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EXHIBIT (3.4)
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FIFTH AMENDMENT TO THE DECLARATION OF
TRUST OF LIBERTE INVESTORS
(formerly known as LOMAS & NETTLETON MORTGAGE INVESTORS)
WHEREAS, Liberte Investors (formerly known as Lomas &
Nettleton Mortgage Investors) is a business trust organized under the laws of
Massachusetts pursuant to a Declaration of Trust dated June 26, 1969, and
recorded in the Registry of Deeds of Suffolk County on June 27, 1969, in Book
8293 at Page 278, as amended by instruments (i) dated September 19, 1969,
recorded in such Registry on October 3, 1969, in Book 8316 at Page 217, (ii)
dated January 24, 1986, recorded in such Registry on February 19, 1986, in Book
12298 at Page 204, (iii) dated January 19, 1989, recorded in such Registry on
January 31, 1989, in Book 15338 at Page 46, and (iv) recorded in such Registry
on December 15, 1992, in Book 17912 at Page 76, having an effective date of
December 18, 1992; and
WHEREAS, Liberte Investors has sought relief, as debtor in
possession, under Chapter 11, relating to reorganizations, of the Federal
Bankruptcy Code in the United States Bankruptcy Court for the Southern District
of New York (Case No. 93B-45262(BRL) ) (the Chapter 11 Case); and
WHEREAS, a Plan of Reorganization for Liberte Investors was
confirmed on January 24, 1994, in the Chapter 11 Case; and
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WHEREAS, such Plan of Reorganization (1) contemplates the
taking of certain actions provided for therein, without further action by the
Trustees of Liberte Investors or holders of its shares of beneficial interest,
including the amendment of the Declaration of Trust of Liberte Investors and
(2) designates Robert Ted Enloe III, President of Liberte, as an officer having
the power and authority to do or take or cause to be done or taken, any act
necessary to cause such amendment to become effective under Massachusetts law,
all without any further action by Liberte Investors trustees or holders of
shares of beneficial interest, but with like effect as if any such power and
authority has been exercised and actions taken by unanimous action of the
Trustees of Liberte Investors and the holders of its shares of beneficial
interest;
NOW, THEREFORE, the Declaration of Trust of Liberte investors
is amended as follows:
(1) SECTION 2.1, as previously amended, shall be further amended
by striking out the clause "but in no case less than five (5) nor more than
eleven (11)", and substituting in lieu thereof the clause "but in no case less
than three (3) nor more than seven (7)"
(2) SECTION 2.2 shall be amended by striking out the second
sentence thereof and inserting in lieu thereof the following sentence:
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Of the three Trustees who shall continue to qualify as
Trustees after the Fifth Amendment to the Declaration of Trust becomes
effective (all of whom have an address in care of the principal executive
offices of the Trust), one class of Trustees shall consist of Edward W. Rose,
III, who shall continue to serve until the 1994 Annual Meeting of Shareholders
and until his successor shall have been elected and qualified; another class
shall consist of Gene H. Bishop, who shall continue to serve until the 1995
Annual Meeting of Shareholders and until his successor shall have been elected
and qualified; and a third class shall consist of Robert Ted Enloe, III, who
shall continue to serve until the 1996 Annual Meeting of Shareholders and until
his successor shall have been elected and qualified.
(3) ARTICLE 3 shall be amended by:
(a) redesignating Section 3.20 as Section 3.21; and
(b) inserting the following as the new Section 3.20:
SECTION 3.20 Power to appoint a resident agent in
Massachusetts. The Trustees shall have the power to appoint a resident agent in
Massachusetts as the true and lawful attorney of the Trust upon whom all lawful
processes in any action or proceeding against the Trust may be served. Such
resident agent shall be either an individual who is a resident of and has a
business address in Massachusetts, a corporation organized under Massachusetts
law, or a corporation organized under the laws of any other state of the United
States which has an office in Massachusetts and has complied with the reporting
provisions of Massachusetts law with respect to foreign corporations. The
Trustees have duly appointed as resident agent, Frederick Goldstein, Esq.,
having an address at Lourie & Cutler, P.C., 60 State Street, Boston,
Massachusetts 02109. Such appointment shall become effective upon the filing of
the Fifth Amendment to the Declaration of Trust. The Trust may, by vote of the
Trustees, revoke any appointment of a resident agent or appoint a new resident
agent. Any such revocation or appointment shall become effective upon the
amendment of this Declaration of Trust in accordance with the provisions of
Section 8.1. Any resident agent shall give notice of a change in business
address, or of its resignation as such, in a manner similar to that prescribed
for resident agents of corporations under the applicable provisions of the
Massachusetts Business Corporation Law.
