Exhibit 3(i)(a)
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MEDITRUST ACQUISITION COMPANY
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Declaration of Trust
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June 2, 1997
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Principal Business Address:
197 First Avenue
Needham, MA 02194
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Business Address of Meditrust Acquisition Company's Trustees:
197 First Avenue
Needham, MA 02194
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Agent for Service of Process for
Meditrust Acquisition Company and its Trustees:
Michael S. Benjamin, Esq
Meditrust Acquisition Company
197 First Avenue
Needham, MA 02194
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ARTICLE I
THE TRUST; DEFINITIONS
Page
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1.1 Name..................................................... 1
1.2 Places of Business....................................... 1
1.3 Nature of Trust ......................................... 1
1.4 Definitions ............................................. 2
ARTICLE II
TRUSTEES
2.1 Number, Term of Office and Qualifications
of Trustees............................................. 4
2.2 Compensation and Other Remuneration ..................... 5
2.3 Resignation, Removal and Death of Trustees .............. 5
2.4 Vacancies................................................ 5
2.5 Successor and Additional Trustees ....................... 6
2.6 Actions by Trustees ..................................... 6
2.7 Certification of Changes in Trustees .................... 6
2.8 Committees .............................................. 7
ARTICLE III
TRUSTEES' POWERS
3.1 Power and Authority of Trustees ......................... 7
3.2 Specific Powers and Authority ........................... 7
3.3 By-Laws .................................................12
ARTICLE IV
ADVISOR
4.1 Employment of Advisor ...................................13
4.2 Other Activities of Advisor .............................13
ARTICLE V
INVESTMENT POLICY
5.1 Statement of Policy .....................................14
ARTICLE VI
THE SHARES AND SHAREHOLDERS
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6.1 Description of Shares ...................................14
6.2 Certificates ............................................16
6.3 Fractional Shares .......................................16
6.4 Issuance of Units .......................................16
6.5 Legal Ownership of Trust Estate .........................17
6.6 Shares Deemed Personal Property .........................17
6.7 Share Record; Issuance and Transferability of Shares.....17
6.8 Dividends or Distributions to Shareholders ..............18
6.9 Transfer Agent, Dividend Disbursing Agent and Registrar..18
6.10 Shareholders' Meetings ..................................18
6.11 Proxies .................................................20
6.12 Fixing Record Date ......................................20
6.13 Notice to Shareholders ..................................20
6.14 Shareholder Disclosures; Trustees Right to Refuse to
Transfer Shares; Limitation on Holdings; Redemption of
Shares..................................................20
ARTICLE VII
LIABILITY OF TRUSTEES, SHAREHOLDERS,
OFFICERS, EMPLOYEES AND AGENTS,
AND OTHER MATTERS
7.1 Exculpation of Trustees, Officers, Employees
and Agents .............................................22
7.2 Limitation of Liability of Shareholders, Trustees,
Officers, Employees and Agents .........................22
7.3 Express Exculpatory Clauses and Instruments .............23
7.4 Indemnification and Reimbursement of Trustees,
Officers, Employees, and Agents ........................23
7.5 Right of Trustees, Officers, Employees and Agents to
Own Share or Other Property and to Engage in Other
Business ...............................................24
7.6 Transactions Between Trustees, Officers, Employees or
Agents and the Trust ...................................25
7.7 Restriction of Duties and Liabilities ...................26
7.8 Persons Dealing with Trustees, Officers, Employees
or Agents ..............................................26
7.9 Reliance ................................................26
ARTICLE VIII
DURATION, AMENDMENT AND TERMINATION
OF TRUST
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8.1 Duration of Trust .......................................26
8.2 Termination of Trust ....................................27
8.3 Amendment Procedure .....................................27
8.4 Amendments Effective ....................................28
8.5 Transfer to Successor ...................................28
8.6 Sale of Assets, Merger ..................................28
ARTICLE IX
MISCELLANEOUS
9.1 Applicable Law ..........................................29
9.2 Index and Headings for Reference Only ...................29
9.3 Successors in Interest ..................................29
9.4 Inspection of Records ...................................29
9.5 Counterparts ............................................29
9.6 Provisions of the Trust in Conflict with Law or
Regulations; Severability ..............................29
9.7 Certifications ..........................................30
DECLARATION OF TRUST
OF
MEDITRUST
ACQUISITION COMPANY
June 2, 1997
DECLARATION OF TRUST as of the date set forth above by the undersigned
Trustees.
WITNESSETH:
WHEREAS, the Trustees desire to form a trust for the principal purpose of
effecting a Merger with Santa Anita Operating Company;
NOW, THEREFORE, it is hereby agreed and declared that the Trustees will
hold any and all property of every type and description which they are acquiring
or may hereafter acquire as Trustees, together with the proceeds thereof, in
trust, to manage and dispose of the same for the benefit of the holders from
time to time of the Shares of Beneficial Interest being issued and to be issued
hereunder in the manner and subject to the stipulations contained herein.
ARTICLE I
THE TRUST: DEFINITIONS
1.1 Name. The name of the Trust created by this Declaration of Trust
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shall be "Meditrust Acquisition Company" and so far as may be practicable the
Trustees shall conduct the Trust's activities, execute all documents and sue or
be sued under that name, which name (and the word "Trust" wherever used in this
Declaration of Trust, except where the context otherwise requires) shall refer
to the Trustees collectively but not individually or personally nor to the
officers, agents, employees or Shareholders of the Trust or of such Trustees.
Under circumstances under which the Trustees determine that the use of such name
is not practicable or under circumstances in which the Trustees are
contractually bound to change that name, they may adopt another name under which
the Trust may hold property or conduct its activities.
1.2 Places of Business. The Trust shall maintain an office in
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Massachusetts at such place in Massachusetts as the Trustees may determine from
time to time. The Trust may have such other offices or places of business within
or without the Commonwealth of Massachusetts as the Trustees may from time to
time determine.
1.3 Nature of Trust. The Trust shall be of the type commonly termed a
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Massachusetts business trust. The Trust is not intended to be, shall not be
deemed to be, and shall not be treated as a general partnership, limited
partnership, joint venture, corporation or joint stock company nor shall the
Trustees or Shareholders or any of them for any purpose be, nor be deemed to be,
nor be treated in any way
whatsoever to be, liable or responsible hereunder as partners or joint
venturers. The relationship of the Shareholders to the Trustees shall be solely
that of beneficiaries of the Trust in accordance with the rights conferred upon
them by this Declaration.
1.4 Definitions. The terms defined in this Section 1.4 wherever used in
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this Declaration shall, unless the context otherwise requires, have the
respective meanings hereinafter specified. Whenever the singular number is used
in this Declaration and when permitted by the context, the same shall include
the plural, and the masculine gender shall include the feminine and neuter
genders and vice versa. Where applicable, calculations to be made pursuant to
any such definition shall be made in accordance with generally accepted
accounting principles as in effect from time to time except as otherwise
provided in such definition.
(a) Advisor. "Advisor" shall mean the Person employed by the
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Trustees in accordance with the provisions of Article IV but shall not
include any individual who provides services to the Trust as an employee,
advisor or consultant, on either a full-time or part-time basis.
(b) Affiliate. "Affiliate" shall mean, as to any person, (i) any
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other Person directly or indirectly controlling, controlled by or under
common control with such Person, (ii) any other Person that owns
beneficially, directly or indirectly, five percent (5%) or more of the
outstanding capital stock or shares of equity interests of such Person, or
(iii) any officer, director, employee, general partner or trustee of such
Person or of any Person controlling, controlled by or under common control,
with such Person (excluding trustees and persons serving in similar
capacities who are not otherwise an Affiliate of such Person).
(c) Affiliated Trustee. "Affiliated Trustee" shall mean a Trustee
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who is not an Independent Trustee.
(d) Annual Meeting of Shareholders. "Annual Meeting of
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Shareholders" shall mean the meeting described in the first sentence of
Section 6.10.
(e) By-Laws. "By-Laws" shall have the meaning set forth in Section
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3.3.
(f) Declaration. "Declaration" or "this Declaration" shall mean
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this Declaration of Trust, as amended, restated or modified from time to
time. References in this Declaration to "herein" and "hereunder" shall be
deemed to refer to this Declaration and shall not be limited to the
particular text, article or section in which such words appear.
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(g) Independent Trustee. "Independent Trustee" shall mean a
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Trustee, who, in his individual capacity, (i) is not affiliated, directly
or indirectly, with an Advisor of the Trust, whether by ownership of,
ownership interest in, employment by, any business or professional
relationship with, or serves as an officer or director of, such Advisor or
an affiliated business entity of such Advisor and (ii) does not perform any
services for the Trust except as Trustee. An indirect relationship shall
include circumstances in which a member of the immediate family of a
Trustee has one of the foregoing relationships with the Trust or an Advisor
of the Trust.
(h) Internal Revenue Code. "Internal Revenue Code" shall mean the
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Internal Revenue Code of 1986, as now enacted or hereafter amended, or
successor statutes.
(i) Mortgage Loans. "Mortgage Loans" shall mean notes, debentures,
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bonds and other evidences of indebtedness or obligations which are
negotiable or nonnegotiable and which are secured or collateralized by
Mortgages.
