**EXHIBIT3.2**

 

SENIOR HOUSING PROPERTIES TRUST

 

 

AMENDED AND RESTATED BYLAWS

 

 

As Amended and Restated ~~February 24,~~November 2, 2009

 

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**Table of Contents**

 
| ARTICLE I OFFICES                   |                                                                              | 1      |
|-------------------------------------|-----------------------------------------------------------------------------------|--------|
| Section 1.1.                   | Principal Office                                                                  | 1      |
| Section 1.2.                   | Additional Offices                                                                | 1      |
|                                |                                                                              |   |
| ARTICLE II MEETINGS OF SHAREHOLDERS | 1                                                                                 |
| Section 2.1.                   | Place                                                                             | 1      |
| Section 2.2.                   | Annual Meeting                                                                    | 1      |
| Section 2.3.                   | Special Meetings                                                                  | 1      |
| Section 2.4.                   | Notice of Regular or Special Meetings                                             | 1      |
| Section 2.5.                   | Notice of Adjourned Meetings                                                      | 2      |
| Section 2.6.                   | Scope of Meetings                                                                 | 2      |
| Section 2.7.                   | Organization of Shareholder Meetings                                              | 2      |
| Section 2.8.                   | Quorum                                                                            | 3      |
| Section 2.9.                   | Voting                                                                            | 3      |
| Section 2.10.                  | Proxies                                                                           | 3      |
| Section 2.11.                  | Record Date                                                                       | 4      |
| Section 2.12.                  | Voting of Shares by Certain Holders                                               | 4      |
| Section 2.13.                  | Inspectors                                                                        | 4      |
| Section 2.14.                  | Nominations and Other Proposals to be Considered at  Meetings of Shareholders     | 4      |
| Section 2.14.1.                | Annual Meetings of Shareholders                                                   | 4      |
| Section 2.14.2.                | Shareholder Nominations or Other Proposals Causing Covenant  Breaches or Defaults | 11     |
| Section 2.14.3.                | Shareholder Nominations or Other Proposals Requiring  Governmental Action         | 11     |
| Section 2.14.4.                | Special Meetings of Shareholders                                                  | 12     |
| Section 2.14.5.                | General                                                                           | 13     |
| Section 2.15.                  | No Shareholder Actions by Written Consent                                         | 15     |
| Section 2.16.                  | Voting by Ballot                                                                  | 15     |
| Section 2.17.                  | Proposals of Business Which Are Not Proper Matters For  Action By Shareholders    | 15     |
|                                |                                                                              |   |
| ARTICLE III TRUSTEES                | 15                                                                                |
| Section 3.1.                   | General Powers; Qualifications; Trustees Holding Over                             | 15     |
| Section 3.2.                   | Independent Trustees and Managing Trustees                                        | 15     |
| Section 3.3.                   | Number and Tenure                                                                 | 16     |
| Section 3.4.                   | Annual and Regular Meetings                                                       | 16     |
| Section 3.5.                   | Special Meetings                                                                  | 16     |
| Section 3.6.                   | Notice                                                                            | 17     |
| Section 3.7.                   | Quorum                                                                            | 17     |
| Section 3.8.                   | Voting                                                                            | 17     |
| Section 3.9.                   | Telephone Meetings                                                                | 17     |
| Section 3.10.                  | Action by Written Consent of Trustees                                             | 17     |
| Section 3.11.                  | Waiver of Notice                                                                  | 18     |
| Section 3.12.                  | Vacancies                                                                         | 18     |

 

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| Section 3.13.                                | Compensation                                                   | 18     |
|---------------------------------------------------|----------------------------------------------------------------|--------|
| Section 3.14.                                | Removal of Trustees                                            | 18     |
| Section 3.15.                                | Surety Bonds                                                   | 18     |
| Section 3.16.                                | Reliance                                                       | 18     |
| Section 3.17.                                | Interested Trustee Transactions                                | 19     |
| Section 3.18.                                | Qualifying Shares Not Required                                 | 19     |
| Section 3.19.                                | Certain Rights of Trustees, Officers, Employees and Agents     | 19     |
| Section 3.20.                                | Emergency Provisions                                           | 19     |
|                                              |                                                           |   |
| ARTICLE IV COMMITTEES                             | 19                                                             |
| Section 4.1.                                 | Number; Tenure and Qualifications                              | 19     |
| Section 4.2.                                 | Powers                                                         | 19     |
| Section 4.3.                                 | Meetings                                                       | 20     |
| Section 4.4.                                 | Telephone Meetings                                             | 20     |
| Section 4.5.                                 | Action by Written Consent of Committees                        | 20     |
| Section 4.6.                                 | Vacancies                                                      | 20     |
|                                              |                                                           |   |
| ARTICLE V OFFICERS                                | 20                                                             |
| Section 5.1.                                 | General Provisions                                             | 20     |
| Section 5.2.                                 | Removal and Resignation                                        | 21     |
| Section 5.3.                                 | Vacancies                                                      | 21     |
| Section 5.4.                                 | Chief Executive Officer                                        | 21     |
| Section 5.5.                                 | Chief Operating Officer                                        | 21     |
| Section 5.6.                                 | Chief Financial Officer                                        | 21     |
| Section 5.7.                                 | Chairman and Vice Chairman of the Board                        | 21     |
| Section 5.8.                                 | President                                                      | 21     |
| Section 5.9.                                 | Vice Presidents                                                | 22     |
| Section 5.10.                                | Secretary                                                      | 22     |
| Section 5.11.                                | Treasurer                                                      | 22     |
| Section 5.12.                                | Assistant Secretaries and Assistant Treasurers                 | 22     |
|                                              |                                                           |   |
| ARTICLE VI CONTRACTS, LOANS, CHECKS AND DEPOSITS  | 22                                                             |
| Section 6.1.                                 | Contracts                                                      | 22     |
| Section 6.2.                                 | Checks and Drafts                                              | 22     |
| Section 6.3.                                 | Deposits                                                       | 22     |
|                                              |                                                           |   |
| ARTICLE VII SHARES                                | 23                                                             |
| Section 7.1.                                 | Certificates                                                   | 23     |
| Section 7.2.                                 | Transfers                                                      | 23     |
| Section 7.3.                                 | Lost Certificates                                              | 23     |
| Section 7.4.                                 | Closing of Transfer Books or Fixing of Record Date             | 23     |
| Section 7.5.                                 | Share Ledger                                                   | 24     |
| Section 7.6.                                 | Fractional Shares; Issuance of Units                           | 24     |
|                                              |                                                           |   |
| ARTICLE VIII REGULATORY COMPLIANCE AND DISCLOSURE | 24                                                             |
| Section 8.1.                                 | Actions Requiring Regulatory Compliance Implicating the  Trust | 24     |
| Section 8.2.                                 | Compliance With Law                                            | 25     |
| Section 8.3.                                 | Limitation on Voting Shares or Proxies                         | 26     |

 

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| Section 8.4.                           | Representations, Warranties and Covenants Made to  Governmental or Regulatory Bodies | 26     |
|---------------------------------------------|--------------------------------------------------------------------------------------|--------|
| Section 8.5.                           | Board of Trustees’ Determinations                                               | 26     |
|                                        |                                                                                 |   |
| ARTICLE IX FISCAL YEAR                      | 26                                                                                   |
| Section 9.1.                           | Fiscal Year                                                                          | 26     |
|                                        |                                                                                 |   |
| ARTICLE X DIVIDENDS AND OTHER DISTRIBUTIONS | 26                                                                                   |
| Section 10.1.                          | Dividends and Other Distributions                                                    | 26     |
|                                        |                                                                                 |   |
| ARTICLE XI SEAL                             |                                                                                 | 27     |
| Section 11.1.                          | Seal                                                                                 | 27     |
| Section 11.2.                          | Affixing Seal                                                                        | 27     |
|                                        |                                                                                 |   |
| ARTICLE XII WAIVER OF NOTICE                | 27                                                                                   |
| Section 12.1.                          | Waiver of Notice                                                                     | 27     |
|                                        |                                                                                 |   |
| ARTICLE XIII AMENDMENT OF BYLAWS            | 27                                                                                   |
| Section 13.1.                          | Amendment of Bylaws                                                                  | 27     |
|                                        |                                                                                 |   |
| ARTICLE XIV MISCELLANEOUS                   | 27                                                                                   |
| Section 14.1.                          | References to Declaration of Trust                                                   | 27     |
| Section 14.2.                          | Costs and Expenses                                                                   | 27     |
| Section 14.3.                          | Ratification                                                                         | 28     |
| Section 14.4.                          | Ambiguity                                                                            | 28     |
| Section 14.5.                          | Inspection of Bylaws                                                                 | 28     |
| Section 14.6.                          | Election to be Subject to Part of Title 3, Subtitle 8                           | 28     |
| Section 14.7.                          | Special Voting Provisions relating to Control Shares                                 | 28     |
|                                        |                                                                                 |   |
| ARTICLE XV ARBITRATION                      | 29                                                                                   |
| Section 15.1.                          | Procedures for Arbitration of Disputes                                               | 29     |
| Section 15.2.                          | Arbitrators                                                                          | 29     |
| Section 15.3.                          | Place of Arbitration                                                                 | 30     |
| Section 15.4.                          | Discovery                                                                            | 30     |
| Section 15.5.                          | Awards                                                                               | 30     |
| Section 15.6.                          | Costs and Expenses                                                                   | 30     |
| Section 15.7.                          | Final and Binding                                                                    | 30     |
| Section 15.8.                          | Beneficiaries                                                                        | 30     |

 

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**SENIOR HOUSING PROPERTIES TRUSTAMENDED AND RESTATED BYLAWS**

** **

**ARTICLE I**OFFICES

** **

Section 1.1.            Principal Office.  The principal office of theTrust shall be located at such place or places as the Board of Trustees maydesignate.

 

Section 1.2.            Additional Offices.  The Trust may have additionaloffices at such places as the Board of Trustees may from time to time determineor the business of the Trust may require.

 

**ARTICLE II**MEETINGS OF SHAREHOLDERS

** **

Section 2.1.            Place.  All meetings of shareholdersshall be held at the principal office of the Trust or at such other place as isdesignated by the Trustees or the chairman of the board or president.

 

Section 2.2.            Annual Meeting.  An annual meeting of theshareholders for the election of Trustees and the transaction of any businesswithin the powers of the Trust shall be held at such times as the Trustees maydesignate.  Failure to hold an annualmeeting does not invalidate the Trust’s existence or affect any otherwise validacts of the Trust.

 

Section 2.3.            Special Meetings.  Special meetings of shareholdersmay be called only by a majority of the Trustees then in office.  If there shall be no Trustees, the officersof the Trust shall promptly call a special meeting of the shareholders entitledto vote for the election of successor Trustees for the purpose of electingTrustees.

 

Section 2.4.            Notice of Regular or SpecialMeetings.  Writtennotice specifying the place, day and hour of any regular or special meeting,the purposes of the meeting, to the extent required by law to be provided, andall other matters required by law shall be given to each shareholder of recordentitled to vote, either personally or by sending a copy thereof by mail,postage prepaid, to his or her address appearing on the books of the Trust ortheretofore given by him or her to the Trust for the purpose of notice or, ifno address appears or has been given, addressed to the place where theprincipal office of the Trust is situated, or by electronic transmission,including facsimile transmission, to any address or number of such shareholderat which the shareholder receives electronic transmissions.  If mailed, such notice shall be deemed to begiven once deposited in the U.S. mail addressed to the shareholder at his orher post office address as it appears on the records of the Trust, with postagethereon prepaid.  It shall be the duty ofthe secretary to give notice of each meeting of the shareholders.

