Exhibit 3.1
BRANDYWINE REALTY TRUST
DECLARATION OF TRUST
(Amended and Restated as of May 12, 1997 at the Annual
Meeting of Shareholders by affirmative vote of the
holders of a majority of the outstanding shares
of the Trust pursuant to Section 8-202(c)
of Title 8 of the Maryland Corporations
and Associations Code)
This DECLARATION OF TRUST ("Declaration of Trust" or
"Declaration") is amended and restated as of the date set forth above by the
undersigned Trustees.
WHEREAS, the Trustees desire to create a real estate
investment trust under Title 8 of the Corporations and Associations Article of
the Annotated Code of Maryland, as amended ("Title 8"); and
WHEREAS, the Trustees desire that this trust qualify as a
"real estate investment trust" under the Internal Revenue Code of 1986, as
amended (the "Code"), so long as such qualification, in the opinion of the
Trustees, is advantageous to the Shareholders; and
WHEREAS, the beneficial interest in the Trust shall be divided
into transferable shares of one or more classes evidenced by certificates;
NOW, THEREFORE, the Trustees hereby declare that they will
hold all property which they have or may hereafter acquire as such Trustees,
together with the proceeds thereof, in trust, and manage the Trust Property (as
defined herein) for the benefit of the Shareholders as provided by this
Declaration of Trust.
ARTICLE 1
THE TRUST; DEFINITIONS
ARTICLE 1 SECTION .1. Name. The name of the trust (the "Trust") is:
Brandywine Realty Trust
So far as may be practicable, the business of the Trust shall be conducted and
transacted 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 and shall
not refer to the Shareholders or to any officers, employees or agents of the
Trust or of such Trustees.
Under circumstances in which the Trustees determine that the
use of the name "Brandywine Realty Trust" is not practicable, they may use any
other designation or name for the Trust.
ARTICLE 1 SECTION .2. Resident Agent. The name of the
resident agent for service of process of the Trust in the State of Maryland is
The Corporation Trust Incorporated, whose post office address is c/o The
Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21202.
The Trust may have such offices or places of business within or without the
State of Maryland as the Trustees may from time to time determine.
ARTICLE 1 SECTION .3. Nature of Trust. The Trust is a real
estate investment trust within the meaning of Title 8. The Trust shall not be
deemed to be a general partnership, limited partnership, joint venture, joint
stock company or, except as provided in Section 11.4, a corporation (but nothing
herein shall preclude the Trust from being treated for tax purposes as an
association under the Code).
ARTICLE 1 SECTION .4. Powers. The Trust shall have all of the
powers granted to real estate investment trusts generally by Title 8 or any
successor statute and shall have any other and further powers as are not
inconsistent with and are appropriate to promote and attain the purposes set
forth in this Declaration of Trust.
ARTICLE 1 SECTION .5. Definitions. As used in this
Declaration of Trust, the following terms shall have the following meanings
unless the context otherwise requires:
"Adviser" means the Person, if any, appointed, employed or
contracted with by the Trust pursuant to Section 4.1.
"Affiliate" or "Affiliated" means, as to any individual,
corporation, partnership, trust or other association (other than the Trust), any
Person (i) that holds beneficially, directly or indirectly, 10% or more of the
outstanding stock or equity interests thereof or (ii) who is an officer,
director, partner or trustee thereof or of any Person which controls, is
controlled by, or is under common control with, such corporation, partnership,
trust or other association or (iii) which controls, is controlled by or under
common control with, such corporation, partnership, trust or other association.
"Book Value Per Share" shall mean an amount equal to the
quotient obtained by dividing (i) the Shareholders' Equity as shown in the
annual or quarterly financial statements of the Trust most recently filed by the
Trust with the Securities and Exchange Commission by (ii) the number of Shares
outstanding as of the date of such financial statements. For purposes of clause
(ii) of the preceding sentence, "outstanding" Shares shall consist of those
Common Shares then actually issued and outstanding and those Common Shares
issuable upon the exercise or conversion of any then outstanding "in-the-money"
warrants, options or other convertible securities.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Person" means an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of
the Code), a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity, or any government or agency or
political subdivision thereof, and also includes a group as that term is used
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for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
"Real Property" or "Real Estate" means land, rights in land
(including leasehold interests), and any buildings, structures, improvements,
furnishings, fixtures and equipment located on or used in connection with land
and rights or interests in land.
"REIT Provisions of the Code" means Sections 856 through 860
of the Code and any successor or other provisions of the Code relating to real
estate investment trusts (including provisions as to the attribution of
ownership of beneficial interests therein) and the regulations promulgated
thereunder.
"Securities" means Shares, any stock, shares or other
evidences of equity or beneficial or other interests, voting trust certificates,
bonds, debentures, notes or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, 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, or shares or other securities of any successor in
interest of the Trust.
"Securities of the Trust" means any Securities issued by the
Trust.
"Shareholders" means holders of record of outstanding Shares.
"Shareholders' Equity" means the total shareholders' equity of
the Trust or, if the Trust has a class of Preferred Shares outstanding as of the
applicable date, "Shareholders' Equity" means the total "common" shareholders'
equity of the Trust (computed with appropriate adjustments to reflect any
entitlement of Preferred Shares to participate equally and ratably with the
Common Shares in the assets of the Trust upon a liquidation of the Trust and
computed to include amounts payable upon exercise or conversion of outstanding
"in-the-money" warrants, options or other convertible securities issued by the
Trust).
"Shares" means shares of Preferred Shares or Common Shares
(all as defined in Section 6.1).
"Specified Properties" means the four real estate projects
held by Brandywine Realty Partners on the date hereof and known as: One
Greentree Centre; Two Greentree Centre; Three Greentree Centre; and Twin Forks.
"Trustees" or "Board of Trustees" means, collectively, all
individuals who have been duly elected and qualify as trustees of the Trust
hereunder.
"Trust Property" means any and all property, real, personal or
otherwise, tangible or intangible, which is transferred or conveyed to the Trust
or the Trustees (including all rents, income, profits and gains therefrom),
which is owned or held by, or for the account of, the Trust.
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"Voting Shares" means the outstanding Shares entitled to vote
generally in the election of trustees.
ARTICLE 2
TRUSTEES
ARTICLE 2 SECTION .1. Number. The number of Trustees shall be
four, but such number may be increased or decreased by the unanimous vote of the
Trustees then in office from time to time; provided, that the total number of
Trustees shall be not fewer than three and not more than 15. No reduction in the
number of Trustees shall cause the removal of any Trustee from office prior to
the expiration of his term.
ARTICLE 2 SECTION .2. Initial Board; Term. The Trustees, as
of the date on which this Declaration of Trust has been amended and restated, as
set forth above (the "Initial Trustees"), shall be Anthony A. Nichols, Sr.,
Joseph L. Carboni, Richard M. Osborne, Gerard H. Sweeney, Warren V. Musser,
Walter D'Alessio and Charles P. Pizzi, but in each case only for so long as he
shall continue to serve as a Trustee of the Trust hereunder. The term of the
Initial Trustees shall commence on the date hereof and shall continue until the
annual meeting of Shareholders in 1997 and until their successors shall have
been duly elected and shall have qualified.
The names and addresses of the Initial Trustees who shall
serve until the annual meeting of the Shareholders held in 1997 and until their
successors are duly elected and qualified are:
Name Address
---- -------
Anthony A. Nichols, Sr. 16 Campus Boulevard
Newtown Square, PA 19073
Joseph L. Carboni 212 Haddon Avenue
Westmont, NJ 08108
Richard M. Osborne 7001 Center Street
Mentor, Ohio 44060
Gerard H. Sweeney 16 Campus Boulevard
Newtown Square, PA 19073
Warren V. Musser 800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
Walter D'Alessio 1735 Market Street
Philadelphia, PA 19103
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Charles P. Pizzi 1234 Market Street
Philadelphia, PA 19107
Beginning with the annual meeting of Shareholders in 1996 and
at each succeeding annual meeting of Shareholders, the Trustees will be elected
to hold office for a term expiring at the succeeding annual meeting. Each
Trustee will hold office for the term for which he is elected and until his
successor is duly elected and qualified.
ARTICLE 2 SECTION .3. Resignation, Removal or Death. Any Trustee may
resign by written notice to the remaining Trustees, effective upon execution and
delivery to the Trust of such written notice or upon any future date specified
in the notice. A Trustee may be removed from office only at a meeting of the
Shareholders called for that purpose, by the affirmative vote of the holders of
not less than a majority of the Shares entitled to vote in the election of
Trustees; provided, however, that in the case of any Trustees elected solely by
holders of a series of Preferred Shares, such Trustees may be removed by the
affirmative vote of a majority of the Preferred Shares of that series then
outstanding and entitled to vote in the election of Trustees, voting together as
a single class. Upon the resignation or removal of any Trustee, or his otherwise
ceasing to be a Trustee, he shall automatically cease to have any right, title
or interest in and to the Trust Property and shall execute and deliver such
documents as the remaining Trustees require for the conveyance of any Trust
Property held in his name, and shall account to the remaining Trustees as they
require for all property which he holds as Trustee. Upon the incapacity or death
of any Trustee, his legal representative shall perform the acts described in the
foregoing sentence.