(j) Mortgages. "Mortgages" shall mean mortgages, deeds of trust or
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other security interests in Real Property or in rights or interests,
including leasehold interests, in Real Property.
(k) Person. "Person" shall mean and include individuals,
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corporations, limited partnerships, general partnerships, joint stock
companies or associations, joint ventures, associations, companies, trusts,
banks, trust companies, land trusts, business trusts, or other entities and
governments and agencies and political subdivisions thereof.
(l) Real Property. "Real Property" shall mean and include land,
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leasehold interests (including but not limited to interests of a lessor or
lessee therein), rights and interests in land, and any buildings,
structures, improvements, furnishings, fixtures and equipment located on or
used in connection with land, leasehold interests or rights in land or
interests therein, but does not include investments in Mortgages, Mortgage
Loans or interests therein.
(m) REIT. "REIT" shall mean a real estate investment trust as
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defined in the REIT Provisions of the Internal Revenue Code.
(n) REIT Provisions of the Internal Revenue Code. "REIT Provisions
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of the Internal Revenue Code" shall mean Parts II and III of Subchapter M
of Chapter 1 of Subtitle A of the Internal Revenue Code, or similar
provisions of any successor statute.
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(o) Securities. "Securities" shall mean any stock, shares, voting
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trust certificates, bonds, debentures, notes or other evidences of
indebtedness or in general any instruments commonly known as "securities"
or any certificates of interest, shares or participations in, temporary or
interim certificates for, receipts for, guarantees of, or warrants, options
or rights to subscribe to, purchase or acquire any of the foregoing.
(p) Shareholders. "Shareholders" shall mean as of any particular
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time all holders of record of outstanding Shares at such time.
(q) Shares. "Shares" or, as the context may require, "shares" shall
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mean the shares of beneficial interest of the Trust as described in the
first sentence of Section 6.1 hereof.
(r) Trust. "Trust" shall mean the Trust created by this
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Declaration.
(s) Trustees. "Trustees" shall mean, as of any particular time, the
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original signatories hereto as long as they hold office hereunder and
additional and successor Trustees, and shall not include the officers,
employees or agents of the Trust or the Shareholders. Nothing herein shall
be deemed to preclude the Trustees from also serving as officers, employees
or agents of the Trust or owning Shares.
(t) Trust Estate. "Trust Estate" shall mean as of any particular
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time any and all property, real, personal or otherwise, tangible or
intangible, which is transferred, conveyed or paid to or purchased by the
Trust or Trustees and all rents, income, profits and gains therefrom and
which at such time is owned or held by or for the Trust or the Trustees.
ARTICLE II
TRUSTEES
2.1 Number, Term of Office and Qualifications of Trustees. There shall be
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no fewer than one (1) nor more than twelve (12) Trustees. The initial Trustees
shall be the signatories hereto. Within the limits set forth in this Section
2.1, the number of Trustees may be increased or decreased from time to time by
the Trustees or by the Shareholders. No reduction in the number of Trustees
shall have the effect of removing any Trustee from office prior to the
expiration of his term. Subject to the provisions of Section 2.3 each Trustee
shall hold office until the next annual meeting of Shareholders and until the
election and qualification of his successor. There shall be no cumulative voting
in the election for Trustees. A Trustee shall be an individual at least twenty-
one (21) years of age who is not under legal disability. At least one of the
Trustees shall at all times be a person who is an Independent Trustee; provided,
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however, that upon a failure to comply with this requirement because of the
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resignation, removal or death of a Trustee who is an Independent Trustee, such
requirement shall not be applicable for a period of sixty (60) days. Nominees to
serve as Independent Trustees shall be nominated by the then current Independent
Trustees, if any. Unless otherwise required by law, no Trustee shall be required
to give bond, surety or security in any jurisdiction for the performance of any
duties or obligations hereunder. The Trustees in their capacity as Trustees
shall not be required to devote their entire time to the business and affairs of
the Trust.
2.2 Compensation and Other Remuneration. The Trustees shall be entitled
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to receive such reasonable compensation for their services as Trustees as the
Trustees may determine from time to time. The Trustees and Trust officers shall
be entitled to receive remuneration for services rendered to the Trust in any
other capacity. Subject to Sections 7.5 and 7.6, such services may include,
legal, accounting or other professional services, or services as a broker,
transfer agent or underwriter, whether performed by a Trustee or any person
affiliated with a Trustee.
2.3 Resignation, Removal and Death of Trustees. A Trustee may resign at
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any time by giving written notice to the remaining Trustees at the principal
office of the Trust. Such resignation shall take effect on the date specified in
such notice, without need for prior accounting. A Trustee may be removed at any
time with or without cause by vote or consent of holders of Shares representing
a majority of the total votes authorized to be cast by Shares then outstanding
and entitled to vote thereon, or with cause by all remaining Trustees. A Trustee
judged incompetent or bankrupt, or for whom a guardian has been appointed, shall
be deemed to have resigned as of the date of such adjudication or appointment.
Upon the resignation or removal of any Trustee, his legal representative shall
perform the acts set forth in the preceding sentence and the discharge mentioned
therein shall run to such legal representative and to the incapacitated Trustee
or the estate of the deceased Trustee, as the case may be.
2.4 Vacancies. If any or all the Trustees cease to be Trustees hereunder,
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whether by reason of resignation, removal, incapacity, death or otherwise, such
event shall not terminate the Trust or affect its continuity. Until vacancies
are filled, the remaining Trustee or Trustees may exercise the powers of the
Trustees hereunder. Vacancies (including vacancies created by increases in
number) may be filled by the remaining Trustee or by a majority of the remaining
Trustees (or by the remaining Independent Trustee or a majority of the remaining
Independent Trustees, if any, if the vacant position was formerly held by an
Independent Trustee or is required to be held by an Independent Trustee) or by
vote of the Shareholders. If at any time there shall be no Trustees in office,
successor Trustees shall be elected by the Shareholders as provided in Section
6.10. Any Trustee elected to fill a vacancy created by the resignation, removal
or death of a former Trustee shall hold office for the unexpired term of such
former Trustee.
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2.5 Successor and Additional Trustees. The right, title and interest of
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the Trustees in and to the Trust Estate shall also vest in successor and
additional Trustees upon their qualification, and they shall thereupon have all
the rights and obligations of Trustees hereunder. Such right, title and interest
shall vest in the Trustees whether or not conveyancing documents have been
executed and delivered. Appropriate written evidence of the election and
qualification of successor and additional Trustees shall be filed with the
records of the Trust and in such other offices or places as the Trustees may
deem necessary, appropriate or desirable.
2.6 Actions by Trustees. The Trustees may act with or without a meeting.
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A quorum for all meetings of the Trustees shall be a majority of the Trustees;
provided, however, that, whenever pursuant to Section 7.6 or otherwise the vote
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of a majority of a particular group of Trustees is required at a meeting, a
quorum for such meeting shall be a majority of the Trustees which shall include
a majority of such group. Unless specifically provided otherwise in this
Declaration, any action of the Trustees may be taken at a meeting by vote of a
majority of the Trustees present (a quorum being present) or without a meeting
by written consents of a majority of the Trustees, which consents shall be filed
with the records of meetings of the Trustees. Any action or actions permitted to
be taken by the Trustees in connection with the business of the Trust may be
taken pursuant to authority granted by a meeting of the Trustees conducted by a
telephone conference call or similar communications equipment by means of which
all persons participating in the meeting can hear each other at the same time,
and participation by such means shall constitute presence in person at the
meeting and the transaction of Trust business represented thereby shall be of
the same authority and validity as if transacted at a meeting of the Trustees
held in person or by written consent. The minutes of any Trustees' meeting held
by telephone shall be prepared in the same manner as a meeting of the Trustees
held in person. Any agreement, deed, mortgage, lease or other instrument or
writing executed by one or more of the Trustees or by any authorized person
shall be valid and binding upon the Trustees and upon the Trust when authorized
or ratified by action of the Trustees or as provided in the By-Laws.
With respect to the actions of the Trustees, Trustees who have, or
are Affiliates of Persons who have, any direct or indirect interest in or
connection with any matter being acted upon may be counted for all quorum
purposes under this Section 2.6 and, subject to the provisions of Section 7.6,
may vote on the matter as to which they or their Affiliates have such interest
or connection.
2.7 Certification of Changes in Trustees. No alteration in the number of
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Trustees, no removal of a Trustee and no election or appointment of any
individual as Trustee (other than an individual who was serving as a Trustee
immediately prior to such election or appointment) shall become effective unless
and until there shall be delivered to the President or the Secretary of the
Trust an instrument in writing signed by a majority of the Trustees, certifying
to such alteration in the number of
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Trustees and/or to such removal of a Trustee and/or naming the individual so
elected or appointed as Trustee, together with his written acceptance thereof
and agreement to be bound thereby.
2.8 Committees. The Trustees may appoint from among their number such
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standing committees as the Trustees determine. At least one member of each
standing committee shall be an Independent Trustee; provided, however, that upon
a failure to comply with this requirement because of the resignation, removal or
death of a Trustee who is an Independent Trustee, such requirement shall not be
applicable for a period of sixty (60) days. Each committee shall have such
powers, duties and obligations as the Trustees may deem necessary or
appropriate. The standing committees shall report their activities periodically
to the Trustees.
