Exhibit 3.2
BYLAWS
OF
MAXUS REALTY TRUST, INC.
AS AMENDED ON MAY 13, 2003
TABLE OF CONTENTS
Page
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ARTICLE I THE TRUST: DEFINITIONS..............................................1
1.1 Name.........................................................1
1.2 Places of Business...........................................1
1.3 Nature of Trust..............................................1
1.4 Definitions..................................................1
ARTICLE II TRUSTEES...........................................................4
2.1 Number of Trustees...........................................4
2.2 Election and Term of Office..................................5
2.3 Vacancies....................................................5
2.4 Place of Meeting.............................................5
2.5 Organization Meetings........................................5
2.6 Regular Meetings.............................................5
2.7 Special Meetings.............................................5
2.8 Quorum.......................................................6
2.9 Executive Committee..........................................6
2.10 Audit Committee..............................................6
2.11 Other Committees.............................................7
2.12 Action by Written Consent....................................7
2.13 Fees and Compensation........................................7
2.14 Independent Trustees.........................................7
2.15 Removal of Trustee by Board of Trustees......................8
2.16 Removal of Trustees by Shareholders..........................8
ARTICLE III TRUSTEES' POWERS..................................................8
3.1 Power and Authority of Trustees..............................8
3.2 Trustees' Regulations.......................................12
3.3 Limit on Trustees' Obligations..............................12
3.4 Independent Trustees........................................12
ARTICLE IV OFFICERS..........................................................14
4.1 Officers....................................................14
4.2 Election and Term of Office.................................14
4.3 Subordinate Officers........................................14
4.4 Compensation................................................14
4.5 Chairman of the Board.......................................14
4.6 President...................................................14
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TABLE OF CONTENTS
(Continued)
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4.7 Executive or Senior Vice Presidents.........................15
4.8 Vice Presidents.............................................15
4.9 Secretary...................................................15
4.10 Assistant Secretaries.......................................15
4.11 Treasurer...................................................15
4.12 Assistant Treasurer.........................................16
ARTICLE V ADVISOR; LIMITATION ON OPERATING EXPENSES..........................16
5.1 Employment of Advisor.......................................16
5.2 Qualification of Advisor....................................16
5.3 Contract with Advisor.......................................17
5.4 Other Activities of the Advisor.............................17
5.5 Limitation on Total Operating Expenses of the Trust.........17
ARTICLE VI INVESTMENT POLICY.................................................18
6.1 General Statement of Policy.................................18
6.2 Restrictions................................................20
6.3 Appraisals..................................................21
ARTICLE VII MEETINGS OF SHAREHOLDERS.........................................21
7.1 Place of Meetings...........................................21
7.2 Annual Meetings.............................................21
7.3 Special Meetings............................................21
7.4 Closing of Transfer Books and Fixing of Record Dates........22
7.5 Quorum......................................................23
7.6 Voting of Shares............................................23
7.7 Action by Written Consent...................................23
7.8 Proxies.....................................................23
ARTICLE VIII SHARES OF STOCK.................................................24
8.1 Certificates................................................24
8.2 Transfer Agent, Dividend Disbursing Agent, Dividend
Reinvestment Plan Agent and Registrar.......................24
8.3 Transfer Agents and Registrars; Facsimile Signatures........24
8.4 Lost Certificates...........................................25
8.5 Transfer of Shares..........................................25
8.6 Registered Shareholders.....................................25
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TABLE OF CONTENTS
(Continued)
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8.7 Shareholders' Disclosure; call of Shares; Right to Refuse
to Transfer Shares or Warrants..............................26
8.8 Limitation on Acquisition and ownership Of Shares and
Warrants....................................................27
8.9 Dividends or Distributions to Shareholders..................28
ARTICLE IX LIABILITY OF TRUSTEES, SHAREHOLDERS AND
OFFICERS AND OTHER MATTERS....................................................28
9.1 Exculpation of Trustees, Officers and Others................28
9.2 (a) Actions Involving Directors, Officers and Employees....29
9.3 Right of Trustees, Officers and Others to Own Shares or
Other Property and to Engage in Other Business..............31
9.4 Transactions Between the Trust, the Trustees, the Advisor,
and Certain Affiliates......................................31
9.5 Persons Dealing with Trustees or Officers...................33
9.6 Reliance....................................................33
9.7 Income Tax Status...........................................34
ARTICLE X MISCELLANEOUS......................................................34
10.1 Reports to Shareholders.....................................34
10.2 Notices.....................................................34
10.3 Inspection of Bylaws........................................35
10.4 Inspection of Corporate Records.............................35
10.5 Checks......................................................35
10.6 Fiscal Year.................................................35
10.7 Seal........................................................35
10.8 Power of Shareholders in Event of Merger or Sale of
Assets......................................................35
10.9 Conflicting Provisions......................................36
ARTICLE XI AMENDMENTS........................................................36
iii
BYLAWS
OF
MAXUS REALTY TRUST, INC.
AS AMENDED ON MAY 13, 2003
ARTICLE I
THE TRUST: DEFINITIONS
1.1 Name. The name of the corporation is "Maxus Realty Trust, Inc." Maxus
Realty Trust, Inc. is referred to herein as the "Trust". As far as practicable
and except as otherwise provided in the Articles of Incorporation and these
Bylaws, the Trustees (as defined in Section 1.4(x) hereof) shall manage the
business, conduct the affairs of the Trust and execute all documents in the name
of Maxus Realty Trust, Inc.
1.2 Places of Business. The registered office of the Trust in Missouri
shall be located at 7701 Forsyth Boulevard, St. Louis, Missouri 63105 or at such
other address within the State of Missouri as the Board of Trustees may from
time to time authorize by duly adopted resolution. The Trust may maintain such
other offices or places of business both within and without the State of
Missouri as the Trustees may from time to time determine or as the business of
the Trust may require.
1.3 Nature of Trust. The Trust is a corporation organized under the laws
of the State of Missouri. It is intended that the Trust shall qualify as a "real
estate investment trust" under the REIT Provisions of the Internal Revenue Code
during such period as the Trustees shall deem it advisable so to qualify the
Trust.
1.4 Definitions. As used in these Bylaws, the following terms shall have
the following meanings unless the context otherwise requires:
(a) Administrator. "Administrator" shall mean the official or agency
administering the securities laws of a jurisdiction.
(b) Advisor. "Advisor" shall mean any Person responsible for
directing or performing the day-to-day business affairs of the Trust, including
any Person to whom an Advisor subcontracts substantially all of such functions.
(c) Affiliate. "Affiliate" of a specified Person (the "Specified
Person")shall mean any Person (i) who directly or indirectly controls, is
controlled by, or is under common control with the Specified Person; (ii) who
owns or controls ten percent (10%) or more of the Specified Person's outstanding
voting securities; (iii) in whom such Specified Person owns or controls ten
percent (10%) or more of the outstanding voting securities; (iv) who is a
director, partner, executive officer or trustee of the Specified Person; or (v)
in whom the Specified Person is a director, partner, executive officer or
trustee.
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(d) Annual meeting of Shareholders. "Annual Meeting of Share-holders"
shall mean the meeting referred to in Section 7.2 hereof.
(e) Annual Report. "Annual Report" shall mean the report referred to
in section 10.1 hereof.
(f) Appraisal. "Appraisal" shall mean a determination of the fair
market value, as of the date of the Appraisal, of real property in its existing
state or in a state to be created, such determination to be made by a qualified
independent real estate appraiser selected by the Independent Trustees.
(g) Articles of Incorporation. "Articles of Incorporation" shall
mean the original Articles of Incorporation of the Trust and all amendments
thereto.
(h) Average Invested Assets. "Average Invested Assets" for any period
shall mean the average of the aggregate book value (on an historical cost basis)
of the assets of the Trust invested, directly or indirectly, in equity interests
in and loans secured by real estate, before reserves for depreciation or bad
debts or other similar non-cash reserves, computed by taking the average of such
values at the end of each month during such period.
(i) Board of Trustees. "Board of Trustees" shall mean, as of any
particular time, the members of the Board of Directors of the Trust.
(j) Bylaws. "Bylaws" shall mean these Bylaws and all amendments,
restatements or modifications thereof. References in these Bylaws to "herein",
"hereof" and "hereunder" shall be deemed to refer to these By laws and shall not
be limited to the particular text, article or section in which such words
appear.
(k) Independent Trustee(s). "Independent Trustee(s)" shall mean the
Trustee(s) of the Trust who are not Affiliates, either directly or indirectly,
of the Advisor or of any business entity which is an Affiliate of the Advisor.
An indirect relationship shall include circumstances in which a member of the
immediate family of a Trustee is an Affiliate of the Advisor or the Trust. The
"immediate family" of a Trustee shall include only such Trustee's parents,
grandparents, brothers and sisters, spouse, children and grandchildren.
(l) Internal Revenue Code. "Internal Revenue code" shall mean the
Internal Revenue Code of 1954, as amended.
(m) 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.
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(n) Net Income. "Net Income" for any period shall mean total revenues
applicable to such period, less the expenses applicable to such period other
than additions to reserves for depreciation or bad debts or other similar
non-cash reserves.
(o) Person. "Person" shall mean any individual, corporation,
partnership, trust or other entity.
(p) REIT. "REIT" shall mean a real estate investment trust, as
defined in the Internal Revenue Code.
(q) REIT Provisions of the Internal Revenue Code. "REIT Provisions of
the Internal Revenue Code" shall mean Part II of Subchapter M of Chapter 1 of
Subtitle A of the Internal Revenue Code, as now enacted or hereafter amended, or
successor statutes, and any regulations and rulings promulgated thereunder.
(r) Securities. "Securities" shall mean any Shares, stock, shares,
voting trust certificates, bonds, limited partnership interests, debentures,
notes, or other evidences of indebtedness or ownership or, in general, any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for, receipts for,
guarantees of, or warrants, options or rights to subscribe to purchase or
acquire any of the foregoing.
(s) Shares. "Shares" shall mean the shares of common stock of the
Trust, as described in Article VIII hereof.
(t) Shareholders. "Shareholders" shall mean, as of any particular
time, the holders of record of outstanding Shares at such time.
(u) Total Assets. "Total Assets" shall mean the total assets of the
Trust as shown on its balance sheet, without deducting therefrom any liabilities
of the Trust and without deducting depreciation or other non-cash reserves.
