, contains
restrictions on the number of our shares of capital stock that a person may own. Our charter provides that, subject to certain
exceptions, (i) no person, other than Mr. Spodek, may beneficially or constructively own more than 8.5%, in value or in number
of shares, whichever is more restrictive, of the aggregate outstanding shares of our Common Stock, and (ii) no person may beneficially
or constructively own more than 8.5%, in value of the outstanding shares of any class or series of our preferred stock. In addition,
our charter provides an excepted holder limit that allows Mr. Spodek to beneficially or constructively own up to 15%, in value
or in number of shares, whichever is more restrictive, of the aggregate outstanding shares of our Common Stock.


 


Our charter also prohibits any person from:


 


	 	●	beneficially or constructively owning or transferring shares of our capital stock if such ownership or transfer would result in our being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a year);


 


	 	●	transferring shares of our capital stock if such transfer would result in our capital stock being owned by fewer than 100 persons (determined under the principles of Section 856(a)(5) of the Code);


 


	 	●	beneficially or constructively owning shares of our capital stock to the extent such beneficial or constructive ownership would cause us to constructively own ten percent or more of the ownership interests in a tenant (other than our taxable REIT subsidiary) of our real property within the meaning of Section 856(d)(2)(B) of the Code; or


 


	 	●	beneficially or constructively owning or transferring shares of our capital stock if such beneficial or constructive ownership or transfer would otherwise cause us to fail to qualify as a REIT under the Code.


 






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Our board of directors, in its sole discretion,
may prospectively or retroactively exempt a person from certain of the limits described in the paragraph above and may establish
or increase an excepted holder percentage limit for such person if our board of directors obtains such representations, covenants
and undertakings as it deems appropriate in order to conclude that granting the exemption and/or establishing or increasing the
excepted holder percentage limit will not result in our being “closely held” under 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.
Our board of directors may not grant an exemption to any person if that exemption would result in our failing to qualify as a REIT.
Our 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 our board of directors, in its sole discretion, in order to determine or ensure our status as a REIT.


 


Notwithstanding the receipt of any ruling
or opinion, our board of directors may impose such guidelines or restrictions as it deems appropriate in connection with granting
such exemption. In connection with granting a waiver of the ownership limit or creating an exempted holder limit or at any other
time, our board of directors from time to time may increase or decrease the ownership limit, subject to certain exceptions. A decreased
ownership limit will not apply to any person or entity whose percentage of ownership of our capital stock is in excess of the decreased
ownership limit until the person or entity’s ownership of our capital stock equals or falls below the decreased ownership
limit, but any further acquisition of our capital stock will be subject to the decreased ownership limit.


 


Any attempted transfer of shares of our
capital stock which, if effective, would violate any of the restrictions described above will result in the number of shares of
our capital stock causing the violation (rounded up to the nearest whole share) to be automatically transferred to a trust for
the exclusive benefit of one or more charitable beneficiaries and the purported owner or transferee (the “prohibited owner”)
acquiring no rights in such shares, except that any transfer that results in the violation of the restriction relating to shares
of our capital stock being beneficially owned by fewer than 100 persons will be void ab initio. In either case, the prohibited
owner will not acquire any rights in those shares. The automatic transfer will be deemed to be effective as of the close of business
on the business day prior to the date of the purported transfer or other event that results in the transfer to the trust. Shares
held in the trust will be issued and outstanding shares. The prohibited owner will not benefit economically from ownership of any
shares held in the trust, will have no rights to dividends or other distributions and will have no rights to vote or other rights
attributable to the shares held in the trust. The trustee of the trust will have all voting rights and rights to dividends or other
distributions with respect to shares held in the trust. These rights will be exercised for the exclusive benefit of the charitable
beneficiary. Any dividend or other distribution paid prior to our discovery that shares have been transferred to the trust will
be paid by the recipient to the trustee upon demand. Any dividend or other distribution authorized but unpaid will be paid when
due to the trustee. Any dividend or other distribution paid to the trustee will be held in trust for the charitable beneficiary.
Subject to Maryland law, the trustee will have the authority (i) to rescind as void any vote cast by the prohibited owner prior
to our discovery that the shares have been transferred to the trust and (ii) to recast the vote in accordance with the desires
of the trustee acting for the benefit of the charitable beneficiary. However, if we have already taken irreversible corporate action,
then the trustee will not have the authority to rescind and recast the vote.


