Form 8-K Hudson Pacific Propertie For: Jan 10

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January 12, 2015 4:48 PM EST

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�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

FORM 8-K

�

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

January�10, 2015

Date of Report

(Date of earliest event reported)

�

Hudson Pacific Properties, Inc.

(Exact name of registrant as specified in its charter)

�


Maryland	�	001-34789	�	27-1430478
(State or other jurisdiction of incorporation)	�	(Commission File Number)	�	(I.R.S. Employer Identification No.)
(State or other jurisdiction of incorporation)	�	(Commission File Number)	�	(I.R.S. Employer Identification No.)

11601 Wilshire Blvd., Sixth Floor Los Angeles, California			�	90025
(Address of principal executive offices)			�	(Zip Code)

Registrant�s telephone number, including area code: (310)�445-5700

Not Applicable

(Former name or former address, if changed since last report.)

�

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

�

�	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

�

�	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

�	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

�

�	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

�

This Current Report on Form 8-K is filed by Hudson Pacific Properties, Inc., a Maryland corporation (referred to herein as the �Company,� �we,� �our� and �us�), in connection with the matters described herein. References in this Current Report on Form 8-K to the �Operating Partnership� mean Hudson Pacific Properties, L.P., a Maryland limited partnership, of which we serve as the sole general partner.

Item�5.03.�Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On January�10, 2015, the Board of Directors (the �Board�) of the Company amended and restated the Company�s Amended and Restated Bylaws (the �Bylaws�). Article II, Section�7 of the Bylaws was amended to replace the current plurality vote standard for uncontested elections of directors with a majority vote standard. As a result, at each meeting of stockholders at which the election of directors is uncontested, a nominee will be elected as a director only if such nominee receives the affirmative vote of a majority of all the votes cast �for� and �against� the election of such nominee. Directors will continue to be elected by a plurality of the votes cast in contested elections. An election will be considered to be contested if the Company�s secretary has received notice that a stockholder has nominated or proposes to nominate one or more persons for election as a director, which notice complies or purports to comply with the requirements for advance notice of stockholder nominations set forth in the Bylaws, and the nomination or proposed nomination has not been withdrawn at least 14 days prior to the date that the Company�s proxy statement with respect to the meeting at which such nomination or proposed nomination would be made is first released to stockholders and would thereby cause the number of nominees and proposed nominees to exceed the number of directors to be elected at the meeting, irrespective of whether such notice complies with the requirements for advance notice of stockholder nominations set forth in the Bylaws or such nomination or proposed nomination is thereafter withdrawn by such stockholder.

The foregoing summary of the changes to the Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaws, as amended and restated, which is attached hereto as Exhibit 3.1 and incorporated herein by reference.

Item�8.01 Other Events.

Corporate Governance Guidelines

On January�10, 2015, in connection with the amendment and restatement of the Bylaws disclosed in Item�5.03 of this this Current Report on Form 8-K, the Company also amended its Corporate Governance Guidelines (the �Guidelines�) to provide that, if an incumbent director is not re-elected due to his or her failure to receive a majority of the votes cast in an uncontested election, the director will promptly offer to tender his or her resignation as a director, subject to acceptance by the Board. The Nominating and Corporate Governance Committee (the �Committee�) must make a recommendation to the Board as to whether to accept or reject such offer to resign, or whether other action should be taken with respect to such offer to resign. The Committee and the Board may consider any factors they deem relevant in deciding whether to accept, reject or take other action with respect to any such offer to resign. The Board must publicly disclose within 90 days of certification of the stockholder vote its decision and rationale regarding whether to accept, reject or take other action with respect to such offer in a press release, a periodic or current report filed with the Securities and Exchange Commission or by other public announcement. If any director�s offer to resign is not accepted by the Board, such director will continue to serve until the end of such director�s term as a director and until his or her successor is elected and qualifies or his or her earlier death, retirement, resignation or removal. If any director�s offer to resign is accepted by the Board, then such director will thereupon cease to be a director of the Company, and the Board, in its sole discretion, may fill the resulting vacancy or may decrease the size of the Board pursuant to the provisions of Bylaws.

The foregoing summary of the changes to the Guidelines does not purport to be complete. The full text of the Guidelines, as amended, is available in the �Investor Relations�Corporate Governance� section of the Company�s website at http://www.hudsonpacificproperties.com. The information on the Company�s website is not incorporated herein by reference.

Target Property Acquisition

On December�6, 2014, the Company entered into an asset purchase agreement (the �Purchase Agreement�), by and among the Company, the Operating Partnership and certain affiliates of The Blackstone Group L.P. (collectively, the �Seller Parties�), pursuant to which the Operating Partnership and/or other subsidiaries of the Company will acquire a portfolio of 26 high-quality office assets totaling approximately 8.2�million square feet and two development parcels in the San Francisco Peninsula and Silicon Valley (the �Target Properties�) from the Seller Parties in exchange for a combination of cash and equity consideration. Pursuant to the terms of

�

the Purchase Agreement, in consideration for the purchase and sale of the Target Properties, the Operating Partnership will deliver to the Seller Parties a cash payment of $1.75 billion and equity consideration consisting of an aggregate amount of up to 63,474,791 shares of common stock of the Company and common units of limited partnership interest in the Operating Partnership, subject in each case to certain adjustments. The Target Properties are referred to collectively herein as the Target Portfolio.

The acquisition of the Target Portfolio is subject to customary closing requirements and conditions. There can be no assurance that the acquisition will close, or if it does, when the closing will occur.

Information about the Target Properties

The Target Properties represent a portfolio of 26 high-quality office assets totaling approximately 8.2�million square feet and two development parcels totaling approximately 40 acres located in the San Francisco Peninsula and Silicon Valley areas. As of September�30, 2014, the Target Properties were approximately 85.4% leased (giving effect to leases signed but not commenced as of that date) and 81.6% occupied.

Comparison of the nine months ended September�30, 2014 to the nine months ended September�30, 2013

Revenue

Tenant Reimbursements. Tenant reimbursements increased $1.9 million, or 7.5%, to $27.4 million for the nine months ended September�30, 2014 compared to $25.5 million for the nine months ended September�30, 2013. The increase in tenant reimbursements was primarily the result of an increase in operating expenses across the Target Portfolio.

Other Property Income. Other property income includes lease termination fees, parking revenues, and other ancillary property income. Other property income increased $7.9 million, or 151.9%, to $13.1 million for the nine months ended September�30, 2014 compared to $5.2 million for the nine months ended September�30, 2013. The increase in other property income is primarily the result of an increase in lease termination fees of $10.2 million, or 566.7%, to $12.0 million for the nine months ended September�30, 2014 compared to $1.8 million for the nine months ended September�30, 2013. During the nine months ended September�30, 2014, a $9.5 million lease termination fee was received from a tenant at the Patrick Henry Drive property.

The increase in lease termination fees is partially offset by a decrease in other ancillary property revenues of $2.4 million, or 70.6%, to $1.0 million for the nine months ended September�30, 2014 compared to $3.4 million for the nine months ended September�30, 2013. During the nine months ended September�30, 2013, a $2.4 million restoration fee to refurbish a tenant space to the agreed-upon terms per the lease was received from a tenant vacating the Metro Center Tower property.

Certain Expenses

Property Operating Expenses. Total property operating expenses consist of property operating expenses, repairs and maintenance, and insurance. Property operating expenses increased $3.8 million, or 7.9%, to $51.6 million for the nine months ended September�30, 2014 compared to $47.8 million for the nine months ended September�30, 2013. The increase in property operating expenses is primarily the result of an increase in repairs and maintenance expense for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013.

Real Estate Taxes. Real estate taxes remained relatively flat for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013.

Ground Rent. Ground rent decreased $0.4 million or 3.5%, to $11.1 million for the nine months ended September�30, 2014 compared to $11.5 million for the nine months ended September�30, 2013. The decrease in ground rent expense is primarily the result of a decrease in ground rent expense at the Foothill Research property. Ground rent at the Foothill Research property, a component of which is based on a percentage of rental revenues earned at the property, decreased $1.0 million, or 53.4%, for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. The decrease in ground rent at Foothill Research was the result of decreased rental revenues at the property due to the early termination in August 2013 of a tenant occupying 115,000 square feet of the building.

�

Comparison of the year ended December�31, 2013 to the year ended December�31, 2012

Revenue

Tenant Reimbursements. Tenant reimbursements increased $4.8 million, or 16.2%, to $34.5 million for the twelve months ended December�31, 2013 compared to $29.7 million for the twelve months ended December�31, 2012. The increase in tenant reimbursements was primarily the result of an increase in operating expenses and an increase in average occupancy across the Target Portfolio.

Other Property Income. Other property income includes lease termination fees, parking revenues, and other ancillary property income. Other property income increased $2.8 million, or 100%, to $5.6 million for the twelve months ended December�31, 2013 compared to $2.8 million for the twelve months ended December�31, 2012. The increase in other property income is primarily the result of an increase in lease termination fees and other ancillary property revenues. Lease termination fees increased $1.6 million, or 800.0%, to $1.8 million for the twelve months ended December�31, 2013 compared to $0.2 million for the twelve months ended December�31, 2012. During the twelve months ended December�31, 2013, a $1.7 million lease termination fee was received from a tenant at the Foothill Research property.

Other ancillary property revenues increased $1.2 million, or 48.0%, to $3.7 million for the twelve months ended December�31, 2013 compared to $2.5 million for the twelve months ended December�31, 2012. During the twelve months ended December�31, 2013 a $2.4 million restoration fee to refurbish a tenant space to the agreed-upon terms per the lease was received from a tenant vacating the Metro Center Tower property.

Certain Expenses

Property Operating Expenses. Total property operating expenses consist of property operating expenses, repairs and maintenance and insurance. Property operating expenses remained relatively flat for the twelve months ended December�31, 2013 compared to the twelve months ended December�31, 2012.

Real Estate Taxes. Real estate taxes increased $1.7 million, or 7.4%, to $24.8 million for the twelve months ended December�31, 2013 compared to $23.1 million for the twelve months ended December�31, 2012. The increase in real estate taxes is primarily due to an increase in the assessed values of the properties across the Target Portfolio. Subsequent to the market downturn in 2008, reductions in the assessed value of the properties (Prop 8 reductions) were obtained for the majority of the Target Portfolio. By tax year 2013, the market had recovered and the majority of the assessed property valuations reverted back to the assessed values that had been in place prior to the market downturn.

Ground Rent. Ground rent increased $2.0 million, or 14.8%, to $15.5 million for the twelve months ended December�31, 2013 compared to $13.5 million for the twelve months ended December�31, 2012. The increase in ground rent expense is primarily the result of an increase in ground rent expense at the Foothill Research property of $1.2 million, or 85.7%, to $2.6 million for the twelve months ended December�31, 2013 compared to $1.4 million for the twelve months ended December�31, 2012. Supplemental annual ground rent payments at the Foothill Research property commenced in July 2012. The supplemental annual ground rent payments are based on a percentage of rental revenues earned at the property. Prior to July 2012, ground rent payments at Foothill Research were based on a fixed amount.

�

Comparison of the year ended December�31, 2012 to the year ended December�31, 2011

Revenue

Rental Revenue. Rental revenue includes rents from the office properties in the Target Portfolio and percentage rent on retail space contained within those properties. Total rental revenue decreased $10.3 million, or 4.6%, to $212.1 million for the twelve months ended December�31, 2012 compared to $222.4 million for the twelve months ended December�31, 2011. The decrease in rental revenue was the result of a decrease in the average in-place rent of the Target Portfolio of $2.31 per square foot or 7%. The decrease in the in-place rental rate was driven by the December�31, 2011 lease expiration of a tenant that occupied 100% of the 3400 Hillview property. In-place rental rates for this tenant were significantly higher than the average in-place rental rates for the Target Portfolio. This decrease was partially offset by an increase in average occupancy of 200 basis points to 83.5% for the twelve months ended December�31, 2012 as compared to 81.5% for the twelve months ended December�31, 2011.

Tenant Reimbursements. Tenant reimbursements remained relatively flat for the twelve months ended December�31, 2012 as compared to the twelve months ended December�31, 2011.

Other Property Income. Other property income includes lease termination fees, parking revenues, and other ancillary property income. Other property income decreased $0.8 million, or 22.2%, to $2.8 million for the twelve months ended December�31, 2012 compared to $3.6 million for the twelve months ended December�31, 2011. The decrease in other property income is primarily the result of a decrease in other ancillary property revenues of $0.9 million, or 26.5%, to $2.5 million for the twelve months ended December�31, 2012 compared to $3.4 million for the twelve months ended December�31, 2011. During the twelve months ended December�31, 2011, a $1.1 million restoration fee was received from a tenant at the Concourse property and a $0.8 million restoration fee was received from a tenant at the 3400 Hillview property.

Certain Expenses

Property Operating Expenses. Total property operating expenses consist of property operating expenses, repairs and maintenance, and insurance. Property operating expenses increased $3.0 million, or 4.8%, to $65.8 million for the twelve months ended December�31, 2012 compared to $62.8 million for the twelve months ended December�31, 2011. The increase in property operating expense is primarily the result of an increase in repairs and maintenance expense for the twelve months ended December�31, 2012 as compared to the twelve months ended December�31, 2011.

Real Estate Taxes. Real estate taxes increased $0.6 million, or 2.7%, to $23.1 million for the twelve months ended December�31, 2012 compared to $22.5 million for the twelve months ended December�31, 2011. The increase in real estate taxes is primarily due to an increase in the assessed values of the properties across the Target Portfolio. Subsequent to the market downturn in 2008, reductions in the assessed value of the properties (Prop 8 reductions) were obtained for the majority of the Target Portfolio. Beginning with tax year 2012, the assessed value of the properties began to increase as the market recovered.

Ground Rent. Ground rent increased $1.4 million, or 11.6%, to $13.5 million for the twelve months ended December�31, 2012 compared to $12.1 million for the twelve months ended December�31, 2011. The increase in ground rent expense is primarily the result of an increase in ground rent expense at the Foothill Research property of $0.9 million, or 180.0%, to $1.4 million for the twelve months ended December�31, 2012 compared to $0.5 million for the twelve months ended December�31, 2011. Supplemental annual ground rent payments at the Foothill Research property commenced in July 2012. The supplemental annual ground rent payments are based on a percentage of rental revenues earned at the property. Prior to July 2012, ground rent payments at Foothill Research were based on a fixed amount.

The Target Portfolio

The Target Portfolio consists of 26 office properties comprising an aggregate of approximately 8.2�million square feet. As of September�30, 2014, the properties were approximately 85.4% leased (giving effect to leases signed but not commenced as of that date). All the properties are located in Northern California. As of September�30, 2014, the weighted average remaining lease term for the properties was 36 months.

�

The following table sets forth certain information relating to each of the properties as of September�30, 2014.

