SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported)
August 7, 1997
National Properties Investment Trust
Formerly Richard Roberts Real Estate Growth Trust I
(Exact Name of Registrant as Specified in Charter)
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Massachusetts 2-95449 06-6290322
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(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
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P.O. Box 148 Canton Center, CT 06020
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (888) 678-1109
N/A
(FORMER NAME OR FORMER ADDRESS IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
On August 7, 1997, each of the Trustees of the Registrant executed a
Restated Declaration of Trust of National Properties Investment Trust that was
filed with the Secretary of State of the Commonwealth of Massachusetts on
August 19, 1997 (the "New Declaration of Trust"). This New Declaration of Trust
amends and restates the Declaration of Trust of Richard Roberts Real Estate
Growth Trust 1 executed as of January 16, 1985 and filed with the Secretary of
State of the Commonwealth of Massachusetts on January 18, 1985, as amended and
restated by the Amended and Restated Declaration of Trust executed on March 11,
1985 and filed with the Secretary of State of the Commonwealth of Massachusetts
on March 15, 1985, as amended and restated by the Amended and Restated
Declaration of Trust executed on March 31, 1985, and filed with the Secretary
of State of the Commonwealth of Massachusetts on April 9, 1985, as amended and
restated by the Amended and Restated Declaration of Trust executed on April 18,
1995, and filed with the Secretary of State of the Commonwealth of
Massachusetts on May 1, 1995 (the "Old Declaration of Trust").
The New Declaration of Trust amends and restates the Old Declaration of
Trust to, among other things, make the Trust self-managing with an infinite
life.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
Amended and Restated Declaration of Trust of National Properties
Investment Trust formerly known as Richard Roberts Real Estate Growth Trust 1.
[Remainder of page intentionally left blank. Signature page to follow.]
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL PROPERTIES INVESTMENT TRUST
BY: /s/ Peter M. Stein
Peter M. Stein,
Managing Trustee
October 17, 1997
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INDEX TO EXHIBITS
Exhibit
Number Description
3.1(i) Amended and Restated Declaration of Trust of National Properties
Investment Trust formerly known as Richard Roberts Real Estate
Growth Trust 1.
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Exhibit 3.1(i)
RESTATED
DECLARATION OF TRUST
of
NATIONAL PROPERTIES INVESTMENT TRUST
F/K/A/ RICHARD ROBERTS REAL ESTATE GROWTH TRUST 1
This is a Restated Declaration of Trust ("Restated Declaration") executed
on the 7th day of August, 1997 by PETER M. STEIN, residing at 32 Hanson Road,
Canton Center, Connecticut 06020, JAY GOLDMAN, residing at 41 Vineyard Road,
Newton, Massachusetts 02159 and ROBERT H. REIBSTEIN, residing at 135 Dedham
Street, Newton, Massachusetts 02161, restating the Declaration of Trust of
Richard Roberts Real Estate Growth Trust 1 executed as of January 16, 1985 and
filed with the Secretary of State of the Commonwealth of Massachusetts on
January 18, 1985 (the "Original Declaration"), as amended by the Amended and
Restated Declaration of Trust executed on March 11, 1985 and filed with the
Secretary of State of the Commonwealth of Massachusetts on March 15, 1985, as
amended by the amended and Restated Declaration of Trust executed on March 31,
1985, and filed with the Secretary of State of the Commonwealth of
Massachusetts on April 9, 1985, as amended by the Amended and Restated
Declaration of Trust executed on April 18, 1995, and filed with the Secretary
of State of the Commonwealth of Massachusetts on May 1, 1995. The undersigned
desire that the Trust created by the Original Declaration as restated hereby
(the "Trust") be operated in the manner and for the purposes hereinafter
stated, and that the Trust qualify as a "real estate investment trust" under
the REIT Provisions of the Code. The Trustees intend (i) to make an election to
qualify the Trust as a REIT as soon as practicable after the Trust has met the
REIT requirements under the Code and (ii) to conduct its operations in such a
manner as to enable the Trust to continue to qualify as a REIT. The undersigned
may hereafter acquire, hold, manage and dispose of certain assets as Trustees
in the manner hereinafter stated. It is proposed that the beneficial interest
in the Trust and the Trust assets shall be divided into transferable shares of
beneficial interest, evidenced by certificates therefore as hereinafter
provided. Accordingly, the undersigned hereby declare that they will hold in
trust any and all property of every type and description which they are
acquiring or may hereafter acquire as Trustees, together with the proceeds
thereof, and will manage and dispose of the same from time to time for the
benefit of the holders of the Shares being issued and to be issued hereunder in
the manner and subject to the stipulations contained herein. The Trust's funds
shall not be held in any account in which they are commingled with the funds of
any other Person.
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ARTICLE I
THE TRUST, DEFINITIONS
Section 1.1. Name. The name of the Trust created by the Original
Declaration as amended and restated hereby shall be NATIONAL PROPERTIES
INVESTMENT TRUST and so far as may be practicable the Trust's activities shall
be conducted, all documents shall be executed, and suits shall be prosecuted
and defended under that name. Under circumstances under which the Trustees
determine that the use of such name is not practicable, legal or convenient or
under circumstances in which the Trustees are contractually bound to change
that name, they may use such other designation or they may adopt another name
under which the Trust may hold property or conduct its activities.
Section 1.2. Place of Business. The Trust shall maintain an office in
Massachusetts at c/o The Prentice-Hall Corporation System, Inc., 160 Gould
Street, Needham, Massachusetts 02194, or such other place in Massachusetts as
the Trustees may determine from time to time. 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.
Section 1.3. Nature of Trust. The Trust shall be of the type commonly
termed a Massachusetts business trust. It is intended that the Trust shall
carry on a business as a REIT as described in the REIT Provisions of the Code.
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 (but nothing herein shall preclude the Trust
from being treated for tax purposes as an association under the REIT Provisions
of the Code) nor shall the Trustees or Shareholders or any of them for any
purpose be, nor be deemed to be, liable or responsible hereunder as partners or
joint venturers. The relationship of the Shareholders to the Trustees shall be
solely that of beneficiaries of the Trust in accordance with the rights
conferred upon them by this Declaration.
Section 1.4. Definitions. The terms defined in this Section 1.4 whenever
used in this Declaration shall, unless the context otherwise requires, have the
respective meanings hereinafter specified in this Section 1.4. In this
Declaration, words in the singular number include the plural and in the plural
number include the singular.
(a) Affiliate. As to any Person, (i) any other Person who owns
beneficially, directly or indirectly, five percent (5%) or more of the
outstanding capital stock, shares or equity interests of such Person, (ii) any
other Person which controls, is controlled by or is under common control with,
such Person or (iii) any officer, retired officer, director, employee, partner
or trustee of such Person or of any other Person which controls, is controlled
by or is under common control with such Person.
(b) Affiliated Trustee. A Trustee who is not an Independent
Trustee.
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(c) Annual Meeting of Shareholders. The meaning as set forth in
Section 2.9 hereof.
(d) Annual Report. The meaning set forth in Section 2.11 hereof.
(e) Appraisal. The determination of the then Current value of Real
Property as determined by a disinterested person, having no economic interest
in the Real Property nor an affiliation with the Trust or its Affiliates, and
who is appointed by the Trustees, and provided that such person is a member in
good standing of the American Institute of Real Estate Appraisers (M.A.I.) or
who in the sole judgment of the Trustees is properly qualified to make such a
determination. An Appraisal that has been conducted earlier on behalf of any
other Person shall constitute an Appraisal for purposes hereof so long as the
Trustees rely upon the same in good faith, provided (i) it meets the aforesaid
standards (other than with respect to who made the appointment) and was made on
Real Property in which the Trust acquires an entire or participating interest
therein or (ii) it was prepared not earlier than two years prior to the
acquisition by the Trust of its interest in the Real Property. In appraising
such properties, appraisers may take into consideration each of the specific
terms and conditions of a purchase, including any leaseback or other guarantee
arrangement contained therein. Such appraisal may not necessarily represent the
cash value of the property but may be based upon the value of the income stream
from such property plus the discounted value of the fee interest and other
terms of the purchase.
(f) Average Invested Assets. For any period, the average of the
aggregate Book Value of the Invested Assets before reserves for depreciation or
bad debts or other similar non-cash reserves computed by taking the average of
such values at the end of each month during such period.
(g) Book Value. The "Book Value" of an asset or assets of the
Trust shall be determined on the basis of generally accepted accounting
principles consistently applied and shall mean the value of such asset or
assets on the books of the Trust, without deduction for depreciation or bad
debts or other asset valuation reserves and without deduction for mortgages or
other security interests to which such asset or assets are subject, except that
no asset shall be valued at more than its fair market value as determined by
the Trustees.
(h) Code. The Internal Revenue Code of 1954, as amended, as now
enacted or hereafter amended and any successor statute and the regulations
promulgated thereunder.
(i) Declaration. The Original Declaration of the Trust as restated
by this Restated Declaration and all amendments, restatements, or modifications
thereof.
(j) Invested Assets. The Book Value of all Real Estate Investments
of the Trust.
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(k) NASAA Guidelines. The Statement of Policy on REIT's adopted
by the North American Securities Administrators Association, Inc.
(l) Net Assets. The Book Value of all the assets of the Trust
(other than intangibles) at cost before deducting depreciation or other non-cash
reserves minus all the liabilities of the Trust calculated at least quarterly
on a basis consistently applied, provided that prior to the initial public
offering of the Shares under the Registration Statement, the Net Assets shall
be no less than the lesser of (i) 10% of the total Net Assets upon completion
of such offering or (ii) $200,000, and further provided that the adjusted net
worth of the Trust (the amount obtained by subtracting the Trust's total
liabilities from its total assets as adjusted, calculated on the basis of Book
Value) shall not be less than $1,000,000 upon completion of the initial public
offering of the Shares.
(m) Net Income. For any period, the total revenues applicable to
such period, less the expenses applicable to such period other than additions to
reserves for depreciation or bad debts or other similar non-cash reserves (but
not including any gain to the Trust from the sale of any of the Trust's Real
Estate Investments).
(n) Offering Period. The period of time in which the initial
offering of the Shares through the Registration Statement occurs.
(o) Operating Expenses. The aggregate cash operating expenses of
every kind for any period including additional expenses paid directly or
indirectly by the Trust to, its Affiliates, or third parties based upon their
relationship with the Trust, including loan administration, servicing,
engineering, inspection and all other expenses, paid by the Trust, except the
expenses related to raising capital, for interest, taxes and direct property
acquisition, operation, maintenance and management costs.
(p) Person. Individuals, corporations, limited partnerships,
general partnerships, joint stock companies or associations, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other entities and governments and agencies and political
subdivisions thereof.
