U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A
[X]AMENDED QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file No. 1-13080
GROVE REAL ESTATE ASSET TRUST (Exact name of small business
issuer as specified in its charter)
Maryland 06-1391084
(State of incorporation) (I.R.S. Employer Identification No.)
598 Asylum Avenue, Hartford, Connecticut 06105
(Address of principal offices) (Zip Code)
(860) 520-4789
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of theExchange Act during the past 12 months (or for such shorter
period that the registrant was required tofile such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes: X No:
525,000 common shares, $.01 par value, were outstanding as of August 2, 1996.
<PAGE>
GROVE REAL ESTATE ASSET TRUST
Form 10-QSB
Index
Page
Part I: Financial Information 3
Item 1: Financial Statements
Balance Sheets of Grove Real Estate Asset Trust as of
June 30, 1996 and December 31, 1995 3
Income Statements of Grove Real Estate Asset Trust
for the six months ended June 30, 1996 and June 30, 1995 4
Income Statements of Grove Real Estate Asset Trust
for the three months ended June 30, 1996 and June 30, 1995 5
Statement of Shareholders' Equity of Grove Real Estate
Asset Trust for the six months ended June 30, 1996 6
Statements of Cash flows of Grove Real Estate Asset Trust
for the six months ended June 30, 1996 and June 30, 1995 7
Notes to Financial Statements 8 - 10
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 11 - 14
Part II: Other Information 15
Item 1: Legal proceedings 15
Item 2: Changes in Securities 15
Item 3: Submission of Matters to a Vote of Security Holders 15
Item 4: Other Information 15
Item 5: Exhibits and Reports on Form 8-K 15
Signatures 15
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GROVE REAL ESTATE ASSET TRUST
BALANCE SHEETS
June 30, December 31,
1996 1995
(Unuadited) (Audited)
----------- ---------
ASSETS
Real estate assets:
Land ...................................... $ 920,293 493,823
Buildings and improvements ................ 8,457,640 4,658,438
Furniture, fixtures and equipment ......... 343,392 240,438
------- -------
9,721,325 5,392,699
Less - accumulated depreciation ........... (864,169) (694,215)
-------- --------
Net real estate assets ............ 8,857,157 4,698,484
Cash and cash equivalents ......................... 479,466 383,725
Cash - resident security deposits ................. 157,700 99,973
Deferred charges, net of accumulated amortization
of $3,042 and $11,736, respectively .......... 62,360 56,279
Other assets ...................................... 26,698 2,712
------ -----
Total assets ..................................... $9,583,381 5,241,173
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage note payable ..................... $5,68$,403 1,190,031
Accounts payable, accrued expense and other 66,770 31,304
Due to affiliates ......................... 1,796 97,528
Resident security deposits ................ 157,700 99,973
Dividends payable ......................... 120,750 119,438
------- -------
Total liabilities ................................. 6,028,419 1,538,273
--------- ---------
Commitments and subsequent event .................. -- --
Shareholders' equity:
Preferred shares, $.01 par value per share,
4,000,000 shares authorized; no shares
issued or outstanding ................. -- --
Common shares, $.01 par value per share,
10,000,000 shares authorized; 525,000
shares issued and outstanding ......... 5,250 5,250
Additional paid-in capital ................ 3,913,176 3,913,176
Distributions in excess of earnings ....... (363,464) (215,526)
-------- --------
Total equity ...................................... 3,554,962 3,702,900
--------- ---------
Total liabilities and shareholders' equity ........ $9,583,381 5,241,173
========= =========
See accompanying notes to financial statements
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GROVE REAL ESTATE ASSET TRUST
INCOME STATEMENTS
(Unaudited)
For the Six Months Ended
------------------------
June 30, June 30,
1996 1995
---- ----
Revenues:
Rental income .............................. $1,000,825 $ 639,354
Interest and other income .................. 19,729 14,249
------ ------
Total revenues ......................... 1,020,554 653,603
--------- -------
Expenses:
Property operating and maintenance ......... 346,069 190,034
Real estate taxes .......................... 101,712 73,946
Related party management fees .............. 52,594 33,255
General and administrative ................. 40,450 36,305
------ ------
Total expenses ......................... 540,826 333,540
------- -------
479,729 320,063
Interest expense ............................... 189,203 42,234
Depreciation and amortization .................. 198,275 107,117
------- -------
Net income ......................... $ 92,250 $ 170,712
====== =======
Net income per share ........................... $ 0.18 $ 0.33
==== ====
Weighted average number of shares .............. 525,000 525,000
======= =======
See accompanying notes to financial statements
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<PAGE>
GROVE REAL ESTATE ASSET TRUST
INCOME STATEMENTS
(Unaudited)
For the Three Months Ended
--------------------------
June 30, June 30,
1996 1995
---- ----
Revenues:
Rental income $514,593 $328,203
Interest and other income 10,857 7,043
------ -----
Total revenues 525,450 335,246
------- -------
Expenses:
Property operating and maintenance 165,595 89,583
Real estate taxes 52,105 37,002
Related party management fees 27,059 17,105
General and administrative 20,026 26,493
------ ------
Total expenses 264,785 170,183
------- -------
260,665 165,063
Interest expense 101,580 21,195
Depreciation and amortization 87,789 53,846
------ ------
Net income $ 71,297 $ 90,022
====== ======
Net income per share $0.14 $0.17
===== =====
Weighted average number of shares 525,000 525,000
======= =======
See accompanying notes to financial statements
-5-
<PAGE>
GROVE REAL ESTATE ASSET TRUST
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(Unaudited)
Additional Distributions
Common Paid-in in Excess of
Shares Capital Net Income
------ ------- ----------
Amounts at December 31, 1995 $ 5,250 3,913,176 (215,526)
Net Income 92,250
Declared dividends (240,188)
--------- --------- --------
Amounts at June 30, 1996(unaudited) $ 5,250 3,913,176 (363,464)
========= ========= ========
See accompanying notes to financial statements
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<PAGE>
GROVE REAL ESTATE ASSET TRUST
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
------------------------
June 30, June 30,
1996 1995
---- ----
Cash flows from operating activities:
Net income ....................................... $ 92,250 $ 170,712
Furniture, Fixtures and Equipment
provided by operating activities:
Depreciation and amortization ................. 198,275 107,116
Imputed interest - mortgage ................... 18,415 17,131
Increase in other assets ...................... (35,221) 5,448
Increase (decrease) in accounts payable,
accrued expenses and other ................. 35,466 (11,239)
------ -------
Net cash provided by operating activities .............. 309,185 289,168
------- -------
Cash flows from investing activities:
Expenditures for building and improvements ....... (31,162) (16,125)
Expenditures for furniture, fixtures and equipment (17,661) ( 8,967)
------- - -----
Net cash used in investing activities .................. (48,823) (25,092)
------- -------
Cash flows from financing activities:
Proceeds from mortgage payable ................... 220,197 --
Financing costs .................................. (23,169) --
Repayment of mortgage payable .................... (27,043) --
Repayment of notes payable to affiliates ......... (95,732) (50,000)
Dividends paid ................................... (238,875) (233,625)
-------- --------
Net cash provided by (used in) financing activities .... (164,621) (283,625)
-------- --------
Net increase (decrease) in cash and cash equivalents ... 95,741 (19,549)
Cash and cash equivalents, beginning of period ......... 383,725 416,012
------- -------
Cash and cash equivalents, end of period ............... $479,766 $396,463
======= =======
See accompanying notes to financial statements
-7-
<PAGE>
GROVE REAL ESTATE ASSET TRUST
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. FORMATION AND BUSINESS OF THE COMPANY
Grove Real Estate Asset Trust (the "Company") was organized in the State of
Maryland on April 4, 1994 as a Real Estate Investment Trust ("REIT"). The
Company currently operates four properties with a total of 257 residential
apartments. The Company purchased three properties on June 23, 1994 (the
"Original Properties"), and the fourth property ("Cambridge") was acquired
for $4,250,000 in January of 1996. Cambridge is a ninety-two unit
multifamily apartment complex located in Norwich, Connecticut
These statements do not contain all information required by generally
accepted accounting principles to be included in a full set of financial
statements. In the opinion of management, the accompanying unaudited
financial statements reflect all the adjustments necessary to present
fairly the financial position of the Company at June 30, 1996 and results
of operations and its cash flows for the period then ended and the period
ended June 30, 1995. These unaudited financial statements should be read in
conjunction with the audited financial statements and notes contained in
the Company's Form 10-KSB for the year ended December 31, 1995. Results of
operations for this period are not necessarily indicative of results to be
expected for the full year.