ARTICLE 2 SECTION .4. Vacancies. Any vacancy (including a vacancy
created by an increase in the number of Trustees) shall be filled, at any
regular or special meeting of Trustees called for that purpose, by a majority of
the Trustees (although less than a quorum). Any individual so elected as Trustee
shall hold office until the next annual meeting of Shareholders and until his
successor has been duly elected and qualified.
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ARTICLE 2 SECTION .5. Legal Title. Legal title to all Trust Property
shall be vested in the Trustees, but they may cause legal title to any Trust
Property to be held by or in the name of any Trustee, or the Trust, or any other
Person as nominee. The right, title and interest of the Trustees in and to the
Trust Property shall automatically vest in successor and additional Trustees
upon their qualification and acceptance of election or appointment as Trustees,
and they shall thereupon have all the rights and obligations of Trustees,
whether or not conveyancing documents have been executed and delivered pursuant
to Section 2.3 or otherwise. Written evidence of the qualification and
acceptance of election or appointment of successor and additional Trustees may
be filed with the records of the Trust and in such other offices, agencies or
places as the Trustees may deem necessary or desirable.
ARTICLE 3
POWERS OF TRUSTEES
ARTICLE 3 SECTION .1. General. Subject to the express limitations
herein or in the bylaws of the Trust (the "Bylaws"), (i) the business and
affairs of the Trust shall be managed under the direction of the Board of
Trustees and (ii) the Trustees shall have full, exclusive and absolute power,
control and authority over the Trust Property and over the business of the Trust
as if they, in their own right, were the sole owners thereof. The Trustees may
take any actions that, in their sole judgment and discretion, are necessary or
desirable to conduct the business of the Trust. This Declaration of Trust shall
be construed with a presumption in favor of the grant of power and authority to
the Trustees. Any construction of this Declaration of Trust or determination
made in good faith by the Trustees concerning their powers and authority
hereunder shall be conclusive. The enumeration and definition of particular
powers of the Trustees included in this Article 3 shall in no way be limited or
restricted by reference to or inference from the terms of this or any other
provision of this Declaration of Trust or construed or deemed by inference or
otherwise in any manner to exclude or limit the powers conferred upon the
Trustees under the general laws of the State of Maryland as now or hereafter in
force.
ARTICLE 3 SECTION .2. Specific Powers and Authority. Subject only to
the express limitations herein, and in addition to all other powers and
authority conferred by this Declaration or by law, the Trustees, without any
vote, action or consent by the Shareholders, shall have and may exercise, at any
time or times, in the name of the Trust or on its behalf the following powers
and authorities:
(a) Investments. Subject to Section 8.5, to invest in,
purchase or otherwise acquire and to hold real, personal or mixed, tangible or
intangible, property of any kind wherever located, or rights or interests
therein or in connection therewith, all without regard to whether such property,
interests or rights are authorized by law for the investment of funds held by
trustees or other fiduciaries, or whether obligations the Trust acquires have a
term greater or lesser than the term of office of the Trustees
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or the possible termination of the Trust, for such consideration as the Trustees
may deem proper (including cash, property of any kind or Securities of the
Trust); provided, however, that the Trustees shall take such actions as they
deem necessary and desirable to comply with any requirements of Title 8 relating
to the types of assets held by the Trust.
(b) Sale, Disposition and Use of Property. Subject to
Section 8.5, to sell, rent, lease, hire, exchange, release, partition, assign,
mortgage, grant security interests in, encumber, negotiate, dedicate, grant
easements in and options with respect to, convey, transfer (including transfers
to entities wholly or partially owned by the Trust or the Trustees) or otherwise
dispose of any or all of the Trust Property by deeds (including deeds in lieu of
foreclosure with or without consideration), 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, on such terms as
they deem appropriate; to give consents and make contracts relating to the Trust
Property and its use or other property or matters; to develop, improve, manage,
use, alter and otherwise deal with the Trust Property; and to rent, lease or
hire from others property of any kind; provided, however, that the Trust may not
use or apply land for any purposes not permitted by applicable law.
(c) Financings. To borrow or in any other manner raise money
for the purposes and on the terms they determine, and to evidence the same by
issuance of Securities of the Trust, which may have such provisions as the
Trustees determine; to reacquire such Securities of the Trust; to enter into
other contracts or obligations on behalf of the Trust; to guarantee, indemnify
or act as surety with respect to payment or performance of obligations of any
Person; to mortgage, pledge, assign, grant security interests in or otherwise
encumber the Trust Property to secure any such Securities of the Trust,
contracts or obligations (including guarantees, indemnifications and
suretyships); and 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.
(d) Loans. Subject to the provisions of Section 8.5, to lend
money or other Trust Property on such terms, for such purposes and to such
Persons as they may determine.
(e) Issuance of Securities. Subject to the provisions of
Article 6, to create and authorize and direct the issuance (on either a pro-rata
or a non-pro-rata basis) by the Trust, in shares, units or amounts of one or
more types, series or classes, of Securities of the Trust, which may have such
voting rights, dividend or interest rates, preferences, subordinations,
conversion or redemption prices or rights, maturity dates, distribution,
exchange, or liquidation rights or other rights as the Trustees may determine,
without vote of or other action by the Shareholders, to such Persons for such
consideration, at such time or times and in such manner and on such terms as the
Trustees determine; to list any of the Securities of the Trust on any
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securities exchange; and to purchase or otherwise acquire, hold, cancel,
reissue, sell and transfer any Securities of the Trust.
(f) Expenses and Taxes. To pay any charges, expenses or
liabilities necessary or desirable, in the sole discretion of the Trustees, for
carrying out the purposes of this Declaration of Trust and conducting the
business of the Trust, including compensation or fees to Trustees, officers,
employees and agents of the Trust, and to Persons contracting with the Trust,
and any taxes, levies, charges and assessments of any kind imposed upon or
chargeable against the Trust, the Trust Property, or the Trustees in connection
therewith; and to prepare and file any tax returns, reports or other documents
and take any other appropriate action relating to the payment of any such
charges, expenses or liabilities.
(g) Collection and Enforcement. To collect, sue for and
receive money or other property due to the Trust; to consent to extensions of
the time for payment, or to the renewal, of any Securities or obligations; to
engage or to intervene in, prosecute, defend, compound, enforce, compromise,
release, abandon or adjust any actions, suits, proceedings, disputes, claims,
demands, security interests, or things relating to the Trust, the Trust
Property, or the Trust's affairs; to exercise any rights and enter into any
agreements; and take any other action necessary or desirable in connection with
the foregoing.
(h) Deposits. To deposit funds or Securities constituting part
of the Trust Property in banks, trust companies, savings and loan associations,
financial institutions and other depositories, whether or not such deposits will
draw interest, subject to withdrawal on such terms and in such manner as the
Trustees determine.
(i) Allocation; Accounts. To determine whether moneys,
profits or other assets of the Trust shall be charged or credited to, or
allocated between, income and capital, including whether or not to amortize any
premium or discount and to determine in what manner any expenses or
disbursements are to be borne as between income and capital (regardless of how
such items would normally or otherwise be charged to or allocated between income
and capital without such determination); to treat any dividend or other
distribution on any investment as, or apportion it between, income and capital;
in their discretion to provide reserves for depreciation, amortization,
obsolescence or other purposes in respect of any Trust Property in such amounts
and by such methods as they determine; to determine what constitutes net
earnings, profits or surplus; to determine the method or form in which the
accounts and records of the Trust shall be maintained; and to allocate to the
Shareholders equity account less than all of the consideration paid for Shares
and to allocate the balance to paid-in capital or capital surplus.
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(j) Valuation of Property. To determine the value of all or
any part of the Trust Property and of any services, Securities, property or
other consideration to be furnished to or acquired by the Trust, and to revalue
all or any part of the Trust Property, all in accordance with such appraisals or
other information as are reasonable, in their sole judgment.
(k) Ownership and Voting Powers. To exercise all of the
rights, powers, options and privileges pertaining to the ownership of any
mortgages, Securities, Real Estate and other Trust Property to the same extent
that an individual owner might, including without limitation to vote or give any
consent, request, or notice or waive any notice, either in person or by proxy or
power of attorney, which proxies and powers of attorney may be for any general
or special meetings or action, and may include the exercise of discretionary
powers.
