SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
VININGS INVESTMENT PROPERTIES TRUST
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
<PAGE>
VININGS INVESTMENT PROPERTIES TRUST
3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500
June 10, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of Vinings Investment Properties Trust (the "Trust") to be held on Tuesday, June
29, 1999, at 10:00 a.m., local time, at Cobb Galleria Centre, Two Galleria
Parkway, Atlanta, GA 30339 (the "Annual Meeting").
The Annual Meeting has been called for the purpose of considering and
voting upon the election of seven Trustees, each to serve for a one-year term
and until the election and qualification of his or her successor, the adoption
of certain amendments to the Trust's Second Amended and Restated Declaration of
Trust, as amended (the "Declaration of Trust"), and such other business as may
properly come before the meeting or any adjournments or postponements thereof.
The Board of Trustees has fixed the close of business on June 4, 1999
as the record date for determining shareholders entitled to notice of and vote
at the Annual Meeting and any adjournments or postponements thereof.
The Board of Trustees of the Trust recommends that you vote "FOR" the
election of the seven nominees of the Board of Trustees as Trustees of the Trust
and "FOR" each of the amendments to the Declaration of Trust.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE
ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY
RETURNED YOUR PROXY CARD.
Very truly yours,
PETER D. ANZO
President and Chief Executive Officer
<PAGE>
VININGS INVESTMENT PROPERTIES TRUST
3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500
---------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
To be Held on Tuesday, June 29, 1999
--------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Vinings Investment Properties Trust (the "Trust") will be held on Tuesday, June
29, 1999, at 10:00 a.m., local time, at Cobb Galleria Centre, Two Galleria
Parkway, Atlanta, Georgia 30339 (the "Annual Meeting"), for the purpose of
considering and voting upon:
1. The election of seven Trustees, each to serve for a one-year
term and until the election and qualification of his or her
successor;
2. The approval of a proposal to amend the Trust's Second Amended
and Restated Declaration of Trust, as amended (the "Declaration
of Trust"), to decrease the total number of authorized shares of
beneficial interest from unlimited to 25,000,000 and to classify
all such shares as common shares of beneficial interest or, if
Proposal 3 is also approved by the Shareholders, to decrease the
total number of authorized shares of beneficial interest from
unlimited to 32,050,000 and to classify 25,000,000 of such shares
as common shares of beneficial interest;
3. The approval of a proposal to amend the Declaration of Trust to
authorize a new class of 7,050,000 preferred shares of beneficial
interest which, upon the affirmative vote of two-thirds of the
Board of Trustees, may be issued in such amounts, in one or more
series, and with such designations, preferences, limitations and
relative rights for each series as the Board of Trustees shall
determine;
4. The approval of a proposal to amend the Declaration of Trust to
(a) provide the Trust with a perpetual existence, (b) remove all
references and provisions relating to the Trust's being
externally-advised and the Trust's prior operations as a mortgage
real estate investment trust, (c) eliminate those provisions that
prohibit the Trust from investing in certain investments in which
a Trustee or officer of the Trust has an interest and (d)
eliminate those provisions that require the Trust to mail to
shareholders certain financial information that is already
required to be disclosed to all shareholders; and
5. Such other business as may properly come before the meeting or
any adjournments or postponements thereof.
Under the provisions of the Declaration of Trust, the Board of Trustees
has fixed the close of business on June 4, 1999 as the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting and any adjournments or postponements thereof. Only holders of record of
shares of beneficial interest, without par value, of the Trust at the close of
business on that date will be entitled to notice of and vote at the Annual
Meeting and any adjournments or postponements thereof.
In the event there are not sufficient votes with respect to the
foregoing proposals at the time of the Annual Meeting, the Annual Meeting may be
adjourned to permit further solicitation of proxies.
By Order of the Board of Trustees,
STEPHANIE A. REED
Secretary
June 10, 1999
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF
YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF YOU
HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
VININGS INVESTMENT PROPERTIES TRUST
3111 Paces Mill Road
Suite A-200
Atlanta, GA 30339
(770) 984-9500
-----------------------------
PROXY STATEMENT
-----------------------------
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Tuesday, June 29, 1999
This Proxy Statement and the enclosed Proxy Card are being furnished in
connection with the solicitation of proxies by the Board of Trustees of Vinings
Investment Properties Trust (the "Trust") for use at the Annual Meeting of
Shareholders of the Trust to be held on Tuesday, June 29, 1999, at 10:00 a.m.,
local time, at Cobb Galleria Centre, Two Galleria Parkway, Atlanta, Georgia
30339, and any adjournments or postponements thereof (the "Annual Meeting").
At the Annual Meeting, the shareholders of the Trust will be asked to
consider and vote upon the following matters:
1. The election of seven Trustees, each to serve for a one-year
term and until the election and qualification of his or her
successor;
2. The approval of a proposal to amend the Trust's Second Amended
and Restated Declaration of Trust, as amended (the "Declaration
of Trust"), to decrease the total number of authorized shares of
beneficial interest from unlimited to 25,000,000 and to classify
all such shares as common shares of beneficial interest or, if
Proposal 3 is also approved by the Shareholders, to decrease the
total number of authorized shares of beneficial interest from
unlimited to 32,050,000 and to classify 25,000,000 of such shares
as common shares of beneficial interest;
3. The approval of a proposal to amend the Declaration of Trust to
authorize a new class of 7,050,000 preferred shares of beneficial
interest which, upon the affirmative vote of two-thirds of the
Board of Trustees, may be issued in such amounts, in one or more
series, and with such designations, preferences, limitations and
relative rights for each series as the Board of Trustees shall
determine;
4. The approval of a proposal to amend the Declaration of Trust to
(a) provide the Trust with a perpetual existence, (b) remove all
references and provisions relating to the Trust's being
externally-advised and the Trust's prior operations as a mortgage
real estate investment trust, (c) eliminate those provisions that
prohibit the Trust from investing in certain investments in which
a Trustee or officer of the Trust has an interest and (d)
eliminate those provisions that require the Trust to mail to
shareholders certain financial information that is already
required to be disclosed to all shareholders; and
5. Such other business as may properly come before the meeting or
any adjournments or postponements thereof.
The Notice of Annual Meeting, Proxy Statement and Proxy Card are first
being mailed to shareholders of the Trust on or about June 10, 1999 in
connection with the solicitation of proxies for the Annual Meeting. The Board of
Trustees has fixed the close of business on June 4, 1999 as the record date for
the determination of shareholders entitled to notice of and to vote at the
Annual Meeting (the "Record Date"). Only holders of record of shares of
beneficial interest, without par value, of the Trust (the "Shares") at the close
of business on the Record Date will be entitled to notice of and to vote at the
Annual Meeting. As of May 18, 1999, there were 1,100,504 Shares outstanding and
entitled to vote at the Annual Meeting and 700 shareholders of record. Each
Share outstanding as of the close of business on the Record Date entitles the
holder thereof to one vote on each matter properly submitted at the Annual
Meeting.
VOTING
The representation in person or by proxy of at least a majority of the
outstanding Shares entitled to vote is necessary to provide a quorum at the
Annual Meeting. Each Share outstanding on the Record Date is entitled to one
vote. A quorum being present, the affirmative vote of a majority of the votes
cast at the Annual Meeting is required to elect Trustees, and the affirmative
vote of a majority of the outstanding Shares entitled to vote at the Annual
Meeting is required to approve each of Proposal 2, Proposal 3 and Proposal 4.
Shares that reflect abstentions or "broker non-votes" (i.e., shares represented
at the meeting held by brokers or nominees as to which instructions have not
been received from the beneficial owners or persons entitled to vote such shares
and the broker or nominee does not have discretionary voting power to vote such
shares) will be counted for purposes of determining whether a quorum is present
for the transaction of business at the meeting. With respect to the election of
Trustees, votes may be cast in favor of or withheld from each nominee; votes
that are withheld will be excluded entirely from the vote and will have no
effect. With respect to each of Proposal 2, Proposal 3 and Proposal 4,
abstentions and broker non-votes will have the same effect as votes against the
approval of such proposal.
The Annual Report of the Trust, including financial statements for the
fiscal year ended December 31, 1998 ("fiscal 1998"), is being mailed to
shareholders of the Trust concurrently with this Proxy Statement. The Annual
Report, however, is not a part of the proxy solicitation material.
PROXIES; REVOCATION OF PROXIES
Shareholders of the Trust are requested to complete, date, sign and
return the accompanying Proxy Card in the enclosed envelope. Shares represented
by properly executed proxies received by the Trust and not revoked will be voted
at the Annual Meeting in accordance with the instructions contained therein. If
instructions are not given therein, properly executed proxies will be voted
"FOR" the election of the seven nominees for Trustees set forth in Proposal 1
and "FOR" each of Proposal 2, Proposal 3 and Proposal 4. It is not anticipated
that any matters other than those set forth in this Proxy Statement will be
presented at the Annual Meeting. If other matters are presented, proxies will be
voted in accordance with the discretion of the proxy holders.
Any properly completed proxy may be revoked at any time before it is
voted on any matter (without, however, affecting any vote taken prior to such
revocation) by giving written notice of such revocation to the Secretary of the
Trust, or by signing and duly delivering a proxy bearing a later date, or by
attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.
EXPENSES OF SOLICITATION
All expenses of this solicitation will be borne by the Trust. Brokerage
firms, nominees, fiduciaries and other custodians have been requested to forward
proxy solicitation materials to the beneficial owners of Shares held of record
by such persons, and the Trust will reimburse such brokerage firms, nominees,
fiduciaries and other custodians for reasonable out-of-pocket expenses incurred
by them in connection therewith. In addition to solicitation of proxies by mail,
Trustees, officers and employees of the Trust, without receiving additional
compensation therefor, may solicit proxies from shareholders of the Trust by
telephone, facsimile, letter, in person or by other means.
PROPOSAL 1
ELECTION OF TRUSTEES
====================
The Board of Trustees of the Trust currently consists of seven members,
each of whom serves for a one-year term and until the election and qualification
of his or her successor.
At the Annual Meeting, seven Trustees will be elected to serve until the
2000 annual meeting of shareholders and until the election and qualification of
his or her successor. The Board of Trustees has nominated Peter D. Anzo,
Stephanie A. Reed, Phill D. Greenblatt, Henry Hirsch, Martin H. Petersen, James
D. Ross and Gilbert H. Watts, Jr., each of whom currently serves as a Trustee,
for election as Trustees. Certain information with respect to the persons
nominated by the Board of Trustees for election as Trustees is shown below under
"Information Regarding Trustees." Unless otherwise specified in the proxy, it is
the intention of the proxy holders to vote the Shares represented by each
properly executed proxy for the election as Trustees of each of the nominees.
Each of the nominees has agreed to stand for election and to serve if elected as
a Trustee. If any of the persons nominated by the Board of Trustees fails to
stand for election or is unable to accept election, however, proxies not marked
to the contrary will be voted in favor of the election of such other person as
the Board of Trustees may recommend.
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of a majority of the votes
cast at the Annual Meeting is necessary to elect a nominee as a Trustee of the
Trust.
The Board of Trustees of the Trust recommends that the Trust's
shareholders vote "FOR" the election of each of the seven
nominees as Trustees of the Trust.
INFORMATION REGARDING TRUSTEES
MEETINGS OF BOARD OF TRUSTEES AND COMMITTEES
During fiscal 1998, the Board of Trustees of the Trust held ten meetings.
Each Trustee who was a Trustee during fiscal 1998 attended at least 75% of the
total number of meetings of the Board of Trustees and meetings held by all
committees of the Board of Trustees on which such Trustee served. The Board of
Trustees has established an Audit Committee and a Compensation Committee.
Stephanie A. Reed, Gilbert H. Watts, Jr. and Martin H. Petersen were members of
the Audit Committee during fiscal 1998. The Audit Committee reviews the
financial statements of the Trust and the scope of the annual audit, monitors
the Trust's internal financial and accounting controls and recommends to the
Board of Trustees the appointment of independent certified public accountants.
The Audit Committee did not meet during fiscal 1998. James D. Ross, Gilbert H.
Watts, Jr. and Phill D. Greenblatt were members of the Compensation Committee
during fiscal 1998. The Compensation Committee reviews the Trust's executive
compensation policies and recommends the compensation levels of executive
officers of the Trust to the Board of Trustees. See "Report of the Compensation
Committee of the Board of Trustees on Executive Compensation." The Compensation
Committee met one time during fiscal 1998. The Board of Trustees does not have a
nominating committee.
COMPENSATION OF TRUSTEES
Trustees who are officers of the Trust do not receive compensation for
their services as Trustees. Trustees who are not officers of the Trust (each a
"Non-Employee Trustee") receive compensation for their services as the Board of
Trustees may from time to time determine. During fiscal 1998, the Non-Employee
Trustees did not receive an annual retainer but did receive $250 for each
regular and special meeting of the Board of Trustees attended.
In addition, the Non-Employee Trustees are eligible to participate in the
Trust's 1997 Stock Option and Incentive Plan (the "1997 Incentive Plan").
Pursuant to the 1997 Incentive Plan, in fiscal 1998, the Board of Trustees
granted to the Non-Employee Trustees stock options to purchase an aggregate of
27,000 Shares, subject to vesting and certain other conditions. Martin H.
Petersen, James D. Ross and Thomas B. Bender (Mr. Bender served as a Trustee
from January 1, 1998 through May 4, 1998, the date of the 1998 annual meeting of
shareholders) each received an option to purchase 3,000 Shares. Phill D.
Greenblatt, Henry Hirsch and Gilbert H. Watts, Jr. each received an option to
purchase 6,000 Shares. Each of these options was granted at a per Share exercise
price of $4.00 and becomes fully exercisable on June 9, 1999, the first
anniversary of the grant date.
INFORMATION REGARDING TRUSTEES
Set forth below is certain information regarding the current seven Trustees
of the Trust who are elected by the Trust's shareholders at each annual meeting
of the Trust.
------------------------------- ------------
Trustee
Name Since
------------------------------- ------------
Peter D. Anzo 1996
Stephanie A. Reed 1996
Phill D. Greenblatt 1996
Henry Hirsch 1996
Martin H. Petersen 1996
James D. Ross 1998
Gilbert H. Watts, Jr. 1996
------------------------------- ------------
PETER D. ANZO, age 45, has been Chief Executive Officer, President and
Chairman of the Board of Trustees since 1996. He is also Chief Executive Officer
and a director of The Vinings Group, Inc. and affiliates, a position he has held
since 1987. From 1990 through 1997 Mr. Anzo was Chief Executive Officer and a
director of A&P Investors, Inc. Mr. Anzo has been a delegate since 1995, on the
Legislative Committee since 1991 and is currently Chairman of the Political
Action Committee of the National Apartment Association. He has been past
Co-Chairman of the Government Affairs Committee since 1995, Co-Chairman of the
Affordable Housing Task Force and a director from 1992 until 1998 of the Atlanta
Apartment Association. He was a director of the Georgia Apartment Association
from 1993 to 1998. From 1983 until 1986, Mr. Anzo served as Vice President of
Acquisitions of First Investment Companies, where he was involved in the
management and acquisition of commercial apartment properties throughout the
United States. Mr. Anzo was Vice President, Dispositions of Balcor/American
Express from 1981 until 1983, where he was involved in the sale of apartment
communities and commercial properties in the United States. Prior to 1981, Mr.
Anzo was involved in the management, leasing, purchase and construction of real
property with The Beaumont Company and Linkletter Properties.
STEPHANIE A. REED, age 40, has been Vice President, Secretary, Treasurer
and a Trustee since 1996. Since 1991, Ms. Reed has been Vice President and a
director of The Vinings Group, Inc. and affiliates. She was also Vice President
of A&P Investors, Inc. from 1991 through 1997. From 1987 to 1991, Ms. Reed was
Vice President -- Development of The Sterling Group, Inc., a multifamily
development company located in Atlanta, Georgia where she was responsible for
all phases of development for multifamily projects. Prior to 1987, she served as
Vice President -- Finance of The Sterling Group, Inc., in the syndication and
management of multifamily projects. Prior to joining The Sterling Group, Inc.,
she was a certified public accountant for independent public accounting firms in
Atlanta, Georgia and Orlando, Florida.
PHILL D. GREENBLATT, age 53, has been a Trustee since 1996. Since 1975, Mr.
Greenblatt has been President of p.d.g. Real Estate Co., Inc., a real estate
brokerage and investment firm in multifamily, retail and industrial properties
in Colorado, Arizona and Florida. From 1971 through 1974, Mr. Greenblatt was a
commercial sales associate with Heller-Mark Realty. He also served as an
investment banking officer for the First National Bank of Denver from 1968 to
1971.
HENRY HIRSCH, age 62, has been a Trustee since 1996. Mr. Hirsch is Chairman
of the Board of Engineered Concepts, Inc., ECI Management Corporation and ECI
Realty, and is President of ECI Properties, positions which he has held for over
ten years. Mr. Hirsch has been involved in the real estate business since 1968,
specializing in multifamily apartment development. He and his related entities
currently own and/or manage over 3,500 apartment units, as well as office
buildings. The construction arm of his related entities has completed over
$250,000,000 of new construction and rehabilitation. Mr. Hirsch is a Certified
Apartment Property Supervisor with the National Apartment Association. He has
served on the Hotpoint Builders Advisory Council and National Association of
Home Builders, and has served as a director and past President of the Atlanta
Apartment Association. He has served as a Regional Vice President of the
National Apartment Association.
MARTIN H. PETERSEN, age 49, has been a Trustee since 1996. Mr. Petersen is
currently President and a director of The Hallmark Companies, Inc. and
affiliates, which are active in the ownership and management of multifamily
communities. He is also the President and a director of A&P Investors, Inc., a
position he has held since 1990. From 1987 through 1997 he was President and a
director of The Vinings Group, Inc. and affiliates. Since 1975 he has been a
licensed real estate broker in the State of Georgia, as well as a member of the
Institute of Real Estate Management. From 1984 through 1987 Mr. Petersen was
Vice President of Southeast United States Plaza Equities Management and Plaza
Pacific Equities, Inc., where he supervised the acquisition, disposition and
management of 5,700 apartment units located throughout the southeastern United
States. Mr. Petersen served as a Branch Manager of GK Properties of Atlanta,
Georgia, from 1979 to 1984, where he was responsible for overseeing the
operations of its southeastern United States offices, which included the
acquisition and management of 5,500 garden style apartment units. Prior to
joining GK Properties, from 1975 through 1979, he served as Vice President of
Stonehenge Properties and Stonehenge Realty Corp., where he oversaw the
management of the commercial office division and performed various other
functions, including the initiation of numerous feasibility, marketing and other
consulting studies for real estate investment trusts, financial institutions,
savings and loans and other owners of distressed and foreclosed properties. From
1971 to 1974, Mr. Petersen was a credit analyst for Dun & Bradstreet in its
Business Trades Division.
JAMES D. ROSS, age 49, has been a Trustee since 1998. Mr. Ross is currently
associated with Financial & Investment Management Group, a registered investment
advisor. From 1995 to early 1998, Mr. Ross was Executive Vice President of Aegon
U.S.A. Investment Management, an international insurance and investment concern.
At Aegon, Mr. Ross was responsible for interest rate risk management including
all commercial and residential mortgage backed securities holdings. From 1991 to
1995, he served as Chief Executive Officer of Southeastern Financial Services, a
registered investment advisor and an affiliated company of Kentucky Home Mutual.
Mr. Ross also served on the Board of Directors of Kentucky Home Mutual. From
1985 to 1991, Mr. Ross served as Treasurer and Chief Investment Officer for
Shenandoah Life Insurance Company. From 1975 to 1985, Mr. Ross was employed by
Maccabees Mutual Life Insurance Company where he served as an investment officer
and portfolio manager. Mr. Ross is a member of the State Bars of Kentucky and
Michigan.
GILBERT H. WATTS, JR., age 50, has been a Trustee since 1996. Mr. Watts is
Managing Partner of Watts Agent, L.P., a position he has held since 1971. Watts
Agent, L.P. manages various real estate investments including residential,
commercial and industrial properties. Mr. Watts is the Chairman of Radio Center
Dalton, Inc., a position he has held since 1985. Mr. Watts also is a Director of
The Community Group, Inc., a five bank holding company, and a Director of
various family businesses.
INFORMATION REGARDING EXECUTIVE OFFICERS
Listed below are the names of the executive officers of the Trust. The
names and ages of all executive officers of the Trust and principal occupation
and business experience during at least the last five years is discussed above
in "Information Regarding Trustees."
------------------- ----------------------------------------
Name Position
------------------- ----------------------------------------
Peter D. Anzo President, Chief Executive Officer
and Chairman of the Board of Trustees
Stephanie A. Reed Vice President, Secretary and Treasurer
The business experience of Mr. Anzo and Ms. Reed has been summarized above
under "Information Regarding Trustees."
EXECUTIVE COMPENSATION
The following sections of this Proxy Statement set forth and discuss the
compensation paid or awarded during the last three years to the Trust's Chief
Executive Officer. The Trust had no executive officers who earned in excess of
$100,000 during fiscal 1998.
SUMMARY COMPENSATION TABLE
The following table shows for the fiscal years ended December 31, 1996,
1997 and 1998 the annual compensation paid by the Trust to the Chief Executive
Officer and the four most highly compensated executive officers who earned in
excess of $100,000 during fiscal year 1998.
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (11) (i)
Securities
Other Annual Restricted Underlying LTIP All Other
Salary Bonus Compensation Stock Warrants/ Payouts Compensation
Award(s) Options
Year ($) ($) ($) ($) (#) ($) ($)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter D. Anzo (1) 1998 -- 40,000(2) -- -- 35,000(3) -- --
President, Chief 1997 -- -- -- -- 5,000(3) -- --
Executive Officer 1996 -- -- -- -- -- -- --
and Chairman of
the Board
<FN>
(1) Mr. Anzo became President, Chief Executive Officer and Chairman of the
Board of Trustees on February 29, 1996.
Mr. Anzo did not receive salary compensation from the Trust for
services rendered in his capacity as President, Chief Executive Officer and
Chairman of the Board of Trustees of the Trust during fiscal 1998 or during
the fiscal years ended December 31, 1997 and 1996. See "Report of the
Compensation Committee of the Board of Trustees on Executive Compensation
-- Compensation Policies for Executive Officers" below.
(2) Represents a bonus in the form of 10,000 Shares which had a market value as
of July 1, 1998, the date of the grant, of $40,000.
(3) Represents stock options granted pursuant to the Trust's 1997 Stock Option
and Incentive Plan.
</FN>
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth each grant of stock options during fiscal
1998 to the Chief Executive Officer (who is the only executive officer named in
the Summary Compensation Table). No stock appreciation rights ("SARs") have been
granted.
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term (3)
-------------------- -----------------
(a) (b) (c) (d) (e) (f) (g)
Number of
Securities % of Total
Underlying Options/SARs
Options Granted to Exercise or
Granted Employees in Base Price Expiration
(#)(1) Fiscal Year(2) ($/Sh) Date 5%($) 10%($)
------ -------------- ------ ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Peter D. Anzo 35,000 82% $4.00 6/10/08 $88,045 $223,124
<FN>
(1) All options were granted pursuant to the Trust's 1997 Stock Option and
Incentive Plan.
(2) Percentages are based on a total of 42,500 Shares underlying all options
granted to Officers of the Trust in fiscal 1998.
(3) Represents the value of the options granted at the end of the option terms
if the price of the Trust's Shares were to appreciate annually by 5% and
10% respectively. There is no assurance that the stock price will
appreciate at the rates shown in the table. If the stock price appreciates,
the value of Shares held by all shareholders will increase.
(4) Such options vest and become fully exercisable on the first anniversary of
the date of the grant or June 9, 1999.
</FN>
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END VALUES
The following table sets forth the Shares acquired and the value realized
upon exercise of stock options during fiscal 1998 by the Chief Executive Officer
(who is the only executive officer named in the Summary Compensation Table) and
certain information concerning the number and value of unexercised stock
options. There are currently no outstanding SARs.
<TABLE>
(a) (b) (c) (d) (e)
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/
Shares Acquired Value Options/Warrants at FY-End(#) Warrants at FY-End (#)(1)
Name on Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------------- -------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter D. Anzo -- -- 5,000 35,000 -- --
<FN>
(1) Equal to the market value of Shares covered by in-the-money options on
December 31, 1998, less the aggregate option exercise price. Options are
in-the-money if the market value of the Shares covered thereby is greater
than the exercise price of the options.
</FN>
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF TRUSTEES ON EXECUTIVE
COMPENSATION
The members of the Compensation Committee of the Board of Trustees of the
Trust, whose names are set forth below, have prepared the following report on
the Trust's executive compensation policies and philosophy for fiscal 1998.
GENERAL
The Compensation Committee consists of Mr. Ross, Mr. Watts and Mr.
Greenblatt, each of whom is a Non-Employee Trustee. The Compensation Committee
is generally responsible for developing the Trust's executive and management
compensation policies, including awards of equity-based compensation.
COMPENSATION POLICY REVIEW
During fiscal 1998, the Compensation Committee, together with the Board of
Trustees, did not complete its review of the compensation policies with respect
to executive compensation as the officers were not paid by the Trust in fiscal
1998. While it is still anticipated that the officers will receive compensation
during fiscal 1999, it has not been determined when the officers will be paid by
the Trust, but the Compensation Committee will complete its review and establish
the compensation of the executives of the Trust prior to such time.
COMPENSATION OF EXECUTIVE OFFICERS
Base Salary and Cash Bonuses
- ----------------------------
Officers of the Trust historically have not received compensation for their
services provided to the Trust. Until February 29, 1996, the date upon which an
affiliate of the Trust acquired approximately 73.3% of the outstanding Shares of
the Trust pursuant to a tender offer (the "Tender Offer"), the Trust was an
externally-advised real estate investment trust (a "REIT"), and accordingly, the
Trust had no employees and no compensation committee. Upon the consummation of
the Tender Offer, the relationship with the Trust's advisor was terminated and
the Trust became self-administered and established a compensation committee. As
a result, the Trustees currently anticipate that officers of the Trust may serve
as employees and may be compensated as such for services rendered to the Trust.
During Fiscal 1998, the officers of the Trust did not receive cash
compensation from the Trust for their services as officers, but did receive
bonuses in the form of Shares and options to purchase Shares. See "Equity and
Equity-Based Incentives" below. While a majority of their time was spent
handling Trust affairs, the officers were also officers of The Vinings Group,
Inc. ("The Vinings Group"), a privately held real estate company, from which
they received compensation and benefits. The Trust did not reimburse The Vinings
Group for any of the officers' salaries or benefits provided to them by The
Vinings Group. Should any officers of the Trust become employees and be directly
compensated by the Trust for such services, the Compensation Committee will
recommend to the Board of Trustees the annual salary, any salary adjustments and
any other benefits for executive officers of the Trust, all of which will be
targeted according to the salaries of executives holding similar offices and
having similar responsibilities within the Trust's industry segment. The
Compensation Committee may also consider factors such as industry experience and
executive retention.
Equity and Equity-Based Incentives
- ----------------------------------
Equity and equity-based incentive awards are designed to attract and retain
executives who can make significant contributions to the Trust's success, reward
executives for such significant contributions and give executives a longer-term
incentive to increase shareholder value. The size and frequency of equity and
equity-based incentive awards are recommended to the Board of Trustees by the
Compensation Committee, taking into account individual performance and
responsibilities, but without any specific performance measures. The
Compensation Committee may also recommend stock options for executive retention
purposes, taking into account, among other things, general industry practice. To
ensure that high levels of performance occur over the long-term, stock options
granted to executives typically vest over a period of time. All outstanding
options have been granted with an exercise price equal to or in excess of 100%
of the fair market value of the Trust's Shares on the grant date.
The 1997 Incentive Plan is the principal vehicle by which the Trust intends
to achieve the executive compensation policy objective of providing long-term
incentives to executive officers that will more closely align the interests of
such executives with those of the Trust's shareholders. Pursuant to the 1997
Incentive Plan, the Compensation Committee may recommend a variety of long-term
incentive awards based on the Shares of the Trust, including stock options (both
incentive options and non-qualified options), SARs, restricted stock,
unrestricted stock, performance shares and dividend equivalent rights.
In fiscal 1998, Peter D. Anzo and Stephanie A. Reed were each granted an
option to purchase 35,000 Shares and 7,500 Shares, respectively, at a per Share
exercise price of $4.00. Each of these options vests and becomes fully
exercisable on June 9, 1999, the first anniversary of the grant date.