�

Property

�

Submarket

�

Year Built/
Renovated

�

Square
Feet⁽¹⁾

�

Percent
Leased⁽²⁾

�

Percent
Occupied⁽³⁾

�

Annualized
Base Rent⁽⁴⁾

�

Annualized
Base Rent
Per
Occupied
Square
Foot⁽⁵⁾

�

OFFICE PROPERTIES

�

Bayhill Office Center

�

Peninsula

�

1982/1987

�

554,328

��

�

92.3

%�

�

73.1

%�

�

12,376,740

��

�

30.54

��

One Bay Plaza

�

Peninsula

�

1979

�

195,739

��

�

80.9

%�

�

78.9

%�

�

4,318,317

��

�

27.96

��

Bay Park Plaza

�

Peninsula

�

1985/1998

�

260,183

��

�

84.5

%�

�

84.5

%�

�

6,605,641

��

�

30.06

��

Metro Center Tower⁽⁶⁾

�

Peninsula

�

1985-1988

�

730,215

��

�

58.9

%�

�

51.7

%�

�

15,700,834

��

�

41.59

��

Peninsula Office Park

�

Peninsula

�

1971/1998

�

510,456

��

�

80.0

%�

�

80.0

%�

�

15,009,285

��

�

36.73

��

Shorebreeze I & II

�

Redwood Shores

�

1985-1986

�

230,932

��

�

83.8

%�

�

80.0

%�

�

7,124,154

��

�

38.58

��

333 Twin Dolphin Plaza

�

Redwood�Shores

�

1985

�

182,789

��

�

86.6

%�

�

86.6

%�

�

5,977,976

��

�

37.75

��

555 Twin Dolphin Plaza

�

Redwood Shores

�

1989

�

198,936

��

�

87.2

%�

�

85.1

%�

�

6,863,709

��

�

40.56

��

Towers at Shore Center

�

Redwood Shores

�

2002

�

334,483

��

�

96.0

%�

�

96.0

%�

�

25,371,950

��

�

79.03

��

Skyway Landing

�

Redwood Shores

�

2000

�

247,173

��

�

92.9

%�

�

92.9

%�

�

7,649,247

��

�

33.31

��

2180 Sand Hill Road

�

Palo Alto

�

1976

�

45,613

��

�

65.0

%�

�

65.0

%�

�

2,222,680

��

�

74.97

��

Embarcadero Place

�

Palo Alto

�

1984

�

197,241

��

�

86.6

%�

�

86.6

%�

�

3,998,592

��

�

23.40

��

Palo Alto Square⁽⁷⁾

�

Palo Alto

�

1971/1985

�

328,251

��

�

96.4

%�

�

95.6

%�

�

17,091,519

��

�

54.44

��

Clocktower Square⁽⁸⁾

�

Palo Alto

�

1967/1983

�

100,344

��

�

100.0

%�

�

100.0

%�

�

5,092,703

��

�

50.75

��

Page Mill Center⁽⁹⁾

�

Palo Alto

�

1972

�

176,245

��

�

62.8

%�

�

62.8

%�

�

6,945,859

��

�

62.78

��

Lockheed⁽¹⁰⁾

�

Palo Alto

�

1991

�

46,759

��

�

100.0

%�

�

100.0

%�

�

1,603,136

��

�

34.29

��

3400 Hillview⁽¹¹⁾

�

Palo Alto

�

1991

�

207,857

��

�

100.0

%�

�

100.0

%�

�

12,203,284

��

�

58.71

��

Foothill Research Center⁽¹²⁾

�

Palo Alto

�

1991

�

195,366

��

�

50.9

%�

�

40.6

%�

�

3,817,287

��

�

48.09

��

Campus Center

�

Silicon Valley

�

2001/2007-08

�

471,580

��

�

100.0

%�

�

100.0

%�

�

14,147,400

��

�

30.00

��

Techmart Commerce Ctr⁽¹³⁾

�

Silicon Valley

�

1987

�

284,440

��

�

73.2

%�

�

71.8

%�

�

6,582,610

��

�

32.22

��

Patrick Henry Drive

�

Silicon Valley

�

1981

�

68,987

��

�

0.0

%�

�

0.0

%�

�

��

�

��

�

Gateway

�

San Jose Airport

�

1981-84,1998

�

608,626

��

�

85.9

%�

�

84.5

%�

�

13,267,338

��

�

25.81

��

Metro Plaza

�

San Jose Airport

�

1986-1987

�

456,921

��

�

85.9

%�

�

85.9

%�

�

10,314,168

��

�

26.28

��

1740 Technology

�

San Jose Airport

�

1986/1994

�

206,876

��

�

98.4

%�

�

98.4

%�

�

5,696,904

��

�

27.97

��

Concourse

�

San Jose Airport

�

1980/2000

�

944,386

��

�

95.9

%�

�

85.6

%�

�

20,509,825

��

�

25.36

��

Skyport Plaza

�

San Jose Airport

�

2001

�

418,086

��

�

99.1

%�

�

99.1

%�

�

9,665,745

��

�

23.33

��

�

Portfolio Total/Weighted Average:

�

8,202,812

��

�

85.4

%�

�

81.6

%�

�

240,156,903

��

�

35.86

��

�

LAND

�

Skyport Land

�

San Jose Airport

�

��

�

350,000

��

�

Campus Center Land

�

Silicon Valley

�

��

�

750,000

��

�

Total Land Assets:

�

1,100,000

��

�

Total:

�

9,302,812

��

�

(1)

Square footage for office properties has been determined by management based upon estimated leasable square feet, which may be less or more than the Building Owners and Managers Association, or BOMA, rentable area. Square footage may change over time due to remeasurement, releasing, acquisition, or development. Square footage for land assets represents the Seller Parties� estimate of developable square feet, the majority of which remains subject to entitlement approvals that have not yet been obtained.

(2)	Percent leased for office properties is calculated as (i)�square footage under commenced and uncommenced leases as of September�30, 2014, divided by (ii)�total square feet, expressed as a percentage.

(3)	Percent occupied for office properties is calculated as (i)�square footage under commenced leases as of September�30, 2014, divided by (ii)�total square feet, expressed as a percentage.

(4)

Rent data for the office properties is presented on an annualized basis. Annualized base rent for office properties is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) under commenced leases as of September�30, 2014 by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

(5)	Annualized base rent per occupied square foot for the office properties is calculated as (i)�annualized base rent divided by (ii)�square footage under commenced leases as of September�30, 2014.

(6)	This property is subject to ground leases that expire April�29, 2054, each subject to four 11-year extension options.

(7)	This property is subject to a ground lease that expires November�30, 2045.

(8)	This property is subject to a ground lease that expires September�26, 2056.

(9)	This property is subject to a ground lease that expires November�30, 2041.

�

(10)	This property is subject to a ground lease that expires July�31, 2040.

(11)	This property is subject to a ground lease that expires October�31, 2040.

(12)	This property is subject to a ground lease that expires June�30, 2039.

(13)	This property is subject to a ground lease that expires May�3, 2053, with two 10 year extension options.

Tenant Diversification of the Target Portfolio

The properties in the Target Portfolio are currently leased to a variety of companies. The following table sets forth information regarding the 15 largest tenants in the Target Portfolio based on annualized base rent as of September�30, 2014.

�

Tenant

�

Property

�

Lease Expiration

�

Total
Occupied
Square
Feet

�

Percentage
of
Portfolio
Square
Feet

�

Annualized
Base Rent⁽¹⁾

�

Percentage
of Portfolio
Annualized
Base Rent

�

Weil, Gotshal�& Manges LLP⁽²⁾

�

Towers�at�Shore�Center

�

August�31,�2016

�

101,751

��

�

1.2

%�

�

15,640,035

��

�

6.5

%�

Cisco Systems, Inc.⁽³⁾

�

Campus Center

�

December�31,�2019

�

471,580

��

�

5.7

%�

�

14,147,400

��

�

5.9

%�

Google, Inc.⁽⁴⁾

�

3400 Hillview

�

November�30,�2021

�

207,857

��

�

2.5

%�

�

12,203,284

��

�

5.1

%�

Qualcomm Atheros

�

Skyport Plaza

�

July 31, 2017

�

365,038

��

�

4.5

%�

�

8,434,526

��

�

3.5

%�

NetSuite Inc.

�

Peninsula Office Park

�

August 31, 2019

�

119,262

��

�

1.5

%�

�

5,008,456

��

�

2.1

%�

Morgan, Lewis�& Bockius LLP

�

Palo Alto Square

�

February 28, 2017

�

54,728

��

�

0.7

%�

�

3,899,988

��

�

1.6

%�

Stanford Hospital and Clinics

�

Page Mill Center

�

June 30, 2019

�

63,201

��

�

0.8

%�

�

3,792,060

��

�

1.6

%�

Robert Bosch Healthcare System⁽⁵⁾

�

Various

�

Various

�

88,171

��

�

1.1

%�

�

3,474,948

��

�

1.4

%�

HQ Global Workplaces LLC⁽⁶⁾

�

Various

�

Various

�

96,649

��

�

1.2

%�

�

3,171,675

��

�

1.3

%�

Invensense, Inc.⁽⁷⁾

�

Concourse

�

December 31, 2019

�

131,331

��

�

1.6

%�

�

2,669,642

��

�

1.1

%�

Cooley LLP⁽⁸⁾

�

Palo Alto Square

�

Various

�

66,791

��

�

0.8

%�

�

2,582,541

��

�

1.1

%�

Virgin America, Inc.⁽⁹⁾

�

Bay Park Plaza

�

Various

�

85,811

��

�

1.0

%�

�

2,510,864

��

�

1.0

%�

Wells Fargo Bank, N.A.^(3)(10)

�

Various

�

Various

�

58,057

��

�

0.7

%�

�

2,081,881

��

�

0.9

%�

Quinstreet, Inc.

�

Metro Center Tower

�

October 31, 2018

�

63,998

��

�

0.8

%�

�

2,265,529

��

�

0.9

%�

Oracle America, Inc.

�

Bayhill Office Center

�

May�31, 2018

�

73,421

��

�

0.9

%�

�

2,060,911

��

�

0.9

%�

�

Total

�

2,047,646

��

�

24.9

%�

�

83,943,740

��

�

35.0

%�

�

(1)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) under commenced leases as of September�30, 2014 (ii)�by 12. Annualized base rent does not reflect tenant reimbursements.

(2)	Subsequent to September�30, 2014, Weil, Gotshal�& Manges LLP executed a lease renewal to extend the term of their lease to August�31, 2026 with respect to 76,278 square feet with a starting base rent of $65.00 per square foot.

(3)	Cisco Systems, Inc. and Wells Fargo Bank, N.A. leases are subject to early termination prior to expiration at the option of the tenant, subject to tenants paying a termination fee.

(4)	Subsequent to September�30, 2014, Google, Inc. executed a lease for an additional 97,872 square feet at Foothill Research Center commencing on March�1, 2015 and expiring on February�28, 2025.

(5)

Robert Bosch Healthcare System expirations by property and square footage: (i)�6,675 square feet at Embarcadero Place expiring on December�31, 2014; (ii)�24,949 square feet at Embarcadero Place expiring on December�31, 2016; (iii)�56,547 square feet at Foothill Research Center expiring on December�31, 2017.

(6)	HQ Global Workplaces LLC expirations by property and square footage: (i)�27,369 square feet at Techmart Commerce Center expiring April�30, 2015; (ii)�44,957 square feet at Gateway expiring on November�30, 2016; (iii)�24,323 square feet at Bayhill Office Center expiring on July�31, 2019.

(7)	Invensense, Inc. executed a lease for an additional 29,357 square feet commencing on November�1, 2014 and expiring on December�31, 2019.

(8)	Cooley LLP expirations by square footage: (i)�13,040 square feet expiring on September�30, 2014; (ii)�53,751 square feet expiring on January�31, 2015.

(9)	Virgin America, Inc. expirations by square footage: (i)�4,053 square feet expiring on January�31, 2015; (ii)�81,758 square feet expiring on October�7, 2017.

(10)

Wells Fargo Bank, N.A. expiration by property and square footage: (i)�5,153 square feet at Palo Alto Square expiring on June�30, 2017; (ii)�5,543 square feet at 555 Twin Dolphin Plaza expiring on October�31, 2017; (iii)�7,104 square feet at Metro Center Tower expiring on July�31, 2020; (iv)�40,257 square feet at Skyway Landing expiring on November�30, 2020.

�

Uncommenced Leases

As of September�30, 2014, 21 leases have been signed with respect to properties in the Target Portfolio that have not yet commenced. The following table sets forth data for these 21 uncommenced leases.

�

Tenant⁽¹⁾

��

Lease
Commencement

�

��

Lease
Expiration

�

��

Total
Leased
Square
Feet

�

��

Percentage
of�Portfolio
Square�Feet

�

Annualized
Base Rent⁽²⁾

�

Wal-Mart Stores, Inc.

��

�

2/1/2015

��

�

1/31/2025

��

�

106,099

��

�

1.3

%�

�

2,419,057

��

Conviva Inc.

��

�

1/1/2015

��

�

6/30/2020

��

�

34,764

��

�

0.4

%�

�

1,304,121

��

Invensense, Inc.

��

�

11/1/2014

��

�

12/31/2019

��

�

29,357

��

�

0.4

%�

�

810,253

��

Globallogic Inc.

��

�

10/1/2014

��

�

9/30/2021

��

�

28,930

��

�

0.4

%�

�

815,826

��

Aerotek, Inc.

��

�

10/1/2014

��

�

12/31/2019

��

�

24,958

��

�

0.3

%�

�

763,103

��

Jefferies LLC

��

�

12/1/2014

��

�

4/30/2022

��

�

14,562

��

�

0.2

%�

�

961,092

��

Infosys Limited

��

�

12/1/2014

��

�

2/29/2020

��

�

12,364

��

�

0.2

%�

�

771,514

��

Other

��

�

Various

��

�

Various

��

�

57,279

��

�

0.7

%�

�

2,479,059

��

�

��

�

Total

��

�

308,313

��

�

3.8

%�

�

10,324,025

��

�

��

�

(1)	The tenants listed in the above table are not subject to any early termination options or renewal options.

(2)	For uncommenced leases, annualized base rent is calculated by multiplying (i)�the first full month of contractual rents to be received under the applicable lease (defined as cash base rents (before abatements)), by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

Lease Distribution of the Target Portfolio

The following table sets forth information relating to the distribution of leases in the Target Portfolio, based on net rentable square feet under lease as of September�30, 2014.

�

Square Feet Under Lease

��

Number�of
Leases

�

��

Percentage�of
All�Leases

�

Total�Leased
Square Feet

�

��

Percentage�of
Portfolio
Leased�Square
Feet

�

Annualized
Base Rent⁽¹⁾

�

��

Percentage�of
Portfolio
Annualized
Base�Rent

�

2,500 or less

��

�

187

��

�

27.0

%�

�

295,578

��

�

4.2

%�

�

9,269,370

��

�

3.7

%�

2,501-10,000

��

�

310

��

�

44.7

%�

�

1,583,047

��

�

22.6

%�

�

53,390,703

��

�

21.3

%�

10,001-20,000

��

�

��

�

12.4

%�

�

1,229,478

��

�

17.6

%�

�

42,480,945

��

�

17.0

%�

20,001-40,000

��

�

��

�

6.3

%�

�

1,165,597

��

�

16.6

%�

�

43,274,860

��

�

17.3

%�

40,001-100,000

��

�

��

�

2.7

%�

�

1,068,792

��

�

15.3

%�

�

38,385,430

��

�

15.3

%�

Greater than 100,000

��

�

��

�

1.2

%�

�

1,277,557

��

�

18.2

%�

�

53,094,888

��

�

21.2

%�

Building management use

��

�

��

�

2.6

%�

�

76,796

��

�

1.1

%�

�

260,707

��

�

0.1

%�

Uncommenced leases

��

�

��

�

3.0

%�

�

308,313

��

�

4.4

%�

�

10,324,025

��

�

4.1

%�

��

�

��

�

��

�

��

�

Portfolio Total:

��

�

693

��

�

100.0

%�

�

7,005,158

��

�

100.0

%�

�

250,480,928

��

�

100.0

%�

��

�

��

�

��

�

��

�

(1)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)), including uncommenced leases, as of September�30, 2014 by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

�

Lease Expirations of the Target Portfolio

The following table sets forth a summary schedule of the lease expirations for leases in place as of September�30, 2014 plus available space, for the fourth quarter of 2014 and for each of the ten full calendar years beginning January�1, 2015 at the properties in the Target Portfolio. Unless otherwise stated in the footnotes, the information set forth in the table assumes that tenants exercise no renewal options.

�

Year of Lease Expiration⁽¹⁾

��

Square
Footage�of
Expiring
Leases

�

��

Percentage�of
Portfolio
Square�Feet

�

Annualized
Base Rent⁽²⁾

�

��

Percentage�of
Portfolio
Annualized
Base Rent

�

Annualized
Base Rent
Per Leased
Square�Foot

�

Vacant

��

�

1,197,654

��

�

14.6

%�

�

��

�

��

�

0.0

%�

�

��

�

2014

��

�

268,089

��

�

3.3

%�

�

7,973,749

��

�

3.2

%�

�

29.74

��

2015

��

�

1,012,046

��

�

12.5

%�

�

35,802,185

��

�

14.3

%�

�

35.38

��

2016

��

�

1,250,307

��

�

15.2

%�

�

51,658,775

��

�

20.6

%�

�

41.32

��

2017

��

�

1,488,675

��

�

18.1

%�

�

48,282,871

��

�

19.3

%�

�

32.43

��

2018

��

�

819,885

��

�

10.0

%�

�

28,810,725

��

�

11.5

%�

�

35.14

��

2019

��

�

572,877

��

�

7.0

%�

�

23,737,034

��

�

9.5

%�

�

41.43

��

2020

��

�

820,920

��

�

10.0

%�

�

24,178,173

��

�

9.7

%�

�

29.45

��

2021

��

�

256,998

��

�

3.1

%�

�

13,813,245

��

�

5.5

%�

�

53.75

��

2022

��

�

19,385

��

�

0.2

%�

�

1,197,993

��

�

0.5

%�

�

61.80

��

2023

��

�

51,004

��

�

0.6

%�

�

1,602,147

��

�

0.6

%�

�

31.41

��

2024

��

�

59,863

��

�

0.7

%�

�

2,839,299

��

�

1.1

%�

�

47.43

��

Thereafter

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

Building management use⁽³⁾

��

�

76,796

��

�

0.9

%�

�

260,707

��

�

0.1

%�

�

3.39

��

Signed Leases not commenced

��

�

308,313

��

�

3.8

%�

�

10,324,025

��

�

4.1

%�

�

33.49

��

�

��

�

��

�

Portfolio Total/Weighted Average:

��

�

8,202,812

��

�

100.0

%�

�

250,480,928

��

�

100.0

%�

�

35.76

��

�

��

�

��

�

(1)	Some of the leases are subject to various forms of lease termination options exercisable by tenants. Depending on the form of the option, some of these options may or may not require the payment of a fee and notice period as a condition to exercise.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)), including uncommenced leases, as of September�30, 2014, by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

(3)	Annualized base rent per square foot relates to a healthclub at the Skyport Plaza property.