(l) Officers, Etc.; Delegation of Powers. To elect, appoint
or employ such officers for the Trust and such committees of the Board of
Trustees with such powers and duties as the Trustees may determine or the
Trust's Bylaws provide; to engage, employ or contract with and pay compensation
to any Person (including, subject to Section 8.5, any Trustee and any Person who
is an Affiliate of any Trustee) as agent, representative, Adviser, member of an
advisory board, employee or independent contractor (including advisers,
consultants, transfer agents, registrars, underwriters, accountants,
attorneys-at-law, real estate agents, property and other managers, appraisers,
brokers, architects, engineers, construction managers, general contractors or
otherwise) in one or more capacities, to perform such services on such terms as
the Trustees may determine; to delegate to one or more Trustees, officers or
other Persons engaged or employed as aforesaid or to committees of Trustees or
to the Adviser, the performance of acts or other things (including granting of
consents), the making of decisions and the execution of such deeds, contracts or
other instruments, either in the names of the Trust, the Trustees or as their
attorneys or otherwise, as the Trustees may determine; and to establish such
committees as they deem appropriate.
(m) Associations. Subject to Section 8.5, to cause the Trust
to enter into joint ventures, general or limited partnerships, participation or
agency arrangements or any other lawful combinations, relationships, or
associations of any kind.
(n) Reorganizations, Etc. Without limiting the scope of
Section 9.2, to cause to be organized or assist in organizing any Person under
the laws of any jurisdiction to acquire all or any part of the Trust Property or
carry on any business in which the Trust shall have an interest; to sell, rent,
lease, hire, convey, negotiate, assign, exchange or transfer all or any part of
the Trust Property to or with any Person in exchange for Securities of such
Person or otherwise; and to lend money to, subscribe for and purchase 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 interests.
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(o) Reverse Stock Splits. Upon the approval of not less than
80% of the Trustees, to cause the Shares of the Trust to be recapitalized or
consolidated by effectuating a reverse stock split of one or more series or
classes of Shares based upon a reverse stock split ratio (the "Ratio") approved
by not less than 80% of the Trustees, such that following the consummation of
such reverse stock split, each Share of the series or class(es) of Shares in
question will automatically, without vote of or other action by the
Shareholders, be deemed to be a fewer number of Shares computed in accordance
with such Ratio; and, if determined by the Trustees to be appropriate or
desirable, to cause any fractional Shares resulting therefrom to be canceled in
exchange for a cash payment equal to (x) with respect to Common Shares, the
"market value" of such Share determined in accordance with the provisions of
ss.3-601 et seq. of the Maryland General Corporation Law (computed for the
period ending on the business day prior to the effective date of such reverse
stock split), or for Shares other than Common Shares traded on the American
Stock Exchange, as determined by the Trustees in good faith, multiplied by (y)
the applicable fraction.
(p) Insurance. To purchase and pay for out of Trust Property
insurance policies insuring the Trust and the Trust Property against any and all
risks, and insuring the Shareholders, Trustees, officers, employees and agents
of the Trust individually against all claims and liabilities of every nature
arising by reason of holding or having held any such status, office or position
or by reason of any action alleged to have been taken or omitted (including
those alleged to constitute misconduct, gross negligence, reckless disregard of
duty or bad faith) by any such Person in such capacity, whether or not the Trust
would have the power to indemnify such Person against such claim or liability.
(q) Executive Compensation, Pension and Other Plans. To adopt
and implement executive compensation, pension, profit sharing, stock option,
stock bonus, stock purchase, stock appreciation rights, savings, thrift,
retirement, incentive or benefit plans, trusts or provisions, applicable to any
or all Trustees, officers, employees or agents of the Trust, or to other Persons
who have benefitted the Trust, all on such terms and for such purposes as the
Trustees may determine.
(r) Distributions. To declare and pay dividends or other
distributions to Shareholders, subject to the provisions of Section 6.4.
(s) Indemnification. Without regard to the indemnification
provided for in Section 8.4, to indemnify any Person, including any Adviser or
independent contractor, with whom the Trust has dealings.
(t) Charitable Contributions. To make donations for the
public welfare or for community, charitable, religious, educational, scientific,
civic or similar purposes, regardless of any direct benefit to the Trust.
(u) Discontinue Operations; Bankruptcy. To discontinue the
operations of the Trust; to petition or apply for relief under any provision of
federal or state bankruptcy, insolvency or reorganization laws or similar laws
for the relief of debtors; to permit any Trust Property to be foreclosed
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upon without raising any legal or equitable defenses that may be available to
the Trust or the Trustees or otherwise defending or responding to such
foreclosure; to confess judgment against the Trust; or to take such other action
with respect to indebtedness or other obligations of the Trustees, in such
capacity, the Trust Property or the Trust as the Trustees in their discretion
may determine.
(v) Trustees. To nominate persons for election as Trustees.
(w) Fiscal Year. Subject to the Code, to adopt, and from time
to time change, a fiscal year for the Trust.
(x) Seal. 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.
(y) Bylaws. To adopt, implement and from time to time alter,
amend or repeal Bylaws of the Trust relating to the business and organization of
the Trust which are not inconsistent with the provisions of this Declaration of
Trust.
(z) Accounts and Books. To determine from time to time
whether and to what extent, and at what times and places, and under what
conditions and regulations, the accounts and books of the Trust, or any of them,
shall be open to the inspection of Shareholders.
(aa) Voting Trust. To participate in, and accept Securities
issued under or subject to, any voting trust.
(ab) Proxies. To solicit proxies of the Shareholders at the
expense of the Trust.
(ac) Further Powers. To do all other acts and things and
execute and deliver all instruments incident to the foregoing powers, and to
exercise all powers which they deem necessary, useful or desirable to carry on
the business of the Trust or to carry out the provisions of this Declaration of
Trust, even if such powers are not specifically provided hereby.
ARTICLE 3 SECTION .3. Limitations on Powers and Authority.
Notwithstanding any provision hereof to the contrary, in no event shall the
Trustees have the power or authority to cause the Trust to do any of the
following without the prior approval of the Shareholders:
(a) Commodities Contracts. To invest in commodities or
commodity future contracts other than interest rate futures intended to hedge
the Trust against interest rate risk.
(b) Trading Activities. To engage in trading (as compared
with investment activities) or engage in the underwriting or agency distribution
or sale of securities issued by others.
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(c) Certain Holdings. To hold property primarily for sale to
customers in the ordinary course of business; provided, however, that the Trust
may sell properties if necessary, advisable or desirable or if effected pursuant
to an intent to liquidate the Trust.
ARTICLE 4
ADVISER
ARTICLE 4 SECTION .1. Appointment. The Trustees are responsible for
setting the general policies of the Trust and for the general supervision of its
business conducted by officers, agents, employees, advisers or independent
contractors of the Trust. However, the Trustees are not required personally to
conduct the business of the Trust, and they may (but need not) appoint, employ
or contract with any Person (including a Person Affiliated with any Trustee) as
an Adviser and may grant or delegate such authority to the Adviser as the
Trustees may, in their sole discretion, deem necessary or desirable. The
Trustees may determine the terms of retention and the compensation of the
Adviser and may exercise broad discretion in allowing the Adviser to administer
and regulate the operations of the Trust, to act as agent for the Trust, to
execute documents on behalf of the Trust and to make executive decisions which
conform to general policies and principles established by the Trustees.
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ARTICLE 4 SECTION .2. Affiliation and Functions. The Trustees, by
resolution or in the Bylaws, may provide guidelines, provisions or requirements
concerning the affiliation and functions of the Adviser.
ARTICLE 5
INVESTMENT POLICY
The fundamental investment policy of the Trust is to make investments
in such a manner as to comply with the REIT Provisions of the Code and with the
requirements of Title 8, with respect to the composition of the Trust's
investments and the derivation of its income. The Trustees will use their best
efforts to carry out this fundamental investment policy and to conduct the
affairs of the Trust in such a manner as to continue to qualify the Trust for
the tax treatment provided in the REIT Provisions of the Code; however, 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 Code, except to the
extent provided in Section 8.2. The Trustees may change from time to time, by
resolution or in the Bylaws of the Trust, such investment policies as they
determine to be in the best interests of the Trust, including prohibitions or
restrictions upon certain types of investments.
ARTICLE 6
SHARES
ARTICLE 6 SECTION .1. Authorized Shares. The total number of shares of
beneficial interest which the Trust is authorized to issue is 30,000,000, of
which 5,000,000 shares shall be preferred shares, par value $.01 per share
("Preferred Shares"), and 25,000,000 shares shall be common shares, $0.01 par
value per share ("Common Shares").
The Board of Trustees, without any action by the Shareholders of the
Company, may amend the Declaration of Trust from time to time to increase or
decrease the aggregate number of shares of beneficial interest or the number of
shares of beneficial interest of any class that the Company is authorized to
issue.
ARTICLE 6 SECTION .2. Common Shares.
(a) Dividend Rights. Subject to the preferential dividend
rights of the Preferred Shares, if any, as may be determined by the Board of
Trustees pursuant to Section 6.3, the holders of Common Shares shall be entitled
to receive such dividends as may be declared by the Board of Trustees.