Additionally, Peter D. Anzo and Stephanie A. Reed were each awarded a bonus in
the form of 10,000 Shares and 2,500 Shares, respectively, during fiscal 1998.
The Board of Trustees granted these awards to Mr. Anzo and Ms. Reed as
compensation for services rendered to the Trust as officers as they did not
receive cash compensation from the Trust for their services as officers. Any
value received by an executive officer from a stock option and any increases in
the value of stock received as a bonus depends entirely on increases in the
price of the Trust's Shares.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Peter D. Anzo
- -----------------
Mr. Anzo currently does not receive cash compensation for services he
provides to the Trust as its Chief Executive Officer. See "Compensation Policies
for Executive Officers" above. In order to encourage outstanding performance and
as an incentive to increase Trust performance and Share value, in fiscal 1998,
the Board of Trustees awarded Mr. Anzo an option to purchase 35,000 Shares, at a
per Share exercise price of $4.00, which option vests and becomes fully
exercisable on June 9, 1999, the first anniversary of the grant date.
Additionally, Mr. Anzo was awarded a bonus in the form of 10,000 Shares during
fiscal 1998.
FEDERAL TAX REGULATIONS APPLICABLE TO EXECUTIVE COMPENSATION
As a result of Section 162(m) of the Internal Revenue Code (the "Code"),
the Trust's deduction of executive compensation may be limited to the extent
that a "covered employee" (i.e., the chief executive officer or one of the four
highest compensated officers who is employed on the last day of the Trust's
taxable year) receives compensation in excess of $1,000,000 in such taxable year
of the Trust (other than performance-based compensation that otherwise meets the
requirements of Section 162(m) of the Code). The Trust intends to take
appropriate action to comply with such regulations, if applicable, in the
future.
James D. Ross, Chairman Gilbert H. Watts, Jr. Phill D. Greenblatt
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Anzo, the President, Chief Executive Officer and Chairman of the Board
of Trustees of the Trust, and Ms. Reed, Vice President, Secretary and Treasurer
of the Trust, will make general recommendations to and review with the
Compensation Committee the salary increases and bonus compensation of executives
and management other than themselves.
On February 4, 1999, Mr. Watts purchased the Trust's line of credit and the
Trust paid interest to Mr. Watts monthly at the rate of 8.50% from such date
through April 27, 1999, at which time the Trust obtained a new line of credit
which expires April 27, 2000. The entire proceeds from the new line of credit
were used to repay the outstanding indebtedness to Mr. Watts. For a detailed
discussion, see "Certain Relationships and Related Transactions" below.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Trust's Shares with the
cumulative total return of companies on the Standard & Poor's (S&P) 500 Stock
Index, the National Association of Real Estate Investment Trusts' ("NAREIT")
Equity REIT Total Return Index (the "Equity REIT Index") and the NAREIT Mortgage
REIT Total Return Index. The returns are based on the market price of the Shares
and assume the reinvestment of dividends. The calculation of total cumulative
return assumes a $100 investment in the Shares on December 31, 1993. The
comparisons in this table are historical and are not intended to forecast or be
indicative of possible future performance of the Trust's Shares.
Subsequent to the consummation of the Tender Offer in February 1996 and
consistent with its growth and expansion strategy, management of the Trust has
caused the Trust to expand into additional multifamily property markets, a line
of business which is covered by the Equity REIT Index. As a result of the change
in the line of business of the Trust, the Trustees believe that, for periods
subsequent to the Tender Offer, it is no longer appropriate to compare the
performance of the Trust's Shares to companies on the Mortgage REIT Index.
Accordingly, the performance of the Trust's Shares has been compared to both the
Mortgage REIT Index and the Equity REIT Index assuming a $100 investment on
December 31, 1993.
[GRAPH]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Vinings Investment Properties Trust 100 134 142 236 236 242
NAREIT Equity Index 100 103 119 161 193 160
NAREIT Mortgage Index 100 76 124 187 194 137
S&P 500 Index 100 101 139 171 228 294
</TABLE>
PROPOSALS TO AMEND
THE DECLARATION OF TRUST
The Board of Directors has approved and recommends that shareholders of the
Trust approve the amendments to the Declaration of Trust described in Proposal
2, Proposal 3 and Proposal 4. If any of Proposal 2, Proposal 3 or Proposal 4 is
approved by the shareholders of the Trust, the Trustees will take such action as
may be deemed necessary or desirable to effect such action, including the
execution and filing of a Third Amended and Restated Declaration of Trust which
will reflect the amendments contained in each of the approved proposals. The
following description of the terms of the proposed amendments does not purport
to be complete and is qualified in its entirety by reference to the full text of
the proposed Third Amended and Restated Declaration of Trust, which is attached
hereto as Exhibit A to this Proxy Statement. The current Declaration of Trust is
attached hereto as Exhibit B to this Proxy Statement. The Board of Trustees
urges shareholders to read carefully the following description and discussion of
the amendments and Exhibits A and B before voting on the proposals.
PROPOSAL 2
PROPOSAL TO DECREASE AUTHORIZED SHARES OF BENEFICIAL INTEREST AND
CLASSIFY SHARES AS COMMON SHARES OF BENEFICIAL INTEREST
Proposal 2 is a proposal to amend the Declaration of Trust to decrease the
total number of authorized shares of beneficial interest ("Shares") from
unlimited to 25,000,000 and to classify all such Shares as common shares of
beneficial interest ("Common Shares") or, if Proposal 3 is also approved, to
decrease the total number of authorized Shares from unlimited to 32,050,000 and
to classify 25,000,000 of such Shares as Common Shares, with the remaining
7,050,000 Shares being classified as preferred shares of beneficial interest
("Preferred Shares").
The Declaration of Trust currently authorizes the Board of Trustees to
issue an unlimited number of Shares without requiring the Board of Trustees to
seek shareholder approval for any specific issuance. If Proposal 2 is approved
by the shareholders of the Trust, the Board of Trustees would be required to
obtain shareholder approval for any issuance of Shares in excess of 25,000,000
and all such Shares would be classified as Common Shares. If, in addition to
approving Proposal 2, the shareholders of the Trust also approve Proposal 3, the
Board of Trustees would be required to obtain shareholder approval for any
issuance of Shares in excess of 32,050,000 and 25,000,000 of such Shares would
be classified as Common Shares and 7,050,000 Shares would be classified as
Preferred Shares. As of May 18, 1999, there were 1,100,504 Shares issued and
outstanding. In addition, as of May 18, 1999, 134,305 Shares were reserved for
issuance under the Trust's 1997 Stock Option and Incentive Plan.
The Board of Trustees believes that it is in the best interests of the
shareholders and the Trust to give shareholders the right to control issuances
of Shares by the Board of Trustees in excess of a certain number of Shares by
requiring that the shareholders approve any such issuances, rather than allowing
the Board of Trustees to unilaterally issue an unlimited number of Shares. The
Board of Trustees believes that following the approval of Proposal 2 by the
shareholders of the Trust (whether or not Proposal 3 is also approved by the
shareholders of the Trust), there will be sufficient authorized but unissued
Common Shares to provide the Trust with the flexibility it might need to issue
Common Shares in connection with possible future financings, stock dividends or
distributions, acquisitions or other proper purposes which may be identified by
the Board of Trustees in the future. The Board of Trustees currently has no
negotiations, understandings, agreements or arrangements concerning the issuance
of Common Shares, except that the Board of Trustees is currently considering
whether to authorize the issuance of up to 29,000 Shares to MFI Reality, Inc. as
a fee in connection with the Heritage Transaction, which transaction is
described in detail in the Trust's Current Report on Form 8-K filed with the SEC
on April 29, 1999.
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of the holders of a majority
of the outstanding Shares entitled to vote thereon is required to approve
Proposal 2.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR
PROPOSAL 2.
PROPOSAL 3
AUTHORIZE A NEW CLASS OF PREFERRED SHARES OF BENEFICIAL INTEREST
Proposal 3 is a proposal to amend the Declaration of Trust to authorize a
new class of 7,050,000 Preferred Shares which, upon the affirmative vote of
two-thirds of the members of the Board of Trustees, may be issued in such
amounts, in one or more series, and with such designations, preferences,
limitations and relative rights for each series as the Board of Trustees shall
determine.
The purpose of this amendment is to provide the Board of Trustees added
flexibility by having Preferred Shares available for issuance in connection with
possible future transactions, such as financings, strategic alliances, corporate
mergers, acquisitions and other uses not presently determinable and as may be
deemed to be feasible and in the best interests of the Trust. The Preferred
Shares will have such designations, preferences, conversion rights, cumulative,
relative, participating, optional or other rights, including voting rights,
qualifications, limitations or restrictions thereof as are determined by the
Board of Trustees in its sole discretion, without further authorization by the
Trust's shareholders. By not specifying the rights of the additional Preferred
Shares in the Declaration of Trust and by authorizing the Board of Trustees to
determine such rights by resolution, the Board of Trustees will retain maximum
flexibility for the purposes described above.
It is not possible to determine the actual effect of the Preferred Shares
on the rights of the shareholders of the Trust until the Board of Trustees
determines the rights of the holders of a series of the Preferred Shares.
However, such effects might include: (i) restrictions on the payment of
dividends to holders of Shares or Common Shares, as the case may be; (ii)
dilution of voting power to the extent that the holders of Preferred Shares are
given voting rights; (iii) dilution of the equity interests and voting power if
the Preferred Shares are convertible into Shares or Common Shares, as the case
may be; and (iv) restrictions upon any distribution of assets to the holders of
Shares or Common Shares, as the case may be, upon liquidation or dissolution and
until the satisfaction of any liquidation preference granted to the holders of
Preferred Shares.
The Board of Trustees will make the determination to issue shares of
Preferred Shares based upon its judgment as to the best interests of the
shareholders and the Trust. Although the Board of Trustees has no present
intention of doing so, it could issue shares of Preferred Shares (within the
limits imposed by applicable law) that could, depending on the terms of such
series, make more difficult or discourage an attempt to obtain control of the
Trust by means of a merger, tender offer, proxy contest or other means. When in
the judgment of the Board of Trustees such action would be in the best interests
of the shareholders and the Trust, the issuance of Preferred Shares could be
used to create voting or other impediments or to discourage persons seeking to
gain control of the Trust, for example, by the sale of Preferred Shares to
purchasers favorable to the Board of Trustees. In addition, the Board of
Trustees could authorize holders of a series of Preferred Shares to vote either
separately as a class or with the holders of Shares or Common Shares, as the
case may be, on any merger, sale or exchange of assets by the Trust or any other
extraordinary corporate transaction. The existence of the additional authorized
Preferred Shares could have the effect of discouraging unsolicited takeover
attempts. The issuance of new Preferred Shares could also be used to dilute the
capital stock ownership of a person or entity seeking to obtain control of the
Trust should the Board of Trustees consider the action of such entity or person
not to be in the best interests of the shareholders and the Trust. The Board of
Trustees currently has no negotiations, understandings, agreements or
arrangements concerning the issuance of Preferred Shares.
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of the holders of a majority
of the outstanding Shares entitled to vote thereon is required to approve
Proposal 3.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR
PROPOSAL 3.
PROPOSAL 4
Proposal 4 is a proposal to amend the Declaration of Trust to (a) provide
the Trust with a perpetual existence, (b) remove all references and provisions
relating to the Trust's being externally-advised and the Trust's prior
operations as a mortgage real estate investment trust, (c) eliminate those
provisions that prohibit the Trust from investing in certain investments in
which a Trustee or officer of the Trust has an interest and (d) eliminate those
provisions that require the Trust to disclose certain publicly-available
financial information to shareholders on a quarterly basis.
PERPETUAL EXISTENCE
The Trustees have adopted a resolution approving, and recommending to the
Trust's shareholders for their approval, an amendment to the Declaration of
Trust to provide the Trust with a perpetual life, unless the Trust is earlier
terminated by the affirmative vote of the holders of at least a majority of the
outstanding Shares.
Prior the February 1996, the Trust (then known as Mellon Participating
Mortgage Trust, Commercial Properties Series 85/10) was a REIT, the purpose of
which was to invest in participating, shared appreciation, convertible and
fixed-rate mortgages secured by office, industrial and retail facilities located
throughout the United States (a "Mortgage REIT") and its original intent was to
terminate within approximately ten years, but in no event later than twenty
years. The Trustees were in the process of the orderly liquidation of assets and
the distribution of proceeds when the Trust entered into an agreement on
December 21, 1995 with an affiliate of the current management of the Trust to
commence a cash tender offer to acquire a minimum of a majority and a maximum of
85% of the outstanding Shares of the Trust (the "Tender Offer"). The purpose of
the Tender Offer was for the purchaser to acquire control of the Trust and
refocus its investments from mortgages to equity investments. Upon consummation
of the Tender Offer, management of the Trust caused the Trust to cease being a
Mortgage REIT and, consistent with the Trust's growth and expansion strategy,
the Trust has begun to rebuild its assets by expanding into the multifamily
markets. Therefore the original intent to terminate after approximately ten
years but in no event later than twenty years is no longer appropriate and is a
hindrance in furthering the Trust's growth and expansion strategy.
REMOVAL OF REFERENCES TO EXTERNAL ADVISOR AND MORTGAGE REIT
The Trustees have adopted a resolution approving, and recommending to the
Trust's shareholders for their approval, an amendment to the Declaration of
Trust that removes all references and provisions relating to (i) the Trust being
externally-advised and (ii) the Trust's prior operation as a Mortgage REIT in
the Declaration of Trust.
As described above, since the consummation of the Tender Offer, the
Trust has not been operated as a Mortgage REIT, but rather has expanded into the
multifamily property markets. Accordingly, references and provisions in the
Declaration of Trust relating to the Trust's prior operations as a Mortgage REIT
are inappropriate and should, therefore, be removed.
Furthermore, prior to the Tender Offer, the Trust was an externally-advised
REIT for which it paid advisory fees to an unrelated third party (the
"Advisor"). Upon the consummation of the Tender Offer, however, the relationship
with the Advisor was terminated and the Trust became self-administered.
Accordingly, references and provisions in the Declaration of Trust relating to
an external advisor are inappropriate and should, therefore, be removed.
INTERESTED TRANSACTIONS
The Trustees have adopted a resolution approving, and recommending to the
Trust's shareholders for their approval, an amendment to the Declaration of
Trust that eliminates the prohibition on the Trust's ability to invest, directly
or indirectly in an investment in (a) real property, (b) any indebtedness or
obligation that is secured or collateralized by an interest in real property or
(c) an entity, in which any Trustee is an investor, creditor or owner.
Since the consummation of the Tender Offer, management's growth and
expansion strategy has been to rebuild the Trust's assets by acquiring
multifamily properties that meet certain investment criteria. Execution of this
strategy may include the potential acquisition of certain properties within the
existing multifamily property portfolios of entities affiliated with management
of the Trust as well as the acquisition of properties from unaffiliated third
parties. In addition, it has been the Trustees intent for the Trust to
eventually become a self-managed REIT, through the purchase, merger or other
acquisition of the privately held management company affiliated with the
officers of the Trust.
The existing Declaration of Trust adequately protects the shareholders of
the Trust by requiring that any transaction with an affiliate of the Trust
receive the approval of a majority of Trustees that do not have any interest in
such transaction only after a determination has been made that (a) the
transaction is fair and reasonable to the Trust and its shareholders and (b) the
terms of such transaction are at least as favorable as the terms of any
comparable transactions made on an arm's-length basis. The Board of Trustees
believes that the Declaration of Trust currently provides the shareholders of
the Trust with adequate protection and that it is in the best interests of the
Trust and its shareholders to provide the Trust with the ability to invest,
directly or indirectly, in an investment in which a Trustee or officer (or an
affiliated person) has an interest so that the Trust may more effectively pursue
its growth and expansion strategy.
ELIMINATION OF REPORTING REQUIREMENTS
The Trustees have adopted a resolution approving, and recommending to the
Trust's shareholders for their approval, an amendment to the Declaration of
Trust to remove certain reporting requirements, which require the Trust to
disclose to each shareholder, on a quarterly basis, the costs of raising capital
and, as applicable, the source of all dividends and distributions.
The Trust is required to report through its filings with the Securities and
Exchange Commission all material transactions that have occurred, including the
costs of raising capital and the source of all dividends and distributions of
shareholders. This information is made public and is readily available from a
number of sources including, at any time, by request from the Trust. In
addition, Internal Revenue Code requirements dictate that all dividend and
distribution information be reported timely to shareholders. The Trustees
believe that the requirements in the Declaration of Trust could be interpreted
to mean that additional and costly reporting could be required, in addition to
the regulatory requirements that already exist, and that the removal of these
requirements is in the best interests of the Trust and its shareholders because
such action will lessen the administrative burdens and additional costs that
such reporting requirements could place on the Trust.
VOTE REQUIRED FOR APPROVAL
A quorum being present, the affirmative vote of the holders of a majority
of the outstanding Shares entitled to vote thereon is required to approve
Proposal 4.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR
PROPOSAL 4.
PRINCIPAL AND MANAGEMENT SHAREHOLDERS
The following table sets forth, to the best knowledge and belief of the
Trust, certain information regarding the beneficial ownership of the Trust's
Shares as of May 18, 1999 by (i) each person known by the Trust to be the
beneficial owner of more than 5% of the outstanding Shares, (ii) each of the
Trustees, (iii) each of the executive officers of the Trust and (iv) all of the
Trust's executive officers and Trustees as a group.
<TABLE>
<CAPTION>
Shares
Trustees, Executive Officers Beneficially Percent of
and 5% Shareholders Owned (1) Class (2)
------------------- --------- ---------
<S> <C> <C>
Financial & Investment Management Group, Ltd.................. 310,758(3) 28.24%
Paul H. Sutherland, CFP, President
417 St. Joseph Street
P.O. Box 40
Suttons Bay, MI 49682
Clifford K. Watts............................................. 90,000(4) 8.18%
6565 Red Hill Road
Boulder, CO 80302
Peter D. Anzo................................................. 138,312(5) 12.13%
Stephanie A. Reed............................................. 25,018(6) 2.25%
Phill D. Greenblatt........................................... 32,505(7) 2.93%
Henry Hirsch.................................................. 68,512(8) 6.17%
Martin H. Petersen............................................ 96,785(9) 8.73%
James D. Ross................................................. 4,000(10) *
Gilbert H. Watts, Jr.......................................... 11,855(11) 1.06%
----------
All Trustees and officers as a group (7 persons) 376,987(12) 31.69%
<FN>
------------------
* Less than 1%
(1) Beneficial share ownership is determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended. Accordingly, a beneficial
owner of a security includes any person who, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise
has or shares the power to vote such security or the power to dispose of
such security. The amounts set forth above as beneficially owned include
Shares owned, if any, by spouses and relatives living in the same home as
to which beneficial ownership may be disclaimed.
(2) Percentages are calculated on the basis of 1,100,504 Shares outstanding as
of May 18, 1999, together with applicable options to purchase Shares of
each shareholder.
(3) Based on an Amended Schedule 13D filed with the Securities and Exchange
Commission on or about April 20, 1999, Financial & Investment Management
Group, Ltd. ("FIMG") and Paul H. Sutherland, CFP, President, have shared
dispositive and voting power with respect to all such Shares.
(4) Based on a Schedule 13D filed with the Securities and Exchange Commission
on March 2, 1998.
(5) Includes 40,000 Shares that Mr. Anzo may acquire upon the exercise of
options within 60 days of May 18, 1999. Amounts reported herein do not
include 24,785 Shares beneficially owned by ANTS, Inc., ("ANTS"), which Mr.
Anzo may be deemed to beneficially own by virtue of his being a director,
officer and minority shareholder of ANTS. Mr. Anzo expressly disclaims
beneficial ownership of all such Shares and the filing of this report shall
not be deemed an admission that Mr. Anzo is the beneficial owner of such
Shares.
(6) Includes 12,500 Shares that Ms. Reed may acquire upon the exercise of
options within 60 days of May 18, 1999.
(7) Includes 8,500 Shares that Mr. Greenblatt may acquire upon the exercise of
options within 60 days of May 18, 1999.
(8) Includes 8,500 Shares that Mr. Hirsch may acquire upon the exercise of
options within 60 days of May 18, 1999.
(9) Includes 8,000 Shares that Mr. Petersen may acquire upon the exercise of
options within 60 days of May 18, 1999. Amounts reported herein do not
include 24,785 Shares beneficially owned by A&P Investors, Inc., ("A&P"),
which Mr. Petersen maybe deemed to beneficially own by virtue of his being
a director, officer and minority shareholder of A&P. Mr. Petersen expressly
disclaims beneficial ownership of all such Shares and the filing of this
report shall not be deemed an admission that Mr. Petersen is the beneficial
owner of such Shares.
(10) Includes 3,000 Shares that Mr. Ross may acquire upon the exercise of
options within 60 days of May 18, 1999.
(11) Includes 8,500 Shares that Mr. Watts may acquire upon the exercise of
options within 60 days of May 18, 1999. Mr. Watts may be deemed to
beneficially own 3,355 Shares by virtue of his position as Managing Partner
of Watts Agent, L.P. ("Watts LP"). Mr. Watts and Watts LP have shared
dispositive and voting power with respect to all such Shares.
(12) Includes 89,000 Shares that may be acquired by such persons upon the
exercise of options within 60 days of May 18, 1999.
</FN>
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Trust entered into management agreements with Vinings Properties, Inc.,
an affiliate of Mr. Anzo and Ms. Reed, to provide property management services
for The Thicket Apartments ("Thicket") and Windrush Apartments ("Windrush") for
a fee equal to a percentage of gross revenues plus a fee for data processing. A
total of $215,392 in management and data processing fees was incurred by the
Trust during 1998. On January 1, 1999, the Trust entered into new management
agreements with VIP Management, LLC, also an affiliate of Mr. Anzo and Ms. Reed,
to provide management services for Thicket, Windrush and Peachtree Business
Center ("Peachtree") on substantially the same terms as the previous agreements.
In addition, as a commitment to the rebuilding of the Trust, prior to 1998
The Vinings Group, Inc., an affiliate of Mr. Anzo and Ms. Reed and the parent
corporation of Vinings Properties, Inc., (collectively, "The Vinings Group"),
provided numerous services at no cost to the Trust relating to administration,
acquisition, and capital and asset advisory services. Certain direct costs paid
on the Trust's behalf were reimbursed to The Vinings Group and beginning January
1, 1998, The Vinings Group charged the Trust for certain overhead charges.
However, while the Trust has been in its initial growth stages, The Vinings
Group has been committed to providing as many services as possible to promote
the Trust's growth. A total of $45,000 was paid for 1998 to The Vinings Group
for shareholder services provided for the sole benefit of the Trust by one of
The Vinings Group's employees. In addition, a total of $105,000 was incurred for
the year ended December 31, 1998 to The Vinings Group for the reimbursement of
overhead expenses, which includes salaries and benefits for other employees
hired by The Vinings Group for the benefit of the Trust.
On June 28, 1998 the Trust renewed its line of credit in the amount of
$2,000,000 for six months, which expired on December 28, 1998. The Trust did not
renew the line of credit at that time and the bank informally extended the due
date to February 4, 1999 with interest continuing to be paid monthly until the
Trust secured alternative financing. On February 4, 1999 Mr. Watts, an
independent Trustee of the Trust, purchased the line of credit from the bank and
the Trust paid interest to Mr. Watts monthly at the annual rate of 8.50% from
such date through April 27, 1999. At that time, the Trust obtained a new line of
credit, the entire proceeds of which were used to repay the outstanding
indebtedness to Mr. Watts.
The Trust believes that all of the above relationships and transactions are
fair and reasonable and are on terms at least as favorable to the Trust as those
which might have been obtained with unrelated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Trust's officers, Trustees and beneficial owners of more than 10% of
the Trust's Shares are required under Section 16(a) of the Exchange Act to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Copies of those reports must also be furnished to the Trust. Based
solely on a review of the copies of reports and amendments thereto furnished to
the Trust and written representations that no other reports were required, the
Trust believes that during its 1998 fiscal year, no person who was a Trustee,
officer or greater than 10% beneficial owner of the Trust's Shares failed to
file on a timely basis any report required by Section 16(a), except in the case
of a certain report of Stephanie A. Reed and certain amendments to reports of
Peter D. Anzo, Stephanie A. Reed, Martin H. Petersen, Gilbert H. Watts, Jr.,
Phill D. Greenblatt, Henry Hirsch and Thomas B. Bender.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Shareholder proposals intended to be presented at the 2000 annual meeting
of shareholders of the Trust must be received by the Trust on or before February
10, 2000 in order to be considered for inclusion in the Trust's proxy statement
for such meeting. Such a proposal must also comply with the requirements as to
form and substance established by the SEC in order to be included in the proxy
statement and should be directed to: Secretary, Vinings Investment Properties
Trust, 3111 Paces Mill Road, Suite A-200, Atlanta, GA 30339.
INDEPENDENT AUDITORS
The Board of Trustees has selected the firm of Arthur Andersen LLP,
independent public accountants, as the auditors of the financial statements of
the Trust and its subsidiaries for its current fiscal year ending December 31,
1999. A member of Arthur Andersen LLP will be present at the Annual Meeting and
will be given the opportunity to make a statement and to answer any questions
any shareholder may have with respect to the financial statements of the Trust
for fiscal 1998.
The following disclosure appeared in the Trust's Current Report on Form 8-K
filed with the SEC on January 8, 1997:
On January 8, 1997, Vinings Investment Properties Trust (the "Registrant")
dismissed Ernst & Young LLP as independent public accountants for the
Registrant. For the fiscal year ended December 31, 1994 ("Fiscal 1994"), Kenneth
Leventhal & Company (succeeded by merger with Ernst & Young LLP) had examined
and reported upon the Registrant's financial statements and had served as the
Registrant's independent public accountants. For the fiscal year ended December
31, 1995 ("Fiscal 1995"), Ernst & Young LLP had examined and reported upon the
Registrant's financial statements and had served as the Registrant's independent
public accountants. For the fiscal year ended December 31, 1996 ("Fiscal 1996")
and through the dismissal of Ernst & Young LLP on January 8, 1997, Ernst & Young
LLP served as the Registrant's independent public accountants but did not
examine and/or report upon the Registrant's financial statements.
On January 9, 1997, the Registrant engaged Arthur Andersen LLP as the
independent public accountants to examine and report upon the Registrant's
financial statements for Fiscal 1996. The change in independent public
accountants followed a decision by management and approval by the Audit
Committee and the Board of Trustees, that it was in the best interest of the
Registrant to review the relationship between the Registrant and its independent
public accounting firm with respect to services provided and fees charged. The
Audit committee solicited and received proposals from, and interviewed Ernst &
Young LLP,
Deloitte & Touche LLP and Arthur Andersen LLP concerning audit and certain
tax services to be provided for Fiscal 1996 prior to making the decision to
dismiss Ernst & Young LLP and to engage Arthur Andersen LLP. During the
Registrant's two most recent fiscal years and any subsequent interim period
prior to engaging Arthur Andersen LLP, neither the Registrant nor anyone on its
behalf consulted Arthur Andersen LLP regarding any matter described in Item
304(a)(2)(i) or (ii) of Regulation S-K.
In connection with the audits of Fiscal 1994 and Fiscal 1995 and through
the dismissal of Ernst & Young LLP on January 8, 1997, there were no
disagreements with Ernst & Young LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to their satisfaction would have caused them to
make reference to the subject matter of the disagreement in connection with
their report. During the Registrant's two most recent fiscal years and through
the dismissal of Ernst & Young LLP on January 8, 1997, none of the kind of
events listed in paragraphs (A) through (D) of Item 304(a)(1)(v) of Regulation
S-K occurred.
Neither the audit reports of Kenneth Leventhal & Company on the
consolidated financial statements of the Registrant for Fiscal 1994 nor the
audit reports of Ernst & Young LLP on the consolidated financial statements of
the Registrant for Fiscal 1995 contained any adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope, or
accounting principles.
The Registrant has provided Ernst & Young LLP with a copy of the
disclosures it is making in this Current Report on Form 8-K prior to the filing
of this report with the Securities and Exchange Commission. The Registrant has
requested and received a letter from Ernst & Young LLP addressed to the
Securities and Exchange Commission stating that it agrees with the statements
made by the Registrant herein in response to Item 304(a) of Regulation S-K and
such letter is included in this filing as an exhibit.