(q) Real Estate Investment. Any direct or indirect investment in
any equity interest in Real Property.
(r) Real Property. Land, leasehold interests (including but not
limited to interests of a lessor or lessee therein), rights and interests in
land, and any buildings, structures, improvements, furnishings, fixtures and
equipment located on or used in connection with land, leasehold interests or
rights in land or interests therein, located, to the extent practicable,
throughout the United States.
(s) Registration Statement. The registration statement on Form
S-11 of the Trust with respect to the Trust and the offer and sale of Shares,
filed with the SEC pursuant to and in conformity with Sections six and ten of
the Securities Act of 1933, as amended.
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(t) REIT. A real estate investment trust, as defined in Sections
856-860 of the Code.
(u) REIT Provisions of the Code. Part II, Subchapter (m) of
Chapter 1, of the Code and the regulations promulgated thereunder.
(v) Securities. Any stock, shares, shares of beneficial interest,
voting trust certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible subordinated or otherwise or in
general any instruments commonly known as "securities" or any certificates of
interest, shares or participation in temporary or interim certificates for,
receipts for, guarantees of, or warrants, options or rights to subscribe to, or
purchase any of the foregoing.
(w) SEC. The Securities and Exchange Commission.
(x) Shares The shares of beneficial interest of the Trust as
described in Section 2.1 hereof.
(y) Shareholders. As of any particular date, all holders of record
of outstanding Shares at such time.
(z) Trustees. As of any particular time, the trustees of the Trust
holding office at such time.
(aa) Trust Estate. As of any particular time, any and all
property, real, personal or otherwise, tangible or intangible, which is owned
or held by the Trust, including, but not limited to, property which is
transferred, conveyed or paid to the Trust, and all rents, income, profits and
gains therefrom.
(bb) Trustees' Regulations. The regulations as set forth
in Section 4.5 hereof.
ARTICLE II
THE SHARES AND SHAREHOLDERS
Section 2.1. Shares. The units into which the beneficial interest in the
Trust and the Trust Estate will be divided shall be designated as Shares, each
without par value. The Shares shall be of one class, and each Share shall be
identical in all respects with every other Share. Subject to Section 4.2
hereof, the Trust shall have authority to issue an unlimited number of Shares,
without par value. The certificates evidencing the Shares shall be in such
form, and signed as provided in Section 4.2(e) on behalf of the Trust and of a
transfer agent and/or registrar (if any) in such manner as the Trustees may
from time to time prescribe or as may be prescribed in the Trustees'
Regulations. The certificates shall be negotiable and title thereto and to the
Shares represented thereby shall be transferred by assignment and delivery
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thereof to the same extent and in all respects as a share certificate of a
Massachusetts business corporation (subject to Sections 2.4, 2.13 and 4.2(e)).
The Shares shall be issued by action of the Trustees and may be issued for such
consideration as the Trustees shall deem advisable (and shall not be issued
until such consideration is fully paid) or by way of share dividend or share
split in the discretion of the Trustees. All Shares shall be validly issued,
fully paid and nonassessable Shares by the Trust upon receipt of full
consideration for which they have been issued or without additional
consideration if issued by way of share dividend or share split, and when so
issued will be deemed fully paid and non-assessable. Each holder of Shares
shall as a result of being such holder be deemed to have agreed to the terms of
this Declaration and to be bound thereby. The holders of Shares shall be
entitled to receive, when and as declared from time to time by the Trustees out
of any funds legally available therefor, such dividends as may be declared from
time to time by the Trustees. In the event of the termination of the Trust or
upon the distribution of its assets, the assets of the Trust available for
payment and distribution to Shareholders shall be distributed ratably among the
holders of Shares at the time outstanding with an equal amount of assets per
Share being distributed. The Shares shall entitle the holders thereof to one
non-cumulative vote per share, shall not entitle the holders thereof to
preference, appraisal, conversion, exchange, preemptive or redemption rights of
any kind and shall have equal dividend or distribution, liquidation and other
rights. The Shareholders cannot 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.
Section 2.2. Legal Ownership of Trust Estate. The legal ownership of the
Trust Estate and the right to control and conduct the business of the Trust are
vested exclusively in the Trustees (subject to Article III and Article IV
hereof), and the Shareholders shall have no interest therein other than
beneficial interest in the Trust and the Trust Estate 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.
Section 2.3. 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 or provided for 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 (including without limitation the right to an accounting), 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 Trustees' Regulations 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.
Section 2.4. Share Record: Issuance and Transferability of Shares. Records
shall be kept (at the executive offices of the Trust or at the offices of its
transfer agent, if any) 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 numbers of the certificates
representing the Shares, and in which there shall be recorded all transfers of
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Shares. The Trust and the Trustees and any agents or employees of the Trust
shall be entitled to deem the Persons in whose names certificates are
registered on the records of the Trust to be the absolute owners of the Shares
represented thereby for all purposes of this Trust; but nothing herein shall be
deemed to preclude the Trustees, employees or agents of the Trust from
inquiring as to the actual ownership of Shares. A transfer of Shares shall not
be effective until any such transfer is duly effected on the records of the
Trust, and until such time, the Trustees shall not be affected by any notice of
such transfer, either actual or constructive.
Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereunto duly authorized in writing upon
delivery to the Trustees or a transfer agent of the Trust of the certificate or
certificates therefor, properly endorsed or accompanied by duly executed
instruments of transfer and accompanied by all necessary documentary stamps
together with such evidence of the genuineness of each such endorsement,
execution or authorization and of other matters as may reasonably be required
by the Trustees or such transfer agent. Upon such delivery, the transfer shall
be recorded in the records of the Trust, the delivered certificates canceled
and a new certificate for the Shares so transferred shall be issued to the
transferee and in case of transfer of only a part of the Shares represented by
any certificate, a new certificate for the balance shall be issued to the
transferor. Any Person becoming entitled to any Shares in consequence of the
death of a Shareholder or otherwise by operation of law shall be recorded as
the holder of such shares and shall receive a new certificate therefor but only
upon delivery to the Trustees or a transfer agent of the Trust of evidence
satisfactory to the Trustees or transfer agent of the Trust to demonstrate such
entitlement, the existing certificate for such Shares and such releases from
applicable governmental authorities as may be required by the Trustees or
transfer agent. 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.
Section 2.5. Dividends or Distributions to Shareholders. The Trustees may
from time to time declare and pay to Shareholders such dividends or
distributions in cash, property or assets of the Trust or Securities issued by
the Trust, out of current or accumulated income, capital, capital gains,
principal, surplus, proceeds from the increase or financing or refinancing of
Trust obligations, or from the sale of portions of the Trust Estate or from any
other source as the Trustees in their discretion shall determine and in
accordance with the Trust's policies concerning distributions set forth in
Section 5.1 hereof. Shareholders shall have no right to any dividend or
distribution unless and until declared by the Trustees. The Trustees shall
furnish the Shareholders within a reasonable time after each such dividend or
distribution with a statement in writing advising as to the source of the funds
so distributed or, if the source thereof has not then been determined, the
communication shall so state and in such event the statement as to such source
shall be sent to the Shareholders not later than sixty (60) days after the
close of the fiscal year in which the dividend or distribution was made, also
the Trust shall furnish to each Shareholder not later than sixty (60) days
after the close of each fiscal year in which a dividend or distribution was
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made a statement setting forth distributions paid during such year and their
characterization as ordinary income, return of capital or capital gain.
Section 2.6. Transfer Agent, Dividend Disbursing Agent and Registrar. The
Trustees shall have power to employ one or more transfer agents, dividend
disbursing agents and registrars and to authorize them on behalf of the Trust
to keep records, to hold and to disburse any dividends and distributions, and
to have and perform, in respect of all original issues and transfers of Shares,
dividends and distributions and reports and communications to Shareholders, the
power and duties usually had and performed by transfer agents, dividend
disbursing agents and registrars of a Massachusetts business corporation.
Section 2.7. Repurchase of Securities. The Trustees may, on behalf of the
Trust, purchase or otherwise acquire its outstanding Securities (except for its
outstanding Shares unless otherwise permitted hereunder, however acquisitions
of Shares by the Trust's Share Resale Plan during the Offering Period are not
prohibited hereby) from time to time for such consideration and on such terms
as they may deem proper.
Section 2.8. Trustees as Shareholders. Any Trustee in his individual
capacity may purchase and otherwise acquire its or sell and otherwise dispose
of Shares issued by the Trust, and in so doing shall be subject to the same
limitations as a director of a Massachusetts business corporation.
Section 2.9. Shareholders' Meetings.
(a) Annual Meetings. There shall be an annual meeting of the
Shareholders, at such date, time and place as shall be determined by or in the
manner prescribed in, the Trustees' Regulations, at which the Trustees shall be
elected and any other proper business may be conducted. In any such case, the
Annual Meeting of Shareholders shall be held after delivery to the Shareholders
of the Annual Report and within six (6) months after the end of each fiscal
year.
(b) Special Meetings. Special meetings of Shareholders may be
called by a majority of the Trustees and shall be called by the Managing
Trustee upon the written request of Shareholders holding in the aggregate not
less than ten percent (10%) of the total votes authorized to be cast by the
outstanding Shares of the Trust entitled to vote at such meeting, in the manner
provided in the Trustees' Regulations. 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, within ten (10)
business days after receipt of said request, with written notice (either in
person or by mail) of a special meeting to be held on a date not less than
twenty (20) nor more than sixty (60) days after receipt of said request, at a
time and place convenient to Shareholders. Notice of any special meeting shall
state the nature of the business to be transacted and that no other business
shall be considered at such meeting.
(c) Quorum. The presence in person or by proxy of the holders of
Shares entitled to vote at the meeting representing a majority of the total
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number of votes authorized to be cast by Shares then outstanding and entitled
to vote on any question shall constitute a quorum at any such meeting for
action on such question. Any meeting may be adjourned from time to time by a
majority of the votes of Shareholders entitled to vote thereat present in
person or by proxy properly cast upon the question, whether or not a quorum is
present, and the meeting may be reconvened without further notice. At any
reconvened session of the meeting at which there shall be a quorum, any
business may be transacted at the meeting as originally noticed.
(d) Voting Rights. Whenever any action is to be taken by the
Shareholders, it shall, except as otherwise required by this Declaration, be
authorized by holders of a majority of the Shares then outstanding and entitled
to vote thereon which are present at the meeting in person or by proxy. At all
elections of Trustees, voting by Shareholders shall be conducted under the
non-cumulative method and the election of Trustees shall be by the affirmative
vote of the holders of shares representing a majority of the total votes
authorized to be cast by shares then outstanding which are present at the
meeting in person or by proxy and entitled to vote in the election of the
Trustees. The Shareholders shall be entitled, to the same extent as the
shareholders in a Massachusetts business corporation, to determine by vote
whether a court action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or its Shareholders.