(b) Rights Upon Liquidation. Subject to the preferential
rights of the Preferred Shares, if any, as may be determined by the Board of
Trustees pursuant to Section 6.3, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of, or any distribution of the assets of,
the Trust, each holder of Common Shares shall be entitled to receive,
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ratably with each other holder of Common Shares, that portion of the assets of
the Trust available for distribution to the holders of Common Shares that bears
the same relation to the total amount of such assets of the Trust as the number
of Common Shares held by such holder bears to the total number of Common Shares
then outstanding.
(c) Voting Rights. The holders of the Common Shares shall be
entitled to vote on all matters (for which a common shareholder shall be
entitled to vote thereon) at all meetings of the Shareholders of the Trust, and
shall be entitled to one vote for each Common Share entitled to vote at such
meeting, voting together with the holders of the Preferred Shares who are
entitled to vote (except as otherwise may be determined by the Board of Trustees
pursuant to Section 6.3).
ARTICLE 6 SECTION .3. Preferred Shares. With respect to the Preferred
Shares, the Board of Trustees shall have the power from time to time (a) to
classify or reclassify, in one or more series, any unissued Preferred Shares and
(b) to reclassify any unissued shares of any series of Preferred Shares, in the
case of either (a) or (b) by setting or changing the number of shares
constituting such series and the designation, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption of such shares and, in such event, the
Trust shall file for record with the State Department of Assessments and
Taxation of Maryland articles supplementary to this Declaration of Trust in
substance and form as prescribed by Title 8.
ARTICLE 6 SECTION .4. Dividends or Distributions. The Trustees may
from time to time declare and cause the Trust to pay to Shareholders such
dividends or distributions in cash, property or other assets of the Trust or in
Securities of the Trust or from any other source as the Trustees in their
discretion shall determine. The Trustees shall endeavor to declare and pay such
dividends and distributions as shall be necessary for the Trust to qualify as a
real estate investment trust under the REIT Provisions of the Code; however,
Shareholders shall have no right to any dividend or distribution unless and
until declared by the Trustees. The exercise of the powers and rights of the
Trustees pursuant to this section shall be subject to the provisions of any
class or series of Shares at the time outstanding. The receipt by any Person in
whose name any Shares are registered on the records of the Trust or by his duly
authorized agent shall be a sufficient discharge for all dividends or
distributions payable or deliverable in respect of such Shares and from all
liability to see to the application thereof.
ARTICLE 6 SECTION .5. General Nature of Shares. All Shares shall be
personal property entitling the Shareholders only to those rights provided in
this Declaration of Trust or in the resolution creating any class or series of
Shares. The legal ownership of the Trust Property and the right to conduct the
business of the Trust are vested exclusively in the Trustees; the Shareholders
shall have no interest therein other than beneficial interest in the Trust
conferred by their Shares and shall have no right to compel any partition,
division, dividend or distribution of the Trust or any of the Trust Property.
The death of a Shareholder shall not terminate the Trust or give his legal
representative any rights against other Shareholders, the Trustees
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or the Trust Property, except the right, exercised in accordance with applicable
provisions of the Bylaws, to receive a new certificate for Shares in exchange
for the certificate held by the deceased Shareholder. Holders of Shares shall
not have any preemptive right to subscribe to any securities of the Trust.
ARTICLE 6 SECTION .6. Restrictions on Ownership and Transfer:
Exchange For Excess Shares.
(a) Definitions. For the purposes of Sections 6.6, 6.7 and
6.8, the following terms shall have the following meanings:
"Beneficial Ownership" shall mean ownership of Shares either directly
or constructively through the application of Section 544 of the Code, as
modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the correlative
meanings. Accordingly, for purposes hereof, Beneficial Ownership shall be
calculated for any Person by dividing two numbers, (a) the number that is the
numerator being the sum of (i) such Person's ownership of outstanding Shares
plus (ii) the maximum number of Shares issuable upon the exercise or conversion
of outstanding warrants, preferred stock or other securities exercisable for or
convertible into Shares owned by such Person and (b) the number that is the
denominator being the sum of (i) all outstanding Shares plus (ii) the maximum
number of Shares issuable upon the exercise or conversion of outstanding
warrants, preferred stock or other securities exercisable for or convertible
into Shares owned by such Person; provided that the Board of Trustees shall
retain full authority to adopt such other approach to determining Beneficial
Ownership as it may deem appropriate. Notwithstanding the foregoing, for
purposes of determining compliance with this Section 6.6 by any Person to whom
the Trust issues an option or warrant (or any Shareholder of any such Person),
such option or warrant shall not be deemed to confer upon such Person Beneficial
Ownership or Constructive Ownership of the Shares issuable upon the exercise
thereof, and the Shares issuable upon the exercise thereof shall be excluded
from both the numerator and denominator of the foregoing calculation.
"Beneficiary" shall mean the beneficiary of the Special Trust as
determined pursuant to Section 6.8(e).
"Common Equity Shares" shall mean outstanding Shares that are either
Common Shares or Excess Common Shares.
"Constructive Ownership" shall mean ownership of Shares either directly
or constructively through the application of Section 318(a) of the Code, as
modified by Section 856(d)(5) of the Code. The terms "Constructive Owner,"
"Constructively Owns" and "Constructively Owned" shall have the correlative
meanings. Accordingly, for purposes hereof, Constructive Ownership shall be
calculated for any Person by dividing two numbers, (a) the number that is the
numerator being the sum of (i) such Person's ownership of outstanding Shares
plus (ii) the maximum number of Shares issuable upon the exercise or conversion
of outstanding warrants, preferred stock or other securities exercisable for or
convertible into Shares owned by such Person and (b) the
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number that is the denominator being the sum of (i) all outstanding Shares plus
(ii) the maximum number of Shares issuable upon the exercise or conversion of
outstanding warrants, preferred stock or other securities exercisable for or
convertible into Shares owned by such Person; provided that the Board of
Trustees shall retain full authority to adopt such other approach to determining
Constructive Ownership as it may deem appropriate. Notwithstanding the
foregoing, for purposes of determining compliance with Sections 6.6(b) and (c)
by any Person to whom the Trust issues an option or warrant (or any Shareholder
of any such Person), such option or warrant shall not be deemed to confer upon
such Person Beneficial Ownership or Constructive Ownership of the Shares
issuable upon the exercise thereof, and the Shares issuable upon the exercise
thereof shall be excluded from both the numerator and denominator of the
foregoing calculation.
"Event" shall have the meaning assigned to it in Section 6.6(c).
"Excess Common Shares" shall mean Excess Shares that would, under
Section 6.8(e)(i), automatically be exchanged for Common Shares in the event of
a transfer of an interest in the Special Trust in which such Excess Shares are
held.
"Excess Preferred Shares" shall mean Excess Shares that would, under
Section 6.8(e)(i), automatically be exchanged for Preferred Shares in the event
of a transfer of an interest in the Special Trust in which such Excess Shares
are held.
"Excess Shares" shall mean, as applicable, Excess Common Shares or
Excess Preferred Shares.
"Exempt Parties" shall mean (i) (A) The Richard M. Osborne Trust
(the "Osborne Trust"), (B) Turkey Vulture Fund XIII, Ltd., (C) Richard M.
Osborne ("Osborne") and all of the members of Osborne's immediate family, as
such term is defined in Section 544(a)(2) of the Code and (D) any Section 544
Subsidiary of the entity or the individuals described in (A), (B) or (C), above
(the entities and individuals described in clauses (A), (B), (C) and (D) above
being collectively referred to herein as the "Osborne Affiliates"), (ii)
Safeguard Scientifics, Inc. and any Section 544 Subsidiary thereof
(collectively, the "SSI Affiliates") and (iii) The Nichols Company and any
Section 544 Subsidiary thereof (collectively, the "Nichols Affiliates"). The
term "Exempt Party" shall mean any of the foregoing.
"Market Price" shall mean the last reported sales price reported on
the American Stock Exchange of Shares on the trading day immediately preceding
the relevant date, or if the Shares are not then traded on the American Stock
Exchange, the last reported sales price of Shares on the trading day immediately
preceding the relevant date as reported on any exchange or quotation system over
which the Shares may be traded, or if the Shares are not then traded over any
exchange or quotation system, then the market price of the Shares on the
relevant date as determined in good faith by the Board of Trustees of the Trust.
The Market Price of the Common Shares shall be determined separately from the
Market Price of any outstanding class of Preferred Shares.
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"Ownership Limit" shall mean 4.16% in value of the outstanding Shares.
"Ownership Limitation Termination Date" shall mean the first day after
the date on which the Board of Trustees determines that it is no longer in the
best interests of the Trust to attempt to, or continue to, qualify as a REIT.
"Permissible Ownership Threshold" shall mean as to the Osborne
Affiliates, the SSI Affiliates and The Nichols Affiliates, respectively, 33.33%,
35.25% and 9.25%; provided that, once an Exempt Party transfers Shares such that
such Exempt Party following such transfer Beneficially Owns and Constructively
Owns less in value than the Ownership Limit, then such Exempt Party's
Permissible Ownership Threshold shall equal the Ownership Limit; provided,
further, however, that the foregoing proviso shall not restrict SSI Affiliates
or Nichols Affiliates from acquiring Shares upon the redemption of Class A Units
issued to them by Brandywine Operating Partnership, L.P. if such acquisition
would not result in such SSI Affiliates or Nichols Affiliates exceeding the
applicable percentage (35.25% or 9.25%) specified above.
