SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 1, 1994
HEALTH AND RETIREMENT PROPERTIES TRUST
(Exact name of registrant as specified in charter)
Maryland 1-9317 04-6558834
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
400 Centre Street, Newton, Massachusetts 02158
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 617-332-3990
HEALTH AND REHABILITATION PROPERTIES TRUST
(Former name of registrant)
Item 5. Other Events.
On July 1, 1994, Health and Rehabilitation Properties Trust
(the "Company") filed a Third Amended and Restated Declaration of
Trust (the "Amendment") with the Maryland State Department of
Assessments and Taxation. The Amendment changed the Company's
name to "Health and Retirement Properties Trust."
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
3.1. Third Amended and Restated Declaration of Trust.
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.
HEALTH AND RETIREMENT PROPERTIES TRUST
Date: July 7, 1994 By: /s/ David J. Hegarty
David J. Hegarty, Executive Vice
President and Chief Financial
Officer
HEALTH AND REHABILITATION
PROPERTIES TRUST
Changing its Name to
Health and Retirement Properties Trust
Third Amendment and Restatement of Declaration of Trust
October 9, 1986
As Amended and Restated on July 1, 1994
<PAGE>
INDEX
Page
ARTICLE I
THE TRUST; DEFINITIONS
1.1 Name . . . . . . . . . . . . . . . . . . . . 2
1.2 Places of Business . . . . . . . . . . . . . 2
1.3 Nature of Trust. . . . . . . . . . . . . . . 2
1.4 Definitions. . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUSTEES
2.1 Number, Term of Office and Qualifications
of Trustees. . . . . . . . . . . . . . . . 7
2.2 Compensation and Other Remuneration. . . . . 8
2.3 Resignation, Removal and Death of Trustees . 8
2.4 Vacancies. . . . . . . . . . . . . . . . . . 9
2.5 Successor and Additional Trustees. . . . . . 9
2.6 Actions by Trustees. . . . . . . . . . . . . 10
2.7 Certification of Changes in Trustees . . . . 10
2.8 Committees . . . . . . . . . . . . . . . . . 11
ARTICLE III
TRUSTEES' POWERS
3.1 Power and Authority of Trustees. . . . . . . 11
3.2 Specific Powers and Authority. . . . . . . . 11
3.3 Bylaws . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV
ADVISOR
4.1 Employment of Advisor. . . . . . . . . . . . 17
4.2 Term . . . . . . . . . . . . . . . . . . . . 17
4.3 Other Activities of Advisor. . . . . . . . . 18
4.4 Advisor Compensation . . . . . . . . . . . . 19
4.5 Annual Total Operating Expenses. . . . . . . 19
ARTICLE V
INVESTMENT POLICY AND POLICIES
WITH RESPECT TO CERTAIN
DISTRIBUTIONS TO SHAREHOLDERS
5.1 Statement of Policy. . . . . . . . . . . . . 20
5.2 Prohibited Investments and Activities. . . . 22
5.3 Appraisals . . . . . . . . . . . . . . . . . 23
5.4 Change in Investment Policies. . . . . . . . 23
ARTICLE VI
THE SHARES AND SHAREHOLDERS
6.1 Description of Shares. . . . . . . . . . . . 23
6.2 Certificates . . . . . . . . . . . . . . . . 25
6.3 Fractional Shares. . . . . . . . . . . . . . 25
6.4 Legal Ownership of Trust Estate. . . . . . . 26
6.5 Shares Deemed Personal Property. . . . . . . 26
6.6 Share Record; Issuance and Transferability
of Shares. . . . . . . . . . . . . . . . . 26
6.7 Dividends or Distributions to Shareholders . 27
6.8 Transfer Agent, Dividend Disbursing
Agent and Registrar. . . . . . . . . . . . 27
6.9 Shareholders' Meetings . . . . . . . . . . . 28
6.10 Proxies. . . . . . . . . . . . . . . . . . . 29
6.11 Reports to Shareholders. . . . . . . . . . . 29
6.12 Fixing Record Date . . . . . . . . . . . . . 29
6.13 Notice to Shareholders . . . . . . . . . . . 30
6.14 Shareholders' Disclosures; Trustees' Right
to Refuse to Transfer Shares; Limitation
on Holdings; Redemption of Shares. . . . . 30
6.15 Special Voting Requirements for Certain
Business Combinations. . . . . . . . . . . 33
ARTICLE VII
LIABILITY OF TRUSTEES, SHAREHOLDERS,
OFFICERS, EMPLOYEES AND AGENTS,
AND OTHER MATTERS
7.1 Limitation of Liability of Shareholders,
Trustees, Officers, Employees and Agents
for Obligations of the Trust . . . . . . . 34
7.2 Express Exculpatory Clauses and Instruments. 35
7.3 Limitation of Liability of Trustees, Officers,
Employees and Agents to the Trust and to
Shareholders for Acts and Omissions. . . . 35
7.4 Limitation of Liability of Affiliated
Trustees and Their Affiliates to the
Trust and to Shareholders for Acts and
Omissions. . . . . . . . . . . . . . . . . 36
7.5 Indemnification and Reimbursement of
Shareholders . . . . . . . . . . . . . . . 38
7.6 Certain Definitions. . . . . . . . . . . . . 38
7.7 Right of Trustees, Officers, Employees and
Agents to Own Shares or Other Property
and to Engage in Other Business. . . . . . 38
7.8 Transactions Between Trustees, Officers,
Employees or Agents and the Trust. . . . . 39
7.9 Independent Counsel. . . . . . . . . . . . . 40
7.10 Persons Dealing with Trustees, Officers,
Employees or Agents. . . . . . . . . . . . 41
7.11 Reliance . . . . . . . . . . . . . . . . . . 41
ARTICLE VIII
DURATION, AMENDMENT AND TERMINATION
OF TRUST
8.1 Duration of Trust. . . . . . . . . . . . . . 42
8.2 Termination of Trust . . . . . . . . . . . . 42
8.3 Amendment Procedure. . . . . . . . . . . . . 43
8.4 Amendments Effective . . . . . . . . . . . . 43
8.5 Transfer to Successor. . . . . . . . . . . . 43
ARTICLE IX
MISCELLANEOUS
9.1 Applicable Law . . . . . . . . . . . . . . . 44
9.2 Index and Headings for Reference Only. . . . 44
9.3 Successors in Interest . . . . . . . . . . . 44
9.4 Inspection of Records. . . . . . . . . . . . 44
9.5 Counterparts . . . . . . . . . . . . . . . . 44
9.6 Provisions of the Trust in Conflict with
Law or Regulations; Severability . . . . . 45
9.7 Certifications . . . . . . . . . . . . . . . 45
<PAGE>
THIRD AMENDMENT AND RESTATEMENT OF DECLARATION OF TRUST
OF
HEALTH AND REHABILITATION
PROPERTIES TRUST
Changing its Name to
Health and Retirement Properties Trust
Dated October 9, 1986
As Amended and Restated on July 1, 1994
______________________________________
The Declaration of Health and Rehabilitation Properties
Trust (the "Trust"), as filed with the Maryland Department of
Assessments and Taxation on October 9, 1986 and as amended on
September 27, 1987, July 23, 1992 and July 30, 1993 (the
"Declaration"), is hereby amended and restated as follows:
DECLARATION OF TRUST made as of the date set forth above by
the undersigned Trustees.
WITNESSETH:
WHEREAS, the Trustees desire to create a trust for the
principal purpose of investing in real property and interests
therein; and
WHEREAS, the Trustees desire that such trust qualify as a
"real estate investment trust" under the REIT Provisions of the
Internal Revenue Code, and under Title 8 of the Corporations and
Associations Article of the Annotated Code of Maryland; and
WHEREAS, in furtherance of such purpose the Trustees intend
to acquire certain real property and interests therein and to
hold, manage and dispose of all such property as Trustees in the
manner hereinafter stated; and
WHEREAS, it is proposed that the beneficial interest in the
Trust be divided into transferable Shares of Beneficial Interest,
evidenced by certificates therefor, as hereinafter provided;
NOW, THEREFORE, it is hereby agreed and declared that the
Trustees will hold any and all property of every type and
description which they are acquiring or may hereafter acquire as
Trustees, together with the proceeds thereof, in trust, to manage
and dispose of the same for the benefit of the holders from time
to time of the Shares of Beneficial Interest being issued and to
be issued hereunder in the manner and subject to the stipulations
contained herein.
ARTICLE I
THE TRUST; DEFINITIONS
1.1 Name. The name of the Trust created by this
Declaration of Trust shall be "Health and Retirement Properties
Trust" and so far as may be practicable the Trustees shall
conduct the Trust's activities, execute all documents and sue or
be sued under that name, which name (and the word "Trust"
wherever used in this Declaration of Trust, except where the
context otherwise requires) shall refer to the Trustees
collectively but not individually or personally nor to the
officers, agents, employees or Shareholders of the Trust or of
such Trustees. Under circumstances under which the Trustees
determine that the use of such name is not practicable 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.
1.2 Places of Business. The Trust shall maintain an office
in Maryland at CT Corporation or such other place in Maryland as
the Trustees may determine from time to time. The Resident Agent
of the Trust at such office shall be The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland, 21202. The
Trust may change such Resident Agent from time to time as the
Trustees shall determine. The Trust may have such other offices
or places of business within or without the State of Maryland as
the Trustees may from time to time determine.
1.3 Nature of Trust. The Trust shall be a real estate
investment trust within the meaning of Title 8 of the
Corporations and Associations Article of the Annotated Code of
Maryland. It is also intended that the Trust shall carry on a
business as a "real estate investment trust" as described in the
REIT Provisions of the Internal Revenue 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 Internal Revenue Code) nor shall the
Trustees or Shareholders or any of them for any purpose be, nor
be deemed to be, nor be treated in any way whatsoever 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.
1.4 Definitions. The terms defined in this Section 1.4.,
wherever used in this Declaration, shall, unless the context
otherwise requires, have the respective meanings hereinafter
specified. Whenever the singular number is used in this
Declaration and when permitted by the context, the same shall
include the plural, and the masculine gender shall include the
feminine and neuter genders, and vice versa. Where applicable,
calculations to be made pursuant to any such definition shall be
made in accordance with generally accepted accounting principles
as in effect from time to time except as otherwise provided in
such definition.
(a) Advisor. "Advisor" shall mean the Person employed by
the Trustees in accordance with the provisions of Article IV.
