**Exhibit 3.1**

 

 

SENIORHOUSING PROPERTIES TRUST

 

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AMENDEDAND RESTATED BYLAWS

 

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AsAmended and Restated November 5, 2008

 

 

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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................................................................................................................................... | 11 |
| Section 2.14.4.                                                                                                                                                                            |   | Special Meetings of Shareholders................................................................................................................ | 12 |
| Section 2.14.5.                                                                                                                                                                            |   | General......................................................................................................................................................... | 13 |
| Section 2.15.                                                                                                                                                                              |   | No Shareholder Actions by Written Consent............................................................................................... | 15 |
| Section 2.16.                                                                                                                                                                              |   | Voting by Ballot........................................................................................................................................... | 15 |
| Section 2.17.                                                                                                                                                                              |   | Proposals of Business Which Are Not Proper Matters  For   Action By Shareholders............................................................................................................................... | 15 |
|                                                                                                                                                                                            |   |   |   |
| ARTICLE III TRUSTEES........................................................................................................................................................................    | 15     |
| Section 3.1.                                                                                                                                                                               |   | General Powers; Qualifications; Trustees Holding  Over............................................................................. | 15 |
| Section 3.2.                                                                                                                                                                               |   | Independent Trustees and Managing Trustees............................................................................................. | 15 |
| Section 3.3.                                                                                                                                                                               |   | Number and Tenure...................................................................................................................................... | 16 |
| Section 3.4.                                                                                                                                                                               |   | Annual and Regular Meetings...................................................................................................................... | 16 |
| Section 3.5.                                                                                                                                                                               |   | Special Meetings.......................................................................................................................................... | 16 |
| Section 3.6.                                                                                                                                                                               |   | Notice........................................................................................................................................................... | 17 |
| Section 3.7.                                                                                                                                                                               |   | Quorum......................................................................................................................................................... | 17 |
| Section 3.8.                                                                                                                                                                               |   | Voting........................................................................................................................................................... | 17 |
| Section 3.9.                                                                                                                                                                               |   | Telephone Meetings..................................................................................................................................... | 17 |
| Section 3.10.                                                                                                                                                                              |   | Action by Written Consent of Trustees........................................................................................................ | 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.....................................................................................................................................                                                                     | 18     |
| Section 3.15.                                                                                                                                                                             |   | Surety Bonds................................................................................................................................................                                                                  | 18     |
| Section 3.16.                                                                                                                                                                             |   | Reliance........................................................................................................................................................                                                              | 18     |
| Section 3.17.                                                                                                                                                                             |   | Interested  Trustee Transactions....................................................................................................................                                                                          | 19     |
| Section 3.18.                                                                                                                                                                             |   | Qualifying  Shares Not Required..................................................................................................................                                                                             | 19     |
| Section 3.19.                                                                                                                                                                             |   | Certain Rights  of Trustees, Officers, Employees and Agents.....................................................................                                                                                              | 19     |
| Section 3.20.                                                                                                                                                                             |   | Emergency Provisions..................................................................................................................................                                                                        | 19     |
|                                                                                                                                                                                           |   |                                                                                                                                                                                                                          |   |
| ARTICLE IV  COMMITTEES.................................................................................................................................................................        | 19     |
| Section 4.1.                                                                                                                                                                              |   | Number; Tenure  and Qualifications.............................................................................................................                                                                               | 19     |
| Section 4.2.                                                                                                                                                                              |   | Powers..........................................................................................................................................................                                                              | 19     |
| Section 4.3.                                                                                                                                                                              |   | Meetings.......................................................................................................................................................                                                               | 20     |
| Section 4.4.                                                                                                                                                                              |   | Telephone  Meetings.....................................................................................................................................                                                                      | 20     |
| Section 4.5.                                                                                                                                                                              |   | Action by  Written Consent of Committees..................................................................................................                                                                                    | 20     |
| Section 4.6.                                                                                                                                                                              |   | Vacancies.....................................................................................................................................................                                                                | 20     |