 


Within 20 days of receiving notice from
us that shares of our capital stock have been transferred to the trust, the trustee will sell the shares to a person, designated
by the trustee, whose ownership of the shares will not violate the above ownership and transfer limitations. Upon the sale, the
interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the
sale to the prohibited owner and to the charitable beneficiary as follows. The prohibited owner will receive the lesser of (i)
the price paid by the prohibited owner for the shares or, if the prohibited owner did not give value for the shares in connection
with the event causing the shares to be held in the trust (e.g., a gift, devise or other similar transaction), the market price
(as defined in our charter) of the shares on the day of the event causing the shares to be held in the trust and (ii) the price
per share received by the trustee (net of any commission and other expenses of sale) from the sale or other disposition of the
shares. The trustee may reduce the amount payable to the prohibited owner by the amount of dividends or other distributions paid
to the prohibited owner and owed by the prohibited owner to the trustee. Any net sale proceeds in excess of the amount payable
to the prohibited owner will be paid immediately to the charitable beneficiary. If, prior to our discovery that our shares of our
capital stock have been transferred to the trust, the shares are sold by the prohibited owner, then (i) the shares shall be deemed
to have been sold on behalf of the trust and (ii) to the extent that the prohibited owner received an amount for the shares that
exceeds the amount he or she was entitled to receive, the excess shall be paid to the trustee upon demand.


 






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In addition, shares of our capital stock
held in the trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser
of (i) the price per share in the transaction that resulted in the transfer to the trust (or, in the case of a devise or gift,
the market price at the time of the devise or gift) and (ii) the market price on the date we, or our designee, accept the offer,
which we may reduce by the amount of dividends and distributions paid to the prohibited owner and owed by the prohibited owner
to the trustee. We will have the right to accept the offer until the trustee has sold the shares. Upon a sale to us, the interest
of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to
the prohibited owner.


  


If a transfer to a charitable trust, as
described above, would be ineffective for any reason to prevent a violation of a restriction, the transfer that would have resulted
in a violation will be void ab initio, and the prohibited owner shall acquire no rights in those shares.


 


The foregoing restrictions on transferability
and ownership will not apply if our board of directors determines that it is no longer in our best interests to attempt to qualify,
or to continue to qualify, as a REIT.


 


Any certificate representing shares of
our capital stock, and any notices delivered in lieu of certificates with respect to the issuance or transfer of uncertificated
shares, will bear a legend referring to the restrictions described above.


 


Any person who acquires or attempts or
intends to acquire beneficial or constructive ownership of shares of our capital stock that will or may violate any of the foregoing
restrictions on transferability and ownership, or any person who would have owned shares of our capital stock that resulted in
a transfer of shares to a charitable trust, is required to give written notice immediately to us, or in the case of a proposed
or attempted transaction, to give at least 15 days’ prior written notice, and provide us with such other information as we
may request in order to determine the effect of the transfer on our status as a REIT.


 


Every owner of 5% or more (or any lower
percentage as required by the Code or the regulations promulgated thereunder) in number or value of the outstanding shares of our
capital stock, within 30 days after the end of each taxable year, is required to give us written notice, stating his or her name
and address, the number of shares of each class and series of shares of our capital stock that he or she beneficially owns and
a description of the manner in which the shares are held. Each of these owners must provide us with additional information that
we may request in order to determine the effect, if any, of his or her beneficial ownership on our status as a REIT and to ensure
compliance with the ownership limits. In addition, each stockholder will upon demand be required to provide us with information
that we may request in good faith in order to determine our status as a REIT and to comply with the requirements of any taxing
authority or governmental authority or to determine our compliance.