(b) Affiliate. "Affiliate" shall mean, as to any Person,
(i) any other Person directly or indirectly controlling,
controlled by or under common control with such Person, (ii) any
other Person that owns beneficially, directly or indirectly, five
percent (5%) or more of the outstanding capital stock, shares or
equity interests of such Person, or (iii) any officer, director,
employee, general partner or trustee of such Person or of any
Person controlling, controlled by or under common control with
such Person (excluding trustees who are not otherwise an
Affiliate of such Person).
(c) Affiliated Trustee. "Affiliated Trustee" shall mean a
Trustee who is not an Independent Trustee.
(d) Annual Meeting of Shareholders. "Annual Meeting of
Shareholders" shall mean the meeting described in the first
sentence of Section 6.9.
(e) Annual Report. "Annual Report" shall have the meaning
set forth in Section 6.11(a).
(f) Average Invested Real Estate Assets. "Average Invested
Real Estate Assets" for any period shall mean the average of the
aggregate book value of the consolidated assets of the Company
invested, directly or indirectly, in equity interests in, and
loans secured by, real estate and personal property associated
with such real estate, before reserves for depreciation or bad
debt or other similar non-cash reserves, calculated by taking the
average of such values at the end of each month during such
period.
(g) Book Value. "Book Value" of an asset or assets shall
mean the value of such asset or assets of the Trust on the books
of the Trust, without deduction for depreciation 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 or under procedures adopted by the
Trustees, and the underlying assets of a partnership, joint
venture or other form of indirect ownership, to the extent of the
Trust's interest therein, shall be valued as if owned directly by
the Trust.
(h) Bylaws. "Bylaws" shall have the meaning set forth in
Section 3.3.
(i) Declaration. "Declaration" or "this Declaration" shall
mean this Declaration of Trust, as amended, restated or modified
from time to time. References in this Declaration to "herein"
and "hereunder" shall be deemed to refer to this Declaration and
shall not be limited to the particular text, article or section
in which such words appear.
(j) [Intentionally left blank].
(k) Independent Trustee. "Independent Trustee" shall mean
a Trustee who, in his individual capacity, (i) is neither an
Affiliate of, nor has any material business or professional
relationship with, the Advisor or any other Person whom the
Trustees may pursuant to Section 6.14(c) hereof permit to
purchase in excess of 8.5% of the Trust's Shares (provided,
however, that any Trustee affiliated with an underwriter shall
not cease to be an Independent Trustee solely on the basis of
such underwriter's purchase of Shares in connection with any
public offering of the Trust's Shares), and (ii) does not perform
any services for the Trust except as Trustee.
(l) Internal Revenue Code. "Internal Revenue Code" shall
mean the Internal Revenue Code of 1954, as now enacted or
hereafter amended, or successor statutes and applicable rules and
regulations thereunder.
(m) Invested Assets. "Invested Assets" shall mean the Book
Value of all the Real Estate Investments of the Trust.
(n) Mortgage Loans. "Mortgage Loans" shall mean notes,
debentures, bonds and other evidences of indebtedness or
obligations, whether negotiable or non-negotiable, and which are
secured or collateralized by Mortgages.
(o) Mortgages. "Mortgages" shall mean mortgages, deeds of
trust or other security interests in Real Property.
(p) Net Assets. "Net Assets" shall mean the total assets
(other than intangibles) at cost before deducting depreciation or
other non-cash reserves less total liabilities, calculated at
least quarterly on a basis consistently applied.
(q) Net Income. "Net Income" for any period shall be
calculated on the basis of the Trust's audited financial
statements and shall mean 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.
(r) Person. "Person" shall mean and include individuals,
corporations, limited partnerships, general partnerships, joint
stock companies or associations, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business
trusts and other entities and governments and agencies and
political subdivisions thereof.
(s) Real Estate Investment. "Real Estate Investment" shall
mean any direct or indirect investment in any interest in Real
Property or in any Mortgage Loan, or in any Person whose
principal purpose is to make any such investment.
(t) Real Property. "Real Property" shall mean and include
land leasehold interests (including but not limited to interests
of a lessor or lessee therein), rights and interests in land, and
in any buildings, structures, improvements, furnishings and
fixtures located on or used in connection with land or interests
therein, but does not include investments in Mortgages, Mortgage
Loans or interests therein.
(u) REIT. "REIT" shall mean a real estate investment trust
as defined in the REIT Provisions of the Internal Revenue Code.
(v) REIT Provisions of the Internal Revenue Code. "REIT
Provisions of the Internal Revenue Code" shall mean Parts II and
III of Subchapter M of Chapter 1 of Subtitle A of the Internal
Revenue Code or any successor provision.
(w) Securities. "Securities" shall mean any stock, shares,
voting trust certificates, bonds, debentures, notes or other
evidences of indebtedness or in general any instruments commonly
known as "securities" or any certificates of interest, shares or
participations in, temporary or interim certificates for,
receipts for, guarantees of, or warrants, options or rights to
subscribe to, purchase or acquire any of the foregoing.
(x) Shareholders. "Shareholders" shall mean as of any
particular time all holders of record of outstanding Shares at
such time.
(y) Shares. "Shares" or, as the context may require,
"shares" shall mean the shares of beneficial interest of the
Trust as described in Section 6.1 hereof.
(z) Total Assets. "Total Assets" shall mean the Book Value
of all the assets of the Trust, as such Book Value appears on the
most recent quarterly balance sheet of the Trust.
(aa) Total Operating Expenses. "Total Operating Expenses"
shall be calculated on the basis of the Trust's annual audited
financial statements and shall mean the aggregate annual expenses
regarded as ordinary operating expenses (including any
compensation payable to the Advisor), exclusive of the following:
(i) interest payments and any other cost of borrowed
money;
(ii) taxes on income and taxes and assessments on real
property, if any, and all other taxes applicable to
the Trust;
(iii) legal, auditing, accounting, underwriting, brokerage,
listing, reporting, registration and other fees, and
printing, engraving and other expenses and taxes
incurred in connection with the issuance,
distribution, transfer, trading, registration and
stock exchange listing of the Trust's securities,
including transfer agent's, registrar's and indenture
trustee's fees and charges;
(A) expenses of organizing, restructuring,
reorganizing or terminating the Trust, or of
revising, amending, converting or modifying the
Trust's organizational documents;
(B) expenses directly connected with the
acquisition, disposition and ownership of real
estate interests or other property (including
the costs of foreclosure, insurance premiums,
legal services, brokerage and sales commissions,
maintenance, repair, improvement and local
management of property), other than expenses
with respect thereto of employees of the
Advisor, to the extent that such expenses are to
be borne by the Advisor pursuant to the terms of
the advisory contract;
(iv) non-cash provisions for depreciation, depletion and
amortization;
(v) losses on the disposition of assets and provisions
for such losses; and
(vi) other extraordinary charges including, without
limitation, litigation costs.
(bb) Trust. "Trust" shall mean the Trust created by this
Declaration.
(cc) Trustees. "Trustees" shall mean, as of any particular
time, the original signatories hereto as long as they hold office
hereunder and additional and successor Trustees, and shall not
include the officers, employees or agents of the Trust or the
Shareholders. Nothing herein shall be deemed to preclude the
Trustees from also serving as officers, employees or agents of
the Trust or owning Shares.
(dd) Trust Estate. "Trust Estate" shall mean as of any
particular time any and all property, real, personal or
otherwise, tangible or intangible, which is transferred, conveyed
or paid to or purchased by the Trust or Trustees and all rents,
income, profits and gains therefrom and which at such time is
owned or held by or for the Trust or the Trustees.
ARTICLE II
TRUSTEES
2.1 Number, Term of Office and Qualifications of Trustees.
There shall be no fewer than three (3) nor more than twelve (12)
Trustees. The exact number of Trustees shall be five (5) until
changed by a two-thirds (2/3) vote of the Trustees or by an
amendment of this Declaration duly adopted by the Shareholders.
The Board of Trustees shall be classified into three groups, with
two (2) Trustees in Group I, two (2) Trustees in Group II, and
one (1) Trustee in Group III. Each Trustee in Group I shall
serve for a term ending at the annual meeting of Shareholders in
1996; each Trustee in Group II shall serve for a term ending at
the annual meeting of Shareholders in 1997; and the Trustee in
Group III shall serve for a term ending at the annual meeting of
Shareholders in 1995. After the respective terms of the groups
indicated, each such group of Trustees shall be elected for
successive terms ending at the annual meeting of Shareholders
held during the third year after election.
The names and business addresses of the current Trustees who
will serve as Trustees until the expiration of their respective
terms and until their successors are elected and qualify are as
follows:
Name Address
Group I: Barry M. Portnoy Sullivan & Worcester
One Post Office Square
Boston, MA 02109
John L. Harrington 990 Washington Street
Suite 315
Dedham, MA 02026
Group II: Rev. Justinian St. Gabriel's Parish
Manning, C.P. Rectory
139 Washington Street
Brighton, MA 02135
Gerard M. Martin M & P Partners Limited
Partnership
400 Centre Street
Newton, MA 02158
Group III: Arthur G. Cumberland Farms, Inc.
Koumantzelis 777 Dedham Street
Canton, MA 02021-9118
The current Trustees shall be the signatories hereto. No
reduction in the number of Trustees shall have the effect of
removing any Trustee from office prior to the expiration of term.
Subject to the provisions of Section 2.3, each Trustee shall hold
office until the election and qualification of his successor.
There shall be no cumulative voting in the election of Trustees.
A Trustee shall be an individual at least twenty-one (21) years
of age who is not under legal disability. A majority of the
Trustees shall at all times be persons who are Independent
Trustees; provided, however, that upon a failure to comply with
this requirement because of the resignation, removal or death of
a Trustee who is an Independent Trustee, such requirement shall
not be applicable for a period of ninety (90) days. Nominees to
serve as Independent Trustees shall be nominated by the then
current Independent Trustees, if any. 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 shall not be required to devote their entire time to the
business and affairs of the Trust.
2.2 Compensation and Other Remuneration. The Trustees
shall be entitled to receive such reasonable compensation for
their services as Trustees as the Trustees may determine from
time to time. The Trustees and Trust officers shall be entitled
to receive remuneration for services rendered to the Trust in any
other capacity. Subject to Sections 7.7 and 7.8, such services
may include, without limitation, services as an officer 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.