(v) Total operating Expenses of the Trust. "Total Operating Expenses
of the Trust" for any period shall mean all expenses of the Trust regarded as
operating expenses in accordance with generally accepted accounting principles,
including expenses paid directly or indirectly by the Trust to the Advisor,
Affiliates of the Advisor, or by third parties based upon their relationship
with the Trust, including loan administration, servicing, engineering,
inspection and all other operating expenses paid by the Trust, exclusive of
(i) the cost of money borrowed by the Trust;
(ii) taxes on income and taxes and assessments on real property
and all other taxes applicable to the Trust;
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(iii) legal, auditing, accounting, underwriting, brokerage,
private placement, listing, registration and other fees and printing, engraving
and other expenses and taxes incurred in connection with the organization of the
Trust and the issuance, distribution, transfer, registration and listing of the
Trust's securities, including compensation and direct expenses of partners,
officers and employees of the Advisor and its Affiliates while directly engaged
in such activities on behalf of the Trust;
(iv) expenses connected directly with the acquisition,
financing, refinancing, disposition, operation, maintenance and management of
Trust assets, including but not limited to fees payable to the Advisor or its
Affiliates in connection with the acquisition and disposition of Trust assets
(including Incentive Compensation, as defined in the Advisory Agreement between
the Trust and Nooney Advisors Ltd.), expenses connected with the maintenance,
repair and improvement of Trust property, property management fees, leasing
commissions, legal and accounting fees, premiums for insurance on property owned
by the Trust, taxes, brokerage and sales commissions, title insurance and
abstract expenses, provisions for depreciation, depletion and amortization, and
losses on the disposition of assets and provisions for such losses;
(v) expenses connected with communications to holders of
Securities of the Trust and other bookkeeping and clerical work necessary in
maintaining relations with holders of such Securities, including legal expenses;
the cost of printing and mailing certificates for Securities, proxy solicitation
materials and reports to holders of the Trust's Securities; and transfer
agents', warrant agents' and dividend reinvestment plan agents' fees and
expenses; and
(vi) expenses related to the organization, modification,
reorganization or liquidation of the Trust.
(w) Trust. "Trust" shall mean Maxus Realty Trust, Inc.
(x) Trustees. "Trustees" shall mean, as of any particular time, the
directors of the Trust holding office at such time.
(y) Trust Estate. "Trust Estate" shall mean, as of any particular time,
any and all property, real, personal or otherwise, tangible or intangible, which
is owned or held by the Trust, including but not limited to property which is
transferred, conveyed or paid to the Trust and all rents, income, profits and
gains therefrom.
ARTICLE II
TRUSTEES
2.1 Number of Trustees. Unless and until changed by action of a
majority of the entire Board of Trustees, the number of Trustees to
constitute the Board of Trustees shall be nine (9), and, subject to the
provisions of Section 2.14, at least a majority of the Trustees shall
at all times be Independent Trustees. Any change in the number of
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members of the Board of Trustees shall be reported to the Secretary of State
of Missouri within thirty (30) calendar days of such change. No reduction in
the number of Trustees shall affect the term of office of any incumbent Trustee.
2.2 Election and Term of Office. The Trustees, other than the initial Board
of Trustees, shall be elected at the Annual Meeting of Shareholders, and each
Trustee shall serve until the next succeeding Annual Meeting of Shareholders and
until his successor shall have been elected and qualified. The initial Board of
Trustees shall hold office until the first Annual Meeting of Shareholders.
2.3 Vacancies. Vacancies on the Board of Trustees, including vacancies
created by an increase in the number of Trustees, may be filled by the vote of a
majority of the Trustees then in office, although less than a quorum, or by a
sole remaining Trustee; provided, however, that replacements for vacancies
amongst the Independent Trustees' positions shall be nominated by the
Independent Trustees pursuant to Section 2.14 hereof so long as there remains
one Independent Trustee in office. Each Trustee so elected shall hold office
until the next election of Trustees by the Shareholders.
2.4 Place of Meeting. The Trustees may hold their meetings and keep the
books of the Trust at the registered office of the Trust or at such other place
as they may from time to time determine and as may be permitted by law. Trustees
may participate in a meeting of the Board of Trustees or in a meeting of any
committee designated by the Board of Trustees by means of conference telephone
or similar communications equipment whereby all Persons participating in the
meeting can hear each other, and participation in a meeting in this manner shall
constitute presence in person at the meeting.
2.5 Organization Meetings. The first organization meeting of the Board of
Trustees shall be held as soon as convenient after the organization of the Trust
at the call of a majority of the Trustees. Thereafter, the Board of Trustees
shall hold a regular meeting for the purpose of organization, election of
officers and the transaction of other business immediately following each Annual
Meeting of Shareholders. Notice of such meetings, with the exception of the
initial organization meeting, is hereby dispensed with.
2.6 Regular Meetings. Regular meetings of the Board of Trustees may be held
without notice at such time and place as shall from time to time be determined
by the Board of Trustees.
2.7 Special Meetings. Special meetings of the Board of Trustees for
any purpose or purposes may be called by any Trustee or, upon the written
request of any Trustee, by the president or secretary of the Trust. Written
notice of the time and place of special meetings shall be delivered personally
to the Trustees or sent to each Trustee by mail or by other form of written
communication, charges prepaid, addressed to the Trustee at such address
as appears on the records of the Trust. In case such notice is mailed, it shall
be deposited in the United States mail in the place in which the registered
5
office of the Trust is located at least four (4) days prior to the time of the
special meeting. In case such notice is delivered personally or telegraphed, it
shall be so delivered or deposited with the telegraph company at least forty-
eight (48) hours prior to the time of the meeting.
2.8 Quorum. At all meetings of the Board of Trustees a majority of the
entire Board of Trustees shall be necessary and sufficient to constitute a
quorum for the transaction of business and the act of a majority of the Trustees
present at any meeting at which there is a quorum shall be the act of the Board
of Trustees, except as may be otherwise specifically provided by statute, by the
Articles of Incorporation or by these Bylaws. If a quorum shall not be present
at any meeting of Trustees, the Trustees present thereat may adjourn the
meeting, from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
2.9 Executive Committee. The Board of Trustees, by resolution adopted by a
majority of the entire Board of Trustees, may designate three (3) or more
Trustees to constitute an Executive Committee; provided, however, that subject
to the provisions of Section 2.14, at least a majority of the members of the
Executive Committee shall at all times be Independent Trustees. The Executive
Committee shall have and may exercise, between meetings of the Board of
Trustees, all of the authority of the Board of Trustees in the management of the
Trust. Vacancies in the membership of the Executive Committee shall be filled by
the Board of Trustees at any regular or special meeting of the Board of
Trustees. The Executive Committee shall keep regular minutes of its proceedings
and report the same to the Board of Trustees when requested. Notwithstanding the
foregoing, the designation of an Executive Committee shall not operate to
relieve the Board of Trustees or any member thereof of any responsibility
imposed upon it or him by statute, the REIT Provisions of the Internal Revenue
Code, the Articles of Incorporation or these Bylaws.
2.10 Audit Committee. The Board of Trustees, by resolution adopted
by a majority of the entire Board of Trustees, may designate three (3)
or more Independent Trustees to constitute the Audit Committee. The Audit
Committee shall recommend to the Board of Trustees the accounting firm to be
selected by the Board of Trustees as independent auditor of the Trust, and
shall act on behalf of the Board of Trustees in meeting and reviewing with
the independent auditors and the appropriate Trust officers matters relating
to Trust financial reporting and accounting procedures and policies, the
adequacy of Trust financial, accounting and operating controls and the
scope of the respective audits of the independent auditors and the internal
auditor, if any. The Audit Committee shall additionally submit to the Board
of Trustees any recommendations it may have from time to time with respect
to Trust financial reporting and accounting practices and policies and
financial, accounting, and operation controls and safeguards, and shall have
such other duties as shall be specified by resolution of the Board of Trustees.
Vacancies in the membership of the Audit Committee shall be filled by the Board
of Trustees at any regular or special meeting of the Board of Trustees.
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Notwithstanding the foregoing, the designation of an Audit Committee shall
not operate to relieve the Board of Trustees or any member thereof of any
responsibility imposed upon it or him by statute, the REIT Provisions of the
Internal Revenue Code, the Articles of Incorporation or these Bylaws.
2.11 Other Committees. The Board of Trustees, by resolution adopted by a
majority of the entire Board, may designate three (3) or more Trustees to
constitute such other committees of the Board of Trustees as the Board of
Trustees by resolution may establish; provided, however, that, subject to the
provisions of Section 2.14, at least a majority of the members of each such
committee shall at all times be Independent Trustees. Each such committee, to
the extent provided in the resolutions establishing the committee, shall have
and exercise all of the authority of the Board of Trustees in the management of
the Trust. Vacancies in the membership of any such committee shall be filled by
the Board of Trustees at any regular or special meeting of the Board of
Trustees. Notwithstanding the foregoing, the designation of any such committees
and the delegation thereto of authority shall not operate to relieve the Board
of Trustees or any member thereof, of any responsibility imposed upon it or him
by statute, the REIT Provisions of the Internal Revenue Code, the Articles of
Incorporation or these Bylaws.
2.12 Action by Written Consent. Any action which is required to be or may be
taken at a meeting of the Trustees or of any committee of the Trustees may be
taken without a meeting if consents in writing, setting forth the action so
taken, are signed by all of the members of the Board of Trustees or of the
committee, as the case may be.
2.13 Fees and Compensation. The Trustees shall be entitled to receive
expenses of attendance, if any, for attendance at meetings of the Board and such
reasonable compensation for their services as Trustees as the Trustees may fix
or determine from time to time by resolution of the Board of Trustees; provided,
however, that the Trustees of the Trust who are Affiliates of the Advisor or of
business entities which are Affiliates of the Advisor shall not receive
Compensation from the Trust for their services as Trustees of the Trust. The
Trustees shall also be entitled to receive, directly or indirectly, compensation
for services rendered to the Trust in any other capacity including, without
limitation, services as an officer of the Trust, legal, accounting or other
professional services, or services as a transfer agent, warrant agent,
underwriter or broker; provided, however, that Trustees of the Trust who are
directors, partners, officers, employees and agents of the Advisor or of
Affiliates of the Advisor shall receive no compensation from the Trust for their
services as officers of the Trust, except while directly engaged on behalf of
the Trust in activities connected with the organization of the Trust and the
issuance, distribution, transfer, registration and listing of the Trust's
Securities.
2.14 Independent Trustees. A majority of the Trustees of
the Trust and a majority of the members of any Trust committee
shall at all times be Independent Trustees; provided, however,
that in the event that an Independent Trustee shall cease to
7
be a Trustee, whether by reason of resignation, removal, death,
incapacity or otherwise, the Board of Trustees shall have a reasonable period of
time to fill the vacancy created by the departure of such Independent Trustee
with another Independent Trustee. Replacements for vacancies amongst the
Independent Trustees' positions shall be nominated by the Independent Trustees
so long as there remains one Independent Trustee in office.
2.15 Removal of Trustee by Board of Trustees. Any Trustee may be removed for
cause by action of a majority of the entire Board of Trustees if the Trustee to
be removed, at the time of removal, shall fail to meet the qualifications stated
in the Articles of Incorporation or these Bylaws for election as a Trustee or
shall be in breach of any agreement between such Trustee and the Trust relating
to such Trustee's services as a Trustee or employee of the Trust. Notice of any
proposed removal shall be given to all Trustees prior to action thereon.