Earnings per share is based on the weighted average number of common shares
issued and outstanding from January 1, 1996 to June 30, 1996, and from
January 1, 1995 to June 30, 1995, which was equal to 525,000 shares. The
assumed exercise of outstanding stock options and warrants is not dilutive
and, therefore, is not included.
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2. MORTGAGE NOTES PAYABLE
Mortgage notes payable at June 30, 1996 and December 31, 1995 consist of
the following:
June 30, 1996 December 31, 1995
------------- -----------------
Southington Apartments note $ 1,208,446 $ 1,190,031
Cambridge Estates note 4,472,957 0
--------- -
$ 5,681,403 $ 1,190,031
============= =============
The mortgage note on the Southington Apartments property located in
Southington, Connecticut, one of the Original Properties, which has a face
amount of $1,250,000, has an imputed interest rate of 7.25% due in monthly
interest payments of $4,167 through June 1997 and monthly principal and
interest payments of $8,527 through July 2013. The note is collateralized
by the Southington Apartments property and 15% of the face amount is
guaranteed by certain executive officers and shareholders of the Company.
The Cambridge note payable had an original principal balance of $4,500,000.
Monthly principal and interest payments of $31,920 based on a 25-year
amortization table are due through January 2006. Interest is fixed at
7.04%. The mortgage is secured by a blanket first mortgage lien on the
Cambridge property, and the two other Original Properties located in
Hamden, Connecticut.
3. STOCK OPTIONS AND WARRANTS
The Company has adopted the 1994 Share Option Plan (the "Plan") and has
reserved 100,000 shares for issuance under the Plan. The Company has
granted options to purchase 50,000 shares to the executive officers with an
exercise price of $11.125 per share. The options will expire on the tenth
anniversary of the closing of the IPO. Additionally, the Company has
granted each Trust Manager of the Company who is not an employee upon their
election as a Trust Manager a non-qualified stock option to purchase 2,000
shares for a total of 6,000 shares with an exercise price of $11.125 per
share. At the time of each annual meeting of shareholders, each
non-employee Trust Manager receives an option to purchase 1,000 shares at
the fair market value of the shares on the date of grant. All options which
have been granted under the Plan become exercisable in increments of 33 1/3
% per year on each of the first three anniversaries of the date of grant.
At June 30, 1996, no options had been exercised. At June 30, 1996, 62,000
options are outstanding, of which 38,334 are exercisable.
At June 30, 1996, warrants to purchase an aggregate of 40,000 common shares
are exercisable at $13.35 per share and expire in June 1999.
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<PAGE>
4. RELATED PARTY TRANSACTIONS
Due to Affiliates
Amounts due to affiliates at June 30, 1996 and December 31, 1995 consist of
the following:
June 30, 1996 December 31, 1995
------------- -----------------
Grove Investment Group $ 0 $ 70,457
Grove Property Services, LP 1,796 14,890
Grove Development Corp. 0 12,181
- ------
Total due to affiliates $ 1,796 $ 97,528
======== ==========
The amount due to the Grove Investment Group ("GIG") relates to advances
made by GIG to GREAT to fund expenses incurred by the Company related to
the IPO and to fund initial organization costs. The Company repaid $50,000
of note payable balance during the second quarter of 1995 and repaid the
remaining balance in January 1996. No interest was paid.
Management Fee
Grove Property Services Limited Partnership, an affiliate of GREAT,
provides all of the operating and support functions requisite to the
operation of properties owned by GREAT, including building management and
leasing, to the Company. The management agreement provides for a management
fee equal to 5% of gross rental revenues, as defined. The agreement expires
on June 30, 1997.
5. SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest expense was $175,971 and $42,131 for the six months
ended June 30, 1996 and 1995, respectively. Cash paid for interest expense
was $102,445 and $21,143 for the three months ended June 30, 1996 and 1995,
respectively. On January 12, 1996 the Company purchased Cambridge for
$4,250,000, which was financed with a $4,500,000 first mortgage from a
bank.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
OVERVIEW
The following discussion should be read in conjunction with the financial
statements and notes thereto included elsewhere in this Report.
The results of operations for the six months ended June 30, 1996 and three
months ended June 30, 1996 include the three multifamily properties (the
"Original Properties") that GREAT has owned since its inception and a fourth
property ("Cambridge") that GREAT acquired on January 12, 1996. The Original
Properties are comprised of 165 residential apartment units, in the aggregate,
two of which are located in Hamden, Connecticut and one of which is in
Southington, Connecticut. Cambridge is a ninety-two unit multifamily apartment
complex located in Norwich, Connecticut. The results of operations for the six
months ended June 30, 1995 and the three months ended June 30, 1995 include the
three Original Properties.
RESULTS OF OPERATIONS
Results of operations of GREAT for the six months ended June 30, 1996 and June
30, 1995.
- --------------------------------------------------------------------------------
The Original Properties experienced increases in occupancy and rental rates
which increased revenues. The Original Properties weighted average rental rates
increased to $672 for the six months ended June 30, 1996 from $656 for the six
months ended June 30, 1995. Physical occupancy for the Original Properties
increased to an aggregate weighted average occupancy of 98.18% for the six
months ended June 30, 1996 from an aggregate weighted average of 96.87% for the
six months ended June 30, 1995. Physical occupancy for the Original Properties
decreased to 98.19% at June 30, 1996 from 98.79% at June 30, 1995. The weighted
average physical occupancy for the Original Properties and Cambridge for the six
months ended June 30, 1996 was 97.73%. Physical occupancy for the Original
Properties and Cambridge was 98.44% at June 30, 1996.
Rental and other income increased $366,951 from $653,603 to $1,020,554 during
the six months ended June 30, 1996, as compared to the corresponding period in
1995. Approximately $342,000 of the increase is due to operation of Cambridge,
and the remainder of the increase is attributable to the previously mentioned
increases in occupancy and rental rates.
Property operating and maintenance expenses increased $156,035 from $190,034 to
$346,069 during the six months ended June 30, 1996, as compared to the
corresponding period in 1995. Approximately $123,000 of the increase is due the
acquisition of the Cambridge property. Additionally, the Original Properties
experienced an increase in operating and maintenance experiences due primarily
to the harsh winter experienced in the New England area in 1996 compared to the
mild winter experienced in the New England area in 1995.
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<PAGE>
General and administrative expenses increased $4,145 from $36,305 to $40,450
during the six months ended June 30, 1996, as compared to the corresponding
period in 1995. The increase is primarily due to the additional expenses related
to the acquisition of the Cambridge Property.
Real estate taxes increased $27,767 from $73,946 to $101,712 during the six
months ended June 30, 1996, as compared to the corresponding period in 1995.
Related party management fees increased $19,339 from $33,255 to $52,594. These
increases were due primarily to the acquisition of the Cambridge property.
Interest expense increased $146,969 from $42,234 to $189,203 during the six
months ended June 30, 1996, as compared to the corresponding period in 1995. The
increase is due to the $4,500,000 mortgage note payable used to finance the
acquisition of the Cambridge property. Depreciation and amortization increased
$91,158 primarily due to the acquisition of the Cambridge property.
The Company's net income decreased $78,462 from $170,712 to $92,250 during the
six months ended June 30, 1996, as compared to the corresponding period in 1995.
Approximately $67,000 of the decrease is due to the loss experienced by the
Cambridge property. The decrease in net income for the Original properties of
approximately $11,000 was primarily due to the increase in property operating
and maintenance expenses.