2.3 Resignation, Removal and Death of Trustees. A Trustee
may resign at any time by giving written notice to the remaining
Trustees at the principal office of the Trust. Such resignation
shall take effect on the date specified in such notice, without
need for prior accounting. A Trustee may be removed at any time
with or without cause by vote or consent of holders of Shares
representing two-thirds 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 Trustee judged incompetent or
bankrupt, or for whom a guardian or conservator has been
appointed, shall be deemed to have resigned as of the date of
such adjudication or appointment. Upon the resignation or
removal of any Trustee, or his otherwise ceasing to be a Trustee,
he shall execute and deliver such documents as the remaining
Trustees shall require for the conveyance of any Trust property
held in his name, shall account to the remaining Trustees as they
require for all property which he holds as Trustee and shall
thereupon be discharged as Trustee. Upon the incapacity or death
of any Trustee, his legal representative shall perform the acts
set forth in the preceding sentence and the discharge mentioned
therein shall run to such legal representative and to the
incapacitated Trustee or the estate of the deceased Trustee, as
the case may be.
2.4 Vacancies. If any or all the Trustees cease to be
Trustees hereunder, whether by reason of resignation, removal,
incapacity, death or otherwise, such event shall not terminate
the Trust or affect its continuity. Until vacancies are filled,
the remaining Trustee or Trustees (even though fewer than three
(3)) may exercise the powers of the Trustees hereunder.
Vacancies (including vacancies created by increases in number)
may be filled by the remaining Trustee or by a majority of the
remaining Trustees (or a majority of the remaining Independent
Trustees, if any, if the vacant position was formerly held by an
Independent Trustee or is required to be held by an Independent
Trustee) or by vote of 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. If at any time there
shall be no Trustees in office, successor Trustees shall be
elected by the Shareholders as provided in Section 6.9. 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.
2.5 Successor and Additional Trustees. The right, title
and interest of the Trustees in and to the Trust Estate shall
also vest in successor and additional Trustees upon their
qualification, and they shall thereupon have all the rights and
obligations of Trustees hereunder. Such right, title and
interest shall vest in the Trustees whether or not conveyancing
documents have been executed and delivered pursuant to Section
2.3 or otherwise. Appropriate written evidence of the election
and qualification of successor and additional Trustees shall be
filed with the records of the Trust and in such other offices or
places as the Trustees may deem necessary, appropriate or
desirable.
2.6 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 Section 7.8 or otherwise 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. 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 consents of a majority of the Trustees, which
consents shall be filed with the records of meetings of the
Trustees. Any action or actions permitted to be taken by the
Trustees in connection with the business of the Trust may be
taken pursuant to authority granted by a meeting of the Trustees
conducted by a telephone conference call, and the transaction of
Trust business represented thereby shall be of the same authority
and validity as if transacted at a meeting of the Trustees held
in person or by written consent. The minutes of any Trustees'
meeting held by telephone shall be prepared in the same manner as
a meeting of the Trustees held in person. The acquisition or
disposition of any investment (other than investments in short-
term investment Securities described in Section 5.1) shall
require the approval of a majority of Trustees, except as
otherwise provided in Section 7.8. 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
Bylaws.
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 all quorum purposes under this Section
2.6 and, subject to the provisions of Section 7.8, may vote on
the matter as to which they or their Affiliates have such
interest or connection.
2.7 Certification of Changes in Trustees. No alteration in
the number of Trustees, no removal of a Trustee and no election
or appointment of any individual as Trustee (other than an
individual who was serving as a Trustee immediately prior to such
election or appointment) shall become effective unless and until
there shall be delivered to the secretary of the Trust an
instrument in writing signed by a majority of the Trustees,
certifying to such alteration in the number of Trustees and/or to
such removal of a Trustee and/or naming the individual so elected
or appointed as Trustee, together with his written acceptance
thereof and agreement to be bound thereby.
2.8 Committees. The Trustees may appoint an audit committee
and such other standing committees as the Trustees determine.
Each standing committee shall consist of three or more members,
provided, however, that the Trustees may appoint a standing
committee consisting of at least one Trustee and two non-
Trustees. Notwithstanding the foregoing, however, all members of
the audit committee shall be Independent Trustees. A majority of
the members of each other standing committee comprised solely of
Trustees shall be Independent Trustees; provided, however, that
upon a failure to comply with this requirement because of the
resignation, removal or death of a Trustee who is an Independent
Trustee, such requirement shall not be applicable for a period of
ninety (90) days. Each 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 III
TRUSTEES' POWERS
3.1 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, and 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 as to the
purposes of the Trust or the existence of any power or authority
hereunder shall be conclusive. In construing the provisions of
this Declaration, the 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
or any other specified power or authority conferred herein upon
the Trustees.
3.2 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 time 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, whether tangible
or intangible, 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;
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 any additional authorized Shares (subject
to Section 5.2(e)) or other Securities 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, and to hold for investment, the
entire or any participating interests in any Mortgage Loans
or interest in Real Property, including ownership of, or
participations 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; to
invest in loans secured by the pledge or transfer of
Mortgage Loans;
(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 one or
more of the Trustees or by a duly authorized officer,
employee, agent or nominee of the Trust, provided that no
disposition of a Real Estate Investment shall be
accomplished without the approval of a majority of the
Trustees;
(d) to issue Shares, bonds, debentures, notes or other
evidences of indebtedness, which may be secured or unsecured
and may be subordinated to any indebtedness of the Trust, to
such Persons for such cash, property 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 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 such Securities to bear an actual or
facsimile imprint of the seal of the Trust (if the Trustees
shall have adopted such a seal) and to be signed by manual
or facsimile signature or signatures (and to issue such
Securities, whether or not any Person whose manual or
facsimile signature shall be imprinted thereon shall have
ceased to occupy the office 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; and to issue any of
such Securities of different types in combinations or units
with such restrictions on the separate transferability
thereof as the Trustees shall determine;
(e) 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 and beyond the possible termination
of the Trust, or having a lesser term;
(f) to borrow money and give negotiable or non-
negotiable instruments therefor; or guarantee, indemnify or
act as surety with respect to payment or performance of
obligations of third parties; to enter into other
obligations on behalf of the Trust; and to assign, convey,
transfer, mortgage, subordinate, pledge, grant security
interest in, encumber or hypothecate the Trust Estate to
secure any indebtedness of the Trust or any other of the
foregoing obligations of the Trust;
(g) to lend money, whether secured or unsecured;
(h) to create reserve funds for any purpose;
(i) to incur and pay out of the Trust Estate any
charges or expenses, and to disburse any funds of the Trust,
which charges, expenses or disbursements are, in the opinion
of the Trustees, necessary or incidental to or desirable for
the carrying out of any of the purposes of the Trust or
conducting the business of the Trust, including without
limitation taxes and other governmental levies, charges and
assessments, of whatever kind or nature, imposed upon or
against the Trustees in connection with the Trust or the
Trust Estate or upon or against the Trust Estate or any part
hereof, and for any of the purposes herein;
(j) 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, 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 or officers, employees or agents,
of the Trust) as the Trustees may determine;
(k) to possess and exercise all the rights, powers and
privileges pertaining 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 do so, and, without
limiting the generality of the foregoing, to vote or give
any consent, request or notice, or waive any notice, either
in person or by proxy or power of attorney, with or without
power of substitution, to one or more Persons, which proxies
and powers of attorney may be for meetings or action
generally or for any particular meeting or action, and may
include the exercise of discretionary powers;
(l) to cause to be organized or assist in organizing
any Person under the laws of any jurisdiction to acquire the
Trust Estate or any part or parts thereof or to carry on any
business in which the Trust shall directly or indirectly
have any interest, and to sell, rent, lease, hire, convey,
negotiate, assign, exchange or transfer the Trust Estate or
any part or parts thereof to or with any such Person or any
existing Person in exchange for the Securities thereof or
otherwise, and to merge or consolidate the Trust with or
into any Person or merge or consolidate any Person into the
Trust, and to lend money to, subscribe for the Securities
of, and enter into any contracts with, any Person in which
the Trust holds or is about to acquire Securities or any
other interest;
(m) to enter into joint ventures, general or limited
partnerships, participation or agency arrangements and any
other lawful combinations or associations, and to act as a
general or limited partner provided, however, that the
Trustees may not enter into any such joint venture or other
association as aforesaid unless it has first received from
counsel an opinion to the effect that such joint venture or
other association as aforesaid will be treated for tax
purposes as a partnership;
(n) to elect, appoint, engage or employ such officers
for the Trust as the Trustees may determine, who may be
removed or discharged at the discretion of the Trustees,
such officers to have such powers and duties, and to serve
such terms, as may be prescribed by the Trustees or by the
Bylaws; to engage or employ any Persons (including, subject
to the provisions of Sections 7.7 and 7.8, any Trustee or
officer, agent or employee of the Trust and any Person in
which any Trustee, officer or agent is directly or
indirectly interested or with which he is directly or
indirectly connected) 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, managers, appraisers, brokers,
architects, engineers, construction managers, general
contractors or otherwise) in one or more capacities, and to
pay compensation from the Trust 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, officers,
employees, independent contractors or other Persons;
provided, however, that no such delegation shall be made to
an Affiliate of the Advisor, except with the approval of a
majority of the Independent Trustees;
(o) to determine or cause to be determined from time
to time the value of all or any part of the Trust Estate and
of any services, Securities, property or other consideration
to be furnished to or acquired by the Trust, and from time
to time to revalue or cause to be revalued 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, intervene in,
prosecute, join, defend, compromise, abandon or adjust, by
arbitration or otherwise, any actions, suits, proceedings,
disputes, claims, controversies, demands or other litigation
relating to the Trust, the Trust Estate or the Trust's
affairs, to enter into agreements therefor, whether or not
any suit is commenced or claim accrued or asserted and, in
advance of any controversy, to enter into agreements
regarding arbitration, adjudication or settlement thereof;
(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 self-insure or to purchase and pay for out of
the Trust Estate insurance contracts and policies, including
contracts of indemnity, insuring the Trust Estate against
any and all risks and insuring the Trust and/or all or any
of the Trustees, the Shareholders, or the officers,
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,
officers, employees or agents, 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 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, on such terms,
in such manner and 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 (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 broker/dealer, investment bank,
investment advisor or independent contractor, to such extent
as the Trustees shall determine;
(w) to confess judgment against the Trust;
(x) to discontinue the operations of the Trust;
(y) to repurchase or redeem Shares and other
Securities issued by the Trust;
(z) to declare and pay dividends or distributions,
consisting of cash, property or Securities, to the holders
of Shares of the Trust out of any funds legally available
therefor; and
(aa) 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.
3.3 Bylaws. The Trustees may make or adopt and from time
to time amend or repeal Bylaws (the "Bylaws") 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 Bylaws may define the duties of the officers, employees
and agents of the Trust.