OTHER MATTERS
The Board of Trustees does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are duly presented, proxies will be voted in
accordance with the best judgment of the proxy holders.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
VININGS INVESTMENT PROPERTIES TRUST
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
to be held on June 29, 1999
The undersigned hereby constitutes and appoints Peter D. Anzo and Stephanie A.
Reed, and each of them, as Proxies of the undersigned, with full power to
appoint his or her substitute, and authorizes each of them to represent and vote
all Shares of Beneficial Interest of Vinings Investment Properties Trust (the
"Trust") held of record as of the close of business on June 4, 1999, at the
Annual Meeting of Shareholders (the "Annual Meeting") of the Trust to be held at
Cobb Galleria Centre, Two Galleria Parkway, Atlanta, Georgia 30339, at 10:00
a.m. Eastern Time, on June 29, 1999, and at any adjournments or postponements
thereof.
When properly executed, this proxy will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is given, this proxy will be
voted "FOR" the election of the seven nominees for Trustees set forth in
Proposal 1 and "FOR" each of Proposal 2, Proposal 3 and Proposal 4. In their
discretion, the Proxies are each authorized to vote upon such other business as
may properly come before the Annual Meeting and any adjournments or
postponements thereof. A shareholder wishing to vote in accordance with the
Board of Trustees' recommendations need only sign and date this proxy and return
it in the enclosed envelope.
The undersigned hereby acknowledge(s) receipt of a copy of the accompanying
Notice of Annual Meeting of Shareholders, the Proxy Statement and the Trust's
Annual Report to Shareholders and hereby revoke(s) any proxy or proxies
heretofore given. This proxy may be revoked at any time before it is exercised.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
VININGS INVESTMENT PROPERTIES TRUST
Please vote and sign on the other side and return
promptly in the enclosed envelope.
Do not forget to date your proxy.
Please sign name exactly as shown. Where there is more than one holder, each
should sign. When signing as an attorney, administrator, guardian or trustee,
please add your title as such. If executed by a corporation or partnership, the
proxy should be signed by a duly authorized person, stating his or her title or
authority.
<PAGE>
- ------- Please mark vote
X as in this example
- --------
PROPOSAL 1. Proposal to elect seven Trustees, each to serve for a one-year
term until the election and qualification of his or her successor.
NOMINEES: Peter D. Anzo, Stephanie A. Reed, Phill D. Greenblatt, Henry
Hirsch, Martin H. Petersen, James D. Ross and Gilbert H. Watts, Jr.
-------- -------- --------
FOR AGAINST FOR ALL
EXCEPT
-------- -------- --------
If you do not wish your shares voted FOR a particular nominee, mark the FOR ALL
EXCEPT box and strike a line through that nominee's name. Your shares will be
voted for the remaining nominee(s).
PROPOSAL 2. To approve a proposal to amend the Trust's Declaration of Trust
to decrease the total number of authorized shares of beneficial interest from
unlimited to 25,000,000 and to classify all such shares as common shares of
beneficial interest or, if Proposal 3 is also approved by the shareholders, to
decrease the total number of authorized shares of beneficial interest from
unlimited to 32,050,000 and to classify 25,000,000 of such shares as common
shares of beneficial interest, as described in the Proxy Statement.
-------- -------- --------
FOR AGAINST ABSTAIN
-------- -------- --------
PROPOSAL 3. To approve a proposal to amend the Trust's Declaration of Trust
to authorize a new class of 7,050,000 preferred shares of beneficial interest
which, upon the affirmative vote of two-thirds of the Board of Trustees, may be
issued in such amounts, in one or more series, and with such designations,
preferences, limitations and relative rights for each series as the Board of
Trustees shall determine, as described in the Proxy Statement.
-------- -------- --------
FOR AGAINST ABSTAIN
-------- -------- --------
PROPOSAL 4. To approve a proposal to amend the Trust's Declaration of Trust
to (a) provide the Trust with a perpetual existence, (b) remove all references
and provisions relating to the Trust's being externally-advised and the Trust's
prior operations as a mortgage real estate investment trust, (c) eliminate those
provisions that prohibit the Trust from investing in certain investments in
which a Trustee or officer of the Trust has an interest and (d) eliminate those
provisions that require the Trust to mail to shareholders certain financial
information that is required to be disclosed to all shareholders, as described
in the Proxy Statement.
-------- -------- --------
FOR AGAINST ABSTAIN
-------- -------- --------
Proposal 5. In their discretion, the Proxies are each authorized to
vote upon such other business as may properly come before the Annual Meeting and
any adjournments or postponements thereof.
Please be sure to sign and date this proxy
Date: _________________________________
Signature(s): _________________________________
CHANGE OF _________________________________
ADDRESS? _________________________________
SECOND
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MELLON PARTICIPATING MORTGAGE TRUST
COMMERCIAL PROPERTIES SERIES 85/10
----------------------------------
INDEX
- ----- Page
----
THE TRUST; DEFINITIONS 2
Name 2
Place of Business 2
Nature of Trust 3
Purpose of the Trust 3
Definitions 3
INVESTMENT POLICY 9
General Statement of Policy 9
Additional Investments 9
TRUSTEES 10
Number, Term of Office, Qualifications of Trustees 10
Compensation and Other Remuneration 10
Resignation, Removal and Death of Trustees 10
Vacancies 11
Successor and Additional Trustees 11
Actions by Trustees 11
Unaffiliated Trustees 12
Committees 12
TRUSTEES' POWERS 13
Power and Authority of Trustees 13
Specific Powers and Authorities 13
By-Laws 18
Employment of Adviser, Employees, Agents, etc 18
Term 19
Activities of Adviser 19
Adviser Compensation 19
Operating Expenses 20
PROHIBITED ACTIVITIES 20
Prohibited Investments and Activities 20
Obligor's Default 22
Percentage Determinations 22
Shares 22
Legal Ownership of Trust Estate 23
Shares Deemed Personal Property 23
Share Record, Issuance and Transferability of Shares 23
Dividends and Distributions to Shareholders 24
Transfer Agent, Dividend Disbursing Agent and Registrar 24
Shareholders' Meetings and Consents 25
Proxies 25
Reports to Shareholders 25
Fixing Record Date 26
Notice to Shareholders 26
Shareholders' Disclosure; Trustees' Right to Refuse to
Transfer Shares; Limitation on Holdings; Redemption of Shares 26
Inspection by Shareholders 29
Limitation of Liability of Trustees and Officers 29
Limitation of Liability of Shareholders, Trustees and Officers 29
Express Exculpatory Clauses in Instruments 29
Indemnification and Reimbursement of Trustees and Officers 29
Right of Trustees and Officers to Own Shares or Other Property
and to Engage in Other Business 30
Transactions with Affiliates 31
Persons Dealing With Trustees or Officers 31
Reliance 32
Duration and Termination of Trust 32
Merger, etc 33
Amendment Procedure 34
Amendment, etc. Prior to First Public Offering of Shares 34
Applicable Law 34
Filing of Copies; References; Headings 35
Provisions of the Trust in Conflict With Law or Regulations 35
Binding Effect; Successors in Interest 37
Signatures and Acknowledgments
<PAGE>
SECOND
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MELLON PARTICIPATING MORTGAGE TRUST
COMMERCIAL PROPERTIES SERIES 85/10
-----------------------------------
THE DECLARATION OF TRUST of Mellon Participating Mortgage
Trust, Series 85/10 dated as of the 7th day of December, 1984, and previously
amended January 11, 1985 is hereby amended, effective February 6, 1985 by the
undersigned Trustees, who constitute all the Trustees of Mellon Participating
Mortgage Trust, Series 85/10, to make the amendments as set forth in the
following Amended and Restated Declaration of Trust of Mellon Participating
Mortgage Trust Commercial Properties Series 85/10:
The undersigned Trustees of Mellon Participating Mortgage
Trust, Commercial Properties Series 85/10 hereby declare that all property,
real, personal or mixed, tangible or intangible or of any other description now
held or hereafter acquired by or transferred to them in their capacity as
Trustees hereunder, together with the income and profits therefrom and the
proceeds thereof, shall be held by them in trust and shall be received, managed
and disposed of for the benefit of the Shareholders hereunder and in the manner
and subject to the terms and conditions herein provided.
WHEREAS, the Trustees named herein desire to form a trust for
the purposes of raising capital and utilizing such capital primarily to
invest in mortgage loans and other real estate related investments; and
WHEREAS, the Trustees named herein desire that such trust
qualify as a Real Estate Investment Trust under Sections 856-858 of the
Internal Revenue Code of 1954, as amended; and
WHEREAS, the beneficial interest in the assets of such trust
shall be divided into transferable shares of beneficial interest,
evidenced by certificates therefor, as hereinafter provided;
NOW THEREFORE, the Trustees named herein hereby declare that
they will hold all investments of every type and description which they may
acquire as such Trustees, together with the proceeds from the sale or other
disposition thereof, in trust, to manage, improve, hold and dispose of the same
for the benefit of the holders of record from time to time of the certificates
for shares of beneficial interest of such trust being issued and to be issued
hereunder and in the manner and subject to the provisions hereof, to wit:
ARTICLE I
THE TRUST; DEFINITIONS
1.1 NAME. The Trust created by this Declaration of Trust is
herein referred to as the "Trust" and shall be known by the name "Mellon
Participating Mortgage Trust, Commercial Properties Series 85/10." So far as may
be practicable, legal and convenient, the affairs of the Trust shall be
conducted and transacted under that name, which name shall not refer to the
Trustees individually or personally or to the beneficiaries or Shareholders of
the Trust, or to any officers, employees or agents of the Trust.
Under circumstances in which the Trustees determine that the
use of the name "Mellon Participating Mortgage Trust, Commercial Properties
Series 85-10" is not practicable, legal or convenient, they may as appropriate
use and adopt another name under which the Trust may hold property or operate in
any jurisdiction. Legal title to all the properties subject from time to time to
this Declaration of Trust shall be transferred to, vested and held by the
Trustees as joint tenants with right of survivorship as Trustees of this Trust;
provided that the Trustees shall have the power to cause legal title to any
property of the Trust to be held by and/or in the name of one or more of the
Trustees, or any other Person as nominee, on such terms, in such manner, and
with such powers as the Trustees may determine; and further provided that the
Trustees shall have the power to cause any property of the Trust to be held in
the custody of (i) any bank and that such bank may hold the property of the
Trust in the name of any nominee, partnership or nontaxable corporation, and
(ii) any depository system for the central handling of Securities.
Notwithstanding the foregoing provisions of this Section 1.1,
it is hereby acknowledged that Mellon Bank Corporation has a proprietary
interest in the name "Mellon." Accordingly, and in recognition of this right, at
any time that the Trust ceases to retain a subsidiary or affiliate of Mellon
Bank Corporation to perform the services of Adviser, the Trustees will, promptly
after receipt of a written request of Mellon Bank Corporation (if such request
is made within three months after such subsidiary or affiliate ceases to perform
such services of Adviser), change the name of the Trust to a name that does not
contain the name "Mellon" or any other word or words that might, in the sole
discretion of Mellon Bank Corporation, be susceptible of indication of some form
of relationship between the Trust and Mellon Bank Corporation or any subsidiary
or affiliate thereof. Consistent with the foregoing, it is specifically
recognized that Mellon Bank Corporation or one or more of its affiliates has in
the past and may in the future organize, sponsor or otherwise permit to exist
other investment vehicles (including vehicles for investment in real estate) and
financial and service organizations having the word "Mellon" as part of their
name, all without the need for any consent (and without the right to object
thereto) by the Trust.
1.2 PLACE OF BUSINESS. The Trust shall maintain an office, and
shall designate a resident agent for the service of process (whose name and
address shall be reported from time to time to the Secretary of State of
Massachusetts), in New York, New York. The Trust may have such other offices or
places of business within or without the Commonwealth of Massachusetts as the
Trustees may from time to time determine.
1.3 NATURE OF TRUST. The Trust is a trust or voluntary
association of the type referred to in Section 1 of Chapter 182 of the General
Laws of the Commonwealth of Massachusetts and commonly known as a business
trust. It is intended that the Trust elect to carry on business as a real estate
investment trust as described in the REIT Provisions of the Internal Revenue
Code as soon as and as long as it is deemed by the Trustees to be in the best
interest of the Shareholders to make such election. The Trust is not intended to
be, shall not be deemed to be, and shall not be treated as, a general
partnership, limited partnership, joint venture, corporation, or joint stock
company or association (but nothing herein shall preclude the Trust from being
taxable as an association under the REIT Provisions of the Internal Revenue
Code) nor shall the Trustees or Shareholders or any of them for any purpose be
deemed to be or be treated in any way whatsoever to be, liable or responsible
hereunder as partners or joint venturers or as agents of one another. The
relationship of the Shareholders to the Trustees shall be solely that of
beneficiaries of the Trust and their rights shall be limited to those conferred
upon them by this Declaration.
1.4 PURPOSE OF THE TRUST. The purpose of the Trust is to
purchase, hold, lease, manage, sell, exchange, develop, subdivide, joint
venture, mortgage, finance and improve real property and interests in real
property, including notes, bonds and other obligations secured by mortgages or
deeds of trust on real property, and in general to carry on any other acts in
connection with or arising out of the foregoing and to have and exercise all
powers that are available to voluntary associations formed under the laws of the
Commonwealth of Massachusetts and to do any or all of the things herein set
forth to the same extent as natural persons might or could do.
1.5 DEFINITIONS. The terms defined in this Section 1.5
whenever used in this Declaration shall, unless the context otherwise requires,
have the respective meanings hereinafter specified in this Section 1.5. In this
Declaration, words in the singular number include the plural and in the plural
number include the singular.
1.5.1 ADVISER. "Adviser" shall mean Mellon Real Estate
Investment Management Corporation or any other person (other than any individual
who is a direct employee of the Trust) retained by the Trustees consistent with
the provisions of Article V to manage and administer the day-to-day affairs of
the Trust.
1.5.2 AFFILIATED PERSON. An "Affiliated Person" of another
Person shall mean any Person who owns beneficially, directly or indirectly, 1%
or more of the outstanding capital stock, shares or equity interests of such
other Person or of any other Person which controls, is controlled by or is under
common control with such other Person or who is an officer, director, employee,
partner or trustee (excluding Unaffiliated Trustees not otherwise affiliated
with the entity) of such Person or of any other Person which controls, is
controlled by or is under common control with such Person.
1.5.3 ANNUAL MEETING OF SHAREHOLDERS. "Annual Meeting of
Shareholders" shall mean the meeting referred to in the first sentence of
Section 7.7.
1.5.4 ANNUAL REPORT. "Annual Report" shall mean the
Report referred to in Section 7.9.
1.5.5 Book Value. "Book Value" shall mean the value of an
asset or assets of the Trust on the books of the Trust before reserves for
depreciation or bad debts or other similar non-cash reserves, and before
deducting any Indebtedness or other liability in respect thereto.
1.5.6 BY-LAWS. "By-Laws shall mean the By-Laws referred
to in Section 4.3, if adopted.
1.5.7 DECLARATION. "Declaration" shall mean this Amended and
Restated Declaration of Trust of Mellon Participating Mortgage Trust, Commercial
Properties Series 85-10 and all amendments or modifications hereof. References
in this Declaration to "herein" and "hereunder" shall be deemed to refer to this
Declaration and shall not be limited to the particular text, Article or Section
in which such words appear.
1.5.8 FIRST MORTGAGE. "First Mortgage" shall mean a Mortgage
which takes priority or precedence over all other charges or liens upon the same
Real Property, other than a lessee's interest therein, and which must be
satisfied before such other charges are entitled to participate in the proceeds
of any sale. Such Mortgage may be upon a lessee's interest in Real Property.
Such priority shall not be deemed abrogated by liens for taxes, assessments
which are not delinquent or remain payable without penalty, contracts (other
than contracts for repayment of borrowed moneys) or leases, mechanics' and
materialmen's liens for work performed and materials furnished which are not in
default or are in good faith being contested, and other claims normally deemed
in the local jurisdiction not to abrogate the priority of a First Mortgage.
1.5.9 FIRST MORTGAGE LOAN. "First Mortgage Loan" shall
mean a Mortgage Loan secured or collateralized by a First Mortgage.
1.5.10 INDEBTEDNESS. "Indebtedness" shall mean the amount of
all obligations of the Trust for money borrowed, including all obligations
issued or assumed by the Trust as full or partial payment for property, in each
case except to the extent money shall have been set aside or deposited for the
payment thereof. "Indebtedness" shall be computed without any discount due to
the fact that the interest rate on financing associated with one or more
property acquisitions of the Trust is below a market rate of interest at the
time of any such acquisition.
1.5.11 JUNIOR MORTGAGE. "Junior Mortgage" shall mean a
Mortgage which (I) has the same priority or precedence over charges or
encumbrances upon Real Property as that required for a First Mortgage except
that it is subject to the priority of one or more Mortgages and (ii) must be
satisfied before such other charges or liens (other than prior Mortgages) are
entitled to participate in the proceeds of any sale.
1.5.12 JUNIOR MORTGAGE LOAN. "Junior Mortgage Loan" shall
mean a Mortgage Loan secured or collateralized by a Junior Mortgage, and also
includes any Subordinated Land Purchase-Leaseback.
1.5.13 LAND PURCHASE-LEASEBACK. "Land Purchase-Leaseback"
shall mean a transaction involving the purchase of the land on which
improvements are or are to be constructed, and the lease, generally to the
seller, of the land pursuant to a land or ground lease. In a "Subordinated Land
Purchase-Leaseback" transaction, the Trust's interest in the land will be
subject to a First Mortgage and other liens or security interests which are
liens on the entire Real Property, including the land.
1.5.14 LIMIT. "Limit" shall mean the number of Shares
described in Section 7.12.3.
1.5.15 MORTGAGE. "Mortgage" shall mean the security
interest in Real Property granted to secure a Mortgage Loan.
1.5.16 MORTGAGE LOAN. "Mortgage Loan" shall mean a note,
bond or other evidence of indebtedness or obligation which is secured or
collateralized by an interest in Real Property.
1.5.17 NET INCOME. "Net Income" for any period shall mean the
net income of the Trust for such period computed on the basis of its results of
operations for such period, excluding (i) any disposition fee or any incentive
fee payable to the Adviser, (ii) gains from the disposition of assets of the
Trust (including realized gains from the sale of Real Estate Investments), (iii)
amortization, depreciation or depletion of the assets of the Trust and (iv)
extraordinary items.
1.5.18 PERSON. "Person" shall include individuals,
corporations, limited partnerships, general partnerships, joint stock companies
or associations, joint ventures, associations, consortia, companies, trusts,
banks, trust companies, land trusts, common law trusts, business trusts, or
other entities and governments and agencies and political subdivisions thereof.
1.5.19 REAL ESTATE INVESTMENT. "Real Estate Investment" shall
mean any direct or indirect investment in any interest in Real Property
(including Land Purchase- Leaseback transactions) or in any Mortgage Loan, or in
any entity, partnership or venture whose principal purpose is to make any such
investment or investments.
1.5.20 REAL ESTATE INVESTMENT TRUST. "Real Estate Investment
Trust" and "REIT" shall mean a real estate investment trust as defined in the
REIT Provisions of the Internal Revenue Code, at such time as it is the policy
of the Trust (or, if applicable to a Person other than this Trust, then of such
other Person) to obtain the favorable federal income tax benefits available to a
qualified real estate investment trust.
1.5.21 REAL PROPERTY. "Real Property" shall mean and include
land, rights and interests in land, leasehold interests (including but not
limited to interests of a lessor or lessee therein), and any buildings,
structures, improvements, fixtures and equipment located on or to be located on
or used or to be used in connection with land, leasehold interests and rights in
land or interests in land, but does not include Mortgages, Mortgage Loans, or
interests therein.
1.5.22 REIT PROVISIONS OF THE INTERNAL REVENUE CODE. "REIT
Provisions of the Internal Revenue Code" shall mean Parts II and III of
Subchapter M of Chapter 1 of Subtitle A of the Internal Revenue Code of 1954, as
now enacted or hereafter amended, or successor statutes, other sections of said
Code referred to or incorporated in, or referring to or incorporating, any other
provisions of said Parts II or III, and applicable regulations under and rulings
with respect to the aforesaid provisions of said Code.
1.5.23 SECURITIES. "Securities" shall mean any stock, shares,
voting trust certificates, bonds, debentures, notes or other evidences of
Indebtedness or ownership or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for, receipts for, guarantees of, or warrants,
options or rights to subscribe, to purchase or acquire any of the foregoing.
1.5.24 SHARES. "Shares" shall mean the shares of beneficial
interest in the Trust as described in Section 7.1. "Excess Shares" shall mean
Shares described as such in Section 7.12.3.
1.5.25 SHAREHOLDERS. "Shareholders" shall mean as of any
particular time the holders of record of outstanding Shares at such time.
1.5.26 TOTAL ASSETS; Invested Assets; Net Assets; Base Assets.
"Total Assets" shall mean the total invested assets of the Trust, without
deducting therefrom any liabilities of the Trust and including depreciable
assets therein at the cost of such assets on the books of the Trust. "Invested
Assets" shall mean the aggregate Book Values of the Real Estate Investments of
the Trust. "Average Invested Assets" shall mean for any period the average of
the values of Invested Assets at the beginning of the period and at the end of
each month during such period. "Base Assets" shall mean the Book Value, or such
other value as the Trustees (including a majority of the Trustees not affiliated
with the Adviser) may determine to be the fair value of Total Assets under
management less cash and unsecured indebtedness; and "Average Base Assets" for
any period shall be the average of Base Assets at the beginning of the period
and at the end of each month during such period. "Net Assets" shall mean Total
Assets (other than intangibles) less total liabilities, calculated at least
quarterly on a basis consistently applied. Notwithstanding any other provision
of this Section 1.5.26, Total Assets, Invested Assets, Average Invested Assets,
Base Assets, Average Base Assets and Net Assets shall be computed without any
discount in the carrying amount of any assets due to the fact that the interest
rate on financing associated with one or more property acquisitions of the Trust
is below market rate of interest at the time of such acquisition.
1.5.28 TOTAL OPERATING EXPENSES. "Total Operating Expenses"
for any period shall mean all cash operating expenses, including additional
expenses paid directly or indirectly by the Trust to the Adviser, Affiliated
Persons of the Adviser, or third parties based upon their relationship with the
Trust, including loan administration, servicing, engineering, inspection and all
other expenses paid by the Trust, exclusive of:
(i) Interest and discounts;
(ii) Taxes and license fees;
(iii) Expenses connected directly with the issuance, sale and
distribution, or listing on a stock exchange, of Securities
of the Trust, including but not limited to underwriting and
brokerage discounts and commissions, private placement fees
and expenses, legal and accounting costs, printing, engraving
and mailing costs, and listing and registration fees; and
(iv) Expenses connected directly with the acquisition,
disposition, operation or ownership of Trust assets,
including but not limited to costs of foreclosure;
maintenance, repair and improvement of property; maintenance
and protection of the lien of mortgages; property management
fees; legal fees; premiums for insurance on property owned by
or mortgaged to the Trust; taxes; brokerage and acquisition
fees and commissions; appraisals fees; title insurance and
abstract expenses; provisions for depreciation, depletion and
amortization; disposition fees and subordinated real estate
commissions; and losses on the disposition of assets and
provisions for such losses.
1.5.29 TRUST. "Trust" shall mean the trust created by
this Declaration.
1.5.30 TRUSTEES. "Trustees" shall mean, as of any particular
time, Trustees holding office under this Declaration at such time, whether they
be the Trustees named herein or additional or successor Trustees, and shall not
include the officers, representatives or agents of the Trust or the
Shareholders; but nothing herein shall be deemed to preclude the Trustees from
also serving as officers, representatives or agents of the Trust or owning
Shares.
1.5.31 TRUST ESTATE. "Trust Estate" shall mean as of any
particular time any and all property, real, personal or otherwise, tangible or
intangible, transferred, conveyed or paid to the Trust or Trustees, and all
rents, income, profits and gains therefrom which at such time is owned or held
by the Trust or the Trustees.
1.5.32 UNAFFILIATED TRUSTEE. "Unaffiliated Trustee" shall mean
a Trustee who (i) is not an Affiliated Person of the Adviser or of any
Affiliated Person of the Adviser owns no interest in the Adviser or in any
Affiliated Person of the Adviser, and (ii) any Trustee who performs no services
for the Trust except in his capacity as a Trustee and who has no business or
professional relationship with the Adviser or any Affiliate of the Adviser. If a
member of a Trustee's immediate family could not be an Unaffiliated Trustee,
such Trustee shall not be considered an Unaffiliated Trustee.
1.5.33 UNIMPROVED REAL PROPERTY. "Unimproved Real Property"
shall mean an investment in Real Property which (a) is an equity interest in
Real Property which has not been acquired for the purpose of producing rental or
other operating income and (b) relates to land on which (i) no development or
construction is in progress, and (ii) no development or construction is planned
in good faith to commence within one year.
1.5.34 VALUATION. "Valuation" shall mean a determination, by
the Trustees or by a Person having no economic interest in such Real Property,
who in the sole judgment of the Trustees is properly qualified to make such a
determination, of the market value, as of the date of the valuation, of Real
Property in its existing state or in a state to be created.
ARTICLE II
INVESTMENT POLICY
2.1 GENERAL STATEMENT OF POLICY. It is the general policy of
the Trust that the Trustees invest the Trust Estate principally in investments
which will conserve and protect the Trust's invested capital, produce cash
distributions, and offer the potential for capital appreciation to be realized
upon the sale, refinancing or other disposition of such investments. To achieve
this objective the Trustees intend to invest the assets of the Trust in Mortgage
Loans and Land Purchase-Leasebacks, including those with equity enhancements,
and other real estate investments which offer the potential to achieve such
objective. The consideration paid for Real Property acquired by the Trust shall
ordinarily be based on the fair market value of the property as determined by a
majority of the Trustees. In cases where a majority of the Unaffiliated Trustees
so determine, such fair market value shall be as determined by a qualified
independent real estate appraiser selected by the Trustees, including a majority
of the Unaffiliated Trustees. The Trustees, including a majority of the
Unaffiliated Trustees, shall at least annually review the investment policies of
the Trust to determine that the policies being followed by the Trust are in the
best interests of the Shareholders, and each such determination and the basis
therefor shall be set forth in the minutes of meetings of the Trustees.
2.2 ADDITIONAL INVESTMENTS. To the extent that the Trust has
assets not otherwise invested in accordance with Section 2.1, the Trustees may
invest such assets in:
2.2.1 Obligations of or guaranteed or insured by the United
States Government or any agencies or political subdivisions thereof;
2.2.2 Obligations of or guaranteed by any state, territory or
possession of the United States of America or any agencies or political
subdivisions thereof;
2.2.3 Evidences of deposits in, or obligations of, banking
institutions, state and federal savings and loan associations and savings
institutions which are members of the Federal Deposit Insurance Corporation or
of the Federal Home Loan Bank System, or shares in money market funds (whether
or not insured), including those issued by an Affiliated Person of the Adviser;
2.2.4 Shares of other REITs, to the extent permitted by
the REIT provisions of the Internal Revenue Code; or
2.2.5 Other Securities and property to the extent not
inconsistent with the REIT Provisions of the Internal Revenue Code.
ARTICLE III
TRUSTEES
3.1 NUMBER, TERM OF OFFICE, QUALIFICATIONS OF TRUSTEES. There
shall be no fewer than 3 nor more than 9 Trustees, at least a majority of whom
shall be Unaffiliated Trustees. The initial Trustees shall be the signatories
hereto. The Trustees from time to time may fix the number of Trustees within the
range established in the Declaration of Trust and may change the range in the
authorized number of Trustees, provided that the lower end of the authorized
range shall not be fewer than three. Subject to the provisions of Section 3.3,
each Trustee shall hold office for a term of one year or until the election and
qualification of his successor. At each Annual Meeting of Shareholders, the
Shareholders shall elect successors to the Trustees, unless the number of
Trustees is then being reduced. There shall be no cumulative voting in the
election of Trustees. Trustees may be re-elected without limit as to the number
of times. A Trustee shall be an individual at least 21 years of age who is not
under legal disability. Unless otherwise required by law or by action of the
Trustees, no Trustee shall be required to give bond, surety or security in any
jurisdiction for the performance of any duties or obligations hereunder. The
Trustees in their capacity as Trustees shall not be required to devote their
entire time to the business and affairs of the Trust.