Description of Certain Target Properties

Palo Alto Square, Palo Alto, CA

Palo Alto Square is a six-building, multi-use project located in�Palo Alto, California.�The property, built in 1971, features two 10-story, Class�A office towers, two two-story, Class�A office buildings, and two single-story buildings. In total, the project contains 328,251 net rentable square feet situated on approximately 15 acres with approximately 1,050 parking spaces.�The property is located near the intersection�of Page Mill Road and El Camino Real, a location that is considered �ground zero� for the Palo Alto office market. It has attracted many high-quality tenants including Morgan Lewis Bockius LLP, Cooley LLP, Mayer Brown LLP, White�& Case LLP, Nixon Peabody, Kaye Scholer, Rutan�& Tucker, Robert Half, MAP Royalty, Wells Fargo Bank, Silicon Valley Bank, Navigant, and CBRE.

The project is easily accessed by Highways 101 and 280, the primary north-south transportation arteries, and is close to the California Street CalTrain stop. In addition, it is within walking distance of many retail and food services along El Camino Real and the California Street downtown area.

Palo Alto Square is subject to a ground lease. The fee interest is owned by The Board of Trustees of the Leland Stanford Junior University (�Stanford�). CA-Palo Alto Square Limited Partnership (�CA-Palo Alto�) is the ground lessee under an Amended and Restated Ground Lease by and between Stanford, as ground lessor, and CA-Palo Alto dated as of January�1, 2011 (the �Ground Lease�). The current expiration date of the Ground Lease is November�30, 2045. CA-Palo Alto has no contractual right to extend the term of the Ground Lease. Annual base rent in the amount of $1,500,000 is payable through December�31, 2021, and adjusted thereafter pursuant to the Ground Lease. In addition, CA-Palo Alto pays annual percentage rent based on adjusted gross income as set forth in the Ground Lease. Stanford has a right of first offer on transfers of the Ground Lease, as well as consent right over transfers of the Ground Lease, including any sublease by CA-Palo Alto to tenants exceeding 20,000 square feet of rentable area.

As of September�30, 2014, Palo Alto Square was approximately 96.4% leased to 36 tenants operating in various industries.

�

Palo Alto Square Primary Tenants

The following table summarizes information regarding the primary tenants of Palo Alto Square as of September�30, 2014:

�

Tenant⁽¹⁾

�

Principal
Nature of
Business

�

Lease Expiration

�

Total
Occupied
Square�Feet

�

Percentage
of�Property
Square�Feet

�

Annualized
Base�Rent⁽²⁾

�

Annualized
Base�Rent
per
Occupied
Square�Foot

�

Percentage
of�Property
Annualized
Base�Rent

�

Morgan, Lewis�& Bockius LLP

�

Legal

�

February�2017

�

54,728

��

�

16.7

%�

�

3,899,988

��

�

71.26

��

�

22.8

%�

Cooley LLP⁽³⁾

�

Legal

�

September�2014/January�2015

�

66,791

��

�

20.3

%�

�

2,582,541

��

�

38.67

��

�

15.1

%�

Map Royalty, Inc.

�

Financial�Services

�

September 2019

�

26,285

��

�

8.0

%�

�

1,872,823

��

�

71.25

��

�

11.0

%�

�

(1)	The tenants listed in the above table are not subject to any early termination options or renewal options.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) for the month ended September�30, 2014, by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

(3)	Cooley LLP expirations by square footage: (i)�13,040 square feet expiring on September�30, 2014; (ii)�53,751 square feet expiring on January�31, 2015.

Palo Alto Square Lease Expirations

The following table sets forth the lease expirations for leases in place at Palo Alto Square as of September�30, 2014, plus available space, for the fourth quarter of 2014 and for each of the ten full calendar years beginning January�1, 2015. Unless otherwise stated in the footnotes, the information set forth in the table assumes that tenants exercise no renewal options and all early termination rights. As of September�30, 2014, the weighted average remaining lease term for this property was 24 months without giving effect to uncommenced leases.

�

Year of Lease Expiration⁽¹⁾

��

Number�of
Leases
Expiring

�

��

Square
Footage�of
Expiring
Leases

�

��

Percentage�of
Portfolio
Square Feet

�

Annualized
Base Rent⁽²⁾

�

��

Percentage�of
Portfolio
Annualized
Base Rent

�

Annualized
Base Rent
per Leased
Square�Foot

�

Vacant

��

�

��

�

��

�

11,874

��

�

3.6

%�

�

��

�

��

�

0.0

%�

�

��

�

2014

��

�

��

�

18,245

��

�

5.6

%�

�

670,763

��

�

3.9

%�

�

36.76

��

2015

��

�

��

�

119,178

��

�

36.4

%�

�

5,412,040

��

�

31.4

%�

�

45.41

��

2016

��

�

��

�

41,742

��

�

12.7

%�

�

1,459,152

��

�

8.4

%�

�

34.96

��

2017

��

�

��

�

91,797

��

�

28.0

%�

�

6,481,563

��

�

37.5

%�

�

70.61

��

2018

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

2019

��

�

��

�

29,679

��

�

9.0

%�

�

2,111,049

��

�

12.2

%�

�

71.13

��

2020

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

2021

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

2022

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

2023

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

2024

��

�

��

�

13,291

��

�

4.0

%�

�

956,952

��

�

5.5

%�

�

72.00

��

Thereafter

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

Building Management Use

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

Signed Leases not commenced

��

�

��

�

2,445

��

�

0.7

%�

�

183,375

��

�

1.1

%�

�

75.00

��

�

��

�

��

�

��

�

Portfolio Total/Weighted Average:

��

�

��

�

328,251

��

�

100

%�

�

17,274,894

��

�

100.0

%�

�

54.60

��

�

��

�

��

�

��

�

(1)	Some of the leases are subject to various forms of lease termination options exercisable by tenants. Depending on the form of the option, some of these options may or may not require the payment of a fee and notice period as a condition to exercise.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) for the month ended September�30, 2014, by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

�

Palo Alto Square Percent Leased and Base Rent

The following table sets forth the percentage leased, annualized base rent per leased square foot and annualized net effective base rent per leased square foot for Palo Alto Square as of the dates indicated below:

�

Date

��

Percent
Leased

�

Annualized�Base�Rent
Per Occupied
Square Foot

�

��

Annualized�Net
Effective�Base�Rent�Per
Occupied�Square� Foot⁽¹⁾

�

September�30, 2014

��

�

96.4

%�

�

54.44

��

50.97

��

December�31, 2013

��

�

100.0

%�

�

52.82

��

�

50.61

��

December�31, 2012

��

�

100.0

%�

�

51.71

��

�

50.76

��

December�31, 2011

��

�

95.3

%�

�

49.28

��

�

54.92

��

December�31, 2010

��

�

88.8

%�

�

48.21

��

�

49.18

��

December�31, 2009

��

�

97.6

%�

�

46.47

��

�

48.06

��

�

(1)

Annualized net effective base rent per occupied square foot represents (i)�the contractual base rent for leases in place as of the dates indicated above, calculated on a straight-line basis to amortize free rent periods and abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (ii)�the net rentable square footage under lease as of the same date.

Palo Alto Square consists of one real estate tax parcel located in Santa Clara County, and one personal property account. Fiscal year 2014 real estate taxes are $313,524, based upon an assessed value of $26.5 million. The fiscal year 2014 real estate tax rate is $1.18304 per $1,000 of assessed value.�Direct assessments are $13,150. Personal property taxes are $74, based upon an assessment of $6,346 and a tax rate of $1.1803 per $1,000 of assessed value. Total 2014 fiscal tax expenses are $326,750.

Metro Center Tower, Foster City, CA

Metro Center Tower is a four-building, multi-use project located in�Foster City, California.�The property, built in phases between 1985 and 1988, features a 21-story, steel-framed Class�A office tower (Metro Center Tower), two four-story, steel-framed, Class�A office buildings, and a large neighborhood retail center. In total, the project contains 730,215 net rentable square feet situated on approximately 20 acres with approximately 2,550 parking spaces. The property is located near the intersection�of two major freeways, Highway 101, a major north-south artery, and Highway 92, a key east-west thoroughfare at the geographic center of San Mateo County, a location that has attracted many diverse, high-quality tenants including Metropolitan Life, Jefferies LLC, Wells Fargo Bank, Applied Underwriters, QuinStreet, Scale Ventures, Public Company Accounting Oversight Board, SciClone Pharmaceuticals, and CBRE.

The project was the former headquarters of Sony Computer Entertainment, with a lease for approximately 44% of the project, until June, 2013. After Sony�s vacating of the project, ownership undertook a significant repositioning of the assets, particularly 919 E. Hillsdale and 989 E. Hillsdale.

Metro Center Tower is subject to a ground lease. Metro Center consists of a 21 story tower (950 Tower Lane) (the �Tower�), two four story office buildings (919 and 989 East Hillsdale Blvd) (the �919 Building� and the �989 Building�), and a retail center (923-985 East Hillsdale Blvd) (the �Retail Center�). The office components total 692,091 square feet, and the retail component totals 38,124 square feet. The Tower, 989 Building, and Retail Center are located on land that is owned in fee by Metro TCE LLC (�Ground Lessor�). Ground Lessor is party to three ground leases�one for each of the Tower, 989 Building, and Retail Center�with CA-Metro Center Limited Partnership (�Ground Tenant�), each lease is dated as of April�30, 1998 (the �Ground Leases�). The Ground Leases each have a term ending April�29, 2054. Ground Tenant has the option to extend each of the Ground Leases for four additional periods of eleven years each. Ground Tenant pays annual rent, subject to adjustment as set forth in the Ground Leases. Ground Tenant has an option to purchase the fee interest under each of the Ground Leases during the first 6 months of the 31st lease year, and every 15th lease year thereafter (including option terms). Ground Tenant also has a right of first offer over any sales of the fee interest. Ground Tenant is also the fee owner of the land on which the 919 Building is located.

As of September�30, 2014, Metro Center Tower was approximately 58.9% leased to 54 tenants operating in various industries.

�

Metro Center Tower Primary Tenants

The following table summarizes information regarding the primary tenants of Metro Center Tower as of September�30, 2014:

�

Tenant⁽¹⁾

��

Principal�Nature�of
Business

�

��

Lease
Expiration

�

��

Total
Occupied
Square
Feet

�

��

Percentage
of�Property
Square
Feet

�

Annualized
Base Rent⁽²⁾

�

��

Annualized
Base Rent
per�Occupied
Square Foot

�

��

Percentage�of
Property
Annualized
Base Rent

�

Quinstreet, Inc.

��

�

Business�Services

��

�

October�2018

��

�

63,998

��

�

8.8

%�

�

2,265,529

��

35.40

��

�

14.4

%�

�

(1)	Tenant listed in the above table is not subject to any early termination options or renewal options.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) for the month ended September�30, 2014, by (ii)�12.

Metro Center Tower Lease Expirations

The following table sets forth the lease expirations for leases in place at Metro Center Tower as of September�30, 2014, plus available space, for the fourth quarter of 2014 and for each of the ten full calendar years beginning January�1, 2015. Unless otherwise stated in the footnotes, the information set forth in the table assumes that tenants exercise no renewal options and all early termination rights. As of September�30, 2014, the weighted average remaining lease term for this property was 42 months without giving effect to uncommenced leases.

�

Year of Lease Expiration⁽¹⁾

��

Number
of�Leases
Expiring

�

��

Square
Footage�of
Expiring
Leases

�

��

Percentage�of
Portfolio
Square Feet

�

Annualized
Base Rent⁽²⁾

�

��

Percentage�of
Portfolio
Annualized
Base Rent

�

Annualized
Base Rent
per Leased
Square�Foot

�

Vacant

��

�

��

�

��

�

299,769

��

�

41.1

%�

�

��

�

��

�

0.0

%�

�

��

�

2014

��

�

��

�

41,625

��

�

5.7

%�

�

1,526,742

��

�

8.4

%�

�

36.68

��

2015

��

�

��

�

41,888

��

�

5.7

%�

�

1,529,205

��

�

8.4

%�

�

36.51

��

2016

��

�

��

�

36,441

��

�

5.0

%�

�

1,667,170

��

�

9.2

%�

�

45.75

��

2017

��

�

��

�

54,261

��

�

7.4

%�

�

2,206,669

��

�

12.2

%�

�

40.67

��

2018

��

�

��

�

102,504

��

�

13.9

%�

�

3,961,377

��

�

21.8

%�

�

38.65

��

2019

��

�

��

�

16,740

��

�

2.3

%�

�

734,693

��

�

4.1

%�

�

43.89

��

2020

��

�

��

�

29,700

��

�

4.1

%�

�

1,587,803

��

�

8.8

%�

�

53.46

��

2021

��

�

��

�

1,439

��

�

0.2

%�

�

51,804

��

�

0.3

%�

�

36.00

��

2022

��

�

��

�

19,385

��

�

2.7

%�

�

1,197,993

��

�

6.6

%�

�

61.80

��

2023

��

�

��

�

4,331

��

�

0.6

%�

�

155,916

��

�

0.9

%�

�

36.00

��

2024

��

�

��

�

24,289

��

�

3.3

%�

�

1,081,462

��

�

6.0

%�

�

44.52

��

Thereafter

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

Building Management Use

��

�

��

�

4,900

��

�

0.7

%�

�

��

�

��

�

0.0

%�

�

��

�

Signed Leases not commenced

��

�

��

�

52,943

��

�

7.3

%�

�

2,406,939

��

�

13.3

%�

�

45.46

��

�

��

�

��

�

��

�

Portfolio Total/Weighted Average:

��

�

��

�

730,215

��

�

100

%�

�

18,107,773

��

�

100.0

%�

�

42.07

��

�

��

�

��

�

��

�

(1)	Some of the leases are subject to various forms of lease termination options exercisable by tenants. Depending on the form of the option, some of these options may or may not require the payment of a fee and notice period as a condition to exercise.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) for the month ended September�30, 2014, by (ii)�12.

Metro Center Tower Percent Leased and Base Rent

The following table sets forth the percentage leased, annualized base rent per leased square foot and annualized net effective base rent per leased square foot for Metro Center Tower as of the dates indicated below:

�

Date

��

Percent
Leased

�

Annualized�Base�Rent
Per Occupied
Square Foot

�

��

Annualized�Net
Effective�Base�Rent�Per
Occupied
Square� Foot⁽¹⁾

�

September�30, 2014

��

�

58.9

%�

�

41.59

��

39.92

��

December�31, 2013

��

�

51.5

%�

�

40.29

��

�

38.14

��

December�31, 2012

��

�

94.2

%�

�

36.20

��

�

34.05

��

December�31, 2011

��

�

94.3

%�

�

33.93

��

�

34.71

��

December�31, 2010

��

�

94.2

%�

�

33.72

��

�

30.82

��

December�31, 2009

��

�

86.4

%�

�

33.31

��

�

37.38

��

�

(1)

Metro Center Tower consists of five real estate tax parcels located in San Mateo County. Fiscal year 2014 real estate taxes are $2.3 million, based upon assessed value of $209.9 million. The fiscal year 2014 real estate tax rate is $1.1053 per $1,000 of assessed value. Direct assessments are $1,845. Total 2014 fiscal year tax expenses are $2.3 million.

Concourse, San Jose, CA

Concourse consists of six, five to eight-story, steel-framed Class�A office buildings in a campus style setting including a retail site and a four story parking garage. The property, built in 1980 and renovated in 2000, contains approximately 944,386 rentable square feet situated on a 31.38 acre lot with approximately 2,550 parking spaces.

Concourse is adjacent to the Norman Y. Mineta San Jose International Airport, and is approximately two miles north of downtown San Jose. The property offers easy access to Highways 101, 880, 87 and 280 and public transportation including Caltrain, which offers convenient access to the Peninsula and San Francisco. Concourse is within walking distance to numerous restaurants, hotels and other retail amenities making it highly desirable to tenants looking for urban conveniences in a suburban location. Concourse has attracted many high-quality tenants including New York Life Insurance Company, Comerica Bank, Westinghouse Electric Company, Hensel Phelps, Invensense, HGST, the TSA and NTT America.

As of September�30, 2014, Concourse was approximately 95.9% leased to 102 tenants operating in various industries.