ARTICLE IV
ADVISOR
4.1 Employment of Advisor. The Trustees are responsible
for the general policies of the Trust and for the general
supervision of the business of the Trust conducted by all
officers, agents, employees, advisors, managers or independent
contractors of the Trust. However, the Trustees are not and
shall not be required personally to conduct the business of the
Trust, and, consistent with their ultimate responsibility as
stated above, the Trustees shall have the power to appoint,
employ or contract with any Person (including one or more of
themselves or any corporation, partnership, or trust in which one
or more of them may be directors, officers, stockholders,
partners or trustees) as the Trustees may deem necessary or
proper for the transaction of the business of the Trust. The
Trustees may therefore employ or contract with such Person
(herein referred to as the "Advisor") and, consistent with their
ultimate responsibility as set forth in this Section 4.1, the
Trustees may grant or delegate such authority to the Advisor as
the Trustees may in their sole discretion deem necessary or
desirable without regard to whether such authority is normally
granted or delegated by trustees. The Advisor shall be required
to use its best efforts to supervise the operation of the Trust
in a manner consistent with the investment policies and
objectives of the Trust.
Subject to the provisions of Sections 4.2 and 7.8 hereof,
the Trustees shall have the power to determine the terms and
compensation of the Advisor or any other Person whom they may
employ or with whom they may contract for advisory services. The
Trustees may exercise broad discretion in allowing the Advisor to
administer and regulate the operations of the Trust, to act as
agent for the Trust, to execute documents on behalf of the
Trustees and to make executive decisions which conform to general
policies and general principles previously established by the
Trustees.
4.2 Term. The Trustees shall not enter into any advisory
contract with the Advisor unless such contract has an initial
term of not more than one year, provides for annual renewal or
extension thereafter, provides for termination thereof by the
Trustees without cause at any time upon sixty (60) days' written
notice by the Trustees, by affirmative vote or written consent of
a majority of the Independent Trustees, and provides for
termination thereof by the Advisor without cause at any time
after the expiration of a period specified in such contract
(which period shall not be shorter than the original term)
without penalty upon sixty (60) days' written notice by the
Advisor. In the event of the termination of an advisory
contract, the terminated Advisor shall be required to cooperate
with the Trust and take all reasonable steps requested to assist
the Trustees in making an orderly transition of the advisory
function. It shall be the duty of the Trustees annually to
evaluate the performance of the Advisor, and the Independent
Trustees have a fiduciary duty to the Shareholders to supervise
the relationship of the Trust with the Advisor.
4.3 Other Activities of Advisor. The Advisor shall not be
required to administer the Trust as its sole and exclusive
function and may have other business interests and may engage in
other activities similar or in addition to those relating to the
Trust, including the rendering of advice or services of any kind
to other investors or any other Persons (including other REITs)
and the management of other investments. The Trustees may
request the Advisor to engage in certain other activities which
complement the Trust's investments, and the Advisor may receive
compensation or commissions therefor from the Trust or other
Persons.
Neither the Advisor nor (subject to any applicable
provisions of Section 7.7) any Affiliate of the Advisor shall be
obligated to present any particular investment opportunities to
the Trust, even if such opportunities are of a character such
that, if presented to the Trust, they could be taken by the
Trust, and, subject to the foregoing, each of them shall be
protected in taking for its own account or recommending to others
any such particular investment opportunity.
Notwithstanding the foregoing, the Advisor shall be required
to use its best efforts to present the Trust with a continuing
and suitable program consistent with the investment policies and
objectives of the Trust and with investments which are
representative of, comparable with and on similar terms as
investments being made by Affiliates of the Advisor, or by the
Advisor for its own account or for the account of any Person for
whom the Advisor is providing advisory services. In addition,
the Advisor shall be required to, upon the request of any
Trustee, promptly furnish the Trustees with such information on a
confidential basis as to any investments within the investment
policies of the Trust made by Affiliates of the Advisor or by the
Advisor for its own account or for the account of any Person for
whom the Advisor is providing advisory services.
4.4 Advisor Compensation. The Trustees, including a
majority of the Independent Trustees, shall at least annually
review generally the performance of the Advisor in order to
determine whether the compensation which the Trust has contracted
to pay to the Advisor is reasonable in relation to the nature and
quality of services performed and whether the provisions of the
advisory contract with the Advisor are being carried out. Each
such determination shall be based on such of the following and
other factors as the Trustees (including the Independent
Trustees) deem appropriate and shall be reflected in the minutes
of the meetings of the Trustees:
(a) the size of the advisory fee in relation to the
size, composition and profitability of the portfolio of the
Trust;
(b) the success of the Advisor in generating
opportunities that meet the investment objectives of the
Trust;
(c) the rates charged to other REITs and to investors
other than REITs by advisors performing similar services;
(d) additional revenues realized by the Advisor and
its Affiliates through their relationship with the Trust,
including loan administration, underwriting or brokerage
commissions and servicing, engineering, inspection and other
fees, whether paid by the Trust or by others with whom the
Trust does business;
(e) the quality and extent of service and advice
furnished by the Advisor;
(f) the performance of the investment portfolio of the
Trust, including income, conservation or appreciation of
capital, frequency of problem investments and competence in
dealing with distress situations; and
(g) the quality of the portfolio of the Trust in
relationship to any investments generated by the Advisor for
its own account.
4.5 Annual Total Operating Expenses. Each advisory
contract with an Advisor shall provide that the Total Operating
Expenses of the Trust shall not exceed in any fiscal year the
lower of:
(a) the greater of (i) two percent (2%) of the Average
Invested Real Estate Assets for such fiscal year or (ii)
twenty-five percent (25%) of the Net Income for such fiscal
year (calculated before the deduction therefrom of such
Total Operating Expenses); or
(b) the lowest of any applicable operating expense
limitations that may be imposed by law or regulation in a
state in which any securities of the Trust are or will be
qualified for sale or by a national securities exchange on
which any securities of the Trust are or may be listed, as
such limitations may be altered from time to time.
The Independent Trustees shall at least annually determine
whether the total fees and expenses of the Trust are reasonable
in light of the investment experience of the Trust, its Net
Assets, its Net Income and the fees and expenses of comparable
REITs. Each such determination shall be reflected in the minutes
of meetings of the Trustees.
Within sixty (60) days after the end of any fiscal quarter
of the Trust ending on or after December 31, 1987 for which Total
Operating Expenses (for the twelve months then ended) exceed
either of the expense limitations provided in subparagraph (a) of
this Section 4.5, the Trust shall send to the Shareholders a
written disclosure of such fact, together with an explanation of
the factors, if any, which the Trustees (including a majority of
the Independent Trustees) have concluded were sufficiently
unanticipated, unusual or nonrecurring to justify such higher
Total Operating Expenses.
Each advisory contract with the Advisor shall provide that
in the event that the Total Operating Expenses exceed any of the
limitations provided in this Section 4.5, then the Advisor shall
refund to the Trust the amount by which the aggregate annual
Total Operating Expenses paid or incurred by the Trust exceed the
limitations herein provided; provided, however, that with respect
to the limitations provided in subparagraph (a) of this Section
4.5, only so much of such excess need be refunded as the
Trustees, including a majority of the Independent Trustees, shall
have found to be unjustified as provided above.
ARTICLE V
INVESTMENT POLICY AND POLICIES
WITH RESPECT TO CERTAIN
DISTRIBUTIONS TO SHAREHOLDERS
5.1 Statement of Policy. It shall be the general
objectives of the Trust (i) to provide current income for
distribution to Shareholders through investments in
income-producing rehabilitation, health care and related
facilities and other real estate investments, (ii) to provide
Shareholders with the opportunity for additional returns through
participation in any increases in the operating revenues of
investment properties, (iii) to provide Shareholders with the
opportunity to realize income from investments in income-
producing properties to be financed by the issuance of additional
Shares or debt, (iv) to provide Shareholders with the opportunity
to realize capital growth resulting from appreciation, if any, in
the residual value of investment properties and (v) to preserve
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 III to
invest the Trust Estate in a wide variety of investments, it
shall be the policy of the Trustees to invest the initial portion
of the Trust Estate primarily in income-producing rehabilitation,
health care and related facilities including, without limitation,
acute care and rehabilitation hospitals, skilled nursing and
intermediate care facilities, retirement centers, congregate
living facilities, medical office buildings, health care related
hotels, outpatient rehabilitation centers, community
re-entry/re-training facilities and facilities housing other
health care and related products and services.
The Trust may make secured borrowings to make permitted
additional Real Estate Investments and secured or unsecured
borrowings for normal working capital needs, including the repair
and maintenance of properties in which it has invested, tenant
improvements and leasing commissions. The Trust may make such
borrowings from third parties or, subject to approval by a
majority of the Independent Trustees, from Affiliates of the
Advisor. Interest and other financing charges or fees to be paid
on loans from such Affiliates will not exceed the interest and
other financing charges or fees which would be charged by third
party financing institutions on comparable loans for the same
purpose in the same geographic area.
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) U.S.
government Securities; (ii) Securities of U.S. government
agencies; (iii) bankers' acceptances; (iv) bank certificates of
deposit; (v) interest-bearing deposits in commercial banks; (vi)
participations in pools of mortgages or bonds and notes (such as
Federal Home Loan Mortgage Corporation participation sale
certificates, Government National Mortgage Association modified
pass-through certificates and Federal National Mortgage
Association bonds and notes; (vii) bank repurchase agreements
covering the Securities of the United States or agencies or
instrumentalities thereof; and (viii) other short-term
investments consistent with the Trust's intention to qualify as a
REIT under the Internal Revenue Code.
It shall be the policy of the Trustees to make investments
in such manner as to comply with the requirements of the Internal
Revenue Code with respect to the composition of the investments
and the derivation of the income of a real estate investment
trust as defined in the REIT Provisions of the Internal Revenue
Code; provided, however, that no Trustee, officer, employee or
agent of the Trust shall be liable for any act or omission
resulting in the loss of tax benefits under the Internal Revenue
Code, except for that arising from his own wilful misfeasance,
bad faith, gross negligence or reckless disregard of duty.