3.2 COMPENSATION AND OTHER REMUNERATION. The Trustees (other
than the Unaffiliated Trustees) shall be entitled to receive such reasonable
compensation for their services as Trustees as they may determine from time to
time. The Trustees shall also be entitled to receive, directly or indirectly,
remuneration for services rendered to the Trust in any other capacity,
including, without limitation, services as an officer of or consultant to the
Trust, legal, accounting or other professional services, or services as a
transfer agent, or underwriter, or otherwise. The Trustees shall be reimbursed
for their reasonable expenses incurred in connection with their services as
Trustees.
3.3 RESIGNATION, REMOVAL AND DEATH OF TRUSTEES. A Trustee may
resign at any time by giving written notice to the remaining Trustees at the
principal offices of the Trust. Such resignation shall take effect on the date
such notice is given or at any later time specified in the notice without need
for prior accounting. A Trustee may be removed at any time with or without cause
by vote or written consent of holders of a majority of the outstanding Shares
entitled to vote thereon or with cause by all remaining Trustees. For purposes
of the immediately preceding sentence "cause" shall include physical and/or
mental inability, due to a condition or illness which is expected to be of
permanent or indefinite duration, to perform the duties of a Trustee. A Trustee
may be removed at a special meeting of Shareholders. Upon the resignation or
removal of any Trustee, or his otherwise ceasing to be a Trustee, he shall
execute and deliver such documents as the remaining Trustees shall require for
the conveyance of any Trust property held in his name, shall account to the
remaining Trustee or Trustees as they require for all property which he holds as
Trustee and shall thereupon be discharged as Trustee. Upon the incapacity or
death of any Trustee, his legal representative shall perform the acts set forth
in the preceding sentence and the discharge mentioned therein shall run to such
legal representative and to the incapacitated Trustee or the estate of the
deceased Trustee as the case may be.
3.4 VACANCIES. If any or all of the Trustees cease to be
Trustees hereunder, whether by reason of resignations, removal, incapacity,
death or otherwise, such event shall not terminate the Trust or affect its
continuity. Until vacancies are filled, the remaining Trustee or Trustees (even
though fewer than three) may exercise the powers of the Trustees hereunder.
Vacancies (including vacancies created by increases in the number of Trustees)
may be filled for the unexpired term by the remaining Trustee or by a majority
of the remaining Trustees (which majority shall include a majority of the
remaining Trustees that are Unaffiliated Trustees if the vacant position was
formerly held by an Unaffiliated Trustee). If at any time there shall be no
Trustees in office, successor Trustees shall be elected by the Shareholders as
provided in Section 7.7.
3.5 SUCCESSOR AND ADDITIONAL TRUSTEES. The right, title, and
interest of the Trustees in and to the Trust Estate shall also vest in successor
and additional Trustees upon their qualification, and they shall thereupon have
all the rights and obligations of Trustees hereunder. Such right, title and
interest shall vest in the Trustees whether or not conveyancing documents have
been executed and delivered pursuant to Section 3.3 or otherwise. Appropriate
written evidence of the election and qualification of successor and additional
Trustees shall be filed with the records of the Trust and in such other offices
or places as the Trustees may deem necessary, appropriate or desirable. Upon the
resignation, removal or death of a Trustee, he (and in the event of his death,
his estate) shall automatically cease to have any right, title or interest in or
to any of the Trustee property, and the right, title and interest in such
Trustee in and to the Trust Estate shall vest automatically in the remaining
Trustees without any further act.
3.6 ACTIONS BY TRUSTEES. The Trustees may act with or without
a meeting. A quorum for all meetings of the Trustees shall be a majority of the
Trustees. Unless specifically provided otherwise in this Declaration, any action
of the Trustees may be taken at a meeting by vote of a majority of the Trustees
present at such meeting if a quorum is present, or without a meeting by written
consent of all of the Trustees. The decision of the Trust to invest in any Real
Estate Investment shall require the approval of a majority of the Unaffiliated
Trustees. Any agreement, deed, Mortgage, lease or other instrument or writing
executed by any one or more of the Trustees or by any one or more authorized
Persons shall be valid and binding upon the Trustees and upon the Trust when
authorized by action of the Trustees or as provided in the By-Laws, if the same
are adopted. Trustees and members of any committee of the Trustees may conduct
meetings by conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
An annual meeting of the Trustees shall be held at
substantially the same time as the Annual Meeting of Shareholders. Regular
meetings, if any, shall be held at such other times as shall be fixed by the
Trustees. No notice shall be required of an annual or a regular meeting of
Trustees.
Special meetings of the Trustees shall be called by the
Chairman or the President upon the request of any two Trustees and may be called
by the Chairman or the President on his own motion, on not less than two days'
notice to each Trustee if the meeting is to be held in person, and/or not less
than eight hours' notice if the meeting is to be held by conference telephone or
similar equipment. Such notice, which need not state the purpose of the meeting,
shall be by oral, telegraphic, telephonic or written communication stating the
time and place therefor. Notice of any special meeting need not be given to any
Trustee entitled thereto who submits a written and signed waiver of notice,
either before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to him.
Regular or special meetings of the Trustees may be held within
or without the Commonwealth of Massachusetts, at such places as shall be
designated by the Trustees. The Trustees may adopt such rules and regulations
for their conduct and the management of the affairs of the Trust as they may
deem proper and as are not inconsistent with this Declaration.
3.7 UNAFFILIATED TRUSTEES. In order that a majority of the
Trustees shall be Unaffiliated Trustees, if at any time, by reason of one or
more vacancies, there shall not be such a majority, then within 120 days after
such vacancy occurs, the continuing Trustee or Trustees then in office shall
appoint, pursuant to Section 3.4, a sufficient number of other Persons who are
Unaffiliated Trustees, so that there shall be such a majority. Notwithstanding
the provisions of Section 3.1, of the preceding sentence of this Section 3.7, or
of any other provision of this Declaration of Trust, however, there shall be no
requirement as to the election, appointment or incumbency of, or as to any
action by, Unaffiliated Trustees at any time that all of the outstanding Shares
of the Trust are owned by the Adviser and Affiliated Persons of the Adviser and
by employees of the Adviser and of such Affiliated Persons.
3.8 COMMITTEES. The Trustees may appoint from among their
number an executive committee and such other standing committees, including
without limitation investment, audit, nominating, and compensation committees,
or special committees as the Trustees determine. Each standing committee shall
consist of three or more members, a majority of whom shall not be Affiliated
Persons of the Adviser. Each committee shall have such powers, duties and
obligations as may be required by any governmental agency or other regulatory
body or as the Trustees may be deem necessary and appropriate. Without limiting
the generality of the foregoing, the executive committee shall have the power to
conduct the business and affairs of the Trust during periods between meetings of
the Trustees. The executive committee and other committees shall report their
activities periodically to the Trustees.
ARTICLE IV
TRUSTEES' POWERS
4.1 POWER AND AUTHORITY OF TRUSTEES. The Trustees, subject
only to the specific limitations contained in this Declaration, shall have,
without further or other authorization, and free from any power of control on
the part of the Shareholders, full, absolute and exclusive power, control and
authority over the Trust Estate and over the business and affairs of the Trust
to the same extent as if the Trustees were the sole owners thereof in their own
right, and to do all such acts and things as in their sole judgment and
discretion are necessary or incidental to, or desirable for, the carrying out of
any of the purposes of the Trust or conducting the business or the Trust. Any
determination made in good faith by the Trustees of the purposes of the Trust or
the existence of any power or authority hereunder shall be conclusive. In
construing the provisions of this Declaration, presumption shall be in favor of
the grant of powers and authority to the Trustees. The enumeration of any
specific power or authority herein shall not be construed as limiting the
general powers or authority or any other specified power or authority conferred
herein upon the Trustees.
4.2 SPECIFIC POWERS AND AUTHORITIES. Subject only to the
express limitations contained in this Declaration and in addition to any powers
and authorities conferred by this Declaration or which the Trustees may have by
virtue of any present or future statute or rule of law, the Trustees without any
action or consent by the Shareholders shall have and may exercise, at any time
and from time to time, the following powers and authorities which may or may not
be exercised by them in their sole judgment and discretion, and in such manner,
and upon such terms and conditions as they may, from time to time, deem proper:
4.2.1 To retain, invest and reinvest the capital or other
funds of the Trust and, for such consideration as they deem proper, to purchase
or otherwise acquire for cash or other property or through the issuance of
Shares or other Securities of the Trust and hold for investment real or personal
property of any kind, tangible or intangible, in entirety or in participation,
all without regard to whether any such property is authorized by law for the
investment of trust funds, and to possess and exercise all the rights, powers
and privileges appertaining to the ownership of the Trust Estate with respect
thereto.
4.2.2 To sell, rent, lease, hire, exchange, release,
partition, assign, mortgage, pledge, hypothecate, grant security interests in,
encumber, negotiate, convey, transfer or otherwise dispose of or grant interests
in all or any portion of the Trust Estate by deeds, financing statements,
security agreements and other instruments, trust deeds, assignments, bills of
sale, transfers, leases or Mortgages, for any of such purposes.
4.2.3 To enter into leases, contracts, obligations, and other
agreements for a term extending beyond the term of office of the Trustees and
beyond the possible termination of the Trust or for a lesser term.
4.2.4 To borrow money and give negotiable or non-negotiable
instruments therefor; to guarantee, indemnify or act as surety with respect to
payment or performance of obligations of third parties; to enter into other
obligations on behalf of the Trust; and to assign, convey, transfer, mortgage,
subordinate, pledge, grant security interests in, encumber or hypothecate the
Trust Estate to secure any of the foregoing.
4.2.5 To lend money, whether secured or unsecured, to any
Person, including any Affiliated Person.
4.2.6 To create reserve funds for any purpose.
4.2.7 To incur and pay out of the Trust Estate any charges or
expenses, and disburse any funds of the Trust, which charges, expenses or
disbursements are, in the opinion of the Trustees, necessary or incidental to or
desirable for the carrying out of any of the purposes of the Trust or conducting
the business of the Trust, including, without limitation, taxes and other
governmental levies, charges and assessments, of whatever kind or nature,
imposed upon or against the Trustees in connection with the Trust or the Trust
Estate or upon or against the Trust Estate or any part thereof, and for any of
the purposes herein.
4.2.8 To deposit funds of the Trust in or with banks, trust
companies, savings and loan associations, money market organizations and other
depositories or issuers of depository-type accounts, whether or not such
deposits will draw interest or be insured, the same to be subject to withdrawal
or redemption on such terms and in such manner and by such Person or Persons
(including any one or more Trustees, officers, agents or representatives) as the
Trustees may determine.
4.2.9 To enter into hedging transactions to minimize the
effect of interest rate fluctuations on investments made pursuant to Section 2.2
of this Declaration.
4.2.10 To possess and exercise all the rights, powers and
privileges appertaining to the ownership of all or any Mortgages or Securities
issued or created by, or interests in, any Person, forming part of the Trust
Estate, to the same extent that an individual might and, without limiting the
generality of the foregoing, to vote or give consent, request or notice, or
waive any notice, either in person or by proxy or power of attorney, with or
without power of substitution, to one or more Persons, which proxies and powers
of attorney may be for meetings or action generally or for any particular
meeting or action, and may include the exercise of discretionary powers.
4.2.11 To cause to be organized or assist in organizing any
Person under the laws of any jurisdiction to acquire the Trust Estate or any
part or parts thereof or to carry on any business in which the Trust shall
directly or indirectly have any interest, and to sell, rent, lease, hire,
convey, negotiate, assign, exchange or transfer the Trust Estate or any part of
parts thereof to or with any such Person in exchange for the Securities thereof
or otherwise, and to lend money to, subscribe for the Securities of, and enter
into any contracts with, any such Person in which the Trust holds or is about to
acquire Securities or any other interest.
4.2.12 To enter into joint ventures, general or limited
partnerships and any other lawful combinations or associations.
4.2.13 To elect or appoint officers of the Trust (which shall
include a Chairman, who will be a Trustee, and a President, a Treasurer and a
Secretary, and which may include one or more Vice Presidents and other officers
as the trustees may determine, and none of whom needs be a Trustee), who may be
removed or discharged at the discretion of the Trustees, such officers to have
such powers and duties, and to serve such terms, as may be prescribed by the
Trustees or by the By-Laws of the Trust, if adopted, or as may pertain to such
officers; subject to the provisions of article V, to retain an Adviser and to
pay the Adviser for its services so retained; subject to the provisions of
Section 8.5 and 8.6, to engage or employ any persons as agents, representatives,
employees, or independent contractors (including without limitation, real estate
advisers, investment advisers, transfer agents, registrars, underwriters,
accountants, attorneys at law, real estate agents, managers, appraisers,
brokers, architects, engineers, construction managers, general contractors or
otherwise) in one or more capacities, in connection with the management of the
Trust's affairs or otherwise, and to pay compensation from the Trust for
services in as many capacities as such Person may be so engaged or employed and
notwithstanding that any such Person is, or is an Affiliated Person of, a
Trustee or officer of the Trust; and, except as prohibited by law, to delegate
any of the powers and duties of the Trustees to any one or more Trustees,
agents, representatives, officers, employees, independent contractors or other
Persons, provided, however, that no such delegation shall be made to an
Affiliated Person of the Adviser except with the approval of a majority of the
Unaffiliated Trustees.
4.2.14 To determine whether moneys, Securities or other assets
received by the Trust shall be charged or credited to income or capital or
allocated between income and capital, including the power to amortize or fail to
amortize any part or all of any premium or discount, to treat all or any part of
the profit resulting from the maturity or sale of any asset, whether purchased
at a premium or at a discount, as income or capital, or apportion the same
between income and capital, to apportion the sales price of any asset between
income and capital, and to determine in what manner any expenses or
disbursements are to be borne as between income and capital, whether or not in
the absence of the power and authority conferred by this subsection such moneys,
Securities or other assets would be regarded as income or as capital or such
expense or disbursement would be charged to income or to capital; to treat any
dividend or other distribution on any investment as income or capital or to
apportion the same between income and capital; to provide or fail to provide
reserves for depreciation, amortization or obsolescence in respect of all or any
part of the Trust Estate subject to depreciation, amortization or obsolescence
in such amounts and by such methods as they shall determine; and to determine
the method or form in which the accounts and records of the Trust shall be kept
and to change from time to time such method or form.
4.2.15 To determine from time to time the value of all or any
part of the Trust Estate and of any services, Securities, property or other
consideration to be furnished to or acquired by the Trust, and from time to time
to revalue all or any part of the Trust Estate in accordance with such
Valuations or other information, which Valuations or other information may be
provided by the Adviser and/or by other Persons retained for the purpose, as the
Trustees, in their sole judgment, may deem necessary.
4.2.16 To collect, sue for, and receive all sums of money
coming due to the Trust, and to engage in, intervene in, prosecute, join,
defend, compound, compromise, abandon or adjust, by arbitration or otherwise,
any actions, suits, proceedings, disputes, claims, controversies, demands or
other litigation relating to the Trust, the Trust Estate or the Trust's affairs,
to enter into agreements therefor, whether or not any suit is commenced or claim
accrued or asserted and, in advance of any controversy, to enter into agreements
regarding arbitration, adjudication or settlement thereof.
4.2.17 To renew, modify, release, compromise, extend,
consolidate, or cancel, in whole or in part, any obligation to or of the Trust.
4.2.18 To purchase and pay for out of the Trust Estate
insurance contracts and policies insuring the Trust Estate against any and all
risks and insuring the Trust, the Trustees, the Shareholders, the officers of
the Trust, the Adviser or any or all of them, against any and all claims and
liabilities of every nature asserted by any person arising by reason of any
action alleged to have been taken or omitted by the Trust or by the Trustees,
Shareholders, officers, or the Adviser.
4.2.19 To cause legal title to any of the Trust Estate to be
held by or in the name of the Trustees or, except as prohibited by law, by or in
the name of the Trust or one or more of the Trustees or any other Person as the
Trustees may determine, on such terms and in such manner and with such powers
(not inconsistent with Section 1.1), and with or without disclosure that the
Trust or Trustees are interested therein.
4.2.20 To adopt a fiscal year and accounting method for the
Trust, and from time to time to change such fiscal year and accounting method,
and to engage a firm of independent public accountants to audit the financial
records of the Trust.
4.2.21 To adopt and use a seal (but the use of a seal shall
not be required for the execution of instruments or obligations of the Trust).
4.2.22 With respect to any Securities issued by the Trust, to
provide that the same may be signed by the manual signature of one or more
Trustees or officers, or Persons who have theretofore been Trustees or officers
or by the facsimile signature of any such Person (with or without
countersignature by a transfer agent, registrar, authenticating agent or other
similar Person), and to provide that ownership of such Securities may be
conclusively evidenced by the books and records of the Trust or any appropriate
agent of the Trust without the necessity of any certificate, all as determined
by the Trustees from time to time to be consistent with normal commercial
practices.
4.2.23 To declare and pay dividends and distributions as
provided in Section 7.5.
4.2.24 To adopt a dividend or distribution reinvestment or
similar such plan for the Trust, and to provide for the cost of the
administration thereof to be borne by the Trust.
4.2.25 To file any and all documents and take any and all such
other action as the Trustees in their sole judgment may deem necessary in order
that the Trust may lawfully conduct its business in any jurisdiction.
4.2.26 To participate in any reorganization, readjustment,
consolidation, merger, dissolution, sale or purchase of assets, lease or similar
proceedings of any corporation, partnership or other organization in which the
Trust shall have an interest and in connection therewith to delegate
discretionary powers to any reorganization, protective or similar committee and
to pay assessments and other expenses in connection therewith.
4.2.27 To cause to be organized or assist in organizing any
Person, which may or may not be a subsidiary of the Trust, under the laws of any
jurisdiction to acquire the Trust Estate or any part or parts thereof or to
carry on any business in which the Trust shall directly or indirectly have any
interest; and, also, subject to the provisions of this Declaration, to cause the
Trust to merge with such Person or any existing Person or to sell, rent, lease,
hire, convey, negotiate, assign, exchange or transfer the Trust Estate or any
part or parts thereof to or with any such Person or any existing Person in
exchange for the Securities thereof or otherwise, and to lend money to,
subscribe for the Securities of, and enter into any contracts with, any such
Person in which the Trust holds or is about to acquire Securities or any other
interest.
4.2.28 To determine whether or not, at any time or from time
to time, to attempt to cause the Trust to qualify or to cease to qualify for
taxation as a Real Estate Investment Trust, and to take all action deemed by the
Trustees appropriate in connection with maintaining or ceasing to maintain such
qualification.
4.2.29 To make any indemnification payment authorized by this
Declaration of Trust.
4.2.30 To do all other such acts and things as are incident to
the foregoing, and to exercise all powers which are necessary or useful to carry
on the business of the Trust, to promote any of the purposes for which the Trust
is formed, and to carry out the provisions of this Declaration.
4.3 BY-LAWS. The Trustees may, but are not required to, make,
adopt, amend or repeal By-Laws containing provisions relating to the business of
the Trust, the conduct of its affairs, its rights or powers and the rights or
powers of its Shareholders, Trustees or officers not inconsistent with law or
with this Declaration. Such By-Laws may provide for the appointment by the
Chairman and President of assistant officers or of agents of the Trust in
addition to those provided for in the foregoing Section 4.2.12, subject however
to the right of the Trustees to remove or discharge such officers or agents.
ARTICLE V
ADVISER, OTHER AGENTS AND OPERATING EXPENSES
5.1 EMPLOYMENT OF ADVISER, EMPLOYEES, AGENTS, ETC. The
Trustees are responsible for the general policies of the Trust and for such
general supervision of the business of the Trust conducted by all officers,
agents, employees, advisers, managers or independent contractors of the Trust as
may be necessary to ensure that such business conforms to the provisions of this
Declaration. However, the Trustees are not, and shall not be, required
personally to conduct the business of the Trust and, consistent with their
ultimate responsibility as stated above, the Trustees shall have the power to
retain an Adviser and/or to appoint, employ or contract with any Person
(including one or more of themselves or any corporation, partnership, or trust
in which one or more of them may be directors, officers, stockholders, partners
or trustees) as the Trustees may deem necessary or proper for the transaction of
the business of the Trust, and for such purpose may grant or delegate such
authority to any such Person as the Trustees may in their sole discretion deem
necessary or desirable without regard to whether such authority is normally
granted or delegated by trustees; provided, however, that any determination to
retain an Adviser which is an Affiliated Person of a Trustee shall be valid only
if made or ratified with the approval of a majority of the Unaffiliated
Trustees.
It shall be the duty of the Trustees to evaluate the
performance of the Adviser before entering into or renewing an advisory
contract, and the Unaffiliated Trustees have a fiduciary duty to the
Shareholders to supervise the relationship of the Trust with the Adviser.
The Trustees (subject to the provisions of Section 5.5) shall
have the power to determine the terms and compensation of the Adviser or any
other Person whom they may employ or with whom they may contract. The Trustees
may exercise broad discretion in allowing the Adviser to administer and regulate
the operations of the Trust, to act as agent for the Trust, to execute documents
on behalf of the Trustees, and to make executive decisions which conform to
general policies and general principles previously established by the Trustees.
5.2 TERM. The Trustees shall not enter into any contract with
an Adviser unless such contract has an initial term of not more than one year,
provides for annual renewal or extension thereafter and provides that it may be
terminated at any time by the Trustees, without penalty, upon 60 days written
notice or by the Adviser without penalty, upon 120 days written notice.
Termination of the Adviser's contract by the Trust may be by a majority of the
Trustees or a majority of the Unaffiliated Trustees. In the event of such
termination, the Adviser will cooperate with the Trust and take all reasonable
steps requested to assist the Trustees in making an orderly transition of such
advisory function.
5.3 ACTIVITIES OF ADVISER. The Adviser may administer the
Trust as its sole and exclusive function, or engage in other activities
including, without limitation, the rendering of advice to other investors and
the management of other investments or other real estate investment trusts with
similar investment objectives, including without limitation investors and
investments advised, sponsored or organized by the Adviser, except that, until
60% of the Trust's assets are invested in Real Estate Investments, the Adviser
and its Affiliates shall not sponsor or act as investment adviser or manager for
any other real estate investment trust with investment objectives similar to the
Trust's. The Trustees may request the Adviser to engage in certain other
activities which complement the Trust's investments, including real estate
acquisition and disposition services, renovation and rehabilitation services,
and the placement or brokerage of long-term mortgage loans or secondary mortgage
financing, which activities may include providing services requested by the
prospective mortgagees or mortgagors. Nothing in this Declaration shall limit or
restrict the right of any director, officer, employee or shareholder of the
Adviser, whether or not also a Trustee, officer or employee of the Trust, to
engage in any other business or to render services of any kind to any other
partnership, corporation, firm, individual, trust or association. The Adviser
may, with respect to any loan or other investment in which the Trust may
participate or allot a participation, render advice and service, with or without
remuneration, to each and every participant in that loan or other investment.
5.4 ADVISER COMPENSATION. The Trustees, including a majority
of the Unaffiliated Trustees, shall at least annually review generally the
performance of the Adviser in order to determine whether the compensation which
the Trust has contracted to pay to the Adviser is reasonable in relation to the
nature and quality of services performed and whether the provisions of the
contract with the Adviser are being carried out. Each such determination shall
be based on such of the following and other factors as the Trustees (including
the Unaffiliated Trustees) deem relevant, and shall be reflected in the minutes
of the meetings of the Trustees:
5.4.1 the size of the advisory fee in relation to the
size, composition and profitability of the Invested Assets of the Trust;
5.4.2 the success of the Adviser in generating
opportunities that meet the investment objectives of the Trust;
5.4.3 the rates charged to other REITs and to investors other
than REITs by advisers performing similar services;
5.4.4 additional revenues realized by the Adviser and its
Affiliated Persons through their relationship with the Trust, including loan
administration, underwriting or brokerage commissions, servicing, engineering,
inspection and other fees, whether paid by the Trust or by others with whom the
Trust does business;
5.4.5 the quality and extent of service and advice
furnished by the Adviser;
5.4.6 the performance of the Invested Assets of the Trust,
including income, conservation or appreciation of capital, frequency of problem
investments and competence in dealing with distress situations; and
5.4.7 the quality of the Invested Assets of the Trust in
relationship to any investments generated by the Adviser for its own account.
5.5 Operating Expenses. Within 60 days after the end of any
fiscal quarter of the Trust for which Total Operating Expenses (for the 12
months then ended) exceed limits adopted by the North American Securities
Administrators Association's Statement of Investment Policy For Real Estate
Investment Trusts, the Unaffiliated Trustee shall send to the Shareholders a
written disclosure of such fact.
<PAGE>
ARTICLE VI
PROHIBITED ACTIVITIES
6.1 PROHIBITED INVESTMENTS AND ACTIVITIES. The Trust shall not
engage in any of the following investment practices or activities:
6.1.1 Invest in any Junior Mortgage Loan unless (a) the
capital invested in such mortgage loan is adequately secured on the basis of the
equity of the borrower in the property underlying such investment and the
ability of the borrower to repay the mortgage loan, (b) the total amount of a
Junior Mortgage Loan which, taken together with all other Indebtedness secured
by the underlying Real Property, does not exceed 100% of the value of the
security therefor, (c) the total amount of a Junior Mortgage Loan which, taken
together with all other Indebtedness secured by the underlying Real Property and
senior or pari passu to that held by the Trust, does not exceed 90% of the value
of the security therefor, (d) the senior mortgage is held by a person other than
the Adviser or one of its Affiliates, and (3) total Junior Mortgage Loans will
not exceed 25% of the Trust's assets.
6.1.2 Invest in commodities, or in commodity future contracts
or effect short sales of commodities or Securities. Such limitation is not
intended to apply to investments in interest rate futures or short sales, when
used solely for hedging purposes.
6.1.3 Invest more than 1% of its Total Assets in contracts for
the sale of Real Property, unless such contracts are recordable in the chain of
title.
6.1.4 Issue Securities redeemable at the option of the
holders thereof.
6.1.5 Grant options or warrants to purchase Shares at an
exercise price, or for consideration which consists of services or is otherwise
than for cash, that in the judgment of the Trustees (including a majority of the
Unaffiliated Trustees in the case of the grant of any operation or warrant to
the Adviser or to any officer, director or employee of the Adviser or of the
Trust) is less than the fair market value of such Shares on the date of grant,
or which may be exercisable for a period in excess of 5 years from the date of
grant, or which are for a number of Shares that (when added to the number of
other Shares exercisable pursuant to all then outstanding options and warrants)
is in excess of 9.8% of the number of Shares on the date of grant. Warrants,
options or Share purchase rights that are issued ratably to the holders of all
Shares or another class of Securities, or as part of a financing arrangement are
not prohibited by, or to be included within the limitations of, the preceding
sentence of this Section 6.1.5.
6.1.6 Engage in underwriting or the agency distribution
of Securities issued by others.
6.1.7 Invest more than 10% of Total Assets in Unimproved Real
Property, or Mortgage Loans on Unimproved Real Property.
6.1.8 Engage in trading, as compared with investment,
activities.
6.1.9 Allow the aggregate borrowings of the Trust, secured and
unsecured, to exceed 100% of the Net Assets of the Trust, in the absence of a
determination by the Trustees (including a majority of the Unaffiliated
Trustees) that a higher level of borrowing is appropriate and in the interest of
the Trust; provided, however, that no higher level of borrowing shall be made
which if unsecured exceeds the limit provided in Section 6.1.10 or if secured
exceeds 300% of the net asset value of the property securing such borrowing as
determined by the lender. Any borrowing in excess of such 100% level shall be
disclosed to the Shareholders in the next quarterly report of the Trust.
6.1.10 Make any unsecured borrowing if such borrowing will
result in an asset coverage of less than 300% unless at the time of borrowing at
least 80% of the Trust's Total Assets consist of First Mortgage Loans. "Asset
coverage" for the purpose of this Section 6.1.10 means the ratio which the
Trust's Total Assets, less all liabilities other than Indebtedness for unsecured
borrowings, bears to the aggregate amount of all unsecured borrowings of the
Trust.
6.1.11 Acquire Securities in any company holding investments
or engaging in activities prohibited by this Section 6.1.