"Person" shall mean an individual, corporation, partnership, limited
liability company, estate, trust (including a trust qualified under Section
401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside
for or to be used exclusively for the purposes described in Section 642(c) of
the Code, association, private foundation within the meaning of Section 509(a)
of the Code, joint stock company or other entity or any government or agency or
political subdivision thereof and also includes a group as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
but does not include an underwriter which participates in a public offering of
Shares for a period of 25 days following the purchase by such underwriter of
those Shares.
"Purported Beneficial Holder" shall mean, with respect to any event
other than a purported Transfer which results in Excess Shares, the person for
whom the Purported Record Holder of the Shares that were, pursuant to Section
6.6(c), automatically exchanged for Excess Shares upon the occurrence of such
event held such Shares.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which results in Excess Shares, the purported beneficial
transferee for whom the Purported Record Transferee would have acquired Shares,
if such Transfer had been valid under Section 6.6(b).
"Purported Record Holder" shall mean, with respect to any event other
than a purported Transfer which results in Excess Shares, the record holder of
the Shares that were, pursuant to Section 6.6(c), automatically exchanged for
Excess Shares upon the occurrence of such event.
"Purported Record Transferee" shall mean, with respect to any purported
Transfer which results in Excess Shares, the record holder of the Shares if such
Transfer had been valid under Section 6.6(b).
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"REIT" shall mean a real estate investment trust under Section 856 of
the Code.
"Section 544 Subsidiary" of any individual or entity shall mean any
entity, over 50% of the ownership interest in which is owned, directly or
indirectly (applying the principles of Section 544 of the Code) by the
individual or entity in question.
"Special Trust" shall mean the trust created pursuant to Section
6.8(a).
"Transfer" shall mean any issuance, sale, transfer, gift, assignment,
devise or other disposition of Shares or capital stock of any Person (including
(i) the granting of any option or entering into any agreement for the sale,
transfer or other disposition of Shares, (ii) the sale, transfer, exercise,
assignment or other disposition of any securities or rights convertible into or
exchangeable for Shares or (iii) the establishment of a put or the granting to a
third party of a call right with respect to Shares), whether voluntary or
involuntary, whether of record or beneficially and whether by operation of law
or otherwise.
"Trustee" shall mean, for purposes of this Article VI only, the Trust,
as trustee for the Special Trust, and any successor trustee appointed by the
Trust.
(b) Restrictions on Ownership and Transfer.
(i) Except as provided in Section 6.6(k), prior to the
Ownership Limitation Termination Date, no Person (other than an Exempt Party)
shall Beneficially Own or Constructively Own any Shares to the extent such
ownership would exceed the Ownership Limit. In addition, except as provided in
Section 6.6(k), prior to the Ownership Limitation Termination Date, no Exempt
Party shall Beneficially Own or Constructively Own any Shares in excess of the
Permissible Ownership Threshold for such Exempt Party.
(ii) Except as provided in Section 6.6(k), prior to the
Ownership Limitation Termination Date, any Transfer that, if effective, would
result in any Person (other than an Exempt Party) Beneficially Owning or
Constructively Owning Shares in excess of the Ownership Limit shall be void ab
initio as to the Transfer of such Shares which would be otherwise Beneficially
Owned or Constructively Owned by such Person in excess of such Ownership Limit;
and the intended transferee shall acquire no rights in or to such Shares.
(iii) Except as provided in Section 6.6(k), prior to the
Ownership Limitation Termination Date, any Transfer that, if effective, would
result in any Exempt Party Beneficially Owning or Constructively Owning Shares
in excess of the Permissible Ownership Threshold for such Exempt Party shall be
void ab initio as to the Transfer of such Shares which would be otherwise
Beneficially Owned or Constructively Owned by such Exempt Party in excess of the
Permissible Ownership Threshold for such Exempt Party; and such Exempt Party
shall acquire no rights in or to such Shares.
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(iv) Prior to the Ownership Limitation Termination Date, any
Transfer that, if effective, would result in Shares being beneficially owned by
less than 100 Persons (determined without reference to any rules of attribution)
shall be void ab initio as to the Transfer of such Shares which would be
otherwise beneficially owned by the transferee; and the intended transferee
shall acquire no rights in such Shares.
(v) Prior to the Ownership Limitation Termination Date, any
Transfer that, if effective, would result in the Trust being "closely held"
within the meaning of Section 856(h) of the Code shall be void ab initio as to
the Transfer of the Shares which would cause the Trust to be "closely held"
within the meaning of Section 856(h) of the Code; and the intended transferee
shall acquire no rights in such Shares.
(vi) The Board of Trustees shall have the authority to select
the Ownership Limitation Termination Date.
(c) Exchange For Excess Stock.
(i) If, notwithstanding the other provisions contained in
this Section 6.6, at any time prior to the Ownership Limitation Termination
Date, there is a purported Transfer such that any Person (other than an Exempt
Party) would Beneficially Own or Constructively Own Shares in excess of the
Ownership Limit, then, except as otherwise provided in Section 6.6(k), such
number of Shares in excess of such Ownership Limit (rounded up to the nearest
whole Share) shall be automatically exchanged for an equal number of shares of
Excess Shares. Such exchange shall be effective as of the close of business on
the business day prior to the date of the Transfer.
(ii) If, notwithstanding the other provisions contained in
this Section 6.6, at any time prior to the Ownership Limitation Termination
Date, there is a purported Transfer such that an Exempt Party would Beneficially
Own or Constructively Own Shares in excess of the applicable Permissible
Ownership Threshold, then, except as otherwise provided in Section 6.6(k), such
number of Shares in excess of the applicable Permissible Ownership Threshold
(rounded up to the nearest whole Share) shall be automatically exchanged for an
equal number of Excess Shares. Such exchange shall be effective as of the close
of business on the business day prior to the date of the Transfer.
(iii) If, notwithstanding the other provisions contained in
this Section 6.6, at any time prior to the Ownership Limitation Termination
Date, there is a purported Transfer which, if effective, would cause the Trust
to become "closely held" within the meaning of Section 856(h) of the Code, then
the Shares being Transferred which would cause the Trust to be "closely held"
within the meaning of Section 856(h) of the Code (rounded up to the nearest
whole Share) shall be automatically exchanged for an equal number of Excess
Shares. Such exchange shall be effective as of the close of business on the
business day prior to the date of the Transfer.
(iv) If, notwithstanding the other provisions contained in
this Section 6.6, at any time prior to the Ownership Limitation Termination
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Date, an event other than a purported Transfer (an "Event") occurs which would
(i) cause any Person (other than an Exempt Party) to Beneficially Own or
Constructively Own Shares in excess of the Ownership Limit, or (ii) cause an
Exempt Party to Beneficially Own or Constructively Own Shares in excess of such
Exempt Party's applicable Permissible Ownership Threshold, then, except as
otherwise provided in Section 6.6(k), Shares Beneficially Owned or
Constructively Owned by such Person or Exempt Party, as the case may be (rounded
up to the nearest whole Share), shall be automatically exchanged for an equal
number of Excess Shares to the extent necessary to eliminate such excess
ownership. Such exchange shall be effective as of the close of business on the
business day prior to the date of the Event. In determining which Shares are
exchanged, Shares directly held or Beneficially Owned by any Person who caused
the Event to occur shall be exchanged before any Shares not so held are
exchanged. Where several such Persons exist, the exchange shall be pro rata.
(d) Remedies For Breach. If the Board of Trustees or its
designee(s) shall at any time determine that a Transfer has taken place in
violation of Section 6.6(b) or that a Person intends to acquire or has attempted
to acquire beneficial ownership (determined without reference to any rules of
attribution) of any Shares that would result in Shares being beneficially owned
by less than 100 persons as contemplated by Section 6.6(b)(iv), or in Beneficial
Ownership or Constructive Ownership of any Shares in violation of Section
6.6(b), the Board of Trustees or its designees shall take such action as it
deems advisable to refuse to give effect to or to prevent such Transfer (or any
Transfer related to such intent), including, but not limited to, refusing to
give effect to such Transfer on the books of the Trust or instituting
proceedings to enjoin such Transfer; provided, however, that any Transfers or
attempted Transfers in violation of Sections 6.6(b)(ii), (iii), (iv) or (v)
shall automatically result in the exchange described in Section 6.6(c),
irrespective of any action (or non-action) by the Board of Trustees or its
designees.