ARTICLE III
TRUSTEES' POWERS
3.1 Power and Authority of Trustees. The Trustees, subject only to the
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specific limitations contained in this Declaration, shall have, without further
or other authorization, and free from any power or control on the part of the
Shareholders, full, absolute and exclusive power, control and authority over the
Trust Estate and over the business and affairs of the Trust to the same extent
as if the Trustees were the sole owners thereof in their own right and may do
all such acts and things as in their sole judgment and discretion are necessary
for or incidental to or desirable for the carrying out of or conducting the
business of the Trust. Any construction of this Declaration or any determination
made in good faith by the Trustees of the purposes of the Trust or the existence
of any power or authority hereunder shall be conclusive. In construing the
provisions of this Declaration, presumption shall be in favor of the grant of
powers and authority to the Trustees. The enumeration of any specific power or
authority herein shall not be construed as limiting the aforesaid powers or the
general powers or authority or any other specified power or authority conferred
herein upon the Trustees.
3.2 Specific Powers and Authority. Subject only to the express
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limitations contained in this Declaration and in addition to any powers and
authority conferred by this Declaration or which the Trustees may have by virtue
of any present or future statute or rule or law, the Trustees without any action
or consent by the Shareholders shall have and may exercise at any time and from
time to time the following powers and authorities which may or may not be
exercised by them in their sole judgment and discretion and in such manner and
upon such terms and conditions as they may from time to time deem proper:
(a) to retain, invest and reinvest the capital or other funds of
the Trust in, and to acquire, purchase, or own, real or personal
property of any
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kind, (including without limitation Securities of any Person) wherever
located in the world, and make commitments for such investments, all
without regard to whether any such property is authorized by law for
the investment of trust funds or produces or may produce income and to
possess and exercise all the rights, powers and privileges appertaining
to the ownership of the Trust Estate; and to increase the capital of
the Trust at any time by the issuance of any additional Shares or other
Securities of the Trust for such consideration as they deem advisable;
(b) without limitation of the powers set forth in paragraph (a)
above, to invest in, purchase or otherwise acquire for such
consideration as they deem proper, in cash or other property or through
the issuance of Shares or through the issuance of notes, debentures,
bonds or other obligations of the Trust, and to hold for investment,
the entire or any participating interests in any Mortgage Loans, or
interests in Real Property, including ownership of, or participations
in the ownership of, or rights to acquire, equity interests in Real
Property or in Persons owning, developing, improving, operating or
managing Real Property, which interests may be acquired independently
of or in connection with other investment activities of the Trust and,
in the latter case, may include rights to receive additional payments
based on gross income or rental or other income from the Real Property
or improvements thereon; to invest in loans secured by the pledge or
transfer of Mortgage Loans; to develop, operate, pool, utilize, grant
production payments out of or lease or otherwise dispose of mineral,
oil and gas properties and rights;
(c) to sell, rent, lease, hire, exchange, release, partition,
assign, mortgage, pledge, hypothecate, grant security interests in,
encumber, negotiate, convey, transfer or otherwise dispose of any and
all the Trust Estate by deeds (including deeds in lieu of foreclosure),
trust deeds, assignments, bills of sale, transfers, leases, mortgages,
financing statements, security agreements and other instruments for any
of such purposes executed and delivered for and on behalf of the Trust
or the Trustees by one or more of the Trustees or by a duly authorized
officer, employee, agent or nominee of the Trust;
(d) to issue Shares, bonds, debentures, notes or other evidences of
indebtedness which may be secured or unsecured and may be subordinated
to any indebtedness of the Trust to such Persons for such cash,
property or other consideration (including without limitation
Securities issued or created by, or interests in any Person) at such
time or times and on such terms as the Trustees may deem advisable and
to list any of the foregoing Securities issued by the Trust on any
securities exchange and to purchase or otherwise acquire, hold, cancel,
reissue, sell and transfer any of such Securities, and to cause the
instruments evidencing such Securities to bear an actual or facsimile
imprint of the seal of the Trust and to be signed by manual or
facsimile signature or
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signatures (and to issue such Securities, whether or not any Person
whose manual or facsimile signature shall be imprinted thereon shall
have ceased to occupy the office with respect to which such signature
was authorized), provided that, where only facsimile signatures for the
Trust are used, the instrument shall be countersigned manually by a
transfer agent, registrar or other authentication agent. Any of such
Securities of different types may be issued in combinations or units
with such restrictions on the separate transferability thereof as the
Trustees shall determine;
(e) to enter into leases or subleases of real and personal
property as lessor or lessee and to enter into 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
having a lesser term;
(f) to borrow money and give negotiable or non-negotiable
instruments 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
indebtedness of the Trust or any other of the foregoing obligations of
the Trust;
(g) to lend money, whether secured or unsecured;
(h) to create reserve funds for any purpose;
(i) to incur and pay out of the Trust Estate any charges or
expenses, and disburse any funds of the Trust, which charges, expenses
or disbursements are, in the opinion of the Trustees, necessary or
incidental to or desirable for the carrying out of any of the purposes
of the Trust or conducting the business of the Trust, including without
limitation taxes and other governmental levies, charges and
assessments, of whatever kind or nature, imposed upon or against the
Trustees in connection with the Trust or the Trust Estate or any part
thereof, and for any of the purposes herein;
(j) to deposit funds of the Trust in banks, trust companies,
savings and loan associations and other depositories, whether or not
such deposits will draw interest, the same to be subject to withdrawal
on such terms and in such manner and by such Person or Persons
(including any one or more Trustees, officers, employees or agents) as
the Trustees may determine;
(k) to possess and exercise all the rights, powers and privileges
pertaining to the ownership of all or any Mortgages or Securities
issued or created by, or interests in, any Person, forming part of the
Trust Estate, to the
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same extent that an individual might, and, without limiting the
generality of the foregoing, to vote or give any consent, request or
notice, or waive any notice, either in person or by proxy or power of
attorney, with or without power of substitution, to one or more
Persons, which proxies and powers of attorney may be for meetings or
actions generally or for any particular meeting or action, and may
include the exercise of discretionary powers;
(l) to cause to be organized or assist in organizing any Person
under the laws of any jurisdiction to acquire the Trust Estate or any
part or parts thereof or to carry on any business in which the Trust
shall directly or indirectly have any interest, and to sell, rent,
lease, hire, convey, negotiate, assign, exchange or transfer the Trust
Estate or any part or parts thereof to or with any such Person or any
existing Person in exchange for the Securities thereof or otherwise,
and to merge or consolidate the Trust with or into any Person or merge
or consolidate any Person into the Trust, and to lend money to,
subscribe for the Securities of, and enter into any contracts with, any
Person in which the Trust holds or is about to acquire Securities or
any other interest;
(m) to enter into joint ventures, general or limited partnerships,
participation or agency arrangements and any other lawful combination
or associations;
(n) to elect, appoint, engage or employ such officers for the
Trust as the Trustees may determine, who may be removed or discharged
at the discretion of the Trustees, such officers to have such powers
and duties, and to serve such terms, as may be prescribed by the
Trustees or by the By-Laws; to engage or employ any Persons (including,
without limitation, subject to the provisions of Section 7.5 and 7.6,
any Trustee, officer or agent and any Person in which any Trustee,
officer or agent is directly or indirectly interested or with which he
is directly or indirectly connected) as agents, representatives,
employees or independent contractors (including, without limitation,
real estate advisors, investment advisors, transfer agents, registrars,
underwriters, accountants, attorneys at law, real estate agents,
managers, appraisers, brokers, architects, engineers, construction
managers, general contractors or otherwise) in one or more capacities,
and to pay compensation from the Trust for services in as many
capacities as such Person may be so engaged or employed; and to
delegate any of the powers and duties of the Trustees to any one or
more Trustees, agents, representatives, officers, employees,
independent contractors or other Persons; provided, however, that no
such delegation shall be made to an Affiliate of the Advisor, except
with the approval of a majority of the Independent Trustee or a
Trustees Independent;
(o) to determine whether moneys, Securities or other assets
received by the Trust shall be charged or credited to income or capital
or allocated
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between income and capital, including the power to amortize or fail to
amortize any part or all of any premium or discount, to treat any part
or all the profit resulting from the maturity or sale of any asset
whether purchased at a premium or at a discount, as income or capital,
or apportion the same between income and capital, to apportion the
sales price of any asset between income and capital, and to determine
in what manner any expenses or disbursements are to be borne as between
income and capital, whether or not in the absence of the power and
authority conferred by this subsection such moneys, Securities or other
assets would be regarded as income or as capital or such expense or
disbursement would be charged to income or to capital; to treat any
dividend or other distribution on any investment as income or capital
or apportion the same between income and capital; to provide or fail to
provide reserves for depreciation, amortization or obsolescence in
respect of all or any part of the Trust Estate subject to depreciation,
amortization or obsolescence in such amounts and by such methods as
they shall determine; and to determine the method or form in which the
accounts and records of the Trust shall be kept and to change from time
to time such method or form;
(p) to determine or cause to be determined from time to time the
value of all or any part of the Trust Estate and of any services,
Securities, property or other consideration to be furnished to or
acquired by the Trust, and from time to time to revalue or cause to be
revalued all or any part of the Trust Estate in accordance with such
appraisals or other information as are in the Trustees' sole judgment,
necessary and/or satisfactory;
(q) 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;
(r) to renew, modify, release, compromise, extend, consolidate
or cancel, in whole or in part, any obligation to or of the Trust or
participate in any reorganization of obligors to the Trust;
(s) to purchase and pay for out of the Trust Estate insurance
contracts and policies insuring the Trust Estate against any and all
risks and insuring the Trust and/or all or any of the Trustees, the
Shareholders, officers, employees or agents against any and all claims
and liabilities of every nature asserted by any Person arising by
reason of any action alleged to have been
-11-
taken or omitted by the Trust or by the Trustees, Shareholders,
officers, employees or agents;
(t) to cause legal title to any of the Trust Estate to be held by
and/or in the name of the Trustees, or except as prohibited by law by
and/or in the name of the Trust or one or more of the Trustees or any
other Person, on such terms, in such manner, with such powers in such
Person as the Trustees may determine, and with or without disclosure
that the Trust or Trustees are interested therein;
(u) to adopt a fiscal year for the Trust, and from time to time to
change such fiscal year;
(v) to adopt and use a seal (but the use of a seal shall not be
required for the execution of instruments or obligations of the Trust);
(w) to the extent permitted by law, to indemnify or enter into
agreements with respect to indemnification with any Person with which
the Trust has dealings, including without limitation any investment
advisor or independent contractor, to such extent as the Trustees shall
determine;
(x) to confess judgment against the Trust;
(y) to discontinue the operations of the Trust;
(z) to repurchase or redeem Shares; and
(aa) to do all other such acts and things as are incident to
the foregoing, and to exercise all powers which are necessary or useful
to carry on the business of the Trust and to carry out the provisions
of this Declaration, including, without limitation, all powers of
directors of a Massachusetts business trust.