6.1.12 Pay fees and costs associated with (i) the organization
of the Trust, (ii) the sale of its Shares pursuant to its initial public
offering of Shares and (iii) the acquisition (including brokerage expenses) of
investments with the proceeds of such initial public offering, if the aggregate
amount for all such fees and costs covered by (i), (ii) and (iii) exceed 20% of
the gross selling price of such Shares in such initial public offering; or pay
fees of the type described in Section IV, Subdivisions F, G, H and I of the
North American Securities Administrators Association's Statement of Policy
regarding Real Estate Programs effective July 1, 1984 in amounts exceeding the
limitations set forth in such Subdivisions.
6.1.13 Issue debt securities unless the historical debt
service coverage (in the most recently completed fiscal year) as adjusted for
known changes is sufficient to property service that higher level of debt.
6.2 OBLIGOR'S DEFAULT. Notwithstanding any provision in any
Article of this Declaration, when an obligor to the Trust is in default under
the terms of any obligation to the Trust, the Trustees shall have the power to
pursue any remedies permitted by law which in their sole judgment are in the
interest of the Trust and the Trustees shall have the power to enter into any
necessary investment, commitment or obligation of the Trust resulting from the
pursuit of such remedies that are necessary or desirable to dispose of property
acquired in the pursuit of such remedies.
6.3 PERCENTAGE DETERMINATIONS. Whenever standards contained in
this Article VI are expressed in terms of a percentage, whether of value, Total
Assets, cost or otherwise, such percentage shall be determined at the time of
the issuance of a commitment by the Trust for a transaction covered by such
standard hereunder.
ARTICLE VII
SHARES AND SHAREHOLDERS
7.1 SHARES. The beneficial interest in the Trust shall be
divided into transferable units of a single class, all of which are designated
as Shares, each without par value, and each Share shall (except as provided in
Section 7.12) be identical in all respects with every other Share. The total
number of Shares the Trust shall have authority to issue shall be unlimited. The
Shares may be issued for such consideration as the Trustees shall determine,
including upon the conversion of convertible debt, or by way of share dividend
or share split in the discretion of the Trustees. Outstanding Shares shall be
transferable and assignable in like manner as are shares of stock of a
Massachusetts business corporation. Shares reacquired by the Trust shall no
longer be deemed outstanding and shall have no voting or other rights unless and
until reissued. Shares reacquired by the Trust may be canceled by action of the
Trustees. All Shares shall be fully paid and nonassessable by or on behalf of
the Trust upon receipt of full consideration for which they have been issued or
without additional consideration if issued by way of share dividend, share
split, or upon the conversion of convertible debt. The Shares shall not entitle
the holder to preference, preemptive, conversion, or exchange rights of any
kind, except as the Trustees may specifically determine with respect to any
Shares at the time of issuance of such Shares and except as specifically
provided by law.
7.2 LEGAL OWNERSHIP OF TRUST ESTATE. The legal ownership of
the Trust Estate and the right to conduct the business of the Trust are vested
exclusively in the Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest in the Trust conferred by their Shares issued
hereunder, and they shall have no right to compel any partition, division,
dividend or distribution of the Trust or any of the Trust Estate, nor can they
be called upon to share or assume any losses of the Trust or suffer an
assessment of any kind by virtue of their ownership of Shares.
7.3 SHARES DEEMED PERSONAL PROPERTY. The Shares shall be
personal property and shall confer upon the holders thereof only the interest
and rights specifically set forth in this Declaration. The death, insolvency or
incapacity of a Shareholder shall not dissolve or terminate the Trust or affect
its continuity nor give his legal representative any rights whatsoever, whether
against or in respect of other Shareholders, the Trustees or the Trust Estate or
otherwise except the sole right to demand and, subject to the provisions of this
Declaration, the By-Laws, if adopted, and any requirements of law, to receive a
new certificate for Shares registered in the name of such legal representative,
in exchange for the certificate held by such Shareholder.
7.4 SHARE RECORD, ISSUANCE AND TRANSFERABILITY OF SHARES.
Records shall be kept by or on behalf of and under the direction of the
Trustees, which shall contain the names and addresses of the Shareholders, the
number of Shares held by them respectively, and the number of the certificates,
if any, representing the Shares, and in which there shall be recorded all
transfers of Shares. The Persons in whose names Shares or certificates therefor
are registered on the records of the Trust shall be deemed the absolute owners
of such Shares for all purposes of this Trust; but nothing herein shall be
deemed to preclude the Trustees or officers, or their agents or representatives,
from inquiring as to the actual ownership of Shares. Until a transfer is duly
registered on the records of the Trust, the Trustees shall not be affected by
any notice of such transfer, either actual or constructive. The payment thereof
to the Person in whose name any Shares are registered on the records of the
Trust or to the duly authorized agent of such Person (or if such Shares are so
registered in the names of more than one Person, to any one of such Persons or
to the duly authorized agent of such Person) shall be sufficient discharge for
all dividends or distributions payable or deliverable in respect of such Shares
and from all liability to see to the application thereof.
In case of the loss, mutilation or destruction of any
certificate for Shares, the Trustees may issue or cause to be issued a
replacement certificate on such terms and subject to such rules and regulations
as the Trustees may from time to time prescribe. Nothing in this Declaration
shall impose upon the Trustees or a transfer agent a duty, or limit their rights
to inquire into adverse claims.
In lieu of issuing certificates for Shares, the Trustees may
adopt procedures for the Shares to be considered as uncertificated Securities to
the same extent that such procedures would be available for shares of capital
stock of a Massachusetts business corporation.
Unless the Trustees shall have determined that the Trust shall
no longer qualify as a REIT, any issuance, redemption or transfer of Trust
Shares which would operate to disqualify the Trust as a real estate investment
trust for purposes of Federal income tax, is null and void, and such transaction
will be canceled when so determined in good faith by the Trustees.
7.5 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. The Trustees
may from time to time declare and pay to Shareholders such dividends or
distributions in cash or other property, out of current or accumulated income,
capital, capital gains, principal, surplus, proceeds from the increase or
refinancing of Trust obligations, for the repayment of loans made by the Trust,
from the sale of portions of the Trust Estate, or from any other source as the
Trustees in their discretion shall determine; but, in any event, the Trustees,
shall, from time to time, declare and pay to the Shareholders such distributions
as may be necessary to continue to qualify the Trust as a Real Estate Investment
Trust, so long as such qualification, in the opinion of the Trustees, is in the
best interest of the Shareholders. Shareholders shall have no right to any
dividend or distribution unless and until declared by the Trustees. A written
statement disclosing the source shall be sent to each Shareholder who received
the distribution not later than (i) 60 days after the close of the fiscal year
in which the distribution was made, or (ii) promptly after the independent
auditors of the Trust have completed, or undertaken sufficient actions toward
completion of, the annual audit of the Trust, so that the Trustees can determine
the source of such distribution, whichever event shall occur later.
7.6 TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND REGISTRAR.
The Trustees shall have power to employ one or more transfer agents, dividend
disbursing agents, dividend or distribution reinvestment plan agents, and
registrars and to authorize them on behalf of the Trust: to keep records, to
hold and disburse any dividends and distributions and to have and perform powers
and duties customarily had and performed by transfer agents, dividend disbursing
agents, dividend or distribution reinvestment plan agents, and registrars as may
be conferred upon them by the Trustees.
7.7 SHAREHOLDERS' MEETINGS AND CONSENTS. The Trustees shall
cause to be called and held an Annual Meeting of the Shareholders at such time
and such place as they may determine, at which Trustees shall be elected any
other proper business may be conducted. The Annual Meeting of Shareholders shall
be held within six months after the end of each fiscal year, after not fewer
than 10 days nor more than 60 days written notice of such meeting has been sent
to Shareholders by the Trustees and after delivery to the Shareholders of the
Annual Report for the fiscal year then ended. Special meetings of Shareholders
may be called by a majority of the Trustees, a majority of the Unaffiliated
Trustees, or the Chairman or other chief executive officer of the Trust, and
shall be called by any officer of the Trust upon the written request of
Shareholders holding not less than 10% of the outstanding Shares of the Trust
entitled to vote. Upon receipt of a written request either in person or by
registered mail stating the purpose(s) of the meeting requested by Shareholders,
the Trust shall provide all Shareholders written notice (either in person or by
mail) of a meeting and the purpose of such meeting to be held on a date not
fewer than 10 days nor more than 60 days after the date of such notice, at a
time and place determined by the Trustees. If there shall be no Trustees, a
special meeting of the Shareholders shall be held promptly for the election of
successor Trustees. The call and notice of any special meeting shall state the
purpose of the meeting and no other business shall be considered at such
meeting. A majority of the outstanding Shares entitled to vote at any meeting
represented in person or by proxy shall constitute a quorum at such meeting.
Whenever Shareholders are required or permitted to take any action, such action
may be taken, except as otherwise provided by this Declaration or required by
law, by a majority of the votes cast at a meeting of Shareholders at which a
quorum is present by holders of Shares entitled to vote thereon, or without a
meeting by written consent setting forth the action so taken signed by holders
of all outstanding Shares entitled to vote thereon. Notwithstanding this or any
other provision of this Declaration, no vote or consent of Shareholders shall be
required to approve the sale, exchange or other disposition by the Trustees of
one or more assets of the Trust or the pledging, hypothecating, granting
security interests in, mortgaging, encumbering or leasing of all or any of the
Trust Estate.
7.8 PROXIES. Whenever the vote or consent of Shareholders is
required or permitted under this Declaration, such vote or consent may be give
either directly by the Shareholder or by a proxy. The Trustees may solicit such
proxies from the Shareholders or any of them in any matter requiring or
permitting the Shareholders' vote or consent.
7.9 REPORTS TO SHAREHOLDERS. The Trustees shall cause to be
prepared and mailed not later than 120 days after the close of each fiscal year
of the Trust a report of the business and operation of the Trust during such
fiscal year to the Shareholders, which report shall constitute the accounting of
the Trustees for such fiscal year. The report shall be in such form and have
such content as the Trustees deem proper, but shall in any event include a
balance sheet, an income statement and a surplus statement, each prepared in
accordance with generally accepted accounting principles, shall be audited by an
independent certified public accountant and shall be accompanied by the report
of such accountant thereon. The Trustees shall also publish to the Shareholders
quarterly with respect to the Trust (1) the ratio of the costs of raising
capital during the quarter to the capital raised, and (2) the aggregate amount
of advisory fees and the aggregate amount of other fees paid to the Adviser and
all affiliates of the Adviser by the Trust and including fees or charges paid to
the Adviser and all Affiliates of the Adviser by third parties doing business
with the Trust.
7.10 FIXING RECORD DATE. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days, as the Trustees may
determine; or without closing the transfer books the Trustees may fix a date not
more than 60 days prior to the date of any meeting of Shareholders or dividend
payment or other action as a record date for the determination of Shareholders
entitled to vote at such meeting or any adjournment thereof or to receive such
dividend or to take any other action. Any Shareholder who was a Shareholder at
the time so fixed shall be entitled to vote at such meeting or any adjournment
thereof or to receive such dividend or to take such other action, even though he
has since that date disposed of his Shares, and no Shareholder becoming such
after that date shall be so entitled to vote at such meeting or any adjournment
thereof or to receive such dividend or to take such other action.
7.11 NOTICE TO SHAREHOLDERS. Any notice of meeting or other
notice, communication or report to any Shareholder shall be deemed duly
delivered to such Shareholder when such notice, communication or report is
deposited, with postage thereon prepaid, in the United States mail, addressed to
such Shareholder at his address as it appears on the records of the Trust or is
delivered in person to such Shareholder.
7.12 Shareholders' Disclosure; Trustees' Right to Refuse to
Transfer Shares; Limitation on Holdings; Redemption of Shares:
7.12.1 The Shareholders shall upon demand disclose to the
Trustees in writing such information with respect to direct and indirect
ownership of the Shares as the Trustees deem necessary to comply with the REIT
Provisions of the Internal Revenue Code or to comply with the requirements of
any taxing authority or governmental agency.
7.12.2 Whenever it is deemed by them to be reasonably
necessary to protect the tax status of the Trust as a REIT, the Trustees may
require a statement or affidavit from each Shareholder or proposed transferee of
Shares setting forth the number of Shares already owned by him and any related
Person specified in the form prescribed by the Trustees for that purpose. If, in
the opinion of the Trustees, the proposed transfer may jeopardize the
qualification of the Trust as a REIT, the Trustees shall have the right, but not
a duty, to refuse to transfer the Shares to the proposed transferee. All
contracts for the sale or other transfer of Shares shall be subject to this
provision.
7.12.3 Notwithstanding any other provision of this Declaration
of Trust to the contrary and subject to the provisions of subsection 7.12.5, no
Person, or Persons acting as a group, shall at any time directly or indirectly
acquire ownership in the aggregate of more than 9.8% of the outstanding Shares
of the Trust (the "Limit"). Shares owned by a Person or group of Persons in
excess of the Limit at any time shall be deemed "Excess Shares." For the
purposes of this Section 7.12, the term "ownership" shall be defined in
accordance with or by reference to the qualification requirements of the REIT
Provisions of the Internal Revenue Code and shall also mean ownership as defined
in Rule 13d-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, and the term "group" shall have the same
meaning as that term has for purposes of Section 13(d)(3) of such Act as
amended. All Shares which any Person has the right to acquire upon exercise of
outstanding rights, options and warrants, and upon conversion of any Securities
convertible into Shares, if any, shall be considered outstanding for purposes of
the Limit if such inclusion will cause such person to own more that the Limit.
7.12.4 The Trustees, by notice to the holder thereof, may
redeem any or all Shares that are Excess Shares (including Shares that remain or
become Excess Shares because of the decrease in outstanding Shares resulting
from such redemption); and from and after the date of giving of such notice of
redemption ("redemption date") the Shares called for redemption shall cease to
be outstanding and the holder thereof shall cease to be entitled to dividends,
voting rights and other benefits with respect to such Shares excepting only the
right to payment by the Trust of the redemption price determined and payable as
set forth in the following two sentences. Subject to the limitation on payment
set forth in the following sentence, the redemption price of each Excess Share
called for redemption shall be the average daily per Share closing sales price
if the Shares of the Trust are listed on a national securities exchange, and if
the Shares are not so listed shall be the mean between the average per Share
closing bid prices and the average per Share closing asked prices, in each case
during the 30 day period ending on the business day prior to the redemption
date, or if there have been no sales on a national securities exchange and no
published bid quotations and no published asked quotations with respect to
Shares of the Trust during such 30 day period, the redemption price shall be the
price determined by the Trustees in good faith. Unless the Trustees determine
that it is in the interest of the Trust to make earlier payment of all of the
amount determined as the redemption price per Share in accordance with the
preceding sentence, the redemption price shall by payable only upon the
liquidation of the Trust and shall not exceed an amount which is the sum of the
per Share distributions designated as liquidating distributions and return of
capital distributions declared with respect to unredeemed Shares of the Trust of
record subsequent to the redemption date, and no interest shall accrue with
respect to the period subsequent to the redemption date to the date of such
payment; provided, however, that in the event that within 30 days after the
redemption date the Person from whom the Excess Shares have been redeemed sells
(and notifies the Trust of such sale) a number of the remaining Shares owned by
him at least equal to the number of such Excess Shares (and such sale is to a
Person in whose hands the Shares sold would not be Excess Shares), then the
Trust shall rescind the redemption of the Excess Shares if following such
rescission such Person would not be the holder of Excess Shares, except that if
the Trust receives an opinion of its counsel that such recission would
jeopardize the tax status of the Trust as a REIT then the Trust shall in lieu of
recission make immediate payment of the redemption price.
7.12.5 The Limit set forth in Section 7.12.3 shall not apply
to acquisitions Shares pursuant to a cash tender offer made for all outstanding
Shares of the Trust (including Securities convertible into Shares) in conformity
with applicable federal and sate securities laws where two-thirds of the
outstanding Shares (not including Shares or Securities convertible into Shares
held by the tender offerer and/or any "affiliates" or "associates" thereof
within the meaning of the Act) are duly tendered and accepted pursuant to the
cash tender offer; nor shall the Limit apply to the acquisition of Shares by an
underwriter in a public offering of Shares, or in any transaction involving the
issuance of Shares by the Trust, in which a majority of the Trustees determine
that the underwriter or other person or party initially acquiring such Shares
will make a timely distribution of such Shares to or among other holders such
that, following such distribution, none of such Shares will be Excess Shares.
The Trustees in their discretion may exempt from the Limit ownership of certain
designated Shares while owned by a person who has provided the Trustees with
evidence and assurances acceptable to the Trustees that the qualification of the
Trust as a REIT would not be jeopardized thereby.
7.12.6 Notwithstanding any other provision of this Declaration
of Trust to the contrary, any purported acquisition of Shares of the Trust which
would result in the disqualification of the Trust as a REIT shall be null and
void.
7.12.7 Nothing contained in this Section 7.12 or in any other
provision of this Declaration of Trust shall limit the authority of the Trustees
to take such other action as they deem necessary or advisable to protect the
Trust and the interests of the Shareholders by preservation of the Trust's
qualification as a REIT under the REIT Provisions of the Internal Revenue Code.
7.12.8 If any provision of this Section 7.12 or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court. To the extent this Section 7.12 may be inconsistent with any other
provision of this Declaration of Trust, this Section 7.12 shall be controlling.
7.13 INSPECTION BY SHAREHOLDERS. Shareholders of record of the
Trust shall have the same right to inspect the records of the Trust as has a
stockholder in a Massachusetts business corporation.
ARTICLE VIII
LIABILITY OF TRUSTEES, SHAREHOLDERS
AND OFFICERS, AND OTHER MATTERS
8.1 LIMITATION OF LIABILITY OF TRUSTEES AND OFFICERS. No
Trustee or officer of the Trust shall be liable to the Trust or to any Trustee
or Shareholder for any act or omission of any other Trustee, Shareholder,
officer or agent of the Trust or be held to any personal liability whatsoever in
tort, contract or otherwise in connection with the affairs of this Trust, except
only that arising from his own bad faith, willful misfeasance, gross negligence,
or reckless disregard of his duties.
8.2 LIMITATION OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND
OFFICERS. The Trustees and officers in incurring any debts, liabilities or
obligations, or in taking or omitting any other actions for or in connection
with the Trust are, and shall be deemed to be, acting as Trustees or officers of
the Trust and not in their own individual capacities. Except to the extent
provided in Section 8.1 no Trustee or officer shall, nor shall any Shareholder,
be liable for any debt, claim, demand, judgment, decree, liability or obligation
of any kind of, against or with respect to the Trust arising out of any action
taken or omitted for or on behalf of the Trust and the Trust shall be solely
liable therefor and resort shall be had solely to the Trust Estate for the
payment or performance thereof. Each Shareholder shall be entitled to pro rata
indemnity from the Trust Estate if, contrary to the provisions hereof, such
Shareholder shall be held to any such personal liability.
8.3 EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS. As far as
practicable, the Trustees shall cause any written instrument creating an
obligation of the Trust to include a reference to this Declaration and to
provide that neither the Shareholders nor the Trustees nor the officers of the
Trust shall be liable thereunder and that the other parties to such instrument
shall look solely to the Trust Estate for the payment of any claim thereunder or
for the performance thereof; however, the omission of such provision form any
such instrument shall not render the Shareholders or any Trustee or officer of
the Trust liable nor shall the Trustees or any officer of the Trust be liable to
anyone for such omission.
8.4 INDEMNIFICATION AND REIMBURSEMENT OF TRUSTEES AND
OFFICERS. Any Person made a party to any action, suit or proceeding or against
whom a claim or liability is asserted by reason of the fact that he, his
testator or intestate was or is a Trustee or officer or active in such capacity
on behalf of the Trust shall be indemnified and held harmless by the Trust
against judgments, fines, amounts paid on account thereof (whether in settlement
or otherwise) and reasonable expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense of such action, suit,
proceeding, claim or alleged liability or in connection with any appeal therein,
whether or not the same proceeds to judgment or is settled or otherwise brought
to a conclusion; provided, however, that no such Person shall be so indemnified
or reimbursed for any claim, obligation or liability which arose out of the
Trustee's or officer's bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties; and provided, further, that such Person gives
prompt notice of such action, suit or proceeding, executes such documents and
takes such action as will permit the Trust to conduct the defense or settlement
thereof and cooperates therein. In the event of a settlement approved by the
Trustees of any such claim, alleged liability, action, suit or proceeding,
indemnification and reimbursement shall be provided except as to such matters
covered by the settlement which the Trust is advised by its counsel arose from
the Trustee's or officer's bad faith, willful misfeasance, gross negligence, or
reckless disregard of his duties; provided, however, that such advice by counsel
shall not preclude any Trustee or officer from seeking a judicial determination
that he did not act in bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties and is entitled to indemnification and
reimbursement hereunder. Expenses may be paid in advance by the Trust upon
receipt of an undertaking by or on behalf of a Person indemnified to pay over
the amount unless it shall ultimately be determined he is entitled to be
indemnified by the Trust as authorized herein. Such rights of indemnification
and reimbursement shall be satisfied only out of the Trust Estate. The rights
accruing to any Person under these provisions shall not exclude any other right
to which he may be lawfully entitled, nor shall anything contained herein
restrict the right of the Trust to indemnify or reimburse any such Person in any
proper case even though not specifically provided for herein, nor shall anything
contained herein restrict such right of a Trustee to contribution as may be
available under applicable law. The Trust shall have power to purchase and
maintain liability insurance on behalf of any Person entitled to indemnity
hereunder, whether or not the Trust would have the power to indemnify against
that liability.
8.5 RIGHT OF TRUSTEES AND OFFICERS TO OWN SHARES OR OTHER
PROPERTY AND TO ENGAGE IN OTHER BUSINESS. Any Trustee or officer may acquire,
own, hold and dispose of Shares in the Trust, for his individual account, and
may exercise all rights of a Shareholder to the same extent and in the same
manner as if he were not a Trustee or officer. Any Trustee or officer may have
personal business interests and may engage in personal business activities,
which interests and activities may include the acquisition, syndication,
holding, management, development, operation or deposit in, for his own account
or for the account of others, of interests in Real Property or Persons engaged
in the real estate business, even if the same directly compete with the actual
business being conducted by the Trust. Subject to the provisions of Article V,
any Trustee or officer may be interested as trustee, officer, director,
stockholder, partner, member, Adviser, or employee, or otherwise have a direct
or indirect interest in any Person who may be engaged to render advice or
services to the Trust, and may receive compensation from such Person as well as
compensation as Trustee, officer or otherwise hereunder and no such activities
shall be deemed to conflict with his duties and powers as Trustee or officer.
8.6 TRANSACTIONS WITH AFFILIATES. The Trust shall not
knowingly invest, either directly or indirectly, in any Real Estate Investment
or entity in which any Trustee or Adviser or any of its Affiliates is an
investor, creditor or owner. The Trust shall not engage in transactions with the
Adviser, any Trustee, officer, or any Affiliated Person of such Adviser, Trustee
or officer, except to the extent that each such transaction has, after
disclosure of such affiliation, been approved or ratified by the affirmative
vote of a majority of the Trustees (or, in the case of a transaction with a
person other than the Adviser or its Affiliate, a majority of the Trustees not
having any interest in such transaction) after a determination by them that:
8.6.1 The transaction is fair and reasonable to the Trust and
its Shareholders;
8.6.2 The terms of such transaction are at least as favorable
as the terms of any comparable transactions made on an arm's length basis that
are known to such Trustees;
8.6.3 Payments to the Adviser or to any Trustee or officer for
services rendered in a capacity other than that as Adviser, Trustee, or officer
may only be made upon determination that:
(i) the compensation is not in excess of their compensation
paid for any comparable services; and
(ii) the compensation is not greater than the charges for
comparable services available from others who are competent and
not affiliated with any of the parties involved.
The provisions of this Section 8.6 shall not prohibit the Trust from
participating in any investment on a pari passu basis with any other entity
whose trustees or directors are the same persons as the Trustees of the Trust
and as a result there are no Trustees of the Trust who may not also have an
interest in said investment as trustees or directors of such other entity.
8.7 PERSONS DEALING WITH TRUSTEES OR OFFICERS. Any act of the
Trustees or officers purporting to be done in their capacity as such shall, as
to any Persons dealing with such Trustees or officers, be conclusively deemed to
be within the purposes of this Trust and within the powers of the Trustees and
officers. No Person dealing with the Trustees or any of them, or with the
authorized officers, agents or representatives of the Trust shall be bound to
see to the application of any funds or property passing into their hands or
control. The receipt of the Trustees or any of them, or of authorized officers,
agents, or representatives of the Trust, for moneys or other consideration,
shall be binding upon the Trust.
8.8 RELIANCE. The Trustees and officers may consult with
counsel (which may be a firm in which one or more of the Trustees or officers is
or are members) and the advice or opinion of such counsel shall be full and
complete personal protection to all of the Trustees and officers in respect of
any action taken or suffered by them in good faith and in reliance on or in
accordance with such advice or opinion. In discharging their duties, Trustees
and officers, when acting in good faith, may rely upon financial statements of
the Trust represented to them to be correct by the President or the officer of
the Trust having charge of its books of account, or stated in a written report
by an independent certified public accountant fairly to present the financial
position of the trust. The Trustees may rely, and shall be personally protected
in acting, upon any instrument or other document believed by them to be genuine.
ARTICLE IX
DURATION, TERMINATION, AMENDMENT
AND REORGANIZATION OF TRUST
9.1 DURATION AND TERMINATION OF TRUST. The Trustees will use
their best efforts to terminate the Trust within approximately 10 years from the
date of this Declaration of Trust. However, it shall be in the absolute
discretion of the Trustees to determine in good faith such termination date as
will be in the best interests of the Shareholders of the Trust, taking into
consideration the investments of the Trust at the time at which termination is
considered; but in any event the Trust shall terminate no later than 20 years
from the date of this Declaration. The holders of a majority of the outstanding
shares entitled to vote thereon may amend this Declaration to extent this
period. Any determination by the Trustees of the date upon which termination
shall occur shall be reflected in a vote of or written instrument singed by a
majority of all of the Trustees then in office, including a majority of the
Unaffiliated Trustees; provided, however, that any plan for the termination of
the Trust which contemplates the distribution to the Shareholders of Securities
or other property in kind (other than the right promptly to receive cash) shall
require the vote or consent of the holders of a majority of the outstanding
Shares entitled to vote thereon; and also provided that the Trust shall be
subject to termination at any time by the vote or consent of the holders of a
majority of the outstanding Shares entitled to vote thereon.
9.1.1 Upon the termination of the Trust and unless otherwise
provided in a plan for termination approved by the holders of a majority of the
outstanding Shares and agreeable to a majority of the Trustees:
(i) the Trust shall carry on no business except for the
purpose of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of
the Trust and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust shall
have been wound up, including the power to fulfill or discharge
the contracts of the Trust, collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any
part of the remaining Trust Estate to one or more Persons at
public or private sale for consideration which may consist in
whole or in part of cash, Securities or other property of any
kind, discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business (and provided that the
Trustees may, if permitted by applicable law, and if they deem it
to be in the best interest of the Shareholders, appoint a
liquidating trust, or agent, or other entity, to perform one or
more of the foregoing functions); and
(iii) after paying or adequately providing for the payment
of all liabilities, and upon receipt of such releases,
indemnities and refunding agreements, as they deem necessary for
their protection, the Trustee or any liquidating trust, agent or
other entity appointed by them, shall distribute the remaining
Trust Estate among the Shareholders pro rata according to the
number of Shares held by each.
If any plan for the termination of the Trust approved by the holders of a
majority of the outstanding Shares and agreeable to a majority of the Trustees
provides for actions of the Trustees other than as aforesaid, the Trustees shall
have full authority to take all action as in their opinion is necessary or
appropriate to implement said plan.
9.1.2 After termination of the Trust and distribution to the
Shareholders as provided herein or in any said plan so approved by the
Shareholders, the Trustees shall execute and lodge among the records of the
Trust an instrument in writing setting forth the fact of such termination, and
the Trustees shall thereupon be discharged from all further liabilities and
duties hereunder and the rights and interests of all Shareholders hereunder
shall thereupon cease.
No Person dealing with the Trust or any Person or Persons purporting to act
as Trustees shall at any time (whether or not after 15 years from the date of
this Declaration of Trust) have any obligation to inquire whether or not the
Trust is terminated.