2.16 Removal of Trustees by Shareholders. The entire Board of Trustees may
be removed, with or without cause, by a vote of the holders of a majority of the
outstanding Shares then entitled to vote at an election of Trustees at a meeting
of Shareholders called for the express purpose of removing Trustees and held at
the registered office of the Trust or in the county in which the registered
office is located. If less than the entire Board is to be removed at such a
meeting, no one of the Trustees may be removed if the votes cast against his
removal would be sufficient to elect him if then cumulatively voted at an
election of the entire Board of Trustees.
ARTICLE III
TRUSTEES' POWERS
3.1 Power and Authority of Trustees. The property and business of the Trust
shall be controlled and managed by the Board of Trustees. Notwithstanding the
designation "Trustees", the Trustees will have no different or greater level of
fiduciary duty and responsibility than do directors of any Missouri business
corporation. All powers of the Trust may be exercised by or under authority of
the Board of Trustees, except as conferred on or reserved to the Shareholders by
statute, by the Articles of Incorporation or by these Bylaws. Without prejudice
to such general powers but subject to the same limitations, and in addition to
any other powers conferred on the Trustees by law, the Articles of Incorporation
and these Bylaws, it is hereby expressly declared that the Trustees shall have
the following powers and authorities which may be exercised by them at any time
and from time to time, 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 purchase or otherwise acquire for such
consideration as the Trustees deem proper and to hold for investment,
all on behalf of the Trust, real and personal property of
8
any kind, tangible or intangible, in entirety or in participation, all without
regard to whether any such property is authorized by law for the investment of
Trust funds.
(b) To sell, rent, lease, hire, exchange, release, partition, negotiate,
convey, transfer or otherwise dispose of any of the Trust's properties and
assets in the ordinary course of its business without Shareholder approval.
(c) To authorize the issue of Shares or other Securities of the Trust,
which may be secured or unsecured and may be subordinated to any indebtedness of
the Trust and may be convertible into Shares, and to grant warrants, options or
other rights to acquire Shares to such Persons at such times and on such terms
as the Trustees may deem advisable, and to list any of the foregoing Shares,
other Securities, warrants, options or rights issued by the Trust on any
securities exchange or to include them in the National Association of Securities
Dealers, Inc. Automated Quotations System or other over-the-counter market, and
to purchase or otherwise acquire, hold, cancel, reissue, sell and transfer any
of such Shares, other Securities, warrants, options or rights; provided,
however, that the Trustees shall not
(i) Issue any non-voting or assessable Security;
(ii) Issue equity Securities of more than one class;
(iii) issue any redeemable equity Security, which shall mean any
security, other than short-term paper, under the terms of which the holder, upon
its presentation to the issuer or to a Person designated by the issuer, is
entitled (whether absolutely or only out of surplus) to receive approximately
his proportionate share of the issuer's current Net Assets, or the cash
equivalent thereof;
(iv) Issue debt Securities unless the historical debt service
coverage in the most recently completed fiscal year, as adjusted for known
changes, is sufficient to properly service such debt;
(v) Other than in connection with the initial public offering,
issue options or warrants to purchase its Shares at exercise prices less than
the fair market value of such Shares on the date of grant and for consideration
(which may include services) that, in the judgment of the Independent Trustees,
has a market value less than the value of such options or warrants on the date
of grant;
(vi) Other than in connection with the initial public offering,
issue options or warrants or similar evidences of a right to acquire its
Securities unless issued (A) to all of its Security holders ratably, (B) as a
part of a financing arrangement, or (C) as part of a stock option plan for
Trustees, officers and employees of the Trust;
(vii) Issue options or warrants to purchase its Shares that are
exercisable more than five (5) years from their date of issuance; or
9
(viii)Issue options or warrants to purchase its Shares upon such
terms and in such amounts that the aggregate number of Shares issuable at any
time upon exercise of the outstanding options and warrants would exceed an
amount equal to ten percent (10%) of the outstanding Shares of the Trust on the
date of the grant of any of the options or warrants.
(d) To enter into leases, contracts, obligations, and other agreements
for a term extending beyond the term of office of the Trustees and beyond the
possible termination of the Trust or for a lesser term.
(e) To borrow money and incur indebtedness for the purposes of the Trust
and to cause to be executed and delivered therefor, in the Trust name,
promissory notes, bonds, debentures, deeds of trust, mortgages, pledges,
hypothecations or other evidences of debt and Securities therefor; to guarantee,
indemnify or act as surety with respect to payment or performance of obligations
of third parties; to enter into other obligations on behalf of the Trust; and to
assign, convey, transfer, mortgage, subordinate, pledge, grant security
interests in, encumber or hypothecate the Trust Estate to secure any of the
foregoing; provided, however, that:
(i) the aggregate borrowings of the Trust, secured and
unsecured, shall be reasonable in relation to the Net Assets of the Trust and
shall be reviewed by the Trustees at least quarterly;
(ii) [Intentionally omitted]; and
(iii) [Intentionally omitted].
(f) To create reserve funds for any purpose.
(g) To incur and pay out of the Trust Estate any charges or expenses,
and disburse any funds of the Trust, which charges, expenses or disbursements
are, in the opinion of the Trustees, necessary or incidental to or desirable for
the carrying out of any of the purposes of the Trust or conducting the business
of the Trust, including without limitation taxes and other governmental levies,
charges and assessments, of whatever kind or nature, imposed upon or against the
Trust Estate or any part thereof, and for any of the purposes herein.
(h) 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, officers,
agents or representatives) as the Trustees may determine.
(i) 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
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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 in exchange for the Securities thereof or otherwise, and to lend
money to, subscribe for the Securities of, and enter into any contracts with,
any such Person in which the Trust holds or is about to acquire Securities
or any other interest.
(j) To enter into and participate in any plan of reorganization,
consolidation, merger, combination, or other similar plan, to enter into any
contract or agreement in connection with any such plan and to do all things
necessary and proper or that the Trustees deem advisable in carrying out any
such plan.
(k) To enter into joint ventures, general or limited partnerships and
any other lawful combinations or associations with independent third parties or
with the Advisor or its Affiliates or a combination thereof; and provided
further that the terms and conditions of any joint venture, combination or
association entered into with the Advisor or its Affiliates have been approved
by a majority of the disinterested Trustees.
(l) To select and remove all officers, agents, representatives,
employees and independent contractors of the Trust, to prescribe such powers and
duties for them as may not be inconsistent with law, the Articles of
Incorporation and these Bylaws, and to fix their compensation; provided,
however, that no Affiliate of the Advisor may be selected as an officer, agent,
representative, employee or independent contractor of the Trust except with the
approval of a majority of the Independent Trustees.
(m) To determine from time to time the value of all or any part of the
Trust Estate and of any services, Securities, property or other consideration
to be furnished to or acquired by the Trust, and from time to time to revalue
all or any part of the Trust Estate in accordance with such Appraisals or
other information as the Trustees, in their sole judgment, may deem necessary.
(n) To collect, sue for, and receive all sums of money coming due to the
Trust, and to engage in, intervene in, prosecute, join, defend, compound,
compromise, abandon or adjust, by arbitration or otherwise, any actions, suits,
proceedings, disputes, claims, controversies, demands or other litigation
relating to the Trust, the Trust Estate or the Trust's affairs, to enter into
agreements therefor, whether or not any suit is commenced or claim accrued or
asserted and, in advance of any controversy, to enter into agreements regarding
arbitration, adjudication or settlement thereof.
(o) To renew, modify, release, compromise, extend, consolidate or
cancel, in whole or in part, any obligation to or of the Trust.
(p) To purchase and pay for out of the Trust Estate
insurance contracts and policies insuring the Trust Estate
against any and all risks and insuring the Trust, the
11
Trustees, the Shareholders, officers, agents, representatives, employees and
independent contractors of the Trust, or any or all of them, against any and
all claims and liabilities of every nature asserted by any Person arising by
reason of any action alleged to have been taken or omitted by the Trust or by
any such Person as Trustee, shareholder, officer, agent, representative,
employee or independent contractor, whether or not the Trust would have the
power to indemnify such Person against such liability.
(q) To from time to time change the fiscal year of the Trust.
(r) To file any and all documents and take any and all such action as
the Trustees, in their sole judgment, may deem necessary in order that the Trust
may lawfully conduct its business in any jurisdiction.
(s) To appoint, employ or contract with an independent contractor to
serve as the manager of the property of the Trust; provided, however, that any
determination to appoint, employ or contract with such an independent contractor
shall be valid only if made or ratified with the approval of a majority of the
Independent Trustees.
(t) Generally to exercise all of the powers and to perform all of the
acts and duties that from time to time may be permitted by law appertaining to
their office.
3.2 Trustees' Regulations. The Trustees may make, adopt, amend or repeal
regulations containing provisions relating to the business of the Trust, the
conduct of its affairs, its policies on investment and borrowing, its rights or
powers and the rights or powers of its Shareholders, Trustees or officers, which
regulations shall be consistent with law, the REIT Provisions of the Internal
Revenue Code, the Articles of Incorporation and these Bylaws.
3.3 Limit on Trustees' Obligations. The Trustees, in their capacity as
Trustees, shall not be required to devote their entire time to the business and
affairs of the Trust.
3.4 Independent Trustees. Notwithstanding any other provision of these
Bylaws, the Independent Trustees, in addition to their other duties, to the
extent that they may legally do so, shall:
(a) Monitor the relationship of the Trust with the Advisor. In
this regard, the Independent Trustees as a group, in addition to all Trustees
as a group, will have a fiduciary duty to the Shareholders to supervise
the relationship of the Trust with the Advisor. The Independent Trustees
will monitor the Advisor's performance of its contract and will determine at
least annually that the Advisor's compensation is reasonable in relation to the
nature and quality of services performed. Each such determination will be
based on (i) the amount of the Advisor's compensation in relation to the size,
composition and profitability of the Trust's portfolio, (ii) the investment
12
opportunities generated by the Advisor, (iii) advisory fees paid by other
real estate investment trusts and by investors other than real estate investment
trusts to advisors performing services similar to those performed by the
Advisor, (iv) other compensation paid to the Advisor and its Affiliates by
the Trust or by others with whom the Trust does business, including underwriting
and brokerage commissions, (v) the quality and extent of service and advice
furnished by the Advisor, (vi) the performance of the investment portfolio of
the Trust, (vii) the quality of the investment portfolio of the Trust in
relation to the investments generated by the Advisor for its own account, and
(viii) all other factors such Independent Trustees may deem relevant.
(b) Review the Trust's investment policies at least annually to
determine that such policies remain in the best interests of the Shareholders.
(c) Take reasonable steps to ensure that the Annual Report is sent
to Shareholders pursuant to Section 10.1 and that the Annual Meeting is
conducted pursuant to Article VII hereof.