3.3. By-Laws. The Trustees may make or adopt and from time to time amend
-------
or repeal regulations (the "By-Laws") not inconsistent with law or with this
Declaration, containing provisions relating to the business of the Trust and the
conduct of its affairs and in such By-Laws may define the duties of the
officers, employees and agents of the Trust.
ARTICLE IV
ADVISOR
4.1 Employment of Advisor. The Trustees are responsible for the general
---------------------
policies of the Trust and for the general supervision of the business of the
Trust
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conducted by all officers, agents, employees, advisors, managers or independent
contractors of the Trust. However, the Trustees are not and shall not be
required personally to conduct the business of the Trust, and, consistent with
their ultimate responsibility as stated above, the Trustees shall have the power
to appoint, employ or contract with any Person including one or more of
themselves or any corporation, partnership or trust in which one or more of them
may be directors, officers, stockholders, partners or trustees, as the Trustees
may deem necessary or proper for the transaction of the business of the Trust.
The Trustees may therefore employ or contract with such Person (herein referred
to as the "Advisor") and, consistent with their ultimate responsibility as set
forth in this Section 4.l, the Trustees may grant or delegate such authority to
the Advisor as the Trustees may in their sole discretion deem necessary or
desirable without regard to whether such authority is normally granted or
delegated by trustees.
The Trustees shall have the power to determine the terms and
compensation of the Advisor or any other Person whom they may employ or with
whom they may contract; provided, however, that any determination to employ or
-------- -------
contract with any Trustee or any Person such that a Trustee would be an
Affiliated Trustee shall be valid only if made, approved or ratified after
disclosure of such interests by the affirmative vote or written consent of a
majority of the Trustees who would continue to be Independent Trustees. The
Trustees may exercise broad discretion in allowing the Advisor to administer and
regulate the operations of the Trust, to act as agent for the Trust, to execute
documents on behalf of the Trustees and to make executive decisions which
conform to general policies and general principles previously established by the
Trustees.
4.2. Other Activities of Advisor. The Advisor shall not be required to
---------------------------
administer the Trust as its sole and exclusive function and may have other
business interests and may engage in other activities similar or in addition to
those relating to the Trust, including the rendering of advice or services of
any kind to other investors or any other Persons (including other REITs) and the
management of other investments. The Trustees may request the Advisor to engage
in certain other activities which complement the Trust's investments, and the
Advisor may receive compensation or commissions therefor from the Trust or other
Persons.
The Advisor shall be required to use its best efforts to supervise the
operation of the Trust in a manner consistent with the investment policies and
objectives of the Trust. Neither the Advisor nor (subject to any applicable
provisions of Section 7.5) any director, trustee, officer, partner or employee
of the Advisor or of any Person which controls, is controlled by or is under
common control with the Advisor nor any such Person shall be obligated to
present any particular investment opportunities to the Trust, even if such
opportunities are of a character such that, if presented to the Trust, they
could be taken by the Trust, and, subject to the
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foregoing, each of them shall be protected in taking for its own account or
recommending to others any such particular investment opportunity.
Upon request of any Trustee, the Advisor shall from time to time
promptly furnish the Trustees with such information on a confidential basis as
to any investments within the Trust's investment policies made by the Advisor
for its own account as may be provided in the advisory contract with the Advisor
in effect from time to time.
ARTICLE V
INVESTMENT POLICY
5.1 Statement of Policy. It shall be the policy of the Trustees to make
-------------------
investments in such manner as to comply with the requirements of the Internal
Revenue Code with respect to the composition of the investments and the
derivation of the income for a real estate investment trust as defined in the
REIT Provisions of the Internal Revenue Code; provided, however, that no
Trustee, officer, employee or agent of the Trust shall be liable for any act or
omission resulting in the loss of tax benefits under the Internal Revenue Code,
except for that arising from his own willful misfeasance, bad faith, gross
negligence or reckless disregard of duty.
ARTICLE VI
THE SHARES AND SHAREHOLDERS
6.1 Description of Shares. The interest of the Shareholders shall be
---------------------
divided into shares of beneficial interest which shall be known collectively as
"Shares," all of which shall be validly issued, fully paid and nonassessable by
the Trust upon receipt of full consideration for which they have been issued or
without additional consideration if issued by way of share dividend or share
split. Each holder of Shares shall as a result thereof be deemed to have agreed
to and be bound by the terms of this Declaration. The Shares may be issued for
such consideration as the Trustees shall deem advisable. The Shares shall be
without par value. The number of Shares which the Trust shall have authority to
issue is unlimited. The Trustees are hereby expressly authorized at any time,
and from time to time, to provide for the issuance of Shares upon such terms and
conditions and pursuant to such agreements as the Trustees may determine.
The Shares may consist of one or more classes or series. The Trustees may,
from time to time, establish and designate the different classes and series and
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designate variations in the relative rights and preferences between the
different classes and series as provided below, but in all other respects all
Shares shall be identical.
Subject to the provisions hereof, the Trustees are authorized to establish
one or more classes or series of Shares and, to the extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts, to fix and determine
the preferences, voting powers, qualifications and special or relative rights or
privileges of each class or series including, but not limited to:
(a) the number of Shares to constitute such class or series and the
distinguishing designation thereof;
(b) the dividend rate on the Shares of such class or series and the
preferences, if any, and the special and relative rights of such Shares of
such series as to dividends;
(c) whether or not the Shares of such class or series shall be
redeemable, and, if redeemable, the price, terms and manner of redemption;
(d) the preferences, if any, and the special and relative rights of
the Shares of such class or series upon the voluntary or involuntary
dissolution or liquidation of the Trust;
(e) whether or not the Shares of such class or series shall be subject
to the operation of a sinking or purchase fund and, if so, the terms and
provisions of such fund;
(f) whether or not the Shares of such class or series shall be
convertible into any other class or series of Shares and, if so, the
conversion price or ratio and other conversion rights;
(g) the conditions under which the Shares of such class or series
shall have separate voting rights or no voting rights; and
(h) such other designations, preferences and relative, participating,
optional or other special rights and qualifications, limitations or
restrictions of such class or series to the full extent now or hereafter
permitted by the laws of the Commonwealth of Massachusetts.
Notwithstanding the fixing of the number of Shares constituting a
particular class or series, the Trustees may at any time authorize the issuance
of additional Shares of the same class or series.
-15-
Before the Trust shall issue any Shares of any newly designated class or
series, a certificate setting forth the resolution or resolutions of the
Trustees fixing the voting powers, designations, preferences and rights of such
class or series, the qualifications, limitations or restrictions thereof, and
the number of Shares of such class or series authorized by the Trustees, shall
be executed by a majority of the Trustees and filed with the Secretary of the
Commonwealth of Massachusetts in accordance with Section 7.4 hereof.
The holders of Shares shall be entitled to receive, when and as declared
from time to time by the Trustees out of any funds legally available for the
purpose, such dividends or distributions as may be declared from time to time by
the Trustees. In the event of the termination of the Trust pursuant to Section
8.l or otherwise, or upon the distribution of its assets, the assets of the
Trust available for payment and distribution to Shareholders shall be
distributed ratably among the holders of Shares at the time outstanding in
accordance with Section 8.2. Except as otherwise authorized by the Trustees with
respect to any particular class or series, all Shares shall have equal
noncumulative voting rights at the rate of one vote per share and equal
dividend, distribution, liquidation and other rights, and shall have no
preference, conversion, exchange, sinking fund or redemption rights. No holder
of Shares shall be entitled as a matter of right to subscribe for or purchase
any part of any new or additional issue of Shares of any class whatsoever of the
Trust, or of securities convertible into any shares of any class whatsoever of
the Trust, whether now or hereafter authorized and whether issued for cash or
other consideration or by way of dividend.