Results of operations of GREAT for the three monhts ended June 30, 1996 and June
30, 1995.
- --------------------------------------------------------------------------------
The Original Properties experienced increases in occupancy and rental rates
which increased revenues. The Original Properties weighted average rental rates
increased to $674 for the three months ended June 30, 1996 from $658 for the
three months ended June 30, 1995. Physical occupancy for the Original Properties
decreased to an aggregate weighted average occupancy of 97.98% for the three
months ended June 30, 1996 from an aggregate weighted average of 98.38% for the
three months ended June 30, 1995. The weighted average physical occupancy for
the Original Properties and Cambridge for the three months ended June 30, 1996
was 98.06%.
Rental and other income increased $190,204 from $335,246 to $525,450 during the
three months ended June 30, 1996, as compared to the corresponding period in
1995. Approximately $185,000 of the increase is due to operation of Cambridge,
and the remainder of the increase is attributable to the previously mentioned
increases in occupancy and rental rates.
Property operating and maintenance expenses increased $76,012 from $89,583 to
$165,595 during the three months ended June 30, 1996, as compared to the
corresponding period in 1995. Approximately $59,000 of the increase is due the
acquisition of the Cambridge property. Additionally, the Original Properties
experienced an increase in operating and maintenance experiences due to painting
that was done at the Dogwood property, along with snow removal costs associated
with late winter storms that were experienced in the New England area in 1996.
General and administrative expenses decreased $6,467 from $26,493 to $20,026
during the three months ended June 30, 1996, as compared to the corresponding
period in 1995. The decrease is primarily due to exchange listing fees which
were paid in the second quarter in 1995 but in the first quarter of 1996.
-12-
<PAGE>
Real estate taxes increased $15,103 from $37,002 to $52,105 during the three
months ended June 30, 1996, as compared to the corresponding period in 1995.
Related party management fees increased $9,954 from $17,105 to $27,059. These
increases were due primarily to the acquisition of the Cambridge property.
Interest expense increased $80,385 from $21,195 to $101,580 during the three
months ended June 30, 1996, as compared to the corresponding period in 1995. The
increase is due to the $4,500,000 mortgage note payable used to finance the
acquisition of the Cambridge property. Depreciation and amortization increased
$33,943 primarily due to the acquisition of the Cambridge property.
The Company's net income decreased $18,725 from $90,022 to $71,297 during the
three months ended June 30, 1996, as compared to the corresponding period in
1995. Approximately $13,000 of the decrease is due to the loss experienced by
the Cambridge property. The decrease in net income for the Original properties
of approximately $6,000 was primarily due to the increase in property operating
and maintenance expenses.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents totaled $479,466 as of June 30, 1996. The Company's
long-term debt to market capitalization on June 30, 1996 was 54.08% based on
total market capitalization of $10,504,841 (525,000 shares outstanding at
$9.1875 plus long-term debt) and long-term debt of $5,681,403.
Cash provided by operating activities was $309,185 for the six months ended June
30, 1996. Cash used in investing activities for the purchase of fixed assets was
$48,823 for the six months ended June 30, 1996. On January 12, 1996, Cambridge
was purchased from Grove Cambridge Associates Limited Partnership for
$4,250,000. The acquisition was 100% financed by a first mortgage of $4,500,000
from a bank.
On May 17, 1996, GREAT declared a dividend of $0.23 per share, payable on July
17, 1996 to shareholders of record on June 26, 1996. On March 21, 1996, GREAT
declared a dividend of $0.2275 per share payable on April 16, 1996 to
shareholders of record on March 26, 1996. The dividends declared during the
period of $0.4575 per share resulted in an 92.53% payout of funds from
operations for the six months ended June 30, 1996
GREAT intends to meet its short term liquidity requirements through cash flow
provided by operations. GREAT considers its ability to generate cash to be
adequate, and expects it to continue to be adequate to meet operating
requirements and pay shareholder dividends in accordance with REIT requirements.
GREAT may use other sources of capital to finance additional acquisitions
including, but not limited to, the selling of additional equity interest in
GREAT, non-distributed Funds From Operations, the issuance of debt securities,
and exchanging Common Shares for properties or interest in properties.
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<PAGE>
FUNDS FROM OPERATIONS
Industry analysts generally consider funds from operations ("FFO") an
appropriate measure of performance of an equity REIT. Funds from operations is
defined as income before gains (losses) on investments and extraordinary items
(computed in accordance with generally accepted accounting principles) plus real
estate depreciation, less preferred dividends and after adjustment for
significant non-recurring items, if any. This definition conforms to the
recommendations set forth in a White Paper adopted by the National Association
of Real Estate Investment Trusts ("NAREIT") in early 1995. FFO for years prior
to 1996 have been adjusted to conform to the NAREIT definition. GREAT believes
that in order to facilitate a clear understanding of its operating results,
funds from operations should be examined in conjunction with the net income as
presented in the financial statements and information included elsewhere in this
Report. Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and is
not necessarily indicative of cash available to fund cash needs. Funds from
operations should not be considered as an alternative to net income as an
indication of GREAT's performance or as an alternative to cash flow as a measure
of liquidity.
FFO decreased $12,718 from $272,298 for the six months ended June 30, 1995 to
$259,580 for the six months ended June 30, 1996. Dividends declared for the six
months ended June 30, 1996 were $240,188, representing 92.53% of funds from
operations. FFO increased $2,514 from $140,912 for the three months ended June
30, 1995 to $143,426 for the three months ended June 30, 1996.
The impact of adopting the NAREIT recommendations as set forth above was to
reduce FFO for the six months ended June 30, 1996 and 1995 by $22,317 and
$22,662 respectively. The impact of adopting the NAREIT recommendations was to
reduce FFO for the three months ended June 30, 1996 and 1995 by $9,846 and
$11,599, respectively.
INFLATION
Substantially all of the leases at the properties are for a term of one year or
less, which may enable GREAT to seek increased rents upon renewal or reletting.
Such short-term leases generally lessen the risk to GREAT of the potential
adverse effects of inflation.
-14-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Change in Securities.
None.
Item 3. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Shareholders of the Company held on May 17,
1996 the Shareholders considered and voted on two proposals. First, the
Shareholders voted (410,297 for, 225 against and no abstentions) to
elect Joseph R. LaBrosse and J. Joseph Garrahy as Trustees to the Board
of Trustees to a term expiring at the 1999 annual meeting. After the
May 17, 1996 annual meeting the following Trustees term of office as a
trustee continued: Damon D. Navarro, Harold V. Gorman and James F.
Twadell. Second, the Shareholders voted (409,522 for, 0 against with
1,000 abstentions) to ratify the appointment of BDO Seidman, LLP as
independent public accountants for the Company for the fiscal year
ended December 31, 1996.
Item 4. Other Information
None.
Item 5. Exhibits and Reports on Form 8-K.
(a) Exhibits
See Index to Exhibits on pages 16 and 17
(b) Reports on Form 8-K.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
cause this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
REGISTRANT:
GROVE REAL ESTATE ASSET TRUST
Date: 10/16/96 By: Joseph R. LaBrosse
--------------------------------------------
Name: Joseph R. LaBrosse
Title: Chief Financial Officer, Secretary and Treasurer
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<PAGE>
INDEX TO EXHIBITS
Number Title
3.1 Grove Real Estate Asset Trust Declaration of Trust dated March 21,
1994 incorporated by reference as Exhibit Number 3.1 to GREAT's
Registration Statement on Form SB-2 filed with the U.S. Securities
and Exchange Commission, file no. 33-76732.
3.2 Grove Real Estate Asset Trust Bylaws amended through May 17, 1996 and
attached hereto as Exhibit 3.2.
10.2 Amended Employment Agreement dated May 16, 1994 by and between GREAT
and Damon D. Navarro incorporated by reference as Exhibit Number
10.2 to GREAT's Registration Statement on Amendment No. 1 to Form
SB-2 filed with the U.S. Securities and Exchange Commission, file
No. 33-76732.