5.2 Prohibited Investments and Activities. The Trustees
shall not engage in any of the following investment practices or
activities:
(a) investing in any junior mortgage loan unless by
appraisal or other method the Independent Trustees determine
that (a) capital invested in any such loan is adequately
secured on the basis of the equity of the borrower in the
property underlying such investment and the ability of the
borrower to repay the mortgage loan or (b) such 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;
(b) investing in commodities or commodity futures
contracts (other than interest rate futures, when used
solely for hedging purposes);
(c) investing more than 1% of the Trust's total assets
in real estate contracts of sale unless such contracts of
sale are in recordable form and appropriately recorded in
the chain of title;
(d) issuing Securities that are redeemable at the
option of the holders thereof;
(e) granting warrants or options to purchase shares of
beneficial interest of the Trust unless such warrants or
options (i) are issued at an exercise price greater than or
equal to the fair market value of the shares of beneficial
interest of the Trust on the date of the grant and for
consideration (including services) that in the judgment of a
majority of the Independent Trustees has a market value at
least equal to the value of the warrant or option on the
date of grant, (ii) are exercisable within ten years from
the date of grant and (iii) when aggregated with all other
outstanding options and warrants are less than 10% of the
value of the outstanding shares of beneficial interest of
the Trust on the date of grant; provided that the terms of
warrants or options that are issued ratably to all holders
of shares of beneficial interest or as part of a financing
arrangement need not meet the above restrictions;
(f) holding equity investments in unimproved,
non-income producing real property, except such properties
as are currently undergoing development or are presently
intended to be developed within one year, together with
mortgage loans on such property (other than first mortgage
development loans), aggregating to more than 10% of the
Trust's assets;
(g) engaging in trading (as compared with investment
activities), or engaging in the underwriting of or
distributing as agent of the Securities issued by others;
(h) making secured and unsecured borrowings which in
the aggregate exceed 300% of the Net Assets of the Trust,
unless approved by a majority of the Independent Trustees,
and disclosed to shareholders;
(i) undertaking any activity that would disqualify the
Trust as a real estate investment trust under the provisions
of the Code as long as a real estate investment trust is
accorded substantially the same treatment or benefits under
the United States tax laws from time to time in effect as
under Sections 856-860 of the Code at the date of adoption
of the Trust's Declaration of Trust; and
(j) using or applying land for farming, agriculture,
horticulture or similar purposes in violation of Section
8-302(b) of the Corporations and Associations Article of the
Annotated Code of Maryland.
5.3 Appraisals. If the Trustees shall at any time purchase
Real Property, or interests therein, the consideration paid
therefor shall generally be based upon the fair market value
thereof as determined by an appraisal by a person who is not an
Affiliate of the Trust or the Advisor and who is, in the sole
judgment of the Trustees, properly qualified to make such a
determination.
5.4 Change in Investment Policies. The investment policies
set out in this Article V may be changed by a vote of a majority
of the Trustees, including a majority of the Independent
Trustees.
ARTICLE VI
THE SHARES AND SHAREHOLDERS
6.1 Description of Shares. The interest of the
Shareholders shall be divided into 150,000,000 shares of
beneficial interest which shall be known collectively as
"Shares," all of which shall be validly issued, fully paid and
non-assessable 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.
There shall be two classes of Shares: 50,000,000 shares of one
such class shall be known as "Preferred Shares" and 100,000,000
shares of the other such class shall be known as "Common Shares",
$0.01 par value per share. Each holder of Shares shall as a
result thereof be deemed to have agreed to and be bound by the
terms of this Declaration. The Shares may be issued for such
consideration as the Trustees shall deem advisable. The Trustees
are hereby expressly authorized at any time, and from time to
time, to provide for issuance of Shares upon such terms and
conditions and pursuant to such agreements as the Trustees may
determine.
The Trustees are hereby expressly authorized at any time,
and from time to time, without Shareholder approval, to set (or
change if such class has previously been established) the par
value, preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or
terms, or conditions of redemption, of the Preferred Shares, and
such Preferred Shares may further be divided by the Trustees into
classes or series.
Except as otherwise determined by the Trustees with respect
to any class or series of Preferred Shares, the holders of Shares
shall be entitled to the rights and powers hereinafter set forth
in this Section 6.1: 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 for the purpose, such
dividends or distributions as may be declared from time to time
by the Trustees. In the event of the termination of the Trust
pursuant to Section 8.1 or otherwise, 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 in accordance with
Section 8.2. All Shares shall have equal non-cumulative voting
rights at the rate of one vote per Share, and equal dividend,
distribution, liquidation and other rights, and shall have no
preference, conversion, exchange, sinking fund or redemption
rights. Absent a contrary written agreement of the Trust
authorized by the Trustees, and notwithstanding any other
determination by the Trustees with respect to any class or series
of Preferred Shares, no holder of Shares or Preferred Shares
shall be entitled as a matter of right to subscribe for or
purchase any part of any new or additional issue of Shares of any
class whatsoever of the Trust, or of securities convertible into
any shares of any class whatsoever of the Trust, whether now or
hereafter authorized and whether issued for cash or other
consideration or by way of dividend.
6.2 Certificates. Ownership of Shares shall be evidenced
by certificates. Every Shareholder shall be entitled to receive
a certificate, in such form as the Trustees shall from time to
time approve, specifying the number of Shares of the applicable
class held by such Shareholder. Subject to Sections 6.6 and
6.14(c) hereof, such certificates shall be treated as negotiable
and title thereto and to the Shares represented thereby shall be
transferred by delivery thereof to the same extent in all
respects as a stock certificate, and the Shares represented
thereby, of a Maryland business corporation. Unless otherwise
determined by the Trustees, such certificates shall be signed by
the Chairman, if any, and the President and shall be
countersigned by a transfer agent, and registered by a registrar
if any, and such signatures may be facsimile signatures in
accordance with Section 3.2(d) hereof. There shall be filed with
each transfer agent a copy of the form of certificate so
approved by the Trustees, certified by the Chairman, President,
or Secretary, and such form shall continue to be used unless and
until the Trustees approve some other form.
In furtherance of the provisions of Sections 6.1 and 6.14(c)
hereof, each Certificate evidencing Shares shall contain a legend
imprinted thereon to substantially the following effect or such
other legend as the Trustees may from time to time adopt:
REFERENCE IS MADE TO THE DECLARATION OF TRUST OF THE TRUST
FOR A STATEMENT OF ALL THE DESIGNATIONS, PREFERENCES,
LIMITATIONS, AND RELATIVE RIGHTS OF EACH CLASS OR SERIES OF
SHARES THAT THE TRUST IS AUTHORIZED TO ISSUE, THE VARIATIONS
IN THE RELATIVE RIGHTS AND PREFERENCES OF ANY PREFERRED OR
SPECIAL CLASS OF SHARES IN SERIES, TO THE EXTENT THEY HAVE
BEEN FIXED AND DETERMINED, AND THE AUTHORITY OF THE TRUSTEES
TO FIX AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF
SUBSEQUENT SERIES. ANY SUCH STATEMENT SHALL BE FURNISHED
WITHOUT CHARGE ON REQUEST TO THE TRUST AT ITS PRINCIPAL
PLACE OF BUSINESS OR REGISTERED OFFICE.
IF NECESSARY TO EFFECT COMPLIANCE BY THE TRUST WITH
REQUIREMENTS OF THE INTERNAL REVENUE CODE RELATING TO REAL
ESTATE INVESTMENT TRUSTS, THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE REDEEMED BY THE TRUST AND/OR THE TRANSFER
THEREOF MAY BE PROHIBITED ALL UPON THE TERMS AND CONDITIONS
SET FORTH IN THE DECLARATION OF TRUST. THE TRUST WILL
FURNISH A COPY OF SUCH TERMS AND CONDITIONS TO THE
REGISTERED HOLDER OF THIS CERTIFICATE UPON REQUEST AND
WITHOUT CHARGE.
6.3 Fractional Shares. In connection with any issuance of
Shares, the Trustees may issue fractional Shares or may adopt
provisions for the issuance of scrip including without
limitation, the time within which any such scrip must be
surrendered for exchange into full Shares and the rights, if any,
of holders of scrip upon the expiration of the time so fixed, the
rights, if any, to receive proportional distributions, and the
rights, if any, to redeem scrip for cash, or the Trustees may in
their discretion, or if they see fit at the option of, each
holder, provide in lieu of scrip for the adjustment of the
fractions in cash. The provisions of Section 6.2 hereof relative
to certificates for Shares shall apply so far as applicable to
such scrip, except that such scrip may in the discretion of the
Trustees be signed by a transfer agent alone.
6.4 Legal Ownership of Trust Estate. The legal ownership
of the Trust Estate and the right to conduct the business of the
Trust are vested exclusively in the Trustees (subject to Section
3.2(s)), and the Shareholders shall have no interest therein
(other than beneficial interest in the Trust conferred by their
Shares issued hereunder) and they shall have no right to compel
any partition, division, dividend or distribution of the Trust or
any of the Trust Estate.
6.5 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, 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 Bylaws and any requirements of law, to receive a
new certificate for Shares registered in the name of such legal
representative, in exchange for the certificate held by such
Shareholder.
6.6 Share Record; Issuance and Transferability of Shares.
Records shall be kept by or on behalf of and under the direction
of the Trustees, which shall contain the names and addresses of
the Shareholders, the number of Shares held by them respectively,
and the numbers of the certificates representing the Shares, and
in which there shall be recorded all transfers of Shares. The
Trust, the Trustees and the officers, employees and agents 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 the Trust; but nothing herein shall be deemed to
preclude the Trustees or officers, employees or agents of the
Trust from inquiring as to the actual ownership of Shares. Until
a transfer is duly effected on the records of the Trust, 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 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 and a new certificate for the Shares so transferred shall
be issued to the transferee and in case of a 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 instruments and other evidence required by the
Trustees or the transfer agent 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.
6.7 Dividends or Distributions to Shareholders. Subject to
Section 5.1, 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,
interest, 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. Shareholders shall have no
right to any dividend or distribution unless and until declared
by the Trustees. The Trustees shall furnish the Shareholders
with a statement in writing advising as to the source of the
funds so distributed not later than ninety (90) days after the
close of the fiscal year in which the distribution was made.
6.8 Transfer Agent, Dividend Disbursing Agent and
Registrar. The Trustees shall have power to employ one or more
transfer agents, dividend disbursing agents and registrars
(including the Advisor or its Affiliates) and to authorize them
on behalf of the Trust to keep records to hold and to disburse
any dividends or 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 powers and duties usually had and performed by transfer
agents, dividend disbursing agents and registrars of a Maryland
business corporation.