Concourse Primary Tenants

The following table summarizes information regarding the primary tenants of Concourse as of September�30, 2014:

�

Tenant⁽¹⁾

��

Principal Nature
of Business

�

��

Lease�Expiration

�

��

Total
Occupied
Square
Feet

�

��

Percentage
of�Property
Square�Feet

�

Annualized
Base Rent⁽²⁾

�

��

Annualized
Base Rent
per�Occupied
Square Foot

�

��

Percentage
of�Property
Annualized
Base Rent

�

Invensense, Inc.⁽³⁾

��

�

Manufacturing

��

�

December�2019

��

�

131,331

��

�

13.9

%�

�

2,669,642

��

20.33

��

�

13.0

%�

�

(1)	Tenant listed in the above table is not subject to any early termination options or renewal options.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) for the month ended September�30, 2014, by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

(3)	Invensense, Inc. executed a lease for an additional 29,357 square feet commencing on November�1, 2014 and expiring on December�31, 2019.

�

Concourse Lease Expirations

The following table sets forth the lease expirations for leases in place at Concourse as of September�30, 2014, plus available space, for the fourth quarter of 2014 and for each of the ten full calendar years beginning January�1, 2015. Unless otherwise stated in the footnotes, the information set forth in the table assumes that tenants exercise no renewal options and all early termination rights. As of September�30, 2014, the weighted average remaining lease term for this property was 42 months without giving effect to uncommenced leases.

�

Year of Lease Expiration⁽¹⁾

��

Number
of�Leases
Expiring

�

��

Square
Footage�of
Expiring
Leases

�

��

Percentage�of
Portfolio
Square Feet

�

Annualized
Base Rent⁽²⁾

�

��

Percentage�of
Portfolio
Annualized
Base Rent

�

Annualized
Base Rent
per Leased
Square�Foot

�

Vacant

��

�

��

�

��

�

38,690

��

�

4.1

%�

�

��

�

��

�

0.0

%�

�

��

�

2014

��

�

��

�

17,630

��

�

1.9

%�

�

426,475

��

�

1.8

%�

�

24.19

��

2015

��

�

��

�

96,180

��

�

10.2

%�

�

2,588,229

��

�

11.1

%�

�

26.91

��

2016

��

�

��

�

140,509

��

�

14.9

%�

�

3,657,150

��

�

15.7

%�

�

26.03

��

2017

��

�

��

�

136,326

��

�

14.4

%�

�

3,956,726

��

�

16.9

%�

�

29.02

��

2018

��

�

��

�

65,154

��

�

6.9

%�

�

1,610,348

��

�

6.9

%�

�

24.72

��

2019

��

�

��

�

146,799

��

�

15.5

%�

�

3,453,749

��

�

14.8

%�

�

23.53

��

2020

��

�

��

�

156,277

��

�

16.5

%�

�

3,429,477

��

�

14.7

%�

�

21.94

��

2021

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

2022

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

2023

��

�

��

�

28,489

��

�

3.0

%�

�

809,942

��

�

3.5

%�

�

28.43

��

2024

��

�

��

�

18,388

��

�

2.0

%�

�

577,730

��

�

2.5

%�

�

31.42

��

Thereafter

��

�

��

�

��

�

��

�

��

�

0.0

%�

�

��

�

��

�

0.0

%�

�

��

�

Building Management Use

��

�

��

�

2,842

��

�

0.3

%�

�

��

�

��

�

0.0

%�

�

��

�

Signed Leases not commenced

��

�

��

�

97,102

��

�

10.3

%�

�

2,850,306

��

�

12.1

%�

�

29.35

��

�

��

�

��

�

��

�

Portfolio Total/Weighted Average:

��

�

102

��

�

944,386

��

�

100

%�

�

23,360,132

��

�

100.0

%�

�

25.79

��

�

��

�

��

�

��

�

(1)	Some of the leases are subject to various forms of lease termination options exercisable by tenants. Depending on the form of the option, some of these options may or may not require the payment of a fee and notice period as a condition to exercise.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) for the month ended September�30, 2014, by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

Concourse Percent Leased and Base Rent

The following table sets forth the percentage leased, annualized base rent per leased square foot and annualized net effective base rent per leased square foot for Concourse as of the dates indicated below:

�

Date

��

Percent
Leased

�

Annualized�Base�Rent
Per Occupied
Square Foot

�

��

Annualized�Net
Effective�Base�Rent�Per
Occupied�Square� Foot⁽¹⁾

�

September�30, 2014

��

�

95.9

%�

�

25.36

��

26.62

��

December�31, 2013

��

�

83.3

%�

�

24.22

��

�

25.20

��

December�31, 2012

��

�

60.0

%�

�

26.03

��

�

25.17

��

December�31, 2011

��

�

61.4

%�

�

25.33

��

�

25.77

��

December�31, 2010

��

�

60.0

%�

�

26.23

��

�

26.30

��

December�31, 2009

��

�

85.1

%�

�

31.58

��

�

30.98

��

�

(1)

Concourse consists of three real estate tax parcels located in Santa Clara County, and one personal property account. Fiscal year 2014 real estate taxes are $2.5 million, based upon assessed value of $202.9 million. The fiscal year 2014 real estate tax rate is $1.2301 per $1,000 of assessed value.�Direct assessments are $99,542. Personal property taxes are $458, based upon an assessment of $37,404 and a tax rate of $1.2257 per $1,000 of assessed value. Total 2014 fiscal year tax expenses are $2.6 million.

Towers at Shore Center, Redwood Shores, CA

Towers at Shore Center is a two-building office project located in�Redwood Shores, California.�The property was built in 2002

�

and features two superb Class�A office buildings, one eight-stories and one six-stories, which are considered the finest quality office buildings in the submarket. In total, the project contains 334,483 net rentable square feet situated on approximately 14 acres with approximately 1,000 parking spaces. The property is located in the highly-desirable Redwood Shores submarket, and has attracted many diverse, high-quality tenants including Weil Gotshal�& Manges, Caritas Business Services, Teachers Insurance and Annuity, Coherus Biosciences, BNBT Builders, and Colliers International.

The project is easily accessed via Highway 101, and is located across the street from the Pacific Athletic Club, a high-end fitness facility, as well as the Redwood Shores Shopping Center, which features a boutique grocery store and services such as Starbucks, Jamba Juice, Bank of America, and Amici�s, along with a host of other food services.

As of September�30, 2014, Towers at Shores Center was approximately 96.0% leased to 33 tenants operating in various industries.

Towers at Shore Center Primary Tenants

The following table summarizes information regarding the primary tenants of Towers at Shore Center as of September�30, 2014:

�

Tenant⁽¹⁾

��

Principal Nature
of Business

��

Lease
Expiration

��

Total
Occupied
Square
Feet

�

��

Percentage�of
Property
Square Feet

�

Annualized
Base Rent⁽²⁾

�

��

Annualized
Base Rent
per
Occupied
Square
Foot

�

��

Percentage
of�Property
Annualized
Base Rent

�

Weil, Gotshal�& Manges LLP⁽³⁾

��

Legal

��

August�2016

��

�

101,751

��

�

30.4

%�

�

15,640,035

��

153.71

��

�

61.6

%�

Caritas Business Services

��

Public�Administration

��

March 2018

��

�

50,327

��

�

15.0

%�

�

1,556,967

��

�

30.94

��

�

6.1

%�

�

(1)	The tenants listed in the above table are not subject to any early termination options or renewal options.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) for the month ended September�30, 2014, by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

(3)	Subsequent to September�30, 2014, Weil, Gotshal�& Manges LLP executed a lease renewal to extend the term of their lease to August�31, 2026 with respect to 76,278 square feet with a starting base rent of $65.00 per square foot.

Towers at Shore Center Lease Expirations

The following table sets forth the lease expirations for leases in place at Towers at Shore Center as of September�30, 2014, plus available space, for the fourth quarter of 2014 and for each of the ten full calendar years beginning January�1, 2015. Unless otherwise stated in the footnotes, the information set forth in the table assumes that tenants exercise no renewal options and all early termination rights. As of September�30, 2014, the weighted average remaining lease term for this property was 31 months without giving effect to uncommenced leases.

�

Year of Lease Expiration⁽¹⁾

��

Number
of
Leases
Expiring

�

��

Square
Footage
of
Expiring
Leases

�

��

Percentage
of
Portfolio
Square
Feet

�

Annualized
Base Rent⁽²⁾

�

��

Percentage
of Portfolio
Annualized
Base Rent

�

Annualized
Base Rent
per�Leased
Square
Foot

�

Vacant

��

�

��

�

13,429

��

�

4.0

%�

�

��

�

0.0

%�

�

��

2014

��

�

��

�

5,680

��

�

1.7

%�

�

204,482

��

�

0.8

%�

�

36.00

��

2015

��

�

��

�

25,471

��

�

7.6

%�

�

1,214,239

��

�

4.8

%�

�

47.67

��

2016

��

�

��

�

141,263

��

�

42.3

%�

�

17,454,319

��

�

68.8

%�

�

123.56

��

2017

��

�

��

�

53,594

��

�

16.0

%�

�

2,483,853

��

�

9.8

%�

�

46.35

��

2018

��

�

��

�

55,340

��

�

16.5

%�

�

1,829,574

��

�

7.2

%�

�

33.06

��

2019

��

�

��

�

30,668

��

�

9.2

%�

�

1,697,322

��

�

6.7

%�

�

55.35

��

2020

��

�

��

�

5,143

��

�

1.5

%�

�

265,006

��

�

1.0

%�

�

51.53

��

2021

��

�

��

�

��

�

0.0

%�

�

��

�

0.0

%�

�

��

�

Year of Lease Expiration⁽¹⁾

��

Number
of
Leases
Expiring

�

��

Square
Footage
of
Expiring
Leases

�

��

Percentage
of
Portfolio
Square
Feet

�

Annualized
Base Rent⁽²⁾

�

��

Percentage
of Portfolio
Annualized
Base Rent

�

Annualized
Base Rent
per�Leased
Square
Foot

�

2022

��

�

��

�

��

�

0.0

%�

�

��

�

0.0

%�

�

��

2023

��

�

��

�

��

�

0.0

%�

�

��

�

0.0

%�

�

��

2024

��

�

��

�

3,895

��

�

1.2

%�

�

223,155

��

�

0.9

%�

�

57.29

��

Thereafter

��

�

��

�

��

�

0.0

%�

�

��

�

0.0

%�

�

��

Building Management Use

��

�

��

�

��

�

0.0

%�

�

��

�

0.0

%�

�

��

Signed Leases not commenced

��

�

��

�

��

�

0.0

%�

�

��

�

0.0

%�

�

��

�

��

�

��

�

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Portfolio Total/Weighted Average:

��

�

��

�

334,483

��

�

100

%�

�

25,371,950

��

�

100.0

%�

�

79.03

��

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��

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(1)	Some of the leases are subject to various forms of lease termination options exercisable by tenants. Depending on the form of the option, some of these options may or may not require the payment of a fee and notice period as a condition to exercise.

(2)	Annualized base rent is calculated by multiplying (i)�base rental payments (defined as cash base rents (before abatements)) for the month ended September�30, 2014, by (ii)�12. Annualized base rent does not reflect tenant reimbursements.

Towers at Shore Center Percent Leased and Base Rent

The following table sets forth the percentage leased, annualized base rent per leased square foot and annualized net effective base rent per leased square foot for Towers at Shore Center as of the dates indicated below:

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Date

��

Percent
Leased

�

Annualized�Base�Rent
Per Occupied
Square Foot

�

��

Annualized�Net
Effective�Base�Rent�Per
Occupied�Square� Foot⁽¹⁾

�

September�30, 2014

��

�

96.0

%�

�

79.03

��

72.37

��

December�31, 2013

��

�

95.3

%�

�

73.00

��

�

68.60

��

December�31, 2012

��

�

94.0

%�

�

70.05

��

�

67.71

��

December�31, 2011

��

�

94.8

%�

�

67.85

��

�

67.77

��

December�31, 2010

��

�

94.9

%�

�

66.52

��

�

67.39

��

December�31, 2009

��

�

85.5

%�

�

68.83

��

�

72.25

��

�

(1)

Tower at Shore Center consists of two real estate tax parcels located in San Mateo County, and one personal property account. Fiscal year 2014 real estate taxes are $1.3 million, based upon assessed value of $123.9 million. The fiscal year 2014 real estate tax rate is $1.107 per $1,000 of assessed value. Direct assessments are $61,003. Personal property taxes are $142, based upon an assessment of $13,020 and a tax rate of $1.0953 per $1,000 of assessed value. Total 2014 fiscal year tax expenses are $1.4 million.

Competition

The Target Properties compete for tenants based on a number of factors, including location, rental rates, security, management�s flexibility and expertise to design space to meet prospective tenants� needs and the manner in which each property is operated, maintained and marketed.

Risk Factors

There are a number of significant risks related to the purchase, including the risk factors enumerated below and the risk factors contained in the Company�s Annual Report on Form 10-K for the year ended December�31, 2013.

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Risk Factors Related to the Transaction

The issuance of shares of our common stock in the transaction or upon exchange of common units received in the transaction will have a dilutive effect on our common stock and will reduce your percentage interest in our earnings, voting power and market value.

The equity portion of the transaction consideration consists of up to an aggregate of 63,474,791 shares of our common stock and common units (subject to adjustment as described below). The number of shares of our common stock to be issued to the Seller Parties upon completion of the transaction will be equal to approximately 9.8% of the then total issued and outstanding shares of our common stock and the remainder of the Equity Consideration will consist of common units. The issuance of shares of our common stock in the transaction will have a dilutive effect on our common stock and will reduce the relative percentage interests of current common stockholders in our earnings, voting power and market value.

Additionally, part of the equity portion of the transaction consideration will be paid in common units, which may have a dilutive effect on our common stock. Holders of common units have the right to require the redemption of part or all of their outstanding common units for cash, or, at our election, shares of our common stock, based upon the fair market value of an equivalent number of shares of our common stock at the time of the redemption, subject to certain restrictions on ownership and transfer of our common stock. If the Seller Parties exercise their redemption rights and part or all of their outstanding common units are exchanged for shares of our common stock, such exchange will have a dilutive effect on our common stock and reduce the relative percentage interests of existing common stockholders in our earnings, voting power and market value.

The public resale by the Seller Parties of common stock issued in the transaction or issuable upon exchange of common units received in the transaction, or the perception that such resales could occur, could adversely affect the per share trading price of our common stock following completion of the transaction.

None of the shares of common stock or common units that will be issued to the Seller Parties upon completion of the transaction will initially be registered under the Securities Act, and such securities will only be able to be resold pursuant to an effective registration statement or an applicable exemption from registration under federal and state securities laws. Upon the completion of the transaction, the Seller Parties will enter into the Stockholders Agreement with us and the Operating Partnership, pursuant to which they will agree generally to not to transfer or sell any shares of common stock or common units to be issued in connection with the transaction prior to November�1, 2015. The restrictions on transfer and sale contained in the Stockholders Agreement will terminate with respect to 50% of the securities to be issued to the Seller Parties on November�1, 2015 and with respect to the remaining 50% of such securities on March�1, 2016. In the event that the Seller Parties elect to terminate their right to designate nominees for election as directors to the Board (i)�prior to November�1, 2015, the restriction on transfer and sale contained in the Stockholders Agreement will terminate on November�1, 2015 with respect to all securities issued to the Seller Parties in connection with the transaction, or (ii)�after November�1, 2015 but before March�1, 2016, any remaining restrictions on transfer or sale will terminate on the earlier of March�1, 2016 or thirty days following the Seller Parties� election.

Upon the completion of the transaction, we will enter into the Registration Rights Agreement with the Seller Parties or their designated affiliates receiving the Equity Consideration, pursuant to which we will agree to register for resale all of the shares of common stock to be issued to the Seller Parties or such designated affiliates and any shares of common stock issuable upon the exchange of common units issued in the transaction. In addition, if we propose to register the offer and sale of our common stock under the Securities Act, in connection with the public offering of such common stock, the Seller Parties will be entitled to certain �piggyback� registration rights allowing them to include their shares in such registration, subject to certain marketing and other limitations.

If all or a substantial portion of the shares of our common stock issued in the transaction or shares of common stock issuable upon exchange of common units issued in the transaction are resold into the public markets or if there is a perception that such resales could occur, the per share trading price of our common stock could be adversely affected, and our ability to raise additional capital through the sale of our equity securities in the future may be adversely affected.

If the transaction does not occur, we may incur payment obligations to the Seller Parties.

If the Purchase Agreement is terminated because our stockholders do not approve the Equity Issuance, we will be obligated to pay the Seller Parties up to $14 million in expense reimbursement. If the Purchase Agreement is terminated under certain other circumstances, we will be obligated to pay the Seller Parties a termination fee of up to $120 million, net of certain expense reimbursements.