 


The Voting Equivalency stock is not transferable
other than pursuant to the ownership and transfer restrictions in our charter and to members of Mr. Spodek’s immediate family
or to entities beneficially owned by, controlled by, or for the charitable benefit of Mr. Spodek’s immediate family.


 


These ownership limitations could delay,
defer or prevent a transaction or a change in control that might involve a premium price for shares of our Common Stock or otherwise
be in the best interests of our stockholders. 


 


Exchange Listing


 


Our Class A common stock is listed
on the NYSE under the symbol “PSTL”.


 


Transfer Agent and Registrar


 


Our transfer agent and registrar for the
Class A common stock is American Stock Transfer & Trust Company, LLC.


 






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Certain Provisions of Maryland Law
and Our Charter and Bylaws


 


Our Board of Directors


 


Our charter and bylaws provide that the
number of directors of our company may be established, increased or decreased by our board of directors, but may not be less than
the minimum number required under the MGCL, which is one, or, unless our bylaws are amended, more than fifteen. We have elected
by a provision of our charter to be subject to a provision of Maryland law requiring that, subject to the rights of holders of
one or more classes or series of preferred stock, any vacancy may be filled only by a majority of the remaining directors, even
if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the full term
of the directorship in which such vacancy occurred and until his or her successor is duly elected and qualifies.


 


Each member of our board of directors is
elected by our stockholders to serve until the next annual meeting of stockholders and until his or her successor is duly elected
and qualifies. Holders of shares of our Class A common stock and Voting Equivalency stock will have no right to cumulative
voting in the election of directors, and directors will be elected by a plurality of the votes cast in the election of directors.
Consequently, at each annual meeting of stockholders, stockholders entitled to cast a majority of all the votes entitled to be
cast in the election of directors will be able to elect all of our directors.


 


Removal of Directors


 


Our charter provides that, subject to the
rights of holders of one or more classes or series of preferred stock to elect or remove one or more directors, a director may
be removed only for cause (as defined in our charter) and only by the affirmative vote of holders of shares entitled to cast at
least two-thirds of the votes entitled to be cast generally in the election of directors. This provision, when coupled with the
exclusive power of our board of directors to fill vacant directorships, may preclude stockholders from removing incumbent directors
except for cause and by a substantial affirmative vote and filling the vacancies created by such removal with their own nominees.


 


Business Combinations


 


Under the MGCL, certain “business
combinations” (including a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset
transfer or issuance or reclassification of equity securities) between a Maryland corporation and an interested stockholder (i.e.,
any person (other than the corporation or any subsidiary) who beneficially owns 10% or more of the voting power of the corporation’s
outstanding voting stock after the date on which the corporation had 100 or more beneficial owners of its stock, or an affiliate
or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the
beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation after the date on which the
corporation had 100 or more beneficial owners of its stock) or an affiliate of an interested stockholder, are prohibited for five
years after the most recent date on which the interested stockholder becomes an interested stockholder. Thereafter, any such business
combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors
of such corporation and approved by the affirmative vote of at least (1) 80% of the votes entitled to be cast by holders of outstanding
shares of voting stock of the corporation and (2) two-thirds of the votes entitled to be cast by holders of voting stock of the
corporation other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is
to be effected or held by an affiliate or associate of the interested stockholder, unless, among other conditions, the corporation’s
common stockholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash
or in the same form as previously paid by the interested stockholder for its shares. A person is not an interested stockholder
under the statute if the board of directors approved in advance the transaction by which the person otherwise would have become
an interested stockholder. The board of directors may provide that its approval is subject to compliance, at or after the time
of approval, with any terms and conditions determined by it.