Except with respect to matters on which a Shareholders' vote shall determine
action of the Trust as expressly set forth in this Declaration, no action taken
by the Shareholders at any meeting shall in any way bind the Trustees or the
Trust.
Except as provided in this Section 2.9(d), the Shareholders shall
be entitled to vote only upon the following matters: (1) election of Trustees
and calling of special meetings of Shareholders as provided in this Section 2.9
hereof; (2) change in the number of Trustees as provided in Section 3.1 hereof;
(3) removal of Trustees as provided in Section 3.3 hereof; (4) approval or
ratification of an amendment of this Declaration by the Trustees as provided in
Section 7.3 hereof; (5) approval or ratification of a merger or reorganization
of the Trust or sale of all or substantially all of its assets as provided in
Section 7.4 hereof; (6) modifications of the investment policy of the Trust as
provided in Section 5.1 hereof; and (7) termination of the Trust pursuant to
Section 7.1 hereof and discontinuance of its operations as provided in Section
4.2(x) hereof.
(e) 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.
Section 2.10. Proxies. Whenever the vote or consent of a Shareholder
entitled to vote is required or permitted under this Declaration, such vote or
consent may be given either directly by such Shareholder or to a proxy in the
form prescribed in the Trustees' Regulations. The Trustees may solicit such
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proxies from the Shareholders or any of them entitled to vote in any matter
requiring or permitting the Shareholders' vote or consent. No proxy for any
meeting of Shareholders entitled to vote shall be effective unless such proxy
shall have been placed on file with the Managing Trustee of the Trust (as the
Trustees shall have designated for such Purposes) for verification prior to
such meeting. Each proxy to vote shall be in writing and signed by the
Shareholder or his duly authorized representative. When any Share is held
jointly by more than one person, any one of them may vote at any meeting of
Shareholders in person or by proxy in respect of any such Share, and such proxy
shall be valid if executed by any of them unless prior to exercise of the
proxy, the Trust receives specific written notice from any of them to the
contrary, and if more than one of them is present and such owners disagree, a
vote shall not be received in respect to such Share.
Section 2.11. Reports to Shareholders.
(a) Not later than one hundred twenty (120) days after the close
of each fiscal year of the Trust, the Trustees shall mail or deliver a report
of the business and operations 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 (the "Annual Report") shall be in such form and
have such content as the Trustees deem proper. The Annual Report shall include
an audited balance sheet, a statement of income and expense, a statement of
changes in financial position and a statement of shareholders' equity, each
prepared in accordance with generally accepted accounting principles and
examined by independent accountants, and shall also include a status report on
the Trust's investments. Such financial statements shall be accompanied by the
report of an independent certified public accountant thereon. A manually signed
copy of the accountant's report shall be filed with the Trustees. The Trustees
shall, within such period of time, also furnish an annual report on the
activities of the Trust and a report on distributions to the Shareholders and
their sources along with the publication for each fiscal year of the Trust and
the last quarter thereof of the ratio of the costs of raising capital during
such periods to the capital raised. By January 31st of each year, the Trustees
shall furnish the Shareholders with such information as is necessary to
complete their personal income tax returns for the prior calendar year.
(b) Within sixty (60) days of the end of each of the first three
quarters of each fiscal year of the Trust, the Trustees shall send interim
reports to the Shareholders containing a report on the activities of the Trust
which contains a summary of the information contained in the Trust's Form 1O-Q
for each quarter as filed with the SEC (if such report is required to be so
filed). The Trust shall also publish to its Shareholders quarterly for
inclusion in reports required hereunder the ratio of the costs of raising
capital during the quarter to the capital raised.
Section 2.12. Fixing Record Date. The Trustees' Regulations may provide
for fixing or, in the absence of such provision, the Trustees may fix, in
advance, a date as the record date for determining the Shareholders entitled to
notice of or to vote at any meeting of Shareholders or to express consent to
any proposal without a meeting, or for the purpose of determining Shareholders
entitled to receive payment of any dividend or distribution (whether before or
<PAGE>
after termination of the Trust) or any Annual Report or other communication
from the Trustees, or for any other purpose. The record date so fixed shall be
not less than five (5) days nor more than sixty (60) days prior to the date of
the meeting or event for the purposes of which it is fixed.
Section 2.13. Shareholders Disclosures; Trustees' Right to Refuse to
Transfer Shares; Limitation on Holdings: Redemption of Shares.
(a) 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 or appropriate to comply with the REIT
Provisions of the Code and to comply with the requirements of any taxing
authority or governmental agency.
(b) Whenever it is deemed by them to be reasonably necessary to
protect the 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, which shall be conclusive upon any proposed transferee
of Shares, any proposed transfer would jeopardize the status of the Trust as a
REIT, the Trustees shall have the right, but not the duty, to refuse to permit
such transfer.
(c) If in the opinion of the Trustees, any such transfer would
jeopardize the status of the Trust as a REIT, then the Trustees, by notice to
the holder of such Shares, shall have the power but not the obligation to
redeem the number of Shares and the certificates which have been surrendered
for any such transfer necessary to bring the Trust into conformity with the
REIT Provisions of the Code and if the Trustees shall, at any time and in good
faith, be of the opinion that direct or indirect ownership of the Trust's
Shares has become concentrated to an extent which would disqualify the Trust as
a REIT, then the Trustees shall have the power but not the obligation by lot or
other equitable means to redeem any of the Shares to bring the ownership of the
Shares into conformity with the REIT Provisions of the Code; and from and after
the date of giving of notice of such 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, distributions on
liquidation or otherwise 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 sentence. The redemption
price of each Share called for redemption shall be the average selling price on
the exchange which is the principal United States market for the Shares on the
last business day prior to the redemption date if the Shares of the Trust are
listed or admitted to trading on a national securities exchange, and, if the
Shares are not so listed or admitted to trading, such redemption price shall be
the average of the highest bid and the lowest asked prices on such date as
reported by the National Quotation Bureau Incorporated or a similar
organization selected from time to time by the Trust for such purpose, 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
<PAGE>
Trust on such date, the redemption price shall be the price determined by the
Trustees in good faith.
(d) Notwithstanding any other provision of this Declaration 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.
(e) Nothing contained in this Section 2.13 or in any other
provision of this Declaration 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 status as a
REIT.
(f) It shall be the policy of the Trustees to consult with the
appropriate officials of any stock exchange as far as reasonably possible in
advance of the final exercise (at any time when the Shares are listed on such
exchange) of any powers granted by subsections (b), (c) or (d) of this Section
2.13.
ARTICLE III
TRUSTEES
Section 3.1. Number, Term of Office and Qualification of Trustees. There
shall be no fewer than three (3) nor more than fifteen (15) Trustees. The
initial Trustees shall be the signatories hereto. Thereafter, no person shall
become a Trustee until he has agreed in writing to be bound by the provisions
of this Declaration. Within the limits set forth in this Section 3.1, the
number of Trustees may be fixed and increased or decreased from time to time by
the Trustees in the Trustees' Regulations or by the Shareholders. No reduction
in the number of Trustees shall have the effect of removing any Trustee from
office prior to the expiration of his term. Subject to the provisions of
Section 3.3, each Trustee shall hold office until the next annual meeting of
Shareholders and until the election and qualification of his successor. A
Trustee shall be an individual at least twenty-one (21) years of age who is not
under legal disability. Unless otherwise required by law 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 and fiduciaries to the Shareholders shall not be required
to devote their entire time to the business and affairs of the Trust (devoting
only such time as is necessary or required for the effective conduct of the
Trust's business), provided that the Trustees are required to perform their
duties with respect to the Trust's business in good faith, in a manner believed
by each Trustee to be in the best interests of the Trust, with such care,
including reasonable inquiry, as an ordinary prudent person in a like position
would use under similar circumstances.
Section 3.2. Compensation and Other Remuneration. The Trustees shall be
entitled to receive such reasonable compensation for their services as Trustees
and all Trustees shall be entitled to receive such reimbursement for travel and
other expenses incurred in connection with the discharge of their duties as
<PAGE>
Trustees as a majority of the Trustees may determine from time to time. The
Trustees shall be entitled to receive remuneration for services rendered to the
Trust in any other capacity. Subject to Sections 6.5 and 6.6, such services may
include, without limitation, services as a Managing Trustee of the Trust,
legal, accounting or other professional services, or services as a broker,
transfer agent or underwriter, whether performed by a Trustee or any person
affiliated with a Trustee.
Section 3.3. Resignation, Removal and Death of Trustees. A Trustee may
resign at any time by giving written notice of resignation to the remaining
Trustees at the principal office of the Trust. Such resignation shall take
effect on the date specified in such notice. A Trustee may be removed at any
time with or without cause by vote or written consent of holders of Shares
representing a majority of the total votes authorized to be cast by Shares then
outstanding and entitled to vote thereon or with cause by all remaining
Trustees. A special meeting of Shareholders may be called for the purpose of
removing a Trustee in the manner described in Section 2.9 hereof. A Trustee
judged incompetent or bankrupt, or for whom a guardian or conservator has been
appointed or who has died, shall be deemed to have resigned as of the date of
such adjudication, appointment or death. Upon the resignation or removal of any
Trustee, or his otherwise ceasing to be a Trustee, he or his executor, personal
representative, guardian or conservator, as the case may be, shall execute and
deliver such documents as the remaining Trustees shall require for the
conveyance of any Trust property held in such Trustee's name, and shall account
to the remaining Trustees as they require for all property which is held in
such Trustee's name 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.
Section 3.4. Vacancies. If any or all the Trustees cease to be Trustees
hereunder, whether by reason of resignation, removal, incapacity, death or
otherwise or if vacancies are created because the number of Trustees shall be
fixed at a number greater than the Trustees then in office 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
(3)) may exercise the powers of the Trustees hereunder, but if the remaining
Trustees are fewer than three (3) after the vacancy, the vacancy shall be
filled (so as to have at least three (3) Trustees) within sixty (60) days after
the vacancy. Vacancies (including vacancies created by increases in number) may
be filled by the remaining Trustee or by a majority of the remaining Trustees.
If at any time there shall be no Trustees in office, successor Trustees shall
be elected as soon as possible by the Shareholders at a special meeting of
Shareholders called for such purpose as provided in Section 2.9 hereof. Any
Trustee elected to fill a vacancy created by the resignation, removal or death
of a former Trustee shall hold office for the unexpired term of such former
Trustee.