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Failure to complete the transaction in a timely manner could negatively affect our ability to achieve the benefits associated with the transaction and could negatively affect our share price and future business and financial results.

The transaction is currently expected to close during the first half of 2015, assuming that all of the conditions in the Purchase Agreement are satisfied or waived. The Purchase Agreement provides that either the Buyer Parties or the Seller Parties may terminate the Purchase Agreement if the closing of the transaction has not occurred by 11:59 p.m. New York time on July�3, 2015. Certain events outside our control may delay or prevent the consummation of the transaction. Delays in consummating the transaction or the failure to consummate the transaction at all may result in our incurring significant additional costs in connection with such delay or termination of the Purchase Agreement and/or failing to achieve the anticipated benefits associated with the transaction. We cannot assure you that the conditions to the completion of the transaction will be satisfied or waived or that any adverse effect, event, development or change will not occur, and we cannot provide any assurances as to whether or when the transaction will be completed.

To complete the transaction, our stockholders must approve the Equity Issuance. In addition, the Purchase Agreement contains additional closing conditions, which may not be satisfied or waived. Delays in consummating the transaction or the failure to consummate the transaction at all could negatively affect our future business and financial results, and, in that event, the market price of our common stock may decline significantly, particularly to the extent that the current market price reflects a market assumption that the transaction will be consummated. If the transaction is not consummated for any reason, our ongoing business could be adversely affected, and we will be subject to several risks, including:

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the payment by us of certain costs, including termination fees and expense reimbursements ranging from $14 million to $120 million under certain circumstances as well as costs relating to the transaction, such as legal, accounting, financial advisory, filing, printing and mailing fees; and

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the diversion of management focus and resources from operational matters and other strategic opportunities while working to consummate the transaction.

If the transaction is not consummated, we will not achieve the expected benefits thereof and will be subject to the risks described above, any of which could affect our share price and future business and financial results.

The pendency of the transaction could adversely affect the business and operations of Hudson and the Target Properties.

In connection with the pending transaction, some current or prospective tenants, lenders, joint venture partners or vendors of Hudson or the Seller Parties may delay or defer decisions, which could negatively impact the revenues, earnings, cash flows and expenses of Hudson and of the Target Properties, regardless of whether the transaction is completed. In addition, under the Purchase Agreement, both the Buyer Parties and the Seller Parties are subject to certain restrictions on the conduct of their respective businesses prior to completing the transaction. These restrictions may prevent the parties from pursuing certain strategic transactions, undertaking certain significant capital projects, undertaking certain significant financing transactions and otherwise pursuing other actions that are not in the ordinary course of business, even if such actions would prove beneficial.

We will incur significant non-recurring costs in connection with the transaction.

We expect to incur a number of non-recurring costs associated with transferring and integrating the Target Properties into our business, including any planned renovation, development or lease-up of such properties. Under the terms of the Purchase Agreement we are obligated to pay all expenses incurred in connection with the transaction at closing (subject to certain exceptions). The majority of non-recurring expenses relating to the transaction are comprised of transaction costs, costs of transferring the Target Properties and costs related to formulating integration plans. We expect that approximately $50.6 million will be incurred to complete the transaction although additional unanticipated costs may be incurred in the integration of the Target Properties into our business. As of December�19, 2014, we have incurred $12.4�million in non-recurring costs in connection with the transaction which does not include any fees for which we will need to reimburse the Seller Parties or others at the closing of the transaction.

There can be no assurance that we will be able to obtain financing for the funds necessary to pay the cash portion of the transaction consideration on acceptable terms, in a timely manner, or at all.

Our obligation under the Purchase Agreement to consummate the transaction is not conditioned on us obtaining any financing for the transaction. In connection with the transaction, we have obtained commitments for up to $1.75 billion under a 364-day senior unsecured bridge loan facility to finance the cash portion of the transaction consideration, subject to certain conditions. We are also pursuing a number of financing options, and anticipates that the funds needed to complete the transaction will be derived from a

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combination of (i)�our available cash on hand and/or that of the Operating Partnership, (ii)�proceeds from the sale of equity interests in, or assets of, certain wholly or partially owned subsidiaries, (iii)�the issuance and sale of our common and/or preferred stock and/or limited partnership interests in the Operating Partnership and (iv)�debt financing, which may include, without limitation, some combination of the following: (a)�a senior unsecured bridge loan facility, (b)�the issuance of senior unsecured notes or other debt securities, (c)�borrowings under the Operating Partnership�s existing corporate credit facility and/or an upsizing thereof, including pursuant to the incremental feature thereof, (d)�secured asset level financing and/or (e)�other commercial or institutional bank loans.

There can be no assurance that we will satisfy the conditions needed to enter into the committed 364-day senior unsecured bridge loan facility, or that we will be able to obtain alternative financing on acceptable terms, in a timely manner or at all. If we utilize the committed 364-day senior unsecured bridge loan facility, we would need to refinance such indebtedness within one year and there can be no assurance that we would be able to do so on acceptable terms, in a timely manner or at all, particularly since we would only utilize our committed 364-day senior unsecured bridge facility if alternative financing on better terms was not available to us. Our committed 364-day senior unsecured bridge facility contains provisions that are not favorable to us, including a duration fee that is payable every 90 days after the funding of the bridge and that steps up over time as well as mandatory prepayment requirements for, among other things, debt and equity issuances and asset sales. If we are unable to obtain the funds necessary to pay the cash portion of the transaction consideration, we may not be able to complete the transaction and may be required to pay the Seller Parties a termination fee of up to $120 million.

The equity portion of the transaction consideration will not be adjusted in the event of any change in our stock price.

The equity portion of the transaction consideration consists of an aggregate of up to 63,474,791 shares of our common stock and common units, subject to reduction as set forth in the Purchase Agreement. The number of shares of our common stock to be delivered to the Seller Parties upon completion of the transaction will be equal to approximately 9.8% of the total issued and outstanding shares of our common stock, and the remainder of the Equity Consideration will consist of common units. The aggregate number of shares of common stock and common units will not be adjusted for changes in the market price of our common stock. Changes in the market price of our common stock, which may result from a variety of factors (many of which are beyond our control), will affect the value of the transaction consideration that the Seller Parties will receive upon consummation of the transaction. As a result, prior to the consummation of the transaction, you will not know the exact value of the shares of common stock and the common units that the Seller Parties will receive upon the consummation of the transaction.

Certain of the Target Properties are subject to ground leases, pursuant to which the lessors have consent rights that if not granted may prevent us from acquiring such properties.

Certain of the Target Properties are subject to ground leases with unaffiliated third party ground lessors, pursuant to which such lessors have consent rights that, if not granted or waived, may prevent us from acquiring such properties. There can be no assurance that the Seller Parties will be able to obtain the consents required to consummate the transfer of such properties to us pursuant to the Purchase Agreement. In the event that we are unable to acquire the properties that are subject to ground leases due to a failure to obtain ground lessor consent, the total consideration to be paid in the transaction will be adjusted; however, such reduction in consideration may not be commensurate with the lost actual or anticipated benefits of acquiring such properties. In addition, if we are unable to acquire one or more of the Target Properties for the reasons described above, we may not realize the operating efficiencies that may otherwise be achieved and the overall size, geographic footprint, tenant mix and other attributes of the portfolio of properties to be acquired in the transaction may not be as we anticipated.

The Target Properties may be subject to environmental liabilities, for which we may become responsible.

Certain of the Target Properties that are ground-leased from Stanford University have been subject to environmental investigation and remediation for many years, including soil removal, groundwater remediation and monitoring. These activities are ongoing at certain sites and will continue into the foreseeable future. At other sites, only monitoring is required. At present, these activities do not interfere with the leasing and operation of the properties, but could do so if agency requirements or remediation requirements change. Also, these activities could cause additional expense if the properties are redeveloped or renovated by us. The parties responsible for remediation are typically former tenants that engaged in electronic manufacturing and caused the release of chlorinated compounds and other contaminants. If the responsible parties become unable to meet these remediation obligations, it is possible that we could become responsible for them.

Screening for vapor intrusion is underway on several of the Target Properties. These screenings are monitored by either the San Francisco Regional Water Quality Control Board or the Department of Toxic Substances Control and are the responsibility of prior tenants. If

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the responsible parties are unable to meet any required remediation obligations, it is possible that we could become responsible for them. Also, we could be the subject of claims associated with indoor air exposure. Further, certain of the Target Properties have known asbestos-containing materials. We could incur abatement costs associated with testing for and remediating any asbestos issues and could be subject of claims associated with exposure to asbestos.

We cannot assure you that costs or liabilities incurred as a result of environmental issues will not affect our ability to make distributions to our stockholders or that such costs or other remedial measures will not have an adverse effect on our financial condition, results of operations, cash flow and the per share trading price of our securities. If we do incur material environmental liabilities in the future, we may face significant remediation costs, and we may find it difficult to sell any affected properties.

Risk Factors Following the Transaction

Blackstone may exercise significant influence over us.

Upon completion of the transaction, Blackstone is expected to beneficially own 9.8% of our outstanding common stock and an approximate 48% interest in our Company on a fully diluted basis (including common units). Consequently, Blackstone may be able to significantly influence the outcome of matters submitted for stockholder action, including approval of significant corporate transactions, such as amendments to our governing documents, business combinations, consolidations and mergers. In addition, concurrently with the completion of the transaction, the partnership agreement of the Operating Partnership will be amended to, among other things, provide that holders of common units will be entitled to vote to approve the consummation of certain change of control and other transactions that are required to be approved by Hudson�s stockholders. The right of the holders of common units to vote to approve any such transactions will remain in effect for so long as Blackstone owns at least 9.8% of the aggregate number of shares of common stock and common units that Blackstone receives as the Equity Consideration in the transaction.

Further, under the Purchase Agreement, we have agreed to increase the size of our Board from nine to twelve members, and if the transaction is consummated, entities controlled by Blackstone will have the right to designate three of our director nominees for so long as those entities beneficially own more than 50% of the total number of shares of common stock and common units to be acquired as the Equity Consideration in the transaction. This right to designate director nominees (i)�will be reduced to two directors on the first date on which those entities beneficially own greater than or equal to 30% but less than or equal to 50% of the total number of shares of common stock and common units to be acquired as the Equity Consideration in the transaction, (ii)�will be reduced to one director on the first date on which those entities beneficially own greater than or equal to 15% but less than 30% of the total number of shares of common stock and common units to be acquired as the Equity Consideration in the transaction, and (iii)�will cease altogether on the date on which those entities beneficially own less than 15% of the total number of shares of common stock and common units to be acquired as the Equity Consideration in the transaction. For so long as those entities have the right to designate at least two director nominees, Blackstone will also be entitled to appoint one such nominee then serving on the Board to serve on each committee of the Board (other than certain specified committees). As a result, Blackstone will have substantial influence on us and could exercise its influence in a manner that conflicts with the interests of other stockholders. The presence of a significant stockholder and the addition to the Board of Blackstone�s nominees may also have the effect of making it more difficult for a third party to acquire us or for our Board to discourage a third party form seeking to acquire us.

In connection with the transaction, we will incur significant additional indebtedness in order to finance the acquisition of the Target Properties, which could adversely affect us, including by decreasing our business flexibility and increasing our interest expense.

Our consolidated indebtedness as of September�30, 2014 was approximately $917.2 million (before loan premium). After giving effect to the transaction and the anticipated incurrence of indebtedness in connection therewith (and assuming the transaction were to be consummated on September�30, 2014), our indebtedness would be approximately $2.667 billion (before loan premium), assuming we finance the entire Cash Consideration (before closing costs, prorations, and credits) with indebtedness. We will have substantially increased indebtedness following completion of the transaction, which could have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions and increasing our interest expense. We will also incur various costs and expenses associated with the financing of the transaction. The amount of cash required to pay interest on our increased indebtedness levels following completion of the transaction and thus the demands on our cash resources will be greater than the amount of cash flows required to service our indebtedness prior to the transaction. The increased levels of indebtedness following completion of the transaction could (i)�reduce access to capital, (ii)�increase borrowing costs generally or for any additional indebtedness, (iii)�reduce funds available for working capital, capital expenditures, acquisitions and other general corporate purposes, (iv)�create competitive disadvantages for us relative to other companies with lower debt levels, (v)�reduce the amount of cash available to pay dividends on our common stock and (vi)�increase our vulnerability to general adverse economic and industry conditions. If we do not achieve the expected benefits and cost savings from the transaction, then our ability to service our indebtedness may be adversely impacted.

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Certain of the indebtedness that may be incurred in connection with the transaction could bear interest at variable interest rates. If interest rates increase, such variable rate debt would create higher debt service requirements, which could adversely affect our cash flows, our ability to pay principal and interest on our debt, our cost of refinancing our debt when it becomes due and our ability to make or sustain distributions to stockholders. Additionally, if we choose to hedge our interest rate risk, we cannot guarantee that the hedge will be effective or that the hedging counterparty will meet its obligations to us.

Moreover, we may be required to raise substantial additional financing to fund working capital, capital expenditures, acquisitions or other general corporate requirements. Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control. We cannot assure you that we will be able to obtain additional financing on terms acceptable to us or at all.

Our future results will suffer if we do not effectively integrate the Target Properties and any retained employees following the transaction.

Following the transaction, we may be unable to integrate successfully the Target Properties and any retained employees and realize the anticipated benefits of the transaction or do so within the anticipated timeframe. The integration process could distract management, disrupt our ongoing business or result in inconsistencies in our operations, services, standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with our tenants, lenders, joint venture partners, vendors and employees or to achieve all or any of the anticipated benefits of the transaction.

The market price of our common stock may decline as a result of the transaction.

The market price of our common stock may decline as a result of the transaction if we do not achieve the perceived benefits of the transaction as rapidly or to the extent anticipated by financial or industry analysts, or the effect of the transaction on our financial results is not consistent with the expectations of financial or industry analysts. The transaction is expected to be accretive to funds from operations per share, or FFO per share, in 2015. The extent and duration of any accretion will depend on several factors, including the amount of transaction-related expenses that are charged against our earnings. If expenses charged against earnings are higher than we expected, the amount of accretion in 2015 could be less than currently anticipated and the transaction may not turn out to be accretive (or may be less accretive than currently anticipated). In such event, the price of our common stock could decline.

In addition, if the transaction is consummated, we will own and operate a significantly larger portfolio than at present, with a different mix of properties, geographic concentration, risks and liabilities. Current holders of our common stock may not wish to continue to invest in us if the transaction is consummated or for other reasons may wish to dispose of some or all of their investment. If, following the consummation of the transaction, there is selling pressure on our common stock that exceeds demand at the market price, the price of our common stock could decline. Further, the transaction is expected to be dilutive to adjusted funds from operations per share in 2015, which could cause the price of our common stock to decline.

The agreements that will govern the indebtedness to be incurred or assumed in connection with the transaction are expected to contain various covenants imposing restrictions on us and certain of our subsidiaries that may affect our ability to operate our businesses.

The agreements that will govern the indebtedness to be incurred or assumed in connection with the transaction are expected to contain various affirmative and negative covenants that may, subject to certain significant exceptions, restrict our ability and that of certain of our subsidiaries to, among other things, have liens on property, incur additional indebtedness, make loans, advances or other investments, make non-ordinary course asset sales, and/or merge or consolidate with any other person or sell or convey certain of our assets to any one person. In addition, some of the agreements that govern the debt financing are expected to contain financial covenants that will require us to maintain certain financial ratios. Our ability to comply with these provisions may be affected by events beyond our control. Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations.

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We cannot assure you that Hudson will be able to continue paying dividends at the current rate.

We intend to make distributions each taxable year (not including a return of capital for United States federal income tax purposes) equal to at least 90% of our taxable income and intends to pay regular quarterly dividends to our stockholders. However, holders of our common stock may not receive the same quarterly dividends following the transaction for various reasons, including the following:

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as a result of the transaction and the issuance of the common stock and common units in connection with the transaction, the total amount of cash required for us to pay dividends at our current rate will increase; and

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Hudson may not have enough cash to pay such distributions due to changes in our cash requirements, indebtedness, interest costs, capital spending plans, cash flows or financial position.

The risks associated with implementing our long-term business plan and strategy following the transaction may be different from the risks related to our business with respect to our existing property portfolio.

Our ability to execute our long-term business plan and strategy following the acquisition of the Target Properties may be different from the execution risks related to our business solely with respect to our existing real property portfolio. Such risks may include unforeseen delays or an inability to renew leases, lease vacant spaces or re-let spaces as leases expire. In addition, we may be required to make rent or other concessions and/or incur significant capital expenditures to improve both our existing properties as well as the Target Properties in order to retain and attract tenants, causing our financial condition, results of operation, cash flow and trading price of our common stock to be adversely affected.