(d) Determine at least annually that the total fees and expenses of the
Trust are reasonable in light of its Net Assets, Net Income, investment
experience, and the fees and expenses of other comparable advisors in real
estate. In this regard, the Independent Trustees will have the fiduciary
responsibility for limiting Total Operating Expenses of the Trust to the greater
of two percent (2%) of the Trust's Average Invested Assets or twenty-five
percent (25%) of its Net Income in any fiscal year unless such Independent
Trustees make a finding that a higher level of expenses is justified based on
unusual or non-recurring factors which they deem sufficient.
(e) [Intentionally omitted].
(f) In cases in which an Appraisal of Trust property is deemed necessary
or appropriate, select a qualified independent real estate appraiser to prepare
the Appraisal.
(g) Determine the adequacy of any non-cash consideration given upon the
exercise of any options or warrants.
The vote or consent of a majority of the independent Trustees qualified to
act and present at any meeting of the Trustees or committee at which a quorum
of Trustees or committee members is present will constitute the action of a
majority of all of the Independent Trustees. All required determinations and the
bases therefor will be reflected in the minutes of the Trustees' meetings.
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ARTICLE IV
OFFICERS
4.1 Officers. The officers of the Trust shall be a chairman of the board, a
president and a secretary and, to the extent deemed necessary or appropriate by
the Trustees, one or more executive or senior vice presidents, one or more vice
presidents, a treasurer, and one or more assistant secretaries and assistant
treasurers. Any two (2) or more offices may be held by the same person.
4.2 Election and Term of Office. The officers of the Trust, except those
officers appointed in accordance with the provisions of Section 4.3, shall be
chosen by the Board of Trustees at its first meeting after each Annual Meeting
of Shareholders. The officers of the Trust shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Trustees may be removed at any time by the affirmative
vote of a majority of the entire Board of Trustees. If the office of any officer
becomes vacant for any reason, the vacancy shall be filled by the Board of
Trustees. The appointment as an officer of any Person who is an Affiliate of the
Advisor shall be valid only if made or ratified with the approval of a majority
of the Independent Trustees.
4.3 Subordinate Officers. The Board of Trustees may appoint such other
officers and agents as it shall deem necessary, who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Trustees.
4.4 Compensation. The salaries of all officers and agents of the Trust shall
be fixed by the Board of Trustees.
4.5 Chairman of the Board. The chairman of the board shall be the chief
executive officer of the Trust and shall have general supervision, direction and
control of the business of the Trust. He shall have general powers and duties of
management, shall see that all orders and resolutions of the Board of Trustees
are carried into effect, shall execute bonds, mortgages and other contracts
requiring a seal under the seal of the Trust, except where permitted by law to
be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the Board of Trustees to some other
officer or agent of the Trust, shall preside at all meetings of the Shareholders
and Trustees at which he is present and shall perform such other duties as the
Board of Trustees may prescribe.
4.6 President. In the absence or disability of the chairman of the board,
the president shall perform the duties and exercise the powers of the chairman
of the board. In addition, the president shall have such other powers and duties
as the Board of Trustees may prescribe.
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4.7 Executive or Senior Vice Presidents. The executive or senior vice
presidents, if any, in the order of their seniority shall, in the absence or
disability of the president, perform the duties and exercise the powers of the
president, and shall perform such other duties as the Board of Trustees may
prescribe.
4.8 Vice Presidents. The vice presidents, if any, in the order of their
seniority shall, in the absence or disability of the president and any executive
vice presidents, perform the duties and exercise the powers of the president,
and shall perform such other duties as the Board of Trustees may prescribe.
4.9 Secretary. The secretary shall keep or cause to be kept at the
registered office of the Trust or such other place as the Board of Trustees may
order a record of all meetings of the Shareholders and the Board of Trustees and
record all votes and the minutes of all proceedings in a book to be kept for
that purpose. He shall give, or cause to be given, notice of all meetings of the
Shareholders and special meetings of the Board of Trustees, and shall perform
such other duties as may be prescribed by the Board of Trustees, the chairman of
the board or the president, under whose supervision he shall be. He shall keep
in safe custody the seal of the corporation and shall affix the same to any
instrument requiring it.
The Secretary shall keep or cause to be kept at the registered office of
the Trust or at the office of the Trust's transfer agent a Share register or
a duplicate Share register in which shall be recorded the number of Shares
subscribed, the names of the owners of the Shares, the number of Shares owned by
each Shareholder, the amount of Shares paid, and by whom, and the transfer of
such Shares with the date of transfer.
4.10 Assistant Secretaries. The assistant secretaries, if any, in order of
their seniority shall, in the absence or disability of the secretary, perform
the duties and exercise the powers of the secretary and shall perform such other
duties as the Board of Trustees may prescribe.
4.11 Treasurer. The treasurer, if any, shall have the custody of the
Trust's funds and Securities, shall keep and maintain or cause to be kept
and maintained full and accurate accounts of the properties and business
transactions of the Trust 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 Board of Trustees. The
treasurer shall disburse the funds of the Trust as may be ordered by the
Board of Trustees, taking proper vouchers for such disbursements, and shall
render to the president and Trustees, at the regular meetings of the Board of
Trustees 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
Board of Trustees, the treasurer shall give the Trust a bond in such sum and
with such surety or sureties as shall be satisfactory to the Board of Trustees
for the faithful performance of the duties of his office and for the restoration
to the Trust, in case of his death, resignation, retirement or removal from
15
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Trust. The
Treasurer shall have such other powers and shall perform such other duties
as may be prescribed by the Board of Trustees.
4.12 Assistant Treasurer. The assistant treasurers, if any, in the order of
their seniority shall, in the absence or disability of the treasurer, perform
the duties and exercise the powers of the treasurer and shall perform such other
duties as the Board of Trustees may prescribe.
ARTICLE V
ADVISOR; LIMITATION ON OPERATING EXPENSES
5.1 Employment of Advisor. Anything herein to the contrary notwithstanding,
the Trustees shall have continuing exclusive authority over the management of
the Trust and shall be responsible for the general policies of the Trust and for
generally supervising the business of the Trust as conducted by all officers,
agents, employees, advisors, managers or independent contractors of the Trust to
ensure that such business conforms to the provisions of these Bylaws. However,
the Trustees shall not be required personally to conduct all 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 or
Persons (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 therefor employ or
contract with an Advisor and the Trustees may grant or delegate such authority
to the Advisor as the Trustees may in their sole discretion deem necessary or
desirable; provided, however, that any determination to employ or contract with
an Advisor which is a Trustee or which is an Affiliate of a Trustee shall be
valid only if made or ratified with the approval of a majority of the
Independent Trustees.
The Trustees (subject to the provisions of Sections 5.3 and 5.5) shall have
the power to determine the employment terms and compensation of the Advisor or
any other Person whom they may employ or with whom they may contract.
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 Trust, and to make executive decisions which
conform to general policies and general principles previously established by
the Trustees.
5.2 Qualification of Advisor. Prior to entering into or renewing
a contract with an Advisor, the Trustees shall evaluate the performance
of the Advisor and determine that the proposed Advisor possesses
sufficient qualifications to perform the advisory function for the Trust and
to justify the compensation to be paid to it for its services. The criteria
used by the Trustees in evaluating the performance of the Advisor
16
shall be reflected in the minutes of the Trustees' meeting at which such
evaluation takes place.
5.3 Contract with Advisor. The Trustees shall not enter into any contract
with an Advisor unless such contract has a term of no more than one (1) year;
provided, however, that the initial term of any contract with the Advisor may be
for a period ending December 31, 1985. The contract with the Advisor shall also
provide that it may be terminated without cause by a majority of the Trustees, a
majority of the Independent Trustees, or the Advisor, on sixty (60) days written
notice, and that, in the event of its termination, the Advisor will cooperate
with the Trust and take all reasonable steps requested to assist the Trustees in
making an orderly transition of the advisory function.
5.4 Other Activities of the Advisor. The Advisor shall not be required to
administer the investment activities of 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 services and advice to other Persons (including other real estate
investment trusts) and the management of other investments (including
investments of the Advisor and its Affiliates). The Trustees may request the
Advisor to engage in other activities which complement the Trust's investments,
and the Advisor may receive compensation or commissions therefor from the Trust
or other Persons.
The Advisor shall be required to use its best efforts to present a continuing
and suitable investment program to the Trust which is consistent with the
investment policies and objectives of the Trust, but neither the Advisor nor any
Affiliate of the Advisor (subject to any applicable provisions of Sections 9.3
and 9.4) shall be obligated to present any particular investment opportunity to
the Trust even if such opportunity is of a character which, if presented to the
Trust, could be taken by the Trust and, subject to the foregoing, shall be
protected in taking for its own account or recommending to others such
particular investment opportunity. The Advisor or its Affiliates, or a
combination thereof, may enter into joint ventures or other lawful combinations
or associations with the Trust in connection with the acquisition and ownership
of real property investments; provided, however, that in such event the Trust or
an Affiliate or both taken together shall at all times own a controlling
interest in such joint venture, combination or association and provided,
further, that the terms and conditions of any such joint venture, combination or
association shall be unanimously approved by the Trustees.
5.5 Limitation on Total Operating Expenses of the Trust. The Total Operating
Expenses of the Trust for any fiscal year of the Trust shall, in the absence of
a satisfactory showing to the contrary, be deemed to be excessive if they exceed
an amount equal to the greater of two percent (2%) of the Average Invested
Assets of the Trust or twenty-five percent (25%) of its Net Income for such
year.
17
Pursuant to Section 3.4 hereof, the Independent Trustees shall have the
fiduciary responsibility of limiting the Total Operating Expenses of the Trust
to amounts that do not exceed these limitations unless such Independent Trustees
shall have made a finding that, based on unusual or non-recurring factors which
the Independent Trustees deem sufficient, a higher level of expenses is
justified for such fiscal year. In addition, any time the Total Operating
Expenses of the Trust exceed the limitations set out above for any twelve (12)
month period ending at the end of a fiscal quarter of the Trust, the
shareholders shall receive written disclosure of such fact, together with an
explanation of the factors that the Independent Trustees considered in arriving
at the conclusion that the excess operating expenses were justified, if such was
the conclusion of the Independent Trustees, within sixty (60) days after the end
of such fiscal quarter. In the event the Independent Trustees do not determine
that the excess operating expenses for a fiscal year are justified, the Advisor
shall reimburse the Trust, at the end of the fiscal year, for the amount of such
excess expenses for such fiscal year; provided, however, that no such refund
shall be in an amount exceeding the amount of regular compensation paid to the
Advisor for such fiscal year and any unrefunded amounts shall not cumulate from
year to year. Moreover, each contract made with an Advisor shall specifically
provide that, in the event the Independent Trustees do not determine that any
excess operating expenses for a fiscal year are justified, the Advisor shall
reimburse the Trust at the end of such fiscal year the amount of any such excess
expenses for such fiscal year; provided, however, that no such refund shall be
in an amount exceeding the amount of regular compensation paid to the Advisor
for such fiscal year and any unrefunded amounts shall not cumulate from year to
year.