 

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Section 2.5.            Notice of Adjourned Meetings.  It shall not be necessary to give notice ofthe time and place of any adjourned meeting or of the business to be transactedthereat other than by announcement at the meeting at which such adjournment istaken.

 

Section 2.6.            Scope of Meetings.  Except as otherwise expressly set forthelsewhere in these Bylaws, no business shall be transacted at an annual orspecial meeting of shareholders except as specifically designated in the noticeor otherwise properly brought before the shareholders by or at the direction ofthe Board of Trustees.

 

Section 2.7.            Organization of ShareholderMeetings.  Everymeeting of shareholders shall be conducted by an individual appointed by theBoard of Trustees to be chairperson of the meeting or, in the absence of suchappointment or the absence of the appointed individual, by the chairman of theboard or, in the case of a vacancy in the office or absence of the chairman ofthe board, by one of the following officers present at the meeting in thefollowing order: the vice chairman of the board, if there be one, thepresident, the vice presidents in their order of seniority or, in the absenceof such officers, a chairperson chosen by the shareholders by the vote ofholders of shares of beneficial interest representing a majority of the votescast on such appointment by shareholders present in person or represented by proxy.  The secretary, an assistant secretary or aperson appointed by the Trustees or, in the absence of such appointment, aperson appointed by the chairperson of the meeting shall act as secretary ofthe meeting and record the minutes of the meeting.  If the secretary presides as chairperson at ameeting of the shareholders, then the secretary shall not also act as secretaryof the meeting and record the minutes of the meeting.  The order of business and all other mattersof procedure at any meeting of shareholders shall be determined by thechairperson of the meeting.  Thechairperson of the meeting may prescribe such rules, regulations and proceduresand take such action as, in the discretion of such chairperson, are appropriatefor the proper conduct of the meeting, including, without limitation: (a) restrictingadmission to the time set for the commencement of the meeting; (b) limitingattendance at the meeting to shareholders of record of the Trust, their dulyauthorized proxies or other such persons as the chairperson of the meeting maydetermine; (c) limiting participation at the meeting on any matter toshareholders of record of the Trust entitled to vote on such matter, their dulyauthorized proxies or other such persons as the chairperson of the meeting maydetermine; (d) limiting the time allotted to questions or comments byparticipants; (e) maintaining order and security at the meeting; (f) removingany shareholder or other person who refuses to comply with meeting procedures, rulesor guidelines as set forth by the chairperson of the meeting; (g) concluding ameeting or recessing or adjourning the meeting to a later date and time and ata place announced at the meeting; and (h) complying with any state and locallaws and regulations concerning safety and security.  Without limiting the generality of the powersof the chairperson of the meeting pursuant to the foregoing provisions, thechairperson may adjourn any meeting of shareholders for any reason deemed necessaryby the chairperson, including, without limitation, if (i) no quorum is presentfor the transaction of the business, (ii) the Board of Trustees or thechairperson of the meeting determines that adjournment is necessary orappropriate to enable the shareholders to consider fully information that theBoard of Trustees or the chairperson of the meeting determines has not beenmade sufficiently or timely available to shareholders or (iii) the Board ofTrustees or the chairperson of the meeting determines that adjournment isotherwise in the best interests of the Trust. Unless otherwise determined by the chairperson of the meeting, meetingsof shareholders shall not be required to be held in accordance with the generalrules of parliamentary procedure or any otherwise established rules of order.

 

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Section 2.8.            Quorum.  At any meeting of shareholders, the presencein person or by proxy of shareholders entitled to cast a majority of all thevotes entitled to be cast at such meeting shall constitute a quorum; but thissection shall not affect any requirement under any statute or the Declarationof Trust for the vote necessary for the adoption of any measure.  If, however, such quorum shall not be presentat any meeting of the shareholders, the chairperson of the meeting shall havethe power to adjourn the meeting from time to time without the Trust having toset a new record date or provide any additional notice of such meeting, subjectto any obligation of the Trust to give notice pursuant to Section 2.5.  At such adjourned meeting at which a quorumshall be present, any business may be transacted which might have beentransacted at the meeting as originally notified.  The shareholders present, either in person orby proxy, at a meeting of shareholders which has been duly called and convenedand at which a quorum was established may continue to transact business untiladjournment, notwithstanding the withdrawal of enough votes to leave less thana quorum then being present at the meeting.

 

Section 2.9.            Voting.

 

(a)           Withregard to election of a Trustee, and except as may be mandated by applicablelaw or the listing requirements of the principal exchange on which the Trust’scommon shares are listed: (i) a majority of all the votes cast at a meeting ofshareholders duly called and at which a quorum is present shall be sufficientto elect a Trustee in an uncontested election; and (ii) a majority of all theshares entitled to vote at a meeting of shareholders duly called and at which aquorum is present shall be sufficient to elect a Trustee in a contestedelection (which, for purposes of these Bylaws, is an election at which thenumber of nominees exceeds the number of Trustees to be elected at themeeting).  Each share may be voted for asmany individuals as there are Trustees to be elected and for whose election theshare is entitled to be voted.

 

(b)           Withregard to any other matter which may properly come before a meeting ofshareholders duly called and at which a quorum is present, and except as may bemandated by applicable law, by the listing requirements of the principalexchange on which the Trust’s common shares are listed or by a specificprovision of the Declaration of Trust, (i) if such matter is approved by atleast 75% of the Trustees then in office, including 75% of the IndependentTrustees then in office, a majority of all the votes cast at the meeting shallbe required to approve such matter; and (ii) if such matter is not approved byat least 75% of the Trustees then in office, including 75% of the IndependentTrustees then in office, 75% of all the shares entitled to vote at the meetingshall be required to approve such matter.

 

Section 2.10.          Proxies.  A shareholder may cast the votes entitled tobe cast by him or her either in person or by proxy executed by the shareholderor by his or her duly authorized agent in any manner permitted by law.  Such proxy shall be filed with such officerof the Trust or third party agent as the Board of Trustees shall havedesignated for such purpose for verification at or prior to such meeting.  Any proxy relating to the Trust’s shares ofbeneficial interest shall be valid until the expiration date therein or, if noexpiration is so indicated, for such period as is permitted pursuant toMaryland law.  At a meeting ofshareholders, all questions concerning the qualification of voters, thevalidity of proxies, and the acceptance or rejection of votes, shall be decidedby or on behalf of the chairperson of the meeting, subject to Section 2.13.

 

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Section 2.11.          Record Date.  The Board of Trustees may fix the date fordetermination of shareholders entitled to notice of and to vote at a meeting ofshareholders.  If no date is fixed forthe determination of the shareholders entitled to vote at any meeting ofshareholders, only persons in whose names shares entitled to vote are recordedon the share records of the Trust at the opening of business on the day of anymeeting of shareholders shall be entitled to vote at such meeting.

 

Section 2.12.          Voting of Shares by Certain Holders.  Shares of the Trust registered in the name ofa corporation, partnership, trust or other entity, if entitled to be voted, maybe voted by the president or a vice president, a general partner or trusteethereof, as the case may be, or a proxy appointed by any of the foregoingindividuals, unless some other person who has been appointed to vote suchshares pursuant to a bylaw or a resolution of the governing body of suchcorporation or other entity or pursuant to an agreement of the partners of thepartnership presents a certified copy of such bylaw, resolution or agreement,in which case such person may vote such shares. Any trustee or other fiduciary may vote shares registered in his or hername as such fiduciary, either in person or by proxy.

 

Section 2.13.          Inspectors.

 

(a)           Beforeor at any meeting of shareholders, the chairperson of the meeting may appointone or more persons as inspectors for such meeting.  Such inspectors shall (i) ascertain andreport the number of shares of beneficial interest represented at the meeting,in person or by proxy and the validity and effect of proxies, (ii) receive andtabulate all votes, ballots or consents, (iii) report such tabulation to thechairperson of the meeting and (iv) perform such other acts as are proper toconduct the election or voting at the meeting.

 

(b)           Eachreport of an inspector shall be in writing and signed by him or her or by amajority of them if there is more than one inspector acting at suchmeeting.  If there is more than oneinspector, the report of a majority shall be the report of the inspectors.  The report of the inspector or inspectors onthe number of shares represented at the meeting and the results of the votingshall be primafacie evidence thereof.

 

Section 2.14.          Nominations and Other Proposals tobe Considered at Meetings of Shareholders.  Nominations of individuals for election tothe Board of Trustees and the proposal of other business to be considered bythe shareholders at meetings of shareholders may be properly brought before themeeting only as set forth in this Section 2.14. All judgments and determinations made by the Board of Trustees or thechairperson of the meeting, as applicable, under this Section 2.14 (including,without limitation, judgments and determinations as to the propriety of aproposed nomination or a proposal of other business for consideration byshareholders) shall be final and binding unless determined by a court ofcompetent jurisdiction to have been made in bad faith.

 

Section2.14.1.                      AnnualMeetings of Shareholders.

 

(a)           Nominationsof individuals for election to the Board of Trustees and the proposal of otherbusiness to be considered by the shareholders at an annual meeting ofshareholders may be properly brought before the meeting (i) pursuant to theTrust’s notice of meeting or otherwise properly brought before the meeting byor at the direction of the

 

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Board ofTrustees or (ii) by any shareholder of the Trust who (A) has continuously heldat least $2,000 in market value, or 1%, of the Trust’s shares entitled to voteat the meeting on such election or the proposal for other business, as the casemay be, for at least one year from the date such shareholder gives the noticeprovided for in this Section 2.14.1 (or, if such notice is given prior to April1, 2010, continuously held Trust shares since April 1, 2009 and without regardto the $2,000 market value, or 1%, requirement), and continuously holds suchshares through and including the time of the annual meeting (including anyadjournment or postponement thereof), (B) is a shareholder of record at thetime of giving the notice provided for in this Section 2.14.1 through andincluding the time of the annual meeting (including any adjournment orpostponement thereof), (C) is entitled to make nominations or propose otherbusiness and to vote at the meeting on such election, or the proposal for otherbusiness, as the case may be, (D) complies with the notice procedures set forthin this Section 2.14 as to such nomination or other business and (E) hassubmitted the nomination or proposal of other business to the Board of Trusteesin accordance with the requirements set forth in the Declaration of Trust.  Section 2.14.1(a)(ii) shall be the exclusivemeans for a shareholder to make nominations or propose other business before anannual meeting of shareholders, except to the extent of matters which arerequired to be presented to shareholders by applicable law which have beenproperly presented in accordance with the requirements of such law.  For purposes of determining compliance withthe requirement in subclause (A) of Section 2.14.1(a)(ii), the market value ofthe Trust’s shares held by the applicable shareholder shall be determined bymultiplying the number of shares such shareholder continuously held for thatone-year period by the highest selling price of the Trust shares as reported onthe principal exchange on which the Trust’s common shares are listed during the60 calendar days before the date such notice was submitted.