(4) SECTION 5.1 shall be amended by adding the following to the
end of the second paragraph:
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No interest of beneficiaries in the Trust may be represented
by "nonvoting equity securities" within the meaning of Section
1123(a)(6) of the United States Bankruptcy Code, 11 U.S.C.
Section 1123(a)(6); this provision, included in this
Declaration of Trust in compliance with Section 1123(a)(6) of
the United States Bankruptcy Code, 11 U.S.C. Section 1123,
shall have no force and effect except to the extent required
by such Section so long as such Section is in effect and
applicable to the Trust.
(5) Section 5.7 is amended by replacing such section in its
entirety with the following:
SECTION 5.7 Restrictions on Transfer of Shares to preclude the
application of the Internal Revenue Code's Section 382 limitation and to
preserve other tax attributes. (a) In order to preserve the Trust's net
operating loss carryforwards and other tax attributes under the Internal
Revenue Code, the following restrictions upon transfer of the Trust's Shares
shall apply until the Trustees determine otherwise:
(i) (1) No person other than the Trust shall transfer any
Shares of the Trust to any person to the extent that such transfer (whether or
not such transfer is the result of a transaction entered into through the
facilities of the New York Stock Exchange), if effective, would cause the
Ownership Interest Percentage of the transferee or any other person to increase
to 5 percent or above, or from 5 percent or above to a greater Ownership
Interest Percentage.
(i) (2) For purposes of Section 5.7, the following terms
shall have the following meanings:
(a) "Initial Transferor" shall mean a person who attempts to make
a transfer of Shares described in subparagraph (a)(i)(1);
(b) "Ownership Interest Percentage" shall mean the value of the
Shares owned, directly or indirectly (under the constructive
ownership rules of Section 544 of the Internal Revenue Code),
by a person as a percentage of all issued and outstanding
Shares of the Trust;
(c) "person" shall include any individual, corporation, estate,
trust, association, company, partnership, joint venture, or
similar organization;
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(d) "Prohibited Distributions" shall mean any dividends or other
distributions paid by the Trust with respect to the Prohibited
Shares that were received by the Purported Acquiror.
(e) "Prohibited Shares" shall mean each Share of the Trust the
transfer of which is restricted by subparagraph (a)(i)(1).
(f) "Purported Acquiror" shall mean the person to whom the Initial
Transferor attempts to make a transfer of Shares described in
subparagraph (a)(i)(1) or of the ownership of a Higher Tier
Entity (as defined in subparagraph (i) below);
(g) "Resale Proceeds" shall mean the proceeds of sale of
Prohibited Shares received by the Purported Acquiror to an
unrelated party in an arm's-length transaction.
(h) "Sales Proceeds" shall mean the proceeds of sale of Prohibited
Shares received by a designated agent of the Trust.
(i) "transfer" shall include any means of conveying legal or
beneficial ownership of Shares, whether such means is direct
or indirect, voluntary or involuntary, including without
limitation, the transfer of ownership of any entity which,
directly or indirectly owns Shares (a "Higher Tier Entity");
(j) "transferee" shall mean any person to whom shares are
transferred.
(ii) Any transfer of Shares of the Trust that would
otherwise be prohibited pursuant to subparagraph (a)(i) shall nonetheless be
permitted if information relating to a specific proposed transaction is
presented to the Trustees and the Trustees determine (x) that such transaction
will not create a substantial risk of loss of the Trust's status as a real
estate investment trust, or (y) that the overall economic benefits of such
transaction to the Trust and its Shareholders outweigh the detriments, if any,
of such transfer.