Section 3.5. Successor and Additional Trustees. The right and 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
<PAGE>
thereupon have all 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 hereof 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 Trustee may deem necessary,
appropriate or desirable.
Section 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; provided, however, that, whenever pursuant to this Declaration the
vote of a majority of a particular group of Trustees is required at a meeting,
a quorum for such meeting shall be a majority of the Trustees which shall
include a majority of such group. The Trustees shall meet at least one time
during each quarter of each year of the Trust or more frequently as may be
necessary in their discretion. 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 (a quorum being present) or without a meeting
by written consent of a majority of the Trustees, which consents shall be filed
with the records of meetings of the Trustees. Such action by written consent
shall have the same force and effect as a unanimous vote of such Trustees. Any
action or actions permitted to be taken by the Trustees or a committee thereof
in connection with the business of the Trust may be taken pursuant to authority
granted by a meeting of the Trustees or a committee thereof conducted by a
telephone conference call or similar communications equipment by means of which
all participants can hear each other simultaneously, and the transaction of
Trust business transacted thereby shall be of the same authority and validity
as if transacted at a meeting of the Trustees or a committee thereof held in
person or by written consent. The minutes of any Trustees' meeting or a
committee thereof held by telephone or similar communications equipment shall
be prepared in the same manner as a meeting of the Trustees or a committee
thereof held in person. Any agreement, deed, mortgage, lease or other
instrument or writing executed by one or more of the Trustees or by any
authorized Person shall be valid and binding upon the Trustees and upon the
Trust when authorized or ratified by action of the Trustees or as provided in
the Trustees' Regulations. The Trustees shall establish written policies on
investments and borrowings of the Trust and shall monitor the administrative
procedures, investment operations and performance of the Trust to assure that
such policies are carried out.
Regular and special meetings of the Trustees shall be held at such
date, place and time as set forth in the Trustees' Regulations.
With respect to the actions of the Trustees, Trustees who have, or
are Affiliates of Persons who have, any direct or indirect interest in or
connection with any matter being acted upon may be counted for quorum purposes
under this Section 3.6 and subject to the provisions of Sections 6.5 and 6.6,
vote on the matter as to which they or their Affiliates have such interest or
connection.
Section 3.7. Committees. The Trustees may appoint from among their number
an audit committee and such other standing committees as the Trustees
determine. Each standing committee shall consist of two or more members. Each
<PAGE>
committee shall have such powers, duties and obligations as the Trustees may
deem necessary or appropriate. The standing committees shall report their
activities periodically to the Trustees.
ARTICLE IV
TRUSTEES' POWERS
Section 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 or 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
subject to such delegation as may be permitted by this Declaration, and the
Trustees may do all such acts and things as in their sole judgment and
discretion are necessary for or incidental to or desirable for the carrying out
of or conducting the business of the Trust. Any construction of this
Declaration or any determination made in good faith by the Trustees of the
purposes of the Trust or the existence or exercise 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 aforesaid powers or the general powers
or authority of, or any other specified power or authority conferred herein
upon, the Trustees.
Section 4.2. Specific Powers and Authority. Subject only to the express
limitations contained in this Declaration and in addition to any powers and
authority conferred by this Declaration or which the Trustees may have by
virtue of any present or future statute or rule or 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 tine to time deem
proper:
(a) to retain, invest and reinvest the capital or other funds of
the Trust in, and to acquire, purchase, or own, real or personal property of any
kind, wherever located in the world, and make commitments for such investments,
all without regard to whether any such property is authorized by law for the
investment of trust funds or produces or may produce income and to possess and
exercise all the rights, powers and privileges appertaining to the ownership of
the Trust Estate and to increase the capital of the Trust at any time by the
issuance of additional Shares of the Trust for such consideration as they deem
advisable;
(b) without limitation of the powers set forth in paragraph (a)
above, to invest in, purchase or otherwise acquire for such consideration as
they deem proper, in cash or other property or through the issuance of Shares
or through the issuance of notes, debentures, bonds or other obligations of the
Trust or otherwise, and to hold for investment, the entire or any participating
<PAGE>
interests in Real Property, including ownership of, or participation in the
ownership of, or rights to acquire, equity interests in Real Property or in
Persons owning, developing, improving, operating or managing Real Property,
which interests may be acquired independently of or in connection with other
investment activities of the Trust and, in the latter case, may include rights
to receive additional payments based on gross income or rental or other income
from the Real Property or improvements thereon provided that an Appraisal shall
have been obtained with respect to any investment prior to making any such
investment; the Trustees may make additional investments involving the
expansion of existing facilities owned by the Trust or the acquisition and
development of additional properties in the immediate vicinity of its existing
investments provided that prior thereto the Trustees have determined that such
additional investment will enhance or protect the value of the property to
which it relates or is otherwise in the best interest of the Trust; to develop,
operate, pool, utilize, grant production payments out of or lease or otherwise
dispose of mineral, oil and gas properties and rights. The Trustees shall also
have the power to:
(1) rent, lease or hire from others or to others for terms
which may extend beyond the termination of this Declaration any property or
rights to property, real or personal, and to own, manage, use and hold such
property and such rights;
(2) subdivide, develop or improve Real Property and tear down,
alter or make improvements thereon and grant easements in relation thereto;
(3) grant easements, licenses or servitudes, make leases, give
consents and make contracts relating to the Trust's Real Property or its use;
and
(4) release or dedicate any Trust Real Property or
interest therein;
(c) to sell, rent, lease, hire, exchange, release, partition,
assign, mortgage, pledge, hypothecate, grant security interests in, encumber,
negotiate, convey, transfer or otherwise dispose of any and all the Trust
Estate by deeds (including deeds in lieu of foreclosure), trust deeds,
assignments, bills of sale, transfers, leases, mortgages, financing statements,
security agreements and other instruments for any of such purposes executed and
delivered for and on behalf of the Trust or the Trustees by the Managing
Trustee or by a duly authorized Trustee, employee, agent or nominee of the
Trust, provided that no disposition of a Real Estate Investment shall be
accomplished without the consent of a majority of the Trustees;
(d) 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
<PAGE>
attorney may be for meetings or action generally or for any particular meeting
or action, and may include the exercise of discretionary powers;
(e) to issue Shares, and to issue bonds, debentures, notes or
other evidences of indebtedness (provided that the historical debt service
coverage in the most recently completed fiscal year as adjusted for known
changes is sufficient to properly service that higher level of debt) which may
be secured or unsecured and may be subordinated to any indebtedness of the Trust
and may be convertible into Shares and to issue options, warrants and rights to
subscribe for, purchase or acquire any of the foregoing (only as part of a
financing arrangement involving a ratable distribution to all of the
Shareholders), all without vote of or other action by the Shareholders, to such
Persons for such cash or other consideration (including Securities issued or
created by, or interests in any Person) at such time or times and on such terms
as the Trustees may deem advisable, provided that the Trust shall not issue
options or warrants to purchase its Shares at an exercise price less than the
fair market value of its Shares on the date of grant or for consideration
(which may include services) that in the judgment of the Trustees, has a market
value less than the value of such option or warrant on the date of grant, and
further provided that the options or warrants shall not be exercisable later
than five (5) years from the date of the issuance thereof, and further provided
that the aggregate number of Shares issuable at any time upon exercise of
outstanding options or warrants shall not exceed an amount equal to 10% of the
outstanding Shares of the Trust on the date of grant of any options or
warrants), and to list any of the foregoing securities issued by the Trust on
any securities exchange and to purchase or otherwise acquire, hold, cancel,
reissue, sell and transfer any of such securities, and to cause the instruments
evidencing any such securities to bear an actual or facsimile imprint of the
seal of the Trust and to be signed by manual or facsimile signature of the
Managing Trustee (and to issue any such securities, whether or not any person
whose manual or facsimile signature shall be imprinted thereon shall have
ceased to occupy the position with respect to which such signature was
authorized), provided that, where only facsimile signatures for the Trust are
used, the instrument shall be countersigned manually by a transfer agent,
registrar or other authentication agent of the Trust. Any of such securities of
different types may be issued in combinations or units with such restrictions
on the separate transferability thereof as the Trustees shall determine;
(f) to enter into leases of real and personal property as lessor
or lessee and to enter into contracts, obligations and other agreements for a
term, and to invest in obligations having a term, extending beyond the term of
office of the Trustees, or having an equal or lesser term;
(g) to borrow money and incur indebtedness for the purpose of the
Trust and to cause to be executed and delivered therefor, in the Trust name,
promissory notes, bonds, debentures, deeds of trust, mortgages, pledges,
hypothecations or other evidences of debt and securities therefor provided that
the aggregate borrowings of the Trust, secured and unsecured, are reasonable in
relation to the Net Assets of the Trust; 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,
<PAGE>
transfer, mortgage, subordinate, pledge, grant security interests in, encumber
or hypothecate the Trust Estate to secure any of the foregoing, provided that
upon and after giving effect to any proposed borrowing the amount of
outstanding secured and unsecured indebtedness of the Trust for money borrowed
from or guaranteed to others, including mortgages on acquired Real Property,
would not exceed one hundred percent (100%) of the Net Assets of the Trust. Any
excess in borrowing over such 100% level (which in no event shall exceed three
hundred percent (300%) of such Net Assets) shall be approved by a majority of
the Trustees (if they determine such to be appropriate and in the best interest
of the Trust) and disclosed to Shareholders in the next quarterly report of the
Trust, along with justification for such excess borrowing. The Trustees shall
review the Trust's borrowing policy and its aggregate borrowing at least
quarterly to determine the reasonableness thereof in relation to the Trust's
assets;
(h) except as permitted under Section 5.1 hereof, to lend money
only in connection with a sale by the Trust of any of its Real Property with
respect to which the Trust may extend mortgage loans to the extent that the
Real Property underlying such loans, except under certain limited
circumstances, is not subject to a prior security interest;
(i) to create reserve funds for any purpose;
(j) 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 upon or
against the Trust Estate or any part thereof, and for any of the purposes
herein;
(k) to deposit funds of the Trust in banks, trust companies,
savings and loan associations and other depositories, whether or not such
deposits will draw interest, provided that such depositories have minimum
assets of $100,000,000 and are members of the Federal Deposit Insurance
Corporation, the Federal Savings and Loan Insurance Corporation or the Federal
Home Loan Bank Board, the same to be subject to withdrawal on such terms and in
such manner and by such Person or Persons (including any one or more Trustees,
employees or agents of the Trust) and be subject to such other terms and
conditions as the Trustees may determine;