10.3 Amended Employment Agreement dated May 16, 1994 by and between GREAT
and Brian A. Navarro incorporated by reference as Exhibit Number
10.3 to GREAT's Registration Statement on Amendment No. 1 to Form
SB-2 filed with the U.S. Securities and Exchange Commission, file
No. 33-76732.
10.4 Amended Employment Agreement dated May 16, 1994 by and between GREAT
and Edmund F. Navarro incorporated by reference as Exhibit Number
10.4 to GREAT's Registration Statement on Amendment No. 1 to Form
SB-2 filed with the U.S. Securities and Exchange Commission, file
No. 33-76732.
10.5 Amended Employment Agreement dated May 16, 1994 by and between GREAT
and Joseph R. LaBrosse incorporated by reference as Exhibit Number
10.5 to GREAT's Registration Statement on Amendment No. 1 to Form
SB-2 filed with the U.S. Securities and Exchange Commission, file
No. 33-76732.
10.6 Amended Employment Agreement dated May 16, 1994 by and between GREAT
and Gerald A. McNamara incorporated by reference as Exhibit Number
10.6 to GREAT's Registration Statement on Amendment No. 1 to Form
SB-2 filed with the U.S. Securities and Exchange Commission, file
No. 33-76732.
10.7 Amended Non-Competition Agreement dated May 16, 1994 by and between
GREAT and Damon D. Navarro incorporated by reference as Exhibit
Number 10.7 to GREAT's Registration Statement on Amendment No. 1 to
Form SB-2 filed with the U.S. Securities and Exchange Commission,
file No. 33-76732.
10.8 Non-Competition Agreement dated May 16, 1994 by and between GREAT and the
Grove Companies incorporated by reference as Exhibit Number 10.8 to
GREAT'S Registration Statement on Amendment No. 1 to Form SB-2 filed with
U.S. Securities and Exchange Commission, file No.
33-76732.
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<PAGE>
10.16 Grove Real Estate Asset Trust 1994 Share Option Plan incorporated by
reference as Exhibit Number 10.16 to GREAT's Registration Statement
on Form SB-2 filed with the U.S. Securities and Exchange Commission,
file No. 33-76732.
10.18 Form of Indemnification Agreement by and between GREAT, the Trust
Managers and the Executive Officers incorporated by reference as Exhibit
Number 10.18 to GREAT's Registration Statement on Form SB-2 filed with
the U.S. Securities and Exchange Commission, file No.
33-76732.
10.19 Form of Administrative Services Agreement by and between GREAT and
the Grove Companies incorporated by references as Exhibit Number
10.19 to GREAT's Registration Statement on Form SB-2 filed with the
U.S. Securities and Exchange Commission, file No. 33-76732.
10.22 Assumption of Mortgage Deed and Security Agreement made June 23,
1994 by and among Southington Baron Limited Partnership, Charles D.
Gersten, Ada C. Berin, Grove Real Estate Asset Trust, Damon D.
Navarro and Brian A. Navarro incorporated by reference as Exhibit
Number 10.22 to GREAT's Form 10-KSB for the year ended December 31,
1994 filed with the U.S. Securities and Exchange Commission, File
No. 1-13080.
10.23 Mortgage Note from Southington Baron Limited Partnership to Charles
D. Gersten and Ada C. Berin dated June 8, 1993 in the original
principal amount of $1,250,000 incorporated by reference as Exhibit
Number 10.23 to GREAT's Form 10-KSB for the year ended December 31,
1994 filed with the U.S. Securities and Exchange Commission, File
No. 1-13080.
10.24 Purchase and Sale Agreement between Grove Real Estate Asset Trust and
Grove Cambridge Associates Limited Partnership incorporated by reference
Exhibit Number 1 to GREAT's Form 8-K dated October 30, 1995 and attached
hereto as Exhibit 10.24 filed with the U.S. Securities and Exchange
Commission, File No. 1-13080.
10.25 Mortgage Note from Grove Real Estate Asset Trust to First Union Bank of
Connecticut dated January 11, 1996 in the principal amount of $4,500,000
incorporated by reference as Exhibit 10.25 to GREAT's Form 10-KSB for the
year ended December 31, 1995 filed with the U.S. Securities and Exchange
Commission, File No. 1-13080.
10.26 Form of Management Agreement by and between GREAT and Grove Property
Services Limited Partnership incorporated by reference as Exhibit 10.26
to GREAT's Form 10-KSB for the year ended December 31, 1995 filed with
the U.S. Securities and Exchange Commission, File No. 1-13080.
-17-
GROVE REAL ESTATE ASSET TRUST
BYLAWS
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE.
The principal office of the Trust shall be located at such place or places as
the Trust Managers may designate.
Section 2. ADDITIONAL OFFICES.
The Trust may have additional offices at such places as the Trust Managers may
from time to time determine or the business of the Trust may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE.
All meetings of shareholders shall be held at the principal office of the Trust
or at such other place within the United States as shall be stated in the notice
of the meeting.
Section 2. ANNUAL MEETING.
An annual meeting of the shareholders for the election of Trust Managers and the
transaction of any business within the powers of the Trust shall be held during
the month of June of each year, after the delivery of the annual report referred
to in Section 11 of this Article II, at a convenient location and on proper
notice, on a date and at the time set by the Trust Managers.
Section 3. SPECIAL MEETINGS.
The Chairman of the Board of Trust Managers or the President or one-third of the
Trust Managers may call special meetings of the shareholders. Special meetings
of shareholders shall also be called by the Secretary upon the written request
of the holders of shares entitled to cast not less than 25% of all the votes
entitled to the cast at such meeting. Such request shall state the purpose of
such meeting. The secretary shall inform such shareholders of the reasonably
estimated cost of preparing and mailing notice of the meeting and, upon payment
by such shareholders to the Trust of such costs, the Secretary shall give notice
to each shareholder entitled to notice of the meeting. Unless requested by
shareholders entitled to cast a majority of all the votes entitled to be cast at
such meeting, a special meeting need not be called to consider any matter which
is substantially the same as a matter voted on at any meeting of the
shareholders held during the preceding twelve months.
<PAGE>
Section 4. NOTICE.
Not less than ten nor more than 90 days before such meeting of shareholders, the
Secretary shall give to each shareholder entitled to vote at such meeting and to
each shareholder not entitled to vote who is entitled to notice of the meeting,
written or printed notice stating the time and place of the meeting and, in the
case of a special meeting or as otherwise may be required by any statute, the
purpose for which the meeting is called, either by mail or by presenting it to
such shareholder personally or by leaving it at his residence or usual place of
business. If mailed, such notice shall be deemed to be given when deposited in
the United States mail addressed to the shareholder at higher post office
address as it appears on the records of the Trust, with postage thereon prepaid.
Section 5. SCOPE OF NOTICE.
Any business of the Trust may be transacted at an annual meeting of shareholders
without being specifically designated in the notice, except such business as is
required by any statute to be stated in such notice. No business shall be
transacted at a special meeting of shareholders except as specifically
designated in the notice.
Section 6. QUORUM.
At any meeting of shareholders, the presence in person or by proxy of
shareholders entitled to cast a majority of all the votes entitled to be cast at
such meeting shall constitute a quorum; but this section shall not affect any
requirement under any statute or the Declaration of Trust, as amended, for the
vote necessary for the adoption of any measure. If, however, such quorum shall
not be present at any meeting, the shareholders entitled to vote at the meeting,
present in person or by proxy, shall have power to adjourn the meeting from time
to time to a date not more than 120 days after the original record date without
notice other than announcement at the meeting. At such adjourned meeting at
which a quorum shall be present, any business may be transacted which might have
been transacted at the meeting as originally notified.
Section 7. VOTING.
