**EXHIBIT 3.1**

 

 

SENIOR HOUSING PROPERTIES TRUST

 

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AMENDED AND RESTATED BYLAWS

 

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As Amended and Restated 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                                                   | 5 |
| 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          | 12 |
| Section 2.14.4.                | Special Meetings of Shareholders                                                  | 13 |
| 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                | 16                                                                                |
| Section 3.1.                   | General Powers; Qualifications; Trustees Holding Over                             | 16 |
| Section 3.2.                   | Independent Trustees and Managing Trustees                                        | 16 |
| Section 3.3.                   | Number and Tenure                                                                 | 16 |
| Section 3.4.                   | Annual and Regular Meetings                                                       | 17 |
| Section 3.5.                   | Special Meetings                                                                  | 17 |
| Section 3.6.                   | Notice                                                                            | 17 |
| Section 3.7.                   | Quorum                                                                            | 17 |
| Section 3.8.                   | Voting                                                                            | 18 |
| Section 3.9.                   | Telephone Meetings                                                                | 18 |
| Section 3.10.                  | Action by Written Consent of Trustees                                             | 18 |
| 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                                           | 19     |
| Section 3.15.                                | Surety Bonds                                                  | 19     |
| Section 3.16.                                | Reliance                                                      | 19     |
| 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                             | 20                                                            |
| Section 4.1.                                 | Number; Tenure and Qualifications                             | 20     |
| Section 4.2.                                 | Powers                                                        | 20     |
| Section 4.3.                                 | Meetings                                                      | 20     |
| Section 4.4.                                 | Telephone Meetings                                            | 20     |
| Section 4.5.                                 | Action by Written Consent of Committees                       | 21     |
| Section 4.6.                                 | Vacancies                                                     | 21     |
|                                              |                                                          |   |
| ARTICLE V OFFICERS                                | 21                                                            |
| Section 5.1.                                 | General Provisions                                            | 21     |
| 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                                       | 22     |
| Section 5.6.                                 | Chief Financial Officer                                       | 22     |
| Section 5.7.                                 | Chairman and Vice Chairman of the Board                       | 22     |
| Section 5.8.                                 | President                                                     | 22     |
| Section 5.9.                                 | Vice Presidents                                               | 22     |
| Section 5.10.                                | Secretary                                                     | 22     |
| Section 5.11.                                | Treasurer                                                     | 22     |
| Section 5.12.                                | Assistant Secretaries and Assistant Treasurers                | 23     |
|                                              |                                                          |   |
| ARTICLE VI CONTRACTS, LOANS, CHECKS AND DEPOSITS  | 23                                                            |
| Section 6.1.                                 | Contracts                                                     | 23     |
| Section 6.2.                                 | Checks and Drafts                                             | 23     |
| Section 6.3.                                 | Deposits                                                      | 23     |
|                                              |                                                          |   |
| ARTICLE VII  SHARES                               | 23                                                            |
| Section 7.1.                                 | Certificates                                                  | 23     |
| Section 7.2.                                 | Transfers                                                     | 23     |
| Section 7.3.                                 | Lost Certificates                                             | 24     |
| Section 7.4.                                 | Closing of Transfer Books or Fixing of Record Date            | 24     |
| Section 7.5.                                 | Share Ledger                                                  | 25     |
| Section 7.6.                                 | Fractional Shares; Issuance of Units                          | 25     |
|                                              |                                                          |   |
| ARTICLE VIII REGULATORY COMPLIANCE AND DISCLOSURE | 25                                                            |
| Section 8.1.                                 | Actions Requiring Regulatory Compliance Implicating the Trust | 25     |
| Section 8.2.                                 | Compliance With Law                                           | 26     |
| 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 | 27     |
|---------------------------------------------|--------------------------------------------------------------------------------------|--------|
| Section 8.5.                           | Board of Trustees’ Determinations                                               | 27     |
|                                        |                                                                                 |   |
| ARTICLE IX FISCAL YEAR                      | 27                                                                                   |
| Section 9.1.                           | Fiscal Year                                                                          | 27     |
|                                        |                                                                                 |   |
| ARTICLE X DIVIDENDS AND OTHER DISTRIBUTIONS | 27                                                                                   |
| Section 10.1.                          | Dividends and Other Distributions                                                    | 27     |
|                                        |                                                                                 |   |
| 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            | 28                                                                                   |
| Section 13.1.                          | Amendment of Bylaws                                                                  | 28     |
|                                        |                                                                                 |   |
| ARTICLE XIV MISCELLANEOUS                   | 28                                                                                   |
| Section 14.1.                          | References to Declaration of Trust                                                   | 28     |
| Section 14.2.                          | Costs and Expenses                                                                   | 28     |
| Section 14.3.                          | Ratification                                                                         | 28     |
| Section 14.4.                          | Ambiguity                                                                            | 29     |
| Section 14.5.                          | Inspection of Bylaws                                                                 | 29     |
| Section 14.6.                          | Election to be Subject to Part of Title 3, Subtitle 8                           | 29     |
| Section 14.7.                          | Special Voting Provisions relating to Control Shares                                 | 29     |
|                                        |                                                                                 |   |
| ARTICLE XV ARBITRATION                      | 29                                                                                   |
| Section 15.1.                          | Procedures for Arbitration of Disputes                                               | 29     |
| Section 15.2.                          | Arbitrators                                                                          | 30     |
| 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                                                                    | 31     |
| Section 15.8.                          | Beneficiaries                                                                        | 31     |

 

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**SENIORHOUSING PROPERTIES TRUST**

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**AMENDED ANDRESTATED BYLAWS**

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**ARTICLE I**

** **

**OFFICES**

 

Section 1.1.            Principal Office.  The principal office of the Trust shall belocated at such place or places as the Board of Trustees may designate.

 

Section 1.2.            Additional Offices.  The Trust may have additional offices at suchplaces as the Board of Trustees may from time to time determine or the businessof the Trust may require.

 

**ARTICLE II**

 

**MEETINGS OFSHAREHOLDERS**

 

Section 2.1.            Place.  All meetings of shareholders shall be held atthe principal office of the Trust or at such other place as is designated bythe Trustees or the chairman of the board or president.

 

Section 2.2.            Annual Meeting.  An annual meeting of the shareholders for theelection of Trustees and the transaction of any business within the powers ofthe Trust shall be held at such times as the Trustees may designate.  Failure to hold an annual meeting does notinvalidate the Trust’s existence or affect any otherwise valid acts of theTrust.

 

Section 2.3.            Special Meetings.  Special meetings of shareholders may becalled 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.  Written notice specifyingthe place, day and hour of any regular or special meeting, the purposes of themeeting, to the extent required by law to be provided, and all other mattersrequired by law shall be given to each shareholder of record entitled to vote,either personally or by sending a copy thereof by mail, postage prepaid, to hisor her address appearing on the books of the Trust or theretofore given by himor her to the Trust for the purpose of notice or, if no address appears or hasbeen given, addressed to the place where the principal office of the Trust issituated, or by electronic transmission, including facsimile transmission, toany address or number of such shareholder at which the shareholder receiveselectronic transmissions.  If mailed, suchnotice shall be deemed to be given once deposited in the U.S. mail addressed tothe shareholder at his or her post office 

 

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address as it appears on the records of the Trust, with postage thereonprepaid.  It shall be the duty of thesecretary to give notice of each meeting of the shareholders.

 

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.  Every meeting ofshareholders shall be conducted by an individual appointed by the Board ofTrustees 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 byproxy.  The secretary, an assistantsecretary or a person appointed by the Trustees or, in the absence of suchappointment, a person appointed by the chairperson of the meeting shall act assecretary of the 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, rules orguidelines as set forth by the chairperson of the meeting; (g) concludinga meeting or recessing or adjourning the meeting to a later date and time andat a place announced at the meeting; and (h) complying with any state andlocal laws 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 deemednecessary by the chairperson, including, without limitation, if (i) no quorumis present for the transaction of the business, (ii) the Board of Trusteesor the chairperson 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 Boardof Trustees or the chairperson of 

 

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the meeting determinesthat adjournment is otherwise in the best interests of the Trust.  Unless otherwise determined by thechairperson of the meeting, meetings of shareholders shall not be required tobe held in accordance with the general rules of parliamentary procedure orany otherwise established rules of order.

 

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 to seta new record date or provide any additional notice of such meeting, subject toany 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)           With regard to election of a Trustee,and except as may be mandated by applicable law or the listing requirements ofthe principal exchange on which the Trust’s common shares are listed: (i) amajority of all the votes cast at a meeting of shareholders duly called and atwhich a quorum is present shall be sufficient to elect a Trustee in anuncontested election; and (ii) a majority of all the shares entitled tovote at a meeting of shareholders duly called and at which a quorum is presentshall be sufficient to elect a Trustee in a contested election (which, forpurposes of these Bylaws, is an election at which the number of nomineesexceeds the number of Trustees to be elected at the meeting).  Each sharemay be voted for as many individuals as there are Trustees to be elected andfor whose election the share is entitled to be voted.

 

(b)           With regard to any other matter whichmay properly come before a meeting of shareholders duly called and at which aquorum is present, and except as may be mandated by applicable law, by thelisting requirements of the principal exchange on which the Trust’s common sharesare listed or by a specific provision of the Declaration of Trust, (i) ifsuch matter is approved by at least 75% of the Trustees then in office,including 75% of the Independent Trustees then in office, a majority of all thevotes cast at the meeting shall be required to approve such matter; and (ii) ifsuch matter is not approved by at least 75% of the Trustees then in office,including 75% of the Independent Trustees then in office, 75% of all the sharesentitled to vote at the meeting shall 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 

 

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prior to suchmeeting.  Any proxy relating to the Trust’sshares of beneficial interest shall be valid until the expiration date thereinor, if no expiration is so indicated, for such period as is permitted pursuantto Maryland 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.

 

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)           Before or at any meeting of shareholders,the chairperson of the meeting may appoint one or more persons as inspectorsfor such meeting.  Such inspectors shall (i) ascertainand report the number of shares of beneficial interest represented at themeeting, in person or by proxy and the validity and effect of proxies, (ii) receiveand tabulate all votes, ballots or consents, (iii) report such tabulationto the chairperson of the meeting and (iv) perform such other acts as areproper to conduct the election or voting at the meeting.

 

(b)           Each report of an inspector shall bein writing and signed by him or her or by a majority of them if there is morethan one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall bethe report of the inspectors.  The reportof the inspector or inspectors on the number of shares represented at themeeting and the results of the voting shall be primafacieevidence thereof.

 

Section 2.14.          Nominations and Other Proposals tobe Considered at Meetings of Shareholders. Nominations of individuals for election to the Board of Trustees and theproposal of other business to be considered by the shareholders at meetings ofshareholders may be properly brought before the meeting only as set forth inthis Section 2.14.  All judgmentsand determinations made by the Board of Trustees or the chairperson of themeeting, as applicable, under this Section 2.14 (including, without limitation,judgments and determinations as to the propriety of a proposed nomination or aproposal of other business for consideration by 

 

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shareholders) shall befinal and binding unless determined by a court of competent jurisdiction tohave been made in bad faith.

 

Section 2.14.1.          Annual Meetings of Shareholders.

 

(a)           Nominations of individuals forelection to the Board of Trustees and the proposal of other business to beconsidered by the shareholders at an annual meeting of shareholders may beproperly brought before the meeting (i) pursuant to the Trust’s notice ofmeeting or otherwise properly brought before the meeting by or at the directionof the Board of Trustees or (ii) by any shareholder of the Trust who (A) hascontinuously held at least $2,000 in market value, or 1%, of the Trust’s sharesentitled to vote at the meeting on such election or the proposal for otherbusiness, as the case may be, for at least one year from the date suchshareholder gives the notice provided for in this Section 2.14.1 (or, ifsuch notice is given prior to April 1, 2010, continuously held Trustshares since April 1, 2009 and without regard to the $2,000 market value, or1%, requirement), and continuously holds such shares through and including thetime of the annual meeting (including any adjournment or postponement thereof),(B) is a shareholder of record at the time of giving the notice providedfor in this Section 2.14.1 through and including the time of the annualmeeting (including any adjournment or postponement thereof), (C) isentitled to make nominations or propose other business and to vote at themeeting on such election, or the proposal for other business, as the case maybe, (D) complies with the notice procedures set forth in this Section 2.14as to such nomination or other business and (E) has submitted thenomination or proposal of other business to the Board of Trustees in accordancewith the requirements set forth in the Declaration of Trust.  Section 2.14.1(a)(ii) shall be theexclusive means for a shareholder to make nominations or propose other businessbefore an annual meeting of shareholders, except to the extent of matters whichare required 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 marketvalue of the Trust’s shares held by the applicable shareholder shall bedetermined by multiplying the number of shares such shareholder continuouslyheld for that one-year period by the highest selling price of the Trust sharesas reported on the principal exchange on which the Trust’s common shares arelisted during the 60 calendar days before the date such notice was submitted.

 

(b)           For nominations for election to theBoard of Trustees or other business to be properly brought before an annualmeeting by a shareholder pursuant to Section 2.14.1(a)(ii), theshareholder shall have given timely notice thereof in writing to the secretaryof the Trust in accordance with this Section 2.14 and such other businessshall 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 the150th day prior to the first anniversary of the date of the proxy statement forthe preceding year’s annual meeting ; provided, however, that in the event thatthe date of the proxy statement for the annual meeting is more than 30 daysearlier than the first anniversary of the date of the proxy

 

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statement for the preceding year’sannual meeting, notice by the shareholder to be timely shall be so deliverednot 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 described above.  No shareholder may give a notice to thesecretary described in this Section 2.14.1(b) unless such shareholder holds acertificate for all shares of beneficial interest of the Trust owned by suchshareholder during all times described in Section 2.14.1(a), and a copy of eachsuch certificate held by such shareholder at the time of giving such noticeshall accompany such shareholder’s notice to the secretary in order for suchnotice to be effective.

 

A shareholder’s notice shall set forth:

 

(A)                              as to eachindividual whom the shareholder proposes to nominate for election or reelectionas a Trustee (a “Proposed Nominee”) and any Proposed Nominee Associated Person(as defined in Section 2.14.1(d)), (1) the name, age, business address andresidence address of such Proposed Nominee and the name and address of suchProposed Nominee Associated Person, (2) a statement of whether such ProposedNominee is proposed for nomination as an Independent Trustee (as defined in Section3.2) or a Managing Trustee (as defined in Section 3.2) and a description ofsuch Proposed Nominee’s qualifications to be an Independent Trustee or ManagingTrustee, as the case may be, and such Proposed Nominee’s qualifications to be aTrustee pursuant to the criteria set forth in Section 3.1, (3) the class,series and number of any shares of beneficial interest of the Trust that are,directly or indirectly, beneficially owned or owned of record by such ProposedNominee or by such Proposed Nominee Associated Person, (4) the date such shareswere acquired and the investment intent of such acquisition, (5) a descriptionof all purchases and sales of securities of the Trust by such Proposed Nomineeor by such Proposed Nominee Associated Person during the previous 24 monthperiod, 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 

 

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AssociatedPerson during the previous 24 month period, including the date of thetransactions and the class, series and number of securities involved in, andthe material economic terms of, the transactions, such description to include,without limitation, all information that such Proposed Nominee or ProposedNominee Associated Person would be required to report on an Insider Report (asdefined in Section 2.14.1(d)) if such Proposed Nominee or Proposed NomineeAssociated 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, (7) anyperformance related fees (other than an asset based fee) that such ProposedNominee or such Proposed Nominee Associated Person is entitled to based on anyincrease or decrease in the value of shares of the Trust or instrument orarrangement of the type contemplated within the definition of DerivativeTransaction, if any, as of the date of such notice, including, withoutlimitation, any such interests held by members of such Proposed Nominee’s orsuch Proposed Nominee Associated Person’s immediate family sharing the samehousehold with such Proposed Nominee or such Proposed Nominee AssociatedPerson, (8) any proportionate interest in shares of the Trust or instrument orarrangement of the type contemplated within the definition of DerivativeTransaction held, directly or indirectly, by a general or limited partnershipin which such Proposed Nominee or such Proposed Nominee Associated Person is ageneral partner or, directly or indirectly, beneficially owns an interest in ageneral partner, (9) a description of all direct and indirect compensation andother material monetary agreements, arrangements and understandings during thepast three years, and any other material relationships, between or among such shareholder,Proposed Nominee Associated Person, or their respective affiliates andassociates, or others acting in concert therewith, on the one hand, and eachProposed Nominee, or his or her respective affiliates and associates, or othersacting in concert therewith, on the other hand, including, without limitation,all information that would be required to be disclosed pursuant to Item 404 ofRegulation S-K promulgated by the U.S. Securities and Exchange Commission (the “S.E.C.”)(and any successor regulation), if the shareholder making the nomination andany Proposed Nominee Associated Person on whose behalf the nomination is made,or any affiliate or associate thereof or person acting in concert therewith,were the “registrant” for 

 

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purposesof such rule and the Proposed Nominee were a director or executive officer ofsuch registrant, (10) any rights to dividends on the shares of the Trust ownedbeneficially by such Proposed Nominee or such Proposed Nominee AssociatedPerson that are separated or separable from the underlying shares of the Trust,(11) to the extent known by such Proposed Nominee or such Proposed NomineeAssociated Person, the name and address of any other person who owns, of recordor beneficially, any shares of beneficial interest of the Trust and whosupports the Proposed Nominee for election or reelection as a Trustee, (12) allother information relating to such Proposed Nominee or such Proposed NomineeAssociated Person that is required to be disclosed in solicitations of proxiesfor election of Trustees in an election contest (even if an election contest isnot involved), or is otherwise required, in each case, pursuant to Section 14(or any successor provision) of the Securities Exchange Act of 1934, as amended(the “Exchange Act”), and the rules and regulations promulgated thereunder and(13) such Proposed Nominee’s notarized written consent to being named in theshareholder’s proxy statement as a nominee and to serving as a Trustee ifelected;

 

(B)                                as to anyother business that the shareholder proposes to bring before the meeting, (1) adescription of such business, (2) the reasons for proposing such business atthe meeting and any material interest in such business of such shareholder orany Shareholder Associated Person (as defined in Section 2.14.1(d)), includingany anticipated benefit to such shareholder or any Shareholder AssociatedPerson therefrom, (3) a description of all agreements, arrangements andunderstandings between such shareholder and Shareholder Associated Personamongst themselves or with any other person or persons (including their names)in connection with the proposal of such business by such shareholder and (4) arepresentation that such shareholder intends to appear in person or by proxy atthe meeting to bring the business before the meeting;

 

(C)                                as to theshareholder giving the notice and any Shareholder Associated Person, (1) theclass, series and number of all shares of the Trust that are owned of record bysuch shareholder or by such Shareholder Associated Person, if any, (2) theclass, series and number of, and the nominee 

 

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holderfor, any shares of beneficial interests of the Trust that are owned, directlyor indirectly, beneficially but not of record by such shareholder or by suchShareholder Associated Person, if any, (3) with respect to the foregoingclauses (1) and (2), the date such shares were acquired and the investmentintent of such acquisition and (4) all information relating to such shareholderand Shareholder Associated Person that is required to be disclosed inconnection with the solicitation of proxies for election of Trustees in anelection contest (even if an election contest is not involved), or is otherwiserequired, in each case, pursuant to Section 14 (or any successor provision) ofthe Exchange Act and the rules and regulations promulgated thereunder;

 

(D)                               as to theshareholder giving the notice and any Shareholder Associated Person, (1) thename and address of such shareholder, as they appear on the Trust’s shareledger and the current name and address, if different, of such shareholder andShareholder Associated Person and (2) the investment strategy or objective, ifany, of such shareholder or Shareholder Associated Person and a copy of theprospectus, offering memorandum or similar document, if any, provided toinvestors or potential investors in such shareholder or Shareholder AssociatedPerson;

 

(E)                                 as to theshareholder giving the notice and any Shareholder Associated Person, (1) adescription of all purchases and sales of securities of the Trust by suchshareholder or Shareholder Associated Person during the previous 24 monthperiod, including the date of the transactions, the class, series and number ofsecurities involved in the transactions and the consideration involved, (2) adescription of all Derivative Transactions by such shareholder or ShareholderAssociated Person during the previous 24 month period, including the date ofthe transactions and the class, series and number of securities involved in,and the material economic terms of, the transactions, such description toinclude, without limitation, all information that such shareholder orShareholder Associated Person would be required to report on an Insider Reportif such shareholder or Shareholder Associated Person were a Trustee of theTrust or the beneficial owner of more than 10% of the shares of the Trust atthe time of the transactions, (3) any performance 

 

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relatedfees (other than an asset based fee) that such shareholder or ShareholderAssociated Person is entitled to based on any increase or decrease in the valueof shares of the Trust or instrument or arrangement of the type contemplatedwithin the definition of Derivative Transaction, if any, as of the date of suchnotice, including, without limitation, any such interests held by members ofsuch shareholder’s or Shareholder Associated Person ‘s immediate family sharingthe same household with such shareholder or Shareholder Associated Person, (4) anyproportionate interest in shares of the Trust or instrument or arrangement ofthe type contemplated within the definition of Derivative Transaction held,directly or indirectly, by a general or limited partnership in which suchshareholder or Shareholder Associated Person is a general partner or, directlyor indirectly, beneficially owns an interest in a general partner and (5) anyrights to dividends on the shares of the Trust owned beneficially by suchshareholder or Shareholder Associated Person that are separated or separablefrom the underlying shares of the Trust;

 

(F)                                 to theextent known by the shareholder giving the notice, the name and address of anyother person who owns, beneficially or of record, any shares of beneficialinterest of the Trust and who supports the nominee for election or reelectionas a Trustee or the proposal of other business; and

 

(G)                                if more thanone class or series of beneficial interest in the Trust is outstanding, theclass and series of beneficial interest of the Trust entitled to vote for suchProposed Nominee and/or shareholder’s proposal, as applicable.

 

(c)           Notwithstanding anything in thesecond sentence of Section 2.14.1(b) to the contrary, in the event thatthe number of Trustees to be elected to the Board of Trustees is increased andthere is no public announcement of such action at least 130 days prior to thefirst anniversary of the date of the proxy statement for the preceding year’sannual meeting, a shareholder’s notice required by this Section 2.14.1 alsoshall be considered timely, but only with respect to nominees for any newpositions created by such increase, if the notice is delivered to the secretaryat 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.

 

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(d)           For purposes of this Section 2.14,(i) “Shareholder Associated Person” of any shareholder shall mean (A) anyperson acting in concert with, such shareholder, (B) any direct orindirect beneficial owner of shares of beneficial interest of the Trust ownedof record or beneficially by such shareholder and (C) any personcontrolling, controlled by or under common control with such shareholder or aShareholder 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) “DerivativeTransaction” by a person shall mean any (A) transaction in, or arrangement,agreement or understanding with respect to, any option, warrant, convertiblesecurity, stock appreciation right or similar right with an exercise,conversion or exchange privilege, or settlement payment or mechanism relatedto, any security of the Trust, or similar instrument with a value derived inwhole or in part from the value of a security of the Trust, in any such casewhether or not it is subject to settlement in a security of the Trust orotherwise or (B) any transaction, arrangement, agreement or understanding whichincluded or includes an opportunity for such person, directly or indirectly, toprofit or share in any profit derived from any increase or decrease in thevalue of any security of the Trust, to mitigate any loss or manage any riskassociated with any increase or decrease in the value of any security of theTrust or to increase or decrease the number of securities of the Trust whichsuch person was, is or will be entitled to vote, in any such case whether ornot it is subject to settlement in a security of the Trust or otherwise; and (iv)“Insider Report” shall mean a statement required to be filed pursuant to Section16 of the Exchange Act (or any successor provisions) by a person who is aTrustee of the Trust or who is directly or indirectly the beneficial owner ofmore than 10% of the shares of the Trust.

 

Section 2.14.2.          ShareholderNominations or Other Proposals Causing Covenant Breaches or Defaults.  At the same time as the submission of anyshareholder nomination or proposal of other business to be considered at ashareholders meeting that, if approved and implemented by the Trust, wouldcause the Trust or any subsidiary (as defined in Section 2.14.5(c)) of theTrust to be in breach of any covenant of the Trust or any subsidiary of theTrust or otherwise cause a default (in any case, with or without notice orlapse of time) in any existing debt instrument or agreement of the Trust or anysubsidiary of the Trust or other material contract or agreement of the Trust orany subsidiary of the Trust, the proponent shareholder or shareholders shallsubmit to the secretary at the principal executive offices of the Trust (a) evidencesatisfactory to the Board of Trustees of the lender’s or contracting party’swillingness to waive the breach of covenant or default or (b) a detailed planfor repayment of the indebtedness to the lender or curing the contractualbreach or default and satisfying any resulting damage claim, specificallyidentifying the actions to be taken or the source of funds, which plan must besatisfactory to the Board of Trustees in its discretion, and evidence of theavailability to the Trust of substitute credit or contractual arrangementssimilar to the credit or contractual arrangements which are implicated by theshareholder nomination or other proposal that are at least as favorable to theTrust, as determined by 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 is party to a bankcredit facility that contains covenants which prohibit certain changes in 

 

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the management andpolicies of the Trust without the approval of the lenders; accordingly, ashareholder nomination or proposal which implicates these covenants shall beaccompanied by a waiver of these covenants duly executed by the banks or byevidence satisfactory to the Board of Trustees of the availability of fundingto the Trust to repay outstanding indebtedness under this credit facility andof the availability of a new credit facility on terms as favorable to the Trustas the existing 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 shareholder, any Proposed Nominee AssociatedPerson of such Proposed Nominee, any Shareholder Associated Person of suchshareholder, or their respective affiliates or associates would requireGovernmental Action, then, at the same time as the submission of anyshareholder nomination or proposal of other business to be considered at ashareholders meeting, the proponent shareholder or shareholders shall submit tothe secretary at the principal executive offices of the Trust (x) evidencesatisfactory to the Board of Trustees that any and all Governmental Action hasbeen given or obtained, including, without limitation, such evidence as theBoard of Trustees may require so that any nominee may be determined to satisfyany suitability or other requirements or (y) if such evidence was not obtainablefrom a governmental or regulatory body by such time despite the shareholder’sdiligent and best efforts, a detailed plan for making or obtaining theGovernmental Action prior to the election of any such Proposed Nominee or theimplementation of such proposal, which plan must be satisfactory to the Boardof Trustees in its discretion.  As anexample and not as a limitation, at the time these Bylaws are being amended andrestated, the Trust holds a controlling ownership position in a company beingformed 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 its voting securities.  Accordingly, ashareholder who seeks to exercise proxies for a nomination or a proposalaffecting the governance of the Trust shall obtain any applicable approvalsfrom the Indiana insurance regulatory authorities prior to exercising suchproxies.  Similarly, as a further exampleand not as a limitation, at the time these Bylaws are being amended and restated,the Trust owns healthcare facilities in various states; such facilities aregoverned by and subject to the regulatory and licensing requirements of thestate in which such facility is located. The licensing terms or regulatory regime of certain states withjurisdiction over the Trust may require that certain consents or approvals beobtained prior to the Trust considering or implementing certain actions,including potentially requiring that a Proposed Nominee obtain regulatoryapproval or consent prior to being nominated for or elected as a Trustee.  Accordingly, a shareholder nomination or shareholderproposal that, if approved, would require the Trust to obtain the consent orapproval of a state authority due to the fact that the Trust owns licensedhealthcare facilities in such state, shall be accompanied by evidence that theshareholder or

 

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Proposed Nominee has either secured the requiredapprovals or consents from all applicable state regulatory authorities or ifsuch required approvals have not been obtained, then the shareholder nominationor other proposal shall be accompanied by a copy of any applications or formsrequired to be completed by the Proposed Nominee or shareholder as submitted orto be submitted to the applicable state authorities so that the Board ofTrustees may determine the likelihood that the shareholder or the ProposedNominee, as applicable, will receive any such required approval.

 

Section 2.14.4.          Special Meetings of Shareholders.  As set forth in Section 2.6, onlybusiness brought before the meeting pursuant to the Trust’s notice of meetingshall be conducted at a special meeting of shareholders.  Nominations of individuals for election tothe Board of Trustees only may be made at a special meeting of shareholders atwhich Trustees are to be elected: (a) pursuant to the Trust’s notice ofmeeting; (b) otherwise properly brought before the meeting by or at thedirection 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 2.14.4 through andincluding the time of the special meeting, who is entitled to vote at themeeting on such election and who has complied with the notice procedures andother 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 timelynotice thereof in writing to the secretary of the Trust at the principalexecutive offices of the Trust.  To betimely, a shareholder’s notice shall be delivered to the secretary of the Trustat the principal executive offices of the Trust not earlier than the 150th dayprior to such special meeting and not later than 5:00 p.m. (Eastern Time)on the later of (i) the 120th day prior to such special meeting or (ii) the10th day following the day on which public announcement is first made of thedate of the special meeting and of the nominees proposed by the Trustees to beelected at such meeting.  Neither thepostponement or adjournment of a special meeting, nor the public announcementof such postponement or adjournment, shall commence a new time period for thegiving of a shareholder’s notice as described above.

 

Section 2.14.5.          General.

 

(a)           If information submitted pursuant tothis Section 2.14 by any shareholder proposing a nominee for election as aTrustee or any proposal for other business at a meeting of shareholders shallbe deemed by the Board of Trustees incomplete or inaccurate, any authorizedofficer or the Board of Trustees or any committee thereof may treat suchinformation as not having been provided in accordance with this Section 2.14.  Any notice submitted by a shareholderpursuant to this Section 2.14 that is deemed by the Board of Trusteesinaccurate, incomplete or otherwise fails to satisfy completely any provisionof this Section 2.14 shall be deemed defective and shall thereby renderall proposals and nominations set forth in such notice defective.  Upon written request by the

 

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secretary of the Trust or the Boardof Trustees or any committee thereof (which may be made from time to time), anyshareholder proposing a nominee for election as a Trustee or any proposal forother business at a meeting of shareholders shall provide, within threebusiness days after such request (or such other period as may be specified insuch request), (i) written verification, satisfactory to the secretary orany other authorized officer or the Board of Trustees or any committee thereof,in his, her or its discretion, to demonstrate the accuracy of any informationsubmitted by the shareholder pursuant to this Section 2.14, (ii) writtenresponses to information reasonably requested by the secretary, the Board ofTrustees or any committee thereof and (iii) a written update, to a currentdate, of any information submitted by the shareholder pursuant to this Section 2.14as of an earlier date.  If a shareholderfails to provide such written verification, information or update within suchperiod, the secretary or any other authorized officer or the Board of Trusteesmay treat the information which was previously provided and to which theverification, request or update relates as not having been provided inaccordance with this Section 2.14; provided, however, that no such writtenverification, response or update shall cure any incompleteness, inaccuracy orfailure in any notice provided by a shareholder pursuant to this Section 2.14.  It is the responsibility of a shareholder whowishes to make a nomination or other proposal to comply with the requirementsof Section 2.14; nothing in this Section 2.14.5(a) or otherwise shallcreate any duty of the Trust, the Board of Trustees or any committee thereofnor any officer of the Trust to inform a shareholder that the informationsubmitted pursuant to this Section 2.14 by or on behalf of suchshareholder is incomplete or inaccurate or not otherwise in accordance withthis Section 2.14 nor require the Trust, the Board of Trustees, anycommittee 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)           Only such individuals who arenominated in accordance with this Section 2.14 shall be eligible forelection by shareholders as Trustees and only such business shall be conductedat a meeting of shareholders as shall have been properly brought before themeeting 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 anyproposed nomination or other business is determined not to be in compliancewith this Section 2.14, to declare that such defective nomination orproposal be disregarded.

 

(c)           For purposes of this Section 2.14:(i) “public announcement” shall mean disclosure in (A) a pressrelease reported by the Dow Jones News Service, Associated Press, BusinessWire, PR Newswire or any other widely circulated news or wire service or (B) adocument publicly filed by the Trust with the S.E.C. pursuant to the ExchangeAct; and (ii) “subsidiary” shall include, with respect to a person, anycorporation, partnership, joint venture or other entity of which such person (A) owns,directly or indirectly, 10% or more of the outstanding voting securities orother interests or (B) has a person designated by such person serving on,or a right, contractual or otherwise, to designate a person, so to serve on,the board of directors (or analogous governing body).

 

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(d)           Notwithstanding the foregoingprovisions of this Section 2.14, a shareholder shall also comply with allapplicable legal requirements, including, without limitation, applicablerequirements 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)           The Board of Trustees may from timeto time require any individual nominated to serve as a Trustee to agree inwriting with regard to matters of business ethics and confidentiality whilesuch nominee serves as a Trustee, such agreement to be on the terms and in aform (the “Agreement”) determined satisfactory by the Board of Trustees, asamended and supplemented from time to time in the discretion of the Board ofTrustees.  The terms of the Agreement maybe substantially similar to the Code of Business Conduct and Ethics of theTrust or any similar code promulgated by the Trust (the “Code of BusinessConduct”) or may differ from or supplement the Code of Business Conduct.

 

(f)            Determinations required or permittedto be made under this Section 2.14 by the Board of Trustees may bedelegated by the Board of Trustees to a committee of the Board of 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.

 

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**ARTICLE III**

** **

**TRUSTEES**

** **

Section 3.1.            General Powers; Qualifications;Trustees Holding Over.  The businessand affairs of the Trust shall be managed under the direction of its Board ofTrustees.  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 ofa felony and (c) meet the qualifications of an Independent Trustee or aManaging Trustee, each as defined in Section 3.2, as the case may be, dependingupon the position 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 majority of the Trusteesholding office shall at all times be Independent Trustees; provided, however,that upon a failure to comply with this requirement as a result of the creationof a temporary vacancy which shall be filled by an Independent Trustee, whetheras a result of enlargement of the Board of Trustees or the resignation, removalor death of a Trustee who is an Independent Trustee, such requirement shall notbe applicable.  An “Independent Trustee”is one who is not an employee of the Advisor (as defined in the Declaration ofTrust), who is not involved in the Trust’s day to day activities, who meets thequalifications of an independent trustee under the Declaration of Trust and whomeets the qualifications of an independent director (not including the specificindependence requirements applicable only to members of the Audit Committee ofthe Board of Trustees) under the applicable rules of each stock exchange uponwhich shares of the Trust are listed for trading and the S.E.C., as thoserequirements may be amended from time to time. If the number of Trustees, at any time, is set at less than five, atleast one Trustee shall be a Managing Trustee. So long as the number of Trustees shall be five or greater, at least twoTrustees shall be Managing Trustees.  “ManagingTrustees” shall mean Trustees who are not Independent Trustees and who havebeen employees of the Advisor or involved in the day to day activities of theTrust for at least one year prior to their election.  If at any time the Board of Trustees shallnot be comprised of a majority of Independent Trustees, the Board of Trustees shalltake such actions as will cure such condition; provided that the fact that theBoard of Trustees does not have a majority of Independent Trustees or has nottaken such action at any time or from time to time shall not affect thevalidity of any action taken by the Board of Trustees.  If at any time the Board of Trustees shallnot be comprised of a number of Managing Trustees as is required under this Section3.2, 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 the requisitenumber of Managing Trustees or has not taken such action at any time or fromtime to time shall not affect the validity of any action taken by the Board ofTrustees.

 

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 Boardof Trustees may be increased or decreased from time to time only by a vote ofthe Trustees; provided however that the tenure of office of a 

 

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Trustee shall not be affected by any decrease in thenumber of Trustees.  The number ofTrustees shall be five until increased or decreased by the Board of Trustees.

 

The Board of Trustees shall be classified into threegroups: Group I, Group II and Group III. A majority of the entire Board of Trustees shall designate the Group ofwhich 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.

 

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 theDeclaration of Trust or these Bylaws, the vote of a majority of a particulargroup of Trustees is required for action, a quorum for that action shall alsoinclude a majority of such group.  TheTrustees present at a meeting of the Board of Trustees which has been dulycalled and convened and at which a quorum was established may continue totransact business until adjournment,

 

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notwithstanding the withdrawal of a number of Trusteesresulting 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 themajority of that number of Trustees necessary to constitute a quorum at suchmeeting shall be the action of the Board of Trustees, unless the concurrence ofa greater 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 all personsparticipating 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.  Unless specificallyotherwise provided in the Declaration of Trust, any action required orpermitted to be taken at any meeting of the Trustees may be taken without ameeting, if a majority of the Trustees shall individually or collectivelyconsent in writing to such action.  Suchwritten consent or consents shall be filed with 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 anyor all the Trustees cease to be Trustees, such event shall not terminate theTrust or affect these Bylaws or the powers of the remaining Trustees hereunder(even if 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 

 

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other capacity, and such services may include, withoutlimitation, services as an officer of the Trust, services as an employee of theAdvisor, legal, accounting or other professional services, or services as abroker, transfer agent or underwriter, whether performed by a Trustee or anyperson 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, includingany financial statement or other financial data, prepared or presented by anofficer or employee of the Trust or by the Advisor, accountants, appraisers orother experts or consultants selected by the Board of Trustees or officers ofthe Trust, regardless of whether such counsel or expert may also be a Trustee.

 

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.  ATrustee shall have no responsibility to devote his or her full time to theaffairs of the Trust.  Any Trustee orofficer, employee or agent of the Trust, in his or her personal capacity or ina capacity as an affiliate, employee or agent of any other person, orotherwise, may have business interests and engage in business activitiessimilar or in addition to those of or 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 duringthe existence of any catastrophe, or other similar emergency condition, as aresult of which a quorum of the Board of Trustees under ARTICLE III cannotreadily be obtained (an “Emergency”). During any Emergency, unless otherwise provided by the Board ofTrustees, (a) a meeting of the Board of Trustees may be called by anyManaging Trustee or officer of the Trust by any means feasible under thecircumstances and (b) notice of any meeting of the Board of Trusteesduring such an Emergency may be given less than 24 hours prior to the meetingto as many Trustees and by such means as it may be feasible at the time,including publication, television or radio.

 

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**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 composedsolely of Trustees, except as prohibited by law.  In the event that a charter has been adoptedwith respect to a committee composed solely of Trustees, the charter shallconstitute a delegation by the Trustees of the powers of the Board of Trusteesnecessary to carry out the purposes, responsibilities and duties of a committeeprovided in the charter or reasonably related to those purposes,responsibilities and duties, to the extent permitted by law.

 

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 than one,of the members of any committee shall be present in person at any meeting of acommittee in order to constitute a quorum for the transaction of business at ameeting, and the act of a majority present at a meeting at the time of a voteif 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.

 

Eachcommittee shall keep minutes of its proceedings and shall periodically reportits activities to the full Board of Trustees and, except as otherwise providedby law or under the rules of the S.E.C. and applicable stock exchanges onwhich the Trust’s shares are listed, any action by any committee shall besubject to revision and alteration by the Board of Trustees, provided that norights of third persons shall be affected by any such 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.

 

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Section 4.5.            Action by Written Consent ofCommittees.  Any action required orpermitted to be taken at any meeting of a committee of the Trustees may betaken without a meeting, if a consent in writing to such action is signed by amajority of the committee and such written consent is filed with the minutes ofproceedings 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 qualifies or until his or herdeath, 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 

 

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and vice chairman of the board, the chief executiveofficer shall preside over the meetings of the Board of Trustees at which heshall be present.  In the absence of adifferent designation, the Managing Trustees, or any of them, shall function asthe chief executive 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 executive officeror the Trustees.

 

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) keepthe minutes of the proceedings of the shareholders, the Trustees and committeesof 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 ofthe seal of the Trust, if any; (d) maintain a share register, showing theownership and transfers of ownership of all shares of the Trust, unless atransfer agent is employed to maintain and does maintain such a share register;and (e) in general perform such other duties as from time to time may beassigned to the secretary 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 

 

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shall also have such other responsibilities as may beassigned to him or her by the chief executive officer or the Trustees.

 

Section 5.12.          Assistant Secretaries and AssistantTreasurers.  The assistantsecretaries and assistant treasurers, in general, shall perform such duties asshall be assigned to them by the secretary or treasurer, respectively, or bythe chief executive officer or the Trustees.

 

**ARTICLE VI**

** **

**CONTRACTS, LOANS, CHECKS AND DEPOSITS**

 

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.

 

**ARTICLE VII**

 

**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)           Shares of the Trust shall betransferable in the manner provided by applicable law, the Declaration of Trustand these Bylaws.  Certificates shall betreated as 

 

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negotiable and title thereto and tothe shares they represent shall be transferred by delivery thereof to the sameextent as those of a Maryland stock corporation.

 

(b)           The Trust shall be entitled to treatthe holder of record of any share or shares as the holder in fact thereof and,accordingly, shall not be bound to recognize any equitable or other claim to orinterest in such share or shares on the part of any other person, whether ornot it shall have express or other notice thereof, except as otherwise providedin these Bylaws or by the laws of the State 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)           The Trustees may set, in advance, arecord date for the purpose of determining shareholders entitled to notice ofor to vote at any meeting of shareholders or determining shareholders entitledto receive payment of any dividend or the allotment of any other rights, or inorder to make a determination of shareholders for any other proper purpose.

 

(b)           In lieu of fixing a record date, the Trustees may providethat the share transfer books shall be closed for a stated period but notlonger than 20 days.  If the sharetransfer books are closed for the purpose of determining shareholders entitledto notice of or to vote at a meeting of shareholders, such books shall beclosed for at least 10 days before the date of such meeting.

 

(c)           If no record date is fixed and the share transfer books arenot closed for the determination of shareholders, (i) therecord date for the determination of shareholders entitled to notice of or tovote at a meeting of shareholders shall be at the close of business on the dayon which the notice of meeting is mailed or the 30th day before the meeting,whichever is the closer date to the meeting; and (ii) the record date forthe determination of shareholders entitled to receive payment of a dividend oran allotment of any other rights shall be the close of business on the day onwhich the resolution of the Trustees, declaring the dividend or allotment ofrights, is adopted.

 

(d)           When a determination of shareholdersentitled to vote at any meeting of shareholders has been made as provided inthis section, such determination shall apply to any adjournment thereof unlessthe Board of Trustees shall set a new record date with respect thereto.

 

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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 ofUnits.  The Trustees may issuefractional shares or provide for the issuance of scrip, all on such terms andunder such conditions as they may determine. Notwithstanding any other provision of the Declaration of Trust or theseBylaws, the Trustees may issue units consisting of different securities of theTrust.  Any security issued in a unitshall have the same characteristics as any identical securities issued by theTrust, except that the Trustees may provide that for a specified periodsecurities of the Trust issued in such unit may be transferred on the books ofthe Trust only in such unit.

 

**ARTICLE VIII**

** **

**REGULATORY COMPLIANCE AND DISCLOSURE**

** **

Section 8.1.            Actions Requiring RegulatoryCompliance Implicating the Trust.  Ifany shareholder (whether individually or constituting a group, as determined bythe Board of Trustees), by virtue of such shareholder’s ownership interest inthe Trust or actions taken by the shareholder affecting the Trust, triggers theapplication of any requirement or regulation of any federal, state, municipalor other governmental or regulatory body on the Trust or any subsidiary (forpurposes of this ARTICLE VIII, as defined in Section 2.14.5(c)) of theTrust or any of their respective businesses, assets or operations, including,without limitation, any obligations to make or obtain a Governmental Action (asdefined in Section 2.14.3), such shareholder shall promptly take allactions necessary and fully cooperate with the Trust to ensure that suchrequirements or regulations are satisfied without restricting, imposingadditional obligations on or in any way limiting the business, assets,operations or prospects of the Trust or any subsidiary of the Trust.  If the shareholder fails or is otherwiseunable to promptly take such actions so to cause satisfaction of suchrequirements or regulations, the shareholder shall promptly divest a sufficientnumber of shares of the Trust necessary to cause the application of suchrequirement or regulation to not apply to the Trust or any subsidiary of theTrust.  If the shareholder fails to causesuch satisfaction or divest itself of such sufficient number of shares of theTrust by not later than the 10th day after triggering such requirement orregulation referred to in this Section 8.1, then any shares of the Trustbeneficially owned by such shareholder at and in excess of the level triggeringthe application 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 Trustand be subject to the provisions of Article VII of the Declaration ofTrust and any actions triggering the application of such a requirement orregulation may be deemed 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 expensesas well as any damages which may result to the Trust.

 

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As an example and not asa limitation, at the time these Bylaws are being amended and restated, theTrust holds a controlling ownership position in a company being formed andlicensed 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.

 

As a further example andnot as a limitation, at the time these Bylaws are being amended and restated,the Trust owns healthcare facilities in various states which are subject tostate regulatory and licensing requirements in each such state.  Under the licensing terms or regulatoryregime of certain states with jurisdiction over the Trust, a shareholder whichacquires a controlling equity position in the Trust may be required to obtainregulatory approval or consent prior to or as a result of obtaining suchownership.  Accordingly, if a shareholderwhich acquires a controlling equity position in the Trust that would requirethe shareholder or the Trust to obtain the consent or approval of a stateauthority due to the fact that the Trust owns licensed healthcare facilities insuch state, and the shareholder refuses to provide the Trust with informationrequired to be submitted to the applicable state authority or if the stateauthority declines to approve the shareholder’s ownership of the Trust, then,in either event, shares of the Trust owned by the shareholder necessary toreduce its ownership to an amount so that the shareholder’s ownership of Trustshares would not require it to provide any such information to, or for consentto be obtained from, the state authority, may be deemed by the Board ofTrustees to be shares held in violation of the ownership limitation in Article VIIof the Declaration of Trust and shall be subject to the provisions of Article VIIof the Declaration of Trust.

 

Section 8.2.            Compliance With Law.  Shareholders shall comply with all applicablerequirements of federal and state laws, including all rules andregulations promulgated thereunder, in connection with such shareholder’sownership interest in the Trust and all other laws which apply to the Trust orany subsidiary of the Trust or their respective businesses, assets or operationsand which require action or inaction on the part of the shareholder.

 

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.

 

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Section 8.4.            Representations, Warranties andCovenants Made to Governmental or Regulatory Bodies.  To the fullest extent permitted by law, anyrepresentation, 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 be simultaneouslymade to, for the benefit of and enforceable by, the Trust and any applicablesubsidiary of the Trust.

 

Section 8.5.            Board of Trustees’ Determinations.  The Board of Trustees shall be empowered tomake all determinations regarding the interpretation, application, enforcementand compliance with any matters referred to or contemplated by this ARTICLEVIII.

 

**ARTICLE IX**

** **

**FISCAL YEAR**

** **

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.

 

**ARTICLE XI**

** **

**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 placethe word “(SEAL)” adjacent to the signature of the person authorized to executethe document on behalf of the Trust.

 

**ARTICLE XII**

** **

**WAIVER OF 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 

 

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person or persons entitled to such notice, whetherbefore or after the time stated therein, shall be deemed equivalent to thegiving of such notice.  Neither thebusiness to be transacted at nor the purpose of any meeting need be set forthin the waiver of notice or waiver by electronic transmission, unlessspecifically required by statute.  Theattendance of any person at any meeting shall constitute a waiver of notice ofsuch meeting, except where such person attends a meeting for the expresspurpose of objecting to the transaction of any business on the ground that themeeting is not lawfully called or convened.

 

**ARTICLE XIII**

** **

**AMENDMENT OF 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.

 

**ARTICLE XIV**

** **

**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, expenses, penalties, fines and other amounts, including,without limitation, attorneys’ and other professional fees, whether third partyor internal, arising from such shareholder’s violation of any provision of theDeclaration of Trust or these Bylaws pursuant to Section 8.7 of theDeclaration of Trust, to the fullest extent permitted by law, each shareholderwill 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 or failure to fully comply with any covenant, conditionor provision of these Bylaws or the Declaration of Trust (including Section 2.14of these Bylaws) or any action by or against the Trust (or any subsidiaries oraffiliates thereof) in which such shareholder is not the prevailing party, andshall pay such amounts to such indemnitee on demand, together with interest onsuch amounts, which interest will accrue at the lesser of the Trust’s highestmarginal borrowing rate, per annum compounded, and the maximum amount permittedby law, from the date such costs or the like are incurred until the receipt ofpayment.

 

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 

 

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proceeding on the ground of lack of authority,defective or irregular execution, adverse interest of a Trustee, officer orshareholder, non-disclosure, miscomputation, the application of improperprinciples or practices of accounting, or otherwise, may be ratified, before orafter judgment, by the Board of Trustees or by the shareholders and, if soratified, shall have the same force and effect as if the questioned action orinaction had been originally duly authorized, and such ratification shall bebinding upon the Trust and its shareholders and shall constitute a bar to anyclaim or execution of any judgment in respect of such questioned action orinaction.

 

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.  Notwithstandingany other provision contained in the Declaration of Trust or these Bylaws, theTrust hereby elects to be subject to Section 3-804(b) and (c) ofTitle 3, Subtitle 8 of the Maryland General Corporation Law (or any successorstatute).  This Section 14.6 onlymay be repealed, in whole or in part, by a subsequent amendment to theseBylaws.

 

Section 14.7.          Special Voting Provisions relatingto Control Shares.  Notwithstandingany other provision contained herein or in the Declaration of Trust or theseBylaws, Title 3, Subtitle 7 of the Maryland General Corporation Law (or any successorstatute) shall not apply to any acquisition by any person of shares ofbeneficial interest of the Trust.  Thissection may be repealed, in whole or in part, at any time, whether before orafter an acquisition of control shares and, upon such repeal, may, to theextent provided by any successor bylaw, apply to any prior or subsequentcontrol share acquisition.

 

**ARTICLE XV**

** **

**ARBITRATION**

** **

Section 15.1.          Procedures for Arbitration ofDisputes.  Any disputes, claims orcontroversies brought by or on behalf of any shareholder of the Trust (which,for purposes of this ARTICLE XV, shall mean any shareholder of record or anybeneficial owner of shares of the Trust, or any former shareholder of record orbeneficial owner of shares of the Trust), either on his, her or its own behalf,on behalf of the Trust or on behalf of any series or class of shares of theTrust or shareholders of the Trust against the Trust or any Trustee, officer,manager (including Reit Management & Research LLC or its successor),agent or employee of the Trust, including disputes, claims or controversiesrelating to the meaning, interpretation, effect, validity, performance orenforcement of the Declaration of Trust or these Bylaws (all of which 

 

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are referred to as “Disputes”) or relating in any wayto such a Dispute or Disputes shall, on the demand of any party to suchDispute, be resolved through binding and final arbitration in accordance withthe Commercial Arbitration Rules (the “Rules”) of the American ArbitrationAssociation (“AAA”) then in effect, except as those Rules may be modifiedin this ARTICLE XV.  For the avoidance ofdoubt, and not as a limitation, Disputes are intended to include derivativeactions against Trustees, officers or managers of the Trust and class actions byshareholders against those individuals or entities and the Trust.  For the avoidance of doubt, a Dispute shallinclude a Dispute made derivatively on behalf of one party against anotherparty.

 

Section 15.2.          Arbitrators.  There shall be three arbitrators.  If there are only two parties to the Dispute,each party shall select one arbitrator within 15 days after receipt byrespondent 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, onearbitrator. Such arbitrators may be affiliated or interested persons of theclaimants or the respondents, as the case may be.  If either all claimants or all respondentsfail to timely select an arbitrator then such arbitrator (who shall be neutral,impartial and unaffiliated with any party) shall be appointed by the AAA.  The two arbitrators so appointed shalljointly appoint the third and presiding arbitrator (who shall be neutral,impartial and unaffiliated with any party) within 15 days of the appointment ofthe second arbitrator.  If the thirdarbitrator has not been appointed within the time limit specified herein, thenthe AAA shall provide a list of proposed arbitrators in accordance with theRules, and the arbitrator shall be appointed by the AAA in accordance with alisting, striking and ranking procedure, with each party having a limitednumber of strikes, excluding strikes for cause.

 

Section 15.3.          Place of Arbitration.  Theplace of arbitration shall be Boston, Massachusetts unless otherwise agreed bythe parties.

 

Section 15.4.          Discovery.  There shall be only limited documentarydiscovery of documents directly related to the issues in dispute, as may beordered by the arbitrators.

 

Section 15.5.          Awards.  In rendering an award or decision (the “Award”),the arbitrators shall be required to follow the laws of the State ofMaryland.  Any arbitration proceedings orAward rendered hereunder and the validity, effect and interpretation of thisarbitration agreement shall be governed by the Federal Arbitration Act, 9U.S.C. §1 et seq.  The Award shall be inwriting and may, but shall not be required to, briefly state the findings offact and conclusions of law on which it is based.  Any monetary award shall be made and payablein U.S. dollars free of any tax, deduction or offset.  The party against which the Award assesses amonetary obligation shall pay that obligation on or before the 30th dayfollowing the date of the Award or such other date as the Award may provide.

 

Section 15.6.          Costs and Expenses.  Exceptas otherwise set forth in the Declaration of Trust or these Bylaws, including Section 14.2of these Bylaws, or as otherwise agreed between the parties, each partyinvolved in a Dispute shall bear its own costs and 

 

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expenses (including attorneys’ fees), and thearbitrators shall not render an award that would include shifting of any suchcosts or expenses (including attorneys’ fees) or, in a derivative case or classaction, award any portion of the Trust’s award to the claimant or the claimant’sattorneys.  Each party (or, if there aremore than two parties to the Dispute, all claimants, on the one hand, and allrespondents, on the other hand, respectively) shall bear the costs and expensesof its (or their) selected arbitrator and the parties (or, if there are morethan two parties to the Dispute, all claimants, on the one hand, and allrespondents, on the other hand) shall equally bear the costs and expenses ofthe third appointed arbitrator.

 

Section 15.7.          Final and Binding.  An Award shall be final and binding upon theparties thereto and shall be the sole and exclusive remedy between such partiesrelating to the Dispute, including any claims, counterclaims, issues oraccounting presented to the arbitrators. Judgment upon the Award may be entered in any court havingjurisdiction.  To the fullest extentpermitted by law, no application or appeal to any court of competentjurisdiction may be made in connection with any question of law arising in thecourse of arbitration or with respect to any award made except for actionsrelating to enforcement of this agreement to arbitrate or any arbitral awardissued hereunder and except for actions seeking interim or other provisionalrelief in aid of arbitration proceedings in any court of competentjurisdiction.

 

Section 15.8.          Beneficiaries.  This ARTICLE XV is intended to benefit and beenforceable by the shareholders, Trustees, officers, managers (including ReitManagement & Research LLC or its successor), agents or employees ofthe Trust and the Trust and shall be binding on the shareholders of the Trustand the Trust, as applicable, and shall be in addition to, and not insubstitution for, any other rights to indemnification or contribution that suchindividuals or entities may have by contract or otherwise.

 

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