ARTICLE VI
INVESTMENT POLICY
6.1 General Statement of Policy. The Trustees intend initially, or to the
extent funds are not fully invested in real property as described below, to
invest the Trust Estate in investments such as (a) short-term government
Securities, certificates of deposit and bank deposits, (b) Securities of
government agencies, (c) bankers' acceptances, (d) certificates of deposit, (e)
deposits in commercial banks, (f) participations in pools of mortgages or bonds
and notes (such as Federal Home Loan Mortgage Corporation participation sale
certificates ("Freddie Mac PC's"), Government National Mortgage Association
modified pass-through certificates ("Ginnie Mae's") and Federal National
Mortgage Association bonds and notes ("Fannie Mae's"), (g) other short-term
investment Securities and money market funds, and/or (h) such other investments
as shall be approved by a majority of the Trustees. Otherwise, the Trustees
intend to invest the major portion of the Trust Estate in ownership or other
interests in real property or in Persons involved in owning, operating, leasing,
developing, financing or dealing in real property (which investments shall
ordinarily be made in connection with properties having income-producing
capabilities). The Trustees may make commitments to make investments consistent
with the foregoing policies. The Trust may also participate in the investments
with other investors, including investors (which, subject to Section 5.4, may
18
include the Advisor or its Affiliates) having investment policies similar to
those of the Trust, on the same or different terms, and the Advisor may act as
advisor to such other investors, including investors who have the same
investment policies.
It is the intention of the Trustees that the net proceeds of any offering of
Shares (less reserves and except for interim investments) will initially be
invested primarily in commercial and industrial income-producing real property;
however, the Trust may invest in other types of income-producing real properties
which could include, but are not limited to, apartment complexes. The maximum
amount of aggregate mortgage indebtedness which may be incurred by the Trust in
connection with its properties may not exceed eighty percent (80%) of the value
of all of its properties on a combined basis, as determined by Appraisals;
provided, however, that this limitation shall not be applicable until the
conclusion of the Trust's initial public offering of its Shares. Such
indebtedness may be in the form of temporary or permanent financing from banks,
institutional investors and other lenders, which indebtedness may be secured by
mortgages or other interests in the properties owned by the Trust, including
"wrap-around" or other "all-inclusive" mortgages. The Trust may also obtain
temporary financing from the Advisor or its Affiliates; provided, however that
the interest and other financing charges or fees applicable to such temporary
financing may not exceed the amounts which would be charged by unrelated lending
institutions on comparable loans for the same purpose in the same locality of
the property and, provided, further, that there can be no prepayment charge or
penalty in connection with such loans. The Trust shall not be limited as to the
amount or percent of assets which may be invested in any one property.
The Trust may take purchase money obligations as part payment in connection
with sales of properties by the Trust. When a purchase money obligation is
accepted in lieu of cash upon the sale of a Trust property, the Trust will
continue to have a debt interest in the property and the proceeds of the sale
will be realized over a period of years rather than at closing.
The Trustees shall endeavor to invest the Trust's assets in accordance with
the investment policies set forth in this Article VI, but the failure so to
invest its assets shall not affect the validity of any investment made or action
taken by the Trustees.
The general purpose of the Trust is to seek income which qualifies
under the REIT Provisions of the Internal Revenue Code. The Trustees,
at such time as it is in the best interests of the Shareholders
to do so, intend to make investments in such a manner as to comply
with the requirements of the REIT Provisions of the Internal Revenue Code
with respect to the composition of the Trust's investments and the derivation of
its income; provided, however, that neither the Advisor nor any Trustee,
officer, employee, agent, investment advisor or independent contractor
of the Trust shall be liable for any act or omission, intentional or
otherwise, resulting in the loss of tax benefits under the Internal Revenue
Code, except for that arising from his or its own gross negligence or
19
willful or wanton misconduct; and, provided further, that for the period of
time during which the portfolio of equity investments is developed, the
Trust's assets may be invested in investments with income which does not
qualify under the REIT Provisions of the Internal Revenue Code.
6.2 Restrictions. The Trust shall not:
(a) Invest in any foreign currency (except as necessary for the offer of
the Trust's Securities in a foreign state), bullion, commodities, or commodities
futures contracts, except as permitted in Section 6.1 hereof;
(b) Invest in contracts for the sale of real estate, except in
conjunction with the acquisition or sale of real property;
(c) Engage in any short sale, except in connection with a long sale;
(d) [Intentionally omitted];
(e) Invest in junior mortgage loans, except as permitted in Section 6.1
hereof;
(f) Engage in trading as compared with investment activities, or
engage in the business of underwriting or agency distribution of Securities
issued by others, but this prohibition shall not prevent the Trust from selling
participations or interests in real property or from investing in investments
authorized under Section 6.1 hereof;
(g) Hold property primarily for sale to customers in the ordinary
course of the trade or business of the Trust, but this prohibition shall not be
construed to deprive the Trust of the power to sell any property which it owns
at any time;
(h) Invest in unimproved real property, which shall mean property
which has the following three characteristics: (i) it was not acquired for the
purpose of producing rental or other operating income, (ii) no development or
construction is in process thereon, and (iii) no development or construction is
planned in good faith to commence thereon within one year;
(i) [Intentionally omitted];
(j) [Intentionally omitted];
(k) Incur aggregate mortgage indebtedness in connection
with its investment properties in excess of eighty percent
(80%) of the value of all of its investment properties as
determined by Appraisals; provided, however, that this provision
20
shall not be applicable until the conclusion of the Trust's initial public
offering of its Shares; or
(l) Purchase insurance from an Affiliate of the Trust or from the
Advisor or its Affiliates.
Notwithstanding provisions to the contrary, the foregoing limitations shall
not limit the manner in which any required investment by the Advisor or its
Affiliates in the Trust is made or preclude the Trust from structuring an
investment in real property to minimize Shareholder liability and facilitate the
investment policies of the Trust under Article VI hereof.
6.3 Appraisals. The consideration paid for real property acquired by the
Trust shall ordinarily be based on the fair market value of such property as
determined by a majority of the Trustees. In cases in which a majority of the
Independent Trustees so determine, such fair market value shall be determined by
Appraisal.
ARTICLE VII
MEETINGS OF SHAREHOLDERS
7.1 Place of Meetings. All meetings of the shareholders shall be held at
the registered office of the Trust, or at such other place, within or without
the State of Missouri, as the Trustees may specify in the notice of such
meeting.
7.2 Annual Meetings.
(a) Time of Holding. The Annual Meeting of Shareholders shall be held
on the second Tuesday in May of each year, commencing in May of 1987, at 10:00
o'clock a.m., provided, however, that if such day is a legal holiday, then any
such Annual Meeting of Shareholders shall be held on the next business day
following. At such Annual Meeting, Trustees shall be elected by the cumulative
voting procedures prescribed by the Missouri statutes, and such other business
shall be transacted as may properly be brought before the Annual Meeting.
(b) Notice. Written or printed notice of the Annual Meeting shall be
given to each Shareholder of record entitled to vote, either personally or by
first-class mail or other means of written communication, charges prepaid,
addressed to such Shareholder at such address as appears on the records of the
Trust. Notice shall be deemed to have been delivered at the time when delivered
personally or deposited in the mail or sent by other means of written
communication, properly addressed and with all charges thereon prepaid. All such
notices shall be delivered or given to each Shareholder entitled thereto not
less than ten (10) nor more than fifty (50) days before the date of the Annual
meeting and shall state the place, day and hour of the meeting.
7.3 Special Meetings.
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(a) How Called. Special meetings of the Shareholders, for any purpose
or purposes, may be called by the chief executive officer or president of the
Trust, by a majority of the Trustees or by a majority of the Independent
Trustees and shall be called by any officer of the Trust upon receipt, either in
person or by registered mail, from Shareholders holding in the aggregate not
less than ten percent (10%) of the outstanding Shares of a written request for a
special meeting which states the purpose or purposes of the requested meeting.
Within ten (10) business days after receipt of any such request from
Shareholders, the officer receiving the request shall cause notice of a special
meeting to be given to each Shareholder of record entitled to vote at such
meeting in accordance with the provisions of Section 7.3(b) hereof. Any such
special meeting called on the request of Shareholders shall be held on a date
not less than twenty (20) nor more than sixty (60) days after the receipt of the
request and at a time and place convenient to the Shareholders. Nothing
contained in this paragraph shall be construed as limiting, fixing or affecting
the time when a special meeting of Shareholders called other than upon the
request of ten percent (10%) of the Shareholders may be held.
(b) Notice. Notices of special meetings shall be given in the same
manner as for Annual Meetings. In addition to stating the place, day and hour of
a special meeting, the notice of a special meeting shall state the nature of the
business to be transacted at the meeting and that no other business shall be
considered at the meeting.
(c) Business Transacted. The business transacted at any special
meeting of Shareholders shall be confined to the purposes stated in the notice
of the meeting.
7.4 Closing of Transfer Books and Fixing of Record Dates. The Board
of Trustees shall have power to close the Share transfer books of the Trust
for a period not exceeding fifty (50) days preceding the date of any
meeting of Shareholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change, conversion
or exchange of Shares shall go into effect; provided, however, that,
in lieu of closing the Share transfer books as aforesaid, the Board of Trustees
may fix in advance a date, not exceeding fifty (50) days preceding the date
of any meeting of the Shareholders, or the date for the payment of any dividend,
or the date for the allotment of rights, or the date when any change or
conversion or exchange of Shares shall go into effect, as a record date
for the determination of the Shareholders entitled to notice of, and to
vote at the meeting, and any adjournment thereof, or entitled to receive payment
of the dividend, or entitled to the allotment of rights, or entitled to exercise
the rights in respect of the change, conversion or exchange of Shares. In such
case only the Shareholders who are shareholders of record on the date of closing
the Share transfer books or on the record date so fixed shall be entitled to
notice of, and to vote at, the meeting and any adjournment thereof, or to
receive payment of the dividend, or to receive the allotment of rights, or to
exercise the rights, as the case may be, notwithstanding any transfer of any
Shares on the books of the Trust after the date of closing of the Share transfer
books or the record date fixed as aforesaid. If the Board of Trustees shall not
22
have closed the Share transfer books or set a record date for the determination
of its Shareholders entitled to notice of, and to vote at, a meeting of
Shareholders, only the Shareholders who are shareholders of record at the close
of business on the twentieth (20th) day preceding the date of the meeting shall
be entitled to notice of, and to vote at, the meeting and any adjournment of the
meeting; except that, if prior to the meeting written waivers of notice of the
meeting are signed and delivered to the Trust by all of the shareholders of
record at the time the meeting is convened, only the Shareholders who are
Shareholders of record at the time the meeting is convened shall be entitled to
vote at the meeting or at any adjournment thereof.