6.2 Certificates. Ownership of Shares shall be evidenced by certificates
------------
representing shares of Meditrust beneficial interest without par value
("Meditrust Shares"). Each holder of Meditrust Shares shall be deemed to own an
equal number of Shares, which shall be held in trust for the benefit of such
holders of Meditrust Shares.
6.3 Fractional Shares. In connection with any issuance of Shares, the
-----------------
Trustees may issue fractional Shares or may provide for the issuance of scrip
including, without limitation, the time within which any such scrip must be
surrendered for exchange into full Shares and the rights, if any, of holders of
scrip upon the expiration of the time so fixed, the rights, if any, to receive
proportional distributions, and the rights, if any, to redeem scrip for cash, or
the Trustees may in their discretion, or if they see fit at the option of each
holder, provide in lieu of scrip for the adjustment of the fractions in cash.
The provisions of Section 6.2 hereof relative to certificates for Shares shall
apply so far as applicable to such scrip, except that such scrip may in the
discretion of the Trustees be signed by a transfer agent alone.
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6.4 Issuance of Units. Notwithstanding any other provisions of this
-----------------
Declaration of Trust, the Trustees may issue from time to time units consisting
of different Securities of the Trust. Any Security issued in any such unit shall
have the same characteristics and shall entitle the registered holder thereof to
the same rights as any identical Securities issued by the Trustees, except that
the Trustees may provide (and may cause a notation to be placed on the
certificate representing such unit or Securities of the Trust issued in any such
unit) that for a specified period not to exceed one year after issuance,
Securities of the Trust issued in any such unit may be transferred upon the
books of the Trust only in such unit.
6.5 Legal Ownership of Trust Estate. The legal ownership of the Trust
-------------------------------
Estate and the right to conduct the business of the Trust are vested exclusively
in the Trustees (subject to Section 3.2(t)), and the Shareholders shall have no
interest therein other than beneficial interest in the Trust conferred by their
Shares issued hereunder and they shall have no right to compel any partition,
division, dividend or distribution of the Trust or any of the Trust Estate.
6.6 Shares Deemed Personal Property. The Shares shall be personal property
-------------------------------
and shall confer upon the holders thereof only the interest and rights
specifically set forth or provided for in this Declaration. The death,
insolvency or incapacity of a Shareholder shall not dissolve or terminate the
Trust or affect its continuity nor give his legal representative any rights
whatsoever, whether against or in respect of other Shareholders, the Trustees or
the Trust Estate or otherwise except the sole right to demand and subject to the
provisions of this Declaration, the By-Laws and any requirements of law, to
receive a new certificate for Shares registered in the name of such legal
representative, in exchange for the certificate held by such Shareholder.
6.7 Share Record; Issuance and Transferability of Shares. Records shall be
----------------------------------------------------
kept by or on behalf of and under the direction of the Trustees, which shall
contain the names and addresses of the Shareholders, the number of Shares held
by them respectively, and the numbers of the certificates representing the
Shares, and in which there shall be recorded all transfers of Shares. The Trust,
the Trustees and the officers, employees and agents of the Trust shall be
entitled to deem the Persons in whose names certificates are registered on the
records of the Trust to be the absolute owners of the Shares represented thereby
for all purposes of this Trust; but nothing herein shall be deemed to preclude
the Trustees or officers, employees or agents of the Trust from inquiring as to
the actual ownership of Shares. Until a transfer is duly effected on the records
of the Trust, the Trustees shall not be affected by any notice of such transfer,
either actual or constructive.
Shares shall be transferable on the records of the Trust only by the
record holder thereof or by his agent thereunto duly authorized in writing upon
delivery to the Trustees or a transfer agent of the certificate or certificates
therefor, properly
-17-
endorsed or accompanied by duly executed instruments of transfer and accompanied
by all necessary documentary stamps together with such evidence of the
genuineness of each such endorsement, execution or authorization and of other
matters as may reasonably be required by the Trustees or such transfer agent.
Upon such delivery, the transfer shall be recorded in the records of the Trust
and a new certificate for the Shares so transferred shall be issued to the
transferee and in case of a transfer of only a part of the Shares represented by
any certificate, a new certificate for the balance shall be issued to the
transferor. Any Person becoming entitled to any Shares in consequence of the
death of a Shareholder or otherwise by operation of law shall be recorded as the
holder of such Shares and shall receive a new certificate therefor but only upon
delivery to the Trustees or a transfer agent of instruments and other evidence
required by the Trustees or the transfer agent to demonstrate such entitlement,
the existing certificate for such Shares and such releases from applicable
governmental authorities as may be required by the Trustees or transfer agent.
In case of the loss, mutilation or destruction of any certificate for Shares,
the Trustees may issue or cause to be issued a replacement certificate on such
terms and subject to such rules and regulations as the Trustees may from time to
time prescribe. Nothing in this Declaration shall impose upon the Trustees or a
transfer agent a duty or limit their rights to inquire into adverse claims.
6.8 Dividends or Distributions to Shareholders. Subject to Section 6.1,
------------------------------------------
the Trustees may from time to time declare and pay to Shareholders such
dividends or distributions in cash, property or assets of the Trust or
Securities issued by the Trust, out of current or accumulated income, capital,
capital gains, principal, surplus, proceeds from the increase or financing or
refinancing of Trust obligations, or from the sale of portions of the Trust
Estate or from any other source as the Trustees in their discretion shall
determine. Shareholders shall have no right to any dividend or distribution
unless and until declared by the Trustees. The Trustees shall furnish the
Shareholders with a statement in writing advising as to the source of the funds
so distributed not later than ninety (90) days after the close of the fiscal
year in which the distribution was made.
6.9 Transfer Agent, Dividend Disbursing Agent and Registrar. The
-------------------------------------------------------
Trustees shall have power to employ one or more transfer agents, dividend
disbursing agents and registrars (including the Advisor and/or its Affiliates)
and to authorize them on behalf of the Trust to keep records, to hold and to
disburse any dividends or distributions, and to have and perform, in respect of
all original issues and transfers of Shares, dividends and distributions and
reports and communications to Shareholders, the powers and duties usually had
and performed by transfer agents, dividend disbursing agents and registrars of a
Massachusetts business trust.
6.10 Shareholders' Meetings. There shall be an annual meeting of the
----------------------
Shareholders at such time and place as shall be determined by or in the manner
prescribed in the By-Laws, at which the Trustees shall be elected and any other
-18-
proper business may be conducted. The Annual Meeting of Shareholders shall be
held within six (6) months after the end of each fiscal year. Special meetings
of Shareholders may be called by the President or by a majority of the Trustees
or of the Independent Trustees and shall be called by the President upon the
written request of Shareholders holding in the aggregate not less than ten
percent (10%) of the total votes authorized to be cast by the outstanding Shares
of the Trust entitled to vote at such meeting, in the manner provided in the
By-Laws. If there shall be no Trustees, the officers of the Trust shall promptly
call a special meeting of the Shareholders entitled to vote for the election of
successor Trustees. Notice of any special meeting shall state the purpose of the
meeting. Upon receipt of a written request either in person or by registered
mail stating the purpose of a special meeting requested by Shareholders, the
Trust shall provide all Shareholders, within ten (10) business days after
receipt of said request, written notice of such special meeting and the purpose
of such special meeting to be held on a date not less than twenty (20) nor more
than sixty (60) days after receipt of said request, at a time and place
convenient to Shareholders.
The holders of Shares entitled to vote at the meeting representing a
majority of the total number of votes authorized to be cast by Shares then
outstanding and entitled to vote on any question present in person or by proxy
shall constitute a quorum at any such meeting for action on such question. Any
meeting may be adjourned from time to time by a majority of the votes properly
cast upon the question, whether or not a quorum is present, and except as
otherwise provided in the By-Laws the meeting may be reconvened without further
notice. At any reconvened session of the meeting at which there shall be a
quorum, any business may be transacted at the meeting as originally noticed.
Whenever any action is to be taken by the Shareholders, it shall,
except as otherwise clearly indicated in this Declaration or the By-Laws,
require, and may be effected by, the affirmative vote of the holders of a
majority of the Shares present or represented and entitled to vote and voting on
such matter, provided that such majority shall be at least a majority of the
number of Shares required to constitute a quorum for action on such matter. Any
election by Shareholders shall be determined by a plurality of the votes cast by
the Shareholders entitled to vote at the election. No ballot shall be required
for such election unless requested by a Shareholder present or represented at
the meeting and entitled to vote in the election.
Whenever Shareholders are required or permitted to take any action
(unless a vote at a meeting is specifically required as in Section 8.1 and 8.3),
such action may be taken without a meeting by written consents setting forth the
action so taken, signed by the holders of a majority (or such higher percentage
as may be specified elsewhere in this Declaration) of the outstanding Shares
that would be entitled to vote thereon at a meeting.