Item�9.01 Financial Statements and Exhibits.

(d) Exhibits.

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Exhibit�No.	��	Description

3.1	��	Second Amended and Restated Bylaws of Hudson Pacific Properties, Inc., effective as of January 10, 2015

Forward-Looking Statements

This communication may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as �may,� �will,� �should,� �expects,� �intends,� �plans,� �anticipates,� �believes,� �estimates,� �predicts,� or �potential� or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company�s control that may cause actual results to differ significantly from those expressed in any forward-looking statement. All forward-looking statements reflect the Company�s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company�s future results to differ materially from any forward-looking statements, see the section entitled �Risk Factors� in the Company�s Annual Report on Form 10-K for the year ended December�31, 2013 filed with the Securities and Exchange Commission, or SEC, on March�3, 2014, and other risks described in documents subsequently filed by the Company from time to time with the SEC.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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	�	�		�	HUDSON PACIFIC PROPERTIES, INC.

Date: January 12, 2015	�	�		�

	�	�	By:	�	/S/ MARK T. LAMMAS
	�	�		�	Name: Mark T. Lammas
	�	�		�	Title: Chief Financial Officer

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EXHIBIT INDEX

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Exhibit�No.	��	Description

3.1	��	Second Amended and Restated Bylaws of Hudson Pacific Properties, Inc., effective as of January 10, 2015

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Exhibit 3.1

HUDSON PACIFIC PROPERTIES, INC.

SECOND AMENDED AND RESTATED BYLAWS

ARTICLE I

OFFICES

Section�1. PRINCIPAL OFFICE. The principal office of the Corporation in the State of Maryland shall be located at such place as the Board of Directors may designate.

Section�2. ADDITIONAL OFFICES. The Corporation may have additional offices, including a principal executive office, at such places as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section�1. PLACE. All meetings of stockholders shall be held at the principal executive office of the Corporation or at such other place as shall be set in accordance with these Bylaws and stated in the notice of the meeting.

Section�2. ANNUAL MEETING. An annual meeting of the stockholders for the election of directors and the transaction of any business within the powers of the Corporation shall be held on the date and at the time and place set by the Board of Directors.

Section�3. SPECIAL MEETINGS.

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(a)

General. Each of the chairman of the board, chief executive officer, president and Board of Directors may call a special meeting of stockholders, and such person or group who has called such special meeting shall, except as provided in Section�3(b)(5) of this Article II, set the date, time and place of any special meeting. Subject to Section�3(b) of this Article II, a special meeting of stockholders shall also be called by the secretary to act on any matter that may properly be considered at a meeting of stockholders upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast on such matter at such meeting.

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(b)

Stockholder Requested Special Meetings.

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(1)

Any stockholder of record seeking to have stockholders request a special meeting shall, by sending written notice to the secretary (the �Record Date Request Notice�) by registered mail, return receipt requested, request the Board of Directors to fix a record date to determine the stockholders entitled to request a special meeting (the �Request Record Date�). To be in proper form, such Record Date Request Notice shall set forth:

(i) as to the purpose of the special meeting and to any business that the requesting stockholder proposes to bring before the special meeting, (A)�a reasonably detailed description of such purpose and the business to be conducted, the stockholder�s reasons for proposing such business at the special meeting, and any material interest in such business of such stockholder or any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom, (B)�the text of the proposal or business (including the text of any resolutions proposed for consideration) and (C)�a reasonably detailed description of all agreements, arrangements and understandings (I)�between or among the stockholder and/or any of the Stockholder Associated Persons or (II) between or among the stockholder and/or any of the Stockholder Associated Persons, on the one hand, and any other person or entity (including their names), on the other hand, in connection with the request for the special meeting or the business proposed to be conducted at the special meeting;

(ii) as to each requesting stockholder and Stockholder Associated Person, (A)�the name and address of such stockholder or Stockholder Associated Person, as they appear on the Corporation�s stock ledger, and the current name and business address, if different, of each such Stockholder Associated Person, (B)�the class, series and number of all shares of stock or other securities of the Corporation or any subsidiary thereof (collectively, the �Company Securities�), if any, which are owned (beneficially or of record) by such stockholder or Stockholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any Company Securities of any such person; provided, that, for purposes of the foregoing and wherever else used in this Article II, references to �beneficial� ownership or other correlative terms shall be deemed to have the meaning given thereto under Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the �Exchange Act�), except that such person or entity shall in all events be deemed to beneficially own any shares of any class or series of the Corporation as to which such person or entity has a right to acquire beneficial ownership at any time in the future;

(iii) as to each requesting stockholder or Stockholder Associated Person, any Disclosable Interests (as defined below);

(iv) all information relating to each requesting stockholder or Stockholder Associated Person and each matter of business proposed to be

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acted on at the special meeting that must be disclosed in connection with the solicitation of proxies for the election of directors in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such a solicitation, in each case pursuant to, and in accordance with, Regulation 14A (or any successor provision) under the Exchange Act and the rules and regulations promulgated thereunder;

(v) the signature and date of signature of each requesting stockholder (or of their agents, duly authorized in a writing accompanying the Record Date Request Notice).

In addition, each stockholder submitting a Record Date Request Notice and each Stockholder Associated Person shall comply with all requirements of applicable law, including all requirements of the Exchange Act, with respect to any request to fix a Request Record Date.

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(2)

Upon receiving the Record Date Request Notice, the Board of Directors may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than ten days after the close of business on the date on which the resolution fixing the Request Record Date is adopted by the Board of Directors. If the Board of Directors, within ten days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date, the Request Record Date shall be the close of business on the tenth day after the first date on which the Record Date Request Notice is received by the secretary. If the Board of Directors shall determine that any request to fix a record date or demand to call and hold a special meeting was not properly made in accordance with this Article II, or shall determine that the stockholder or stockholders requesting that the Board of Directors fix such record date or submitting a demand to call the special meeting have not otherwise complied with this Article II, then the Board of Directors shall not be required to fix a Request Record Date and the secretary shall not be required to call a special meeting of stockholders.

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(3)

In order for any stockholder to request a special meeting to act on any matter described in a Record Date Request Notice that may properly be considered at a meeting of stockholders, one or more written requests for a special meeting (collectively, the �Special Meeting Request�) signed and dated by stockholders of record (or by their agents duly authorized in a writing accompanying the Special Meeting Request) as of the applicable Request Record Date entitled to cast not less than a majority (the �Special Meeting Percentage�) of all of the votes entitled to be cast on such matter at such meeting shall be delivered to the secretary. No business may

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be considered at a special meeting called by the secretary in accordance with Section�3(b) of this Article II (a �Stockholder-Requested Special Meeting�) except as described in the applicable Record Date Request Notice or at the direction of the Board of Directors. The Special Meeting Request shall be sent to the secretary by registered mail, return receipt requested, and be received by the secretary within 60 days after the Request Record Date. Any requesting stockholder (or agent duly authorized in a writing accompanying the revocation or the Special Meeting Request) may revoke his, her or its Special Meeting Request at any time by written revocation delivered to the secretary.

Each stockholder providing a Special Meeting Request (other than a stockholder that provides a Special Meeting Request in response to a solicitation made pursuant to a solicitation statement filed on Schedule 14A pursuant to, and in accordance with, Regulation 14A under the Exchange Act) shall provide the information about such stockholder and any Stockholder Associated Person required to be provided in a Record Date Request Notice pursuant to Section�3(b)(1) of this Article II (or, if applicable, shall update any information provided by such stockholder in a Record Date Request Notice), so that such information with respect to the stockholder and each Stockholder Associated Person is true and correct as of the record date for the Stockholder-Requested Special Meeting (the �Meeting Record Date�) and as of the date that is ten Business Days (as defined below) prior to the date of the Stockholder-Requested Special Meeting and the date(s) of any adjournment or postponement thereof. Any such update and supplement shall be sent to the secretary by courier or registered mail, return receipt requested, and shall be received by the secretary, in the case of information required to be provided as of the Meeting Record Date, not later than five (5)�Business Days after the Meeting Record Date and, in the case of information required to be provided as of the date that is ten Business Days prior to the date of such Stockholder-Requested Special Meeting and the date(s) of any adjournment or postponement thereof, not later than eight (8)�Business Days prior to the date of the Stockholder-Requested Special Meeting or, if practicable, the date(s) of any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the Stockholder-Requested Special Meeting has been adjourned or postponed). In addition, each stockholder providing a Special Meeting Request and each Stockholder Associated Person shall comply with all requirements of applicable law, including all requirements of the Exchange Act, with respect to any request to call a Stockholder-Requested Special Meeting.

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(4)

The secretary shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing or delivering the notice of the meeting (including the Corporation�s proxy materials). The secretary shall not be required to call a Stockholder-Requested Special Meeting and such meeting shall not be held unless, in addition to the Special Meeting Request

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�	required by Section�3(b)(3) of this Article II, the secretary receives payment of such reasonably estimated cost prior to the preparation and mailing or delivery of such notice of the meeting.

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(5)

A Stockholder-Requested Meeting shall be held at such place, date and time as may be designated by the Board of Directors; provided, however, that the date of any Stockholder-Requested Meeting shall be not more than 90 days after the Meeting Record Date; and provided further that if the Board of Directors fails to designate, within ten days after the date that a valid Special Meeting Request is actually received by the secretary (the �Delivery Date�), a date and time for a Stockholder-Requested Meeting, then such meeting shall be held at 2:00 p.m., Eastern Time, on the 90th day after the Meeting Record Date, or, if such 90th day is not a Business Day, on the first preceding Business Day; and provided further that in the event that the Board of Directors fails to designate a place for a Stockholder-Requested Meeting within ten days after the Delivery Date, then such meeting shall be held at the principal executive office of the Corporation. In fixing a date for any Stockholder-Requested Meeting, the chairman of the board, chief executive officer, president or Board of Directors may consider such factors as he, she or it deems relevant, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for the meeting and any plan of the Board of Directors to call an annual meeting or other special meeting. In the case of any Stockholder-Requested Meeting, if the Board of Directors fails to fix a Meeting Record Date that is a date within 30 days after the Delivery Date, then the close of business on the 30th day after the Delivery Date shall be the Meeting Record Date. The Board of Directors may revoke the notice for any Stockholder-Requested Meeting in the event that the requesting stockholders fail to comply with the provisions of Section�3(b)(4) of this Article II.

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(6)

If written revocations of the Special Meeting Request have been delivered to the secretary and the result is that stockholders of record (or their agents duly authorized in writing), as of the Request Record Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting on the matter to the secretary: (i)�if the notice of meeting has not already been delivered, the secretary shall refrain from delivering the notice of the meeting and send to all requesting stockholders who have not revoked such requests written notice of any revocation of a request for a special meeting on the matter, or (ii)�if the notice of meeting has been delivered and if the secretary first sends to all requesting stockholders who have not revoked requests for a special meeting on the matter written notice of any

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revocation of a request for the special meeting and written notice of the Corporation�s intention to revoke the notice of the meeting or for the chairman of the meeting to adjourn the meeting without action on the matter, (A)�the secretary may revoke the notice of the meeting at any time before ten days before the commencement of the meeting or (B)�the chairman of the meeting may call the meeting to order and adjourn the meeting without acting on the matter. Any request for a special meeting received after a revocation by the secretary of a notice of a meeting shall be considered a request for a new special meeting.

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(7)

The chairman of the board, chief executive officer, president or Board of Directors may appoint regionally or nationally recognized independent inspectors of elections to act as the agents of the Corporation for the purpose of promptly performing a ministerial review of the validity of any purported Special Meeting Request received by the secretary. For the purpose of permitting the inspectors to perform such review, no such purported Special Meeting Request shall be deemed to have been delivered to the secretary until the earlier of (i)�five Business Days after receipt by the secretary of such purported request and (ii)�such date as the independent inspectors certify to the Corporation that the valid requests received by the secretary represent, as of the Request Record Date, stockholders of record entitled to cast not less than the Special Meeting Percentage. Nothing contained in this paragraph shall in any way be construed to suggest or imply that the Corporation or any stockholder shall not be entitled to contest the validity of any request, whether during or after such five Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

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(8)

For purposes of this Article II, �Stockholder Associated Person� of any stockholder means (i)�the beneficial owner or beneficial owners, if different, of shares of stock of the Corporation at whose request the notice is given pursuant to this Article II, (ii)�any affiliate or associate (each within the meaning of Rule 12b-2 under the Exchange Act) of such stockholder or, if applicable, such beneficial owner and (iii)�any other person with whom such stockholder or, if applicable, such beneficial owner (or any of their respective affiliates or associates) is Acting in Concert (as defined below).

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(9)

For purposes of this Article II, a person shall be deemed to be �Acting in Concert� with another person if such person knowingly acts (whether or not pursuant to an express agreement,

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arrangement or understanding) in concert with, or towards a common goal relating to the management, governance or control of the Corporation in parallel with, such other person where (i)�each person is conscious of the other person�s conduct or intent and this awareness is an element in their decision-making processes and (ii)�at least one additional factor suggests that such persons intend to act in concert or in parallel, which such additional factors may include, without limitation, exchanging information (whether publicly or privately), attending meetings, conducting discussions, or making or soliciting invitations to act in concert or in parallel; provided, that a person shall not be deemed to be Acting in Concert with any other person solely as a result of the solicitation or receipt of revocable proxies or consents from such other person in response to a solicitation made pursuant to, and in accordance with, Regulation 14A under the Exchange Act by way of a proxy or consent solicitation statement filed on Schedule 14A. A person Acting in Concert with another person shall be deemed to be Acting in Concert with any third party who is also Acting in Concert with such other person.

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(10)

For purposes of these Bylaws, �Business Day� shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of California are authorized or obligated by law or executive order to close.

Section�4. NOTICE. Not less than ten nor more than 90 days before each meeting of stockholders, the secretary shall give notice of such meeting to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting. Such notice shall state the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called. Such notice shall be written, and may be delivered by mail, by presenting it to such stockholder personally, by leaving it at the stockholder�s residence or usual place of business, by electronic transmission or by any other means permitted by Maryland law. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at the stockholder�s address as it appears on the records of the Corporation, with postage thereon prepaid. If transmitted electronically, such notice shall be deemed to be given when transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. The Corporation may give a single notice to all stockholders who share an address, which single notice shall be effective as to any stockholder at such address, unless a stockholder objects to receiving such single notice or revokes a prior consent to receiving such single notice. Failure to give notice of any meeting to one or more stockholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II or the validity of any proceedings at any such meeting.

Subject to Section�11(a) of this Article II, any business of the Corporation may be transacted at an annual meeting of stockholders without being specifically designated in the

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notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice. The Corporation may postpone or cancel a meeting of stockholders by making a public announcement (as defined in Section�11(c)(3) of this Article II) of such postponement or cancellation prior to the meeting. Notice of the date, time and place to which the meeting is postponed shall be given not less than ten days prior to such date and otherwise in the manner set forth in this section.

Section�5. ORGANIZATION AND CONDUCT. Every meeting of stockholders shall be conducted by an individual appointed by the Board of Directors to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the chairman of the board or, in the case of a vacancy in the office or absence of the chairman of the board, by one of the following officers present at the meeting in the following order: the vice chairman of the board, if there is one, the chief executive officer, the president, the vice presidents in their order of rank and seniority, the secretary or, in the absence of such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The secretary, or, in the secretary�s absence, an assistant secretary, or, in the absence of both the secretary and assistant secretaries, an individual appointed by the Board of Directors or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary. In the event that the secretary presides at a meeting of stockholders, an assistant secretary, or, in the absence of all assistant secretaries, an individual appointed by the Board of Directors or the chairman of the meeting, shall record the minutes of the meeting. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of the chairman and without any action by the stockholders, are appropriate for the proper conduct of the meeting, including, without limitation, (a)�restricting admission to the time set for the commencement of the meeting; (b)�limiting attendance at the meeting to stockholders of record of the Corporation, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; (c)�limiting participation at the meeting on any matter to stockholders of record of the Corporation entitled to vote on such matter, their duly authorized proxies and other such individuals as the chairman of the meeting may determine; (d)�limiting the time allotted to questions or comments; (e)�determining when and for how long the polls should be opened and when the polls should be closed; (f)�maintaining order and security at the meeting; (g)�removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (h)�concluding a meeting or recessing or adjourning the meeting to a later date and time and at a place announced at the meeting; and (i)�complying with any state and local laws and regulations concerning safety and security. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section�6. QUORUM; ADJOURNMENTS. At any meeting of stockholders, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under any statute or the charter of the Corporation (the �Charter�) for the vote necessary for the approval of any matter. If, however, such quorum is not established at any meeting of the stockholders, the chairman of the meeting may adjourn the meeting sine die or

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from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

The stockholders present either in person or by proxy, at a meeting which has been duly called and at which a quorum has been established, may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough stockholders to leave fewer than would be required to establish a quorum.