(e) Notice of Ownership or Attempted Ownership in Violation
of Section 6.6(b). Any Person who acquires or attempts to acquire Beneficial
Ownership or Constructive Ownership of Shares in violation of Section 6.6(b)
shall immediately give written notice to the Trust of such acquisition or
attempted acquisition and shall provide to the Trust such other information as
the Trust may request in order to determine the effect, if any, of such
acquisition or attempted acquisition on the Trust's status as a REIT.
(f) Owners Required to Provide Information. Prior to the
Ownership Limitation Termination Date:
(i) every Beneficial Owner or Constructive Owner of
more than 4.0% in value of the outstanding Shares shall, within 30 days after
January 1 of each year, give written notice to the Trust stating the name and
address of such Beneficial Owner or Constructive Owner, the number of Shares
Beneficially Owned or Constructively Owned, and a description of how such Shares
are held. Each such Beneficial Owner or Constructive Owner shall provide to the
Trust such additional information as the Trust may request in
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order to determine the effect, if any, of such Beneficial Ownership or
Constructive Ownership on the Trust's status as a REIT.
(ii) Each Person who is a Beneficial Owner or
Constructive Owner of Shares and each Person (including the shareholder of
record) who is holding Shares for a Beneficial Owner or Constructive Owner shall
provide to the Trust such information as the Trust may request in order to
determine the Trust's status as a REIT or to comply with regulations promulgated
under the REIT provisions of the Code.
(g) Remedies Not Limited. Nothing contained in this Section
6.6 shall limit the authority of the Board of Trustees to take such other action
as it deems necessary or advisable to protect the Trust and the interests of its
Shareholders by preserving the Trust's REIT status.
(h) Ambiguity. In the case of an ambiguity in the application
of any of the provisions of this Article VI including any definition contained
in Section 6.6(a) and any ambiguity with respect to which Shares are to be
exchanged for Excess Shares in a given situation, the Board of Trustees shall
have the authority to determine the application of the provisions of this
Section 6.6 with respect to any situation based on the facts known to it.
(i) Increase in Ownership Limit. Subject to the
limitations provided in Section 6.6(j), the Board of Trustees may from time to
time increase the Ownership Limit.
(j) Limitations on Modifications.
(i) The Ownership Limit may not be increased if, after
giving effect to such increase, five Beneficial Owners of Shares would
Beneficially Own, in the aggregate, more than 49.9% of the outstanding Shares.
(ii) Prior to an increase in the Ownership Limit
pursuant to Section 6.6(i), the Board of Trustees may require such opinions of
counsel or the Trust's tax accountants, affidavits, undertakings or agreements
as it may deem necessary or advisable in order to determine or ensure the
Trust's status as a REIT.
(k) Exceptions. The Board of Trustees, with a ruling from the
Internal Revenue Service or an opinion of counsel or the Trust's tax accountants
to the effect that such exemption will not result in the Trust being "closely
held" within the meaning of Section 856(h) of the Code, may exempt a Person from
the Ownership Limit or the Permissible Ownership Threshold, as the case may be,
if the Board of Trustees obtains such representations and undertakings from such
Person as the Board of Trustees may deem appropriate and such Person agrees that
any violation or attempted violation of any of such representations or
undertakings will result in, to the extent necessary or otherwise deemed
appropriate by the Board of Trustees, the exchange of Shares held by such Person
for Excess Shares in accordance with Section 6.6(c).
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(l) American Stock Exchange Transactions. Nothing in this
Section 6.6 shall preclude the settlement of any transaction entered into
through the facilities of the American Stock Exchange, any successor exchange or
quotation system thereto, or any other exchange or quotation system over which
the Shares may be traded from time to time.
6 SECTION .7. Legend. (a) Each certificate for Common Shares hereafter
issued shall bear the following legend:
"The Common Shares represented by this certificate are subject
to restrictions on ownership and transfer for the purpose of the Trust's
maintenance of its status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the "Code"). No Person may Beneficially Own or
Constructively Own Shares in excess of 4.16% in value (or such greater
percentage as may be determined by the Board of Trustees) of the outstanding
Shares of the Trust (unless such Person is an Exempt Party). No Person who is an
Exempt Party may Beneficially Own or Constructively Own Shares in excess of the
Permissible Ownership Threshold for such Exempt Party. Any Person who attempts
to Beneficially Own or Constructively Own Shares in excess of the above
limitations must immediately notify the Trust. All capitalized terms used in
this legend have the meanings set forth in the Declaration of Trust, a copy of
which, including the restrictions on ownership and transfer, will be sent
without charge to each Shareholder who so requests. If the restrictions on
ownership and transfer are violated, the Common Shares represented hereby will
be automatically exchanged for Excess Shares which will be held in trust by the
Trust."
(b) Each certificate for Preferred Shares hereafter issued
shall bear the following legend:
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"The Preferred Shares represented by this certificate are
subject to restrictions on ownership and transfer for the purpose of the Trust's
maintenance of its status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the "Code"). No Person may Beneficially Own or
Constructively Own Shares in excess of 4.16% in value (or such greater
percentage as may be determined by the Board of Trustees) of the outstanding
Shares of the Trust (unless such Person is an Exempt Party). No Person who is an
Exempt Party may Beneficially Own or Constructively Own Shares in excess of the
Permissible Ownership Threshold for such Exempt Party. Any Person who attempts
to Beneficially Own or Constructively Own Shares in excess of the above
limitations must immediately notify the Trust. All capitalized terms used in
this legend have the meanings set forth in the Declaration of Trust, a copy of
which, including the restrictions on ownership and transfer, will be sent
without charge to each Shareholder who so requests. If the restrictions on
ownership and transfer are violated, the Preferred Shares represented hereby
will be automatically exchanged for Excess Shares which will be held in trust by
the Trust."
6 SECTION .8. Excess Shares.
(a) Ownership in Trust. Upon any purported Transfer or
Event that results in an exchange of Shares for Excess Shares pursuant to
Section 6.6(c), such Excess Shares shall be deemed to have been transferred to
the Trust, as Trustee of a Special Trust for the exclusive benefit of the
Beneficiary or Beneficiaries to whom an interest in such Excess Shares may later
be transferred pursuant to Section 6.8(e). Excess Shares so held in trust shall
be issued and outstanding Shares of the Trust. The Purported Record Transferee
or Purported Record Holder shall have no rights in such Excess Shares except as
and to the extent provided in Section 6.8(e).
(b) Dividend Rights. Excess Shares shall not be entitled to
any dividends or distributions. Any dividend or distribution paid prior to the
discovery by the Trust that the Shares with respect to which the dividend or
distribution was made had been exchanged for Excess Shares shall be repaid to
the Trust upon demand.
(c) Rights Upon Liquidation. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Trust, (i) subject to the preferential rights of the
Preferred Shares, if any, as may be determined by the Board of Trustees pursuant
to Section 6.3 and the preferential rights of the Excess Preferred Shares, if
any, each holder of Excess Common Shares shall be entitled to receive, ratably
with each other holder of Common Shares and Excess Common Shares, that portion
of the assets of the Trust available for distribution to the holders of Common
Shares or Excess Common Shares which bears the same relation to the total amount
of such assets of the Trust as the number of Excess Common Shares held by such
holder bears to the total number of Common Shares and Excess Common Shares then
outstanding and (ii) each holder of Excess Preferred Shares shall be entitled to
receive that portion of the assets of the Trust which a holder of the Preferred
Shares that were exchanged for such Excess Preferred Shares would have been
entitled to receive had such Preferred Shares remained outstanding. The Trust,
as holder of the
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Excess Shares in trust, or if the Trust shall have been dissolved, any trustee
appointed by the Trust prior to its dissolution, shall distribute ratably to the
Beneficiaries of the Special Trust, when determined, any such assets received
in respect of the Excess Shares in any liquidation, dissolution or winding up
of, or any distribution of the assets of the Trust.
(d) Voting Rights. The holders of Excess Shares shall not be
entitled to vote on any matters (except as required by law).
(e) Restrictions On Transfer: Designation of Beneficiary.
(i) Excess Shares shall not be transferrable. The
Purported Record Transferee or Purported Record Holder may freely designate a
Beneficiary of an interest in the Special Trust (representing the number of
Excess Shares held by the Special Trust attributable to a purported Transfer or
Event that resulted in the Excess Shares) if (i) the Excess Shares held in the
Special Trust would not be Excess Shares in the hands of such Beneficiary and
(ii) the Purported Beneficial Transferee or Purported Beneficial Holder does not
receive a price, as determined on a Share-by-Share basis, for designating such
Beneficiary that reflects a price for such Excess Shares that, (I) in the case
of a Purported Beneficial Transferee, exceeds (x) the price such Purported
Beneficial Transferee paid for the Shares in the purported Transfer that
resulted in the exchanges of Shares for Excess Shares, or (y) if the Purported
Beneficial Transferee did not give value for such Shares (having received such
Shares pursuant to a gift, devise or other transaction), the Market Price of
such Shares on the date of the purported Transfer that resulted in the exchange
of Shares for Excess Shares or (II) in the case of a Purported Beneficial
Holder, exceeds the Market Price of the Shares that were automatically exchanged
for such Excess Shares on the date of such exchange. Upon such a transfer of an
interest in the Special Trust, the corresponding shares of Excess Shares in the
Special Trust shall be automatically exchanged for an equal number of Common
Shares or Preferred Shares (depending upon the type of Shares that were
originally exchanged for such Excess Shares) and such Common Shares or Preferred
Shares shall be transferred of record to the transferee of the interest in the
Special Trust if such Common Shares or Preferred Shares would not be Excess
Shares in the hands of such transferee. Prior to any transfer of any interest in
the Special Trust, the Purported Record Transferee or Purported Record Holder,
as the case may be, must give advance notice to the Trust of the intended
transfer and the Trust must have waived in writing its purchase rights under
Section 6.8(f).