 


The statute permits various exemptions
from its provisions, including business combinations that are exempted by the board of directors prior to the time that the interested
stockholder became an interested stockholder. As permitted by the MGCL, our board of directors has adopted a resolution exempting
any business combination between us and any other person from the provisions of this statute, provided that the business combination
is first approved by our board of directors (including a majority of directors who are not affiliates or associates of such persons).
However, our board of directors may repeal or modify this resolution at any time in the future, in which case the applicable provisions
of this statute will become applicable to business combinations between us and interested stockholders.


 






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Control Share Acquisitions


 


The MGCL provides that holders of “control
shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights with respect
to those shares except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast by
stockholders entitled to vote generally in the election of directors, excluding votes cast by (1) the person who makes or proposes
to make a control share acquisition, (2) an officer of the corporation or (3) an employee of the corporation who is also a director
of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of
stock previously acquired by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting
power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors
within one of the following ranges of voting power: (1) one-tenth or more but less than one-third, (2) one-third or more but less
than a majority or (3) a majority or more of all voting power. Control shares do not include shares the acquiring person is then
entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means
the acquisition of issued and outstanding control shares, subject to certain exceptions.


 


A person who has made or proposes to make
a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses), may compel the
board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights
of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.


 


If voting rights are not approved at the
meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then, subject to
certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting
rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control
shares, as of the date of the last control share acquisition by the acquirer or of any meeting of stockholders at which the voting
rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting
and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal
rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price
per share paid by the acquirer in the control share acquisition.


 


The control share acquisition statute does
not apply to, among other things, (1) shares acquired in a merger, consolidation or share exchange if the corporation is a party
to the transaction or (2) acquisitions approved or exempted by the charter or bylaws of the corporation.


 


Our bylaws contain a provision exempting
from the control share acquisition statute any acquisition by any person of shares of our stock. There can be no assurance that
such provision will not be amended or eliminated at any time in the future by our board of directors.


 


Subtitle 8


 


Subtitle 8 of Title 3 of the MGCL permits
a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors
to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors, without stockholder approval,
and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions of the MGCL which provide,
respectively, that:


 


		●	the corporation’s board of directors will be divided into three classes;



 


		●	the affirmative vote of two-thirds of the votes cast in the election of directors generally is
required to remove a director;



 


		●	the number of directors may be fixed only by vote of the directors;



 


		●	a vacancy on its board of directors be filled only by the remaining directors and that directors
elected to fill a vacancy will serve for the remainder of the full term of the class of directors in which the vacancy occurred;
and



 


		●	the request of stockholders entitled to cast at least a majority of all the votes entitled to be
cast at the meeting is required for the calling of a special meeting of stockholders.



 






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We have elected by a provision in our charter
to be subject to the provisions of Subtitle 8 relating to the filling of vacancies on our board of directors. In addition, without
our having elected to be subject to Subtitle 8, our charter and bylaws already (1) require the affirmative vote of holders of shares
entitled to cast at least two-thirds of all the votes entitled to be cast generally in the election of directors to remove a director
from our board of directors (which removal must be for cause), (2) vest in our board of directors the exclusive power to fix the
number of directors and (3) require, unless called by our chairman, our president and chief executive officer or our board of directors,
the request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at the meeting to call
a special meeting. Our board of directors is not currently classified. In the future, our board of directors may elect, without
stockholder approval, to classify our board of directors or elect to be subject to any of the other provisions of Subtitle 8.


 


Meetings of Stockholders


 


Pursuant to our bylaws, an annual meeting
of our stockholders for the purpose of the election of directors and the transaction of any other business will be held on a date
and at the time and place set by our board of directors. Each of our directors is elected by our stockholders to serve until the
next annual meeting or until his or her successor is duly elected and qualifies under Maryland law. In addition, our chairman,
our president and chief executive officer or our board of directors may call a special meeting of our stockholders. Subject to
the provisions of our bylaws, a special meeting of our stockholders to act on any matter that may properly be considered by our
stockholders will also be called by our secretary upon the written request of stockholders entitled to cast a majority of all the
votes entitled to be cast at the meeting on such matter, accompanied by the information required by our bylaws. Our secretary will
inform the requesting stockholders of the reasonably estimated cost of preparing and mailing the notice of meeting (including our
proxy materials), and the requesting stockholder must pay such estimated cost before our secretary may prepare and mail the notice
of the special meeting.