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The Shareholders shall be entitled, to the same extent as the shareholders
in a Massachusetts business trust, to determine by vote whether a court action,
proceeding or claim should be brought or maintained derivatively or as a class
action on behalf of the Trust or its Shareholders. Except with respect to
matters on which a Shareholders' vote shall be required for or shall determine
action of the Trustees as expressly set forth in this Declaration, no action
taken by the Shareholders at any meeting shall in any way bind the Trustees.
6.11 Proxies. Whenever the vote or consent of a Shareholder entitled to
-------
vote is required or permitted under this Declaration, such vote or consent may
be given either directly by such Shareholder or by a proxy in the form
prescribed in the By-Laws. The Trustees may solicit such proxies from the
Shareholders or any of them entitled to vote in any matter requiring or
permitting the Shareholders' vote or consent. No proxy for any meeting of
Shareholders entitled to vote shall be effective unless such proxy shall have
been placed on file with such officer of the Trust as the Trustees shall have
designated for such purposes for verification prior to such meeting.
6.12 Fixing Record Date. The By-Laws may provide for fixing or, in the
------------------
absence of such provision, the Trustees may fix, in advance, a date as the
record date for determining the Shareholders entitled to notice of or to vote at
any meeting of Shareholders or to express consent to any proposal without a
meeting or for the purpose of determining Shareholders entitled to receive
payment of any dividend or distribution (whether before or after termination of
the Trust) or any communication from the Trustees, or for any other purpose. The
record date so fixed shall be not less than five (5) days nor more than sixty
(60) days prior to the date of the meeting or event for the purpose of which it
is fixed.
6.13 Notice to Shareholders. Any notice of meeting or other notice,
----------------------
communication or report to any Shareholder shall be deemed duly delivered to
such Shareholder when such notice, communication or report is deposited, with
postage thereon prepaid, in the United States mail, addressed to such
Shareholder at his address as it appears on the records of the Trust or is
delivered in person to such Shareholder.
6.14 Shareholders Disclosures; Trustees Right to Refuse to Transfer
--------------------------------------------------------------
Shares; Limitation on Holdings; Redemption of Shares.
- ----------------------------------------------------
(a) The Shareholders shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of the
Shares as the Trustees deem necessary or appropriate to comply with the REIT
Provisions of the Internal Revenue Code or to comply with the requirements of
any taxing authority or governmental agency.
-20-
(b) Whenever it is deemed by them to be reasonably necessary to protect
the status of the Trust as a REIT, the Trustees may require a statement or
affidavit from each Shareholder or proposed transferee of Shares setting forth
the number of Shares already owned by him and any related Person or Affiliate
specified in the form prescribed by the Trustees for that purpose. If, in the
opinion of the Trustees, which shall be conclusive upon any proposed transferee
of Shares, any proposed transfer would jeopardize the status of the Trust as a
REIT, the Trustees shall have the right, but not the duty, to refuse to permit
such transfer.
(c) The Trustees, by notice to the holder thereof, may redeem any or
all Shares which have been transferred pursuant to a transfer which, in the
opinion of the Trustees, would jeopardize the status of the Trust as a REIT.
Without limiting the generality of the foregoing, if the Trustees shall, at any
time and in good faith, be of the opinion that direct or indirect ownership of
at least 9.9% or more of the Shares has or may become concentrated in the hands
of one beneficial owner (as defined on October 1, 1982 in Rule 13d-3 under the
Securities Exchange Act of 1934), the Trustees, shall have the power (i) by lot
or other means deemed equitable by them to call for the purchase from any
Shareholder a number of Shares sufficient, in the opinion of the Trustees, to
maintain or bring the direct or indirect ownership of Shares of such beneficial
owner to no more than 9.9% of the outstanding Shares, and (ii) to refuse to
transfer or issue Shares to any Person whose acquisition of such Shares would,
in the opinion of the Trustees, result in the direct or indirect ownership of
more than 9.9% of the outstanding Shares. The purchase price for any Shares
shall be equal to the fair market value of the Shares reflected in the closing
sale price for the Shares, if then listed on a national securities exchange, or
the average of the closing sales prices for the Shares if then listed on more
than one national securities exchange, or if the Shares are not then listed on a
national securities exchange, the latest bid quotation for the Shares if then
traded over-the-counter, on the last business day immediately preceding the day
on which notices of such acquisition are sent, or, if no such closing sales
prices or quotations are available, then the purchase price shall be equal to
the net asset value of such Shares as determined by the Trustees in accordance
with the provisions of applicable law. Payment of the purchase price shall be
made in cash by the Trust at such time in such manner as may be determined by
the Trustees. From and after the date fixed for purchase by the Trustees, the
holder of any Shares so called for purchase shall cease to be entitled to
distributions, voting rights and other benefits with respect to such Shares,
excepting only the right to payment of the purchase price fixed as aforesaid.
Any transfer of Shares, options, warrants or other securities convertible into
Shares that would create a beneficial owner of more than 9.9% of the outstanding
Shares shall be deemed void ab initio and the intended transferee shall be
-- ------
deemed never to have an interest therein. If the foregoing provision is
determined to be void or invalid by virtue of any legal decision, statute, rule
or regulation, then the transferee of such shares, options, warrants or other
securities convertible into Shares shall be
-21-
deemed, at the option of the Trust to have acted as agent on behalf of the Trust
in acquiring such Shares and to hold such Shares on behalf of the Trust.
Notwithstanding any other provision in this Declaration of
Trust or the By-Laws of the Trust, the foregoing provision may not be amended or
repealed without the affirmative vote of 90% of the Shares entitled to vote.
(d) Notwithstanding any other provision of this Declaration of Trust to
the contrary, any purported acquisition of Shares of the Trust which would
result in the disqualification of the Trust as a REIT shall be null and void.
(e) Nothing contained in this Section 7.15 or in any other provision of
this Declaration of Trust shall limit the authority of the Trustees to take such
other action as they deem necessary or advisable to protect the Trust and the
interests of the Shareholders by preservation of the Trust status as a REIT.
ARTICLE VII
LIABILITY OF TRUSTEES, SHAREHOLDERS, OFFICERS,
EMPLOYEES AND AGENTS AND OTHER MATTERS
7.1 Exculpation of Trustees, Officers, Employees and Agents. (a) No
-------------------------------------------------------
Trustee, officer, employee, agent or Affiliate of the Trust shall be liable to
the Trust, to any Shareholder or to any other Person for any loss suffered by
the Trust which arises out of any action or inaction of the Trustee, officer,
employee, agent or Affiliate of the Trust if such Trustee, officer, employee,
agent or Affiliate of the Trust, in good faith, determined that such course of
conduct was in the best interests of the Trust and such course of conduct did
not constitute gross negligence or willful misconduct of such Trustee, officer,
employee, agent or Affiliate of the Trust.
(b) No Trustee shall be personally liable to the Trust or its
Shareholders for monetary damages for breach of fiduciary duty by such
Trustee as a Trustee notwithstanding any provision contained in Section
7.1(a) hereof or any provision of law imposing such liability, except to
the extent provided by applicable law for liability (i) for breach of the
Trustee's duty of loyalty to the Trust or its Shareholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, or (iii) for any transaction from which the
Trustee derived an improper personal benefit. Liability of a Trustee for
matters described in clauses (i), (ii) and (iii) in the preceding sentence
shall be determined pursuant to Section 7.1(a) hereof.
7.2 Limitation of Liability of Shareholders, Trustees, Officers,
------------------------------------------------------------
Employees and Agents. The Trustees, officers, employees and agents of the Trust
- --------------------
in incurring any
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debts, liabilities or obligations or in taking or omitting any other actions for
or in connection with the Trust are, and shall be deemed to be, acting as
Trustees, officers, employees or agents of the Trust and not in their own
individual capacities. The Trustees shall have no power to bind the Shareholders
personally, or to call upon them for the payment of any money or any assessment
whatsoever other than such sums as the Shareholders may at any time personally
agree to pay for new Shares to be acquired from the Trust. No Shareholder and,
except to the extent provided in Section 7.l, no Trustee, officer, employee or
agent shall be liable for (a) any debt, liability or obligation of any kind of,
or with respect to, the Trust or (b) any claim, demand, judgment or decree
against the Trust (in any such case in tort, contract or otherwise) arising out
of any action taken or omitted for or on behalf of the Trust and the Trust shall
be solely liable therefor and resort shall be had solely to the Trust Estate for
the payment or performance thereof, and no Shareholder and, except as aforesaid,
no Trustee, officer, employee or agent shall be subject to any personal
liability whatsoever, in tort, contract or otherwise, to any other Person or
Persons in connection with the Trust Estate or the affairs of the Trust (or any
actions taken or omitted for or on behalf of the Trust), and all such other
Persons shall look solely to the Trust Estate for satisfaction of claims of any
nature arising in connection with the Trust Estate or the affairs of the Trust
(or any action taken or omitted for or on behalf of the Trust). Each Shareholder
shall be entitled to pro rata indemnity from the Trust Estate if, contrary to
the provisions hereof, such Shareholder shall be held to any personal liability.
7.3 Express Exculpatory Clauses and Instruments. Any written instrument
-------------------------------------------
creating an obligation of the Trust shall include a reference to this
Declaration and provide that neither the Shareholders nor the Trustees nor
officers, employees or agents of the Trust shall be liable thereunder and that
all Persons shall look solely to the Trust Estate for the payment of any claim
thereunder or for the performance thereof; however, the omission of such
provision from any such instrument shall not render the Shareholders or any
Trustee, officer, employee or agent of the Trust liable nor shall the Trustees
or any officer, employee or agent of the Trust be liable to anyone for such
omission.