(ii) Notwithstanding the foregoing, if a Purported
Beneficial Transferee or Purported Beneficial Holder receives a price for
designating a Beneficiary of an interest in the Special Trust that exceeds the
amounts allowable under Section 6.8(e)(i), such Purported Beneficial Transferee
or Purported Beneficial Holder shall pay, or cause such Beneficiary to pay, such
excess to the Trust.
(f) Purchase Right in Excess Shares. Excess Shares shall be
deemed to have been offered for sale to the Trust, or its designee, at a price
per share equal to, (I) in the case of Excess Shares resulting from a
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purported Transfer, the lesser of (i) the price per share in the transaction
that created such Excess Shares (or, in the case of a gift, devise or other
transaction, the Market Price at the time of such gift, devise or other
transaction) or (ii) the Market Price on the date the Trust, or its designee,
accepts such offer or (II) in the case of Excess Shares created by an Event, the
lesser of (i) the Market Price of the Shares originally exchanged for the Excess
Shares on the date of such exchange or (ii) the Market Price of such Shares on
the date the Trust, or its designee, accepts such offer. The Trust shall have
the right to accept such offer for a period of ninety (90) days after the later
of (i) the date of the purported Transfer or Event which resulted in an exchange
of Shares for such Excess Shares and (ii) the date the Board of Trustees
determines that a purported Transfer or other event resulting in an exchange of
Shares for such Excess Shares has occurred, if the Trust does not receive a
notice of any such Transfer pursuant to Section 6.6(e).
ARTICLE 6 SECTION .9. Severability; Agent for Trust. If any
provision of Section 6.6, 6.7 or 6.8 or any application of any such provision is
determined to be invalid by any federal or state court having jurisdiction over
the issues, the validity of the remaining provisions shall not be affected and
other applications of such provision shall be affected only to the extent
necessary to comply with the determination of such court. In any event, to the
extent such court holds the Purported Record Transferee to be the record and
beneficial owner of Shares which, had the provisions of Sections 6.6, 6.7 and
6.8 been enforced, would have been exchanged for Excess Shares, such Purported
Record Transferee shall be deemed, at the option of the Trust, to have acted as
agent on behalf of the Trust in acquiring such transferred Shares and to hold
such Shares on behalf of the Trust.
ARTICLE 7
SHAREHOLDERS
ARTICLE 7 SECTION .1. Meetings of Shareholders. There shall be an
annual meeting of the Shareholders, to be held at such time and place as shall
be determined by or in the manner prescribed in the Bylaws at which the Trustees
shall be elected and any other proper business may be conducted. Except as
otherwise provided in this Declaration of Trust, special meetings of
Shareholders may be called in the manner provided in the Bylaws. Special
meetings of Shareholders may be called upon the written request of Shareholders
holding an aggregate of not less than ten percent (10%) of the Common Shares.
Special meetings of shareholders may also be called by holders of Preferred
Shares to the extent, if any, determined by the Board of Trustees in connection
with the establishment of a class or series of Preferred Shares. If there are 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. Any
meeting may be adjourned and reconvened as the Trustees determine or as provided
in the Bylaws.
ARTICLE 7 SECTION .2. Voting Rights of Shareholders. Subject to the
provisions of any class or series of Preferred Shares then outstanding and
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the mandatory provisions of any applicable laws or regulations, the Shareholders
shall be entitled to vote only on the following matters: (a) election or removal
of Trustees as provided in Sections 7.1 and 2.3 and Section 8-202 of Title 8 and
the Bylaws; (b) amendment of this Declaration of Trust as provided in Section
9.1; (c) a matter specified in Section 3.3; and (d) a merger of the Trust with
or into another entity as and to the extent required by Section 8-501.1 of Title
8. Except with respect to the foregoing matters, no action taken by the
Shareholders at any meeting shall in any way bind the Trustees.
ARTICLE 7 SECTION .3. Shareholder Action to be Taken by Meeting. Any
action required or permitted to be taken by the Shareholders of the Trust must
be effected at a duly called annual or special meeting of Shareholders of the
Trust and may not be effected by any consent in writing of such Shareholders.
Notwithstanding anything contained in this Declaration of Trust to the contrary,
the affirmative vote of at least a majority of the then outstanding Shares
entitled to vote in the election of Trustees, voting together as a single class,
shall be required to amend, repeal, or adopt any provision inconsistent with
this Section 7.3 and the affirmative vote of such number or percentage of the
then outstanding Shares as is specified in this Declaration of Trust or, if not
so specified, in the Bylaws shall be required to take any other action required
or permitted to be taken by the Shareholders.
ARTICLE 8
LIABILITY OF SHAREHOLDERS, TRUSTEES, OFFICERS,
EMPLOYEES AND AGENTS
AND TRANSACTIONS BETWEEN AFFILIATES AND THE TRUST
ARTICLE 8 SECTION .1. Limitation of Shareholder Liability. No
Shareholder shall be liable for any debt, claim, demand, judgment or obligation
of any kind of, against or with respect to the Trust by reason of his being a
Shareholder, nor shall any Shareholder be subject to any personal liability
whatsoever, in tort, contract or otherwise, to any Person in connection with the
Trust Property or the affairs of the Trust. All written contracts to which the
Trust is a party shall include a provision to the effect that the Shareholders
shall not be personally liable thereon.
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ARTICLE 8 SECTION .2. Limitation of Trustee and Officer Liability. To
the maximum extent that Maryland law in effect from time to time permits
limitation of the liability of trustees and officers of a real estate investment
trust, no Trustee or officer of the Trust shall be liable to the Trust or to any
Shareholder for money damages. Neither the amendment nor repeal of this Section,
nor the adoption or amendment of any other provision of this Declaration of
Trust inconsistent with this Section, shall apply to or affect in any respect
the applicability of the preceding sentence with respect to any act or failure
to act which occurred prior to such amendment, repeal or adoption. In the
absence of any Maryland statute limiting the liability of trustees and officers
of a Maryland real estate investment trust for money damages in a suit by or on
behalf of the Trust or by any Shareholder, no Trustee or officer of the Trust
shall be liable to the Trust or to any Shareholder for money damages except to
the extent that (i) the Trustee or officer actually received an improper benefit
or profit in money, property, or services, for the amount of the benefit or
profit in money, property, or services actually received; or (ii) a judgment or
other final adjudication adverse to the Trustee or officer is entered in a
proceeding based on a finding in the proceeding that the Trustee's or officer's
action or failure to act was the result of active and deliberate dishonesty and
was material to the cause of action adjudicated in the proceeding.
ARTICLE 8 SECTION .3. Express Exculpatory Clauses in Instruments.
Neither the Shareholders nor the Trustees, officers, employees or agents of the
Trust shall be liable under any written instrument creating an obligation of the
Trust, and all Persons shall look solely to the Trust Property for the payment
of any claim under or for the performance of that instrument. The omission of
the foregoing exculpatory language from any instrument shall not affect the
validity or enforceability of such instrument and shall not render any
Shareholder, Trustee, officer, employee or agent liable thereunder to any third
party, nor shall the Trustees or any officer, employee or agent of the Trust be
liable to anyone for such omission. No amendment of this Declaration of Trust or
repeal of any of its provisions shall limit or eliminate the limitation of
liability provided to Trustees and officers hereunder with respect to any act or
omission occurring prior to such amendment or repeal.
ARTICLE 8 SECTION .4. Indemnification. The Trust shall indemnify
(i) its Trustees and officers, whether serving the Trust or at its request any
other entity, to the full extent required or permitted by the general laws of
the State of Maryland applicable to ordinary business corporations now or
hereafter in force, including the advance of expenses under the procedures and
to the full extent permitted by such laws, and (ii) the Shareholders and other
employees and agents of the Trust to such extent as shall be authorized by the
Trustees or the Bylaws and as permitted by law. Nothing contained herein shall
be construed to protect any Person against any liability to the extent such
protection would violate Maryland statutory or decisional law applicable to real
estate investment trusts organized under Title 8 or any successor provision. The
foregoing rights of indemnification shall not be exclusive of any other rights
to which those seeking indemnification may be entitled. The Trustees may take
such action as is necessary to carry out these indemnification provisions and
are expressly empowered to adopt, approve and amend from time to time such
bylaws, resolutions or contracts implementing
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such provisions or such further indemnification arrangements as may be permitted
by law. No amendment of this Declaration of Trust or repeal of any of its
provisions shall limit or eliminate the right of indemnification provided
hereunder with respect to acts or omissions occurring prior to such amendment or
repeal.