 


Amendments to Our Charter and Bylaws


 


Under the MGCL, a Maryland corporation
generally cannot amend its charter unless approved by the affirmative vote of stockholders entitled to cast at least two-thirds
of the votes entitled to be cast on the matter unless a lesser percentage (but not less than a majority of all of the votes entitled
to be cast on the matter) is set forth in the corporation’s charter. Except for certain amendments related to the removal
of directors and the restrictions on ownership and transfer of our stock and the vote required to amend those provisions (which
must be declared advisable by our board of directors and approved by the affirmative vote of stockholders entitled to cast not
less than two-thirds of all the votes entitled to be cast on the matter), our charter generally may be amended only if the amendment
is declared advisable by our board of directors and approved by the affirmative vote of stockholders entitled to cast a majority
of all of the votes entitled to be cast on the matter. Our board of directors, with the approval of a majority of the entire board,
and without any action by our stockholders, may also amend our charter to increase or decrease the aggregate number of shares of
stock or the number of shares of stock of any class or series (other than Voting Equivalency stock) we are authorized to issue.


 


Our board of directors has the exclusive
power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.


 


Extraordinary Transactions


 


Under the MGCL, a Maryland corporation
generally cannot dissolve, merge, convert, sell all or substantially all of its assets, engage in a statutory share exchange or
engage in similar transactions outside the ordinary course of business unless approved by the affirmative vote of stockholders
entitled to cast at least two-thirds of the votes entitled to be cast on the matter unless a lesser percentage (but not less than
a majority of all of the votes entitled to be cast on the matter) is set forth in the corporation’s charter. As permitted
by the MGCL, our charter provides that any of these actions may be approved by the affirmative vote of stockholders entitled to
cast a majority of all of the votes entitled to be cast on the matter. Many of our operating assets will be held by our subsidiaries,
and these subsidiaries may be able to merge or sell all or substantially all of their assets without the approval of our stockholders.


 






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Appraisal Rights


 


Our charter provides that our stockholders
generally will not be entitled to exercise statutory appraisal rights.


 


Advance Notice of Director Nominations
and New Business


 


Our bylaws provide that, with respect to
an annual meeting of stockholders, nominations of individuals for election to our board of directors and the proposal of other
business to be considered by our stockholders at an annual meeting of stockholders may be made only (1) pursuant to our notice
of the meeting, (2) by or at the direction of our board of directors or (3) by any stockholder who was a stockholder of record
at the record date set by our board of directors for the purposes of determining stockholders entitled to vote at the meeting,
at the time of giving of notice and at the time of the meeting, who is entitled to vote at the meeting on the election of the individual
so nominated or such other business and who has complied with the advance notice procedures set forth in our bylaws, including
a requirement to provide certain information about the stockholder and its affiliates and the nominee or business proposal, as
applicable.


 


With respect to special meetings of stockholders,
only the business specified in our notice of meeting may be brought before the meeting. Nominations of individuals for election
to our board of directors may be made at a special meeting of stockholders at which directors are to be elected only (1) by or
at the direction of our board of directors or (2) provided that the special meeting has been properly called in accordance with
our bylaws for the purpose of electing directors, by any stockholder who was a stockholder of record at the record date set by
our board of directors for the purposes of determining stockholders entitled to vote at the meeting, at the time of giving of notice
and at the time of the meeting, who is entitled to vote at the meeting on the election of each individual so nominated and who
has complied with the advance notice provisions set forth in our bylaws, including a requirement to provide certain information
about the stockholder and its affiliates and the nominee.