 

(b)           Fornominations for election to the Board of Trustees or other business to beproperly brought before an annual meeting by a shareholder pursuant to Section 2.14.1(a)(ii),the shareholder shall have given timely notice thereof in writing to thesecretary of the Trust in accordance with this Section 2.14 and such otherbusiness shall otherwise be a proper matter for action by shareholders.  To be timely, a shareholder’s notice shallset forth all information required under this Section 2.14 and shall bedelivered to the secretary at the principal executive offices of the Trust notlater than 5:00 p.m. (Eastern Time) on the 120th day nor earlier than the 150thday prior to the first anniversary of the date of the proxy statement for thepreceding year’s annual meeting ; provided, however, that in the event that thedate of the proxy statement for the annual meeting is more than 30 days earlierthan the first anniversary of the date of the proxy statement for the precedingyear’s annual meeting, notice by the shareholder to be timely shall be sodelivered not later than 5:00 p.m. (Eastern Time) on the 10th day following theearlier of the day on which (i) notice of the annual meeting is mailed orotherwise made available or (ii) public announcement of the date of suchmeeting is first made by the Trust. Notwithstanding the foregoing sentence, with respect to the annualmeeting to be held in calendar year 2009, to be timely, a shareholder’s noticeshall be delivered to the secretary at the principal executive offices of theTrust not later than 5:00 p.m. (Eastern Time) on December 31, 2008 nor earlierthan December 1, 2008.  Neither thepostponement or adjournment of an annual meeting, nor the public announcementof such postponement or adjournment, shall commence a new time period for thegiving of a shareholder’s notice as

 

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describedabove.  No shareholder may give a noticeto the secretary described in this Section 2.14.1(b) unless such shareholderholds a certificate for all shares of beneficial interest of the Trust owned bysuch shareholder during all times described in Section 2.14.1(a), and a copy ofeach such certificate held by such shareholder at the time of giving suchnotice shall accompany such shareholder’s notice to the secretary in order forsuch notice to be effective.

 

A shareholder’s notice shall set forth:

 

(A)                              as to each individual whom theshareholder proposes to nominate for election or reelection as a Trustee (a “ProposedNominee”) and any Proposed Nominee Associated Person (as defined in Section 2.14.1(d)),(1) the name, age, business address and residence address of such ProposedNominee and the name and address of such Proposed Nominee Associated Person, (2)a statement of whether such Proposed Nominee is proposed for nomination as anIndependent Trustee (as defined in Section 3.2) or a Managing Trustee (asdefined in Section 3.2) and a description of such Proposed Nominee’squalifications to be an Independent Trustee or Managing Trustee, as the casemay be, and such Proposed Nominee’s qualifications to be a Trustee pursuant tothe criteria set forth in Section 3.1, (3) the class, series and number of anyshares of beneficial interest of the Trust that are, directly or indirectly,beneficially owned or owned of record by such Proposed Nominee or by suchProposed Nominee Associated Person, (4) the date such shares were acquired andthe investment intent of such acquisition, (5) a description of all purchasesand sales of securities of the Trust by such Proposed Nominee or by suchProposed Nominee Associated Person during the previous 24 month period,including the date of the transactions, the class, series and number ofsecurities involved in the transactions and the consideration involved, (6) adescription of all Derivative Transactions (as defined in Section 2.14.1(d)) bysuch Proposed Nominee or by such Proposed Nominee Associated Person during theprevious 24 month period, including the date of the transactions and the class,series and number of securities involved in, and the material economic termsof, the transactions, such description to include, without limitation, allinformation that such Proposed Nominee or Proposed Nominee Associated Personwould be required to report on an Insider Report (as defined in Section 2.14.1(d))if such Proposed Nominee or Proposed Nominee Associated Person were a Trusteeof the Trust or the beneficial owner of more than 10% of the shares of theTrust at the time of the transactions, 

 

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(7) any performance related fees(other than an asset based fee) that such Proposed Nominee or such ProposedNominee Associated Person is entitled to based on any increase or decrease inthe value of shares of the Trust or instrument or arrangement of the typecontemplated within the definition of Derivative Transaction, if any, as of thedate of such notice, including, without limitation, any such interests held bymembers of such Proposed Nominee’s or such Proposed Nominee Associated Person’simmediate family sharing the same household with such Proposed Nominee or suchProposed Nominee Associated Person, (8) any proportionate interest in shares ofthe Trust or instrument or arrangement of the type contemplated within thedefinition of Derivative Transaction held, directly or indirectly, by a generalor limited partnership in which such Proposed Nominee or such Proposed NomineeAssociated Person is a general partner or, directly or indirectly, beneficiallyowns an interest in a general partner, (9) a description of all direct andindirect compensation and other material monetary agreements, arrangements andunderstandings during the past three years, and any other materialrelationships, between or among such shareholder, Proposed Nominee AssociatedPerson, or their respective affiliates and associates, or others acting inconcert therewith, on the one hand, and each Proposed Nominee, or his or her respectiveaffiliates and associates, or others acting in concert therewith, on the otherhand, including, without limitation, all information that would be required tobe disclosed pursuant to Item 404 of Regulation S-K promulgated by the U.S.Securities and Exchange Commission (the “S.E.C.”) (and any successorregulation), if the shareholder making the nomination and any Proposed NomineeAssociated Person on whose behalf the nomination is made, or any affiliate orassociate thereof or person acting in concert therewith, were the “registrant”for purposes of such rule and the Proposed Nominee were a director or executiveofficer of such registrant, (10) any rights to dividends on the shares of theTrust owned beneficially by such Proposed Nominee or such Proposed NomineeAssociated Person that are separated or separable from the underlying shares ofthe Trust, (11) to the extent known by such Proposed Nominee or such ProposedNominee Associated Person, the name and address of any other person who owns,of record or beneficially, any shares of beneficial interest of the Trust andwho supports the Proposed Nominee for election or reelection as a Trustee, (12)all other information relating to

 

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such Proposed Nominee or suchProposed Nominee Associated Person that is required to be disclosed insolicitations of proxies for election of Trustees in an election contest (evenif an election contest is not involved), or is otherwise required, in eachcase, pursuant to Section 14 (or any successor provision) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”), and the rules andregulations promulgated thereunder and (13) such Proposed Nominee’s notarizedwritten consent to being named in the shareholder’s proxy statement as anominee and to serving as a Trustee if elected;

 

(B)                                as to any other business that theshareholder proposes to bring before the meeting, (1) a description of suchbusiness, (2) the reasons for proposing such business at the meeting and anymaterial interest in such business of such shareholder or any ShareholderAssociated Person (as defined in Section 2.14.1(d)), including any anticipatedbenefit to such shareholder or any Shareholder Associated Person therefrom, (3)a description of all agreements, arrangements and understandings between suchshareholder and Shareholder Associated Person amongst themselves or with anyother person or persons (including their names) in connection with the proposalof such business by such shareholder and (4) a representation that suchshareholder intends to appear in person or by proxy at the meeting to bring thebusiness before the meeting;

 

(C)                                as to the shareholder giving the noticeand any Shareholder Associated Person, (1) the class, series and number of allshares of the Trust that are owned of record by such shareholder or by suchShareholder Associated Person, if any, (2) the class, series and number of, andthe nominee holder for, any shares of beneficial interests of the Trust thatare owned, directly or indirectly, beneficially but not of record by suchshareholder or by such Shareholder Associated Person, if any, (3) with respectto the foregoing clauses (1) and (2), the date such shares were acquired andthe investment intent of such acquisition and (4) all information relating tosuch shareholder and Shareholder Associated Person that is required to bedisclosed in connection with the solicitation of proxies for election ofTrustees in an election contest (even if an election contest is not involved),or is otherwise required, in each case, pursuant to Section 14 (or anysuccessor provision) of the

 

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Exchange Act and the rules andregulations promulgated thereunder;

 

(D)                               as to the shareholder giving the noticeand any Shareholder Associated Person, (1) the name and address of suchshareholder, as they appear on the Trust’s share ledger and the current nameand address, if different, of such shareholder and Shareholder AssociatedPerson and (2) the investment strategy or objective, if any, of suchshareholder or Shareholder Associated Person and a copy of the prospectus,offering memorandum or similar document, if any, provided to investors orpotential investors in such shareholder or Shareholder Associated Person;

 

(E)                                 as to the shareholder giving the noticeand any Shareholder Associated Person, (1) a description of all purchases andsales of securities of the Trust by such shareholder or Shareholder AssociatedPerson during the previous 24 month period, including the date of thetransactions, the class, series and number of securities involved in thetransactions and the consideration involved, (2) a description of allDerivative Transactions by such shareholder or Shareholder Associated Personduring the previous 24 month period, including the date of the transactions andthe class, series and number of securities involved in, and the material economicterms of, the transactions, such description to include, without limitation,all information that such shareholder or Shareholder Associated Person would berequired to report on an Insider Report if such shareholder or ShareholderAssociated Person were a Trustee of the Trust or the beneficial owner of morethan 10% of the shares of the Trust at the time of the transactions, (3) anyperformance related fees (other than an asset based fee) that such shareholderor Shareholder Associated Person is entitled to based on any increase ordecrease in the value of shares of the Trust or instrument or arrangement ofthe type contemplated within the definition of Derivative Transaction, if any,as of the date of such notice, including, without limitation, any such interestsheld by members of such shareholder’s or Shareholder Associated Person ‘simmediate family sharing the same household with such shareholder orShareholder Associated Person, (4) any proportionate interest in shares of theTrust or instrument or arrangement of the type contemplated within thedefinition of Derivative Transaction held, directly

 

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or indirectly, by a general orlimited partnership in which such shareholder or Shareholder Associated Personis a general partner or, directly or indirectly, beneficially owns an interestin a general partner and (5) any rights to dividends on the shares of the Trustowned beneficially by such shareholder or Shareholder Associated Person thatare separated or separable from the underlying shares of the Trust;

 

(F)                                 to the extent known by the shareholdergiving the notice, the name and address of any other person who owns,beneficially or of record, any shares of beneficial interest of the Trust andwho supports the nominee for election or reelection as a Trustee or theproposal of other business; and

 

(G)                                if more than one class or series ofbeneficial interest in the Trust is outstanding, the class and series ofbeneficial interest of the Trust entitled to vote for such Proposed Nomineeand/or shareholder’s proposal, as applicable.

 

(c)           Notwithstandinganything in the second sentence of Section 2.14.1(b) to the contrary, in theevent that the number of Trustees to be elected to the Board of Trustees isincreased and there is no public announcement of such action at least 130 daysprior to the first anniversary of the date of the proxy statement for thepreceding year’s annual meeting, a shareholder’s notice required by this Section2.14.1 also shall be considered timely, but only with respect to nominees forany new positions created by such increase, if the notice is delivered to thesecretary at the principal executive offices of the Trust not later than 5:00 p.m.(Eastern Time) on the 10th day immediately following the day on which suchpublic announcement is first made by the Trust.

 

(d)           Forpurposes of this Section 2.14, (i) “Shareholder Associated Person” of anyshareholder shall mean (A) any person acting in concert with, such shareholder,(B) any direct or indirect beneficial owner of shares of beneficial interest ofthe Trust owned of record or beneficially by such shareholder and (C) anyperson controlling, controlled by or under common control with such shareholderor a Shareholder Associated Person; (ii) “Proposed Nominee Associated Person”of any Proposed Nominee shall mean (A) any person acting in concert with suchProposed Nominee, (B) any direct or indirect beneficial owner of shares ofbeneficial interest of the Trust owned of record or beneficially by suchProposed Nominee and (C) any person controlling, controlled by or under commoncontrol with such Proposed Nominee or a Proposed Nominee Associated Person; (iii)“Derivative Transaction” by a person shall mean any (A) transaction in, orarrangement, agreement or understanding with respect to, any option, warrant,convertible security, stock appreciation right or similar right with anexercise, conversion or exchange privilege, or settlement payment or mechanismrelated to, any security of the Trust, or similar instrument with a

 

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valuederived in whole or in part from the value of a security of the Trust, in anysuch case whether or not it is subject to settlement in a security of the Trustor otherwise or (B) any transaction, arrangement, agreement or understandingwhich included or includes an opportunity for such person, directly orindirectly, to profit or share in any profit derived from any increase ordecrease in the value of any security of the Trust, to mitigate any loss ormanage any risk associated with any increase or decrease in the value of anysecurity of the Trust or to increase or decrease the number of securities ofthe Trust which such person was, is or will be entitled to vote, in any suchcase whether or not it is subject to settlement in a security of the Trust orotherwise; and (iv) “Insider Report” shall mean a statement required to befiled pursuant to Section 16 of the Exchange Act (or any successor provisions)by a person who is a Trustee of the Trust or who is directly or indirectly thebeneficial owner of more than 10% of the shares of the Trust.