6.9 Shareholders' Meetings. There shall be an annual
meeting of the Shareholders, at such time and place as shall be
determined by or in the manner prescribed in the Bylaws, at which
the Trustees shall be elected and any other proper business may
be conducted. The Annual Meeting of Shareholders shall be held
no fewer than 30 days after delivery to the Shareholders of the
Annual Report and within six (6) months after the end of each
fiscal year, commencing with the fiscal year ending December 31,
1986. Special meetings of Shareholders may be called by the
chief executive officer of the Trust or by a majority of the
Trustees or of the Independent Trustees and shall be called by
the chief executive officer of the Trust 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 Bylaws. If there shall be no
Trustees, the officers of the Trust shall promptly call a special
meeting of the Shareholders entitled to vote for the election of
successor Trustees. Notice of any special meeting shall state
the purposes of the meeting.
The holders of Shares entitled to vote at the meeting
representing a majority of the total number of votes authorized
to be cast by Shares then outstanding and entitled to vote on any
question present in person or by proxy 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
properly cast upon the question, without regard to class, whether
or not a quorum is present, and, except as otherwise provided in
the Bylaws, 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.
Except as otherwise clearly indicated in this Declaration or
the Bylaws, whenever any action is to be taken by the
Shareholders, it shall be authorized by the affirmative vote of
the 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. 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 number of votes authorized to be cast by shares then
outstanding and entitled to vote thereon.
Whenever Shareholders are required or permitted to take any
action (unless a vote at a meeting is specifically required as in
Sections 8.1, 8.3 and 8.5), such action may be taken without a
meeting by written consents setting forth the action so taken,
signed by the holders of a majority (or such higher percentage as
may be specified elsewhere in this Declaration) of the total
number of votes authorized to be cast by shares then outstanding
and entitled to vote thereon.
6.10 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 by a proxy in the form prescribed in, and
subject to the provisions of, the Bylaws. The Trustees may
solicit such proxies from the Shareholders or any of them
entitled to vote in any matter requiring or permitting the
Shareholders' vote or consent.
6.11 Reports to Shareholders.
(a) Not later than ninety (90) days after the close of
each fiscal year of the Trust following the end of fiscal
year 1986, 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. Subject to
Section 8-401 of the Annotated Code of Maryland, the report
(the "Annual Report") shall be in such form and have such
content as the Trustees deem proper. The Annual Report
shall include a balance sheet, an income statement and a
surplus statement, each prepared in accordance with
generally accepted accounting principles. Such financial
statements shall be certified by an independent public
accountant based on a full examination of the books and
records of the Trust conducted in accordance with generally
accepted auditing procedure. Manually signed copies of the
Annual Report and of the auditor's certificate will be filed
with the Maryland Department of Assessments and Taxation. A
manually signed copy of the accountant's report shall be
filed with the Trustees.
(b) Not less than forty-five (45) days after the end
of each of the first three fiscal quarters the Trustees
shall send interim reports to the Shareholders containing
financial information which may be unaudited and otherwise
having such form and content as the Trustees deem proper.
6.12 Fixing Record Date. The Bylaws 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 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 ten (10) days nor
more than sixty (60) days prior to the date of the meeting or
event for the purposes of which it is fixed.
6.13 Notice to Shareholders. Any notice of meeting or
other notice, communication or report to any Shareholder shall
be deemed duly delivered to such Shareholder when such notice,
communication or report is deposited, with postage thereon
prepaid, in the United States mail, addressed to such Shareholder
at his address as it appears on the records of the Trust or is
delivered in person to such Shareholder.
6.14 Shareholders' Disclosure; 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 Internal Revenue Code or to comply with the
requirements of any taxing authority or governmental agency.
(b) Whenever in good faith the Trustees deem it
reasonably necessary to protect the status of the Trust as a
REIT they may require a statement or affidavit from each
Shareholder or proposed transferee of Shares setting forth
the number of Shares already owned, directly or indirectly,
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 binding 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) The Trustees, by notice to the holder thereof, may
purchase any or all Shares that have been transferred
pursuant to a transfer which, in the opinion of the
Trustees, would jeopardize the status of the Trust as a
REIT. Without limiting the generality of the foregoing, as
a condition to the transfer and/or registration of transfer
of any Shares which could result in direct or indirect
ownership (as hereafter defined) of Shares representing more
than 8.5% in value of the total Shares outstanding (the
"Excess Shares") becoming concentrated in the hands of one
owner other than an Excepted Person, such potential owner
shall file with the Trust the statement or affidavit
described in subsection (b) of this Section 6.14 no later
than the fifteenth day prior to any transfer, registration
of transfer or transaction which, if consummated, would
result in such ownership. The Trustees shall have the power
(i) by lot or other means deemed equitable by them to call
for the purchase from the beneficial owner or the
Shareholder of such Excess Shares, and (ii) to refuse to
transfer or issue Shares to any Person whose acquisition of
such Shares would, in the opinion of the Trustees, result in
the direct or indirect beneficial ownership of any Excess
Shares by a person other than any of the Excepted Persons.
The purchase price for any Excess Shares shall be equal to
the fair market value of the Shares reflected in the closing
sale price for the Shares, if then listed on a national
securities exchange, or such price for the Shares on the
principal exchange if then listed on more than one national
securities exchange, or if the Shares are not then listed on
a national securities exchange, the latest bid quotation for
the Shares if then traded over-the-counter, on the last
trading day immediately preceding the day on which notices
of such acquisition are sent, or, if no such closing sales
prices or quotations are available, then the purchase price
shall be equal to the net asset value of such Shares as
determined by the Trustees in accordance with the provisions
of applicable law. Prompt payment of the purchase price
shall be made in cash by the Trust in such manner as may be
determined by the Trustees. From and after the date fixed
for purchase by the Trustees, and so long as payment of the
purchase price for the Shares to be so redeemed shall have
been made or duly provided for, the holder of any Excess
Shares so called for purchase shall cease to be entitled to
distributions, voting rights and other benefits with respect
to such Shares, excepting only the right to payment of the
purchase price fixed as aforesaid. Any transfer of Shares,
options, warrants or other securities convertible into
Shares that would create a direct or indirect beneficial
owner of Excess Shares other than any of the Excepted
Persons shall be deemed void ab initio and the intended
transferee shall be deemed never to have an interest
therein. If the foregoing provision is determined to be
void or invalid by virtue of any legal decision, statute,
rule or regulation, then the transferee of such Shares,
options, warrants or other securities convertible into
Shares shall be deemed, at the option of the Trust, to have
acted as agent on behalf of the Trust in acquiring such
Shares and to hold such Shares on behalf of the Trust.
The following persons are "Excepted Persons": (i) the
Advisor, (ii) persons to whom the Advisor's Share ownership
is attributed or whose Share ownership is attributed to the
Advisor, or (iii) other persons approved by the Trustees, at
their option and in their sole discretion, provided only
that such approval shall not be granted to any person whose
ownership of more than 8.5% in value of the total Shares
outstanding would result, directly, indirectly or as a
result of attribution of ownership, in termination of the
status of the Trust as a REIT.
(d) Notwithstanding any other provision in this
Declaration of Trust or the Bylaws, the foregoing provision
may not be amended or repealed without the affirmative vote
of 75% of the Shares entitled to vote.
(e) Notwithstanding any other provision of this
Declaration of Trust to the contrary, any purported
acquisition of Shares of the Trust (whether such purported
acquisition results from the direct or indirect acquisition
or ownership (as hereafter defined) of Shares) which would
result in the disqualification of the Trust as a REIT shall
be null and void. Any such Shares may be treated by the
Trustees in the manner prescribed for Excess Shares in
subsection (c) of this Section 6.14.
(f) Nothing contained in this Section 6.14 or in any
other provision of this Declaration of Trust shall limit the
authority of the Trustees to take such other action as they
deem necessary or advisable to protect the Trust and the
interests of the Shareholders by preservation of the Trust's
status as a REIT.
(g) If any provision of this Section 6.14 or any
application of any such provision is determined to be
invalid by any federal or state court having jurisdiction
over the issues, the validity of the remaining provision
shall not be affected and other applications of such
provision shall be affected only to the extent necessary to
comply with the determination of such court. To the extent
this Section 6.14 may be inconsistent with any other
provision of this Declaration of Trust, this Section 6.14
shall be controlling.
(h) It shall be the policy of the Trustees to consult
with the appropriate officials of any stock exchange on
which the relevant Shares of the Trust are listed 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) or (c) of this
Section 6.14.
(i) For purposes of this Declaration of Trust, Shares
not owned directly shall be deemed to be owned indirectly by
a person if that person or a group of which he is a member
would be the beneficial owner of such Shares, as defined as
of September 1, 1986 in Rule 13d-3 under the Securities
Exchange Act of 1934 and/or would be considered to own such
Shares by reason of the attribution rules of Section 544 or
Section 856(d)(5) of the Internal Revenue Code.
6.15 Special Voting Requirements for Certain Business
Combinations.
(a) The affirmative vote of the holders of not less
than 75% of the Shares then outstanding and entitled to vote
thereon shall be required for the approval or authorization
of any "Business Combination" (as hereinafter defined) of
the Trust with any "Related Person" (as hereinafter
defined). However, such 75% voting requirement shall not be
applicable if: (1) the Board of Trustees by unanimous vote
or written consent shall have expressly approved in advance
the acquisition of the outstanding Shares of the Trust that
caused the Related Person to become a Related Person or
shall have approved the Business Combination prior to the
Related Person involved in the Business Combination having
become a Related Person; or (2) the Business Combination is
solely between the Trust and another limited partnership,
partnership, trust or corporation, 100% of the voting
securities of which is owned directly or indirectly by the
Trust.
(b) For purposes of this Section 6.15:
(i) The term "Business Combination" shall mean (a)
any merger or consolidation of the Trust with or
into a Related Person, (b) any sale, lease,
exchange, transfer or other disposition,
including without limitation a mortgage or any
other security device, of all or any
"Substantial Part" (as hereinafter defined) of
the assets of the Trust (including without
limitation any voting securities of a
subsidiary) to a Related Person, (c) any merger
or consolidation of a Related Person with or
into the Trust, (d) any sale, lease, exchange,
transfer or other disposition of assets of a
Related Person to the Trust having a book value
equal to more than 10% of the Invested Assets of
the Trust as of the end of the Trust's most
recent fiscal year ending prior to the time the
determination is made, (e) the issuance of any
Securities (other than by way of pro rata
distribution to all Shareholders) of the Trust
to a Related Person, and (f) any agreement,
contract or other arrangement providing for any
of the transactions described in this definition
of Business Combination.