A plurality of all the votes cast at a meeting of shareholders duly called and
at which a quorum is present shall be sufficient to elect a Trust Manager. Each
share may be voted for as many individuals as there are Trust Managers to be
elected and for whose election the share is entitled to be voted. A majority of
the votes cast at a meeting of shareholders duly called and at which a quorum is
present shall be sufficient to approve any other matter which may properly come
before the meeting, unless more than a majority of the votes cast is required
herein or by statute or by the Declaration of Trust Managers, as amended. Unless
otherwise provided in the Declaration, each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Section 8. PROXIES.
A shareholder may vote the shares owned of record by him, either in person or by
proxy executed in writing by the shareholder or by his duly authorized attorney
in fact.
Such proxy shall be filed with the Secretary of the Trust before or at the time
of the meeting. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy.
Section 9. VOTING OF SHARES BY CERTAIN HOLDERS.
Shares registered in the name of a corporation, partnership, trust or other
entity, if entitled to be voted, may be voted by the President or a Vice
President, a general partner or trustee, thereof, as the case may be, or a proxy
appointed by any of the foregoing individuals, unless some other person who has
been appointed to vote such shares pursuant to a bylaw or a resolution of the
board of directors of such corporation or other entity, and if such person
presents a certified copy of such bylaw or resolution, in which case such person
may vote such shares. Any trustee or other fiduciary may vote shares registered
in his name as such fiduciary, either in person or by proxy.
Shares of the Trust directly or indirectly owned by it shall not be voted at any
meeting and shall not be counted in determining the total number of outstanding
shares entitled to be voted at any given time, unless they are held by it in a
fiduciary capacity, in which case they may be voted and shall be counted in
determining the total number of outstanding shares at any given time.
The Board of Trust Managers may adopt by resolution a procedure by which a
shareholder may certify in writing to the Trust that any shares registered in
the name of the shareholder are held for the account of a specified person other
than the shareholder. The resolution shall set forth the class of shareholder
who may make the certification; the purpose for which the certification may be
made; the form of certification and the information to be contained in it; if
the certification is with respect to a record date or closing of the share
transfer books, the time after the record date or closing of the share transfer
books within which the certification must be received by the Trust; and any
other provisions with respect to the procedure which the Trust Managers consider
necessary or desirable. On receipt of such certification, the person specified
in the certification shall be regarded as, for the purposes set forth in the
certification, the shareholder of record of the specified shares in place of the
shareholder who makes the certification.
Notwithstanding any other provision contained herein or in the Declaration of
Trust, as amended, or these Bylaws, Title 3, Subtitle 7 of the Corporations and
Associations Article of the Annotated Code of Maryland (or any successor
statutes shall not apply to any acquisition by any person of shares of
beneficial interest of the Trust.
Section 10. INSPECTORS.
At any meeting of shareholders, the Chairman of the meeting may, or upon the
request of any shareholder shall, appoint one or more persons as inspectors for
such meeting. Such inspectors shall ascertain and report the number of shares
represented at the meeting based upon their determination of the validity and
effect of proxies, count all votes, report the results and perform such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him/her or by a
majority of them, if there is more than one inspector acting at such meeting. If
there is more than one inspector, the report of a majority shall be the report
of the inspectors. The report of the inspector(s) on the number of shares
represented at the meeting and the results of the voting shall be Prima facie
evidence thereof.
Section 11. REPORTS TO SHAREHOLDERS.
After the close of each fiscal year of the Trust, the Trust Managers shall
deliver or cause to be delivered a report of the business and operations of the
Trust during such fiscal year to the shareholders containing a balance sheet and
a statement of income and surplus of the Trust, accompanied by the certification
of an independent certified public accountant, and such further information as
the Trust Managers may determine is required pursuant to any law or regulation
to which the Trust is subject. The annual report shall be submitted to
shareholders at or before the annual meeting of the shareholders and within the
earlier of twenty (20) day after the annual meeting of the shareholders or one
hundred and twenty (120) day after the end of the fiscal year shall be placed on
file at the principal office of the Trust.
Section 12. NOMINATIONS AND SHAREHOLDER BUSINESS.
(a) Annual Meetings of Shareholders.
(1) Nominations of persons for election to the Board of Trust Managers and the
proposal of business to be considered by the shareholders may be made at an
annual meeting of shareholders (i) pursuant to the Trust's notice of meeting,
(ii) by or at the direction of the Trust Managers or (iii) by any shareholder of
the Trust who was a shareholder of record at the time of giving of notice
provided for in this Section 12(a), who is entitled to vote at the meeting and
who complied with the notice procedures set forth in this Section 12(a) (2) and
(3).
(2) For nominations or other business to be properly brought before an annual
meeting by a shareholder pursuant to clause (iii) of paragraph (a) (1) of this
Section 12, the shareholder must have given timely notice thereof in writing to
the Secretary of the Trust. To be timely, a shareholder's notice shall be
delivered to the Secretary at the principal executive offices of the Trust not
less than 60 days nor more than 90 days prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is advanced by more than 30 days or delayed by more
than 60 days from such anniversary date, notice by the shareholder to be timely
must be so delivered not earlier than the 90th day prior to such annual meeting
and not later than the close of business on the later of the 60th day prior to
such annual meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made. Such shareholder's
notice shall set forth (i) as to each person whom the shareholder proposes to
nominate for election or reelection as a Trust Manager all information relating
to such person that is required to be disclosed in solicitations of proxies for
election of Trust Managers, or is otherwise required in each case pursuant to
Regulations 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a Trust Manager if elected); (ii)
as to any other business that the shareholder proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business of such shareholder and of the
beneficial owner, if any, on whose behalf the proposal is made, and (iii) as to
the shareholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made, (x) the name and address of such
shareholder, as they appear on the Trust's books, and of such beneficial owner
and (y) the number of each class of shares of the Trust which are owned
beneficially and of record by such shareholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph (a) (2) of this
Section 12 to the contrary, in the event that the number of Trust Managers to be
elected to the Board of Trust Managers is increased and there is no public
announcement naming all of the nominees for Trust Manager or specifying the size
of the increased Board of Trust Managers made by the Trust at least 70 days
prior to the first anniversary of the preceding year's annual meeting, a
shareholder's notice required by this Section 12(a) shall also be considered
timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of the Trust not later than the close of business on the tenth day
following the day on which such public announcement is first made by the Trust.
(b) Special Meetings of Shareholders. Only such business shall be conducted at a
special meeting of shareholders as shall have been brought before the meeting
pursuant to the Trust's notice of meeting. Nominations of persons for election
to the Board of Trust Managers may be made at a special meeting of shareholders
at which Trust Managers are to be elected pursuant to the Trust's notice of
meeting (i) by or at the direction of the Board of Trust matter and any other
shareholder entitled to notice of a meeting of shareholders (but not to vote
thereat) has waived in writing any right to dissent from such action, and such
consent and waiver are filed with the minutes of proceedings of the
shareholders.
Section 14. VOTING BY BALLOT.
Voting on any question or in any election may be viva voce unless the presiding
officer shall order or any shareholder shall demand that voting be by ballot.
ARTICLE III
TRUST MANAGERS
Section 1. GENERAL POWERS: QUALIFICATIONS.
The business and affairs of the Trust shall be managed under the direction of
its Board of Trust Managers. A Trust Manager shall be an individual at least 21
years of age who is not under legal disability.
Section 2. ANNUAL AND REGULAR MEETINGS.
An annual meeting of the Trust Managers shall be held immediately after and at
the same place as the annual meeting of shareholders, no notice other than this
Bylaw being necessary. The Trust Managers may provide, by resolution, the time
and place, either within or without the State of Maryland, for the holding of
regular meetings of the Trust Managers without other notice than such
resolution.
Section 3. SPECIAL MEETINGS.
Special meetings of the Trust Managers may be called by or at the request of the
Chairman of the Board, the Chief Executive Officer or a majority of the Trust
Managers then in office. The person or persons authorized to call special
meetings of the Trust Managers may fix any place, either within or without the
State of Maryland, as the place for holding any special meeting of the Trust
Managers called by them.
Section 4. NOTICE.