|                                                                                                                                                                                           |   |                                                                                                                                                                                                                          |   |
| ARTICLE V  OFFICERS.........................................................................................................................................................................   | 20     |
| Section 5.1.                                                                                                                                                                              |   | General  Provisions.......................................................................................................................................                                                                    | 20     |
| Section 5.2.                                                                                                                                                                              |   | Removal and  Resignation.............................................................................................................................                                                                         | 21     |
| Section 5.3.                                                                                                                                                                              |   | Vacancies.....................................................................................................................................................                                                                | 21     |
| Section 5.4.                                                                                                                                                                              |   | Chief  Executive Officer...............................................................................................................................                                                                       | 21     |
| Section 5.5.                                                                                                                                                                              |   | Chief  Operating Officer...............................................................................................................................                                                                       | 21     |
| Section 5.6.                                                                                                                                                                              |   | Chief  Financial Officer.................................................................................................................................                                                                     | 21     |
| Section 5.7.                                                                                                                                                                              |   | Chairman and  Vice Chairman of the Board.................................................................................................                                                                                     | 21     |
| Section 5.8.                                                                                                                                                                              |   | President.......................................................................................................................................................                                                              | 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............................................................................................                                                                                   | 22     |
|                                                                                                                                                                                           |   |                                                                                                                                                                                                                          |   |
| ARTICLE VI  CONTRACTS, LOANS, CHECKS AND DEPOSITS.....................................................................................................                                         | 22     |
| Section 6.1.                                                                                                                                                                              |   | Contracts.......................................................................................................................................................                                                              | 22     |
| 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...........................................................................................................................................                                                                 | 23     |
| Section 7.4.                                                                                                                                                                              |   | Closing of  Transfer Books or Fixing of Record Date..................................................................................                                                                                         | 24     |
| Section 7.5.                                                                                                                                                                              |   | Share Ledger................................................................................................................................................                                                                  | 24     |
| Section 7.6.                                                                                                                                                                              |   | Fractional  Shares; Issuance of Units............................................................................................................                                                                             | 24     |
|                                                                                                                                                                                           |   |                                                                                                                                                                                                                          |   |
| ARTICLE VIII  REGULATORY COMPLIANCE AND DISCLOSURE..............................................................................................                                               | 24     |
| Section 8.1.                                                                                                                                                                              |   | Actions Requiring Regulatory  Compliance Implicating the   Trust............................................................................................................................................................. | 24     |
| Section 8.2.                                                                                                                                                                              |   | Compliance With Law.................................................................................................................................                                                                          | 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........................................................................................................... | 26     |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Section 8.5.                                                                                                                                                                                 |   | Board of Trustees’ Determinations..............................................................................................................                                              | 26     |
|                                                                                                                                                                                              |   |                                                                                                                                                                                              |   |
| ARTICLE IX  FISCAL YEAR.................................................................................................................................................................          | 26     |
| Section 9.1.                                                                                                                                                                                 |   | Fiscal Year...................................................................................................................................................                                    | 26     |
|                                                                                                                                                                                              |   |                                                                                                                                                                                              |   |
| ARTICLE X  DIVIDENDS AND OTHER DISTRIBUTIONS...............................................................................................................                                       | 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......................................................................................................................................                           | 27     |
| Section 13.1.                                                                                                                                                                                |   | Amendment of Bylaws................................................................................................................................                                               | 27     |
|                                                                                                                                                                                              |   |                                                                                                                                                                                              |   |
| 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....................................................................................................................................................                                     | 28     |
| Section 14.5.                                                                                                                                                                                |   | Inspection of  Bylaws....................................................................................................................................                                         | 28     |
| 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     |