(b) Unless approval of the Trustees is obtained as provided in
subparagraph (a)(ii) of this Section 5.7, any attempted transfer of Shares of
the Trust in excess of the number of Shares that could be transferred to the
transferee without restriction under subparagraph (a)(i)(1) of this Section 5.7
shall not be effective to transfer ownership of such Prohibited Shares to the
Purported Acquiror, who shall
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not be entitled to any rights as a shareholder of the Trust with respect to the
Prohibited Shares (including, without limitation, the right to vote or to
receive dividends with respect thereto). Subject to the Trust's election to
apply subparagraph (b)(i) below, all rights with respect to the Prohibited
Shares shall remain the property of the Initial Transferor. A Purported
Acquiror shall be deemed to have consented to all the provisions of this
Section 5.7 and to have agreed to act as provided in the following subparagraph
(b)(i) if the Trust so demands.
(i) Upon demand by the Trust, the Purported Acquiror
shall transfer any certificate or other evidence of ownership of the Prohibited
Shares within the Purported Acquiror's possession or control, along with any
Prohibited Distributions, to an agent designated by the Trust (the "Agent"). If
the Purported Acquiror has sold the Prohibited Shares to an unrelated party in
an arm's-length transaction after purportedly acquiring them, the Purported
Acquiror shall be deemed to have sold the Prohibited Shares as agent for the
Initial Transferor, and in lieu of transferring the Prohibited Shares and
Prohibited Distributions to the Agent, shall transfer to the Agent the
Prohibited Distributions and the Resale Proceeds except to the extent that the
Agent grants written permission to the Purported Acquiror to retain a portion
of the Resale Proceeds not exceeding the amount that would have been payable by
the Agent to the Purported Acquiror pursuant to the following subparagraph
(b)(ii) if the Prohibited Shares had been sold by the Agent rather than by the
Purported Acquiror. Any purported transfer of the Prohibited Shares by the
Purported Acquiror other than a transfer described in one of the two preceding
sentences shall not be effective to transfer any ownership of the Prohibited
Shares.
(ii) The Agent shall sell in an arm's-length transaction
through the facilities of a national securities exchange or an over-the-counter
market, if possible any Prohibited Shares transferred to the Agent by the
Purported Acquiror, and the Sales Proceeds, or the Resale Proceeds, if
applicable, shall be allocated to the Purported Acquiror up to the following
amount: (x) where applicable, the purported purchase price paid or value of
consideration surrendered by the Purported Acquiror for the Prohibited Shares,
and (y) where the purported transfer of the Prohibited Shares to the Purported
Acquiror was by gift, inheritance, or any similar purported transfer, the fair
market value of the Prohibited Shares at the time of such purported transfer.
Subject to the succeeding provisions of this subparagraph (b)(ii), any Resale
Proceeds or Sales Proceeds in excess of the amount allocable to the Purported
Acquiror pursuant to the preceding sentence, together with any Prohibited
Distributions, shall be the property of the
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Initial Transferor. If the identity of the Initial Transferor cannot be
determined by the Agent through inquiry made to the Purported Acquiror, the
Agent shall publish appropriate notice (in The Wall Street Journal, if
possible) for seven consecutive business days in an attempt to identify the
Initial Transferor in order to transmit any Resale Proceeds or Sales Proceeds
or Prohibited Distributions due to the Initial Transferor pursuant to this
subparagraph (b)(ii). The Agent may also take, but is not required to take,
other reasonable actions to attempt to identify the Initial Transferor. If
after 90 days following the final publication of such notice the Initial
Transferor has not been identified, any amounts due to the Initial Transferor
pursuant to this subparagraph (b)(ii) may be paid over to a court or
governmental agency, if applicable law permits, or otherwise shall be
transferred to an entity designated by the Trust that, is described in Section
501(c)(3) of the Internal Revenue Code. In no event shall any such amounts due
to the Initial Transferor inure to the benefit of the Trust or the Agent, but
such amounts may be used to cover expenses (including but not limited to the
expenses of publication) incurred by the Agent in attempting to identify the
Initial Transferor.