9.2 MERGER, ETC. Upon the vote or written consent of a
majority of the Trustees, including a majority of the Unaffiliated Trustees, and
with the approval of the holders of a majority of the Shares then outstanding
and entitled to vote, at a meeting the notice for which included a statement of
the proposed action, the Trustees may (a) merge the Trust into, or sell, convey
and transfer the Trust Estate to, any corporation, association, trust or other
organization in exchange for shares or Securities thereof, or beneficial
interests therein, or other consideration, and the assumption by such transferee
of the liabilities of the Trust and (b) thereupon terminate the Trust and,
subject to Section 9.1, distribute such shares, securities, beneficial
interests, or other consideration, ratably among the Shareholders in redemption
of their Shares.
9.3 AMENDMENT PROCEDURE. This Declaration may be amended by
the vote or written consent of a majority of the Trustees and of the holders of
a majority of the outstanding Shares entitled to vote thereon; provided,
however, that no amendment which would reduce the priority of payment or amount
payable to any class of Shares of the Trust upon liquidation of the Trust or
that would diminish or eliminate any voting rights pertaining to any class of
Shares shall be made unless approved by the vote or consent of the holders of
two-thirds of the outstanding Shares of such class. The Trustees may also amend
this Declaration by the vote of two-thirds of the Trustees without the vote or
consent of Shareholders at any time to the extent deemed by the Trustees in good
faith to be necessary to meet the requirements for qualification as a Real
Estate Investment Trust under the REIT Provisions of the Internal Revenue Code
or any interpretation thereof by a court or other governmental agency of
competent jurisdiction, but the Trustees shall not be liable for failing so to
do. Actions by the Trustees pursuant to the third paragraph of Section 1.1
hereof or pursuant to subsection 10.3.1 hereof that result in amending this
Declaration may also be effected without vote or consent of any Shareholder.
9.4 AMENDMENT, ETC. Prior to First Public Offering of Shares.
Notwithstanding any other provision of this Declaration, at such time as there
is only one holder of all of the outstanding Shares and prior to the issuance of
Shares pursuant to a registration statement under the Securities Act of 1933,
said holder of all of the outstanding Shares may, without any vote or consent of
the Trustees, (a) amend this Declaration in whole or in part, (b) terminate this
Trust, (c) remove and/or replace any or all of the Trustees, and (d) instruct
the investment and disposition of any funds or properties held by the Trustees.
<PAGE>
ARTICLE X
MISCELLANEOUS
10.1 APPLICABLE LAW. This Declaration of Trust is made in The
Commonwealth of Massachusetts; the situs, domicile and residency of the Trust
for all purposes is Massachusetts; and the Trust is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth, including the Massachusetts Business Corporation Law as the same
may be amended from time to time, to which reference is made with the intention
that matters not specifically covered herein or as to which an ambiguity may
exist shall be resolved as if the Trust were a Massachusetts business
corporation, but the reference to said Business Corporation Law is not intended
to and shall not give the Trust, the Trustees, the Shareholders or any other
person any right, power, authority or responsibility available only to or in
connection with an entity organized in corporate form.
10.2 FILING OF COPIES; REFERENCES; HEADINGS. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each amendment hereto shall be filed by the Trust with the
Secretary of The Commonwealth of Massachusetts and with the Boston City Clerk,
as well as any other governmental office where such filing may from time to time
be required, but the failure to make any such filing shall not impair the
effectiveness of this instrument or any such amendment. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or not
any such amendments have been made, as to the identities of the Trustees and
officers, and as to an matters in connection with the Trust hereunder; and, with
the same effect as if it were the original, may rely on a copy certified by an
officer of the Trust to be a copy of this instrument or of any such amendments.
In this instrument and in any such amendment, references to this instrument, and
all expressions like "herein", "hereof", and "hereunder" shall be deemed to
refer to this instrument as a whole as the same may be amended or affected b any
such amendments. The masculine gender shall include the feminine and neuter
genders. Headings are placed herein for convenience of reference only and shall
not be taken as part hereof or control or affect the meaning, construction or
effect of this instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
10.3 PROVISIONS OF THE TRUST IN CONFLICT WITH LAW OR
REGULATIONS.
10.3.1 The provisions of this Declaration are severable, and
if the Trustees shall determine, with the advice of counsel, that any one or
more of such provisions (the "Conflicting Provisions") could have the effect of
preventing the Trust from qualifying as a real estate investment trust under the
REIT Provisions of the Internal Revenue Code (and if the Trustees have
determined the Trust should elect to be taxed as a REIT under the Internal
Revenue Code) or are in conflict with other applicable federal or state laws or
regulations, the Conflicting Provisions shall be deemed never to have
constituted a part of the Declaration; provided, however, that such
determination by the Trustees shall not affect or impair any of the remaining
provisions of this Declaration or render invalid or improper any action taken or
omitted (including but not limited to the election of Trustees) prior to such
determination. A certification signed by a majority of the Trustees setting
forth any such determination and reciting that it was duly adopted by the
Trustees, or a copy of this Declaration, with the Conflicting Provisions removed
pursuant to such a determination, signed by a majority of the Trustees, shall be
conclusive evidence (except as to Shareholders, as to whom it shall only be
prima facie evidence) of such determination when lodged in the records of the
Trust. The Trustees shall not be liable for failure to make any determination
under this Section 10.3.1. Nothing in this Section 10.3.1 shall in any way limit
or affect the right of the Trustees to amend this Declaration as provided in
Section 9.2.
10.3.2 If any provision of this Declaration shall be held
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other provision of this Declaration, and this Declaration
shall be carried out as if any such invalid or unenforceable provisions were not
contained herein.
10.4 BINDING EFFECT; SUCCESSORS IN INTEREST. Each Person who
becomes a Shareholder shall, as a result thereof, be deemed to have agreed to
and to be bound by the provisions of this Declaration of Trust. This Declaration
shall be binding upon and inure to the benefit of the Trustees and the
Shareholders and the respective successors, assigns, heirs, distributees and
legal representatives of each of them.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Declaration as of the 6th day of February, 1985.
/s/ James L. Mooney /s/ Robert L. Kinney
James L. Mooney Robert L. Kinney
Address: Address:
157 Linden Street Mellon Real Estate Investment
Ridgewood, New Jersey 07450 Management Corporation
Mellon Financial Center
551 Madison Avenue
New York, New York 10022
/s/ Mercer L. Jackson /s/ James T. Foran
Mercer L. Jackson James T. Foran
Address: Address:
3825 North 37th Street Mellon Real Estate Investment
Arlington, Virginia 22207 Management Corporation
Mellon Financial Center
551 Madison Avenue
New York, New York 10022
/s/ Patrick E. McCarthy /s/ Arthur C. Karlin
Patrick E. McCarthy Arthur C. Karlin
Address: Address:
43 Highland Avenue E.F. Hutton & Company, Inc.
Bangor, Maine 04401 595 Madison Avenue
New York, New York 10022
/s/ Irving E.Cohen
Irving E. Cohen
Address:
E.F. Hutton & Company, Inc.
595 Madison Avenue
New York, New York 10022
STATE OF New York
COUNTY OF New York
Then personally appeared Irving E. Cohen, to me known to be one of the
Trustees who executed the foregoing Declaration of Trust and acknowledged the
same to be his free act and deed, this 11th day of February, 1985.
/s/ Kathleen M. Keenan
Notary Public
My commission expires:
3/30/85
STATE OF New York
COUNTY OF New York
Then personally appeared Arthur C. Karlin, to me known to be one of the
Trustees who executed the foregoing Declaration of Trust and acknowledged the
same to be his free act and deed, this 11th day of February, 1985.
/s/ Kathleen M. Keenan
Notary Public
My commission expires:
3-30-85
STATE OF New York
COUNTY OF New York
Then personally appeared James T. Foran, to me known to be one of the
Trustees who executed the foregoing Declaration of Trust and acknowledged the
same to be his free act and deed, this 8th day of February, 1985.
/s/ Kathleen M. Keenan
Notary Public
My commission expires:
3-30-85
MELLON PARTICIPATING MORTGAGE TRUST
COMMERCIAL PROPERTIES SERIES 85/10
AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED
DECLARATION OF TRUST
----------------------------------------------
AMENDMENT NO. 1 (the "Amendment") to the Second Amended and Restated
Declaration of Trust (the "Declaration of Trust") of MELLON PARTICIPATING
MORTGAGE TRUST COMMERCIAL PROPERTIES SERIES 85/10 (the "Trust") dated February
6, 1985, made at Atlanta, Georgia this 13th day of March, 1996 by the Board of
Trustees hereunder.
WHEREAS, the third paragraph of Section 1.1 of the Declaration of Trust
provides, among other things, that upon receipt of a written request by Mellon
Bank Corporation ("Mellon"), the Trustees shall change the name of the Trust to
a name that does not contain the name "Mellon."
WHEREAS, Section 9.3 of the Declaration of Trust provides that actions
by the Trustees pursuant to the third paragraph of Section 1.1 of the
Declaration of Trust that result in amending the Declaration of Trust may be
effected without the vote or consent of any shareholder of the Trust;
WHEREAS, Mellon has requested that the Trust no longer use the name
"Mellon" in the Trust's name; and
WHEREAS, the Board of Trustees desires to amend the Declaration of
Trust to change the name of the Trust from "Mellon Participating Mortgage Trust
Commercial Properties Series 85/10" to "Vinings Investment Properties Trust";
NOW, THEREFORE, the undersigned, being all the Trustees of the Trust,
do hereby state:
1. In accordance with Sections 1.1 and 9.3 of the Declaration of Trust,
(a) The first sentence of the first paragraph of Section 1.1
of the Declaration of Trust is hereby amended in its entirety to read
as follows:
"This Trust created by this Declaration of Trust is herein referred to
as the "Trust" and shall be known by the name "Vinings Investment
Properties Trust."
(b) All references to "Mellon Participating Mortgage Trust
Commercial Properties Series 85/10" (or any similar words) in the
Declaration of Trust shall hereafter be deemed to be references to
"Vinings Investment Properties Trust."
2. This Amendment may executed in separate counterparts, each of which so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
EXECUTED as of the 13th day of March, 1996.
TRUSTEES
/s/ Peter D. Anzo
- -----------------------
Peter D. Anzo
/s/ Martin H. Petersen
- -----------------------
Martin H. Petersen
/s/ Stephanie A. Reed
- -----------------------
Stephanie A. Reed
/s/ Gilbert H. Watts, Jr.
- -----------------------
Gilbert H. Watts, Jr.
/s/ Phill D. Greenblatt
- -----------------------
Phill D. Greenblatt
VININGS INVESTMENT PROPERTIES TRUST
AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED
DECLARATION OF TRUST
----------------------------------------------
AMENDMENT NO. 2 (the "Amendment") to the Second Amended and Restated
Declaration of Trust of VININGS INVESTMENT PROPERTIES TRUST (the "Trust") dated
February 6, 1985, as amended (the "Declaration of Trust"), made at Atlanta,
Georgia this 25th day of June, 1996 by the Board of Trustees hereunder.
WHEREAS, Section 9.3 of the Declaration of Trust provides that the
Declaration of Trust may be amended by the vote or written consent of a majority
of the Trustees and of the holders of a majority of the outstanding shares of
beneficial interest of the Trust entitled to vote thereon;
WHEREAS, the Board of Trustees desires to amend the Declaration of
Trust to (i) authorize the Board of Trustees to combine outstanding shares of
beneficial interest of the Trust by way of reverse share split, (ii) provide
that to achieve the general policy objective of the Trust, the Trustees intend
to invest the assets of the Trust in multifamily apartment properties and other
real estate properties which offer the potential to achieve such objective, and
(iii) eliminate certain restrictions on the Trust's investment practices and
activities (collectively, the "Amendments");
WHEREAS, in accordance with Section 9.3 of the Declaration of Trust,
the Trustees have approved the Amendments pursuant to a unanimous written
consent dated May 23, 1996; and
WHEREAS, in accordance with Section 9.3 of the Declaration of Trust,
the Amendments have been approved at a meeting of shareholders held on June 25,
1996, by the holders of a majority of the outstanding shares of beneficial
interest of the Trust entitled to vote thereon;
NOW, THEREFORE, the undersigned, being all the Trustees of the Trust,
do hereby state:
1. Section 2.1 of the Declaration of Trust is hereby amended in its entirety to
read as follows (new language appearing in italics):
"2.1 GENERAL STATEMENT OF POLICY. It is the general policy of the Trust
that the Trustees invest the Trust Estate principally in investments
which will conserve and protect the Trust's invested capital, produce
cash distributions, and offer the potential for capital appreciation to
be realized upon the sale, refinancing or other disposition of such
investments. To achieve this objective, the Trustees intend to invest
the assets of the Trust in Mortgage Loans and Land Purchase-Leasebacks,
including those with equity enhancements, multifamily apartment
properties and other real estate properties and investments which offer
the potential to achieve such objective. The consideration paid for Real
Property acquired by the Trust shall ordinarily be based on the fair
market value of the property as determined by a majority of the
Trustees. In cases where a majority of the Unaffiliated Trustees so
determine, such fair market value shall be as determined by a qualified
independent real estate appraiser selected by the Trustees, including a
majority of the Unaffiliated Trustees. The Trustees, including a
majority of the Unaffiliated Trustees, shall at least annually review
the investment policies of the Trust to determine that the policies
being followed by the Trust are in the best interests of the
Shareholders, and each such determination and the basis therefor shall
be set forth in the minutes of meetings of the Trustees."
2. Article VI of the Declaration of Trust is hereby deleted in its entirety.
3. Section 7.1 of the Declaration of Trust is hereby amended in its entirety to
read as follows (new language appearing in italics):
"7.1 SHARES. The beneficial interest in the Trust shall be divided into
transferable units of a single class, all of which are designated as
Shares, each without par value, and each Share shall (except as provided
in Section 7.12) be identical in all respects with every other Share.
The total number of Shares the Trust shall have authority to issue shall
be unlimited. The Shares may be issued for such consideration as the
Trustees shall determine, including upon the conversion of convertible
debt, or by way of share dividend or share split in the discretion of
the Trustees. In addition to the issuance of Shares by way of share
dividend or share split, the Trustees may combine outstanding Shares by
way of reverse share split and provide for the payment of cash in lieu
of any fractional interest in a combined Share; and the mechanics
authorized by the Trustees to implement any such combination shall be
binding upon all Shareholders, holders of convertible debt, optionees
and others with any interest in Shares. Outstanding Shares shall be
transferable and assignable in like manner as are shares of stock of a
Massachusetts business corporation. Shares reacquired by the Trust shall
no longer be deemed outstanding and shall have no voting or other rights
unless and until reissued. Shares reacquired by the Trust may be
cancelled by action of the Trustees. All Shares shall be fully paid and
nonassessable by or on behalf of the Trust upon receipt of full
consideration for which they have been issued or without additional
consideration if issued by way of share dividend, share split or
combination or upon the conversion of convertible debt. The Shares shall
not entitle the holder to preference, preemptive, conversion, or
exchange rights of any kind, except as the Trustees may specifically
determine with respect to any Shares at the time of issuance of such
Shares and except as specifically provided by law."
4. This Amendment may executed in separate counterparts, each of which so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
5. Pursuant to Section 10.2 of the Declaration of Trust, a copy of this
Amendment shall be filed with the Secretary of The Commonwealth of Massachusetts
and with the Boston City Clerk.
EXECUTED as of the 25th day of June, 1996.
TRUSTEES
/s/ Peter D. Anzo
- -------------------------
Peter D. Anzo
/s/ Martin H. Petersen
- -------------------------
Martin H. Petersen
/s/ Stephanie A. Reed
- -------------------------
Stephanie A. Reed
/s/ Gilbert H. Watts, Jr.
- -------------------------
Gilbert H. Watts, Jr.
/s/ Phill D. Greenblatt
- -------------------------
Phill D. Greenblatt
/s/ Henry Hirsch
- -------------------------
Henry Hirsch
THIRD
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
VININGS INVESTMENT PROPERTIES TRUST
<PAGE>
<TABLE>
INDEX
Page
----
<S> <C>
ARTICLE I - THE TRUST; DEFINITIONS................................................................................1
1.1 Name............................................................................................1
1.2 Place of Business...............................................................................1
1.3 Nature of Trust.................................................................................2
1.4 Purpose of the Trust............................................................................2
1.5 Definitions.....................................................................................2
ARTICLE II - INVESTMENT POLICY....................................................................................5
2.1 General Statement of Policy.....................................................................5
2.2 Additional Investments..........................................................................5
ARTICLE III - TRUSTEES............................................................................................6
3.1 Number, Term of Office, Qualifications of Trustees..............................................6
3.2 Compensation and Other Remuneration.............................................................6
3.3 Resignation, Removal and Death of Trustees......................................................6
3.4 Vacancies.......................................................................................7
3.5 Successor and Additional Trustees...............................................................7
3.6 Actions by Trustees.............................................................................7
3.7 Unaffiliated Trustees...........................................................................8
3.8 Committees......................................................................................8
ARTICLE IV - TRUSTEES'POWERS......................................................................................9
4.1 Power and Authority of Trustees.................................................................9
4.2 Specific Powers and Authorities.................................................................9
4.3 By-Laws........................................................................................14
ARTICLE V - AGENTS...............................................................................................14
5.1 Employment of Employees, Agents, etc...........................................................14
ARTICLE VI - SHARES AND SHAREHOLDERS.............................................................................14
6.1 Shares.........................................................................................14
6.2 Legal Ownership of Trust Estate................................................................15
6.3 Shares Deemed Personal Property................................................................16
6.4 Share Record, Issuance and Transferability of Shares...........................................16
6.5 Dividends and Distributions to Shareholders....................................................17
6.6 Transfer Agent, Dividend Disbursing Agent and Registrar........................................17
6.7 Shareholders'Meetings and Consents.............................................................17
6.8 Proxies........................................................................................18
6.9 Reports to Shareholders........................................................................18
6.10 Fixing Record Date.............................................................................18
6.11 Notice to Shareholders.........................................................................18
6.12 Shareholders'Disclosure; Trustees'Right to Refuse to Transfer Shares; Limitation on Holdings;
Redemption of Shares 18
6.13 Inspection by Shareholders.....................................................................21
ARTICLE VII - LIABILITY OF TRUSTEES, SHAREHOLDERSAND OFFICERS, AND OTHER MATTERS.................................21
7.1 Limitation of Liability of Trustees and Officers...............................................21
7.2 Limitation of Liability of Shareholders, Trustees and Officers.................................21
7.3 Express Exculpatory Clauses in Instruments.....................................................21
7.4 Indemnification and Reimbursement of Trustees and Officers.....................................22
7.5 Right of Trustees and Officers to Own Shares or Other Property and to Engage in Other Business.22
7.6 Transactions with Affiliates...................................................................23
7.7 Persons Dealing With Trustees or Officers......................................................23
7.8 Reliance.......................................................................................24
ARTICLE VIII - DURATION, TERMINATION, AMENDMENT AND REORGANIZATION OF TRUST......................................24
8.1 Duration of Trust..............................................................................24
8.3 Merger, etc....................................................................................25
8.4 Amendment Procedure............................................................................25
ARTICLE IX - MISCELLANEOUS.......................................................................................26
9.1 Applicable Law.................................................................................26
9.2 Filing of Copies; References; Headings.........................................................26
9.3 Provisions of the Trust in Conflict With Law or Regulations....................................26
9.4 Binding Effect; Successors in Interest.........................................................28
Signatures and Acknowledgments...................................................................................__
</TABLE>
<PAGE>
THIRD
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
VININGS INVESTMENT PROPERTIES TRUST
THE SECOND AMENDED AND RESTATED DECLARATION OF TRUST of VININGS INVESTMENT
PROPERTIES TRUST (formerly known as Mellon Participating Mortgage Trust, Series
85/10) dated as of the 6th day of February, 1985, and previously amended on
March 13, 1996 and June 25, 1996, is hereby amended and restated, effective
_____________, 1999 by the undersigned Trustees, who constitute all the Trustees
of Vinings Investment Properties Trust, to make the amendments as set forth in
the following Third Amended and Restated Declaration of Trust:
ARTICLE I - THE TRUST; DEFINITIONS
----------------------------------
1.1 NAME. The Trust created by this Declaration of Trust is herein referred
to as the "Trust" and shall be known by the name "Vinings Investment Properties
Trust." So far as may be practicable, legal and convenient, the affairs of the
Trust shall be conducted and transacted under that name, which name shall not
refer to the Trustees individually or personally or to the beneficiaries or
Shareholders of the Trust, or to any officers, employees or agents of the Trust.
Under circumstances in which the Trustees determine that the use of the
name "Vinings Investment Properties Trust" is not practicable, legal or
convenient, they may as appropriate use and adopt another name under which the
Trust may hold property or operate in any jurisdiction. Legal title to all the
properties subject from time to time to this Declaration of Trust shall be
transferred to, vested and held by the Trustees as joint tenants with right of
survivorship as Trustees of this Trust; provided that the Trustees shall have
the power to cause legal title to any property of the Trust to be held by and/or
in the name of one or more of the Trustees, or any other Person as nominee, on
such terms, in such manner, and with such powers as the Trustees may determine;
and further provided that the Trustees shall have the power to cause any
property of the Trust to be held in the custody of (i) any bank and that such
bank may hold the property of the Trust in the name of any nominee, partnership
or nontaxable corporation, and (ii) any depository system for the central
handling of Securities.
1.2 PLACE OF BUSINESS. The Trust shall maintain an office, and shall
designate a resident agent for the service of process (whose name and address
shall be reported from time to time to the Secretary of the Commonwealth of
Massachusetts), in Atlanta, Georgia. The Trust may have such other offices or
places of business within or without the Commonwealth of Massachusetts as the
Trustees may from time to time determine.
<PAGE>
1.3 Nature of Trust. The Trust is a trust or voluntary association of the
type referred to in Section 1 of Chapter 182 of the General Laws of the
Commonwealth of Massachusetts and commonly known as a business trust. It is
intended that the Trust elect to carry on business as a real estate investment
trust as described in the REIT Provisions of the Internal Revenue Code as long
as it is deemed by the Trustees to be in the best interest of the Shareholders
to make such election. The Trust is not intended to be, shall not be deemed to
be, and shall not be treated as, a general partnership, limited partnership,
joint venture, corporation, or joint stock company or association (but nothing
herein shall preclude the Trust from being taxable as an association under the
REIT Provisions of the Internal Revenue Code) nor shall the Trustees or
Shareholders or any of them for any purpose be deemed to be or be treated in any
way whatsoever to be, liable or responsible hereunder as partners or joint
venturers or as agents of one another. The relationship of the Shareholders to
the Trustees shall be solely that of beneficiaries of the Trust and their rights
shall be limited to those conferred upon them by this Declaration.
1.4 PURPOSE OF THE TRUST. The purpose of the Trust is to purchase, hold,
lease, manage, sell, exchange, develop, subdivide, joint venture, mortgage,
finance and improve real property and interests in real property, including
notes, bonds and other obligations secured by mortgages or deeds of trust on
real property, and in general to carry on any other acts in connection with or
arising out of the foregoing and to have and exercise all powers that are
available to voluntary associations formed under the laws of the Commonwealth of
Massachusetts and to do any or all of the things herein set forth to the same
extent as natural persons might or could do.
1.5 DEFINITIONS. The terms defined in this Section 1.5 whenever used in
this Declaration shall, unless the context otherwise requires, have the
respective meanings hereinafter specified in this Section 1.5. In this
Declaration, words in the singular number include the plural and in the plural
number include the singular.
1.5.1 AFFILIATED PERSON. An "Affiliated Person" of another Person
shall mean any Person who owns beneficially, directly or indirectly, 1% or
more of the outstanding capital stock, shares or equity interests of such
other Person or of any other Person which controls, is controlled by or is
under common control with such other Person or who is an officer, director,
employee, partner or trustee (excluding Unaffiliated Trustees not otherwise
affiliated with the entity) of such Person or of any other Person which
controls, is controlled by or is under common control with such Person.
1.5.2 ANNUAL MEETING OF SHAREHOLDERS. "Annual Meeting of Shareholders"
shall mean the meeting referred to in the first sentence of Section 6.7.
1.5.3 ANNUAL REPORT. "Annual Report" shall mean the Report referred to
in Section 6.9.
<PAGE>
1.5.4 BY-LAWS. "By-Laws" shall mean the By-Laws referred to in Section
4.3.
1.5.5 DECLARATION. "Declaration" shall mean this Third Amended and
Restated Declaration of Trust of Vinings Investment Properties Trust and
all amendments or modifications hereof.
1.5.6 FIRST MORTGAGE. "First Mortgage" shall mean a Mortgage which
takes priority or precedence over all other charges or liens upon the same
Real Property, other than a lessee's interest therein, and which must be
satisfied before such other charges are entitled to participate in the
proceeds of any sale. Such Mortgage may be upon a lessee's interest in Real
Property. Such priority shall not be deemed abrogated by liens for taxes,
assessments which are not delinquent or remain payable without penalty,
contracts (other than contracts for repayment of borrowed moneys) or
leases, mechanics' and materialmen's liens for work performed and materials
furnished which are not in default or are in good faith being contested,
and other claims normally deemed in the local jurisdiction not to abrogate
the priority of a First Mortgage.
1.5.7 LAND PURCHASE-LEASEBACK. "Land Purchase-Leaseback" shall mean a
transaction involving the purchase of the land on which improvements are or
are to be constructed, and the lease, generally to the seller, of the land
pursuant to a land or ground lease.
1.5.8 LIMIT. "Limit" shall mean the number of Shares described in
Section 6.12.3.
1.5.9 MORTGAGE. "Mortgage" shall mean the security interest in Real
Property granted to secure a Mortgage Loan.
1.5.10 MORTGAGE LOAN. "Mortgage Loan" shall mean a note, bond or other
evidence of indebtedness or obligation which is secured or collateralized
by an interest in Real Property.
1.5.11 PERSON. "Person" shall include individuals, corporations,
limited partnerships, general partnerships, limited liability companies,
joint stock companies or associations, joint ventures, associations,
consortia, companies, trusts, banks, trust companies, land trusts, common
law trusts, business trusts, or other entities and governments and agencies
and political subdivisions thereof.
1.5.12 REAL ESTATE INVESTMENT. "Real Estate Investment" shall mean any
direct or indirect investment in any interest in Real Property (including
Land Purchase- Leaseback transactions) or in any Mortgage Loan, or in any
entity, partnership or venture whose principal purpose is to make any such
investment or investments.
<PAGE>
1.5.13 REAL ESTATE INVESTMENT TRUST. "Real Estate Investment Trust"
and "REIT" shall mean a real estate investment trust as defined in the REIT
Provisions of the Internal Revenue Code, at such time as it is the policy
of the Trust (or, if applicable to a Person other than this Trust, then of
such other Person) to obtain the favorable federal income tax benefits
available to a qualified real estate investment trust.
1.5.14 REAL PROPERTY. "Real Property" shall mean and include land,
rights and interests in land, leasehold interests (including but not
limited to interests of a lessor or lessee therein), and any buildings,
structures, improvements, fixtures and equipment located on or to be
located on or used or to be used in connection with land, leasehold
interests and rights in land or interests in land, but does not include
Mortgages, Mortgage Loans, or interests therein.
1.5.15 REIT. Provisions of the Internal Revenue Code. "REIT Provisions
of the Internal Revenue Code" shall mean Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended, and any successor or other
provisions of the Code relating to real estate investment trusts (including
provisions as to the attribution of ownership of beneficial interests
therein) and the regulations promulgated thereunder.
1.5.16 SECURITIES. "Securities" shall mean any stock, shares, voting
trust certificates, bonds, debentures, notes or other evidences of
indebtedness or ownership or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for, receipts for, guarantees of, or
warrants, options or rights to subscribe, to purchase or acquire any of the
foregoing.
1.5.17 SHARES. "Shares" shall mean the shares of beneficial interest
in the Trust as described in Section 6.1. "Excess Shares" shall mean Shares
described as such in Section 6.12.3.
1.5.18 SHAREHOLDERS. "Shareholders" shall mean as of any particular
time the holders of record of outstanding Shares at such time.
1.5.19 TRUST. "Trust" shall mean the trust created by this
Declaration.
1.5.20 TRUSTEES. "Trustees" shall mean, as of any particular time,
Trustees holding office under this Declaration at such time, whether they
be the Trustees named herein or additional or successor Trustees, and shall
not include the officers, representatives or agents of the Trust or the
Shareholders; but nothing herein shall be deemed to preclude the Trustees
from also serving as officers, representatives or agents of the Trust or
owning Shares.