(l) to cause to be organized or assist in organizing any Person
under the laws of any jurisdiction to acquire all or substantially all 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 all or
substantially all of the Trust Estate to or with any such Person or any other
Person in exchange for the Securities thereof or otherwise, and to merge or
consolidate the Trust with or into any Person (all being subject to the
<PAGE>
approval of a majority of the Trustees and the affirmative vote of the holders
of Shares representing a majority of the total number of Shares then
outstanding and entitled to vote thereon) or sell, rent, lease, hire, convey,
negotiate, assign, exchange or transfer less than substantially all of the
Trust Estate or to merge any Person into the Trust (with only the approval of a
majority of the Trustees being required) 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 Person whether or not the Trust already holds
Securities or any other interest in such Person;
(m) to engage or employ any Persons (including, subject to the
provisions of Section 6.5 and 6.6 hereof, any Trustee or Affiliate of the Trust
and any Person in which any Trustee or Affiliate of the Trust is directly or
indirectly interested or with which he is directly or indirectly connected
provided that the Trust shall not give to any Trustee or any Affiliate of the
Trust the exclusive right to sell for the Trust any of its Real Property) as
agents, representatives, employees, or independent contractors (including
without limitation real estate advisors, investment advisors, transfer agents,
registrars, underwriters, accountants, attorneys at law, real estate agents,
property managers, appraisers, brokers, architects, engineers, construction
managers, general contractors or otherwise) in one or more capacities, and to
pay compensation from the Trust Estate for services in as many capacities as
such Person may be so engaged or employed; and to delegate any of the powers
and duties of the Trustees to any one or more Trustees, agents,
representatives, employees, independent contractors or other Persons; provided,
however, that no such delegation shall be made to a Trustee, an Affiliate or
Trust, except in the manner prescribed in Section 6.6 hereof;
(n) 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 any part of
all 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,
reserves 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 expenses, reserves or disbursements would be charged to
income or to capital; to treat any dividend or other distribution on any
investment as income or capital or apportion the same between income and
capital; to provide or fail to provide reserves for depreciation, amortization
or obsolescence or otherwise in respect of all or any part of the Trust Estate
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;
(o) 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
<PAGE>
time to revalue all or any part of the Trust Estate in accordance with such
Appraisals or other information as are, in the Trustees' sole judgment,
necessary and/or satisfactory;
(p) to collect, sue for, and receive all sums of money coming due
to the Trust, and to engage in or intervene in, prosecute, contest, join,
defend, compound, compromise, settle, abandon or adjust, by arbitration or
otherwise, any actions, suits, proceedings, disputes, claims, controversies,
demands or other litigation by or against the Trust or relating to the Trust,
the Trust Estate or the Trust's affairs, to enter into agreements therefor
(including without limitation agreements related to granting extensions of time
for payment or to the renewal of any bonds or other securities or obligations),
whether or not any suit is commenced or claim accrued or asserted and to enter
into agreements regarding arbitration, adjudication or settlement thereof in
advance of any controversy or otherwise;
(q) to renew, modify, release, compromise, extend, consolidate or
cancel, in whole or in part, any obligation to or of the Trust or participate
in any reorganization of obligors to the Trust;
(r) 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 and/or all or any of the Trustees, the Shareholders,
employees or agents of the Trust 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,
employees or agents of the Trust, whether or not the Trust would have the power
to indemnify such person or persons against any such claim or liability;
(s) to cause legal title to any of the Trust Estate to be held by
and/or in the name of all of the Trustees, or except as prohibited by law by
and/or in the name of the Trust or one or more of the Trustees or any other
Person as nominee for the exclusive benefit of the Trust, on such terms, in
such manner, with such powers in such Person as the Trustees may determine, and
with or without disclosure that the Trust or Trustees are interested therein;
(t) to adopt a fiscal year for the Trust, and from time to time to
change such fiscal year;
(u) to adopt and use a seal containing such language as prescribed
by the Trustees' Regulations (but the use of a seal shall not be required for
the execution of instruments or obligations of the Trust);
(v) to the extent permitted by law, to indemnify or enter into
agreements with respect to indemnification with any Person with which the Trust
has dealings, including without limitation, any manager of the Trust's
properties, any broker-dealer, any investment adviser or any independent
contractor, to such extent as the Trustees shall determine;
(w) to confess judgment against the Trust;
<PAGE>
(x) to discontinue the operations of the Trust after submitting
the same to a vote of the Shareholders and after a majority of the holders of
the Shares entitled to vote thereon have approved the same;
(y) to repurchase or redeem Shares and other Securities of the
Trust;
(z) to establish and maintain a dividend reinvestment plan;
(aa) to furnish all reports required by the SEC, state
authorities and under the NASAA Guidelines;
(bb) to pay all taxes or assessments, of whatever kind or
nature, imposed upon or against the Trust, the Trust Estate or the Trustees in
connection with the Trust or the Trust Estate or upon or against the Trust, the
Trust Estate or the income of or from either, or any part thereof, to contest,
settle and compromise disputed tax liabilities, and for the foregoing purposes
to make such returns and do all such other acts and things as may be deemed by
the Trustees necessary or desirable;
(cc) to supervise the affairs of the Trust, to delegate from
time to time to one or more of their number or to the Trust's officers,
employees, agents and independent contractors the doing of such things and the
execution of such deeds or other instruments either in the name of the Trust or
in the names of the Trustees or as the Trust's attorney or attorneys or
otherwise as the Trustees may from time to time deem necessary or desirable,
and to appoint from time to time an executive committee, consisting of two or
more Trustees, to exercise all the powers of the Trustees between Trustees'
meetings (subject to such limitations as the Trustees may prescribe);
(dd) to pay appropriate compensation or fees from the funds of
the Trust to the Trustees and to Persons with whom the Trust is contracting or
has contracted or is transacting or has transacted business;
(ee) to declare and pay dividends and make other distributions
to Shareholders, whether out of earnings, profits, surplus, capital
or otherwise;
(ff) to appoint any one of the Trustees as the Trust's Managing
Trustee ("Managing Trustee") each year at the first regular meeting of the
Trustees following the annual meeting of Shareholders to serve until the first
regular meeting following the next annual meeting of Shareholders and until his
successor shall have been elected and qualified, and to have the authority to
remove such Managing Trustee from office at any time for cause, and to appoint
any successor thereto upon death, resignation or removal, such Managing Trustee
to have the authority to execute documents on behalf of the Trust and the
Trustees and to make executive decisions which conform to general policies and
general principles established from time to time by the Trustees and to
otherwise take whatever actions are necessary to implement the intentions of
<PAGE>
the Trustees, and to serve as Chairman of all Trustees' meetings and
Shareholders' meetings (in their absence, however, such Chairman shall be
another Trustee appointed by the Trustees); and
(gg) 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 and to carry out the provisions of this
Declaration.
Section 4.3 Transactions with Trustees and Affiliates. Notwithstanding any
other provision of this Declaration, the Trustees may not knowingly, directly
or indirectly, purchase or otherwise acquire for the Trust any property
whatsoever (other than Securities of the Trust) from or sell or otherwise
transfer any property whatsoever (other than Securities of the Trust) to, or
lend any of the cash, assets or property of the Trust to, or borrow from, any
Trustee or employee or agent of the Trust or any Person with which the Trust is
an Affiliate, except, in the case of a sale of property to the Trust by any
such Person, if such Person has acquired the property solely for the purpose of
facilitating the acquisition of the property by the Trust, in which case the
total consideration may in no event be in excess of the cost of the property to
such Person, and unless such transaction has been approved in the manner
prescribed in Section 6.6 hereof (and if such transaction involves the sale to
the Trust of Real Property by such Person or the acquisition by any such Person
of any asset for the purposes of reselling it to the Trust, full disclosure has
been made including the cost of such property to any such Person and (i)
initially such purchase of property is only for the purpose of accumulating a
portfolio for the Trust or (ii) thereafter such property was acquired by such
Person in contemplation of a sale to the Trust Estate upon completion of
financing arrangements by the Trust), and by the holders of a majority of the
outstanding Shares entitled to vote thereon (in the case of a sale of the
Trust's Real Property to the Trustees, employees or agents of the Trust or
Affiliates of the Trust) and provided there is no difference in the interest
rates of any loans secured by the property at the time acquired by such Person
and the time acquired by the Trust, nor any other direct or indirect benefit
arising out of such transaction to such Person apart from compensation
otherwise permitted herein.
Section 4.4 Power to Contract. Subject only to the prohibitions and
limitations contained herein, the Trustees may enter into any type of
transaction or contract and extend or renew the term of the same (including,
without limitation, contracts for any type of services to be rendered on behalf
of the Trust, including real estate brokerage services, advisory services and
property management services), with any Person, including any one or more of
the Trustees, agents or employees of the Trust or the Persons set forth in
Section 6.6 hereof or any other independent contractor of the Trust and may
authorize such amount and type of compensation, including commissions and fees,
as the Trustees may determine; provided, however, that transactions or
contracts or extensions or renewals thereof with Persons contemplated by
Section 6.6 hereof comply with the requirements of Section 6.6 hereof.
The Trust shall be subject to the following restrictions with
respect to payment of real estate brokerage commissions and property management
fees:
<PAGE>
(a) Real estate brokerage commissions paid by the Trust in
connection with the acquisition or disposition of properties by the Trust,
including payments to Trustees, or Affiliates, may not exceed six (6%) percent
of the gross selling price of which amount no more than three (3%) percent of
the gross selling price may be paid to any Trustee and Affiliates of the Trust
in connection with the disposition of properties.
(b) No real estate brokerage commissions may be paid to Trustees
or Affiliates of the Trust upon the reinvestment of the proceeds of any sale or
refinancing of a property, except that in those cases where the total
commissions paid to Trustees and Affiliates of the Trust in connection with the
original acquisition of the property which gave rise to the reinvestment
proceeds was less than three percent (3%) of the gross selling price of such
property, then the Trust may pay a commission upon reinvestment of such
proceeds equal to the difference between the amount actually paid to Trustees
and Affiliates in the original acquisition and three percent (3%) of the gross
selling price of the property originally acquired; and in the case of sales of
properties, the Trust may pay a commission equal to the difference between the
amount actually paid to Trustees and Affiliates in the original sale and three
percent (3%) of the gross selling price of such properties.
Property management fees payable to Trustees or Affiliates of the
Trust with respect to properties managed directly by them may in no event
exceed the lesser of five percent (5%) of the gross rental proceeds of the
property under management, or the prevailing rates paid for similar property
management services in the geographic area where the property is located and
with respect to properties managed by third parties or with respect to
industrial and commercial properties which are leased on a long term (ten or
more years) net (or similar basis) such property management fees may in no
event exceed one percent (1%) of the gross rental proceeds of such properties.