(c) Upon a determination by the Trustees that there has been or is
threatened a purported transfer of Prohibited Shares to a Purported Acquiror,
the Trustees may take such action in addition to any action permitted by this
Section 5.7 as advisable to give effect to the provisions of this Section 5.7
including, without limitation, refusing to give effect on the books of this
Trust to such purported transfer or instituting proceedings to enjoin such
purported transfer.
(d) The Trust may require as a condition to the registration of
the transfer of any Shares that the proposed transferee furnish to the Trust
all information reasonably requested by the Trust with respect to all the
proposed transferee's direct or indirect ownership interests in Shares of the
Trust.
(e) All certificates evidencing ownership of Shares of this Trust
shall be subject to the restrictions on transfer contained in this Section 5.7
and shall bear (or be deemed to bear) a conspicuous legend referencing the
restrictions set forth in this Section 5.7.
(f) Nothing contained in this Section 5.7 shall limit the
authority of the Trustees to take such other action to the extent permitted by
law as it deems necessary or advisable to protect the Trust and the interests
of the holders of its securities in preserving the Trust's real estate
investment trust status.
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(g) The Trustees shall have the power to resolve (1) any ambiguity
in the terms of this Section 5.7 and (2) based on the known facts and making a
"worst-case" assumption about such facts as are not known, any uncertainty as
to the application of this Section 5.7 in a particular factual situation.
(h) Nothing contained in this Section 5.7 shall independently
require the Trustees to preserve the Trust's status as a real estate investment
trust.
(6) SECTION 8.1 is amended by:
(a) striking out the period at the end of the first
sentence thereof, and inserting a semicolon in lieu thereof;
and
(b) inserting the following new clauses:
and further provided, that the Trustees may also, from time to
time, by written instrument signed by at least two-thirds
(2/3) of the Trustees, amend or alter the provisions of this
Declaration of Trust without the vote or assent of the
Shareholders, (i) to modify the Ownership Interest Percentage
in the Trust specified in Section 5.7(a)(i)(1), (ii) to modify
the definitions of any terms set forth in Section 5.7, or
(iii) to amend the provisions of Section 3.20, relating to the
Trust's resident agent in Massachusetts, to comply with
applicable Massachusetts law.
(7) SECTION 8.2 shall be amended by striking out the text of such
section and inserting the following in lieu thereof:
By written instrument signed by at least two-thirds (2/3) of
the Trustees and consented to by at least two-thirds (2/3) of the
Shares then outstanding hereunder and entitled to vote, either in
writing or by a vote at a meeting of Shareholders, a corporation,
association, trust or other organization (or one or more of such
entities) may be organized to take over the Trust property and carry
on the affairs of the Trust. The Trust property may be sold, conveyed
or transferred to any such corporation, association, trust or
organization, or to any existing corporation, association, trust or
other organization, in exchange for the shares or securities thereof,
or beneficial interest therein, and such transferee may be caused to
assume the liabilities of the Trust, to deliver such
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shares, securities or beneficial interests ratably to the Shareholders
in redemption of their Shares, and this Trust may be terminated;
provided, however, that no such sale, conveyance or transfer of the
Trust Property shall be made to any corporation, association, trust or
other organization unless (i) it utilizes its best efforts to continue
to qualify for benefits under the federal income tax laws which are
substantially equal to the benefits for which this Trust qualifies at
such time, if that is appropriate, (ii) it has a purposes
substantially the same as the purpose of this Trust, and (iii) its
shares, securities, or beneficial interests which will be issued in
exchange for such property constitute an investment substantially
equal in quality and substantially the same in type as an investment
in the Shares hereof.