Notice of any special meetings shall be given by written notice delivered
personally, telegraphed or mailed to each Trust Manager at his business or
residence address. Personally delivered or telegraphed notices shall be given at
least two days prior to the meeting. Notice by mail shall be given at least five
days prior to the meeting. If mailed, such notice shall be deemed to be given
when deposited in the United States mail properly addressed, with postage
thereon prepaid. If given by telegram, such notice shall be deemed to be given
when the telegram is delivered to the telegraph company. Neither the business to
be transacted at, nor the purpose of, any annual, regular or special meeting of
the Trust Managers need be stated in the notice, unless specifically required by
statute or these Bylaws.
Section 5. QUORUM.
A majority of the Trust Managers shall constitute a quorum for transaction of
business at any meeting of the Trust Managers, provided that, if less than a
majority of such Trust Managers are present at said meeting, a majority of the
Trust Managers present may adjourn the meeting from time to time without further
notice, and provided further that if, pursuant to the Declaration of Trust, as
amended, or these Bylaws, the vote of a majority of a particular group of Trust
Managers is required for action, a quorum must also include a majority of such
group.
The Trust Managers present at a meeting which has been duly called and convened
may continue to transfer business until adjournment, notwithstanding the
withdrawal of enough Trust Managers to leave less than a quorum.
Section 6. VOTING.
The action of the majority of the Trust Managers present at a meeting at which a
quorum is present shall be the action of the Trust Managers, unless the
concurrence of a greater proportion is required for such action by applicable
statute.
Section 7. TELEPHONE MEETINGS.
Trust Managers may participate in a meeting by means of a conference telephone
or similar communications equipment if all persons participating in the meeting
can hear each other at the same time. Participation in a meeting by these means
shall constitute presence in person at the meeting.
Section 8. INFORMAL ACTION BY TRUST.
Managers. Any action required or permitted to be taken at any meeting of the
Trust Managers may be taken without a meeting, if a consent in writing to such
action is signed by each Trust Manager and such written consent is filed with
the minutes of proceeding of the Trust Managers.
Section 9. VACANCIES.
If for any reason any or all the Trust Managers cease to be Trust Managers, such
event shall not terminate the Trust or affect these Bylaws or the powers of the
remaining Trust Managers hereunder (even if fewer than two Trust Managers
remain). Any vacancy (including a vacancy created by an increase in the number
of Trust Managers) shall be filled, at any regular meeting or at any special
meeting called for that purpose, by a majority of the Trust Managers. Any
individual so elected as Trust Managers shall hold office for the unexpired term
of the Trust Manager he is replacing.
Section 10. COMPENSATION.
Trust Managers shall not receive any stated salary for their services as Trust
Manager, but, by resolution of the Trust Managers, may receive fixed sums per
year and/or per meeting. Expenses of attendance, if any, may be allowed to Trust
Managers for attendance at each annual, regular or special meeting of the Trust
Managers or of any committee thereof; but nothing herein contained shall be
construed to preclude any Trust Manager from serving the Trust in any other
capacity and receiving compensation therefore.
Section 11. REMOVAL OF TRUST MANAGERS.
The shareholders may, at any time, remove any Trust Manager in the manner
provided in the Declaration of Trust, as amended.
Section 12. LOSS OF DEPOSITS.
No Trust Manager shall be liable for any loss which may occur by reason of the
failure of the bank, trust company, savings and loan association, or other
institution with whom moneys or shares have been deposited.
Section 13. SURETY BONDS.
Unless required by law, no Trust Manager shall be obligated to give any bond or
surety or other security for the performance of any of his duties.
<PAGE>
Section 14. RELIANCE.
Each Trust Manager, officer, employee and agent of the Trust shall, in the
performance of his duties with respect to the Trust, be fully justified and
protected with regard to any act or failure to act in reliance in good faith
upon the books of account or other records of the Trust, upon an opinion of
counsel or upon reports made to the Trust by any of its officers or employees or
by the advisor, accountants, appraisers or other experts or consultants selected
by the Trust Managers or officers of the Trust, regardless of whether such
counsel or expert may also be a Trust Manager.
Section 15. CERTAIN RIGHTS OF TRUST MANAGERS, OFFICERS
EMPLOYEES AND AGENTS.
The Trust Managers shall have no responsibility to devote their full time to the
affairs of the Trust. Any Trust Manager or officer, employee or agent of the
Trust, in his personal capacity or in a capacity as an affiliate, employee, or
agent of any other person, or otherwise, may have business interests and engage
in business activities similar to or in addition to those of or relating to the
Trust subject to the provisions of any Non-Competition Agreement or Employment
Agreement between any of them and the Trust and exclusively on the terms set
forth in either of those Agreements.
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS.
The Trust Mangers may appoint from among its members an Executive Committee, an
Audit Committee and other committees, composed of two or more independent Trust
Managers, to serve at the pleasure of the Trust Managers.
Section 2. POWERS.
The Trust Managers may delegate to committees appointed under Section 1
of this Article any of the powers of the Trust Managers, except as prohibited
by law.
Section 3. MEETINGS.
In the absence of any member of any such committee, the members thereof present
at any meeting, whether or not they constitute a quorum, may appoint another
Trust Managers to act in the place of such absent member.
Section 4. TELEPHONE MEETINGS.
Members of a committee of the Trust Managers may participate in a meeting by
means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person at
the meeting.
Section 5. INFORMAL ACTION BY COMMITTEES.
Any action required or permitted to be taken at any meeting of a committee of
the Trust Mangers may be taken without a meeting, if a consent in writing to
such action is signed by each member of the committee and such written consent
is filed with the minutes of proceedings of such committee.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS.
The officers of the Trust may consist of a Chairman of the Board, a Vice
Chairman of the Board, a Chief Executive Officer, a President, one or more Vice
Presidents, a Treasurer, one or more Assistant Treasurers, a Secretary, and one
or more Assistant Secretaries. In addition, the Trust managers may from time to
time appoint such other officers with such powers and duties as they shall deem
necessary or desirable. The officers of the Trust shall be elected annually by /
the Trust Mangers at the first meeting of the Trust Managers held l after each
annual meeting of shareholders. If the election of l officers shall not be held
at such meeting, such election shall be held as soon thereafter as may be
convenient. Each officer shall hold office until his successor is elected and
qualifies or-until his death, resignation or removal in the manner hereinafter
provided. Any two or more offices except President and Vice President may be
held by the same person. In their discretion, the Trust Managers may leave
unfilled any office except that of President and Secretary. Election of an
officer or agent shall not of itself create contract rights between the Trust
and such officer or agent.
Section 2. REMOVAL AND RESIGNATION.
Any officer or agent of the Trust may be removed by the Trust Managers if in
their judgment the best interests of the Trust would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Any officer of the Trust may resign at any time by giving written
notice of his resignation to the Trust Managers, the Chairman of the Board, the
President or the Secretary. Any resignation shall take effect at any time
subsequent to the time specified therein or, if the time when it shall become
effective is not specified therein, immediately upon its receipt. The acceptance
of a resignation shall not be necessary to make it effective unless otherwise
stated in the resignation.
Section 3. VACANCIES.
A vacancy in any office may be filled by the Trust Manager for the balance of
the term.
Section 4. CHIEF EXECUTIVE OFFICER.
The Trust Manager may designate a Chief Executive Officer from among the elected
officers. The Chief Executive Officer shall have responsibility for
implementation of the policies of the Trust, as determined by the Trust
Managers, and for the administration of the business affairs of the Trust. In
the absence of both the Chairman and the Vice Chairman of the Board, the Chief
Executive Officer shall preside over the meetings of the Trust Managers and of
the shareholders at which he shall be present.
<PAGE>
Section 5. CHIEF OPERATING OFFICER.
The Trust Managers may designate a Chief Operating Officer from among the
elected officers. Said officer will have the responsibilities and duties as set
forth by the Trust Managers or the Chief Executive Officer.
Section 6. CHIEF FINANCIAL OFFICER.