ARTICLE 8 SECTION .5. Transactions Between the Trust and its
Trustees, Officers, Employees and Agents. Subject to any express restrictions in
this Declaration of Trust or adopted by the Trustees in the Bylaws or by
resolution, the Trust (which, for purposes of this Section 8.5, shall include
the Trust and any of its subsidiaries) may enter into any contract or
transaction of any kind (including without limitation for the purchase or sale
of property or for any type of services, including those in connection with
underwriting or the offer or sale of Securities of the Trust) with any Person,
including any Trustee, officer, employee or agent of the Trust or any Person
Affiliated with the Trust or a Trustee, officer, employee or agent of the Trust,
whether or not any of them has a financial interest in such transaction;
provided, however, that the following contracts and transactions may not be
consummated by the Trust unless first approved by the affirmative vote of a
majority of the Trustees who have no interest in the contract or transaction:
any contract or transaction between the Trust and any Trustee, officer, employee
or agent of the Trust or any person Affiliated with the Trust or a Trustee,
officer, employee or agent of the Trust.
ARTICLE 9
AMENDMENT; REORGANIZATION; MERGER, ETC.
ARTICLE 9 SECTION .1. Amendment.
(a) This Declaration of Trust may be amended by the
affirmative vote of the holders of not less than a majority of the Shares then
outstanding and entitled to vote thereon, except that Section 11.5 shall not be
amended or repealed, nor shall provisions inconsistent therewith be adopted,
except by the affirmative vote of the holders of not less than 80% of the Shares
then outstanding and entitled to vote. Notwithstanding the foregoing, no vote or
other action of Shareholders shall be required in order for the Board of
Trustees to amend this Declaration of Trust pursuant to Section 6.1.
(b) An amendment to this Declaration of Trust shall become
effective as provided in Section 11.6.
(c) This Declaration of Trust may not be amended except as
provided in this Section 9.1.
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ARTICLE 9 SECTION .2. Merger, Consolidation or Sale of Trust
Property. Subject to the provisions of any class or series of Preferred Shares
at the time outstanding and subject to Section 8-501.1 of Title 8, as and to the
extent applicable, the Trustees shall have the power to (i) merge the Trust with
or into another entity, (ii) consolidate the Trust with one or more other
entities into a new entity or (iii) sell or otherwise dispose of all or
substantially all of the Trust Property.
ARTICLE 10
DURATION AND TERMINATION OF TRUST
ARTICLE 10 SECTION .1. Duration of Trust. The Trust shall continue
perpetually unless terminated pursuant to Section 10.2 or pursuant to any
applicable provision of Title 8.
ARTICLE 10 SECTION .2. Termination of Trust.
(a) Subject to the provisions of any class or series of
Preferred Shares at the time outstanding and subject to Section 8-501.1 of Title
8, as and to the extent applicable, the Trustees shall have the power to
terminate the Trust. Upon the termination of the Trust:
(i) The Trustees shall proceed to wind up the affairs
of the Trust and all of the powers of the Trustees under this Declaration of
Trust shall continue, including the powers to fulfill or discharge the Trust's
contracts, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property 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.
(ii) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such releases, indemnities and
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly in each,
among the Shareholders according to their respective rights, so that after
payment in full or the setting apart for payment of such preferential amounts,
if any, to which the holders of any Shares (other than Common Shares) at the
time outstanding shall be entitled, the remaining Trust Property available for
payment and distribution to Shareholders shall, subject to any participating or
similar rights of Shares (other than Common Shares) at the time outstanding, be
distributed ratably among the holders of Common Shares at the time outstanding.
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(b) After termination of the Trust, the liquidation of its
business, and the distribution to the Shareholders as herein provided, a
majority of the Trustees shall execute and file with the Trust's records a
document certifying that the Trust has been duly terminated, and the Trustees
shall be discharged from all liabilities and duties hereunder, and the rights
and interests of all Shareholders shall cease.
ARTICLE 11
MISCELLANEOUS
ARTICLE 11 SECTION .1. Governing Law. This Declaration of Trust is
executed by the undersigned Trustees and delivered in the State of Maryland with
reference to the laws thereof, and the rights of all parties and the validity,
construction and effect of every provision hereof shall be subject to and
construed according to the laws of the State of Maryland without regard to
conflicts of laws provisions thereof.
ARTICLE 11 SECTION .2. Reliance by Third Parties. Any certificate
shall be final and conclusive as to any Persons dealing with the Trust if
executed by an individual who, according to the records of the Trust or of any
recording office in which this Declaration of Trust may be recorded, appears to
be the Secretary or an Assistant Secretary of the Trust or a Trustee, and if
certifying to: (i) the number or identity of Trustees, officers of the Trust or
Shareholders; (ii) the due authorization of the execution of any document; (iii)
the action or vote taken, and the existence of a quorum, at a meeting of
Trustees or Shareholders; (iv) a copy of this Declaration or of the Bylaws as a
true and complete copy as then in force; (v) an amendment to this Declaration;
(vi) the termination of the Trust; or (vii) the existence of any fact or facts
which relate to the affairs of the Trust. No purchaser, lender, transfer agent
or other Person shall be bound to make any inquiry concerning the validity of
any transaction purporting to be made on behalf of the Trust by the Trustees or
by any officer, employee or agent of the Trust.
ARTICLE 11 SECTION .3. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust 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 Code, Title 8 or other applicable
federal or state laws, the Conflicting Provisions shall be deemed never to have
constituted a part of this Declaration of Trust, even without any amendment of
this Declaration pursuant to Section 9.1; provided, however, that such
determination by the Trustees shall not affect or impair any of the remaining
provisions of this Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination. No Trustee shall be liable for
making or failing to make such a determination.
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(b) If any provision of this Declaration of Trust shall be
held invalid or unenforceable in any jurisdiction, such holding shall not in any
manner affect or render invalid or unenforceable such provision in any other
jurisdiction or any other provision of this Declaration of Trust in any
jurisdiction.
ARTICLE 11 SECTION .4. Construction. In this Declaration of Trust,
unless the context otherwise requires, words used in the singular or in the
plural include both the plural and singular and words denoting any gender
include all genders. The title and headings of different parts are inserted for
convenience and shall not affect the meaning, construction or effect of this
Declaration. In defining or interpreting the powers and duties of the Trust and
its Trustees and officers, reference may be made, to the extent appropriate and
not inconsistent with the Code or Title 8, to Titles 1 through 3 of the
Corporations and Associations Article of the Annotated Code of Maryland. In
furtherance and not in limitation of the foregoing, in accordance with the
provisions of Title 3, Subtitles 6 and 7, of the Corporations and Associations
Article of the Annotated Code of Maryland, the Trust shall be included within
the definition of "corporation" for purposes of such provisions.
ARTICLE 11 SECTION .5. Business Combinations. The provisions of
Subtitle 6 of Title 3 of the Corporations and Associations Article of the
Annotated Code of Maryland, as such provisions exist as of June 4, 1986, are by
this reference incorporated herein as if here set forth in their entirety. Such
provisions shall be interpreted in a manner consistent with that in which they
would be interpreted pursuant to the above referenced statute as such statute
exists as of June 4, 1986, assuming the validity of such statute and its
applicability to the Trust.
ARTICLE 11 SECTION .6. Recordation. This Declaration of Trust and any
amendment hereto shall be filed for record with the State Department of
Assessments and Taxation of Maryland and may also be filed or recorded in such
other places as the Trustees deem appropriate, but failure to file for record
this Declaration or any amendment hereto in any office other than in the State
of Maryland shall not affect or impair the validity or effectiveness of this
Declaration or any amendment hereto. A restated Declaration shall, upon filing,
be conclusive evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Declaration and the various amendments
thereto.
IN WITNESS WHEREOF, this Amended and Restated Declaration of Trust has
been signed on this 12th day of May, 1997 by the undersigned Trustees, each of
whom acknowledges, under penalty of perjury, that this document is his free act
and
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deed, and that to the best of his knowledge, information, and belief, the
matters and facts set forth herein are true in all material respects.
/s/ Anthony A. Nichols, Sr.
----------------------------------
Anthony A. Nichols, Sr.
/s/ Joseph L. Carboni
----------------------------------
Joseph L. Carboni
/s/ Richard M. Osborne
----------------------------------
Richard M. Osborne
/s/ Gerard H. Sweeney
----------------------------------
Gerard H. Sweeney
/s/ Warren V. Musser
----------------------------------
Warren V. Musser
/s/ Walter D'Alessio
----------------------------------
Walter D'Alessio
/s/ Charles P. Pizzi
----------------------------------
Charles P. Pizzi
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