Section�7. VOTING.

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(a)

General. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any matter which may properly come before the meeting, except as otherwise provided in Section�7(b) with respect to the election of directors, unless more than a majority of the votes cast is required by statute or by the Charter. Unless otherwise provided by statute or by the Charter, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders. Voting on any question or in any election may be viva voce unless the chairman of the meeting shall order that voting be by ballot or otherwise.

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(b)

Election of Directors. Except as otherwise provided in the Charter with respect to directors to be elected by the holders of any class or series of stock of the Corporation and in these Bylaws with respect to the filling of vacancies on the Board of Directors, a nominee shall be elected as a director only if such nominee receives the affirmative vote of a majority of all the votes cast �for� and �against� the election of such nominee at any meeting of stockholders duly called and at which a quorum is present and directors are to be elected; provided, however, that the directors shall be elected by a plurality of the votes cast at any meeting of the stockholders duly called and at which a quorum is present and directors are to be elected if, in connection with such meeting (i)�the secretary of the Corporation shall have received one or more notices that a stockholder has nominated or proposes to nominate a person or persons for election as a director, which notice(s) purports to be in compliance with the advance notice requirements set forth in Section�11 of this Article II, irrespective of whether the Board of Directors at any time determines that any such notice(s) is not in compliance with such requirements, and (ii)�as of the 14th day preceding the date of the proxy statement (as defined in Section�11 of this Article II) in accordance with applicable law to the stockholders of the Corporation, such nomination or proposed nomination has not been withdrawn by such stockholder and would thereby cause the number of nominees and proposed nominees to exceed the number of directors to be elected at such meeting, as determined by the Secretary of the Corporation, irrespective of whether such nomination or proposed nomination is

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thereafter withdrawn by such stockholder. If the directors are to be elected by a plurality of the votes cast pursuant to the provisions of the immediately preceding sentence, stockholders shall not be permitted to vote �against� any one or more nominees but shall only be permitted to vote �for� one or more nominees or withhold their votes with respect to one or more nominees.

Section�8. PROXIES. A stockholder may cast the votes entitled to be cast by the holder of the shares of stock owned of record by the stockholder in person or by proxy executed by the stockholder or by the stockholder�s duly authorized agent in any manner permitted by law. Such proxy or evidence of authorization of such proxy shall be filed with the secretary before or at the meeting. No proxy shall be valid more than eleven months after its date unless otherwise provided in the proxy.

Section�9. VOTING OF STOCK BY CERTAIN HOLDERS. Stock of the Corporation registered in the name of a corporation, partnership, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, general partner, managing member or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such stock pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such stock. Any director or fiduciary may vote stock registered in the name of such person in the capacity of such director or fiduciary, either in person or by proxy.

Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or desirable. On receipt by the Corporation of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the holder of record of the specified stock in place of the stockholder who makes the certification.

Section�10. INSPECTORS. The Board of Directors or the chairman of the meeting, in advance of or at any meeting, may, but need not, appoint one or more inspectors for the meeting and any successor to an inspector. The inspectors, if any, shall (a)�determine the number of shares of stock represented at the meeting, in person or by proxy, and the validity and effect of proxies, (b)�receive and tabulate all votes, ballots or consents, (c)�report such tabulation to the

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chairman of the meeting, (d)�hear and determine all challenges and questions arising in connection with the right to vote and (e)�do such acts as are proper to fairly conduct the election or vote. Each such report shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

Section�11. ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS.

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(a)

Annual Meetings of Stockholders.

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(1)

At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be brought (i)�pursuant to the Corporation�s notice of meeting, (ii)�by or at the direction of the Board of Directors or (iii)�by any stockholder of the Corporation who (A)�was a stockholder of record (and, if such nomination or other business is proposed at the request of any beneficial owner, at the request of a beneficial owner who was the beneficial owner of shares of stock of the Corporation) both at the time of giving of notice by the stockholder as provided for in this Section�11(a) of this Article II and at the time of the annual meeting, (B)�is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and (C)�has complied with this Section�11(a) of this Article II. Except for proposals properly made pursuant to, and in accordance with, Rule 14a-8 under the Exchange Act, and included in the notice of meeting given by or at the direction of the Board of Directors, the foregoing clause (iii)�shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders.

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(2)

For any nomination or other business to be properly brought before an annual meeting by a stockholder pursuant to Section�11(a)(1)(iii) of this Article II, (i)�the stockholder must have (A)�given timely notice (as defined below) thereof in writing and in proper form to the secretary, (B)�provided any updates or supplements to such notice at the times and in the forms required by this Section�11 of this Article II and (ii)�such other business must otherwise be a proper matter for action by the stockholders. To be timely, a stockholder�s notice shall set forth all information required under this Section�11 of this Article II and shall be delivered to the secretary at the principal executive office of the Corporation not earlier than the 150th day nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the

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proxy statement (as defined in Section�11(c)(3) of this Article II) for the preceding year�s annual meeting; provided, however, that in connection with the Corporation�s first annual meeting or in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year�s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th day prior to the date of such annual meeting, as originally convened, or the tenth day following the day on which public announcement of the date of such meeting is first made. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a stockholder�s notice as described above.

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(3)

To be in proper form, such stockholder�s notice to the secretary shall set forth:

(i) as to each individual whom the stockholder proposes to nominate for election or reelection as a director (each, a �Proposed Nominee�), all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to, and in accordance with, Regulation 14A (or any successor provision) under the Exchange Act;

(ii) as to any business that the stockholder proposes to bring before the meeting, (A)�a reasonably detailed description of such business, the stockholder�s reasons for proposing such business at the meeting and any material interest in such business of such stockholder or any Stockholder Associated Person, individually or in the aggregate, including any anticipated benefit to the stockholder or the Stockholder Associated Person therefrom, (B)�the text of the proposal or business (including the text of any resolutions proposed for consideration) and (C)�a reasonably detailed description of all agreements, arrangements and understandings (I)�between or among the stockholder and/or any of the Stockholder Associated Persons or (II) between or among the stockholder and/or any of the Stockholder Associated Persons, on the one hand, and any other person or entity (including their names), on the other hand, in connection with the proposal of such business by such stockholder;

(iii) as to the stockholder giving the notice, any Proposed Nominee and any Stockholder Associated Person,

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(A) the class, series and number of all shares of Company Securities, if any, which are owned (beneficially or of record) by such stockholder, Proposed Nominee or Stockholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such stock or other security) in any Company Securities of any such person,

(B) the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such stockholder, Proposed Nominee or Stockholder Associated Person,

(C) (I)�any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such stockholder and any Stockholder Associated Person, the purpose or effect of which is to give such stockholder and any Stockholder Associated Person economic risk similar to ownership of shares or units of any Company Securities, including due to the fact that the value of such derivative, swap or other transactions are determined by reference to the price, value or volatility of any shares or units of any Company Securities, or which derivative, swap or other transactions provide, directly or indirectly, the opportunity to profit from any increase in the price or value of shares or units of any Company Securities (�Synthetic Equity Interests�), which Synthetic Equity Interests shall be disclosed without regard to whether (x)�the derivative, swap or other transactions convey any voting rights in such shares or units to such stockholder and any Stockholder Associated Person, (y)�the derivative, swap or other transactions are required to be, or are capable of being, settled through delivery of such shares or units or (z)�such stockholder and any Stockholder Associated Person may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap or other transactions, (II)�any proxy (other than a revocable proxy or consent given in response to a solicitation made pursuant to, and in accordance with, Regulation 14A under the Exchange Act by way of a solicitation statement filed on Schedule 14A), agreement, arrangement, understanding or relationship pursuant to which such stockholder or any Stockholder Associated Person has or shares a right to vote any shares or units of any Company Securities, (III)�any agreement, arrangement, understanding or relationship,

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including any repurchase or similar so-called �stock borrowing� agreement or arrangement, engaged in, directly or indirectly, by such stockholder and any Stockholder Associated Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares or units of any Company Securities by, manage the risk of price changes for, or increase or decrease the voting power of, such stockholder and any Stockholder Associated Person with respect to the shares or units of any Company Securities, or which provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares or units of any Company Securities (�Short Interests�), (IV)�any rights to dividends on the shares or units of any Company Securities owned beneficially by such stockholder and any Stockholder Associated Person that are separated or separable from the underlying Company Securities, (V)�any performance-related fees (other than an asset based fee) that such stockholder or any Stockholder Associated Person is entitled to based on any increase or decrease in the price or value of shares or units of any Company Securities, or any Synthetic Equity Interests or Short Interests, if any, (VI) (x)�if such stockholder or any Stockholder Associated Person is not a natural person, the identity of the natural person or persons associated with such stockholder and any Stockholder Associated Person responsible for the formulation of and decision to propose the business to be brought before the meeting or nominate any such Proposed Nominee (such person or persons, the �Responsible Person�), the manner in which such Responsible Person was selected, any fiduciary duties owed by such Responsible Person to the equity holders or other beneficiaries of such stockholder and any Stockholder Associated Person, the qualifications and background of such Responsible Person and any material interests or relationships of such Responsible Person that are not shared generally by any other record or beneficial holder of the shares or units of any Company Securities and that reasonably could have influenced the decision of such stockholder and any Stockholder Associated Person to propose such business to be brought before the meeting or nominate any such Proposed Nominee, and (y)�if such stockholder or any Stockholder Associated Person is a natural person, the qualifications and background of such natural person and any material interests or relationships of such natural person that are not shared generally by any

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other record or beneficial holder of the shares or units of any Company Securities and that reasonably could have influenced the decision of such stockholder and any Stockholder Associated Person to propose such business to be brought before the meeting or nominate any such Proposed Nominee, (VII)�any significant equity interests or any Synthetic Equity Interests or Short Interests in any principal competitor of the Corporation held by such stockholder and any Stockholder Associated Person, (VIII)�any direct or indirect interest of such stockholder and any Stockholder Associated Person in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (IX)�any pending or threatened litigation in which such stockholder or any Stockholder Associated Person is a party or material participant involving the Corporation or any of its officers or directors, or any affiliate of the Corporation, (X)�any material transaction occurring during the prior twelve months between such stockholder and any Stockholder Associated Person, on the one hand, and the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation, on the other hand, (XI)�a summary of any material discussions regarding the business proposed to be brought before the meeting or the nomination or identify of the Proposed Nominee (x)�between or among any stockholder and any Stockholder Associated Person or (y)�between or among any stockholder and any Stockholder Associated Person and any other record or beneficial holder of the shares or units of any Company Securities (including their names) and (XII)�any other information relating to such stockholder and any Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such stockholder and any Stockholder Associated Person in support of the business proposed to be brought before the meeting or the election of any Proposed Nominee pursuant to, and in accordance with, Regulation 14A under the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (I)�and (XII) are referred to as �Disclosable Interests�); provided, however, that the Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee

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solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner,

(D) Without limiting the foregoing, any other substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with the Corporation), by security holdings or otherwise, of such stockholder, Proposed Nominee or Stockholder Associated Person, in the Corporation or any subsidiary thereof, other than an interest arising from the ownership of Company Securities where such stockholder, Proposed Nominee or Stockholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series, provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner, and

(E) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among the stockholder and/or any Stockholder Associated Person, on the one hand, and each Proposed Nominee, his or her respective affiliates and associates and any other persons with whom such proposed nominee (or any of his or her respective affiliates and associates) is Acting in Concert, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item�404 under Regulation S-K if such stockholder and any Stockholder Associated Person were the �registrant� for purposes of such rule and the Proposed Nominee were a director or executive officer of such registrant (the disclosures to be made pursuant to this paragraph are referred to as �Nominee Information�);

(iv) as to the stockholder giving the notice, any Stockholder Associated Person with an interest or ownership referred to in Sections�11(a)(3)(ii) or (iii)�of this Article II and any Proposed Nominee,

(A) the name and address of such stockholder, as they appear on the Corporation�s stock ledger, and the

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current name and business address, if different, of each such Stockholder Associated Person and any Proposed Nominee, and

(B) the investment strategy or objective, if any, of such stockholder and each such Stockholder Associated Person who is not an individual and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors or potential investors in such stockholder and each such Stockholder Associated Person; and

(v) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director or the proposal of other business on the date of such stockholder�s notice.

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(4)

Such stockholder�s notice shall, with respect to any Proposed Nominee, be accompanied by (i)�a certificate executed by the Proposed Nominee certifying that such Proposed Nominee (A)�will serve as a director of the Corporation if elected, (B)�is not and will not become a party to (I)�any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such Proposed Nominee, if elected as a director of the Corporation, will act or vote on any issue or question (a �Voting Commitment�) that has not been disclosed to the Corporation or (II)�any Voting Commitment that could limit or interfere with such Proposed Nominee�s ability to comply, if elected as a director of the Corporation, with such Proposed Nominee�s duties under applicable law, (C)�is not, and will not become a party to, any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed to the Corporation and (D)�would be in compliance, if elected as a director of the Corporation, and will comply with applicable publicly disclosed corporate governance, conflict of interest, confidentiality, stock ownership and trading policies and guidelines of the Corporation; and (ii)�an attached completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Corporation, upon request, to the stockholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a director in an election contest (even if an election contest is not involved), or would otherwise be required in

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�	connection with such solicitation, in each case pursuant to, and in accordance with, Regulation 14A (or any successor provision) under the Exchange Act and the rules thereunder, or would be required pursuant to the rules of any national securities exchange or over-the-counter market).

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(5)

Notwithstanding anything in this Section�11(a) of this Article II to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased, and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the proxy statement (as defined in Section�11(c)(3) of this Article II) for the preceding year�s annual meeting, a stockholder�s notice required by this Section�11(a) of this Article II shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary at the principal executive office of the Corporation not later than 5:00 p.m., Eastern Time, on the tenth day following the day on which such public announcement is first made by the Corporation.

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(b)

Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation�s notice of meeting. Nominations of individuals for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected only (i)�by or at the direction of the Board of Directors, or (ii)�provided that the special meeting has been called in accordance with Section�3(a) of this Article II for the purpose of electing directors, by any stockholder of the Corporation who is a stockholder of record (and, if such nomination is proposed at the request of any beneficial owner, at the request of a beneficial owner who was the beneficial owner of shares of stock of the Corporation) both at the time of giving of notice provided for in this Section�11 of this Article II and at the time of the special meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the notice procedures set forth in this Section�11 of this Article II. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more individuals to the Board of Directors, any stockholder may nominate an individual or individuals (as the case may be) for election as a director as specified in the Corporation�s notice of meeting, if the stockholder�s notice, containing the information required by Section�11(a)(3) of this Article II, shall be delivered to the secretary at the principal executive office of the Corporation not earlier than the 120th day prior to such special meeting and not later than 5:00 p.m., Eastern Time on the later of the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be

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�	elected at such meeting. The public announcement of a postponement or adjournment of a special meeting shall not commence a new time period for the giving of a stockholder�s notice as described above.

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(c)

General.

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(1)

If information submitted pursuant to this Section�11 of this Article II by any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall be inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section�11 of this Article II. Any such stockholder shall notify the Corporation of any inaccuracy or change (within two Business Days of becoming aware of such inaccuracy or change) in any such information. Upon written request by the secretary or the Board of Directors, any such stockholder shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (A)�written verification, satisfactory, in the discretion of the Board of Directors or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section�11 of this Article II, and (B)�a written update of any information submitted by the stockholder pursuant to this Section�11 of this Article II as of an earlier date. If a stockholder fails to provide such written verification or written update within such period, the information as to which written verification or a written update was requested may be deemed not to have been provided in accordance with this Section�11 of this Article II.

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(2)

Only such individuals who are nominated in accordance with this Section�11 of this Article II shall be eligible for election by stockholders as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with this Section�11 of this Article II. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section�11 of this Article II.

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(3)

For purposes of this Section�11, �the date of the proxy statement� shall have the same meaning as �the date of the company�s proxy statement released to shareholders� as used in Rule 14a-8(e) promulgated under the Exchange Act, as interpreted by the Securities and Exchange Commission from time to time. �Public announcement� shall mean disclosure (i)�in a press release reported by the Dow Jones News Service, Associated Press, Business Wire,

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�	PR Newswire or other widely circulated news or wire service or (ii)�in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to the Exchange Act.