The Trustees shall have power to appoint, employ, or contract with
any Person (including one or more of themselves and any corporation,
partnership or trust of which one or more of them may be an Affiliate), subject
to the applicable requirements contained herein as the Trustees may deem
necessary or desirable for the transaction of the business of the Trust. The
Trustees shall also have the power to appoint or contract with any Person as an
independent contractor to manage any Real Property in which the Trust has an
interest.
Section 4.5. Trustees' Regulations. The Trustees may make or adopt and
from time to time amend or repeal regulations (the "Trustees' Regulations") not
inconsistent with law or with this Declaration containing provisions relating
to the business of the Trust and the conduct of its affairs and in such
Trustees' Regulations may define the duties of the employees and agents of the
Trust.
Section 4.6 Adoption of Corporate Organization. To facilitate the
management of the Trust, the Trustees may choose to elect officers, which may
include a President, one or more Vice Presidents, Secretary, Treasurer and such
other officers as the Trustees deem appropriate:
<PAGE>
(a) The Trustees, at its annual meeting held after the annual
meeting of Shareholders may elect such officers enumerated above, all of whom
shall serve for the term of one (1) year and until their successors are duly
elected and qualified. Any two offices may be held by the same person. The
President shall be a Trustee and shall have, in addition to the powers
hereinafter enumerated, the power of Managing Trustee. Except for the
President, no officer need be a Trustee.
(b) The duties and powers of the officers of the Trust shall be
as follows:
PRESIDENT
The President shall preside at all meetings of the Trustees and
Shareholders.
He shall present at each annual meeting of the Shareholders and
Trustees a report of the condition of the business of the Trust.
He shall cause to be called regular and special meetings of the
Shareholders and Trustees in accordance with the Declaration of Trust.
He shall see that all orders and resolutions of the Trustees are
carried into effect.
He shall appoint and remove, employ and discharge, and fix the
compensation of all servants, agents, employees and clerks of the Trust other
than the duly appointed officers, subject to the approval of the Trustees.
He shall sign and make all contracts and agreements in the name of
the Trust and have, in all respects, the authority of the Managing Trustee.
He shall see that the books, reports, statements and certificates
required by the statutes are properly kept, made and filed according to law.
He shall have general direction and management of the affairs of
the Trust, except that he shall have no authority to commence litigation on
behalf of the Trust without the authority of the Trustees.
He shall enforce the terms of the Trust laws and of this
Declaration and perform all the duties incident to the office of President.
VICE PRESIDENT
The Vice President, or if there shall be more than one, the Vice
Presidents, in the order determined by the Trustees, shall, in the absence or
disability of the President, perform the duties and exercise the powers of the
President and shall perform such other duties and have such other powers as the
Trustees may from time to time prescribe.
<PAGE>
SECRETARY
The Secretary shall keep the minutes of the meetings of the
Trustees and of the Shareholders in appropriate books and keep minutes of
standing executive committees when required.
He shall give and serve all notices of the Trust.
He shall be custodian of the records and of the seal, and affix the
latter when authorized and required.
He shall present to the Trustees at their stated meetings all
communications addressed to him officially by the President or any officer or
Shareholder of the Trust.
He shall attend to all correspondence and perform all the duties
incident to the office of Secretary.
He shall perform such other duties as may be prescribed by the
Trustees or President under whose supervision he shall be.
<PAGE>
ASSISTANT SECRETARY
The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order determined by the Trustees, shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary and shall perform such other duties and have such other
powers as the Trustees may from time to time prescribe.
TREASURER
The Treasurer shall have the care and custody of and be responsible
for the funds and securities of the Trust, and deposit all such funds in the
name of the Trust in such bank or banks, trust company or trust companies or
safe deposit vaults as the Trustees may designate, subject to the provisions of
the Declaration. In the absence of a resolution of the Trustees to the
contrary, he shall sign, make and endorse in the name of the Trust, all checks,
drafts, notes and other evidence of debt.
He shall exhibit as required by the provisions of this Declaration
his books and accounts to any Trustee or Shareholder of the Trust.
He shall render such statements of the condition of the finances of
the Trust as required by the terms of this Declaration and at such other times
as shall be required of him.
He shall keep, at the offices of the Trust, correct books of
account of all its business and transactions and such other books of account as
the Trustees or this Declaration may require.
He shall disburse the funds of the Trust as may be ordered by the
Trustees, taking proper vouchers for such disbursements.
He shall perform all duties incident to the office of Treasurer.
If required by the Trustees, he shall give the Trust a bond in such
sum and with such surety or sureties as shall be satisfactory to the Trustees
for the faithful performance of the duties of his office and for the
restoration to the Trust, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property
of whatever kind in his possession or under his control belonging to the Trust.
ASSISTANT TREASURER
The Assistant Treasurer, or if there shall be more than one, the
Assistant Treasurers in the order determined by the Trustees, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer and shall perform such other duties and have such other
powers as the Trustees may from time to time prescribe.
<PAGE>
VACANCIES, HOW FILLED
Vacancies in any office may be filled by the Trustees, at their
discretion, at its regular meeting, or at a meeting, specially called for that
purpose.
REMOVAL OF OFFICERS
The Trustees may remove any officer, by a majority vote, at any
time, with or without cause.
ARTICLE V
INVESTMENT POLICY
Section 5.1 Statement of Policy. It shall be the principal objectives of
the Trust that the Trustees invest the Trust Estate in investments which will
provide current distributions to Shareholders, provide long-term capital
appreciation of its Real Estate Investments and protect Shareholders' capital.
These general objectives shall be pursued in a manner consistent with the
investment policies specified in the remainder of this Section 5.1.
While the Trustees are authorized pursuant to Article IV to invest
the Trust Estate in a wide variety of investments, it shall be the policy of the
Trustees to invest most of the Trust Estate in ownership or other interests in
income producing commercial, residential and industrial Real Properties,
existing or to be developed, particular investments to be selected by the
Trustees after giving consideration to such factors as the location, age and
type of property, gross rentals, duration and other terms of leases, financial
and business standing of tenants, tenant mix, operating expenses, fixed
charges, land values and physical condition. There shall be no percentage
limitations, either minimum or maximum, on the proportion of the Trust Estate
invested at any time in these investments. Acquisitions of Real Property are to
be made principally on a leveraged basis, primarily with 70% of the purchase
price being paid in cash and 30% being financed, provided that it is not
intended that the Trust will leverage a Real Estate Investment with more than
70% financing.
The investment policies contained herein can only be modified by
the affirmative vote of the holders of Shares representing a majority of the
total number of Shares then outstanding and entitled to vote thereon only after
such modification has been approved by a majority of the Trustees in the manner
provided for amendments of this Declaration contained in Section 7.3 thereof.
The Trust shall continue until such time, as by affirmative vote of
the holders of shares representing a majority of the total number of shares
then outstanding and entitled to vote thereon, that the Trust shall liquidate.
It shall be the policy of the Trustees to make cash distributions
to Shareholders of substantially all of the Trust's current or accumulated
<PAGE>
earnings which shall be in amounts at least sufficient to enable the Trust to
qualify as a REIT (and the Trustees may make distributions in excess of such
amount) which will be calculated and distributed monthly commencing with the
month after the Trust receives and accepts subscriptions aggregating $2,500,000
for the Shares being initially offered to the public pursuant to the
Registration Statement. After each of the Trust's quarters and at the end of
each year, the Trustees shall review the distributions to be certain that the
REIT provisions are being met, and shall adjust future distributions
accordingly. Notwithstanding the foregoing, the payment of distributions shall
be at the discretion of the Trustees and shall depend on the financial
condition of the Trust, its earnings, cash flow and other factors.
To the extent that the Trust Estate has assets not otherwise
invested in accordance with this Section 5.1, it shall be the policy of the
Trustees to invest such assets in (i) short-term Securities issued or
guaranteed by the United States or any agency or political subdivision thereof,
(ii) certificates of deposit, money market funds, savings deposits or other
obligations of financial institutions having minimum assets of $100,000,000,
and (iii) participations in pools of mortgages or bonds and notes (such as
Federal Home Loan Mortgage Corporation participation sale certificates,
Government National Mortgage Association certificates and Federal National
Mortgage Association bonds and notes).
Notwithstanding the foregoing, it shall be the policy of the
Trustees to make investments in such manner as to comply with the requirements
of the Code with respect to the composition of the investments and the
derivation of the income of a REIT as defined in the REIT provisions of the
Code; provided, however, that no Trustee, employee or agent of the Trust shall
be liable for any act or omission resulting in the loss of tax benefits under
the Code, except for that arising from his own gross negligence, or willful or
wanton misconduct.
Section 5.2. Prohibited Investments and Activities. The Trustees shall not
engage in any of the following activities or investment practices:
(a) Invest in the ownership of, or participations in the ownership
of, raw land or in agricultural properties or the issuance of mortgage loans
secured by raw land or agricultural properties (unless such investment is
incidental to the purchase of other properties and provided that in no event
shall the Trust maintain more than 10% of its total assets in investments in or
mortgage loans secured by raw land or agricultural properties), provided that
raw land shall not include properties which are acquired for the purpose of
producing rental or other operating income, are under construction or
development or for which a construction contract has been entered into or for
which development or construction is planned in good faith in the immediate
future and in no event later than one (1) year from when it is acquired.
(b) Invest in any foreign currency, commodities, commodity futures
contracts, bullion or chattels, except such chattels as are employed in the day
to day business of the Trust or in connection with its real property. Such
limitation is not intended to apply to interest rate futures, when used solely
for hedging purposes.
<PAGE>
(c) Invest in any contracts for the sale of real estate, except in
connection with the acquisition of interests in real property and unless such
real estate contracts are recordable in the chain of title.
(d) Issue "redeemable securities" as defined in Section 2(a)(32)
of the Investment Company Act of 1940.
(e) Hold equity Securities, including the shares of other REITs.
(f) Engage in trading as compared with investment activities or
engage in the business of underwriting or agency distribution of Securities
issued by others, but this prohibition shall not prevent the Trustees from
selling interests in Real Property.
(g) Allow the aggregate borrowings of the Trust to exceed one
hundred percent (100%) of the Net Assets, in the absence of a determination by
a majority of the Trustees that a higher level of borrowings (which in no event
shall exceed three hundred percent (300%) of the Net Assets) is appropriate and
in the best interest of the Trust.
(h) Issue Securities in exchange for any Real Estate
Investment.
(i) Invest in Securities or interests in Persons primarily engaged
in real estate activities or invest in Securities of other issuers for the
purpose of exercising control.
(j) Hold property primarily for sale to customers in the ordinary
course of business of the Trust other than in connection with the liquidation
of the Trust, provided that this prohibition shall not be construed to deprive
the Trust of the power to sell any property which it owns at the time.