 

Section 2.14.2.                      ShareholderNominations or Other Proposals Causing Covenant Breaches or Defaults.  Atthe same time as the submission of any shareholder nomination or proposal ofother business to be considered at a shareholders meeting that, if approved andimplemented by the Trust, would cause the Trust or any subsidiary (as definedin Section 2.14.5(c)) of the Trust to be in breach of any covenant of the Trustor any subsidiary of the Trust or otherwise cause a default (in any case, withor without notice or lapse of time) in any existing debt instrument oragreement of the Trust or any subsidiary of the Trust or other material contractor agreement of the Trust or any subsidiary of the Trust, the proponentshareholder or shareholders shall submit to the secretary at the principalexecutive offices of the Trust (a) evidence satisfactory to the Board ofTrustees of the lender’s or contracting party’s willingness to waive the breachof covenant or default or (b) a detailed plan for repayment of the indebtednessto the lender or curing the contractual breach or default and satisfying anyresulting damage claim, specifically identifying the actions to be taken or thesource of funds, which plan must be satisfactory to the Board of Trustees inits discretion, and evidence of the availability to the Trust of substitutecredit or contractual arrangements similar to the credit or contractualarrangements which are implicated by the shareholder nomination or otherproposal that are at least as favorable to the Trust, as determined by theBoard of Trustees in its discretion.  Asan example and not as a limitation, at the time these Bylaws are being amendedand restated, the Trust is party to a bank credit facility that containscovenants which prohibit certain changes in the management and policies of theTrust without the approval of the lenders; accordingly, a shareholdernomination or proposal which implicates these covenants shall be accompanied bya waiver of these covenants duly executed by the banks or by evidencesatisfactory to the Board of Trustees of the availability of funding to theTrust to repay outstanding indebtedness under this credit facility and of theavailability of a new credit facility on terms as favorable to the Trust as theexisting credit facility.

 

Section 2.14.3.                      ShareholderNominations or Other Proposals Requiring Governmental Action.  If (a) submission of any shareholdernomination or proposal of other business to be considered at a shareholdersmeeting that could not be considered or, if approved, implemented by the Trustwithout the Trust, any subsidiary of the Trust, the proponent shareholder, anyProposed Nominee of such shareholder, any Proposed Nominee Associated Person ofsuch Proposed Nominee, any Shareholder Associated Person of such shareholder,the holder of proxies or their respective affiliates or associates filing withor otherwise notifying or obtaining the consent, approval or other action ofany federal, state, municipal or other governmental or regulatory body (a “GovernmentalAction”) or (b) such shareholder’s ownership of shares of the Trust or anysolicitation of proxies or votes or holding or exercising proxies by suchshareholder, any Proposed Nominee of such

 

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shareholder,any Proposed Nominee Associated Person of such Proposed Nominee, anyShareholder Associated Person of such shareholder, or their respectiveaffiliates or associates would require Governmental Action, then, at the sametime as the submission of any shareholder nomination or proposal of otherbusiness to be considered at a shareholders meeting, the proponent shareholderor shareholders shall submit to the secretary at the principal executiveoffices of the Trust (x) evidence satisfactory to the Board of Trustees thatany and all Governmental Action has been given or obtained, including, withoutlimitation, such evidence as the Board of Trustees may require so that anynominee may be determined to satisfy any suitability or other requirements or (y)if such evidence was not obtainable from a governmental or regulatory body bysuch time despite the shareholder’s diligent and best efforts, a detailed planfor making or obtaining the Governmental Action prior to the election of anysuch Proposed Nominee or the implementation of such proposal, which plan mustbe satisfactory to the Board of Trustees in its discretion.  As an example and not as a limitation, at thetime these Bylaws are being amended and restated, the Trust holds a controllingownership position in a company being formed and licensed as an insurancecompany in the State of Indiana.  Thelaws of the State of Indiana have certain regulatory requirements for anyperson who seeks to control (as defined under Indiana law) a company whichitself controls an insurance company domiciled in the State of Indiana,including by exercising proxies representing 10% or more of its voting securities.  Accordingly, a shareholder who seeks toexercise proxies for a nomination or a proposal affecting the governance of theTrust shall obtain any applicable approvals from the Indiana insuranceregulatory authorities prior to exercising such proxies.  Similarly, as a further example and not as alimitation, at the time these Bylaws are being amended and restated, the Trustowns healthcare facilities in various states; such facilities are governed byand subject to the regulatory and licensing requirements of the state in whichsuch facility is located.  The licensingterms or regulatory regime of certain states with jurisdiction over the Trustmay require that certain consents or approvals be obtained prior to the Trustconsidering or implementing certain actions, including potentially requiringthat a Proposed Nominee obtain regulatory approval or consent prior to beingnominated for or elected as a Trustee. Accordingly, a shareholder nomination or shareholder proposal that, ifapproved, would require the Trust to obtain the consent or approval of a stateauthority due to the fact that the Trust owns licensed healthcare facilities insuch state, shall be accompanied by evidence that the shareholder or ProposedNominee has either secured the required approvals or consents from allapplicable state regulatory authorities or if such required approvals have notbeen obtained, then the shareholder nomination or other proposal shall beaccompanied by a copy of any applications or forms required to be completed bythe Proposed Nominee or shareholder as submitted or to be submitted to theapplicable state authorities so that the Board of Trustees may determine thelikelihood that the shareholder or the Proposed Nominee, as applicable, willreceive any such required approval.

 

Section 2.14.4.                      SpecialMeetings of Shareholders.  As setforth in Section 2.6, only business brought before the meeting pursuant to theTrust’s notice of meeting shall be conducted at a special meeting ofshareholders.  Nominations of individualsfor election to the Board of Trustees only may be made at a special meeting ofshareholders at which Trustees are to be elected: (a) pursuant to the Trust’snotice of meeting; (b) otherwise properly brought before the meeting by or atthe direction of the Board of Trustees; or (c) provided that the Board ofTrustees has determined that Trustees shall be elected at such special meeting,by any shareholder of the Trust who is a shareholder of record both at the timeof giving of notice provided for in this Section

 

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2.14.4through and including the time of the special meeting, who is entitled to voteat the meeting on such election and who has complied with the notice proceduresand other requirements set forth in this Section 2.14.4.  In the event the Trust calls a specialmeeting of shareholders for the purpose of electing one or more Trustees to theBoard of Trustees, any such shareholder may nominate an individual orindividuals (as the case may be) for election as a Trustee as specified in theTrust’s notice of meeting, if the shareholder satisfies the holding period andcertificate requirements set forth in Section 2.14.1(a) and Section 2.14.1(b),the shareholder’s notice contains or is accompanied by the information anddocuments required by Section 2.14 and the shareholder has given timely noticethereof in writing to the secretary of the Trust at the principal executiveoffices of the Trust.  To be timely, ashareholder’s notice shall be delivered to the secretary of the Trust at theprincipal executive offices of the Trust not earlier than the 150th day priorto such special meeting and not later than 5:00 p.m. (Eastern Time) on thelater of (i) the 120th day prior to such special meeting or (ii) the 10th dayfollowing the day on which public announcement is first made of the date of thespecial meeting and of the nominees proposed by the Trustees to be elected atsuch meeting.  Neither the postponementor adjournment of a special meeting, nor the public announcement of suchpostponement or adjournment, shall commence a new time period for the giving ofa shareholder’s notice as described above.

 

Section 2.14.5.       General.

 

(a)           Ifinformation submitted pursuant to this Section 2.14 by any shareholderproposing a nominee for election as a Trustee or any proposal for otherbusiness at a meeting of shareholders shall be deemed by the Board of Trusteesincomplete or inaccurate, any authorized officer or the Board of Trustees orany committee thereof may treat such information as not having been provided inaccordance with this Section 2.14.  Anynotice submitted by a shareholder pursuant to this Section 2.14 that is deemedby the Board of Trustees inaccurate, incomplete or otherwise fails to satisfycompletely any provision of this Section 2.14 shall be deemed defective andshall thereby render all proposals and nominations set forth in such noticedefective.  Upon written request by thesecretary of the Trust or the Board of Trustees or any committee thereof (whichmay be made from time to time), any shareholder proposing a nominee forelection as a Trustee or any proposal for other business at a meeting ofshareholders shall provide, within three business days after such request (orsuch other period as may be specified in such request), (i) writtenverification, satisfactory to the secretary or any other authorized officer orthe Board of Trustees or any committee thereof, in his, her or its discretion,to demonstrate the accuracy of any information submitted by the shareholderpursuant to this Section 2.14, (ii) written responses to information reasonablyrequested by the secretary, the Board of Trustees or any committee thereof and (iii)a written update, to a current date, of any information submitted by theshareholder pursuant to this Section 2.14 as of an earlier date.  If a shareholder fails to provide suchwritten verification, information or update within such period, the secretaryor any other authorized officer or the Board of Trustees may treat theinformation which was previously provided and to which the verification,request or update relates as not having been provided in accordance with this Section2.14; provided, however, that no such written verification, response or updateshall cure any incompleteness, inaccuracy or failure in any notice provided bya shareholder pursuant to this Section 2.14. It is the responsibility of a shareholder who wishes to make anomination

 

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or otherproposal to comply with the requirements of Section 2.14; nothing in this Section2.14.5(a) or otherwise shall create any duty of the Trust, the Board ofTrustees or any committee thereof nor any officer of the Trust to inform ashareholder that the information submitted pursuant to this Section 2.14 by oron behalf of such shareholder is incomplete or inaccurate or not otherwise inaccordance with this Section 2.14 nor require the Trust, the Board of Trustees,any committee of the Board of Trustees or any officer of the Trust to requestclarification or updating of information provided by any shareholder, but theBoard of Trustees, a committee thereof or the secretary acting on behalf of theBoard of Trustees or a committee, may do so in its, his or her discretion.

 

(b)           Onlysuch individuals who are nominated in accordance with this Section 2.14 shallbe eligible for election by shareholders as Trustees and only such businessshall be conducted at a meeting of shareholders as shall have been properlybrought before the meeting in accordance with this Section 2.14.  The chairperson of the meeting and the Boardof Trustees shall each have the power to determine whether a nomination or anyother business proposed to be brought before the meeting was made or proposed,as the case may be, in accordance with this Section 2.14 and, if any proposednomination or other business is determined not to be in compliance with this Section2.14, to declare that such defective nomination or proposal be disregarded.

 

(c)           Forpurposes of this Section 2.14: (i) “public announcement” shall mean disclosurein (A) a press release reported by the Dow Jones News Service, AssociatedPress, Business Wire, PR Newswire or any other widely circulated news or wireservice or (B) a document publicly filed by the Trust with the S.E.C. pursuantto the Exchange Act; and (ii) “subsidiary” shall include, with respect to aperson, any corporation, partnership, joint venture or other entity of whichsuch person (A) owns, directly or indirectly, 10% or more of the outstandingvoting securities or other interests or (B) has a person designated by suchperson serving on, or a right, contractual or otherwise, to designate a person,so to serve on, the board of directors (or analogous governing body).

 

(d)           Notwithstandingthe foregoing provisions of this Section 2.14, a shareholder shall also complywith all applicable legal requirements, including, without limitation,applicable requirements of state law and the Exchange Act and the rules andregulations thereunder, with respect to the matters set forth in this Section 2.14.  Nothing in this Section 2.14 shall be deemedto require that a shareholder nomination of an individual for election to theBoard of Trustees or a shareholder proposal relating to other business beincluded in the Trust’s proxy statement, except as may be required by law.

 

(e)           TheBoard of Trustees may from time to time require any individual nominated toserve as a Trustee to agree in writing with regard to matters of businessethics and confidentiality while such nominee serves as a Trustee, suchagreement to be on the terms and in a form (the “Agreement”) determinedsatisfactory by the Board of Trustees, as amended and supplemented from time totime in the discretion of the Board of Trustees.  The terms of the Agreement may besubstantially similar to the Code of Business Conduct and Ethics of the Trustor any similar code promulgated by the Trust (the “Code of Business Conduct”)or may differ from or supplement the Code of Business Conduct.

 

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(f)            Determinationsrequired or permitted to be made under this Section 2.14 by the Board ofTrustees may be delegated by the Board of Trustees to a committee of the Boardof Trustees, subject to applicable law.

 

Section 2.15.          No Shareholder Actions by WrittenConsent.  Shareholders shall not beauthorized or permitted to take any action required or permitted to be taken ata meeting of shareholders by written consent, and may take such action only atshareholders meeting of the Trust.

 

Section 2.16.          Voting by Ballot.  Voting on any question or in any election maybe voice vote unless the chairperson of the meeting or any shareholder shalldemand that voting be by ballot.

 

Section 2.17.          Proposals of Business Which Are NotProper Matters For Action By Shareholders.  Notwithstandinganything in these Bylaws to the contrary, subject to applicable law, anyshareholder proposal for business the subject matter or effect of which wouldbe within the exclusive purview of the Board of Trustees or would reasonablylikely, if considered by the shareholders or approved or implemented by theTrust, result in an impairment of the limited liability status for the Trust’sshareholders, shall be deemed not to be a matter upon which the shareholdersare entitled to vote.  The Board ofTrustees in its discretion shall be entitled to determine whether a shareholderproposal for business is not a matter upon which the shareholders are entitledto vote pursuant to this Section 2.17, and its decision shall be final andbinding unless determined by a court of competent jurisdiction to have beenmade in bad faith.

 

**ARTICLE III**

** **

**TRUSTEES**

** **

Section 3.1.            General Powers; Qualifications;Trustees Holding Over.  Thebusiness and affairs of the Trust shall be managed under the direction of itsBoard of Trustees.  A Trustee shall be anindividual at least 21 years of age who is not under legal disability.  To qualify for nomination or election as aTrustee, an individual, at the time of nomination and election, shall, withoutlimitation, (a) have substantial expertise or experience relevant to thebusiness of the Trust and its subsidiaries, (b) not have been convicted of afelony and (c) meet the qualifications of an Independent Trustee or a ManagingTrustee, each as defined in Section 3.2, as the case may be, depending upon theposition for which such individual may be nominated and elected.  In case of failure to elect Trustees at anannual meeting of the shareholders, the incumbent Trustees shall hold over andcontinue to direct the management of the business and affairs of the Trustuntil they may resign or until their successors are elected and qualify.

 

Section 3.2.            Independent Trustees and ManagingTrustees.  A majorityof the Trustees holding office shall at all times be Independent Trustees;provided, however, that upon a failure to comply with this requirement as aresult of the creation of a temporary vacancy which shall be filled by anIndependent Trustee, whether as a result of enlargement of the Board ofTrustees or the resignation, removal or death of a Trustee who is anIndependent Trustee, such requirement shall not be applicable.  An “Independent Trustee” is one who is not anemployee of the Advisor (as

 

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defined in the Declarationof Trust), who is not involved in the Trust’s day to day activities, who meetsthe qualifications of an independent trustee under the Declaration of Trust andwho meets the qualifications of an independent director (not including thespecific independence requirements applicable only to members of the AuditCommittee of the Board of Trustees) under the applicable rules of each stockexchange upon which shares of the Trust are listed for trading and the S.E.C.,as those requirements may be amended from time to time.  If the number of Trustees, at any time, isset at less than five, at least one Trustee shall be a Managing Trustee.  So long as the number of Trustees shall befive or greater, at least two Trustees shall be Managing Trustees.  “Managing Trustees” shall mean Trustees whoare not Independent Trustees and who have been employees of the Advisor orinvolved in the day to day activities of the Trust for at least one year priorto their election.  If at any time theBoard of Trustees shall not be comprised of a majority of Independent Trustees,the Board of Trustees shall take such actions as will cure such condition;provided that the fact that the Board of Trustees does not have a majority ofIndependent Trustees or has not taken such action at any time or from time totime shall not affect the validity of any action taken by the Board ofTrustees.  If at any time the Board ofTrustees shall not be comprised of a number of Managing Trustees as is requiredunder this Section 3.2, the Board of Trustees shall take such actions as willcure such condition; provided that the fact that the Board of Trustees does nothave the requisite number of Managing Trustees or has not taken such action atany time or from time to time shall not affect the validity of any action takenby the Board of Trustees.

 

Section 3.3.            Number and Tenure.  Pursuant to the Articles Supplementaryaccepted for record by the State Department of Assessments and Taxation (the “SDAT”)as of May 11, 2000, the number of Trustees constituting the entire Board ofTrustees may be increased or decreased from time to time only by a vote of theTrustees; provided however that the tenure of office of a Trustee shall not beaffected by any decrease in the number of Trustees.  The number of Trustees shall be five untilincreased or decreased by the Board of Trustees.

 

The Board of Trustees shallbe classified into three groups: Group I, Group II and Group III.  A majority of the entire Board of Trusteesshall designate the Group of which each Trustee shall be a member.

 

Section 3.4.            Annual and Regular Meetings.  An annual meeting of the Trustees shall beheld immediately after the annual meeting of shareholders, no notice other thanthis Bylaw being necessary.  The time andplace of the annual meeting of the Trustees may be changed by the Board ofTrustees.  The Trustees may provide, byresolution, the time and place, either within or without the State of Maryland,for the holding of regular meetings of the Trustees without other notice thansuch resolution.  In the event any suchregular meeting is not so provided for, the meeting may be held at such timeand place as shall be specified in a notice given as hereinafter provided forspecial meetings of the Board of Trustees.

 

Section 3.5.            Special Meetings.  Special meetings of the Trustees may becalled at any time by any Managing Trustee, the president or pursuant to therequest of any two Trustees then in office. The person or persons authorized to call special meetings of theTrustees may fix any place, either within or without the State of Maryland, asthe place for holding any special meeting of the Trustees called by them.

 

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Section 3.6.            Notice.  Notice of any special meeting shall be givenby written notice delivered personally or by electronic mail, telephoned,facsimile transmitted, overnight couriered (with proof of delivery) or mailedto each Trustee at his or her business or residence address.  Personally delivered, telephoned, facsimiletransmitted or electronically mailed notices shall be given at least 24 hoursprior to the meeting.  Notice by mailshall be deposited in the U.S.  mail atleast 72 hours prior to the meeting.  Ifmailed, such notice shall be deemed to be given when deposited in the U.S.  mail properly addressed, with postage thereonprepaid.  Electronic mail notice shall bedeemed to be given upon transmission of the message to the electronic mailaddress given to the Trust by the Trustee. Telephone notice shall be deemed given when the Trustee is personallygiven such notice in a telephone call to which he is a party.  Facsimile transmission notice shall be deemedgiven upon completion of the transmission of the message to the number given tothe Trust by the Trustee and receipt of a completed answer back indicatingreceipt.  If sent by overnight courier,such notice shall be deemed given when delivered to the courier.  Neither the business to be transacted at, northe purpose of, any annual, regular or special meeting of the Trustees need bestated in the notice, unless specifically required by statute or these Bylaws.

 

Section 3.7.            Quorum.  A majority of the Trustees shall constitute aquorum for transaction of business at any meeting of the Trustees, providedthat, if less than a majority of such Trustees are present at a meeting, amajority of the Trustees present may adjourn the meeting from time to timewithout further notice, and provided further that if, pursuant to the Declarationof Trust or these Bylaws, the vote of a majority of a particular group ofTrustees is required for action, a quorum for that action shall also include amajority of such group.  The Trusteespresent at a meeting of the Board of Trustees which has been duly called andconvened and at which a quorum was established may continue to transactbusiness until adjournment, notwithstanding the withdrawal of a number ofTrustees resulting in less than a quorum then being present at the meeting.

 

Section 3.8.            Voting.  The action of the majority of the Trusteespresent at a meeting at which a quorum is or was present shall be the action ofthe Trustees, unless the concurrence of a greater proportion is required forsuch action by specific provision of an applicable statute, the Declaration ofTrust or these Bylaws.  If enoughTrustees have withdrawn from a meeting to leave fewer than are required toestablish a quorum, but the meeting is not adjourned, the action of the majorityof that number of Trustees necessary to constitute a quorum at such meetingshall be the action of the Board of Trustees, unless the concurrence of agreater proportion is required for such action by applicable law, theDeclaration of Trust or these Bylaws.

 

Section 3.9.            Telephone Meetings.  Trustees may participate in a meeting bymeans of a conference telephone or similar communications equipment if allpersons participating in the meeting can hear each other at the same time.  Participation in a meeting by these meansshall constitute presence in person at the meeting.  Such meeting shall be deemed to have beenheld at a place designated by the Trustees at the meeting.

 

Section 3.10.          Action by Written Consent ofTrustees.  Unlessspecifically otherwise provided in the Declaration of Trust, any actionrequired or permitted to be taken at any meeting of the Trustees may be takenwithout a meeting, if a majority of the Trustees shall individually orcollectively consent in writing to such action. Such written consent or consents shall be filed with

 

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the records of the Trust andshall have the same force and effect as the affirmative vote of such Trusteesat a duly held meeting of the Trustees at which a quorum was present.

 

Section 3.11.          Waiver of Notice.  The actions taken at any meeting of theTrustees, however called and noticed or wherever held, shall be as valid asthough taken at a meeting duly held after regular call and notice if a quorumis present and if, either before or after the meeting, each of the Trustees notpresent waives notice, consents to the holding of such meeting or approves theminutes thereof.

 

Section 3.12.          Vacancies.  Pursuant to the Articles Supplementaryaccepted for record by the SDAT as of May 16, 2000, if for any reason any orall the Trustees cease to be Trustees, such event shall not terminate the Trustor affect these Bylaws or the powers of the remaining Trustees hereunder (evenif fewer than three Trustees remain). Any vacancy on the Board of Trustees may be filled only by a majority ofthe remaining Trustees, even if the remaining Trustees do not constitute aquorum.  Any Trustee elected to fill avacancy, whether occurring due to an increase in size of the Board of Trusteesor by the death, resignation or removal of any Trustee, shall hold office forthe remainder of the full term of the class of Trustees in which the vacancyoccurred or was created and until a successor is elected and qualifies.

 

Section 3.13.          Compensation.  The Trustees shall be entitled to receivesuch reasonable compensation for their services as Trustees as the Trustees maydetermine from time to time.  Trusteesmay be reimbursed for expenses of attendance, if any, at each annual, regularor special meeting of the Trustees or of any committee thereof; and for theirexpenses, if any, in connection with each property visit and any other serviceor activity performed or engaged in as Trustee. The Trustees shall be entitled to receive remuneration for servicesrendered to the Trust in any other capacity, and such services may include,without limitation, services as an officer of the Trust, services as anemployee of the Advisor, legal, accounting or other professional services, orservices as a broker, transfer agent or underwriter, whether performed by aTrustee or any person affiliated with a Trustee.

 

Section 3.14.          Removal of Trustees.  A Trustee may be removed at any time with orwithout cause by the affirmative vote either of all the remaining Trustees or,at a meeting of the shareholders properly called for that purpose, by theaffirmative vote of the holders of not less than two-thirds of the shares ofthe Trust then outstanding and entitled to vote generally in the election ofTrustees.

 

Section 3.15.          Surety Bonds.  Unless specifically required by law, noTrustee shall be obligated to give any bond or surety or other security for theperformance of any of his or her duties.

 

Section 3.16.          Reliance.  Each Trustee, officer, employee and agent ofthe Trust shall, in the performance of his or her duties with respect to theTrust, be entitled to rely on any information, opinion, report or statement,including any financial statement or other financial data, prepared orpresented by an officer or employee of the Trust or by the Advisor, accountants,appraisers or other experts or consultants selected by the Board of Trustees orofficers of the Trust, regardless of whether such counsel or expert may also bea Trustee.

 

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Section 3.17.          Interested Trustee Transactions.  Section 2-419 of the Maryland GeneralCorporation Law shall be available for and apply to any contract or othertransaction between the Trust and any of its Trustees or between the Trust andany other trust, corporation, firm or other entity in which any of its Trusteesis a trustee or director or has a material financial interest.

 

Section 3.18.          Qualifying Shares Not Required.  Trustees need not be shareholders of theTrust.

 

Section 3.19.          Certain Rights of Trustees,Officers, Employees and Agents.  A Trustee shall have no responsibility todevote his or her full time to the affairs of the Trust.  Any Trustee or officer, employee or agent ofthe Trust, in his or her personal capacity or in a capacity as an affiliate,employee or agent of any other person, or otherwise, may have businessinterests and engage in business activities similar or in addition to those ofor relating to the Trust.

 

Section 3.20.                Emergency Provisions.  Notwithstanding any other provision in theDeclaration of Trust or these Bylaws, this Section 3.20 shall apply during theexistence of any catastrophe, or other similar emergency condition, as a resultof which a quorum of the Board of Trustees under ARTICLE III cannot readily beobtained (an “Emergency”).  During anyEmergency, unless otherwise provided by the Board of Trustees, (a) a meeting ofthe Board of Trustees may be called by any Managing Trustee or officer of theTrust by any means feasible under the circumstances and (b) notice of anymeeting of the Board of Trustees during such an Emergency may be given lessthan 24 hours prior to the meeting to as many Trustees and by such means as itmay be feasible at the time, including publication, television or radio.

 

**ARTICLE IV**

** **

**COMMITTEES**

 

Section 4.1.            Number; Tenure and Qualifications.  The Board of Trustees shall appoint an AuditCommittee, a Compensation Committee and a Nominating and GovernanceCommittee.  Each of these committeesshall be composed of three or more Trustees, to serve at the pleasure of theBoard of Trustees.  The Board of Trusteesmay also appoint other committees from time to time composed of one or moremembers, at least one of which shall be a Trustee, to serve at the pleasure ofthe Board of Trustees.  The Board ofTrustees shall adopt a charter with respect to the Audit Committee, theCompensation Committee and the Nominating and Governance Committee, whichcharter shall specify the purposes, the criteria for membership and theresponsibility and duties and may specify other matters with respect to eachcommittee.  The Board of Trustees mayalso adopt a charter with respect to other committees.

 

Section 4.2.            Powers.  The Trustees may delegate any of the powersof the Trustees to committees appointed under Section 4.1 and composed solelyof Trustees, except as prohibited by law. In the event that a charter has been adopted with respect to a committeecomposed solely of Trustees, the charter shall constitute a delegation by theTrustees of the powers of the Board of Trustees necessary to carry out thepurposes, responsibilities and duties of a committee provided in the charter orreasonably related to those purposes, responsibilities and duties, to theextent permitted by law.

 

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Section 4.3.            Meetings.  Notice of committee meetings shall be givenin the same manner as notice for special meetings of the Board ofTrustees.  One-third, but not less thanone, of the members of any committee shall be present in person at any meetingof a committee in order to constitute a quorum for the transaction of businessat a meeting, and the act of a majority present at a meeting at the time of avote if a quorum is then present shall be the act of a committee.  The Board of Trustees or, if authorized bythe Board in a committee charter or otherwise, the committee members maydesignate a chairman of any committee, and the chairman or, in the absence of achairman, a majority of any committee may fix the time and place of itsmeetings unless the Board shall otherwise provide.  In the absence or disqualification of anymember of any committee, the members thereof present at any meeting and notdisqualified from voting, whether or not they constitute a quorum, mayunanimously appoint another Trustee to act at the meeting in the place ofabsent or disqualified members.

 

Each committee shall keep minutes of its proceedingsand shall periodically report its activities to the full Board of Trustees and,except as otherwise provided by law or under the rules of the S.E.C. andapplicable stock exchanges on which the Trust’s shares are listed, any actionby any committee shall be subject to revision and alteration by the Board ofTrustees, provided that no rights of third persons shall be affected by anysuch revision or alteration.

 

Section 4.4.            Telephone Meetings.  Members of a committee may participate in ameeting by means of a conference telephone or similar communications equipmentand participation in a meeting by these means shall constitute presence inperson at the meeting.

 

Section 4.5.            Action by Written Consent ofCommittees.  Any actionrequired or permitted to be taken at any meeting of a committee of the Trusteesmay be taken without a meeting, if a consent in writing to such action issigned by a majority of the committee and such written consent is filed withthe minutes of proceedings of such committee.

 

Section 4.6.            Vacancies.  Subject to the provisions hereof, the Boardof Trustees shall have the power at any time to change the membership of anycommittee, to fill all vacancies, to designate alternate members to replace anyabsent or disqualified member or to dissolve any such committee.

 

**ARTICLE V**

 

**OFFICERS**

 

Section 5.1.            General Provisions.  The officers of the Trust shall include apresident, a secretary and a treasurer and may include a chairman of the board,a vice chairman of the board, a chief executive officer, a chief operatingofficer, a chief financial officer, one or more vice presidents, one or moreassistant secretaries and one or more assistant treasurers.  In addition, the Trustees may from time totime appoint such other officers with such powers and duties as they shall deemnecessary or desirable.  The officers ofthe Trust shall be elected annually by the Trustees at the first meeting of theTrustees held after each annual meeting of shareholders.  If the election of officers shall not be heldat such meeting, such election shall be held as soon thereafter as may beconvenient.  Each officer shall holdoffice until his or her successor is elected and

 

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qualifies or until his orher death, resignation or removal in the manner hereinafter provided.  Any two or more offices, except president andvice president, may be held by the same person. In their discretion, the Trustees may leave unfilled any office exceptthat of president and secretary. Election of an officer or agent shall not of itself create contractrights between the Trust and such officer or agent.

 

Section 5.2.            Removal and Resignation.  Any officer or agent of the Trust may beremoved by the Trustees if in their judgment the best interests of the Trustwould be served thereby, but the removal shall be without prejudice to thecontract rights, if any, of the person so removed.  Any officer of the Trust may resign at anytime by giving written notice of his or her resignation to the Trustees, thechairman of the board, the president or the secretary.  Any resignation shall take effect at any timespecified therein or, if the time when it shall become effective is notspecified therein, immediately upon its receipt.  The acceptance of a resignation shall not benecessary to make it effective unless otherwise stated in the resignation.  A resignation shall be without prejudice tothe contract rights, if any, of the Trust.

 

Section 5.3.            Vacancies.  A vacancy in any office may be filled by theTrustees for the balance of the term.

 

Section 5.4.            Chief Executive Officer.  The Trustees may designate a chief executiveofficer from among the Trustees or elected officers.  The chief executive officer shall haveresponsibility for implementation of the policies of the Trust, as determinedby the Trustees, and for the administration of the business affairs of theTrust.  In the absence of both thechairman and vice chairman of the board, the chief executive officer shallpreside over the meetings of the Board of Trustees at which he shall bepresent.  In the absence of a differentdesignation, the Managing Trustees, or any of them, shall function as the chiefexecutive officer of the Trust.

 

Section 5.5.            Chief Operating Officer.  The Trustees may designate a chief operatingofficer from among the elected officers. Said officer will have the responsibilities and duties as set forth bythe Trustees or the chief executive officer.

 

Section 5.6.            Chief Financial Officer.  The Trustees may designate a chief financialofficer from among the elected officers. Said officer will have the responsibilities and duties as set forth bythe Trustees or the chief executive officer.

 

Section 5.7.            Chairman and Vice Chairman of theBoard.  The chairman of the board, ifany, and the vice chairman of the board, if any, shall perform such duties asmay be assigned to him, her or them by the Trustees.  In the absence of a chairman and vicechairman of the board or if none are appointed, the Managing Trustees, or anyof them, shall preside at meetings of the Board of Trustees.

 

Section 5.8.            President.  The president may execute any deed, mortgage,bond, lease, contract or other instrument, except in cases where the executionthereof shall be expressly delegated by the Trustees or by these Bylaws to someother officer or agent of the Trust or shall be required by law to be otherwiseexecuted, and in general shall perform all duties incident to the office ofpresident and such other duties as may be prescribed by the chief executiveofficer or the Trustees.

 

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Section 5.9.            Vice Presidents.  In the absence or unavailability of thepresident, the vice president (or in the event there be more than one vicepresident, any vice president) shall perform the duties of the president andwhen so acting shall have all the powers of the president; and shall performsuch other duties as from time to time may be assigned to him or her by thepresident, the chief executive officer or by the Trustees.  The Trustees may designate one or more vicepresidents as executive vice presidents, senior vice presidents or as vicepresidents for particular areas of responsibility.

 

Section 5.10.          Secretary.  The secretary (or his or her designee) shall (a)keep the minutes of the proceedings of the shareholders, the Trustees andcommittees of the Trustees in one or more books provided for that purpose; (b) seethat all notices are duly given in accordance with the provisions of theseBylaws or as required by law; (c) be custodian of the Trust records and of theseal of the Trust, if any; (d) maintain a share register, showing the ownershipand transfers of ownership of all shares of the Trust, unless a transfer agentis employed to maintain and does maintain such a share register; and (e) ingeneral perform such other duties as from time to time may be assigned to thesecretary by the chief executive officer or the Trustees.

 

Section 5.11.          Treasurer.  The treasurer shall have the custody of thefunds and securities of the Trust and shall keep full and accurate accounts ofreceipts and disbursements in books belonging to the Trust and shall depositall moneys and other valuable effects in the name and to the credit of theTrust in such depositories as may be authorized by the Trustees.  The treasurer shall also have such otherresponsibilities as may be assigned to him or her by the chief executiveofficer or the Trustees.

 

Section 5.12.          Assistant Secretaries and AssistantTreasurers.  Theassistant secretaries and assistant treasurers, in general, shall perform suchduties as shall be assigned to them by the secretary or treasurer,respectively, or by the chief executive officer or the Trustees.

 

**ARTICLE VI**

** **

**CONTRACTS, LOANS, CHECKS ANDDEPOSITS**

 

Section 6.1.            Contracts.  The Board of Trustees may authorize anyTrustee, officer or agent (including the Advisor or any officer of the Advisor)to enter into any contract or to execute and deliver any instrument in the nameof and on behalf of the Trust and such authority may be general or confined tospecific instances.  Any agreement, deed,mortgage, lease or other document executed by an authorized Trustee, officer oragent shall be valid and binding upon the Trustees and upon the Trust whenauthorized or ratified by action of the Trustees.

 

Section 6.2.            Checks and Drafts.  All checks, drafts or other orders for thepayment of money, notes or other evidences of indebtedness issued in the nameof the Trust shall be signed by such officer or agent of the Trust in suchmanner as shall from time to time be determined by the treasurer, the chiefexecutive officer or the Trustees.

 

Section 6.3.            Deposits.  All funds of the Trust not otherwise employedshall be deposited from time to time to the credit of the Trust in such banks,trust companies or other depositories as the treasurer, the chief executiveofficer or the Trustees may designate.

 

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** **

**ARTICLEVII**

** **

**SHARES**

** **

Section 7.1.            Certificates.  Ownership of shares of any class of shares ofbeneficial ownership of the Trust shall be evidenced by certificates, or at theelection of a shareholder in book entry form. Unless otherwise determined by the Board of Trustees, any suchcertificates shall be signed by the chief executive officer, the president or avice president and countersigned by the secretary or an assistant secretary orthe treasurer or an assistant treasurer and may be sealed with the seal, ifany, of the Trust.  The signatures may beeither manual or facsimile.  Certificatesshall be consecutively numbered and if the Trust shall from time to time issueseveral classes of shares, each class may have its own number series.  A certificate is valid and may be issuedwhether or not an officer who signed it is still an officer when it is issued.

 

Section 7.2.            Transfers.

 

(a)           Sharesof the Trust shall be transferable in the manner provided by applicable law,the Declaration of Trust and these Bylaws. Certificates shall be treated as negotiable and title thereto and to theshares they represent shall be transferred by delivery thereof to the sameextent as those of a Maryland stock corporation.

 

(b)           TheTrust shall be entitled to treat the holder of record of any share or shares asthe holder in fact thereof and, accordingly, shall not be bound to recognizeany equitable or other claim to or interest in such share or shares on the partof any other person, whether or not it shall have express or other noticethereof, except as otherwise provided in these Bylaws or by the laws of theState of Maryland.

 

Section 7.3.            Lost Certificates.  For shares evidenced by certificates, anyofficer designated by the Trustees may direct a new certificate to be issued inplace of any certificate previously issued by the Trust alleged to have beenlost, stolen or destroyed upon the making of an affidavit of that fact by theperson claiming the certificate to be lost, stolen or destroyed.  When authorizing the issuance of a newcertificate, an officer designated by the Trustees may, in such officer’sdiscretion and as a condition precedent to the issuance thereof, require theowner of such lost, stolen or destroyed certificate or the owner’s legalrepresentative to advertise the same in such manner as he shall require and/orto give bond, with sufficient surety, to the Trust to indemnify it against anyloss or claim which may arise as a result of the issuance of a new certificate.

 

Section 7.4.            Closing of Transfer Books orFixing of Record Date.

 

(a)           TheTrustees may set, in advance, a record date for the purpose of determiningshareholders entitled to notice of or to vote at any meeting of shareholders ordetermining shareholders entitled to receive payment of any dividend or theallotment of any other rights, or in order to make a determination ofshareholders for any other proper purpose.

 

(b)           Inlieu of fixing a record date, the Trustees may provide that the share transferbooks shall be closed for a stated period but not longer than 20 days.  If the share

 

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transferbooks are closed for the purpose of determining shareholders entitled to noticeof or to vote at a meeting of shareholders, such books shall be closed for atleast 10 days before the date of such meeting.

 

(c)           Ifno record date is fixed and the share transfer books are not closed for thedetermination of shareholders, (i) the record date for the determination ofshareholders entitled to notice of or to vote at a meeting of shareholdersshall be at the close of business on the day on which the notice of meeting ismailed or the 30th day before the meeting, whichever is the closer date to themeeting; and (ii) the record date for the determination of shareholdersentitled to receive payment of a dividend or an allotment of any other rightsshall be the close of business on the day on which the resolution of theTrustees, declaring the dividend or allotment of rights, is adopted.

 

(d)           Whena determination of shareholders entitled to vote at any meeting of shareholdershas been made as provided in this section, such determination shall apply toany adjournment thereof unless the Board of Trustees shall set a new recorddate with respect thereto.

 

Section 7.5.            Share Ledger.  The Trust shall maintain at its principaloffice or at the office of its counsel, accountants or transfer agent a shareledger containing the name and address of each shareholder and the number ofshares of each class held by such shareholder.

 

Section 7.6.            Fractional Shares; Issuance of Units.  The Trustees may issue fractional shares orprovide for the issuance of scrip, all on such terms and under such conditionsas they may determine.  Notwithstandingany other provision of the Declaration of Trust or these Bylaws, the Trusteesmay issue units consisting of different securities of the Trust.  Any security issued in a unit shall have thesame characteristics as any identical securities issued by the Trust, exceptthat the Trustees may provide that for a specified period securities of theTrust issued in such unit may be transferred on the books of the Trust only insuch unit.

 

**ARTICLE VIII**

** **

**REGULATORY COMPLIANCE AND DISCLOSURE**

 

Section 8.1.            Actions Requiring RegulatoryCompliance Implicating the Trust.  If any shareholder (whether individually orconstituting a group, as determined by the Board of Trustees), by virtue ofsuch shareholder’s ownership interest in the Trust or actions taken by theshareholder affecting the Trust, triggers the application of any requirement orregulation of any federal, state, municipal or other governmental or regulatorybody on the Trust or any subsidiary (for purposes of this ARTICLE VIII, asdefined in Section 2.14.5(c)) of the Trust or any of their respectivebusinesses, assets or operations, including, without limitation, anyobligations to make or obtain a Governmental Action (as defined in Section 2.14.3),such shareholder shall promptly take all actions necessary and fully cooperatewith the Trust to ensure that such requirements or regulations are satisfiedwithout restricting, imposing additional obligations on or in any way limitingthe business, assets, operations or prospects of the Trust or any subsidiary ofthe Trust.  If the shareholder fails oris otherwise unable to promptly take such actions so to cause satisfaction of

 

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such requirements orregulations, the shareholder shall promptly divest a sufficient number ofshares of the Trust necessary to cause the application of such requirement orregulation to not apply to the Trust or any subsidiary of the Trust.  If the shareholder fails to cause suchsatisfaction or divest itself of such sufficient number of shares of the Trustby not later than the 10th day after triggering such requirement or regulationreferred to in this Section 8.1, then any shares of the Trust beneficiallyowned by such shareholder at and in excess of the level triggering theapplication of such requirement or regulation shall, to the fullest extentpermitted by law, be deemed to constitute shares held in violation of theownership limitations set forth in Article VII of the Declaration of Trust andbe subject to the provisions of Article VII of the Declaration of Trust and anyactions triggering the application of such a requirement or regulation may bedeemed by the Trust to be of no force or effect.  Moreover, if the shareholder who triggers theapplication of any regulation or requirement fails to satisfy the requirementsor regulations or to take curative actions within such 10 day period, the Trustmay take all other actions which the Board of Trustees deems appropriate torequire compliance or to preserve the value of the Trust’s assets; and theTrust may charge the offending shareholder for the Trust’s costs and expenses aswell as any damages which may result to the Trust.

 

Asan example and not as a limitation, at the time these Bylaws are being amendedand restated, the Trust holds a controlling ownership position in a companybeing formed and licensed as an insurance company in the State of Indiana.  The laws of the State of Indiana have certainregulatory requirements for any person who seeks to control (as defined underIndiana law) a company which itself controls an insurance company domiciled inthe State of Indiana, including by exercising proxies representing 10% or moreof the Trust’s voting securities. Accordingly, if a shareholder seeks to exercise proxies for a matter tobe voted upon at a meeting of the Trust’s shareholders without having obtainedany applicable approvals from the Indiana insurance regulatory authorities,such proxies representing 10% or more of the Trust’s voting securities will,subject to Section 8.3, be void and of no further force or effect.

 

Asa further example and not as a limitation, at the time these Bylaws are beingamended and restated, the Trust owns healthcare facilities in various stateswhich are subject to state regulatory and licensing requirements in each suchstate.  Under the licensing terms orregulatory regime of certain states with jurisdiction over the Trust, ashareholder which acquires a controlling equity position in the Trust may berequired to obtain regulatory approval or consent prior to or as a result ofobtaining such ownership.  Accordingly,if a shareholder which acquires a controlling equity position in the Trust thatwould require the shareholder or the Trust to obtain the consent or approval ofa state authority due to the fact that the Trust owns licensed healthcarefacilities in such state, and the shareholder refuses to provide the Trust withinformation required to be submitted to the applicable state authority or ifthe state authority declines to approve the shareholder’s ownership of theTrust, then, in either event, shares of the Trust owned by the shareholdernecessary to reduce its ownership to an amount so that the shareholder’sownership of Trust shares would not require it to provide any such informationto, or for consent to be obtained from, the state authority, may be deemed bythe Board of Trustees to be shares held in violation of the ownershiplimitation in Article VII of the Declaration of Trust and shall be subject tothe provisions of Article VII of the Declaration of Trust.

 

Section 8.2.            Compliance With Law.  Shareholders shall comply with all applicablerequirements of federal and state laws, including all rules and regulationspromulgated thereunder,

 

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in connection with suchshareholder’s ownership interest in the Trust and all other laws which apply tothe Trust or any subsidiary of the Trust or their respective businesses, assetsor operations and which require action or inaction on the part of theshareholder.

 

Section 8.3.            Limitation on Voting Shares orProxies.  Without limiting theprovisions of Section 8.1, if a shareholder (whether individually orconstituting a group, as determined by the Board of Trustees), by virtue ofsuch shareholder’s ownership interest in the Trust or its receipt or exerciseof proxies to vote shares owned by other shareholders, would not be permittedto vote the shareholder’s shares of the Trust or proxies for shares of theTrust in excess of a certain amount pursuant to applicable law (including byway of example, applicable state insurance regulations) but the Board ofTrustees determines that the excess shares or shares represented by the excessproxies are necessary to obtain a quorum, then such shareholder shall not beentitled to vote any such excess shares or proxies, and instead such excessshares or proxies may, to the fullest extent permitted by law, be voted by theAdvisor (or by another person designated by the Trustees) in proportion to thetotal shares otherwise voted on such matter.

 

Section 8.4.            Representations,Warranties and Covenants Made to Governmental or Regulatory Bodies.  To the fullest extent permitted bylaw, any representation, warranty or covenant made by a shareholder with anygovernmental or regulatory body in connection with such shareholder’s interestin the Trust or any subsidiary of the Trust shall be deemed to besimultaneously made to, for the benefit of and enforceable by, the Trust andany applicable subsidiary of the Trust.

 

Section 8.5.            Board of Trustees’ Determinations.  The Board ofTrustees shall be empowered to make all determinations regarding theinterpretation, application, enforcement and compliance with any mattersreferred to or contemplated by this ARTICLE VIII.

** **

**ARTICLEIX**

** **

**FISCALYEAR**

** **

Section 9.1.            Fiscal Year.  The fiscal year of the Trust shall be thecalendar year.

 

**ARTICLE X**

** **

**DIVIDENDS AND OTHER DISTRIBUTIONS**

** **

Section 10.1.          Dividends and Other Distributions.  Dividends and other distributions upon theshares of beneficial interest of the Trust may be authorized and declared bythe Trustees.  Dividends and otherdistributions may be paid in cash, property or shares of the Trust.

 

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**ARTICLEXI**

** **

**SEAL**

** **

Section 11.1.          Seal.  The Trustees may authorize the adoption of aseal by the Trust.  The Trustees mayauthorize one or more duplicate seals.

 

Section 11.2.          Affixing Seal.  Whenever the Trust is permitted or requiredto affix its seal to a document, it shall be sufficient to meet therequirements of any law, rule or regulation relating to a seal to place theword “(SEAL)” adjacent to the signature of the person authorized to execute thedocument on behalf of the Trust.

** **

**ARTICLEXII**

** **

**WAIVEROF NOTICE**

** **

Section 12.1.          Waiver of Notice.  Whenever any notice is required to be givenpursuant to the Declaration of Trust, these Bylaws or applicable law, a waiverthereof in writing, signed by the person or persons entitled to such notice, ora waiver by electronic transmission by the person or persons entitled to suchnotice, whether before or after the time stated therein, shall be deemedequivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meetingneed be set forth in the waiver of notice or waiver by electronic transmission,unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver ofnotice of such meeting, except where such person attends a meeting for theexpress purpose of objecting to the transaction of any business on the groundthat the meeting is not lawfully called or convened.

** **

**ARTICLEXIII**

** **

**AMENDMENTOF BYLAWS**

** **

Section 13.1.          Amendment of Bylaws.  Except for any change for which these Bylawsrequires approval by more than a majority vote of the Trustees, these Bylawsmay be amended or repealed or new or additional Bylaws may be adopted only bythe vote or written consent of a majority of the Trustees.

** **

**ARTICLEXIV**

** **

**MISCELLANEOUS**

** **

Section 14.1.          References to Declaration of Trust.  All references to the Declaration of Trustshall include any amendments thereto.

 

Section 14.2.          Costs and Expenses.  In addition to, and as further clarificationof each shareholder’s obligation to indemnify and hold the Trust harmless fromand against all costs,

 

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expenses, penalties, finesand other amounts, including, without limitation, attorneys’ and otherprofessional fees, whether third party or internal, arising from suchshareholder’s violation of any provision of the Declaration of Trust or theseBylaws pursuant to Section 8.7 of the Declaration of Trust, to the fullestextent permitted by law, each shareholder will be liable to the Trust (and any subsidiaries or affiliates thereof) for,and indemnify and hold harmless the Trust (and any subsidiaries or affiliatesthereof) from and against, all costs, expenses, penalties, fines or otheramounts, including, without limitation, reasonable attorneys’ and otherprofessional fees, whether third party or internal, arising from suchshareholder’s breach of ~~any~~or failure tofully comply with any covenant, condition or provision of these Bylaws orthe Declaration of Trust (including Section 2.14of these Bylaws) or any action by or againstthe Trust (or any subsidiaries or affiliatesthereof) in which such shareholder is not the prevailing party, and shallpay such amounts to such indemnitee ondemand, together with interest on such amounts, which interest will accrue atthe lesser of the Trust’s highest marginal borrowing rate, per annumcompounded, and the maximum amount permitted by law, from the date such costsor the like are incurred until the receipt of payment.

 

Section 14.3.          Ratification.  The Board of Trustees or the shareholders mayratify and make binding on the Trust any action or inaction by the Trust or itsofficers to the extent that the Board of Trustees or the shareholders couldhave originally authorized the matter. Moreover, any action or inaction questioned in any shareholder’sderivative proceeding or any other proceeding on the ground of lack ofauthority, defective or irregular execution, adverse interest of a Trustee,officer or shareholder, non-disclosure, miscomputation, the application ofimproper principles or practices of accounting, or otherwise, may be ratified,before or after judgment, by the Board of Trustees or by the shareholders and,if so ratified, shall have the same force and effect as if the questionedaction or inaction had been originally duly authorized, and such ratificationshall be binding upon the Trust and its shareholders and shall constitute a barto any claim or execution of any judgment in respect of such questioned actionor inaction.

 

Section 14.4.          Ambiguity.  In the case of an ambiguity in theapplication of any provision of these Bylaws or any definition contained inthese Bylaws, the Board of Trustees shall have the sole power to determine theapplication of such provisions with respect to any situation based on the factsknown to it and such determination shall be final and binding unless determinedby a court of competent jurisdiction to have been made in bad faith.

 

Section 14.5.          Inspection of Bylaws.  The Trustees shall keep at the principaloffice for the transaction of business of the Trust the original or a copy ofthe Bylaws as amended or otherwise altered to date, certified by the secretary,which shall be open to inspection by the shareholders at all reasonable timesduring office hours.

 

Section 14.6.          Election to be Subject to Part ofTitle 3, Subtitle 8. Notwithstanding any other provision contained in the Declaration ofTrust or these Bylaws, the Trust hereby elects to be subject to Section 3-804(b)and (c) of Title 3, Subtitle 8 of the Maryland General Corporation Law (or anysuccessor statute).  This Section 14.6only may be repealed, in whole or in part, by a subsequent amendment to theseBylaws.

 

Section 14.7.          Special Voting Provisions relatingto Control Shares. Notwithstanding any other provision contained herein or in theDeclaration of Trust or these Bylaws, Title 3, Subtitle 7

 

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of the Maryland GeneralCorporation Law (or any successor statute) shall not apply to any acquisitionby any person of shares of beneficial interest of the Trust.  This section may be repealed, in whole or inpart, at any time, whether before or after an acquisition of control sharesand, upon such repeal, may, to the extent provided by any successor bylaw,apply to any prior or subsequent control share acquisition.

 

**ARTICLE XVARBITRATION**

** **

Section 15.1.      Procedures for Arbitrationof Disputes.  Any disputes, claims or controversies broughtby or on behalf of any shareholder of the Trust (which, for purposes of thisARTICLE XV, shall mean any shareholder of record or any beneficial owner ofshares of the Trust, or any former shareholder of record or beneficial owner ofshares of the Trust), either on his, her or its own behalf, on behalf of theTrust or on behalf of any series or class of shares of the Trust orshareholders of the Trust against the Trust or any Trustee, officer, manager(including Reit Management & Research LLC or its successor), agent oremployee of the Trust, including disputes, claims or controversies relating tothe meaning, interpretation, effect, validity, performance or enforcement ofthe Declaration of Trust or these Bylaws (all of which are referred to as “Disputes”)or relating in any way to such a Dispute or Disputes shall, on the demand ofany party to such Dispute, be resolved through binding and final arbitration inaccordance with the Commercial Arbitration Rules (the “Rules”) of the AmericanArbitration Association (“AAA”) then in effect, except as those Rules may bemodified in this ARTICLE XV.  For theavoidance of doubt, and not as a limitation, Disputes are intended to includederivative actions against Trustees, officers or managers of the Trust andclass actions by shareholders against those individuals or entities and theTrust.  For the avoidance of doubt, aDispute shall include a Dispute made derivatively on behalf of one partyagainst another party.

 

Section 15.2.      Arbitrators.  There shallbe three arbitrators.  If there are onlytwo parties to the Dispute, each party shall select one arbitrator within 15days after receipt by respondent of a copy of the demand for arbitration.  Such arbitrators may be affiliated orinterested persons of such parties.  Ifeither party fails to timely select an arbitrator, the other party to theDispute shall select the second arbitrator who shall be neutral and impartialand shall not be affiliated with or an interested person of either party. Ifthere are more than two parties to the Dispute, all claimants, on the one hand,and all respondents, on the other hand, shall each select, by the vote of amajority of the claimants or the respondents, as the case may be, one arbitrator.Such arbitrators may be affiliated or interested persons of the claimants orthe respondents, as the case may be.  Ifeither all claimants or all respondents fail to timely select an arbitratorthen such arbitrator (who shall be neutral, impartial and unaffiliated with anyparty) shall be appointed by the AAA. The two arbitrators so appointed shall jointly appoint the third andpresiding arbitrator (who shall be neutral, impartial and unaffiliated with anyparty) within 15 days of the appointment of the second arbitrator.  If the third arbitrator has not beenappointed within the time limit specified herein, then the AAA shall provide alist of proposed arbitrators in accordance with the Rules, and the arbitratorshall be appointed by the AAA in accordance with a listing, striking andranking procedure, with each party having a limited number of strikes,excluding strikes for cause.

 

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Section 15.3.      Place of Arbitration.  The placeof arbitration shall be Boston, Massachusetts unless otherwise agreed by theparties.

 

Section 15.4.      Discovery.  There shallbe only limited documentary discovery of documents directly related to theissues in dispute, as may be ordered by the arbitrators.

 

Section 15.5.      Awards.  Inrendering an award or decision (the “Award”), the arbitrators shall be requiredto follow the laws of the State of Maryland. Any arbitration proceedings or Award rendered hereunder and thevalidity, effect and interpretation of this arbitration agreement shall begoverned by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Award shall be in writing and may, butshall not be required to, briefly state the findings of fact and conclusions oflaw on which it is based.  Any monetaryaward shall be made and payable in U.S. dollars free of any tax, deduction oroffset.  The party against which theAward assesses a monetary obligation shall pay that obligation on or before the30th day following the date of the Award or such other date as the Award mayprovide.

 

Section 15.6.      Costs and Expenses.  Except asotherwise set forth in the Declaration of Trust or these Bylaws, including Section14.2 of these Bylaws, or as otherwise agreed between the parties, each partyinvolved in a Dispute shall bear its own costs and expenses (includingattorneys’ fees), and the arbitrators shall not render an award that wouldinclude shifting of any such costs or expenses (including attorneys’ fees) or,in a derivative case or class action, award any portion of the Trust’s award tothe claimant or the claimant’s attorneys. Each party (or, if there are more than two parties to the Dispute, allclaimants, on the one hand, and all respondents, on the other hand,respectively) shall bear the costs and expenses of its (or their) selectedarbitrator and the parties (or, if there are more than two parties to theDispute, all claimants, on the one hand, and all respondents, on the otherhand) shall equally bear the costs and expenses of the third appointed arbitrator.

 

Section 15.7.      Final and Binding.  An Awardshall be final and binding upon the parties thereto and shall be the sole andexclusive remedy between such parties relating to the Dispute, including anyclaims, counterclaims, issues or accounting presented to the arbitrators.  Judgment upon the Award may be entered in anycourt having jurisdiction.  To thefullest extent permitted by law, no application or appeal to any court ofcompetent jurisdiction may be made in connection with any question of lawarising in the course of arbitration or with respect to any award made exceptfor actions relating to enforcement of this agreement to arbitrate or anyarbitral award issued hereunder and except for actions seeking interim or otherprovisional relief in aid of arbitration proceedings in any court of competentjurisdiction.

 

Section 15.8.      Beneficiaries.  ThisARTICLE XV is intended to benefit and be enforceable by the shareholders,Trustees, officers, managers (including Reit Management & Research LLC orits successor), agents or employees of the Trust and the Trust and shall bebinding on the shareholders of the Trust and the Trust, as applicable, andshall be in addition to, and not in substitution for, any other rights toindemnification or contribution that such individuals or entities may have bycontract or otherwise.

 

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