7.4 Indemnification and Reimbursement of Trustees, Officers, Employees
------------------------------------------------------------------
and Agents. The present and former Trustees, officers, employees, agents and
- ----------
Affiliates of the Trust and the present and former directors, officers,
employees, agents and Affiliates of the Advisor who are engaged in business by,
or on behalf of, the Trust (or any person who serves or served, at the Trust's
request, as a director, officer, employer or agent of another organization or
who serves or served at the Trust's request in any capacity with respect to any
employee benefit plan) shall be indemnified by the Trust against any losses,
judgments, liabilities, expenses and amounts paid in settlement of any claims
sustained by them in connection with service in such capacity, provided that
--------
such losses, judgments, liabilities, expenses and amounts paid in settlement
were not the result of gross negligence or willful
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misconduct on the part of such Persons, and provided further, that such Person
-------- -------
gives prompt notice thereof, executes such documents and takes such action as
will permit the Trust to conduct the defense or settlement thereof and cooperate
therein. In the event of a settlement approved by the Trustees of any such
claim, alleged liability, action, suit or proceeding, indemnification and
reimbursement shall be provided except as to such matters covered by the
settlement for which the Trust receives advice of its independent counsel (which
advice the Trust is obligated to request) that such matters, if adjudicated,
would likely be adjudicated to have arisen out of or been based upon such
Person's gross negligence or willful misconduct. Such rights of indemnification
and reimbursement shall be satisfied only out of the Trust Estate. The Trust
shall not incur the cost of that portion of any insurance, other than public
liability insurance, which insures any party against any liability the
indemnification of which is herein prohibited. The rights accruing to any Person
under these provisions shall not exclude any other right to which he may be
lawfully entitled, nor shall anything contained herein restrict such Person's
right to contribution as may be available under applicable law. The Trust may
provide advances to any such Person for legal expenses and other costs related
to a claim which may be indemnified hereunder, provided that such Person
undertakes to repay the advanced funds to the Trust in cases where it is
determined that such Person was not entitled to such indemnification.
Any action taken by or conduct on the part of a Trustee, officer, employee
or agent of the Trust in conformity with or in good faith reliance upon the
provisions of Section 7.5 shall not, for the purposes of this Trust (including
without limitation Sections 7.l, 7.2 and 7.3 and this Section 7.4) constitute
negligence or misconduct.
7.5 Right of Trustees, Officers, Employees and Agents to Own Shares or
------------------------------------------------------------------
Other Property and to Engage in Other Business. Any Trustee or officer, employee
- ----------------------------------------------
or agent of the Trust may acquire, own, hold and dispose of Shares in the Trust,
for his individual account, and may exercise all rights of a Shareholder to the
same extent and in the same manner as if he were not a Trustee or officer,
employee or agent of the Trust. Any Trustee or officer, employee or agent of the
Trust may, in his personal capacity or in the capacity of trustee, officer,
director, stockholder, partner, member, adviser or employee of any Person or
otherwise, have business interests and engage in business activities similar to
or in addition to those relating to the Trust, which interests and activities
may be similar to and competitive with those of the Trust and may include the
acquisition, syndication, holding, management, development, operation or
disposition, for his own account or for the account of such Person or others, of
interests in Mortgages, interests in Real Property, or interests in Persons
engaged in the real estate business. Each Trustee, officer, employee and agent
of the Trust shall be free of any obligation to present to the Trust any
investment opportunity which comes to him in any capacity other than solely as
Trustee, officer, employee or agent of the Trust, even if such opportunity is of
a character which, if presented to the Trust, could be taken by the Trust;
provided, however, that the
- -------- -------
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provisions of this sentence shall not extend, with respect to interests in Real
Property which could be acquired by the Trust consistent with its then existing
policies, to any of such Trustees or agents who are Affiliated Trustees or would
be Affiliated Trustees were they Trustees rather than agents, or to any officer
or employee of the Trust or (at a time when there is no Advisor or other person
providing an investment program for the Trust) to any Trustee of the Trust, who
in failing to present such opportunity is not acting as a trustee, officer,
director, stockholder, partner, member, adviser or employee of any Person other
than the Trust but is acting for his own personal account. Subject to the
provisions of Article IV and Section 7.6, any Trustee or officer, employee or
agent of the Trust may be interested as trustee, officer, director, stockholder,
partner, member, adviser or employee of, or otherwise have a direct or indirect
interest in, any Person who may be engaged to render advice or services to the
Trust, and may receive compensation from such Person as well as compensation as
Trustee, officer, employee or agent or otherwise hereunder.
7.6 Transactions Between Trustees, Officers, Employees or Agents and the
--------------------------------------------------------------------
Trust. Except as otherwise provided by this Declaration, and in the absence of
- -----
fraud, a contract, act or other transaction, between the Trust and any other
Person, or in which the Trust is interested, shall be valid and no Trustee,
officer, employee or agent of the Trust shall have any liability as a result of
entering into any such contract, act or transaction, even though (a) one or more
Trustees, officers, employees or agents are directly or indirectly interested in
or connected with, or are trustees, partners, directors, employees, officers, or
agents of such other Person, or (b) one or more of the Trustees, officers,
employees or agents of the Trust, individually or jointly with others, is a
party or are parties to, or directly or indirectly interested in, or connected
with, such contract, act or transaction, provided that (i) such interest or
connection is disclosed or known to the Trustees and thereafter the Trustees
authorize or ratify such contract, act or other transaction by affirmative vote
of a majority of the Trustees who are not so interested or (ii) such interest or
connection is disclosed or known to the Shareholders, and thereafter such
contract, act or transaction is approved by Shareholders holding a majority of
the Shares, then outstanding and entitled to vote thereon or (iii) such
contract, act or transaction is fair as to the Trust as of the time it is
authorized, approved or ratified by the Trustees or the Shareholders.
This Section 7.6 shall not prevent any sale of Shares issued by the Trust
for the public offering thereof in accordance with a registration statement
filed with the Securities and Exchange Commission under the Securities Act of
1933. The Trustees are not restricted by this Section 7.6 from forming a
corporation, partnership, trust or other business association owned by any
Trustee, officer, employee or agent or by their nominees for the purpose of
holding title to property of the Trust or managing property of the Trust,
provided that the Trustees make a determination that the creation of such entity
for such purpose is in the best interest of the Trust.
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No Trustee, officer or Advisor of the Trust or any Affiliate of such Person
shall, directly or indirectly, acquire any asset for the purpose of reselling it
to the Trust except to purchase property to be acquired by the Trust upon
completion of financing arrangements by the Trust.
7.7 Restriction of Duties and Liabilities. The Shareholders, Trustees,
-------------------------------------
officers, employees and agents shall in no event have any greater duties or
liabilities than those established by this Declaration of Trust or, in cases as
to which such duties or liabilities are not so established, than those of the
shareholders, directors, officers, employees and agents of a Massachusetts
business trust in effect from time to time.
7.8 Persons Dealing with Trustees, Officers, Employees or Agents. Any
------------------------------------------------------------
act of the Trustees, officers, employees or agents purporting to be done in
their capacity as such, shall, as to any Persons dealing with such Trustees,
officers, employees or agents, be conclusively deemed to be within the purposes
of this Trust and within the powers of the Trustees, officers, employees or
agents. No Person dealing with the Trustees or any of them, or with the
officers, employees or agents of the Trust, shall be bound to see to the
application of any funds or property passing into their hands or control. The
receipt of the Trustees or any of them, or of authorized officers, employees or
agents of the Trust, for moneys or other consideration, shall be binding upon
the Trust.
7.9 Reliance. The Trustees and the officers, employees and agents of the
--------
Trust may consult with counsel and the advice or opinion of such counsel shall
be prima facie evidence of good faith and lack of negligence of all the Trustees
and the officers, employees and agents of the Trust in respect of any action
taken or suffered by them in reliance on or in accordance with such advice or
opinion. In discharging their duties, Trustees or officers, employees or agents
of the Trust, when acting in good faith, may rely upon financial statements of
the Trust represented to them to fairly present the financial position or
results of operations of the Trust by the President of the Trust or the officer
of the Trust having charge of its books of account, or stated in a written
report by an independent certified public accountant fairly to present the
financial position or results of operations of the Trust. The Trustees and the
officers, employees and agents of the Trust may rely, and shall be personally
protected in acting, upon any instrument or other document believed by them in
good faith to be genuine.
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ARTICLE VIII
DURATION, AMENDMENT AND TERMINATION OF TRUST
8.1 Duration of Trust.
-----------------
The Trust shall continue without limitation of time, provided, however,
-------- -------
that the Trust may be terminated at any time by the affirmative vote at a
meeting of Shareholders of the holders of Shares representing a majority, of the
total number of votes authorized to be cast by Shares, then outstanding and
entitled to vote thereon.