(ii) The term "Related Person" shall mean and include
any individual, corporation, partnership,
limited partnership or other person or entity
other than the Advisor or any wholly owned
subsidiary of the Advisor which, together with
its "affiliates" and "associates" (as defined as
of September 1, 1986, in Rule 12b-2 under the
Securities Exchange Act of 1934), "beneficially
owns" (as defined as of September 1, 1986, in
Rule 13d-3 under the Securities Exchange Act of
1934) in the aggregate 10% or more of the
outstanding Shares of the Trust.
(iii) The term "Substantial Part" shall mean an amount
equal to more than 10% of the Invested Assets of
the Trust as of the end of its most recent
fiscal year ending prior to the time the
determination is being made.
(iv) Without limitation, any Shares that any Related
Person has the right to acquire pursuant to any
agreement, or upon exercise of conversion
rights, warrants or options, or otherwise, shall
be deemed beneficially owned by the Related
Person.
(c) The Trust elects not to be governed by the
provisions of Subtitle 6 of Title 3 of the Corporations and
Associations Article of the Annotated Code of Maryland, and
the provisions of subparagraphs (a) and (b) of this Section
6.15 shall be in substitution for and to the exclusion of
said Subtitle 6 of Title 3.
(d) Except as otherwise provided in this Section 6.15,
the Trust may effect any merger or consolidation in
accordance with applicable law.
ARTICLE VII
LIABILITY OF TRUSTEES, SHAREHOLDERS, OFFICERS,
EMPLOYEES AND AGENTS, AND OTHER MATTERS
7.1 Limitation of Liability of Shareholders, Trustees,
Officers, Employees and Agents for Obligations of the Trust. The
Trustees and the officers, employees and agents (including the
Advisor) 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, officers, employees or agents of the Trust and not
in their own individual capacities. Except as otherwise provided
in Sections 7.3 hereof with respect to liability of Trustees or
officers, agents or employees of the Trust to the Trust or to
Shareholders, no Shareholder, Trustee or officer, employee or
agent (including the Advisor) of the Trust shall be liable for
any debt, claim, demand, judgment decree, liability or obligation
of any kind (in tort, contract or otherwise) of, against or with
respect to the Trust or 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 no
Shareholder, Trustee or officer, employee or agent (including the
Advisor) of the Trust shall be subject to any personal liability
whatsoever, in tort, contract or otherwise, to any other Person
or Persons in connection with the Trust Estate or the affairs of
the Trust (or any actions taken or omitted for or on behalf of
the Trust), 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 Estate or the affairs of the Trust (or
any action taken or omitted for or on behalf of the Trust).
7.2 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 any officers, employees or
agents (including the Advisor) 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, any
Trustee, or any officer, employee or agent (including the
Advisor) of the Trust liable nor shall the Shareholders, any
Trustee or any officer, employee or agent (including the Advisor)
of the Trust be liable to any one for such omission.
7.3 Limitation of Liability of Trustees, Officers,
Employees and Agents to the Trust and to Shareholders for Acts
and Omissions. (a) No Independent Trustee or officer, employee
or agent of the Trust shall have any greater duties than those
established by this Declaration of Trust or, in cases as to which
such duties are not so established, than those of the directors,
officers, employees and agents of a Maryland business corporation
in effect from time to time. No Independent Trustee, officer,
employee or agent of the Trust shall be liable to the Trust,
Shareholders or to any other Person for any act or omission
except for his own willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.
(b) No Affiliated Trustee shall have liability to the
Trust, Shareholders or any other Person for any loss suffered by
the Trust which arises out of any action or inaction of such
Affiliated Trustee if such Affiliated Trustee in good faith had
determined that such course of conduct was in the best interest
of the Trust and if such course of conduct did not constitute
negligence or misconduct of such Affiliated Trustee.
7.4 Indemnification and Reimbursement of Trustees,
Officers, Employees and Agents.
(a) Except as otherwise provided in paragraph (b) of
this Section 7.4, any Person made a party to any action,
suit or proceeding or against whom a claim or liability is
asserted by reason of the fact that he, his testator or
intestate was or is a Independent Trustee, officer, employee
or agent of the Trust shall be indemnified and held harmless
by the Trust against judgments, fines, amounts paid on
account thereof (whether in settlement or otherwise) and
reasonable expenses, including attorneys' fees, actually and
reasonably incurred by him in connection with the defense of
such action, suit, proceeding, claim or alleged liability or
in connection with any appeal therein, whether or not the
same proceeds to judgment or is settled or otherwise brought
to a conclusion; provided, however, that no such Person
shall be so indemnified or reimbursed for any claim,
obligation or liability which shall have been adjudicated to
have arisen out of or been based upon his willful
misfeasance, bad faith, gross negligence or reckless
disregard of duty; 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 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 been based upon such
Person's willful misfeasance, bad faith, gross negligence or
reckless disregard of duty. 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 such Person's right to contribution as may be
available under applicable law. The Trustees may make
advance payments in connection with indemnification under
this Section 7.4, provided that the indemnified Person shall
have given a written undertaking to reimburse the Trust in
the event it is subsequently determined that he is not
entitled to such indemnification. Any action taken by or
conduct on the part of an Independent Trustee, officer,
employee or agent of the Trust in conformity with or in good
faith reliance upon the provisions of this Declaration
(including without limitation any provision in Article VII
hereof) shall not constitute willful misfeasance, bad faith,
gross negligence or reckless disregard of duty.
(b) Each Affiliated Trustee and any Affiliates (as
defined in Section 7.5 hereof) of such Affiliated Trustee
shall be indemnified by the Trust against any losses,
judgments, liabilities, expenses and amounts paid in
settlement of any claims sustained by them in connection
with any action or inaction of such Affiliated Trustee or
Affiliate if such Affiliated Trustee or Affiliate, in good
faith, determined that such course of conduct was in the
best interest of the Trust and if such conduct did not
constitute negligence or misconduct on the part of such
Affiliated Trustee or Affiliate. Notwithstanding the
foregoing, Affiliated Trustees and their Affiliates and any
person acting for the Trust as a broker/dealer shall not be
indemnified for any losses, liabilities or expenses arising
from or out of an alleged violation of federal or state
securities laws unless (i) there has been a successful
adjudication on the merits of each count involving alleged
securities law violations as to the particular indemnitee,
or (ii) such claims have been dismissed with prejudice on
the merits by a court of competent jurisdiction as to the
particular indemnitee or (iii) a court of competent
jurisdiction approves a settlement of the claim against the
particular indemnitee. In any claim for indemnification for
federal or state securities law violations, the party
seeking indemnification shall place before the court the
position of the Securities and Exchange Commission and the
Massachusetts Securities Division (and any other state
securities commissioner or administrator who may so require)
with respect to the issue of indemnification for securities
law violations. The Trust shall not incur the cost of that
portion of any insurance, other than public liability
insurance, which insures any party against any liability the
indemnification of which is prohibited by this Section
7.4(b). The provision of advances from Trust funds to the
Affiliated Trustees and any Affiliates for legal expenses
and other costs incurred as a result of any legal action
initiated against the Affiliated Trustees by Shareholders of
the Trust is prohibited.
(c) Notwithstanding anything herein to the contrary,
and to the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, no Trustee or
officer of the Trust shall be personally liable to the Trust
or its shareholders for money damages. No amendment of this
Declaration or repeal of any of its provisions shall limit
or eliminate the limitation on liability provided to
Trustees and officers hereunder with respect to any act or
omission occurring prior to such amendment or repeal.
7.5 Certain Definitions. For the purposes of
Section 7.4(b) hereof, the term "Affiliate," when used in
connection with the term "Affiliated Trustee," shall mean any
person performing services on behalf of the Trust who (i)
directly or indirectly controls, is controlled by, or is under
common control with such Affiliated Trustee; (ii) owns or
controls ten percent (10%) or more of the outstanding voting
securities of such Affiliated Trustee; (iii) is an officer,
director, partner or trustee of such Affiliated Trustee; or (iv)
is a company for which such Affiliated Trustee acts as an
officer, director, partner or trustee. For the purposes of the
above definition, the terms "control," "controlling," "controlled
by," and "under common control with" refer to the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
7.6 Indemnification and Reimbursement of Shareholders. Any
Shareholder made a party to any action, suit or proceeding or
against him a claim or liabilities asserted by reason of the fact
that he, his testate or intestate was or is a Shareholder shall
be indemnified and held harmless by the Trust against judgments,
fines, amounts paid on account thereof (whether in settlement or
otherwise) and reasonable expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the
defense of such action, suit, proceeding, claim or alleged
liability or in connection with any appeal therein, whether or
not the same proceeds to judgment or is settled or otherwise
brought to a conclusion; provided however, that such Shareholder
gives prompt notice thereof, executes such documents and takes
such action as will permit the Trust to conduct the defense or
settlement thereof and cooperates therein. In the event that the
assets of the Trust Estate are insufficient to satisfy the
Trust's indemnity obligations hereunder, each Shareholder shall
be entitled to such indemnification pro rata from the Trust
Estate.
7.7 Right of Trustees, Officers, Employees and Agents to
Own Shares or Other Property and to Engage in Other Business.
Any Trustee or officer, employee or agent of the Trust may
acquire, own, hold and dispose of Shares in the Trust, for his
individual account, and may exercise all rights of a Shareholder
to the same extent and in the same manner as if he were not a
Trustee or officer, employee or agent of the Trust. Any Trustee
or officer, employee or agent of the Trust may, in his personal
capacity or in the capacity of trustee, officer, director,
stockholder, partner, member, advisor or employee of any Person
or otherwise, have business interests and engage in business
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 the
acquisition, syndication, holding, management, development,
operation or disposition, for his own account, or for the account
of such Person or others, of interests in Mortgages, interests in
Real Property, or interests in Persons engaged in the real estate
business. Each Trustee, officer, employee 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, officer, employee 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. Subject to the
provisions of Article IV and Section 7.8, any Trustee or officer,
employee or agent of the Trust may be interested as trustee,
officer, director, stockholder, partner, member, advisor 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, officer, employee or agent or otherwise
hereunder. None of these activities shall be deemed to conflict
with his duties and powers as Trustee or officer, employee or
agent of the Trust.
7.8 Transactions Between Trustees, Officers, Employees 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 in which
the Trust is interested, shall be valid, and no Trustee or
officer, employee 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 or more of the Trustees or
officers, employees or agents of the Trust are directly or
indirectly interested in or connected with or are trustees,
partners, directors, employees, officers or agents of such other
Person, or (b) one or more of the Trustees or officers, employees
or agents of the Trust individually or jointly with others, is a
party or are parties to, or are directly or indirectly interested
in or connected with, such contract, act or transaction; provided
that in each such case (i) 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 so
interested or (ii) such interest or connection is disclosed or
known to the Shareholders, and thereafter such contract, act or
transaction is approved by Shareholders holding a majority of the
Shares then outstanding and entitled to vote thereon.
Notwithstanding any other provision of this Declaration, the
Trust shall not engage in a transaction with (a) any Trustee,
officer, employee or agent of the Trust (acting in his individual
capacity), (b) any director, trustee, partner, officer, employee
or agent (acting in his individual capacity) of the Advisor or
any other investment advisor of the Trust, (c) the Advisor or any
other investment advisor 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, been approved or ratified
by the affirmative vote of a majority of the Trustees including a
majority of the Independent Trustees (or, if the transaction is
with a Person other than the Advisor or its Affiliates, a
majority of the Trustees not having any interest in such
transaction and not Affiliates of any party to the transaction)
after a determination by them that to the extent applicable:
(A) such transaction is fair and reasonable to the
Trust and the Shareholders;
(B) based upon an appraisal by a qualified independent
real estate appraiser, such qualification to be determined
in each instance by a majority of the Independent Trustees
who shall, in each case, have been approved by a majority of
the Independent Trustees (or, if the transaction is with a
Person other than the Advisor its Affiliates, a majority of
the Trustees not having any interest in such transaction and
not Affiliates of any party to the transaction), 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 not 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 payment by the Trust
for services rendered to the Trust by a Person in a capacity
other than that of Advisor, Trustee or Trust officer, (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 7.8 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 Securities and Exchange
Commission under the Securities Act of 1933. The Trustees are
not restricted by this Section 7.8 from forming a corporation,
partnership, trust or other business association owned by any
Trustee, officer, employee or agent or by their nominees for the
purpose of holding title to property of the Trust or managing
property of the Trust, provided that the Trustees make a
determination that the creation of such entity for such purpose
is in the best interest of the Trust.
7.9 Independent Counsel. In the event of a dispute between
the Trust and the Advisor or its Affiliates, or should it be
necessary for the Trust to prepare and negotiate contracts and
agreements between the Trust and the Advisor or its Affiliates
which in the good faith judgment of a majority of the Independent
Trustees require the advice or assistance of separate counsel or
accountants from that of the Advisor or its Affiliates, the Trust
will retain such separate counsel or accountants for such
matters, the choice of which shall be made by a majority of the
Independent Trustees.
7.10 Persons Dealing with Trustees, Officers, Employees or
Agents. Any act of the Trustees or of the officers, employees or
agents of the Trust purporting to be done in their capacity as
such, shall, as to any Persons dealing with such Trustees,
officers, employees or agents, be conclusively deemed to be
within the purposes of this Trust and within the powers of such
Trustees or officers, employees or agents. No Person dealing
with the Trustees or any of them or with the officers, employees
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 of the Trustees or any of them, or of authorized
officers, employees or agents of the Trust, for moneys or other
consideration, shall be binding upon the Trust.
7.11 Reliance. The Trustees and the officers, employees
and agents of the Trust may consult with counsel (which may be a
firm in which one or more of the Trustees or the officers,
employees 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 officers,
employees and agents of the Trust in respect of any action taken
or suffered by them in good faith and in reliance on or in
accordance with such advice or opinion. In discharging their
duties, Trustees or officers, employees or agents of the Trust,
when acting in good faith, may rely upon financial statements of
the Trust represented to them to fairly present the financial
position or results of operations of the Trust by the chief
financial officer of the Trust or the officer of the Trust having
charge of its books of account, or stated in a written report by
an independent certified public accountant fairly to present the
financial position or results of operations of the Trust. The
Trustees and the officers, employees and agents of the Trust may
rely, and shall be personally protected in acting, upon any
instrument or other document believed by them to be genuine.
ARTICLE VIII
DURATION, AMENDMENT AND TERMINATION OF TRUST
8.1 Duration of Trust. The duration of the Trust shall be
perpetual; provided, however, the Trust may be terminated at any
time by the affirmative vote at a meeting of Shareholders of the
holders of Shares representing two-thirds of the total number of
Shares then outstanding and entitled to vote thereon.
8.2 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 and all the powers of the
Trustees under this Declaration shall continue
until the affairs of the Trust shall have been
wound up, including the power to fulfill or
discharge the contracts of the Trust, collect
its assets, sell, convey, assign, exchange,
transfer or otherwise dispose of all or any part
of the remaining Trust Estate to one or more
persons at public or private sale (for
consideration which may consist in whole or in
part of cash, Securities or other property of
any kind), discharge or pay its liabilities, and
do all other acts appropriate to liquidate its
business; and
(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
partly each) among the Shareholders according to
their respective rights.
(b) After termination of the Trust and distribution of
the Trust Estate 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 distribution, a copy of which
instrument shall be filed with the Maryland Department of
Assessments and Taxation, 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.
8.3 Amendment Procedure. This Declaration may be amended
(except that the provisions governing the personal liability of
the Shareholders, Trustees and of the officers, employees and
agents of the Trust and the prohibition of assessments upon
Shareholders may not be amended in any respect that could
increase the personal liability of such Shareholders, Trustees or
officers, employees and agents of the Trust) at a meeting of
Shareholders by holders of Shares representing a majority (or,
with respect to amendments of Article V, amendments to the
provisions of Section 8.1, amendments to this Section 8.3 that
would reduce the percentage vote required to approve any
amendments to this Declaration, and with respect to amendments
inconsistent with Sections 2.1, 6.14 and 6.15, seventy-five
percent (75%)) of the total number of votes authorized to be cast
in respect of Shares then outstanding and entitled to vote
thereon. The approval of a majority of the Trustees (including a
majority of the Independent Trustees) shall also be required for
any such amendment. Two-thirds (2/3) of the Trustees may, after
fifteen (15) days written notice to the Shareholders, also amend
this Declaration without the vote or consent of Shareholders if
in good faith they deem it necessary to conform this Declaration
to the requirements of the REIT Provisions of the Internal
Revenue Code, but the Trustees shall not be liable for failing to
do so. Actions by the Trustees pursuant to Section 6.1 or
pursuant to Section 9.6(a) that result in an amendment to this
Declaration shall be effected without vote or consent of
Shareholders.
8.4 Amendments Effective. Any amendment pursuant to any
Section of this Declaration shall not become effective until it
is duly filed with the Maryland Department of Assessments and
Taxation.
8.5 Transfer to Successor. The Trustees, with the approval
of a majority of the Trustees (including a majority of the
Independent Trustees) and the affirmative vote, at a meeting
approving a plan for this purpose, of the holders of Shares
representing a majority of all votes cast at a meeting at which a
quorum is present, may (a) cause the organization of a limited
partnership, partnership, corporation, association, trust or
other organization to take over the Trust Estate and carry on the
affairs of the Trust, (b) merge the Trust into, or sell, convey
and transfer the Trust Estate to, any such limited partnership,
partnership, corporation, association, trust or organization 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 among the
Shareholders in accordance with such plan.
ARTICLE IX
MISCELLANEOUS
9.1 Applicable Law. This Declaration is executed and
acknowledged by the Trustees with reference to the statutes and
laws of the State of Maryland, 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 State.
9.2 Index and Headings for Reference Only. The index and
headings preceding the text, articles and sections hereof have
been inserted for convenience and reference only and shall not be
construed to affect the meaning, construction or effect of this
Declaration.
9.3 Successors in Interest. This Declaration and the
Bylaws shall be binding upon and inure to the benefit of the
undersigned Trustees and their successors, assigns, heirs,
distributees and legal representatives, and every Shareholder and
his successors, assigns, heirs, distributees and legal
representatives.
9.4 Inspection of Records. Trust records 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
Maryland business corporation would be available for inspection
by shareholders under the laws of the State of Maryland. Except
as specifically provided for in this Declaration or in Title 8 of
the Annotated Code of Maryland, Shareholders shall have no
greater right than shareholders of a Maryland business
corporation to require financial or other information from the
Trust, Trustees or officers of the Trust. Any Federal or state
securities administrator or the Maryland Department of
Assessments and Taxation shall have the right, at reasonable
times during business hours and for proper purposes, to inspect
the books and records of the Trust.
9.5 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.
9.6 Provisions of the Trust in Conflict with Law or
Regulations; Severability.
(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 Internal Revenue Code, 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. An amendment 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 removed pursuant to such a
determination, in recordable form, signed by a majority of
the Trustees, shall be conclusive evidence of such
determination when filed with the Maryland Department of
Assessments and Taxation. The Trustees shall not be liable
for failure to make any determination under this Section
9.6(a). Nothing in this Section 9.6(a) shall in any way
limit or affect the right of the Trustees to amend this
Declaration as provided in Section 8.3.
(b) If any provision of this Declaration shall be held
invalid or unenforceable, such invalidity or
unenforceability shall attach only to such provision and
shall not in any manner affect or render invalid or
unenforceable any other provision of this Declaration, and
this Declaration shall be carried out as if any such invalid
or unenforceable provision were not contained herein.
9.7 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 officers at any particular time, when
made in writing by the secretary of the Trust;
(c) a certification that a copy of this Declaration or
of the Bylaws is a true and correct copy thereof as then in
force, when made in writing by the secretary of the Trust;
(d) the certifications referred to in Sections 2.7,
8.4 and 9.6(a); and
(e) a certification as to any actions by Trustees,
other than the above, when made in writing by the secretary
of the Trust or by any Trustee.
These amendments do not affect the total number of common
shares of beneficial interest, $.01 par value, ("Common Shares")
authorized or issued by the Trust. The amendment and restatement
of the Declaration was authorized by the Board of Trustees of the
Trust acting at a meeting duly called and held on March 5, 1994
and by the holders of more than two-thirds (2/3) of the issued
and outstanding Common Shares, at the annual meeting of the
Trust's shareholders duly called and held on May 17, 1994.
IN WITNESS WHEREOF, this amendment has been executed and
delivered as of the First day of July, 1994, by the undersigned
Trustees, each of whom acknowledges, under penalties of perjury,
that this document is such Trustee's free act and deed, and that,
to the best of his knowledge, information and belief, the matters
and facts set forth herein are true in all material respects.
BY THE TRUSTEES:
/s/ John L. Harrington
John L. Harrington
/s/ Arthur G. Koumantzelis
Arthur G. Koumantzelis
/s/ Justinian Manning, C.P.
Rev. Justinian Manning, C.P.
/s/ Gerard M. Martin
Gerard M. Martin
/s/ Barry M. Portnoy
Barry M. Portnoy