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(4)

Notwithstanding the foregoing provisions of this Section�11 of this Article II, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section�11 of this Article II. Nothing in this Section�11 of this Article II shall be deemed to affect any right of a stockholder to request inclusion of a proposal in, or the right of the Corporation to omit a proposal from, the Corporation�s proxy statement pursuant to, and in accordance with, Rule 14a-8 (or any successor provision) under the Exchange Act. Nothing in this Section�11 of this Article II shall require disclosure of revocable proxies received by the stockholder or Stockholder Associated Person pursuant to a solicitation of proxies after the filing of an effective Schedule 14A by such stockholder or Stockholder Associated Person pursuant to, and in accordance with, Regulation 14A under the Exchange Act.

Section�12. CONTROL SHARE ACQUISITION ACT. Notwithstanding any other provision of the Charter or these Bylaws, Title�3, Subtitle�7 of the Maryland General Corporation Law, or any successor statute (the �MGCL�), shall not apply to any acquisition by any person of shares of stock of the Corporation. This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.

Section�13. TELEPHONIC MEETINGS. The Board of Directors or chairman of the meeting may permit one or more stockholders to participate in a meeting of stockholders by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means constitutes presence in person at the meeting.

ARTICLE III

DIRECTORS

Section�1. GENERAL POWERS. The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.

Section�2. NUMBER, TENURE AND RESIGNATIONS. At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board of Directors may establish, increase or decrease the number of directors, provided that the number thereof shall never be less than the minimum number required by the MGCL, nor more than 15, and further provided that the tenure of office of a director shall not be affected by any decrease in the number of directors. Any director of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the chairman of the board or the secretary. Any

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resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.

Section�3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of Directors shall be held immediately after and at the same place as the annual meeting of stockholders, no notice other than this Bylaw being necessary. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors. The Board of Directors may provide, by resolution, the time and place for the holding of regular meetings of the Board of Directors without other notice than such resolution.

Section�4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the chairman of the board, the chief executive officer, the president or a majority of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix any place as the place for holding any special meeting of the Board of Directors called by them. The Board of Directors may provide, by resolution, the time and place for the holding of special meetings of the Board of Directors without other notice than such resolution.

Section�5. NOTICE. Notice of any special meeting of the Board of Directors shall be delivered personally or by telephone, electronic mail, facsimile transmission, courier or United States mail to each director at his or her business or residence address. Notice by personal delivery, telephone, electronic mail or facsimile transmission shall be given at least 24 hours prior to the meeting. Notice by United States mail shall be given at least three days prior to the meeting. Notice by courier shall be given at least two days prior to the meeting. Telephone notice shall be deemed to be given when the director or his or her agent is personally given such notice in a telephone call to which the director or his or her agent is a party. Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Corporation by the director. Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Corporation by the director and receipt of a completed answer-back indicating receipt. Notice by United States mail shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be stated in the notice, unless specifically required by statute or these Bylaws.

Section�6. QUORUM. A majority of the directors shall constitute a quorum for transaction of business at any meeting of the Board of Directors, provided that, if less than a majority of such directors is present at such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to applicable law, the Charter or these Bylaws, the vote of a majority or other percentage of a particular group of directors is required for action, a quorum must also include a majority or such other percentage of such group.

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The directors present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough directors to leave fewer than required to establish a quorum.

Section�7. VOTING. The action of a majority of the directors present at a meeting at which a quorum is present shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws. If enough directors have withdrawn from a meeting to leave fewer than required to establish a quorum, but the meeting is not adjourned, the action of the majority of that number of directors necessary to constitute a quorum at such meeting shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable law, the Charter or these Bylaws.

Section�8. ORGANIZATION. At each meeting of the Board of Directors, the chairman of the board or, in the absence of the chairman, the vice chairman of the board, if any, shall act as chairman of the meeting. In the absence of both the chairman and vice chairman of the board, the chief executive officer or, in the absence of the chief executive officer, the president or, in the absence of the president, a director chosen by a majority of the directors present, shall act as chairman of the meeting. The secretary or, in his or her absence, an assistant secretary, or, in the absence of the secretary and all assistant secretaries, an individual appointed by the chairman of the meeting, shall act as secretary of the meeting.

Section�9. TELEPHONE MEETINGS. Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section�10. CONSENT BY DIRECTORS WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each director and is filed with the minutes of proceedings of the Board of Directors.

Section�11. VACANCIES. If for any reason any or all of the directors cease to be directors, such event shall not terminate the Corporation or affect these Bylaws or the powers of the remaining directors hereunder. Until such time as the Corporation becomes subject to Section�3-804(c)�of the MGCL, any vacancy on the Board of Directors for any cause other than an increase in the number of directors may be filled by a majority of the remaining directors, even if such majority is less than a quorum; any vacancy in the number of directors created by an increase in the number of directors may be filled by a majority vote of the entire Board of Directors; and any individual so elected as director shall serve until the next annual meeting of stockholders and until his or her successor is elected and qualifies. At such time as the Corporation becomes subject to Section�3-804(c)�of the MGCL and except as may be provided by the Board of Directors in setting the terms of any class or series of preferred stock, any vacancy on the Board of Directors may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum. Any director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is elected and qualifies.

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Section�12. COMPENSATION. Directors shall not receive any stated salary for their services as directors but, by resolution of the Board of Directors, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned or leased by the Corporation and for any service or activity they performed or engaged in as directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Directors or of any committee thereof and for their expenses, if any, in connection with each property visit and any other service or activity they perform or engage in as directors; but nothing herein contained shall be construed to preclude any directors from serving the Corporation in any other capacity and receiving compensation therefor.

Section�13. RELIANCE. Each director and officer of the Corporation shall, in the performance of his or her duties with respect to the Corporation, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Corporation whom the director or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the director or officer reasonably believes to be within the person�s professional or expert competence, or, with respect to a director, by a committee of the Board of Directors on which the director does not serve, as to a matter within its designated authority, if the director reasonably believes the committee to merit confidence.

Section�14. RATIFICATION. The Board of Directors or the stockholders may ratify and make binding on the Corporation any action or inaction by the Corporation or its officers to the extent that the Board of Directors or the stockholders could have originally authorized the matter. Moreover, any action or inaction questioned in any stockholders� derivative proceeding or any other proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a director, officer or stockholder, non-disclosure, miscomputation, the application of improper principles or practices of accounting or otherwise, may be ratified, before or after judgment, by the Board of Directors or by the stockholders, and if so ratified, shall have the same force and effect as if the questioned action or inaction had been originally duly authorized, and such ratification shall be binding upon the Corporation and its stockholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned action or inaction.

Section�15. CERTAIN RIGHTS OF DIRECTORS AND OFFICERS. A director who is not also an officer of the Corporation shall have no responsibility to devote his or her full time to the affairs of the Corporation. Any director or officer, in his or her personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have business interests and engage in business activities similar to, in addition to or in competition with those of or relating to the Corporation.

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ARTICLE IV

COMMITTEES

Section�1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors may appoint from among its members an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and one or more other committees, composed of one or more directors, to serve at the pleasure of the Board of Directors. The exact composition of each committee, including the total number of directors and the number of Independent Directors on each such committee, shall at all times comply with the listing requirements and rules and regulations of the New York Stock Exchange, as modified or amended from time to time, and the rules and regulations of the Securities and Exchange Commission, as modified or amended from time to time. For purposes of this section, �Independent Director� shall have the definition set forth in Section�303A.01 of the New York Stock Exchange Listed Company Manual, as amended from time to time, or such superseding definition as is hereafter promulgated by the New York Stock Exchange.

Section�2. POWERS. The Board of Directors may delegate to committees appointed under Section�1 of this Article IV�any of the powers of the Board of Directors, except as prohibited by law.

Section�3. MEETINGS. Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Directors. A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the committee. The act of a majority of the committee members present at a meeting shall be the act of such committee. The Board of Directors may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board shall otherwise provide. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another director to act in the place of such absent member.

Section�4. TELEPHONE MEETINGS. Members of a committee of the Board of Directors may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section�5. CONSENT BY COMMITTEES WITHOUT A MEETING. Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each member of the committee and is filed with the minutes of proceedings of such committee.

Section�6. VACANCIES. Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership of any committee, to fill any vacancy, to designate an alternate member to replace any absent or disqualified member or to dissolve any such committee.

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ARTICLE V

OFFICERS

Section�1. GENERAL PROVISIONS. The officers of the Corporation shall include a president, a secretary and a treasurer and may include a chairman of the board, a vice chairman of the board, a chief executive officer, one or more vice presidents, a chief operating officer, a chief financial officer, one or more assistant secretaries and one or more assistant treasurers. In addition, the Board of Directors may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable. The officers of the Corporation shall be elected annually by the Board of Directors, except that the chief executive officer or president may from time to time appoint one or more vice presidents, assistant secretaries and assistant treasurers or other officers. Each officer shall serve until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent.

Section�2. REMOVAL AND RESIGNATION. Any officer or agent of the Corporation may be removed, with or without cause, by the Board of Directors if in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by delivering his or her resignation to the Board of Directors, the chairman of the board, the chief executive officer, the president or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.

Section�3. VACANCIES. A vacancy in any office may be filled by the Board of Directors for the balance of the term.

Section�4. CHIEF EXECUTIVE OFFICER. The Board of Directors may designate a chief executive officer. In the absence of such designation, the chairman of the board shall be the chief executive officer of the Corporation. The chief executive officer shall have general responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Directors from time to time.

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Section�5. CHIEF OPERATING OFFICER. The Board of Directors may designate a chief operating officer. The chief operating officer shall have the responsibilities and duties as determined by the Board of Directors or the chief executive officer.

Section�6. CHIEF FINANCIAL OFFICER. The Board of Directors may designate a chief financial officer. The chief financial officer shall have the responsibilities and duties as determined by the Board of Directors or the chief executive officer.

Section�7. CHAIRMAN OF THE BOARD. The Board of Directors may designate from among its members a chairman of the board. The chairman of the board shall preside over the meetings of the Board of Directors. The chairman of the board shall perform such other duties as may be assigned to him or her by the Board of Directors.

Section�8. PRESIDENT. In the absence of a chief executive officer, the president shall in general supervise and control all of the business and affairs of the Corporation. In the absence of a designation of a chief operating officer by the Board of Directors, the president shall be the chief operating officer. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time.

Section�9. VICE PRESIDENTS. In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to such vice president by the chief executive officer, the president or the Board of Directors. The Board of Directors may designate one or more vice presidents as executive vice president, senior vice president, or vice president for particular areas of responsibility.

Section�10. SECRETARY. The secretary shall (a)�keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (b)�see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c)�be custodian of the corporate records and of the seal of the Corporation; (d)�keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (e)�have general charge of the stock transfer books of the Corporation; and (f)�in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Directors.

Section�11. TREASURER. The treasurer shall have the custody of the funds and securities of the Corporation, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board

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of Directors and in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Directors. In the absence of a designation of a chief financial officer by the Board of Directors, the treasurer shall be the chief financial officer of the Corporation.

The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and Board of Directors, at the regular meetings of the Board of Directors or whenever it may so require, an account of all his or her transactions as treasurer and of the financial condition of the Corporation.

Section�12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the chief executive officer, the president or the Board of Directors.

Section�13. COMPENSATION. The compensation of the officers shall be fixed from time to time by or under the authority of the Board of Directors and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a director.

ARTICLE VI

CONTRACTS, LOANS, CHECKS AND DEPOSITS

Section�1. CONTRACTS. The Board of Directors may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Corporation when duly authorized or ratified by action of the Board of Directors and executed by an authorized person.

Section�2. CHECKS AND DRAFTS. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board of Directors.

Section�3. DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited or invested from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors, the chief executive officer, the president, the chief financial officer, or any other officer designated by the Board of Directors may determine.

ARTICLE VII

STOCK

Section�1. CERTIFICATES. The Board of Directors may authorize the Corporation to issue some or all of the shares of any class or series of its stock without certificates. In the

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event that the Corporation issues shares of stock represented by certificates, such certificates shall be in such form as prescribed by the Board of Directors or a duly authorized officer, shall contain the statements and information required by the MGCL and shall be signed by the officers of the Corporation in the manner permitted by the MGCL. In the event that the Corporation issues shares of stock without certificates, to the extent then required by the MGCL, the Corporation shall provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates. There shall be no differences in the rights and obligations of stockholders based on whether or not their shares are represented by certificates. If shares of a class or series of stock are authorized by the Board of Directors to be issued without certificates, no stockholder shall be entitled to a certificate or certificates representing any shares of such class or series of stock held by such stockholder unless otherwise determined by the Board of Directors and then only upon written request by such stockholder to the secretary of the Corporation.

Section�2. TRANSFERS. All transfers of shares of stock shall be made on the books of the Corporation, by the holder of the shares, in person or by his or her attorney, in such manner as the Board of Directors or any officer of the Corporation may prescribe and, if such shares are certificated, upon surrender of certificates duly endorsed. The issuance of a new certificate upon the transfer of certificated shares is subject to the determination of the Board of Directors that such shares shall no longer be represented by certificates. Upon the transfer of any uncertificated shares, to the extent then required by the MGCL, the Corporation shall provide to the record holders of such shares a written statement of the information required by the MGCL to be included on stock certificates.

The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of Maryland.

Notwithstanding the foregoing, transfers of shares of any class or series of stock will be subject in all respects to the Charter and all of the terms and conditions contained therein.

Section�3. REPLACEMENT CERTIFICATE. Any officer of the Corporation may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, stolen or mutilated, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, destroyed, stolen or mutilated; provided, however, if such shares have ceased to be certificated, no new certificate shall be issued unless requested in writing by such stockholder and the Board of Directors has determined that such certificates may be issued. Unless otherwise determined by an officer of the Corporation, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Corporation a bond in such sums as it may direct as indemnity against any claim that may be made against the Corporation.

Section�4. FIXING OF RECORD DATE. The Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any

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meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of stockholders, not less than ten days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.

When a record date for the determination of stockholders entitled to notice of and to vote at any meeting of stockholders has been set as provided in this section, such record date shall continue to apply to the meeting if adjourned or postponed, except if the meeting is adjourned to a date more than 120 days or postponed to a date more than 90 days after the record date originally fixed for the meeting, in which case a new record date for such meeting may be determined as set forth herein.

Section�5. STOCK LEDGER. The Corporation shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate stock ledger containing the name and address of each stockholder and the number of shares of each class held by such stockholder.

Section�6. FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors may authorize the Corporation to issue fractional stock or authorize the issuance of scrip, all on such terms and under such conditions as it may determine. Notwithstanding any other provision of the Charter or these Bylaws, the Board of Directors may issue units consisting of different securities of the Corporation. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Corporation, except that the Board of Directors may provide that for a specified period securities of the Corporation issued in such unit may be transferred on the books of the Corporation only in such unit.

ARTICLE VIII

ACCOUNTING YEAR

The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution.

ARTICLE IX

DISTRIBUTIONS

Section�1. AUTHORIZATION. Dividends and other distributions upon the stock of the Corporation may be authorized by the Board of Directors, subject to the provisions of law and the Charter. Dividends and other distributions may be paid in cash, property or stock of the Corporation, subject to the provisions of law and the Charter.

Section�2. CONTINGENCIES. Before payment of any dividends or other distributions, there may be set aside out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends or

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other distributions, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine, and the Board of Directors may modify or abolish any such reserve.

ARTICLE X

INVESTMENT POLICY

Subject to the provisions of the Charter, the Board of Directors may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Corporation as it shall deem appropriate in its sole discretion.

ARTICLE XI

SEAL

Section�1. SEAL. The Board of Directors may authorize the adoption of a seal by the Corporation. The seal shall contain the name of the Corporation and the year of its incorporation and the words �Incorporated Maryland.� The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.

Section�2. AFFIXING SEAL. Whenever the Corporation is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word �(SEAL)� adjacent to the signature of the person authorized to execute the document on behalf of the Corporation.

ARTICLE XII

INDEMNIFICATION AND ADVANCE OF EXPENSES

To the maximum extent permitted by Maryland law in effect from time to time, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a)�any individual who is a present or former director or officer of the Corporation and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (b)�any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner, trustee, member or manager 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. The rights to indemnification and advance of expenses provided by the Charter and these Bylaws shall vest immediately upon election of a director or officer. The Corporation may, with the approval of its Board of Directors, provide such indemnification and advance for expenses to an individual who served a predecessor of the Corporation in any of the capacities described in (a)�or (b)�above and to any employee or agent of the Corporation or a predecessor of the Corporation. The indemnification and payment or reimbursement of expenses provided in these Bylaws shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment or reimbursement of expenses may be or may become entitled under any bylaw, regulation, insurance, agreement or otherwise.

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Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Charter or these Bylaws inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph of this Article XII with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

ARTICLE XIII

WAIVER OF NOTICE

Whenever any notice of a meeting is required to be given pursuant to the Charter or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice of such meeting, unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.

ARTICLE XIV

AMENDMENT OF BYLAWS

The Board of Directors shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.

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