The Trust Managers may designate a Chief Financial Officer from among the
elected officers. Said officer will have the responsibilities and duties as set
forth by the Trust Managers or the Chief Executive Officer.
Section 7. Chairman AND VICE CHAIRMAN OF THE BOARD.
The Chairman of the Board shall preside over the meetings of the Trust Mangers
and of the shareholders at which he shall be present and shall in general
oversee all of the business and affairs of the Trust. In the absence of the
Chairman of the Board, the Vice Chairman of the Board shall presides at such
meetings at which he shall be present. The Chairman and the Vice Chairman of the
Board may execute any deed, mortgage, bond, contract or other instrument, except
in cases where the execution thereof shall be expressly delegated by the Trust
Managers or by those Bylaws to some other officer or agent of the Trust or shall
be required by law to be otherwise executed. The Chairman of the Board and the
Vice Chairman of the Board shall perform such other duties as may be assigned to
him or them by the Trust Mangers.
Section 8. PRESIDENT.
In the absence of the Chairman, the Vice Chairman of the Board and the Chief
Executive Officer, the President shall preside over the meetings of the Trust
Managers and the shareholders at which he shall be present. In the absence of a
designation of a Chief Executive Officer by the Trust Managers, the President
shall be the Chief Executive Officer and shall be ex officio a member of all
committees that may, from time to time, be constituted by the Trust Managers.
The President may execute any deed, mortgage, bond, contract or other
instrument, except in cases where the execution thereof shall be expressly
delegated by the Trust Managers or by these Bylaws to some other officer or
agent of the Trust or shall be required by law to be otherwise executed; and in
general shall perform all duties incident to the office of President an such
other duties as may be prescribed by the Trust
Managers from time to time.
Section 9. VICE PRESIDENTS.
In the absence of the President or in the event of a vacancy in such office, the
Vice President (or in the event there be more than one Vice President, election
or, in the absence of any designation, then in the order of their election)
shall perform the duties of the President and when so acting shall have all the
powers of and be subject to all the restrictions upon the President; and shall
perform such other duties as from time to time may be assigned to him by the
President or by the Trust Managers. The Trust Managers may designate one or more
Vice Presidents as executive Vice President or as Vice President for particular
areas of responsibility.
Section 10. SECRETARY.
The Secretary shall (a) keep the minutes of the proceedings of the shareholders,
the Trust Mangers and committees of the Trust Mangers in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these Bylaws or as required by law; (c) be custodian of
the trust records and of the seal of the Trust; (d) keep a register of the post
office address of each shareholder which shall be furnished to the Secretary be
such shareholder; (e) have general charge of the share transfer books of the
Trust; and (f) in general perform such other duties as from time to time may be
assigned to him by the Chief Executive Officer, the President or the Trust
Managers.
Section 11. TREASURER.
The Treasurer shall have the custody of the funds and securities of the Trust
and shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Trust and shall deposit all moneys and other valuable effects
in the name and to the credit of the Trust in such depositories as may be
designated by the Trust Mangers.
He shall disburse the funds of the Trust as may be ordered by the Trust
Managers, taking proper vouchers for such disbursements, and shall render to the
President and Trust Managers, at the regular meetings of the Trust Managers or
whenever they may require it, an account of all his transactions as Treasurer
and of the financial condition of the Trust.
If required by the Trust Managers, he shall give the Trust a bond in such sum
and with such surety or sureties as shall be satisfactory to the Trust Managers
for the faithful performance of the duties of his office and for the restoration
to the Trust, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, moneys and other property of whatever
kind in his possession or under his control belonging to the Trust.
Section 12. ASSISTANT, SECRETARIES AND ASSISTANT TREASURERS.
The Assistant Secretaries and Assistant Treasurers, in general, shall perform
such duties as shall be assigned to them by the Secretary or Treasurer,
respectively, or by the President or the Trust Managers. The Assistant Treasures
shall, if required by the Trust Managers, give bonds for the faithful
performance of their duties in such sums and with such surety or sureties as
shall be satisfactory to the Trust Manager.
Section 13. SALARIES.
The salaries of the officers shall be fixed from time to time by the Trust
Managers and no officer shall be prevented from receiving such salary by reason
of the fact that he is also a Trust Manager.
<PAGE>
ARTICLE Vl
CONTRACTS, LEANS CHECKS AND DEPOSITS
Section 1. CONTRACTS.
The Trust Manager may authorize any officer or agent to enter into any contract
or to execute and deliver any instrument in the name of and on behalf of the
Trust and such authority may be general or confined to specific instances. Any
agreement, deed, mortgage, lease or other document executed by one or more of
the Trust Managers or by an authorized person shall be valid and binding upon
the Trust Managers and upon the Trust when authorized or ratified by action of
the Trust Managers.
Section 2. CHECKS AND DRAFTS.
All checks, drafts or other orders for the payment of money, notes or other
evidence of indebtedness issued in the name of the Trust shall be signed by such
officer or officers, agent or agents of the Trust in such manner as shall from
time to time be determined by the Trust Managers.
Section 3. DEPOSITS.
All funds of the Trust not otherwise employed shall be deposited from time to
time to the credit of the Trust in such banks, trust companies or other
depositories as the Trust Managers may designate.
ARTICLE VII
SHARES
Section 1. CERTIFICATES.
Each shareholder shall be entitled to a certificate or certificates which shall
represent and certify the number of shares of each class of beneficial interests
held by him in the Trust. Each certificate shall be signed by the Chief
Executive Officer, the President or a Vice President and countersigned by the
Secretary or an Assistant Secretary or the treasure or an Assistant Treasurer
and may be sealed with the seal, if any, of the Trust. The signatures may be
either manual or facsimile. Certificates shall be consecutively numbered; and if
the Trust shall, from time to time, issue several classes of shares, each class
may have its own number series. A certificate is valid and may be issued whether
or not an officer who signed it is still an officer when it is issued. Each
certificate representing shares which are restricted as to their transferability
or voting powers, which are preferred or limited as to their dividends or as to
their allocable portion of the assets upon liquidation or which are redeemable
at the option of the Trust, shall have a statement of such restriction,
limitation, preference or redemption provision, or a summary thereof, plainly
stated on the certificate. In lieu of such statement or summary, the Trust may
set forth upon the face or back of the certificate a statement that the Trust
will furnish to any shareholder, upon request and without charge, a full
statement of such information.
<PAGE>
Section 2. TRANSFERS.
Certificates shall be treated as negotiable and title thereto and to the shares
they represent shall be transferred by delivery thereof to the same extent as
those of a Maryland stock corporation. Upon surrender to the Trust or the
transfer agent of the Trust of a share certificate duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, the Trust
shall issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 3. LOST CERTIFICATE.
The Trust Managers (or any officer or officers designated by them) may direct a
new certificate to be issued in place of any certificate previously issued by
the Trust alleged to have been lost, stolen or destroyed upon the making of an
affidavit of that fact by the person claiming the certificate to be lost, stolen
or destroyed. When authorizing the issuance of a new certificate, the Trust
Managers (or any officer or officers designated by them) may, in his or their
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or his legal representative
to advertise the same in such manner as he or they shall require and/or to give
bond, with sufficient surety, to the Trust to indemnify it against any loss or
claim which may arise as a result of the issuance of a new certificate.
Section 4. CLOSING OF TRANSFER BOORS OR FIXING OF RECORD DATE.
The Trust Managers may set, in advance, a record date for the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders or determining shareholder entitled to receive payment of any
dividend or the allotment of any other rights, or in order to make a
determination of shareholders for any other proper purposes. Such date, in any
case, shall not be prior to the close of business on the day the record date is
fixed and shall be not more than 90 days and, in the case of a meeting of
shareholders not less than ten days, before the date on which the meeting or
particular action requiring such determination of shareholders is to be held or
taken. In lieu of fixing a record date, the Trust Managers may provide that the
share transfer books shall be closed for a stated period but not longer than 20
days. If the share transfer books are closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days before the date of such meeting.