(8) Section 8.4 shall be amended by striking out the heading and
the text of such section and inserting the following in lieu thereof:
SECTION 8.4. Power to organize other corporations or
business trusts. By written instrument signed by at least two-thirds (2/3) of
the Trustees and without the vote or assent of the Shareholders, the Trustees
may cause the Trust to organize, or cause to be organized, one or more
corporations or business trusts, under the Business Corporation Law of the
Commonwealth of Massachusetts or of the applicable laws of any other state, all
of the outstanding shares of each of which shall be owned by the Trust, for any
appropriate purpose of the Trust that they deem in its best interests.
(9) The Declaration of Trust shall be amended by inserting the
following as new Section 8.6 thereof:
SECTION 8.6. Effect of Reorganization under Federal laws and
Implementation of Plan of Reorganization. (a) If, pursuant to the provisions of
any applicable statute of the United States relating to reorganizations, a plan
of reorganization of the Trust has been or shall be confirmed by the decree or
order of a court of competent jurisdiction, the Trust may put into effect and
carry out the plan and the decrees and orders of the court relative thereto and
may take any proceeding and do any act provided in the plan or directed by such
decrees and orders, without further action by its Trustees or Shareholders.
Such power and authority may be exercised, and such proceedings and acts may be
taken, as may be directed by such decrees or orders, by the
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trustee or trustees for the Trust appointed by the court in the reorganization
proceedings (or a majority thereof), or if none be appointed and acting, and
the Trust is the debtor in possession, by designated officers of the Trust, or
by a master or other representative appointed by the court, with like effect as
if exercised and taken by unanimous action of the Trustees and Shareholders of
the Trust.
(b) In accordance with any such plan of reorganization, the Trust
may organize, cause to be organized, or utilize one or more entities or
corporations under the Business Corporation Law of the Commonwealth of
Massachusetts or any other state of the United States, all of the outstanding
shares of which initially shall be owned by the Trust.
(c) The Trust may, in the manner provided in subsection (a), but
without limiting its generality or effect, alter, amend or repeal its by-laws;
constitute or reconstitute the Board of Trustees, and name, constitute or
appoint Trustees and officers in place of or in addition to all or some of the
Trustees or officers then in office; amend this Declaration of Trust without
the vote or assent of the Trustees and/or the Shareholders, and make any change
in its authorized and issued shares of beneficial interest, or make any other
amendment, change or alteration, or provision, authorized by such plan or
necessary for its implementation, or transfer all or part of its assets. In no
such case, however, shall any Shareholder have any right to demand payment for
such Shareholder's shares of beneficial interest.
(d) Any amendment made to the Declaration of Trust pursuant to the
foregoing provisions of this section shall be signed under the penalties of
perjury by the person or persons authorized by the court, in accordance with
the provisions of subsection (a), and filed with the state secretary, recorded
in the Registry, and filed with the clerk of the City of Boston. The amendment
shall become effective when it has been so filed and recorded, unless said
amendment specifies a later effective date and not more than thirty days after
such filing, in which even the amendment shall become effective on such later
date.
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IN WITNESS WHEREOF, I, Robert Ted Enloe III, have this 31st
day of March, 1994, set my hand and seal, under penalties of perjury, to this
Fifth Amendment, and declare that I have examined this amendment, and believe
it constitutes the true, correct, and complete text of the amendment to the
Declaration of Trust of Liberte Investors provided for in the Plan of
Reorganization confirmed in the Chapter 11 Case.
/s/ ROBERT TED ENLOE III
Robert Ted Enloe III
President and Trustee, and
not individually
THE STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned, a Notary Public in and for said
County and State, on this day personally appeared ROBERT TED ENLOE III, known
to me to be the person whose name is subscribed to the foregoing instrument,
and acknowledged to me that he executed the same for the purpose therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 31st day of March,
1994.
My Commission Expires:
8/30/95 /s/ BRIDGET SHEAHAN
Notary Public, State of New
York
(SEAL)
BRIDGET SHEAHAN Bridget Sheahan
Notary Public, State of New York Printed Name of Notary
No. 5017113
Qualified in New York County
Commission Expires Aug. 30, 1995