7.5 Quorum. A majority of the Shares issued and outstanding and
entitled to vote at any meeting, represented in person or by proxy, shall
constitute a quorum at all meetings of the Shareholders for the transaction of
business, except as otherwise provided by statute. When a quorum is present at
any meeting, the vote of the holders of a majority of the shares having voting
power represented in person or by proxy shall decide any question brought before
such meeting, unless the question is one upon which, by express provision of the
statutes, the Articles of Incorporation, or these Bylaws, a different vote is
required, in which case such express provision shall govern and control the
decision of such questions. If a quorum shall not be present or represented at
any meeting of the Shareholders, the Shareholders entitled to vote at the
meeting, present in person or represented by proxy, shall have power
successively to adjourn the meeting to a specified date not more than ninety
(90) days after such adjournment, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
scheduled.
7.6 Voting of Shares. Except as provided in this Section 7.6, each
outstanding Share entitled to vote under the provisions of the Articles of
Incorporation shall be entitled to one vote on each matter submitted to a vote
of the Shareholders. Every Shareholder entitled to vote at any election for
Trustees shall have the right to cumulate his votes and to give one candidate a
number of votes equal to the number of Trustees to be elected multiplied by the
number of votes to which his Shares are entitled, or to distribute his votes on
the same principle among as many candidates as he shall think fit.
7.7 Action by Written Consent. Any action which may be taken at any
meeting of the Shareholders may be taken without a meeting if consents in
writing, setting forth the action so taken, shall be signed by all of the
Shareholders entitled to vote with respect to the subject matter thereof.
7.8 Proxies. Every Person entitled to vote or execute consents
shall have the right to do so either in person or by proxy
appointed by a proper instrument in writing executed by the
Shareholder or his duly authorized attorney in fact. No proxy shall be
23
valid after eleven (11) months from the date of its execution, unless otherwise
provided in the proxy. A duly executed proxy shall be irrevocable only if it
states that it is irrevocable and if it is coupled with an interest sufficient
in law to support an irrevocable power of
attorney.
ARTICLE VIII
SHARES OF STOCK
8.1 Certificates. The certificates representing Shares of the Trust
shall be numbered and shall be entered in the books of the Trust as they are
issued. They shall exhibit the name of the registered holder and number of
shares represented thereby and the par value of each Share and shall be signed
by the chairman of the board and the secretary or by such other officers
authorized so to do by law and shall bear the seal of the Trust or a facsimile
thereof. The Persons in whose names certificates are registered on the records
of the Trust shall be deemed the absolute owners of the shares represented
thereby for all purposes of the Trust; but nothing herein contained shall be
deemed to preclude the Trustees or officers or their agents or representatives,
from inquiring as to ,he actual ownership of Shares. Until a transfer is duly
registered on the records of the Trust, the Trustees shall not be affected by
any notice of such transfer, either actual or constructive. The payment thereof
to the Person in whose name any shares are registered on the records of the
Trust or to the duly authorized agent of such Person (or, if such Shares are so
registered in the names of more than one Person, to any one of such Persons or
to the duly authorized agent of any such Person) shall be a sufficient discharge
for all dividends or distributions payable or deliverable in respect of such
Shares and from all liability to see to the application thereof. All Shares
shall be fully paid and non-assessable by or on behalf of the Trust upon receipt
of the full consideration for which they have been issued.
8.2 Transfer Agent, Dividend Disbursing Agent, Dividend Reinvestment Plan
Agent and Registrar. The Trustees shall have the power to employ one or more
transfer agents, dividend disbursing agents, dividend reinvestment plan agents
and registrars, including Affiliates of the Advisor; provided, however, that any
determination to employ an Affiliate of the Advisor in any such capacity shall
be valid only if made or ratified with the approval of a majority of the
Independent Trustees. The Trustees may authorize any such Persons on behalf of
the Trust to keep records, to hold, disburse and reinvest any dividends and
distributions, and to have and perform in respect of all original issues and
transfers of Shares, dividends and distributions and reports and communications
to Shareholders such powers and duties customarily had and performed by transfer
agents, dividend disbursing agents, dividend reinvestment plan agents and
registrars as may be conferred upon them by the Trustees.
8.3 Transfer Agents and Registrars; Facsimile Signatures.
If the Board of Trustees appoints one or more transfer agents or
transfer clerks or one or more registrars, the Board of Trustees
may require all certificates for Shares to bear the signature or
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signatures of any of them. Where a certificate is signed (a) by a transfer
agent or an assistant or co-transfer agent, or (b) by a transfer clerk or (c) by
a registrar or co-registrar, the signatures of the president and secretary or
other authorized officers of the Trust thereon may be facsimile. Where a
certificate is signed by a registrar or co-registrar the certificate of any
transfer agent or co-transfer agent thereon may be by facsimile signature
of the authorized signatory of such transfer agent or co-transfer agent. In
case any officer or officers of the Trust who have signed, or whose facsimile
signature or signatures have been used on any such certificate or certificates
shall cease , to be such officer or officers of the Trust, whether, because of
death, resignation or otherwise, before such certificate or certificates have
been delivered by the Trust, such certificate or certificates may, nevertheless,
be issued and delivered as though the Person or Persons who signed such
certificate or certificates or whose facsimile signature or signatures have
been used thereon had not ceased to be such officer or officers of the Trust.
8.4 Lost Certificates. The holder of any Shares of the Trust shall
immediately notify the Trust and its transfer agents and registrars, if any, of
any loss or destruction of the certificates representing the same. The Board of
Trustees may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Trust alleged to have
been lost or destroyed, upon the making of an affidavit of that fact by the
Person claiming the certificate to be lost or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Trustees may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and
give the Trust a bond in such sum as it may direct as indemnity against any
claim that may be made against the Trust with respect to the certificate alleged
to have been lost or destroyed.
8.5 Transfer of Shares. The Shares of the Trust shall be transferable
only upon the books of the Trust by the holders thereof in person or by their
duly authorized attorneys or legal representatives. Upon surrender to the Trust
or the transfer agent of the Trust of a certificate for Shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Trust to issue a new certificate to the
Person entitled thereto, cancel the old certificate and record the transaction
upon its books.
8.6 Registered Shareholders. The Trust shall be entitled to treat the
holder of record of any Share or Shares as the holder in fact thereof and shall
not be bound to recognize any legal, equitable or other claim to, or interest
in, such Share or Shares on the part of any other Person, whether or not it or
they shall have express or other notice thereof, and shall not be liable for any
registration or transfer of shares which are registered, or to be registered, in
the name of a fiduciary or the nominee of a fiduciary unless made with actual
knowledge that a fiduciary, or nominee of a fiduciary is committing a breach of
trust in requesting such registration or transfer, or with knowledge of such
facts that its participation therein amounts to bad faith.
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8.7 Shareholders' Disclosure; Call of Shares; Right to Refuse to
Transfer Shares or Warrants. The Shareholders, any holders of warrants or
similar rights to purchase shares, and any proposed transferee of Shares or
warrants or similar rights to purchase Shares shall upon demand disclose to the
Trustees in writing such information with respect to direct and indirect
ownership of the Shares and warrants or similar rights to purchase Shares and
any proposed or requested transfer thereof as the Trustees deem necessary to
comply with the provisions of the Internal Revenue Code and the regulations
thereunder, as the same shall be from time to time amended, or to comply with
the requirements of any other taxing authority, or which the Trustees deem
necessary to avoid violation of state or federal securities laws. Several
different Share ownership tests have to be satisfied in order for the Trust to
qualify as a REIT or for the Trust's income to satisfy certain income tests
applicable to REITs. Pursuant to the Internal Revenue Code, Share ownership is
not determined in the same manner for each test. Depending upon the particular
test with which compliance is being determined, a Shareholder's Share ownership
may be determined (i) without applying any rules of attribution; (ii) pursuant
to Section 318 of the Internal Revenue Code; or (iii) pursuant to Sections
542(a) and 544 of the Internal Revenue Code.
(a) If the Trustees shall, at any time and in good faith, be of the
opinion that direct or indirect ownership of Shares of the Trust has or may
become concentrated to an extent which would prevent the Trust from qualifying
as a REIT under the REIT Provisions of the Internal Revenue Code, the Trust
shall have the power by lot or other means deemed equitable by the Trustees, to
call a number of Shares sufficient, in the opinion of the Trustees, to maintain
or bring the direct or indirect ownership of Shares of the Trust into conformity
with the requirements for a REIT; provided, however, that failure to call Shares
as provided herein shall not render the Trustees or any Shareholder or officer
liable to anyone for such failure. The call price shall be equal to (i) the last
reported sale price of the Shares on the last business day prior to the call
date on the principal national securities exchange on which the Shares are
listed or admitted to trading, or (ii) if the Shares are not so listed or
admitted to trading, the average of the highest bid and lowest asked prices on
such last business day as reported by NASDAQ, National Quotation Bureau
incorporated or a similar organization selected by the Trust for such purpose,
or (iii) if no quotations for the Shares are available, as determined in good
faith by the Trustees. From and after the date fixed for such call by the
Trustees, the holder of any Shares so called shall cease to be entitled to
dividends, distributions, voting rights and other benefits with respect to such
Shares, excepting only the right to payment of the call price fixed as
aforesaid.
(b) If the Trustees shall, at any time and in good faith, be of
the opinion, which opinion shall be conclusive upon any proposed transferor
or proposed transferee of Shares or warrants or similar rights to purchase
Shares, that any proposed transfer or exercise would jeopardize the status of
the Trust as a REIT under the Internal Revenue Code, as now enacted or as
hereafter amended, or would violate state or federal securities laws or
regulations, the Trustees may refuse to permit such transfer or exercise;
26
provided, however, that failure to refuse to permit such transfer or exercise as
provided herein shall not render the Trustees or any Shareholder or holder of
warrants or similar rights to purchase Shares or officer of the Trust liable
to anyone for such failure. Any attempted transfer or exercise as to which
the Trustees have refused their permission shall be void and of no effect to
transfer any legal or beneficial interest in the Shares or warrants or similar
rights to purchase Shares. All contracts for the sale or other transfer or
exercise of Shares or warrants or similar rights to purchase Shares shall
be subject to this provision.