<PAGE>
1.5.21 TRUST ESTATE. "Trust Estate" shall mean as of any particular
time any and all property, real, personal or otherwise, tangible or
intangible, transferred, conveyed or paid to the Trust or the Trustees in
their capacity as Trustees, and all rents, income, profits and gains
therefrom which at such time is owned or held by the Trust or the Trustees
in their capacity as Trustees.
1.5.22 UNAFFILIATED TRUSTEE. "Unaffiliated Trustee" shall mean a
Trustee who (i) is not an officer or employee of the Trust or any
Affiliated Person of the Trust, and (ii) who performs no services for the
Trust or any Affiliated Person of the Trust except in his capacity as a
Trustee. If a member of a Trustee's immediate family could not be an
Unaffiliated Trustee, such Trustee shall not be considered an Unaffiliated
Trustee.
1.5.23 VALUATION. "Valuation" shall mean a determination, by the
Trustees or by a Person having no economic interest in such Real Property,
who in the sole judgment of the Trustees is properly qualified to make such
a determination, of the market value, as of the date of the valuation, of
Real Property in its existing state or in a state to be created.
ARTICLE II - INVESTMENT POLICY
------------------------------
2.1 GENERAL STATEMENT OF POLICY. It is the general policy of the Trust that
the Trustees invest the Trust Estate principally in investments which will
conserve and protect the Trust's invested capital, produce cash distributions,
and offer the potential for capital appreciation to be realized upon the sale,
refinancing or other disposition of such investments. To achieve this objective
the Trustees intend to invest the assets of the Trust in multifamily apartment
properties and other real estate properties and investments which offer the
potential to achieve such objective. The consideration paid for Real Property
acquired by the Trust shall ordinarily be based on the fair market value of the
property as determined by a majority of the Trustees. In cases where a majority
of the Unaffiliated Trustees so determine, such fair market value shall be as
determined by a qualified independent real estate appraiser selected by the
Trustees, including a majority of the Unaffiliated Trustees. The Trustees,
including a majority of the Unaffiliated Trustees, shall at least annually
review the investment policies of the Trust to determine that the policies being
followed by the Trust are in the best interests of the Shareholders, and each
such determination and the basis therefor shall be set forth in the minutes of
meetings of the Trustees.
2.2 ADDITIONAL INVESTMENTS. To the extent that the Trust has assets not
otherwise invested in accordance with Section 2.1, the Trustees may invest such
assets in:
2.2.1 Obligations of or guaranteed or insured by the United States
Government or any agencies or political subdivisions thereof;
2.2.2 Obligations of or guaranteed by any state, territory or
possession of the United States of America or any agencies or political
subdivisions thereof;
<PAGE>
2.2.3 Evidences of deposits in, or obligations of, banking
institutions, state and federal savings and loan associations and savings
institutions which are members of the Federal Deposit Insurance Corporation
or of the Federal Home Loan Bank System, or shares in money market funds
(whether or not insured);
2.2.4 Shares of other REITs, to the extent permitted by the REIT
Provisions of the Internal Revenue Code; or
2.2.5 Other Securities and property to the extent not inconsistent
with the REIT Provisions of the Internal Revenue Code.
ARTICLE III - TRUSTEES
----------------------
3.1 NUMBER, TERM OF OFFICE, QUALIFICATIONS OF TRUSTEES. There shall be no
fewer than 3 nor more than 9 Trustees, at least a majority of whom shall be
Unaffiliated Trustees. The Trustees from time to time may fix the number of
Trustees within the range established in the Declaration of Trust and may change
the range in the authorized number of Trustees, provided that the lower end of
the authorized range shall not be fewer than three. Subject to the provisions of
Section 3.3, each Trustee shall hold office for a term of one year or until the
election and qualification of his successor. At each Annual Meeting of
Shareholders, the Shareholders shall elect successors to the Trustees, unless
the number of Trustees is then being reduced. There shall be no cumulative
voting in the election of Trustees. Trustees may be re-elected without limit as
to the number of times. A Trustee shall be an individual at least 21 years of
age. Unless otherwise required by law or by action of the Trustees, no Trustee
shall be required to give bond, surety or security in any jurisdiction for the
performance of any duties or obligations hereunder. The Trustees in their
capacity as Trustees shall not be required to devote their entire time to the
business and affairs of the Trust.
3.2 COMPENSATION AND OTHER REMUNERATION. The Trustees (other than the
Unaffiliated Trustees) shall be entitled to receive such reasonable compensation
for their services as Trustees as they may determine from time to time. The
Trustees shall also be entitled to receive, directly or indirectly, remuneration
for services rendered to the Trust in any other capacity, including, without
limitation, services as an officer of or consultant to the Trust, legal,
accounting or other professional services, or services as a transfer agent, or
underwriter, or otherwise. The Trustees shall be reimbursed for their reasonable
expenses incurred in connection with their services as Trustees.
<PAGE>
3.3 RESIGNATION, REMOVAL AND DEATH OF TRUSTEES. A Trustee may resign at any
time by giving written notice to the remaining Trustees at the principal offices
of the Trust. Such resignation shall take effect on the date such notice is
given or at any later time specified in the notice without need for prior
accounting. A Trustee may be removed at any time with or without cause by vote
or written consent of holders of a majority of the outstanding Shares entitled
to vote thereon or with cause by all remaining Trustees. For purposes of the
immediately preceding sentence "cause" shall include physical and/or mental
inability, due to a condition or illness which is expected to be of permanent or
indefinite duration, to perform the duties of a Trustee. A Trustee may be
removed at a special meeting of Shareholders. Upon the resignation or removal of
any Trustee, or his otherwise ceasing to be a Trustee, he shall execute and
deliver such documents as the remaining Trustees shall require for the
conveyance of any Trust property held in his name, shall account to the
remaining Trustee or Trustees as they require for all property which he holds as
Trustee and shall thereupon be discharged as Trustee. Upon the incapacity or
death of any Trustee, his legal representative shall perform the acts set forth
in the preceding sentence and the discharge mentioned therein shall run to such
legal representative and to the incapacitated Trustee or the estate of the
deceased Trustee as the case may be.
3.4 VACANCIES. If any or all of the Trustees cease to be Trustees
hereunder, whether by reason of resignations, removal, incapacity, death or
otherwise, such event shall not terminate the Trust or affect its continuity.
Until vacancies are filled, the remaining Trustee or Trustees (even though fewer
than three) may exercise the powers of the Trustees hereunder. Vacancies
(including vacancies created by increases in the number of Trustees) may be
filled for the unexpired term by the remaining Trustee or by a majority of the
remaining Trustees (which majority shall include a majority of the remaining
Trustees that are Unaffiliated Trustees if the vacant position was formerly held
by an Unaffiliated Trustee). If at any time there shall be no Trustees in
office, successor Trustees shall be elected by the Shareholders as provided in
Section 6.7.
3.5 SUCCESSOR AND ADDITIONAL TRUSTEES. The right, title, and interest of
the Trustees in and to the Trust Estate shall also vest in successor and
additional Trustees upon their qualification, and they shall thereupon have all
the rights and obligations of Trustees hereunder. Such right, title and interest
shall vest in the Trustees whether or not conveyancing documents have been
executed and delivered pursuant to Section 3.3 or otherwise. Appropriate written
evidence of the election and qualification of successor and additional Trustees
shall be filed with the records of the Trust and in such other offices or places
as the Trustees may deem necessary, appropriate or desirable. Upon the
resignation, removal or death of a Trustee, he (and in the event of his death,
his estate) shall automatically cease to have any right, title or interest in or
to any of the Trustee property, and the right, title and interest in such
Trustee in and to the Trust Estate shall vest automatically in the remaining
Trustees without any further act.
<PAGE>
3.6 ACTIONS BY TRUSTEES. The Trustees may act with or without a meeting. A
quorum for all meetings of the Trustees shall be a majority of the Trustees.
Unless specifically provided otherwise in this Declaration, any action of the
Trustees may be taken at a meeting by vote of a majority of the Trustees present
at such meeting if a quorum is present, or without a meeting by written consent
of all of the Trustees. The decision of the Trust to invest in any Real Estate
Investment shall require the approval of a majority of the Unaffiliated
Trustees. Any agreement, deed, Mortgage, lease or other instrument or writing
executed by any one or more of the Trustees or by any one or more authorized
Persons shall be valid and binding upon the Trustees and upon the Trust when
authorized by action of the Trustees or as provided in the By-Laws, if the same
are adopted. Trustees and members of any committee of the Trustees may conduct
meetings by conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
An annual meeting of the Trustees shall be held at substantially the same
time as the Annual Meeting of Shareholders. Regular meetings, if any, shall be
held at such other times as shall be fixed by the Trustees. No notice shall be
required of an annual or a regular meeting of Trustees.
Special meetings of the Trustees shall be called by the Chairman or the
President upon the request of any two Trustees and may be called by the Chairman
or the President on his own motion, on not less than two days' notice to each
Trustee if the meeting is to be held in person, and/or not less than eight
hours' notice if the meeting is to be held by conference telephone or similar
equipment. Such notice, which need not state the purpose of the meeting, shall
be by oral, telegraphic, telephonic or written communication stating the time
and place therefor. Notice of any special meeting need not be given to any
Trustee entitled thereto who submits a written and signed waiver of notice,
either before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to him.
Regular or special meetings of the Trustees may be held within or without
the Commonwealth of Massachusetts, at such places as shall be designated by the
Trustees. The Trustees may adopt such rules and regulations for their conduct
and the management of the affairs of the Trust as they may deem proper and as
are not inconsistent with this Declaration.
3.7 UNAFFILIATED TRUSTEES. In order that a majority of the Trustees shall
be Unaffiliated Trustees, if at any time, by reason of one or more vacancies,
there shall not be such a majority, then within 120 days after such vacancy
occurs, the continuing Trustee or Trustees then in office shall appoint,
pursuant to Section 3.4, a sufficient number of other Persons who are
Unaffiliated Trustees, so that there shall be such a majority.
3.8 COMMITTEES. The Trustees may appoint from among their number an
executive committee and such other standing committees, including without
limitation investment, audit, nominating, and compensation committees, or
special committees as the Trustees determine. Each standing committee shall
consist of three or more members, a majority of whom shall be Unaffiliated
Trustees. Each committee shall have such powers, duties and obligations as may
be required by any governmental agency or other regulatory body or as the
Trustees may be deem necessary and appropriate. Without limiting the generality
of the foregoing, the executive committee shall have the power to conduct the
business and affairs of the Trust during periods between meetings of the
Trustees. The executive committee and other committees shall report their
activities periodically to the Trustees.
<PAGE>
ARTICLE IV - TRUSTEES' POWERS
-----------------------------
4.1 POWER AND AUTHORITY OF TRUSTEES. The Trustees, subject only to the
specific limitations contained in this Declaration, shall have, without further
or other authorization, and free from any power of control on the part of the
Shareholders, full, absolute and exclusive power, control and authority over the
Trust Estate and over the business and affairs of the Trust to the same extent
as if the Trustees were the sole owners thereof in their own right, and to do
all such acts and things as in their sole judgment and discretion are necessary
or incidental to, or desirable for, the carrying out of any of the purposes of
the Trust or conducting the business or the Trust. Any determination made in
good faith by the Trustees of the purposes of the Trust or the existence of any
power or authority hereunder shall be conclusive. In construing the provisions
of this Declaration, presumption shall be in favor of the grant of powers and
authority to the Trustees. The enumeration of any specific power or authority
herein shall not be construed as limiting the general powers or authority or any
other specified power or authority conferred herein upon the Trustees.
4.2 SPECIFIC POWERS AND AUTHORITIES. Subject only to the express
limitations contained in this Declaration and in addition to any powers and
authorities conferred by this Declaration or which the Trustees may have by
virtue of any present or future statute or rule of law, the Trustees without any
action or consent by the Shareholders shall have and may exercise, at any time
and from time to time, the following powers and authorities which may or may not
be exercised by them in their sole judgment and discretion, and in such manner,
and upon such terms and conditions as they may, from time to time, deem proper:
4.2.1 To retain, invest and reinvest the capital or other funds of the
Trust and, for such consideration as they deem proper, to purchase or
otherwise acquire for cash or other property or through the issuance of
Shares or other Securities of the Trust and hold for investment real or
personal property of any kind, tangible or intangible, in entirety or in
participation, all without regard to whether any such property is
authorized by law for the investment of trust funds, and to possess and
exercise all the rights, powers and privileges appertaining to the
ownership of the Trust Estate with respect thereto.
4.2.2 To sell, rent, lease, hire, exchange, release, partition,
assign, mortgage, pledge, hypothecate, grant security interests in,
encumber, negotiate, convey, transfer or otherwise dispose of or grant
interests in all or any portion of the Trust Estate by deeds, financing
statements, security agreements and other instruments, trust deeds,
assignments, bills of sale, transfers, leases or Mortgages, for any of such
purposes.
4.2.3 To enter into leases, contracts, obligations, and other
agreements for a term extending beyond the term of office of the Trustees
and beyond the possible termination of the Trust or for a lesser term.
<PAGE>
4.2.4 To borrow money and give negotiable or non-negotiable
instruments therefor; to guarantee, indemnify or act as surety with respect
to payment or performance of obligations of third parties; to enter into
other obligations on behalf of the Trust; and to assign, convey, transfer,
mortgage, subordinate, pledge, grant security interests in, encumber or
hypothecate the Trust Estate to secure any of the foregoing.
4.2.5 To lend money, whether secured or unsecured, to any Person,
including any Affiliated Person.
4.2.6 To create reserve funds for any purpose.
4.2.7 To incur and pay out of the Trust Estate any charges or
expenses, and disburse any funds of the Trust, which charges, expenses or
disbursements are, in the opinion of the Trustees, necessary or incidental
to or desirable for the carrying out of any of the purposes of the Trust or
conducting the business of the Trust, including, without limitation, taxes
and other governmental levies, charges and assessments, of whatever kind or
nature, imposed upon or against the Trustees in connection with the Trust
or the Trust Estate or upon or against the Trust Estate or any part
thereof, and for any of the purposes herein.
4.2.8 To deposit funds of the Trust in or with banks, trust companies,
savings and loan associations, money market organizations and other
depositories or issuers of depository-type accounts, whether or not such
deposits will draw interest or be insured, the same to be subject to
withdrawal or redemption on such terms and in such manner and by such
Person or Persons (including any one or more Trustees, officers, agents or
representatives) as the Trustees may determine.
4.2.9 To enter into hedging transactions to minimize the effect of
interest rate fluctuations on investments made pursuant to Section 2.2 of
this Declaration.
4.2.10 To possess and exercise all the rights, powers and privileges
appertaining to the ownership of all or any Mortgages or Securities issued
or created by, or interests in, any Person, forming part of the Trust
Estate, to the same extent that an individual might and, without limiting
the generality of the foregoing, to vote or give consent, request or
notice, or waive any notice, either in person or by proxy or power of
attorney, with or without power of substitution, to one or more Persons,
which proxies and powers of attorney may be for meetings or action
generally or for any particular meeting or action, and may include the
exercise of discretionary powers.
<PAGE>
4.2.11 To cause to be organized or assist in organizing any Person
under the laws of any jurisdiction to acquire the Trust Estate or any part
or parts thereof or to carry on any business in which the Trust shall
directly or indirectly have any interest, and to sell, rent, lease, hire,
convey, negotiate, assign, exchange or transfer the Trust Estate or any
part of parts thereof to or with any such Person in exchange for the
Securities thereof or otherwise, and to lend money to, subscribe for the
Securities of, and enter into any contracts with, any such Person in which
the Trust holds or is about to acquire Securities or any other interest.
4.2.12 To enter into joint ventures, general or limited partnerships
and any other lawful combinations or associations.
4.2.13 To elect or appoint officers of the Trust (which shall include
a Chairman, who will be a Trustee, and a President, a Treasurer and a
Secretary, and which may include one or more Vice Presidents and other
officers as the trustees may determine, and none of whom needs be a
Trustee), who may be removed or discharged at the discretion of the
Trustees, such officers to have such powers and duties, and to serve such
terms, as may be prescribed by the Trustees or by the By-Laws of the Trust
or as may pertain to such officers; subject to the provisions of Section
7.5 and 7.6, to engage or employ any persons as agents, representatives,
employees, or independent contractors (including without limitation, real
estate advisers, investment advisers, transfer agents, registrars,
underwriters, accountants, attorneys at law, real estate agents, managers,
appraisers, brokers, architects, engineers, construction managers, general
contractors or otherwise) in one or more capacities, in connection with the
management of the Trust's affairs or otherwise, and to pay compensation
from the Trust for services in as many capacities as such Person may be so
engaged or employed and notwithstanding that any such Person is, or is an
Affiliated Person of, a Trustee or officer of the Trust; and, except as
prohibited by law, to delegate any of the powers and duties of the Trustees
to any one or more Trustees, agents, representatives, officers, employees,
independent contractors or other Persons.
4.2.14 To determine whether moneys, Securities or other assets
received by the Trust shall be charged or credited to income or capital or
allocated between income and capital, including the power to amortize or
fail to amortize any part or all of any premium or discount, to treat all
or any part of the profit resulting from the maturity or sale of any asset,
whether purchased at a premium or at a discount, as income or capital, or
apportion the same between income and capital, to apportion the sales price
of any asset between income and capital, and to determine in what manner
any expenses or disbursements are to be borne as between income and
capital, whether or not in the absence of the power and authority conferred
by this subsection such moneys, Securities or other assets would be
regarded as income or as capital or such expense or disbursement would be
charged to income or to capital; to treat any dividend or other
distribution on any investment as income or capital or to apportion the
same between income and capital; to provide or fail to provide reserves for
depreciation, amortization or obsolescence in respect of all or any part of
the Trust Estate subject to depreciation, amortization or obsolescence in
such amounts and by such methods as they shall determine; and to determine
the method or form in which the accounts and records of the Trust shall be
kept and to change from time to time such method or form.
<PAGE>
4.2.15 To determine from time to time the value of all or any part of
the Trust Estate and of any services, Securities, property or other
consideration to be furnished to or acquired by the Trust, and from time to
time to revalue all or any part of the Trust Estate in accordance with such
Valuations or other information, which Valuations or other information may
be provided by Persons retained for the purpose, as the Trustees, in their
sole judgment, may deem necessary.
4.2.16 To collect, sue for, and receive all sums of money coming due
to the Trust, and to engage in, intervene in, prosecute, join, defend,
compound, compromise, abandon or adjust, by arbitration or otherwise, any
actions, suits, proceedings, disputes, claims, controversies, demands or
other litigation relating to the Trust, the Trust Estate or the Trust's
affairs, to enter into agreements therefor, whether or not any suit is
commenced or claim accrued or asserted and, in advance of any controversy,
to enter into agreements regarding arbitration, adjudication or settlement
thereof.
4.2.17 To renew, modify, release, compromise, extend, consolidate, or
cancel, in whole or in part, any obligation to or of the Trust.
4.2.18 To purchase and pay for out of the Trust Estate insurance
contracts and policies insuring the Trust Estate against any and all risks
and insuring the Trust, the Trustees, the Shareholders, the officers of the
Trust, or any or all of them, against any and all claims and liabilities of
every nature asserted by any person arising by reason of any action alleged
to have been taken or omitted by the Trust or by the Trustees, Shareholders
or officers.
4.2.19 To cause legal title to any of the Trust Estate to be held by
or in the name of the Trustees or, except as prohibited by law, by or in
the name of the Trust or one or more of the Trustees or any other Person as
the Trustees may determine, on such terms and in such manner and with such
powers (not inconsistent with Section 1.1), and with or without disclosure
that the Trust or Trustees are interested therein.
4.2.20 To adopt a fiscal year and accounting method for the Trust, and
from time to time to change such fiscal year and accounting method, and to
engage a firm of independent public accountants to audit the financial
records of the Trust.
4.2.21 To adopt and use a seal (but the use of a seal shall not be
required for the execution of instruments or obligations of the Trust).
<PAGE>
4.2.22 With respect to any Securities issued by the Trust, to provide
that the same may be signed by the manual signature of one or more Trustees
or officers, or Persons who have theretofore been Trustees or officers or
by the facsimile signature of any such Person (with or without
countersignature by a transfer agent, registrar, authenticating agent or
other similar Person), and to provide that ownership of such Securities may
be conclusively evidenced by the books and records of the Trust or any
appropriate agent of the Trust without the necessity of any certificate,
all as determined by the Trustees from time to time to be consistent with
normal commercial practices.
4.2.23 To declare and pay dividends and distributions as provided in
Section 7.5.
4.2.24 To adopt a dividend or distribution reinvestment or similar
such plan for the Trust, and to provide for the cost of the administration
thereof to be borne by the Trust.
4.2.25 To file any and all documents and take any and all such other
action as the Trustees in their sole judgment may deem necessary in order
that the Trust may lawfully conduct its business in any jurisdiction.
4.2.26 To participate in any reorganization, readjustment,
consolidation, merger, dissolution, sale or purchase of assets, lease or
similar proceedings of any corporation, partnership or other organization
in which the Trust shall have an interest and in connection therewith to
delegate discretionary powers to any reorganization, protective or similar
committee and to pay assessments and other expenses in connection
therewith.
4.2.27 To cause to be organized or assist in organizing any Person,
which may or may not be a subsidiary of the Trust, under the laws of any
jurisdiction to acquire the Trust Estate or any part or parts thereof or to
carry on any business in which the Trust shall directly or indirectly have
any interest; and, also, subject to the provisions of this Declaration, to
cause the Trust to merge with such Person or any existing Person or to
sell, rent, lease, hire, convey, negotiate, assign, exchange or transfer
the Trust Estate or any part or parts thereof to or with any such Person or
any existing Person in exchange for the Securities thereof or otherwise,
and to lend money to, subscribe for the Securities of, and enter into any
contracts with, any such Person in which the Trust holds or is about to
acquire Securities or any other interest.
4.2.28 To determine whether or not, at any time or from time to time,
to attempt to cause the Trust to qualify or to cease to qualify for
taxation as a Real Estate Investment Trust, and to take all action deemed
by the Trustees appropriate in connection with maintaining or ceasing to
maintain such qualification.
4.2.29 To make any indemnification payment authorized by this
Declaration of Trust.
4.2.30 To do all other such acts and things as are incident to the
foregoing, and to exercise all powers which are necessary or useful to
carry on the business of the Trust, to promote any of the purposes for
which the Trust is formed, and to carry out the provisions of this
Declaration.
<PAGE>
4.3 BY-LAWS. The Trustees may, but are not required to, make, adopt, amend
or repeal By-Laws containing provisions relating to the business of the Trust,
the conduct of its affairs, its rights or powers and the rights or powers of its
Shareholders, Trustees or officers not inconsistent with law or with this
Declaration. Such By-Laws may provide for the appointment by the Chairman and
President of assistant officers or of agents of the Trust in addition to those
provided for in the foregoing Section 4.2.12, subject however to the right of
the Trustees to remove or discharge such officers or agents.
ARTICLE V - AGENTS
------------------
5.1 EMPLOYMENT OF EMPLOYEES, AGENTS, ETC. The Trustees are responsible for
the general policies of the Trust and for such general supervision of the
business of the Trust conducted by all officers, agents, employees, advisers,
managers or independent contractors of the Trust as may be necessary to ensure
that such business conforms to the provisions of this Declaration. However, the
Trustees are not, and shall not be, required personally to conduct the business
of the Trust and, consistent with their ultimate responsibility as stated above,
the Trustees shall have the power to appoint, employ or contract with any Person
(including one or more of themselves or any corporation, partnership, or trust
in which one or more of them may be directors, officers, stockholders, partners
or trustees) as the Trustees may deem necessary or proper for the transaction of
the business of the Trust, and for such purpose may grant or delegate such
authority to any such Person as the Trustees may in their sole discretion deem
necessary or desirable without regard to whether such authority is normally
granted or delegated by trustees.
The Trustees shall have the power to determine the terms and compensation
of any Person whom they may employ or with whom they may contract.
<PAGE>
ARTICLE VI - SHARES AND SHAREHOLDERS
------------------------------------
6.1 SHARES. The beneficial interest in the Trust shall be divided into
Shares. The total number of Shares the Trust shall have authority to issue shall
be thirty-two million and fifty thousand (32,050,000) shares, consisting of (i)
seven million and fifty thousand (7,050,000) preferred shares of beneficial
interest, each without par value ("Preferred Shares"), and (ii) twenty five
million (25,000,000) common shares of beneficial interest, each without par
value ("Common Shares," and together with the Preferred Shares, the "Shares").
The Shares may be issued for such consideration as the Trustees shall determine,
including upon the conversion of convertible debt, or by way of share dividend
or share split in the discretion of the Trustees. In addition to the issuance of
Shares by way of share dividend or share split, the Trustees may combine
outstanding Shares by way of a reverse share split and provide for the payment
in cash in lieu of any fractional interest in a combined Share; and the
mechanics authorized by the Trustees to implement any such combination shall be
binding upon all Shareholders, holders of convertible debt, optionees and others
with any interest in the Shares. Outstanding Shares shall be transferable and
assignable in like manner as are shares of stock of a Massachusetts business
corporation. Shares reacquired by the Trust shall no longer be deemed
outstanding and shall have no voting or other rights unless and until reissued.
Shares reacquired by the Trust may be canceled by action of the Trustees. All
Shares shall be fully paid and nonassessable by or on behalf of the Trust upon
receipt of full consideration for which they have been issued or without
additional consideration if issued by way of share dividend, share split, or
upon the conversion of convertible debt.
6.1.1 Preferred Shares. Upon the vote of two-thirds of the Board of
Trustees, the Trust may issue Preferred Shares in one or more series
consisting of such numbers of Shares and having such preferences,
conversion and other rights, voting powers, restrictions and limitations as
to dividends, qualifications and terms and conditions of redemption of
Shares as the Board of Trustees may from time to time determine when
designating such series.
6.1.2 Common Shares.
6.1.2.1 General. Upon the vote of a majority of the Board of
Trustees, the Trust may issue Common Shares. Shares of a particular
class of issued Common Shares shall have equal dividend, distribution,
liquidation and other rights, and shall have no preference,
cumulative, preemptive, appraisal, conversion or exchange rights.
6.1.2.2 Rights Upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any
distribution of the assets of, the Trust, each holder of Common Shares
shall be entitled to receive, ratably with each other holder of Common
Shares that portion of the assets of the Trust available for
distribution to the holders of its Common Shares and as the number of
Common Shares held by such holder bears to the total number of Common
Shares then outstanding.
6.1.2.3 Voting Rights. The holders of Common Shares shall be
entitled to vote on all matters submitted to the holders of Common
Shares for a vote, at all meetings of the Shareholders, and each
holder of Common Shares shall be entitled to one vote for each Common
Share held by such Shareholder.
6.2 LEGAL OWNERSHIP OF TRUST ESTATE. The legal ownership of the Trust
Estate and the right to conduct the business of the Trust are vested exclusively
in the Trustees, and the Shareholders shall have no interest therein other than
the beneficial interest in the Trust conferred by their Shares issued hereunder,
and they shall have no right to compel any partition, division, dividend or
distribution of the Trust or any of the Trust Estate, nor can they be called
upon to share or assume any losses of the Trust or suffer an assessment of any
kind by virtue of their ownership of Shares.
<PAGE>
6.3 SHARES DEEMED PERSONAL PROPERTY. The Shares shall be personal property
and shall confer upon the holders thereof only the interest and rights
specifically set forth in this Declaration. The death, insolvency or incapacity
of a Shareholder shall not dissolve or terminate the Trust or affect its
continuity nor give his legal representative any rights whatsoever, whether
against or in respect of other Shareholders, the Trustees or the Trust Estate or
otherwise except the sole right to demand and, subject to the provisions of this
Declaration, the By-Laws, if adopted, and any requirements of law, to receive a
new certificate for Shares registered in the name of such legal representative,
in exchange for the certificate held by such Shareholder.