 

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**SENIORHOUSING PROPERTIES TRUST**AMENDED AND RESTATED BYLAWS

 

**ARTICLE IOFFICES**

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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 IIMEETINGS OF SHAREHOLDERS**

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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 Special Meetings.  Written notice specifying the place, day andhour of any regular or special meeting, the purposes of the meeting, to theextent required by law to be provided, and all other matters required by lawshall be given to each shareholder of record entitled to vote, eitherpersonally or by sending a copy thereof by mail, postage prepaid, to his or heraddress appearing on the books of the Trust or theretofore given by him or herto the Trust for the purpose of notice or, if no address appears or has beengiven, 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,such notice shall be deemed to be given once deposited in the U.S.  mail addressed to the shareholder at his orher 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 Shareholder Meetings.  Every meeting of shareholders shall beconducted by an individual appointed by the Board of Trustees to be chairpersonof the meeting or, in the absence of such appointment or the absence of theappointed individual, by the chairman of the board or, in the case of a vacancyin the office or absence of the chairman of the board, by one of the followingofficers present at the meeting in the following order: the vice chairman ofthe board, if there be one, the president, the vice presidents in their orderof seniority or, in the absence of such officers, a chairperson chosen by theshareholders by the vote of holders of shares of beneficial interestrepresenting a majority of the votes cast on such appointment by shareholderspresent in person or represented by proxy. The secretary, an assistant secretary or a person appointed by theTrustees or, in the absence of such appointment, a person appointed by thechairperson of the meeting shall act as secretary of the meeting and record theminutes of the meeting.  If the secretarypresides as chairperson at a meeting of the shareholders, then the secretaryshall not also act as secretary of 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) noquorum is present for the transaction of the business, (ii) the Board ofTrustees or the chairperson of the meeting determines that adjournment isnecessary or appropriate to enable the shareholders to consider fullyinformation that the Board of Trustees or the chairperson of the meetingdetermines has not been made sufficiently or timely available to shareholdersor (iii) the Board of Trustees or the chairperson of

 

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the meetingdetermines that adjournment is otherwise in the best interests of theTrust.  Unless otherwise determined bythe chairperson of the meeting, meetings of shareholders shall not be requiredto be held in accordance with the general rules of parliamentary procedureor any 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 toset a new record date or provide any additional notice of such meeting, subjectto any obligation of the Trust to give notice pursuant to Section 2.5.  At such adjourned meeting at which a quorumshall be present, any business may be transacted which might have beentransacted at the meeting as originally notified.  The shareholders present, either in person orby proxy, at a meeting of shareholders which has been duly called and convenedand at which a quorum was established may continue to transact business untiladjournment, notwithstanding the withdrawal of enough votes to leave less thana quorum then being present at the meeting.

 

Section 2.9.            Voting.

 

(a)           With regard to election of a Trustee, and except asmay be mandated by applicable law or the listing requirements of the principalexchange on which the Trust’s common shares are listed: (i) a majority ofall the votes cast at a meeting of shareholders duly called and at which aquorum is present shall be sufficient to elect a Trustee in an uncontestedelection; and (ii) a majority of all the shares entitled to vote at ameeting of shareholders duly called and at which a quorum is present shall besufficient to elect a Trustee in a contested election (which, for purposes ofthese Bylaws, is an election at which the number of nominees exceeds the numberof Trustees to be elected at the meeting).  Each share may be votedfor as many individuals as there are Trustees to be elected and for whoseelection the share is entitled to be voted.

 

(b)           With regard to any other matter which may properlycome before a meeting of shareholders duly called and at which a quorum ispresent, and except as may be mandated by applicable law, by the listingrequirements of the principal exchange on which the Trust’s common shares arelisted or by a specific provision of the Declaration of Trust, (i) if suchmatter is approved by at least 75% of the Trustees then in office, including75% of the Independent Trustees then in office, a majority of all the votescast 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 such meeting.  Any proxyrelating to the Trust’s shares of beneficial interest shall be valid until theexpiration date therein or, if no expiration is so indicated, for such periodas is permitted pursuant to Maryland law. At a meeting of shareholders, all questions concerning the qualificationof voters, the validity of proxies, and the acceptance or rejection of votes,shall be decided by 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, thechairperson of the meeting may appoint one or more persons as inspectors for suchmeeting.  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 be in writing andsigned by him or her or by a majority of them if there is more than oneinspector acting at such meeting.  Ifthere is more than one inspector, the report of a majority shall be the reportof the inspectors.  The report of theinspector or inspectors on the number of shares represented at the meeting andthe results of the voting shall be primafacie evidence thereof.

 

Section 2.14.          Nominations and Other Proposals to beConsidered 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, withoutlimitation, judgments and determinations as to the propriety of a proposednomination or a proposal of other business for consideration by

 

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shareholders)shall be final and binding unless determined by a court of competentjurisdiction to have been made in bad faith.

 

Section 2.14.1.          Annual Meetings ofShareholders.