(k) Except as permitted under Section 5.1 hereof, make or invest
in mortgage loans, except for purchase money mortgages acquired to facilitate
the disposition of an interest in Real Property provided that the same are not
secured by raw land or agricultural properties (unless the Trust invests in
such raw land or agricultural properties and such investment is incidental to
the purchase of other properties provided that in no event shall the Trust
maintain more than 10% of its total assets in investments in or mortgage loans
secured by raw land or agricultural properties) and further provided that if
they are junior mortgage loans the Trust shall not invest in the same unless,
by appraisal or other method that the Trustees determine, the capital invested
in any such mortgage loan is adequately secured on the basis of the equity of
the borrower in the property underlying such investment (provided that the
junior debt when added to the senior debt secured by any such property shall
not exceed ninety percent (90%) of the appraised value thereof) and the ability
of the borrower to repay the mortgage loan, or the mortgage loan is a financing
device entered into by the Trust to establish the priority of its capital
investment over the capital invested by others investing with the Trust in a
real estate project; provided, however, that the Trustees shall determine that
any such junior mortgage loan is not and may not be made subordinate to a
<PAGE>
mortgage held by any Trustee, or any Affiliate of a Trustee, and further
provided that the value of all such junior debt (as shown on the books of the
Trust in accordance with generally accepted accounting principles, after all
reasonable reserves but before provision for depreciation) would not then
exceed twenty-five percent (25%) of the Trust's tangible assets. The value of
all of the Trust's junior debt which does not meet the aforementioned
requirements is limited to ten percent (10%) of the Trusts tangible assets
(which shall be included within the aforementioned twenty-five percent (25%)
limitation).
(l) Engage in any short, sale, or borrow, on an unsecured basis,
if such borrowing will result in an asset coverage of less than 300%, except
that such borrowing limitation shall not apply to a first mortgage trust. For
purposes hereof, "asset coverage" means the ratio which the value of the total
assets of the Trust, less all liabilities and indebtedness except indebtedness
for unsecured borrowings, bears to the aggregate amount of all unsecured
borrowings of the Trust.
(m) Issue debt Securities unless the historical debt service
coverage (in the most recently completed fiscal year of the Trust) as adjusted
for known changes is sufficient to properly service that higher level of debt.
(n) Engage in joint ventures or other lawful combination or
associations with any Person in connection with the acquisition and ownership
of investments in Real Property.
(o) Sell any Real Property to any Person or any of its
affiliates.
(p) Re-purchase its Shares except as otherwise permitted hereunder
(and re-purchase of its Shares during the Offering Period by the Share Resale
Plan is permitted).
(q) Acquire Securities in any company holding investments or
engaging in activities prohibited by this Section 5.2.
(r) Invest in Real Property under construction or under contract
for development, unless (i) the seller guarantees timely completion of
construction and provides the Trust with a satisfactory guaranty against
construction cost overruns and unexpected operating deficits in the early years
of operations, (ii) such Real Property is subject to a net lease, or (iii)
payment of the purchase price or a portion of the purchase price is subject to
the achievement of certain minimum levels of rental income or occupancy.
Section 5.3. Appraisals. If the Trustees shall at any time purchase Real
Property, the consideration paid therefor shall ordinarily be based upon the
fair market value thereof as determined by a majority of the Trustees. In cases
in which a majority of the Trustees so determine, such fair market values shall
be as determined by an Appraisal as defined in Section 1.4 hereof furnished by
an appraiser selected in the manner provided in Section 1.4 hereof. The Trust
shall not purchase any equity investment in Real Property for a purchase price
<PAGE>
which, together with the closing costs (including real estate commissions
payable to any Person) exceed the appraised value of each such investment.
ARTICLE VI
LIABILITY OF TRUSTEES, SHAREHOLDERS,
EMPLOYEES AND AGENTS, AND OTHER MATTERS
Section 6.1. Exculpation of Trustees, Employees, Officers and Agents.
Notwithstanding anything to the contrary contained herein, no Trustee,
employee, officers or agent of the Trust shall be liable to the Trust or to any
of the Shareholders or to any other Person for any act or omission for or in
connection with the Trust (including without limitation for any act or omission
which results in the loss of any tax benefits under the Code) except for his
own gross negligence or willful or wanton misconduct.
Section 6.2. Limitation of Liability of Shareholders, Officers. Trustees,
Employees and Agents. The Trustees, employees, officers and agents of the Trust
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, employees, officers or agents of the Trust and not in
their own individual capacities. No Shareholder and, except to the extent
provided in Section 6.1, no Trustee, employee, officer or agent shall be liable
to the Trust, to any Shareholder or to any other Person for any debt, claim,
demand, judgment, decree, liability, loss, damage, expense or obligation of any
kind (in tort, contract or otherwise) or, against or with respect to the Trust
or the Trust's affairs or the Trust Estate, 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, and all such other Persons shall look solely to the Trust
Estate for satisfaction of claims of any nature arising in connection with the
Trust, the Trust Estate or the affairs of the Trust (or any action taken or
omitted for or on behalf of the Trust). 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 personal liability.
Section 6.3. Express Exculpatory Clauses and Instruments. Any written
instrument creating an obligation of the Trust shall include a reference to
this Declaration and provide that neither the Shareholders nor the Trustees nor
employees, nor officers or agents of the Trust shall be liable thereunder and
that all Persons 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 from any such instrument shall not render the Shareholders or any
Trustee, employee, officer or agent of the Trust liable nor shall the Trustees
or any employee, officer or agent of the Trust be liable to anyone for such
omission.
Section 6.4. Indemnification and Reimbursement of Shareholders, Trustees
Officers, Employees and Agents. Any Person made a party to any action, suit or
<PAGE>
proceeding or against whom a claim or liability is asserted by reason of the
fact that he, his personal representative, the personal representative of his
estate or the legatee or distributes thereof was or is a Shareholder, Trustee,
officer, employee or agent of the Trust shall be indemnified and held harmless
by the Trust against any and all losses, liabilities, damages, fines, claims
and judgments and amounts paid on account thereof (whether in settlement or
otherwise) and shall be indemnified and held harmless against and, upon payment
thereof, shall be entitled to reimbursement for reasonable expenses, including
attorneys' fees, actually and reasonably incurred by him in connection with the
defense of such action, suit, proceeding, judgment, 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 Trustee, officer, employee or agent shall be so indemnified or
reimbursed for any loss, damage, fine, claim, judgment or liability and amounts
paid on account thereof (or expenses related thereto) which shall have been
adjudicated to have arisen out of or to have been based upon his gross
negligence or willful or wanton misconduct or with respect to any Trustee,
employee, officer or agent of the Trust if the same arises from any violation
by them of Federal or State securities laws; and provided further that such
Person gives prompt notice thereof, executes such documents and takes such
action as will permit the Trust to conduct the defense (including the
employment of counsel satisfactory to the Trustees) and/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 would, if
adjudicated, likely be adjudicated to have arisen out of or to have been based
upon such person's gross negligence or willful or wanton misconduct. Expenses
incurred in defending a civil or criminal action, suit or proceeding may be
paid by the Trust in advance of the final disposition of such action, suit or
proceeding as authorized by the Trust in the specific action upon receipt of an
undertaking by or on behalf of a person indemnified to pay over such amount
unless it shall be ultimately determined that 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 such person in any
proper case even though not specifically provided for herein, nor shall
anything contained herein restrict such person's right to contribution as may
be available under applicable law.
Any action taken by or conduct on the part of a Trustee, employee,
officer or agent of the Trust in conformity with or in good faith reliance upon
the provisions of Sections 6.5, 6.6, 6.7, 6.8 and 6.9 hereof shall not, for the
purposes of this Trust (including without limitation Sections 6.1, 6.2 and 6.3
hereof and this Section 6.4) constitute bad faith, willful misfeasance, gross
negligence, reckless disregard of his duties or willful or wanton misconduct.
Section 6.5. Right of Trustees, Employees, Officers and Agents to Own
Shares or Other Property and to Engage in Other Business. Any Trustee,
employee, officer or agent of the Trust may acquire, own, hold and dispose of
<PAGE>
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, employee, officer or agent of the Trust. Any Trustee, employee,
officer or agent of the Trust may, in his personal capacity or in a capacity of
trustee, officers director, stockholder, partner, member, advisor or employee
of any Person or otherwise, have business interests and engage in business and
investment activities similar to or in addition to those relating to the Trust,
which interests and activities may be similar to and competitive with those of
the Trust and may include without limitation the acquisition, syndication,
holding, management, development, operation or disposition of, for his account
or for the account of such Person or others, interests in Real Property, or
interests in Persons engaged in the real estate business. Each Trustee,
employee, officer and agent of the Trust shall be free of any obligation to
present to the Trust any investment opportunity which comes to him in any
capacity other than solely as Trustee, employee, officer or agent of the Trust,
even if such opportunity is of a character which, if presented to the Trust,
could be taken by the Trust; provided, however, that the provisions of this
sentence shall not extend to interests in Real Property which could be acquired
by the Trust consistent with its then existing policies, if any of such
Trustees or agents who in failing to present such opportunity is not acting as
a trustee, officer, director, stockholder, partner, member, adviser or employee
of any Person other than the Trust but is acting for his own personal account.
Subject to the provisions of Section 6.6 hereof, any Affiliated
Trustee, employee, officer or agent of the Trust may be interested as trustee,
officer, director, stockholder, partner, member, adviser or employee of, 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, employee or agent or otherwise
hereunder. None of these activities shall be deemed to conflict with his duties
and powers as Trustee, or officer, or employee or agent of the Trust.
Section 6.6. Transactions Between Trustees, Employees, Officers or Agents
and the Trust. Except as otherwise provided by this Declaration, and in the
absence of fraud, a contract, act or other transaction, between the Trust and
any other Person, or in which the Trust is interested, shall be valid and no
Trustee, employee, officer or agent of the Trust shall have any liability as a
result of entering into any such contract, act or transaction, even though (a)
one (1) or more of the Trustees, employees, officer or agents are directly or
indirectly interested in or connected with, or are trustees, partners,
directors, employees, officer or agents of such other Person, or (b) one (1) or
more of the Trustees, employees officers, or agents of the Trust, individually
or jointly with others, is a party or are parties to, or directly or indirectly
interested in, or connected with, such contract, act or transaction, provided
that such interest or connection is disclosed or known to the Trustees and
thereafter the Trustees authorize or ratify such contract, act or other
transaction by affirmative vote of a majority of the Trustees who are not
interested in the transaction or affiliated with any other entity in the
transaction.