8.2 Termination of Trust.
--------------------
(a) Upon the termination of the Trust:
(i) the Trust shall carry on no business except for the
purposes of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the
Trust and all the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust
shall have been wound up, including the power to fulfill
or discharge the contracts of the Trust, collect its
assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining
Trust Estate to one or more persons at public or private
sale for consideration which may consist in whole or in
part of cash, Securities or other property of any kind,
discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business; and
(iii) after paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases,
indemnities and refunding agreements, as they deem
necessary for their protection, the Trustees may
distribute the remaining Trust Estate, in cash or, with
the consent of at least 90% of the Shareholders not
affiliated with the Advisor, in kind or partly each, among
the Shareholders according to their respective rights.
(b) After termination of the Trust and distribution to the
Shareholders as herein provided, the Trustees shall execute and lodge among
the records of the Trust an instrument in writing setting forth the fact of
such termination and such distribution, a copy of which instrument shall be
filed with the Secretary of State of the Commonwealth of Massachusetts, and
the Trustees shall
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thereupon be discharged from all further liabilities and duties hereunder
and the rights and interests of all Shareholders shall thereupon cease.
8.3 Amendment Procedure. This Declaration may be amended (except as to
-------------------
the limitations of personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust and the prohibition of assessments upon
Shareholders set forth in Section 7.2) at a meeting of Shareholders by holders
of Shares representing a majority (or, with respect to (i) amendments to Article
V, (ii) amendments to the proviso to Section 8.l, and (iii) amendments to this
Section 8.3 that would reduce the percentage vote required to approve any
amendments to this Declaration, three quarters) of the total number of votes
authorized to be cast by Shares, then outstanding and entitled to vote thereon,
provided that the Trustees may authorize one or more classes or series of Shares
to vote separately as a class or series with respect to certain or all
amendments to the Declaration as determined by the Trustees. Two-thirds of the
Trustees may, after fifteen (15) days written notice to the Shareholders, also
amend this Declaration without the vote or consent of Shareholders if they deem
it necessary to conform this Declaration to the requirements of (i) the REIT
Provisions of the Internal Revenue Code, (ii) other applicable federal laws or
regulations or (iii) any state securities or "blue sky" laws or requirements of
administrative agencies thereunder in connection with any public offering of
Shares, but the Trustees shall not be liable for failing so to do. Actions by
the Trustees pursuant to Section 6.1 or Section 9.6(a) that result in amending
this Declaration shall be effected without vote or consent of Shareholders.
8.4 Amendments Effective. Any amendment pursuant to any Section of this
--------------------
Declaration of Trust (including any resolution adopted pursuant to Section 6.1
hereof) shall not become effective until a certification in recordable form
signed by a majority of the Trustees setting forth an amendment and reciting
that it was duly adopted as aforesaid or a copy of this Declaration, as amended,
in recordable form, and executed by a majority of the Trustees, is filed with
the Secretary of State of the Commonwealth of Massachusetts.
8.5 Transfer to Successor. The Trustees, with the approval a majority of
---------------------
the Trustees (including a majority of the Independent Trustees) and the
affirmative vote or written consent, approving a plan for this purpose, of the
holders of Shares representing a majority of the total number of votes
authorized to be cast by Shares then outstanding and entitled to vote thereon,
shall (a) cause the organization of a corporation, association, trust or other
organization to take over the Trust Estate and carry on the affairs of the
Trust, (b) merge the Trust into, or sell, convey and transfer the Trust Estate
to, any such corporation, association, trust or organization in exchange for
Securities thereof, or beneficial interests therein, and the assumption by such
transferee of the liabilities of the Trust and (c) thereupon terminate this
Declaration and deliver such shares, Securities or beneficial interests among
the Shareholders in accordance with such plan.
-28-
8.6 Sale of Assets, Merger. The Trustees, with the approval of a
----------------------
majority of the Trustees (and, in the case of a merger, a majority of the
Independent Trustees) and the affirmative vote or written consent of the holders
of Shares representing (i) a majority of the total number of votes authorized to
be cast by Shares then outstanding and entitled to vote thereon and (ii) such
percentage as determined by the Trustees of the total number of votes authorized
to be cast by any class and/or series of Shares as shall have been authorized by
the Trustees to vote separately as a class or series on such matters, may: (a)
sell, lease or exchange all or substantially all of the property and assets of
the Trust, (b) merge the Trust into any corporation, association, trust or
organization or (c) merge any corporation, association, trust or organization
into the Trust.
ARTICLE IX
MISCELLANEOUS
9.1 Applicable Law. This Declaration and the rights of all parties and
--------------
the construction and effect of every provision hereof shall be subject to and
construed according to the statutes and laws of the Commonwealth of
Massachusetts.
9.2 Index and Headings for Reference Only. The index and headings
-------------------------------------
preceding the text, articles and sections hereof have been inserted for
convenience and reference only and shall not be construed to affect the meaning,
construction or effect of this Declaration.
9.3 Successors in Interest. This Declaration and the By-Laws shall be
----------------------
binding upon and inure to the benefit of the undersigned Trustees and their
successors, assigns, heirs, distributees and legal representatives, and every
Shareholder and his successors, assigns, heirs, distributees and legal
representatives.
9.4 Inspection of Records. Trust records shall be available for
---------------------
inspection by Shareholders at the same time and in the same manner and to the
extent that comparable records of a Massachusetts business trust would be
available for inspection by shareholders, under the laws of the Commonwealth of
Massachusetts. Except as specifically provided for in this Declaration,
Shareholders shall have no greater right than shareholders of a Massachusetts
business trust to require financial or other information from the Trust,
Trustees or officers of the Trust. Any federal or state securities
administration or other similar authority shall have the right, at reasonable
times during business hours and for proper purposes, to inspect the books and
records of the Trust.
9.5 Counterparts. This Declaration may be simultaneously executed in
------------
several counterparts, each of which when so executed shall be deemed to be an
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original and such counterparts together shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
9.6 Provisions of the Trust in Conflict with Law or Regulations;
------------------------------------------------------------
Severability.
- ------------
(a) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any one or more
of such provisions (the "Conflicting Provisions") are in conflict with the
REIT Provisions of the Internal Revenue Code, or with other applicable
federal laws and regulations, the Conflicting Provisions shall be deemed
never to have constituted a part of the Declaration; provided, however,
-------- -------
that such determination by the Trustees shall not affect or impair any of
the remaining provisions of this Declaration or render invalid or improper
any action taken or omitted (including but not limited to the election of
Trustees) prior to such determination. A certification in recordable form
signed by a majority of the Trustees setting forth any such determination
and reciting that it was duly adopted by the Trustees, or a copy of this
Declaration, with the Conflicting Provisions removed pursuant to such a
determination, in recordable form, signed by a majority of the Trustees,
shall be conclusive evidence of such determination when filed with the
Secretary of State of the Commonwealth of Massachusetts. The Trustees shall
not be liable for failure to make any determination under this Section
9.6(a). Nothing in this Section 9.6(a) shall in any way limit or affect the
right of the Trustees to amend this Declaration as provided in Section 8.3.
(b) If any provision of this Declaration shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to
such provision and shall not in any manner affect or render invalid or
unenforceable any other provision of this Declaration, and this Declaration
shall be carried out as if any such invalid or unenforceable provision were
not contained herein.
9.7 Certifications. The following certifications shall be final and
--------------
conclusive as to any Persons dealing with the Trust:
(a) a certification of a vacancy among the Trustees by reason of
resignation, removal, increase in the number of Trustees, incapacity, death
or otherwise, when made in writing by a majority of the remaining Trustees;
(b) a certification as to the individuals holding office as Trustees
or officers at any particular time, when made in writing by any one of the
president, vice president, treasurer, assistant treasurer, secretary or
assistant secretary of the Trust or by any Trustee;
-30-
(c) a certification that a copy of this Declaration or of the By-Laws
is a true and correct copy thereof as then in force, when made in writing
by any one of the president, vice president, treasurer, assistant
treasurer, secretary or assistant secretary of the Trust or by any Trustee;
(d) the certifications referred to in Sections 2.7, 8.4 and 9.6(a);
and
(e) a certification as to any actions by Trustees, other than the
above, when made in writing by any one of the president, vice president,
treasurer, assistant treasurer, secretary or assistant secretary of the
Trust or by any Trustee.
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IN WITNESS WHEREOF, the undersigned has signed these presents all on the
day and year first above written.
David Benson
/s/ David F. Benson
--------------------------------
As Trustee, and not individually
ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS June 2, 1997
SS:
COUNTY OF SUFFOLK
On this 2 day of June, 1997, before me personally appeared David Benson, to
me known to be the person described in and who executed the foregoing
instrument, and acknowledged that he executed the same as his free act and deed.
Notarial Seal /s/ Jennifer K. Smith
------------------------------------
Notary Public
My commission expires: Jan. 22, 2004
-32-
IN WITNESS WHEREOF, the undersigned has signed these presents all on the
day and year first above written.
Edward W. Brooke
/s/ Edward W. Brooke
--------------------------------
As Trustee, and not individually
ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS June 2, 1997
SS:
COUNTY OF SUFFOLK
On this __ day of June, 1997, before me personally appeared Edward W.
Brooke, to me known to be the person described in and who executed the foregoing
instrument, and acknowledged that he executed the same as his free act and deed.
Notarial Seal /s/ Sherma E. Munger
----------------------------------------
Alexandria, Virginia Notary Public
My commission expires:
September 30, 1999
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