 

(a)           Nominations of individuals for election to the Boardof Trustees and the proposal of other business to be considered by theshareholders at an annual meeting of shareholders may be properly broughtbefore the meeting (i) pursuant to the Trust’s notice of meeting orotherwise properly brought before the meeting by or at the direction of theBoard of Trustees or (ii) by any shareholder of the Trust who (A) isa shareholder of record at the time of giving the notice provided for in this Section 2.14.1through and including the time of the annual meeting (including any adjournmentor postponement thereof), (B) is entitled to make nominations or proposeother business and to vote at the meeting on such election, or the proposal forother business, as the case may be, (C) complies with the noticeprocedures set forth in this Section 2.14 as to such nomination or otherbusiness and (D) has submitted the nomination or proposal of otherbusiness to the Board of Trustees in accordance with the requirements set forthin the Declaration of Trust.  Section 2.14.1(a)(ii) shallbe the exclusive means for a shareholder to make nominations or propose otherbusiness before an annual meeting of shareholders, except to the extent ofmatters which are required to be presented to shareholders by applicable lawwhich have been properly presented in accordance with the requirements of suchlaw.

 

(b)           For nominations for election to the Board of Trusteesor other business to be properly brought before an annual meeting by ashareholder pursuant to Section 2.14.1(a)(ii), the shareholder shall havegiven timely notice thereof in writing to the secretary of the Trust inaccordance with this Section 2.14 and such other business shall otherwisebe a proper matter for action by shareholders. To be timely, a shareholder’s notice shall set forth all informationrequired under this Section 2.14 and shall be delivered to the secretaryat the principal executive offices of the Trust not later than 5:00 p.m.(Eastern Time) on the 120th day nor earlier than the 150th day prior to thefirst anniversary of the date of the proxy statement for the preceding year’sannual meeting ; provided, however, that in the event that the date of theproxy statement for the annual meeting is more than 30 days earlier than thefirst anniversary of the date of the proxy 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, 2008nor earlier than December 1, 2008. Neither the postponement or adjournment of an annual meeting, nor thepublic announcement of such postponement or adjournment, shall commence a newtime period for the giving 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 shareholderholds a certificate for all shares of beneficial interest of the Trust owned bysuch shareholder, and a copy of

 

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each such certificate shall accompanysuch shareholder’s notice to the secretary in order for such notice to be effective.

 

A shareholder’s notice shall set forth:

 

(A)          as to each individual whom theshareholder proposes to nominate for election or reelection as a Trustee (a “ProposedNominee”) and any Proposed Nominee Associated Person (as defined in Section 2.14.1(d)),(1) the name, age, business address and residence address of such ProposedNominee and the name and address of such Proposed Nominee Associated Person, (2) astatement of whether such Proposed Nominee is proposed for nomination as anIndependent Trustee (as defined in Section 3.2) or a Managing Trustee (asdefined in Section 3.2) and a description of such Proposed Nominee’squalifications to be an Independent Trustee or Managing Trustee, as the casemay be, and such Proposed Nominee’s qualifications to be a Trustee pursuant tothe criteria set forth in Section 3.1, (3) the class, series andnumber of any shares of beneficial interest of the Trust that are, directly orindirectly, beneficially owned or owned of record by such Proposed Nominee orby such Proposed Nominee Associated Person, (4) the date such shares wereacquired 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))by such Proposed Nominee or by such Proposed Nominee Associated Person duringthe previous 24 month period, including the date of the transactions and theclass, series and number of securities involved in, and the materialeconomic terms of, the transactions, such description to include, withoutlimitation, all information that such Proposed Nominee or Proposed NomineeAssociated Person would be required to report on an Insider Report (as definedin Section 2.14.1(d)) if such Proposed Nominee or Proposed Nominee AssociatedPerson were a Trustee of the Trust or the beneficial owner of more than 10% ofthe shares of the Trust at the time of the transactions, (7) any performancerelated fees (other than an asset based fee) that such Proposed Nominee or suchProposed Nominee Associated Person is entitled to based on any increase or

 