If no record date is fixed and the share transfer books are not closed for the
determination of shareholders, (a) the record date for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the day on which the notice of meeting is mailed
or the 30th day before the meeting, whichever is the closer date to the meeting;
and (b) the record date for the determination of shareholders entitled to
receive payment of a dividend or an allotment of any other rights shall be the
close of business on the day on which the resolution of the Trust Managers,
declaring the dividend or allotment for rights, is adopted.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, except where the determination has been made
through the closing of the transfer books and the stated period of closing has
expired.
Section 5. STOCK LEDGER.
The Trust shall maintain at its principal office or at the office of its
counsel, accountants or transfer agent, an original or duplicate share ledger
containing the name and address of each shareholder and the number of shares of
each class held by such shareholder.
Section 6. FRACTIONAL SHARES: ISSUANCE OF UNITS.
The Trust Managers may issue fractional shares or provide for the issuance of
scrip, all on such terms and under such conditions as they may determine.
Notwithstanding any other provision of the Declaration of Trust, as amended, or
these Bylaws, the Trust Managers may issue units consisting of different
securities of the Trust. Any security issued in a unit shall have the same
characteristics as any identical securities issued by the Trust, except that the
Trust Managers may provide that for a specified period securities of the Trust
issued in such unit may be transferred on the books of the Trust only in such
unit.
ARTICLE VIII
ACCOUNTING YEAR
The Trust Managers shall have the power, from time to time, to fix the fiscal
year of the Trust by a duly adopted resolution.
ARTICLE IX
DIVlDENDS
Section 1. DECLARATION
Dividends upon the shares of the Trust may be declared by the Trust Managers,
subject to the provisions of law and the Declaration of Trust, as amended.
Dividends may be paid in cash, property of shares of the Trust, subject to the
provisions of law and the Declaration of Trust, as amended.
Section 2. CONTINGENCIES.
Before payment of any dividends there may be set aside out of any funds of the
Trust available for dividends such sum or sums as the Trust Manager may from
time to time, in their absolute discretion, think proper as a reserve fund for
contingencies, for equalizing dividends, for repairing or maintaining any
property of the Trust or for such other purpose as the Trust Managers shall
determine to be in the best interest of the Trust, and the Trust Managers may
modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
PROHIBITED INVESTMENTS AND ACTIVITIES
Notwithstanding anything to the contrary in the Declaration of Trust, as
amended, the Trust shall not make any interests of the Trust, and will not,
without the approval of a majority of the disinterested Trust Mangers, (i)
acquire from or sell to any Trust Manager, officer or employee of the Trust, any
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in which a Trust Manager, officer or employee of the Trust owns more
than a one percent interest or any affiliate of any of the foregoing, any of the
assets or other property of the Trust, except for the acquisition, directly or
indirectly of certain properties and partnership interests in connection with
the initial public offering of shares by the Trust, which properties and
partnership interests shall be described in the prospectus relating to such
initial public offering, (ii) make any loan to or borrow from any of the
foregoing person or (iii) engage in any other transaction with any of the
foregoing persons. Each such transaction will be in all respects on such terms
as are, as the time of the transaction and under the circumstances then
prevailing, fair and reasonable to the Trust.
ARTICLE XI
SEAL
Section 1. SEAL.
The Trust Managers may authorize the adoption of a seal by the Trust. The seal
shall have inscribed thereon the name of the Trust and the year of its
organization. The Trust Managers may authorize one or more duplicate seals and
provide for the custody thereof.
Section 2. AFFIXING SEAL.
Whenever the Trust is required to place its seal to a document, it shall be
sufficient to meet the requirements of any law, rule or regulation relating to a
seal to place the word "(SEAL) n adjacent to the signature of the person
authorized to execute the document on behalf of the Trust.
ARTICLE XII
INDEMNIFICATION AND ADVANCES FOR EXPENSES
To the maximum extent permitted by Maryland law in effect from time to time, the
Trust, without requiring a preliminary determination of the ultimate entitlement
to indemnification, shall indemnify (a) any Trust Managers, officer or
shareholder or any former Trust Managers, officer or shareholder (including
among the foregoing, for all purposes of this Article XII and without
limitation, any individual who, while a Trust Manager, officer or shareholder at
the express request of the Trust, serves or has served another corporation,
partnership, joint venture, trust, employee benefit plan or any other enterprise
as a director, officer, shareholder, partner or trust manager of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) who has been successful, on the merits or otherwise, in the defense
of a proceeding to which he was made a party by reason of service in proceeding
to which he was made a party by reason of service in connection with the
proceeding, (b) any Trust Manager or officer or any former Trust Manager or
officer against any claim or liability to which he may become subject by reason
of such status unless it is established that (i) his act or omission was
material to the matter giving rise to the proceeding and was committed in bad
faith or was the result of active and deliberate dishonesty, (ii) he actually
received an improper personal benefit in money, property or services or (iii) in
the case of a criminal proceeding, he had reasonable cause to believe that his
act or omission was unlawful and (c) each shareholder or former shareholder
against any claim or liability to which he may become subject by reason of such
status. In addition, the Trust shall pay or reimburse, in advance of final
disposition of a proceeding, reasonable expenses incurred by a Trust Manager,
officer or shareholder or former Trust Manager, officer or shareholder made a
party to a proceeding by reason of such status, provided that, in the case of a
Trust Manager or officer, the Trust shall have received (i) a written
affirmation by the Trust Manager or officer of his good faith belief that he has
met the applicable standard of conduct necessary for indemnification by the
Trust as authorized by these Bylaws and (ii) a written undertaking by or on his
behalf to repay the amount paid or reimbursed by the Trust if it shall
ultimately be determined that the applicable standard of conduct was not met.
The Trust may, with the approval of its Trust Mangers, provide such
indemnification and payment or reimbursement of expenses to any Trust Manager,
officer or shareholder or any former Trust Manager, officer or shareholder who
served a predecessor of the Trust. Neither the amendment nor repeal of this
Article, nor the adoption or amendment of any other provision of the Declaration
of Trust, as amended, or these Bylaws inconsistent with this Article, shall
apply to or affect in any respect the applicability of this Article with respect
to any act or failure to act which occurred prior to such amendment, repeal or
adoption.
Any indemnification or payment or reimbursement of the expenses permitted by
these Bylaws shall be furnished in accordance with the procedures provided for
indemnification or payment or reimbursement of expenses, as the case may be,
under Section 2-418 of the Maryland General Corporation Law (the MGCL") for
directors of Maryland corporations. The Trust may provide the Trust Managers,
payment or reimbursement of expenses to the fullest extent permitted by the
MGCL, as in effect from time to time, for directors of Maryland corporations. In
the event of a conflict between these Bylaws and the terms of any
Indemnification Agreement between the Trust and any Trust Manager of Executive
Officer of the Trust, the terms of the Indemnification Agreement shall prevail.
ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the Declaration of
Trust, as amended, or Bylaws or pursuant to or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Neither the business to be transacted at nor the
purpose of any meeting need be set forth in the waiver of notice, unless
specifically required by statute. The attendance of any person at any meeting
shall constitute a waiver of notice of such meeting, except where such person
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.
ARTICLE XIV
AMENDMENT OF BYLAWS
The Trust Manager shall have the exclusive power to adopt, alter or repeal any
provision of these Bylaws and to make new Bylaws.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE JUNE 30, 1996 FINANCILA STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 637,166
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 663,864
<PP&E> 9,721,325
<DEPRECIATION> 864,169
<TOTAL-ASSETS> 9,583,380
<CURRENT-LIABILITIES> 347,016
<BONDS> 5,681,403
0
0
<COMMON> 5,250
<OTHER-SE> 3,549,712
<TOTAL-LIABILITY-AND-EQUITY> 9,583,380
<SALES> 1,000,825
<TOTAL-REVENUES> 1,020,554
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 540,826
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 189,203
<INCOME-PRETAX> 92,250
<INCOME-TAX> 0
<INCOME-CONTINUING> 92,250
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92,250
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.18
</TABLE>