6.4 SHARE RECORD, ISSUANCE AND TRANSFERABILITY OF SHARES. Records shall be
kept by or on behalf of and under the direction of the Trustees, which shall
contain the names and addresses of the Shareholders, the number of Shares held
by them respectively, and the number of the certificates, if any, representing
the Shares, and in which there shall be recorded all transfers of Shares. The
Persons in whose names Shares or certificates therefor are registered on the
records of the Trust shall be deemed the absolute owners of such Shares for all
purposes of this Trust; but nothing herein shall be deemed to preclude the
Trustees or officers, or their agents or representatives, from inquiring as to
the actual ownership of Shares. Until a transfer is duly registered on the
records of the Trust, the Trustees shall not be affected by any notice of such
transfer, either actual or constructive. The payment thereof to the Person in
whose name any Shares are registered on the records of the Trust or to the duly
authorized agent of such Person (or if such Shares are so registered in the
names of more than one Person, to any one of such Persons or to the duly
authorized agent of such Person) shall be sufficient discharge for all dividends
or distributions payable or deliverable in respect of such Shares and from all
liability to see to the application thereof.
In case of the loss, mutilation or destruction of any certificate for
Shares, the Trustees may issue or cause to be issued a replacement certificate
on such terms and subject to such rules and regulations as the Trustees may from
time to time prescribe. Nothing in this Declaration shall impose upon the
Trustees or a transfer agent a duty, or limit their rights to inquire into
adverse claims.
In lieu of issuing certificates for Shares, the Trustees may adopt
procedures for the Shares to be considered as uncertificated Securities to the
same extent that such procedures would be available for shares of capital stock
of a Massachusetts business corporation.
Unless the Trustees shall have determined that the Trust shall no longer
qualify as a REIT, any issuance, redemption or transfer of Trust Shares which
would operate to disqualify the Trust as a real estate investment trust for
purposes of Federal income tax, is null and void, and such transaction will be
canceled when so determined in good faith by the Trustees.
<PAGE>
6.5 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. The Trustees may from time
to time declare and pay to Shareholders such dividends or distributions in cash
or other property, out of current or accumulated income, capital, capital gains,
principal, surplus, proceeds from the increase or refinancing of Trust
obligations, for the repayment of loans made by the Trust, from the sale of
portions of the Trust Estate, or from any other source as the Trustees in their
discretion shall determine; but, in any event, the Trustees, shall, from time to
time, declare and pay to the Shareholders such distributions as may be necessary
to continue to qualify the Trust as a Real Estate Investment Trust, so long as
such qualification, in the opinion of the Trustees, is in the best interest of
the Shareholders. Shareholders shall have no right to any dividend or
distribution unless and until declared by the Trustees.
6.6 TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND REGISTRAR. The Trustees
shall have power to employ one or more transfer agents, dividend disbursing
agents, dividend or distribution reinvestment plan agents, and registrars and to
authorize them on behalf of the Trust: to keep records, to hold and disburse any
dividends and distributions and to have and perform powers and duties
customarily had and performed by transfer agents, dividend disbursing agents,
dividend or distribution reinvestment plan agents, and registrars as may be
conferred upon them by the Trustees.
6.7 SHAREHOLDERS' MEETINGS AND CONSENTS. The Trustees shall cause to be
called and held an Annual Meeting of the Shareholders at such time and such
place as they may determine, at which Trustees shall be elected any other proper
business may be conducted. The Annual Meeting of Shareholders shall be held
after not fewer than 10 days nor more than 60 days written notice of such
meeting has been sent to Shareholders by the Trustees and after delivery to the
Shareholders of the Annual Report for the fiscal year then ended. Special
meetings of Shareholders may be called by a majority of the Trustees, a majority
of the Unaffiliated Trustees, or the Chairman or other chief executive officer
of the Trust, and shall be called by an officer of the Trust upon the written
request of Shareholders holding not less than 10% of the outstanding Shares of
the Trust entitled to vote. Upon receipt of a written request either in person
or by registered mail stating the purpose(s) of the meeting requested by
Shareholders, the Trust shall provide all Shareholders written notice (either in
person or by mail) of a meeting and the purpose of such meeting to be held on a
date not fewer than 10 days nor more than 60 days after the date of such notice,
at a time and place determined by the Trustees. If there shall be no Trustees, a
special meeting of the Shareholders shall be held promptly for the election of
successor Trustees. The call and notice of any special meeting shall state the
purpose of the meeting and no other business shall be considered at such
meeting. A majority of the outstanding Shares entitled to vote at any meeting
represented in person or by proxy shall constitute a quorum at such meeting.
Whenever Shareholders are required or permitted to take any action, such action
may be taken, except as otherwise provided by this Declaration or required by
law, by a majority of the votes cast at a meeting of Shareholders at which a
quorum is present by holders of Shares entitled to vote thereon, or without a
meeting by written consent setting forth the action so taken signed by holders
of all outstanding Shares entitled to vote thereon. Notwithstanding this or any
other provision of this Declaration, no vote or consent of Shareholders shall be
required to approve the sale, exchange or other disposition by the Trustees of
one or more assets of the Trust or the pledging, hypothecating, granting
security interests in, mortgaging, encumbering or leasing of all or any of the
Trust Estate.
<PAGE>
6.8 PROXIES. Whenever the vote or consent of Shareholders is required or
permitted under this Declaration, such vote or consent may be give either
directly by the Shareholder or by a proxy. The Trustees may solicit such proxies
from the Shareholders or any of them in any matter requiring or permitting the
Shareholders' vote or consent.
6.9 REPORTS TO SHAREHOLDERS. The Trustees shall cause to be prepared and
mailed not later than 120 days after the close of each fiscal year of the Trust
a report of the business and operation of the Trust during such fiscal year to
the Shareholders, which report shall constitute the accounting of the Trustees
for such fiscal year. The report shall be in such form and have such content as
the Trustees deem proper, but shall in any event include a balance sheet, an
income statement and a surplus statement, each prepared in accordance with
generally accepted accounting principles, shall be audited by an independent
certified public accountant and shall be accompanied by the report of such
accountant thereon.
6.10 FIXING RECORD DATE. For the purpose of determining the Shareholders
who are entitled to vote or act at any meeting or any adjournment thereof, or
who are entitled to participate in any dividend or distribution, or for the
purpose of any other action, the Trustees may from time to time close the
transfer books for such period, not exceeding 30 days, as the Trustees may
determine; or without closing the transfer books the Trustees may fix a date not
more than 60 days prior to the date of any meeting of Shareholders or dividend
payment or other action as a record date for the determination of Shareholders
entitled to vote at such meeting or any adjournment thereof or to receive such
dividend or to take any other action. Any Shareholder who was a Shareholder at
the time so fixed shall be entitled to vote at such meeting or any adjournment
thereof or to receive such dividend or to take such other action, even though he
has since that date disposed of his Shares, and no Shareholder becoming such
after that date shall be so entitled to vote at such meeting or any adjournment
thereof or to receive such dividend or to take such other action.
6.11 NOTICE TO SHAREHOLDERS. Any notice of meeting or other notice,
communication or report to any Shareholder shall be deemed duly delivered to
such Shareholder when such notice, communication or report is deposited, with
postage thereon prepaid, in the United States mail, addressed to such
Shareholder at his address as it appears on the records of the Trust or is
delivered in person to such Shareholder.
6.12 Shareholders' Disclosure; Trustees' Right to Refuse to Transfer
Shares; Limitation on Holdings; Redemption of Shares:
6.12.1 The Shareholders shall upon demand disclose to the
Trustees in writing such information with respect to direct and
indirect ownership of the Shares as the Trustees deem necessary to
comply with the REIT Provisions of the Internal Revenue Code or to
comply with the requirements of any taxing authority or governmental
agency.
<PAGE>
6.12.2 Whenever it is deemed by them to be reasonably necessary
to protect the tax status of the Trust as a REIT, the Trustees may
require a statement or affidavit from each Shareholder or proposed
transferee of Shares setting forth the number of Shares already owned
by him and any related Person specified in the form prescribed by the
Trustees for that purpose. If, in the opinion of the Trustees, the
proposed transfer may jeopardize the qualification of the Trust as a
REIT, the Trustees shall have the right, but not a duty, to refuse to
transfer the Shares to the proposed transferee. All contracts for the
sale or other transfer of Shares shall be subject to this provision.
6.12.3 Notwithstanding any other provision of this Declaration of
Trust to the contrary and subject to the provisions of subsection
6.12.5, no Person, or Persons acting as a group, shall at any time
directly or indirectly acquire ownership in the aggregate of more than
9.8% of the outstanding Shares of the Trust (the "Limit"). Shares
owned by a Person or group of Persons in excess of the Limit at any
time shall be deemed "Excess Shares." For the purposes of this Section
6.12, the term "ownership" shall be defined in accordance with or by
reference to the qualification requirements of the REIT Provisions of
the Internal Revenue Code and shall also mean ownership as defined in
Rule 13d-3 promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, and the term "group" shall have
the same meaning as that term has for purposes of Section 13(d)(3) of
such Act as amended. All Shares which any Person has the right to
acquire upon exercise of outstanding rights, options and warrants, and
upon conversion of any Securities convertible into Shares, if any,
shall be considered outstanding for purposes of the Limit if such
inclusion will cause such person to own more that the Limit.
<PAGE>
6.12.4 The Trustees, by notice to the holder thereof, may redeem
any or all Shares that are Excess Shares (including Shares that remain
or become Excess Shares because of the decrease in outstanding Shares
resulting from such redemption); and from and after the date of giving
of such notice of redemption ("redemption date") the Shares called for
redemption shall cease to be outstanding and the holder thereof shall
cease to be entitled to dividends, voting rights and other benefits
with respect to such Shares excepting only the right to payment by the
Trust of the redemption price determined and payable as set forth in
the following two sentences. Subject to the limitation on payment set
forth in the following sentence, the redemption price of each Excess
Share called for redemption shall be the average daily per Share
closing sales price if the Shares of the Trust are listed on a
national securities exchange, and if the Shares are not so listed
shall be the mean between the average per Share closing bid prices and
the average per Share closing asked prices, in each case during the 30
day period ending on the business day prior to the redemption date, or
if there have been no sales on a national securities exchange and no
published bid quotations and no published asked quotations with
respect to Shares of the Trust during such 30 day period, the
redemption price shall be the price determined by the Trustees in good
faith. Unless the Trustees determine that it is in the interest of the
Trust to make earlier payment of all of the amount determined as the
redemption price per Share in accordance with the preceding sentence,
the redemption price shall by payable only upon the liquidation of the
Trust and shall not exceed an amount which is the sum of the per Share
distributions designated as liquidating distributions and return of
capital distributions declared with respect to unredeemed Shares of
the Trust of record subsequent to the redemption date, and no interest
shall accrue with respect to the period subsequent to the redemption
date to the date of such payment; provided, however, that in the event
that within 30 days after the redemption date the Person from whom the
Excess Shares have been redeemed sells (and notifies the Trust of such
sale) a number of the remaining Shares owned by him at least equal to
the number of such Excess Shares (and such sale is to a Person in
whose hands the Shares sold would not be Excess Shares), then the
Trust shall rescind the redemption of the Excess Shares if following
such rescission such Person would not be the holder of Excess Shares,
except that if the Trust receives an opinion of its counsel that such
recission would jeopardize the tax status of the Trust as a REIT then
the Trust shall in lieu of recission make immediate payment of the
redemption price.
6.12.5 The Limit set forth in Section 6.12.3 shall not apply to
acquisitions Shares pursuant to a cash tender offer made for all
outstanding Shares of the Trust (including Securities convertible into
Shares) in conformity with applicable federal and state securities
laws where two-thirds of the outstanding Shares (not including Shares
or Securities convertible into Shares held by the tender offerer
and/or any "affiliates" or "associates" thereof within the meaning of
the Act) are duly tendered and accepted pursuant to the cash tender
offer; nor shall the Limit apply to the acquisition of Shares by an
underwriter in a public offering of Shares, or in any transaction
involving the issuance of Shares by the Trust, in which a majority of
the Trustees determine that the underwriter or other person or party
initially acquiring such Shares will make a timely distribution of
such Shares to or among other holders such that, following such
distribution, none of such Shares will be Excess Shares. The Trustees
in their discretion may exempt from the Limit ownership of certain
designated Shares while owned by a person who has provided the
Trustees with evidence and assurances acceptable to the Trustees that
the qualification of the Trust as a REIT would not be jeopardized
thereby.
6.12.6 Notwithstanding any other provision of this Declaration of
Trust to the contrary, any purported acquisition of Shares of the
Trust which would result in the disqualification of the Trust as a
REIT shall be null and void.
6.12.7 Nothing contained in this Section 6.12 or in any other
provision of this Declaration of Trust shall limit the authority of
the Trustees to take such other action as they deem necessary or
advisable to protect the Trust and the interests of the Shareholders
by preservation of the Trust's qualification as a REIT under the REIT
Provisions of the Internal Revenue Code.
<PAGE>
6.12.8 If any provision of this Section 6.12 or any application
of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the
remaining provisions shall not be affected and other applications of
such provision shall be affected only to the extent necessary to
comply with the determination of such court. To the extent this
Section 6.12 may be inconsistent with any other provision of this
Declaration of Trust, this Section 6.12 shall be controlling.
6.13 INSPECTION BY SHAREHOLDERS. Shareholders of record of the Trust shall
have the same right to inspect the records of the Trust as has a stockholder in
a Massachusetts business corporation.
ARTICLE VI - LIABILITY OF TRUSTEES, SHAREHOLDERS
AND OFFICERS, AND OTHER MATTERS
------------------------------------------------
7.1 LIMITATION OF LIABILITY OF TRUSTEES AND OFFICERS. No Trustee or officer
of the Trust shall be liable to the Trust or to any Trustee or Shareholder for
any act or omission of any other Trustee, Shareholder, officer or agent of the
Trust or be held to any personal liability whatsoever in tort, contract or
otherwise in connection with the affairs of this Trust, except only that arising
from his own bad faith, willful misfeasance, gross negligence, or reckless
disregard of his duties.
7.2 LIMITATION OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OFFICERS. The
Trustees and officers in incurring any debts, liabilities or obligations, or in
taking or omitting any other actions for or in connection with the Trust are,
and shall be deemed to be, acting as Trustees or officers of the Trust and not
in their own individual capacities. Except to the extent provided in Section 7.1
no Trustee or officer shall, nor shall any Shareholder, be liable for any debt,
claim, demand, judgment, decree, liability or obligation of any kind of, against
or with respect to the Trust arising out of any action taken or omitted for or
on behalf of the Trust and the Trust shall be solely liable therefor and resort
shall be had solely to the Trust Estate for the payment or performance thereof.
Each Shareholder shall be entitled to pro rata indemnity from the Trust Estate
if, contrary to the provisions hereof, such Shareholder shall be held to any
such personal liability.
7.3 EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS. As far as practicable, the
Trustees shall cause any written instrument creating an obligation of the Trust
to include a reference to this Declaration and to provide that neither the
Shareholders nor the Trustees nor the officers of the Trust shall be liable
thereunder and that the other parties to such instrument shall look solely to
the Trust Estate for the payment of any claim thereunder or for the performance
thereof; however, the omission of such provision form any such instrument shall
not render the Shareholders or any Trustee or officer of the Trust liable nor
shall the Trustees or any officer of the Trust be liable to anyone for such
omission.
<PAGE>
7.4 INDEMNIFICATION AND REIMBURSEMENT OF TRUSTEES AND OFFICERS. Any Person
made a party to any action, suit or proceeding or against whom a claim or
liability is asserted by reason of the fact that he, his testator or intestate
was or is a Trustee or officer or active in such capacity on behalf of the Trust
shall be indemnified and held harmless by the Trust against judgments, fines,
amounts paid on account thereof (whether in settlement or otherwise) and
reasonable expenses, including attorneys' fees, actually and reasonably incurred
by him in connection with the defense of such action, suit, proceeding, claim or
alleged liability or in connection with any appeal therein, whether or not the
same proceeds to judgment or is settled or otherwise brought to a conclusion;
provided, however, that no such Person shall be so indemnified or reimbursed for
any claim, obligation or liability which arose out of the Trustee's or officer's
bad faith, willful misfeasance, gross negligence or reckless disregard of his
duties; and provided, further, that such Person gives prompt notice of such
action, suit or proceeding, executes such documents and takes such action as
will permit the Trust to conduct the defense or settlement thereof and
cooperates therein. In the event of a settlement approved by the Trustees of any
such claim, alleged liability, action, suit or proceeding, indemnification and
reimbursement shall be provided except as to such matters covered by the
settlement which the Trust is advised by its counsel arose from the Trustee's or
officer's bad faith, willful misfeasance, gross negligence, or reckless
disregard of his duties; provided, however, that such advice by counsel shall
not preclude any Trustee or officer from seeking a judicial determination that
he did not act in bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties and is entitled to indemnification and reimbursement
hereunder. Expenses may be paid in advance by the Trust upon receipt of an
undertaking by or on behalf of a Person indemnified to pay over the amount
unless it shall ultimately be determined he is entitled to be indemnified by the
Trust as authorized herein. Such rights of indemnification and reimbursement
shall be satisfied only out of the Trust Estate. The rights accruing to any
Person under these provisions shall not exclude any other right to which he may
be lawfully entitled, nor shall anything contained herein restrict the right of
the Trust to indemnify or reimburse any such Person in any proper case even
though not specifically provided for herein, nor shall anything contained herein
restrict such right of a Trustee to contribution as may be available under
applicable law. The Trust shall have power to purchase and maintain liability
insurance on behalf of any Person entitled to indemnity hereunder, whether or
not the Trust would have the power to indemnify against that liability.
<PAGE>
7.5 RIGHT OF TRUSTEES AND OFFICERS TO OWN SHARES OR OTHER PROPERTY AND TO
ENGAGE IN OTHER BUSINESS. Any Trustee or officer may acquire, own, hold and
dispose of Shares in the Trust, for his individual account, and may exercise all
rights of a Shareholder to the same extent and in the same manner as if he were
not a Trustee or officer. Any Trustee or officer may have personal business
interests and may engage in personal business activities, which interests and
activities may include the acquisition, syndication, holding, management,
development, operation or deposit in, for his own account or for the account of
others, of interests in Real Property or Persons engaged in the real estate
business, even if the same directly compete with the actual business being
conducted by the Trust. Any Trustee or officer may be interested as trustee,
officer, director, stockholder, partner, member or employee, or otherwise have a
direct or indirect interest in any Person who may be engaged to render advice or
services to the Trust, and may receive compensation from such Person as well as
compensation as Trustee, officer or otherwise hereunder and no such activities
shall be deemed to conflict with his duties and powers as Trustee or officer.
7.6 TRANSACTIONS WITH AFFILIATES. The Trust shall not engage in
transactions with any Trustee, officer, or any Affiliated Person of such Trustee
or officer, except to the extent that each such transaction has, after
disclosure of such affiliation, been approved or ratified by the affirmative
vote of a majority of the Trustees not having any interest in such transaction
after a determination by them that:
7.6.1 The transaction is fair and reasonable to the Trust and its
Shareholders;
7.6.2 The terms of such transaction are at least as favorable as the
terms of any comparable transactions made on an arm's length basis that are
known to such Trustees;
7.6.3 Payments to any Trustee or officer for services rendered in a
capacity other than that as Trustee, or officer may only be made upon
determination that:
(i) the compensation is not in excess of their compensation paid
for any comparable services; and
(ii) the compensation is not greater than the charges for
comparable services available from others who are competent and not
affiliated with any of the parties involved.
The provisions of this Section 7.6 shall not prohibit the Trust from
participating in any investment on a pari passu basis with any other entity
whose trustees or directors are the same persons as the Trustees of the Trust
and as a result there are no Trustees of the Trust who may not also have an
interest in said investment as trustees or directors of such other entity.
7.7 PERSONS DEALING WITH TRUSTEES OR OFFICERS. Any act of the Trustees or
officers purporting to be done in their capacity as such shall, as to any
Persons dealing with such Trustees or officers, be conclusively deemed to be
within the purposes of this Trust and within the powers of the Trustees and
officers. No Person dealing with the Trustees or any of them, or with the
authorized officers, agents or representatives of the Trust shall be bound to
see to the application of any funds or property passing into their hands or
control. The receipt of the Trustees or any of them, or of authorized officers,
agents, or representatives of the Trust, for moneys or other consideration,
shall be binding upon the Trust.
<PAGE>
7.8 RELIANCE. The Trustees and officers may consult with counsel (which may
be a firm in which one or more of the Trustees or officers is or are members)
and the advice or opinion of such counsel shall be full and complete personal
protection to all of the Trustees and officers in respect of any action taken or
suffered by them in good faith and in reliance on or in accordance with such
advice or opinion. In discharging their duties, Trustees and officers, when
acting in good faith, may rely upon financial statements of the Trust
represented to them to be correct by the President or the officer of the Trust
having charge of its books of account, or stated in a written report by an
independent certified public accountant fairly to present the financial position
of the trust. The Trustees may rely, and shall be personally protected in
acting, upon any instrument or other document believed by them to be genuine.
ARTICLE VIII - DURATION, TERMINATION, AMENDMENT
AND REORGANIZATION OF TRUST
-----------------------------------------------
8.1 DURATION OF TRUST. The Trust shall continue perpetually unless
terminated pursuant to Section 8.2.
8.2 TERMINATION OF TRUST. The Trust may be terminated at any meeting of
Shareholders called for that purpose, by the affirmative vote of the holders of
not less than a majority of the Shares outstanding and entitled to vote thereon.
Upon the termination of the Trust:
(i) the Trust shall carry on no business except for the purpose
of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the
Trust and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust shall have been wound
up, including the power to fulfill or discharge the contracts of the
Trust, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Estate to
one or more Persons at public or private sale for consideration which
may consist in whole or in part of cash, Securities or other property
of any kind, discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business (and provided that the Trustees
may, if permitted by applicable law, and if they deem it to be in the
best interest of the Shareholders, appoint a liquidating trust, or
agent, or other entity, to perform one or more of the foregoing
functions); and
(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and
refunding agreements, as they deem necessary for their protection, the
Trustee or any liquidating trust, agent or other entity appointed by
them, shall distribute the remaining Trust Estate among the
Shareholders pro rata according to the number of Shares held by each.
If any plan for the termination of the Trust approved by the
holders of a majority of the Shares outstanding and entitled to vote
thereon and agreeable to a majority of the Trustees provides for
actions of the Trustees other than as aforesaid, the Trustees shall
have full authority to take all action as in their opinion is
necessary or appropriate to implement said plan.
<PAGE>
8.2.1 After termination of the Trust and distribution to the
Shareholders as provided herein or in any said plan so approved by the
Shareholders, the Trustees shall execute and lodge among the records
of the Trust an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties hereunder and the rights and interests
of all Shareholders hereunder shall thereupon cease.
8.3 MERGER, ETC. Upon the vote or written consent of a majority of the
Trustees, including a majority of the Unaffiliated Trustees, and with the
approval of the holders of a majority of the Shares then outstanding and
entitled to vote, at a meeting the notice for which included a statement of the
proposed action, the Trustees may (a) merge the Trust into, or sell, convey and
transfer the Trust Estate to, any corporation, association, trust or other
organization in exchange for shares or Securities thereof, or beneficial
interests therein, or other consideration, and the assumption by such transferee
of the liabilities of the Trust and (b) thereupon terminate the Trust and,
subject to Section 8.2, distribute such shares, securities, beneficial
interests, or other consideration, ratably among the Shareholders in redemption
of their Shares.
8.4 AMENDMENT PROCEDURE. This Declaration may be amended by the vote or
written consent of a majority of the Trustees and of the holders of a majority
of the outstanding Shares entitled to vote thereon; provided, however, that no
amendment which would reduce the priority of payment or amount payable to any
class of Shares of the Trust upon liquidation of the Trust or that would
diminish or eliminate any voting rights pertaining to any class of Shares shall
be made unless approved by the vote or consent of the holders of two-thirds of
the outstanding Shares of such class. The Trustees may also amend this
Declaration by the vote of two-thirds of the Trustees without the vote or
consent of Shareholders at any time to the extent deemed by the Trustees in good
faith to be necessary to meet the requirements for qualification as a Real
Estate Investment Trust under the REIT Provisions of the Internal Revenue Code
or any interpretation thereof by a court or other governmental agency of
competent jurisdiction, but the Trustees shall not be liable for failing so to
do. Actions by the Trustees pursuant to subsection 9.3.1 hereof that result in
amending this Declaration may also be effected without vote or consent of any
Shareholder.
<PAGE>
ARTICLE IX - MISCELLANEOUS
--------------------------
9.1 APPLICABLE LAW. This Declaration of Trust is made in The Commonwealth
of Massachusetts; the situs, domicile and residency of the Trust for all
purposes is Massachusetts; and the Trust is created under and is to be governed
by and construed and administered according to the laws of said Commonwealth,
including the Massachusetts Business Corporation Law as the same may be amended
from time to time, to which reference is made with the intention that matters
not specifically covered herein or as to which an ambiguity may exist shall be
resolved as if the Trust were a Massachusetts business corporation, but the
reference to said Business Corporation Law is not intended to and shall not give
the Trust, the Trustees, the Shareholders or any other person any right, power,
authority or responsibility available only to or in connection with an entity
organized in corporate form.
9.2 FILING OF COPIES; REFERENCES; HEADINGS. The original or a copy of this
instrument and of each amendment hereto shall be kept at the office of the Trust
where it may be inspected by any Shareholder. A copy of this instrument and of
each amendment hereto shall be filed by the Trust with the Secretary of The
Commonwealth of Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time be required,
but the failure to make any such filing shall not impair the effectiveness of
this instrument or any such amendment. Anyone dealing with the Trust may rely on
a certificate by an officer of the Trust as to whether or not any such
amendments have been made, as to the identities of the Trustees and officers,
and as to an matters in connection with the Trust hereunder; and, with the same
effect as if it were the original, may rely on a copy certified by an officer of
the Trust to be a copy of this instrument or of any such amendments. In this
instrument and in any such amendment, references to this instrument, and all
expressions like "herein", "hereof", and "hereunder" shall be deemed to refer to
this instrument as a whole as the same may be amended or affected by any such
amendments. The masculine gender shall include the feminine and neuter genders.
Headings are placed herein for convenience of reference only and shall not be
taken as part hereof or control or affect the meaning, construction or effect of
this instrument. This instrument may be executed in any number of counterparts
each of which shall be deemed an original.
9.3 Provisions of the Trust in Conflict With Law or Regulations.
9.3.1 The provisions of this Declaration are severable, and if
the Trustees shall determine, with the advice of counsel, that any one
or more of such provisions (the "Conflicting Provisions") could have
the effect of preventing the Trust from qualifying as a real estate
investment trust under the REIT Provisions of the Internal Revenue
Code (and if the Trustees have determined the Trust should elect to be
taxed as a REIT under the Internal Revenue Code) or are in conflict
with other applicable federal or state laws or regulations, the
Conflicting Provisions shall be deemed never to have constituted a
part of the Declaration; provided, however, that such determination by
the Trustees shall not affect or impair any of the remaining
provisions of this Declaration or render invalid or improper any
action taken or omitted (including but not limited to the election of
Trustees) prior to such determination. A certification signed by a
majority of the Trustees setting forth any such determination and
reciting that it was duly adopted by the Trustees, or a copy of this
Declaration, with the Conflicting Provisions removed pursuant to such
a determination, signed by a majority of the Trustees, shall be
conclusive evidence (except as to Shareholders, as to whom it shall
only be prima facie evidence) of such determination when lodged in the
records of the Trust. The Trustees shall not be liable for failure to
make any determination under this Section 9.3.1. Nothing in this
Section 9.3.1 shall in any way limit or affect the right of the
Trustees to amend this Declaration as provided in Section 8.2.
<PAGE>
9.3.2 If any provision of this Declaration shall be held invalid
or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render
invalid or unenforceable any other provision of this Declaration, and
this Declaration shall be carried out as if any such invalid or
unenforceable provisions were not contained herein.
9.4 BINDING EFFECT; SUCCESSORS IN INTEREST. Each Person who becomes a
Shareholder shall, as a result thereof, be deemed to have agreed to and to be
bound by the provisions of this Declaration of Trust. This Declaration shall be
binding upon and inure to the benefit of the Trustees and the Shareholders and
the respective successors, assigns, heirs distributees and legal representatives
of each of them.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Declaration as
of the __th day of _______, 1999.
STATE OF
COUNTY OF
Then personally appeared _______________, to me known to be one of the
Trustees who executed the foregoing Declaration of Trust and acknowledged the
same to be his free act and deed, this ___ day of __________, 1999.
Notary Public
---------------------------
My commission expires:
