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, 1998
HRPT 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 02458
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 617-332-3990
Health and Retirement Properties Trust
(Former name or former address, if changed since last report)
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Item 5. Other Events.
(a) Change of Name.
As more fully described in the registrant's press release included as
Exhibit 99 to this Current Report, effective July 1, 1998, the Declaration of
Trust of the registrant was amended to change the name of the registrant from
"Health and Retirement Properties Trust" to "HRPT Properties Trust". The
registrant's trading symbol on the New York Stock Exchange, "HRP", remains
unchanged.
(b) Election of Trustee.
Patrick F. Donelan was elected as the registrant's Group III Trustee at
the June 16, 1998 reconvened session of the registrant's adjourned Annual
Meeting of Shareholders. Mr. Donelan's principal occupation for the past five
years and his age as of April 1, 1998 are as follows:
PATRICK F. DONELAN Age: 56
Mr. Donelan has since 1996 been an Executive Vice President of
Dresdner Kleinwort Benson North America LLC, a New York based banking
institution which is a subsidiary of Dresdner Bank AG of Germany. Prior
to 1996, Mr. Donelan was Chairman of Kleinwort Benson North America,
Inc., a subsidiary of Kleinwort Benson Ltd. of England which was
acquired by Dresdner Bank AG in 1996.
Dresdner Kleinwort Benson North America LLC is agent and a lender under
the registrant's revolving bank credit facility. The registrant uses such
facility for interim acquisition funding and for working capital borrowings, and
recently amended it to increase the maximum permitted borrowings from $450
million to $500 million and to extend the scheduled maturity from 2001 to 2002.
The facility provides for interest on advances at LIBOR plus a spread, as well
as for certain alternate interest rates, and the lenders and agents under the
facility are entitled to receive certain fees.
(c) Completion of Transaction.
The registrant and certain of its subsidiaries have consummated the
acquisition of the effective beneficial ownership of 1735 Market Street, a
commercial office property with approximately 1.3 million square feet located in
Philadelphia, Pennsylvania, previously reported in the registrant's Current
Report on Form 8-K dated May 22, 1998.
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Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
3. Third Amendment and Restatement of Declaration of Trust of
HRPT Properties Trust (formerly known as Health and Retirement
Properties Trust) dated July 1, 1994, as amended to date.
99. Press Release dated July 1, 1998 of HRPT Properties Trust
(formerly known as Health and Retirement Properties Trust).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HRPT PROPERTIES TRUST
(f/k/a Health and Retirement Properties Trust)
By: /s/ Ajay Saini
Ajay Saini, Treasurer and Chief Financial
Officer
Date: July 1, 1998
HRPT PROPERTIES TRUST
(formerly known as Health and Retirement Properties Trust)
Third Amendment and Restatement of Declaration of Trust
October 9, 1986
As Amended and Restated on July 1, 1994
and Amended July 9, 1996
and Amended March 3, 1997
and Amended May 26, 1998
and Amended July 1, 1998
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INDEX
Page
ARTICLE I
THE TRUST; DEFINITIONS
1.1 Name........................................................... 2
1.2 Places of Business............................................. 2
1.3 Nature of Trust................................................ 3
1.4 Definitions.................................................... 3
ARTICLE II
TRUSTEES
2.1 Number, Term of Office and Qualifications
of Trustees.................................................. 8
2.2 Compensation and Other Remuneration............................ 10
2.3 Resignation, Removal and Death of Trustees..................... 10
2.4 Vacancies...................................................... 10
2.5 Successor and Additional Trustees.............................. 11
2.6 Actions by Trustees............................................ 11
2.7 Certification of Changes in Trustees........................... 12
2.8 Committees..................................................... 12
ARTICLE III
TRUSTEES' POWERS
3.1 Power and Authority of Trustees................................ 13
3.2 Specific Powers and Authority.................................. 13
3.3 Bylaws......................................................... 19
ARTICLE IV
ADVISOR
4.1 Employment of Advisor.......................................... 20
4.2 Term........................................................... 21
4.3 Other Activities of Advisor.................................... 21
4.4 Advisor Compensation........................................... 22
4.5 Annual Total Operating Expenses................................ 23
ARTICLE V
INVESTMENT POLICY AND POLICIES
WITH RESPECT TO CERTAIN
DISTRIBUTIONS TO SHAREHOLDERS
5.1 Statement of Policy............................................ 24
5.2 Prohibited Investments and Activities.......................... 26
5.3 Appraisals..................................................... 27
5.4 Change in Investment Policies.................................. 27
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ARTICLE VI
THE SHARES AND SHAREHOLDERS
6.1 Description of Shares.......................................... 28
6.2 Certificates................................................... 29
6.3 Fractional Shares.............................................. 30
6.4 Legal Ownership of Trust Estate................................ 30
6.5 Shares Deemed Personal Property................................ 31
6.6 Share Record; Issuance and Transferability
of Shares.................................................... 31
6.7 Dividends or Distributions to Shareholders..................... 32
6.8 Transfer Agent, Dividend Disbursing
Agent and Registrar.......................................... 32
6.9 Shareholders' Meetings......................................... 33
6.10 Proxies........................................................ 34
6.11 Reports to Shareholders........................................ 34
6.12 Fixing Record Date............................................. 35
6.13 Notice to Shareholders......................................... 35
6.14 Shareholders' Disclosures; Trustees' Right
to Refuse to Transfer Shares; Limitation
on Holdings; Redemption of Shares............................ 35
6.15 Special Voting Requirements for Certain
Business Combinations........................................ 39
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................................. 41
7.2 Express Exculpatory Clauses and Instruments.................... 41
7.3 Limitation of Liability of Trustees, Officers,
Employees and Agents to the Trust and to
Shareholders for Acts and Omissions.......................... 42
7.4 Indemnification and Reimbursement of
Trustees, Officers, Employees and
Agents ...................................................... 42
7.5 Certain Definitions............................................ 44
7.6 Indemnification and Reimbursement of
Shareholders................................................. 45
7.7 Right of Trustees, Officers, Employees and
Agents to Own Shares or Other Property
and to Engage in Other Business.............................. 45
7.8 Transactions Between Trustees, Officers,
Employees or Agents and the Trust............................ 46
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7.9 Independent Counsel............................................ 48
7.10 Persons Dealing with Trustees, Officers,
Employees or Agents.......................................... 48
7.11 Reliance....................................................... 48
ARTICLE VIII
DURATION, AMENDMENT AND TERMINATION
OF TRUST
8.1 Duration of Trust.............................................. 49
8.2 Termination of Trust........................................... 49
8.3 Amendment Procedure............................................ 50
8.4 Amendments Effective........................................... 51
8.5 Transfer to Successor.......................................... 51
ARTICLE IX
MISCELLANEOUS
9.1 Applicable Law................................................. 51
9.2 Index and Headings for Reference Only.......................... 52
9.3 Successors in Interest......................................... 52
9.4 Inspection of Records.......................................... 52
9.5 Counterparts................................................... 52
9.6 Provisions of the Trust in Conflict with
Law or Regulations; Severability............................. 52
9.7 Certifications................................................. 53
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THIRD AMENDMENT AND RESTATEMENT OF DECLARATION OF TRUST
OF
HRPT PROPERTIES TRUST
(formerly known as Health and Retirement Properties Trust)
Dated October 9, 1986
As Amended and Restated on July 1, 1994
and as Amended July 9, 1996
and Amended March 3, 1997
and Amended May 26, 1998
and Amended July 1, 1998
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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.
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ARTICLE I
THE TRUST; DEFINITIONS
1.1 Name. The name of the Trust created by this Declaration of Trust
shall be "HRPT 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
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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
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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
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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.
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(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.
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(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
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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
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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.
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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.
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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
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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;
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(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
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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;
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(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;
<PAGE>
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(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.
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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
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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.
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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
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(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
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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
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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;
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(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 200,000,000 shares of beneficial interest which shall be known
collectively as "Shares," all of which shall be validly issued, fully paid and
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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 150,000,000 shares of
the other such class shall be known as "Common Shares," each such class having
$.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 amend this Declaration to increase or decrease the
aggregate number of Shares or the number of Shares of any class that the Trust
has authority to issue.
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.
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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,
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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
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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
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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
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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
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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
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(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
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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
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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.
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(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
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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
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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,
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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.
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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,
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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,
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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
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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.
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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
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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
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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.
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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;
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(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.
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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
July 1, 1998
FOR IMMEDIATE RELEASE For More Information
- --------------------- Contact:
David J. Hegarty, President or
Ajay Saini, Treasurer
617-332-3990
Health and Retirement Properties Trust
Announces Name Change and
Election of New Trustee
--------------------------------------
Newton, MA: Health and Retirement Properties Trust (NYSE: HRP) today
announced a change in the Company's name to "HRPT Properties Trust."
The name change is intended to call attention to the fact that the
Company invests in commercial office properties as well as health care related
real estate. The new name was selected to represent the Company's heritage while
retaining its existing NYSE trading symbol "HRP". The new CUSIP number is
40426W.
HRP also announced the election of Patrick F. Donelan as a Trustee. Mr.
Donelan (Age 56) has since 1996 been an Executive Vice President of Dresdner
Kleinwort Benson North America LLC, a New York based banking institution which
is a subsidiary of Dresdner Bank AG of Germany. Prior to 1996, Mr. Donelan was
Chairman of Kleinwort Benson North America, Inc., a subsidiary of Kleinwort
Benson Ltd. of England which was acquired by Dresdner Bank AG in 1996.
The election of Mr. Donelan is the result of the vacancy on the Board
of Trustees created by the death of Ralph J. Watts.
HRP is a real estate investment trust with approximately $2.8 billion
of real estate investments located in 35 states and the District of Columbia.
(end)