 


Exclusive Forum


 


Our bylaws provide that, unless we consent
in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not
have jurisdiction, the United States District Court for the District of Maryland, Northern Division, will be the sole and absolute
forum for (a) any Internal Corporate Claim, as such term is defined in Section 1-101(p) of the MGCL, (b) any derivative action
or proceeding brought on our behalf other than actions arising under the federal securities laws, (c) any action asserting a claim
of breach of any duty owed by any of our directors, officers or other employees to us or to our stockholders, (d) any action asserting
a claim against us or any of our directors, officers or other employees arising pursuant to any provision of the MGCL or our charter
or bylaws or (e) any action asserting a claim against us or any of our directors, officers or other employees that is governed
by the internal affairs doctrine and no such action may be brought in any court sitting out of the State of Maryland unless we
consent in writing to such court.


 


Limitation of Liability and Indemnification
of Directors and Officers


 


Maryland law permits a Maryland corporation
to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders
for money damages, except for liability resulting from (1) actual receipt of an improper benefit or profit in money, property or
services or (2) active and deliberate dishonesty that is established by a final judgment and is material to the cause of action.
Our charter contains a provision that eliminates such liability to the maximum extent permitted by Maryland law.


 


Our charter provides for indemnification
of our officers and directors against liabilities to the maximum extent permitted by the MGCL, as amended from time to time.


 






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The MGCL requires a corporation (unless
its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the
merits or otherwise, in the defense of any proceeding to which he or she is made, or threatened to be made, a party
by reason of his or her service in that capacity. The MGCL permits a corporation to indemnify its present and former directors
and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them
in connection with any proceeding to which they may be made, or threatened to be made, a party by reason of their service in those
or other capacities unless it is established that:


 


		●	the
                                         act or omission of the director or officer was material to the matter giving rise to
                                         the proceeding and (1) was committed in bad faith or (2) was the result of active and
                                         deliberate dishonesty;



 


		●	the
                                         director or officer actually received an improper personal benefit in money, property
                                         or services; or



 


		●	in
                                         the case of any criminal proceeding, the director or officer had reasonable cause to
                                         believe that the act or omission was unlawful.



 


However,
under the MGCL, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation
or for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders
indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, and then only
for expenses. In addition, the MGCL permits a Maryland corporation to advance reasonable expenses to a director or officer upon
its receipt of:


 


		●	a
                                         written affirmation by the director or officer of his or her good faith belief that he
                                         or she has met the standard of conduct necessary for indemnification by the corporation;
                                         and



 


		●	a
                                         written undertaking by the director or officer or on the director’s or officer’s
                                         behalf to repay the amount paid or reimbursed by the corporation if it is ultimately
                                         determined that the director or officer did not meet the standard of conduct.



 


Our
charter obligates us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring
a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of
final disposition of such a proceeding to:


 


		●	any
                                         present or former director or officer of our company who is made, or threatened to be
                                         made, a party to the proceeding by reason of his or her service in that capacity; or



 


		●	any
                                         individual who, while a director or officer of our company and at our request, serves
                                         or has served as a director, officer, partner, trustee, member, manager, employee or
                                         agent of another corporation, real estate investment trust, limited liability company,
                                         partnership, joint venture, trust, employee benefit plan or other enterprise and who
                                         is made, or threatened to be made, a party to the proceeding by reason of his or her
                                         service in that capacity.



 


Our
charter also permits us to indemnify and advance expenses to any individual who served our Predecessor in any of the capacities
described above and to any employee or agent of our company or our Predecessor.


 


We have entered into indemnification agreements
with each of our directors and executive officers that provide for indemnification to the maximum extent permitted by Maryland
law.


 


REIT Qualification


 


Our charter provides that our board of
directors may revoke or otherwise terminate our REIT election, without approval of our stockholders, if it determines that it is
no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.


 


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