8.8 Limitation on Acquisition and ownership Of Shares and Warrants.
(a) In order to guard against the concentration of ownership of Shares
and warrants or similar rights to purchase Shares to an extent which is contrary
to the requirements of the REIT Provisions of the Internal Revenue Code, no
Person other than David L. Johnson may at any time subsequent to the Trust's
commencement of business operations acquire ownership of or own, directly or
indirectly, as determined pursuant to both (i) Section 318 and (ii) Sections
542(a) and 544 of the Internal Revenue Code, (A) a number of Shares in excess of
7.6% of the outstanding shares of the Trust, or (B) an aggregate number of
Shares and warrants and similar rights to purchase Shares in excess of 7.6% of
the aggregate number of outstanding Shares and warrants and similar rights to
purchase Shares. David L. Johnson may not at any time subsequent to the Trust's
commencement of business operations acquire ownership of or own, directly or
indirectly, as determined pursuant to both (i) Section 318 and (ii) Sections
542(a) and 544 of the Internal Revenue Code, (A) a number of Shares in excess of
19.6% of the outstanding shares of the Trust, or (B) an aggregate number of
Shares and warrants and similar rights to purchase Shares in excess of 19.6% of
the aggregate number of outstanding Shares and warrants and similar rights to
purchase Shares. In addition, no Shares shall be transferred (or issued, for
example, upon the exercise of warrants) and no warrants shall be transferred to
any Person if, following such transfer, such Person's direct or indirect
ownership of Shares and warrants and similar rights to purchase Shares would
exceed these limits.
(b) If Shares or warrants or similar rights to purchase Shares are
acquired by any Person in violation of this Section 8.8, such acquisition shall
be valid only to the extent it does not result in a violation of this Section
8.8, and such acquisition shall be null and void with respect to the excess
("Excess Shares" and/or "Excess Warrants"). Excess Shares shall be deemed to
have been acquired and to be held on behalf of the Trust, and, as the equivalent
of treasury shares for such purpose, shall not be considered to be outstanding
for quorum or voting purposes, and shall not be entitled to receive dividends,
interest or any other distribution. Excess Warrants shall be deemed to be void.
(c) The Trust shall, if deemed necessary or desirable
to implement the provisions of this Section 8.8, include
on the face or back of each Share or warrant
27
certificate issued by the Trust an appropriate legend referring the holder of
such certificate to the restrictions contained in this Section 8.8 and stating
that the complete text of this Section 8.8 is on file with the Secretary of the
Trust at the Trust's registered office.
(d) Nothing herein contained shall limit the ability of the Trustees
to impose or to seek judicial or other imposition of additional restrictions if
deemed necessary or advisable to protect the Trust and the interests of its
Shareholders by preservation of the Trust's status as a qualified REIT under the
Internal Revenue Code.
(e) If any provision of this Section 8.8 or any application of any
such provision is determined to be invalid by any federal or state court having
jurisdiction over the issue, the validity of the remaining provisions shall not
be affected and the other applications of such provisions shall be affected only
to the extent necessary to comply with the determination of such court.
8.9 Dividends or Distributions to Shareholders. The Trustees may from
time to time declare and pay to Shareholders such dividends or distributions in
cash, Shares, other Securities or other property, out of current or accumulated
income, capital, capital gains, principal, surplus, proceeds from the increase
or refinancing of Trust obligations, or from the sale of portions of the Trust
Estate or from any other source as the Trustees in their discretion shall
determine and as may be permitted by law. Shareholders shall have no right to
any dividend or distribution unless and until declared by the Trustees. The
Trustees shall furnish the Shareholders after the close of each fiscal year with
a statement in writing advising as to the source of the funds so distributed
during such fiscal year.
ARTICLE IX
LIABILITY OF TRUSTEES, SHAREHOLDERS
AND OFFICERS AND OTHER MATTERS
9.1 Exculpation of Trustees, Officers and Others. The Trustees are
required to perform their duties with respect to the Trust's business in good
faith and in a manner believed by the Trustees to be in or not opposed to the
best interests of the Trust. A Trustee who performs his duties in accordance
with the foregoing standards and without gross negligence or willful or wanton
misconduct shall not be liable to any Person for failure to discharge his
obligations as a Trustee. Notwithstanding the additional responsibilities of
Independent Trustees, an Independent Trustee shall not have any greater
liability than that of a Trustee who is not an Independent Trustee.
Moreover, the Trust's officers, employees and other agents
are also required to act in good faith and in a manner believed by them
to be in or not opposed to the best interests of the Trust. An officer,
employee or other agent who performs his duties in accordance with
the foregoing standards and without gross negligence or willful or
28
wanton misconduct shall not be liable to any Person for failure to discharge
his obligations as an officer, employee or agent.
9.2 (a) Actions Involving Directors, Officers and Employees. The Trust
shall indemnify any person who was or is a party (other than a party plaintiff
suing on his own behalf or in the right of the Trust), or who is threatened
to be made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
any action by or in the right of the Trust, by reason of the fact that such
person is or was a director, officer or employee of the Trust, or is or was
serving at the request of the Trust as a director, officer, partner or employee
of another trust, partnership, joint venture, corporation or other enterprise,
against any and all claims, damages, losses, costs or expenses of every kind and
nature, including, but not limited to, attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding; provided, that no such person shall be
indemnified by the Trust (a) with respect to remuneration paid to such person if
it shall be finally adjudged that such remuneration was in violation of law; (b)
on account of any suit in which judgment is rendered against such person for an
accounting of profits made from the purchase or sale by such person of
securities of the Trust pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law; (c) from or on account of such
person's conduct which was finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct or (d) to the extent that such
indemnification shall otherwise be finally adjudged to be unlawful.
(b) Actions Involving Agents. The Trust may indemnify any person who
was or is a party (other than a party plaintiff suing on his own behalf or in
the right of the Trust), or who is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including any action by or in the
right of the Trust, by reason of the fact that he is an agent of the Trust, or
is or was serving at the request of the Trust as an agent of another trust,
partnership, joint venture, corporation or other enterprise, against any and all
claims, damages, losses, costs or expenses of every kind and nature, including,
but not limited to, attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by aim in connection with such
action, suit or proceeding, provided, that an agent shall not be indemnified by
the Trust from or on account of conduct which was finally adjudged to have been
knowingly fraudulent, deliberately dishonest or willful misconduct.
(c) Determination of Right to Indemnification. (1) Any
indemnification under Section (a) hereof, unless ordered by a court,
shall be made by the Trust unless a determination is reasonably and
promptly made that indemnification of the director, officer or employee
is not proper in the circumstances because he has not satisfied the
conditions set forth in Section (a). Such determination shall be made (i) by
29
the Board by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (ii) if such a quorum is
not obtainable, or, even if obtainable, a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (iii) by the
Shareholders; provided, that no such determination shall preclude an action
brought in an appropriate court to challenge such determination.
(2) Any indemnification under Section (b) hereof, unless ordered by a
court, shall be made by the Trust only as authorized in the specific case upon a
determination that indemnification of the agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in Section (b).
Such determination shall be made (i) by the Board by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or proceeding,
or (ii) if such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the Shareholders.
(d) Advance Payment of Expenses. Expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid by the Trust in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Trust as authorized in this Section 9.2.
(e) Not Exclusive Right. The indemnification provided for in this
Section 9.2 shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any bylaw, statute, agreement,
vote of Shareholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office. The Board shall have the power to cause the Trust to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Trust, or is or was serving at the request of the Trust
as a director, officer, partner, employee or agent of another trust,
partnership, joint venture, corporation or other enterprise against any
liability asserted against him and incurred by him in any such capacity, arising
out of his status as such, whether or not the Trust would have the power to
indemnify him against such liability under the provisions of this Section 9.2.
In addition, without limiting the other provisions of this Section 9.2, the
Trust is authorized from time to time, without further action by the
Shareholders of the Trust, to enter into agreements with the directors and
officers of the Trust providing such rights of indemnification as the Trust may
deem appropriate, up to the maximum extent permitted under this Section 9.2 or
any law of the state of Missouri as now in effect or hereafter amended. Any
indemnification, whether required under this Section 9.2, or permitted by
statute or otherwise and not expressly contained in this Section 9.2, shall
continue as to a person who has ceased to be a director, officer or employee of
the Trust and shall inure to the benefit of the heirs, executors and
administrators of such person.
30
9.3 Right of Trustees, Officers and Others to Own Shares or Other
Property and to Engage in Other Business. Any Trustee, officer, employee or
agent of the Trust may acquire, own, hold and dispose of Shares in the Trust and
may exercise all rights of a Shareholder to the same extent and in the same
manner as if he were not a Trustee, officer, employee or agent of the Trust. Any
Trustee, officer, employee or agent of the Trust may have personal business
interests and may engage in personal business activities, which interests and
activities may include the acquisition, syndication, holding, management,
operation or disposition, for his own account or for the account of others, of
interests in real property or interests in Persons engaged in the real estate
business, including Persons authorized as investments pursuant to Section 5.4
hereof. In addition, any Trustee, officer, employee or agent of the Trust may
take for his own account or recommend to others any particular investment
opportunity and shall be under no obligation to present any particular
investment opportunity to the Trust even if such opportunity is of a character
which, if presented to the Trust, could be taken by the Trust and, subject to
the foregoing, shall be protected in taking for his own account or recommending
to others any particular investment opportunity. Subject to the provisions of
Section 2.13 and Article V, any Trustee, officer, employee or agent may be
interested as trustee, officer, director, stockholder, partner, member, advisor
or employee, or otherwise have a direct or indirect interest in any Person who
may be engaged to render advice or services to the Trust, and may receive
compensation from such Person as well as compensation as Trustee, officer or
otherwise hereunder. None of these activities shall be deemed to conflict with
his duties and powers as Trustee or officer.
9.4 Transactions Between the Trust, the Trustees, the Advisor, and
Certain Affiliates. No contract, act or other transaction between the Trust and
any Trustee, officer of the Trust, or other Person in which any such Trustee or
officer is directly or indirectly interested or with which any such Trustee or
officer is directly or indirectly connected or of which any such Trustee or
officer is a trustee, partner, director, officer or retired officer shall be
valid unless approved by a vote of a majority of the disinterested Trustee(s).
Except as prohibited by these Bylaws, and in the absence of fraud, a contract,
act or other transaction between the Trust and any other Person, or in which the
Trust is interested, shall be valid even though (a) one or more of the Trustees
or officers are directly or indirectly interested in or connected with, or are
trustees, partners, directors, officers or retired officers of such other
Person, or (b) one or more of the Trustees or officers of the Trust,
individually or jointly with others, is a party or are parties to, or directly
or indirectly interested in, or connected with, such contract, act or
transaction. No Trustee or officer who is aware of the conflict or relationship
shall be under any disability from or have any liability as a result of entering
into any such contract, act or transaction, provided that such interest or
connection is disclosed or known to the Trustees and thereafter the Trustees in
good faith authorize such contract, act or other transaction by the vote of a
majority of the disinterested Trustee(s).