Notwithstanding any other provision of this Declaration, the Trust
shall not engage in a transaction with (a) any Trustee, employee, officer or
<PAGE>
agent of the Trust (acting in his individual capacity), (b) any director,
trustee, partner, officer, employee or agent acting in his individual capacity
of an advisor or contractor of the Trust, (c) an advisor or contractor of the
Trust or, (d) an Affiliate of any of the foregoing, except to the extent that
such transaction has, after disclosure of such affiliation (and if such
transaction involves the acquisition by any such person of any asset for the
purpose of reselling it to the Trust that is then sold to the Trust, full
disclosure has been made including the cost of such property to any such person
and (i) initially such purchases of property is only for the purpose of
accumulating a portfolio for the Trust or (ii) thereafter such property was
acquired by any such person in contemplation of a sale to the Trust Estate upon
completion of financing arrangements by the Trust), been approved or ratified
by the affirmative vote of a majority of the Trustees who are not interested or
affiliated with any such person involved in the transaction, including a
majority of Trustees who have made a determination to the extent applicable
that:
(A) such transaction is fair and reasonable to the Trust and
the Shareholders;
(B) based upon an Appraisal, the total consideration is not in
excess of the appraised value of the interest in real property being acquired,
if an acquisition is involved, or less than the appraised value of the interest
in real property being disposed of, if a disposition is involved; and
(C) if such transaction involves payments by the Trust for
services rendered to the Trust by a Person in a capacity other than that of
Trustee, officer, employee or agent, (1) the compensation is not in excess of
the compensation, if any, paid to such person by any other person who is not an
Affiliate of such person for any comparable services in the same geographic
area, and (2) the compensation is not greater than the charges for comparable
services generally available in the same geographic area from other Persons who
are competent and not affiliated with any of the parties involved.
This Section 6.6 shall not prevent any sale of Shares issued by the
Trust for the public offering thereof in accordance with a registration
statement filed with the SEC under the Securities Act of 1933. The Trustees are
not restricted by this Section 6.6 from forming a corporation, partnership,
trust or other business association owned by any Trustee, employee, officer or
agent or by their nominees for the purpose of holding title to property of the
Trust or managing property of the Trust providing their motive for the
formation of such business association is not for their own enrichment.
Section 6.7. Restriction of Duties and Liabilities. The Shareholders,
Trustees, employees, officers and agents of the Trust shall in no event have
any greater duties than those established by this Declaration or, in cases as
to which such duties are not so established, than those of the shareholders,
directors, officers, employees and agents of a Massachusetts business
corporation in effect from time to time.
<PAGE>
Section 6.8. Persons Dealing with Trustees, Employees, Officers or Agents.
Any act of the Trustees, employees, officers or agents of the Trust purporting
to be done in their capacity as such, shall, as to any Persons dealing with
such Trustees, employees, officers or agents, be conclusively deemed to be
within the purposes of this Trust and within the powers of the Trustees,
employees, officers or agents. No Person dealing with the Trustees or any of
them, or with the employees, officers or agents of the Trust, shall be bound to
see to the application of any funds or property passing into their hands or
control. The receipt by the Trustees or any of them, or of authorized
employees, officers or agents of the Trust, of moneys or other consideration,
shall constitute receipt of the same by the Trust.
Section 6.9. Reliance. The Trustees and the employees, officers and agents
of the Trust may consult with counsel (which may be a firm in which one or more
of the Trustees, employees, officers or agents of the Trust is or are members)
and the advice or opinion of such counsel shall be full and complete personal
protection to all the Trustees and the employees, officers and agents of the
Trust in respect of any or no 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, employees, officers or agents of the Trust, when acting
in good faith, may rely upon financial statements of the Trust represented to
them to be correct by an independent certified public accountant or stated in a
written report by an independent certified public accountant fairly to present
the financial position of the Trust. The Trustees, employees, officers and
agents of the Trust may rely, and shall be personally protected in acting, upon
any instrument or other document believed by them in good faith to be genuine.
ARTICLE VII
DURATION, AMENDMENT AND TERMINATION OF TRUST
Section 7.1. Duration of Trust. The Trust shall continue until terminated
by the affirmative vote of the holders of Shares representing a majority of the
total number of Shares then outstanding and entitled to vote thereon.
Section 7.2. Termination of Trust.
(a) 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 with the purpose of liquidating the Trust and all the powers of the
Trustees under this Declaration shall continue until the affairs of the Trust
shall have been wound up and the Trust shall have been liquidated 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
<PAGE>
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
(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 Trustees may
distribute the remaining Trust Estate, in cash or in kind or in any combination
thereof, among the Shareholders according to their respective rights, such
liquidating distributions to be made at such time or times as determined by the
Trustees based on the then current real estate market and income tax
consequences of such distributions.
(b) After termination of the Trust and distribution to the
Shareholders as herein provided, the Trustees shall execute and lodge among the
records of the Trust an instrument in writing setting forth the fact of such
termination and such distributions, a copy of which instrument shall be filed
with the Secretary of State of the Commonwealth of Massachusetts, and the
Trustees shall thereupon be discharged from all further liabilities and duties
hereunder and the rights and interests of all Shareholders shall thereupon
cease.
Section 7.3. Amendment Procedure. This Declaration may be amended (except
as to the limitations of personal liability and indemnification of the
Shareholders, Trustees, employees, officers and agents of the Trust and the
prohibition of assessments upon Shareholders) only after such amendment has
been approved by a majority of the Trustees and at a meeting of Shareholders
the amendment is approved by holders of Shares representing a majority of the
total number of votes authorized to be cast by Shares then outstanding and
entitled to vote thereon. Notwithstanding the foregoing, a majority of the
Trustees may, without the approval of the Shareholders, adopt any amendment to
this Declaration which they in good faith determine to be necessary to permit
the Trust to qualify or to continue to qualify as a REIT under the Code. No
amendment which would change any rights with respect to any outstanding class
of securities of the Trust, by reducing the amount payable thereon upon
liquidation of the Trust, or by diminishing or eliminating any voting rights
pertaining thereto, shall be made unless approved at such meetings by holders
of Shares representing two-thirds of the total votes authorized to be cast and
entitled to vote thereon.
Any amendment pursuant to any Section of this Declaration
shall not become effective until a certification in recordable form signed by a
majority of the Trustees setting forth an amendment and reciting that it was
duly adopted by the Shareholders and/or the Trustees as required or a copy of
this Declaration, as amended, in recordable form, and executed by a majority of
the Trustees, is filed with the Secretary of State of the Commonwealth of
Massachusetts.
Section 7.4. Transfer to Successor. The Trustees may, with the approval of
a majority of the Trustees and the affirmative vote of the holders of Shares
<PAGE>
representing a majority of the total number of Shares then outstanding and
entitled to vote thereon (a) cause the organization of any Person to take over
the Trust Estate and carry on the affairs of the Trust, (b) merge or
consolidate the Trust with or into any Person or sell, convey or transfer all
or substantially all of the Trust Estate to any Person in exchange for
Securities thereof, or beneficial interests therein, and the assumption by such
transferee of the liabilities of the Trust and (c) thereupon terminate this
Declaration and deliver such shares, Securities or beneficial interests ratably
among the Shareholders in redemption of their Shares.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Applicable Law. This Declaration has been filed with the
Secretary of State of the Commonwealth of Massachusetts and the rights of all
parties and the construction and effect of every provision hereof shall be
subject to and construed according to the statutes and laws of such
Commonwealth.
Section 8.2. Index and Headings for Reference Only. The index and headings
preceding the text, articles and sections hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Declaration.
Section 8.3. Successors in Interest. This Declaration and the Trustees'
Regulations shall be binding upon and inure to the benefit of the undersigned
Trustees and their successors, assigns, heirs, legatees, distributees and legal
representatives, and every Shareholder and his successors, assigns, heirs,
legatees, distributees and legal representatives.
Section 8.4. Inspection of Records. Trust records (including a list of the
names and addresses of all Shareholders) shall be available for inspection by
Shareholders at the same time and in the same manner and to the extent that
comparable records of a Massachusetts business corporation would be available
for inspection by shareholders under the laws of the Commonwealth of
Massachusetts. Except as specifically provided for in this Declaration,
Shareholders shall have no greater right than shareholders of a Massachusetts
business corporation to require financial or other information from the Trust,
Trustees, employees, officers or agents of the Trust. Any Federal or state
securities administration or other similar authority shall have the right, at
reasonable times during business hours and for proper purposes, to inspect the
books and records of the Trust.
Section 8.5. Counterparts. This Declaration may be simultaneously executed
in several counterparts, each of which when so executed shall be deemed to be
an original and such counterparts-together shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 8.6. Provisions of the Trust in Conflict with Law or Regulations.
<PAGE>
(a) 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") are in conflict with the REIT
Provisions of the Code, or with other applicable Federal or state laws and
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 in recordable form 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 deleted signed by a majority of the Trustees, shall be conclusive
evidence of such determination when filed with the Secretary of State of the
Commonwealth of Massachusetts. The Trustees shall not be liable for failure to
make any determination under this Section 8.6(a). Nothing in this Section
8.6(a) shall in any way limit or affect the right of the Trustees to amend this
Declaration as provided in Section 7.3 hereof.
(b) If any provision of this Declaration shall be held by any
Federal or state court having jurisdiction over the issues to be 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 provision were not contained
herein.
Section 8.7. Certifications. The following certifications shall be final
and conclusive as to any persons dealing with the Trust:
(a) a certification of a vacancy among the Trustees by reason of
resignation, removal, increase in the number of Trustees, incapacity, death or
otherwise, when made in writing by a majority of the remaining Trustees;
(b) a certification as to the individuals holding office as
Trustees or Managing Trustees or officer at any particular time, when made in
writing by any Trustee;
(c) a certification that a copy of this Declaration or the
Trustees' Regulations is a true and correct copy thereof as then in force, when
made in writing by the Managing Trustee or by any other Trustee;
(d) the certifications referred to in Sections 7.3 and 8.6(a); and
(e) a certification as to any actions by Trustees, other than the
above, when made in writing by the Managing Trustee or by any other Trustee.
Section 8.8 Records and Minutes. The Trustees shall keep correct and
complete books and records of account and minutes of the proceedings of the
Shareholders, the Trustees and any committee of the Trustees. Any of the
<PAGE>
foregoing books, records or minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
IN WITNESS WHEREOF, the undersigned being all of the current Trustees have
both signed and sealed these presents all on the day and year first above
written.
/s/ Peter M. Stein
PETER M. STEIN
/s/ Jay Goldman
JAY GOLDMAN
/s/ Robert H. Reibstein
ROBERT H. REIBSTEIN