31
The Trust shall not sell, directly or indirectly, any of its real property
to any Trustee or officer of the Trust, the Advisor, or any Affiliate thereof,
and no such Person shall sell any property to the Trust unless:
(a) the property was purchased by any of the foregoing Persons for the
purpose of accumulating a portfolio of investments for the Trust under
circumstances which are fully disclosed in the prospectus by which Shares are
initially offered to the public;
(b) the property was purchased by any of the foregoing Persons for the
purpose of its subsequent acquisition by the Trust upon completion of financing
arrangements by the Trust;
(c) the property or option thereon was purchased or taken by any of
the foregoing Persons in its own name and title and was temporarily held in such
name for the purpose of facilitating the acquisition of such property by the
Trust or facilitating the borrowing of money or obtaining of financing for the
Trust or for any other purpose related to the business of the Trust and the
property or option thereon is purchased by the Trust for a cash payment no
greater than the cost of the property or option to such Person; provided,
however, that the Trust may, if the proceeds of the Trust's sale of Shares from
its initial public offering are insufficient to make (or repay indebtedness
incurred to make) required cash payments in connection with the acquisition of
any property or properties acquired prior to the termination of such initial
public offering, sell to the Advisor or any Affiliate thereof such property or
properties (or sell to the Advisor or an Affiliate of the Advisor an interest
therein) but only on terms which provide for cash payments to the Trust equal to
the Trust's cash payments made and the assumption of all indebtedness incurred
in connection with the acquisition of such property or properties by the Trust
and only if, in the opinion of the Independent Trustees, the Trust will be
unable to obtain a higher price for such property or properties from an
unaffiliated third party;
(d) the purchase or sale was made on terms no less favorable to the
Trust than those that could have been obtained in a comparable transaction on an
arm's length basis from a person who is not an affiliate of the Trust and the
purchase or sale was approved by unanimous vote of the disinterested Independent
Trustees.
Nothing herein, however, shall be deemed to preclude the Trust from
entering into a joint venture with any such Persons with respect to Trust real
property as otherwise permitted herein.
Except as otherwise provided in these Bylaws, the Trust shall not, directly
or indirectly, engage in any transaction with any Trustee, officer or employee
of the Trust or any partner, officer or employee of the Advisor, or of any
company or other organization of which any of the foregoing is an Affiliate,
except for (i) the execution and performance of the agreements and the making of
investments contemplated by Articles V and VI hereof, (ii) transactions
involving the purchase of Securities of the Trust by the Advisor
32
and its Affiliates upon the inception of the Trust to satisfy minimum
capital requirements of applicable laws and regulations of s tates having
jurisdiction and transactions involving the purchase of Securities of the Trust
on the same terms on which such Securities are then being offered to all holders
of any class of Securities of the Trust or to the public, (iii) entering into
joint ventures or partnerships with the Advisor or its Affiliates including
other programs sponsored by the Advisor; (iv) transactions with the Advisor
or Affiliates thereof involving loans, advances, allocations of overhead and
other operating expenses, acquisition and investment advisory services, real
estate brokerage services on the purchase and sale of real property, real
property management and leasing services, personal property leasing services,
or other services, provided such transactions are on terms not less favorable
to the Trust than the terms on which non-affiliated parties are then making
similar loans or performing similar services for comparable entities in the
same area and are not entered into on an exclusive basis with such Person,
(v) transactions necessary to comply with minimum sponsor contribution
requirements, or (vi) transactions made or ratified with the unanimous
approval of the Trustees; provided, however, that any transaction referred
to in clause (iv) relating to payments to the Advisor and its Affiliates for
services rendered in a capacity other than as Advisor may only be made (A) upon
a determination by the Independent Trustees that the compensation is fair and
reasonable and not greater than the charges for comparable services available
from others who are competent and not Affiliates of the parties involved, and
(B) with the approval of a majority of the Independent Trustees. The
simultaneous acquisition by the Trust and the Advisor or any Affiliate of the
Advisor of participations in any investment shall not be deemed to constitute
the purchase or sale of property by one of them to the other. This Section 9.4
shall not prevent the payment to any Person of commissions or fees for the
so-called "private placement" of Securities with investors.
9.5 Persons Dealing with Trustees or Officers. Any act of the Trustees
or officers purporting to be done in their capacity as such shall, as to any
Persons dealing in good faith with such Trustees or officers, be conclusively
deemed to be within the purposes of this Trust and within the powers of the
Trustees and officers. The Trustees may authorize any officer or officers or
agent or agents to enter into any contract or execute any instrument in the name
and on behalf of the Trust. No Person dealing in good faith with the Trustees or
any of them, or with the authorized officers, employees, agents or
representatives of the Trust, shall be bound to see to the application of any
funds or property passing into their hands or control. The receipt of the
Trustees or any of them, or of authorized officers, employees, agents, or
representatives of the Trust, for moneys or other consideration, shall be
binding upon the Trust.
9.6 Reliance. The Trustees and officers may consult with counsel
and the advice or opinion of such counsel shall be full and complete
personal protection to all of the Trustees and officers in respect of any action
taken or suffered by them in good faith and in reliance on or in accordance
with such advice or opinion. In discharging their duties, Trustees and
officers, when acting in good faith, may rely upon financial
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statements of the Trust represented to them to be correct by the president or
the officer of the Trust having charge of its books of account, or stated in
a written report by an independent certified public accountant fairly to present
the financial position of the Trust. The Trustees may rely, and shall be
personally protected in acting, upon any instrument or other document believed
by them to be genuine.
9.7 Income Tax Status. The Trustees shall use their best efforts to
refrain from any action which, in their good faith judgment, would adversely
affect the status of the Trust as a REIT, as defined in the Internal Revenue
Code and the rules and regulations thereunder, once such status is achieved.
Anything to the contrary herein notwithstanding and without limitation of any
rights of indemnification or non-liability of the Trustees herein, however, said
Trustees by these Bylaws make no commitment or representation that the Trust
will qualify as a REIT, as defined in the Internal Revenue Code and the rules
and regulations thereunder in any given year. The failure of the Trust to
qualify as a REIT under the Internal Revenue Code shall not render the Trustees
liable to the Shareholders or to any other Person or in any manner operate to
annul the Trust.
ARTICLE X
MISCELLANEOUS
10.1 Reports to Shareholders.
(a) Within one hundred twenty (120) days after the close of each
fiscal year of the Trust or as soon thereafter as practicable, the Trustees
shall mail a report of the business and operation of the Trust during such
fiscal year to the Shareholders, which report shall constitute the accounting of
the Trustees for such fiscal year. The report shall be in such form and have
such content as the Trustees deem proper. The Annual Report shall include a
balance sheet and a statement of income and surplus of the Trust. Such financial
statements shall be prepared in accordance with generally accepted accounting
principles and shall be accompanied by the report of an independent certified
public accountant thereon. A manually signed copy of the accountant's report
shall be filed with the Trustees. The Independent Trustees shall take reasonable
steps to ensure that this requirement is met.
(b) At least quarterly the Trustees shall send interim reports to the
Shareholders. The interim reports shall be in such form and have such content as
the Trustees deem proper. The interim reports shall include a statement of the
aggregate amount of advisory fees and the aggregate amount of other fees paid
during the preceding quarter to the Advisor and its Affiliates by the Trust and
by third parties based upon their relationship with the Trust.
10.2 Notices. Any notice of meeting or other notice,
communication or report to any Shareholder or Trustee shall
be deemed duly delivered to such Shareholder or Trustee when such
notice, communication or report is deposited, with postage prepaid, in
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the United States mail, addressed to such Shareholder or Trustee at his address
as it appears on the records of the Trust, or is delivered in person to such
Shareholder.
Whenever any notice is required to be given, a waiver thereof in writing
signed by the Person or Persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
10.3 Inspection of Bylaws. The Trust shall keep at its registered
office in the County of St. Louis, State of Missouri, the original or a copy of
the Articles of Incorporation and Bylaws of the Trust and any amendments
thereto, all of which shall be open to inspection by Shareholders during normal
business hours.
10.4 Inspection of Corporate Records. The books and records of the
Trust, including Shareholder records, shall be open to inspection by an
Administrator or by any Shareholder during normal business hours at the
registered office of the Trust in the County of St. Louis, State of Missouri
upon the written request of such Administrator or Shareholder. A list of the
names and addresses of all Shareholders shall be maintained as part of the books
and records of the Trust.
10.5 Checks. All checks or demands for money and notes of the Trust
shall be signed by such officer or officers, or such other Person or Persons as
the Board of Trustees may from time to time designate.
10.6 Fiscal Year. The fiscal year of the Trust shall commence on
January 1 and close on December 31.
10.7 Seal. The seal of the Trust shall have inscribed thereon the name
of the Trust, the year of its incorporation, the words "Corporate Seal" and
"Missouri", and such other inscriptions as the Board of Trustees may deem
appropriate. Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
10.8 Power of Shareholders in Event of Merger or Sale of Assets.
(a) The affirmative vote of the holders of at least two-thirds (2/3)
of the outstanding Shares entitled to vote thereon shall be required to approve
the nature and amount of the consideration and the other principal terms of any
merger or consolidation of the Trust with any Person.
(b) The affirmative vote of the holders of at least two-thirds (2/3)
of the outstanding Shares entitled to vote thereon shall be required to approve
the sale, lease, exchange or other disposition, other than by mortgage, deed of
trust or pledge, of all or substantially all of the property and assets of the
Trust, if such sale, lease, exchange or other disposition is not made in the
usual and regular course of the business of the Trust.
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10.9 Conflicting Provisions.
(a) The provisions of these Bylaws are severable, and if the Trustees
shall determine, with the advice of counsel, that any one or more of such
provisions (the "Conflicting Provisions") would have the effect of preventing
the Trust from qualifying as a REIT under the Internal Revenue Code, or are in
conflict with other applicable federal or state securities laws or regulations
or other applicable federal or state laws or regulations, the Conflicting
Provisions shall be deemed never to have constituted a part of these Bylaws;
provided, however, that no such determination by the Trust shall affect or
impair any of the remaining provisions of these Bylaws or render invalid or
improper any action taken or omitted prior to such determination. A
certification in recordable form signed by a majority of the Trustees setting
forth any such determination and reciting that it was duly adopted by the
Trustees, or a copy of these Bylaws, with the Conflicting Provisions removed
pursuant to such determination, in recordable form, signed by a majority of the
Trustees, shall be conclusive evidence of such determination when lodged in the
records of the Trust. The Trustees shall not be liable for failure to make any
determination under this Section 10.9. Nothing in this Section 10.9 shall in any
way limit or affect the right of the Trustees to amend these Bylaws as provided
in Article XI.
(b) If any provision of these Bylaws 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 these Bylaws, and these Bylaws shall be carried out as if
any such invalid or unenforceable provision were not contained herein.
ARTICLE XI
AMENDMENTS
These Bylaws may be altered, amended or repealed or new bylaws may be
adopted in lieu thereof by the affirmative vote of a majority of the Shares
issued and outstanding and entitled to vote thereon; provided, however, that the
Trustees may amend these Bylaws without the vote or consent of the Shareholders
in the event the Trustees deem such necessary to conform these Bylaws to the
requirements of the REIT Provisions of the Internal Revenue Code, to applicable
state or federal securities laws or to other applicable state or federal laws or
regulations, but the Trustees shall not be liable for failing to do so.
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