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decreasein the value of shares of the Trust or instrument or arrangement of the typecontemplated within the definition of Derivative Transaction, if any, as of thedate of such notice, including, without limitation, any such interests held bymembers of such Proposed Nominee’s or such Proposed Nominee Associated Person’simmediate family sharing the same household with such Proposed Nominee or suchProposed Nominee Associated Person, (8) any proportionate interest inshares of the Trust or instrument or arrangement of the type contemplatedwithin the definition of Derivative Transaction held, directly or indirectly,by a general or limited partnership in which such Proposed Nominee or suchProposed Nominee Associated Person is a general partner or, directly orindirectly, beneficially owns an interest in a general partner, (9) adescription of all direct and indirect compensation and other material monetaryagreements, arrangements and understandings during the past three years, andany other material relationships, between or among such shareholder, ProposedNominee Associated Person, or their respective affiliates and associates, orothers acting in concert therewith, on the one hand, and each Proposed Nominee,or his or her respective affiliates and associates, or others acting in concerttherewith, on the other hand, including, without limitation, all informationthat would be required to be disclosed pursuant to Item 404 of Regulation S-Kpromulgated by the U.S. Securities and Exchange Commission (the “S.E.C.”) (andany successor regulation), if the shareholder making the nomination and anyProposed Nominee Associated Person on whose behalf the nomination is made, orany affiliate or associate thereof or person acting in concert therewith, werethe “registrant” for purposes of such rule and the Proposed Nominee were adirector or executive officer of such registrant, (10) any rights todividends on the shares of the Trust owned beneficially by such ProposedNominee or such Proposed Nominee Associated Person that are separated orseparable from the underlying shares of the Trust, (11) to the extent known bysuch Proposed Nominee or such Proposed Nominee Associated Person, the name andaddress of any other person who owns, of record or beneficially, any shares ofbeneficial interest of the Trust and who supports the Proposed Nominee forelection or reelection as a Trustee, (12) all other information relating tosuch Proposed Nominee or such Proposed Nominee Associated Person that isrequired to be disclosed in solicitations of

 

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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 thereunderand (13) such Proposed Nominee’s notarized written consent to being named inthe shareholder’s proxy statement as a nominee and to serving as a Trustee ifelected;

 

(B)           as to any other business that theshareholder proposes to bring before the meeting, (1) a description ofsuch business, (2) the reasons for proposing such business at the meetingand any material interest in such business of such shareholder or anyShareholder 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 the shareholder giving thenotice and any Shareholder Associated Person, (1) the class, series andnumber of all shares of the Trust that are owned of record by such shareholderor by such Shareholder Associated Person, if any, (2) the class, seriesand number of, and the nominee holder for, any shares of beneficial interestsof the Trust that are owned, directly or indirectly, beneficially but not ofrecord by such shareholder or by such Shareholder Associated Person, if any, (3) withrespect to the foregoing clauses (1) and (2), the date such shares wereacquired and the investment intent of such acquisition and (4) allinformation relating to such shareholder and Shareholder Associated Person thatis required to be disclosed in connection with the solicitation of proxies forelection of Trustees in an election contest (even if an election contest is notinvolved), or is otherwise required, in each case, pursuant to Section 14(or any successor provision) of the Exchange Act and the rules and regulationspromulgated thereunder;

 

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

 

(E)           as to the shareholder giving thenotice and any Shareholder Associated Person, (1) a description of allpurchases and sales of securities of the Trust by such shareholder orShareholder Associated Person during the previous 24 month period, includingthe date of the transactions, the class, series and number of securitiesinvolved 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 related fees (other thanan asset based fee) that such shareholder or Shareholder Associated Person isentitled to based on any increase or decrease in the value of shares of the Trustor instrument or arrangement of the type contemplated within the definition ofDerivative Transaction, if any, as of the date of such notice, including,without limitation, any such interests held by members of such shareholder’s orShareholder Associated Person ‘s immediate family sharing the same householdwith 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

 

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generalpartner and (5) any rights to dividends on the shares of the Trust ownedbeneficially by such shareholder or Shareholder Associated Person that areseparated or separable from the underlying shares of the Trust;

 

(F)           to the extent known by theshareholder giving the notice, the name and address of any other person whoowns, beneficially or of record, any shares of beneficial interest of the Trustand who supports the nominee for election or reelection as a Trustee or the proposalof other business; and

 

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

 

(c)           Notwithstanding anything in the second sentence of Section 2.14.1(b) tothe contrary, in the event that the number of Trustees to be elected to theBoard of Trustees is increased and there is no public announcement of suchaction at least 130 days prior to the first anniversary of the date of theproxy statement for the preceding year’s annual meeting, a shareholder’s noticerequired by this Section 2.14.1 also shall be considered timely, but onlywith respect to nominees for any new positions created by such increase, if thenotice is delivered to the secretary at the principal executive offices of theTrust not later than 5:00 p.m. (Eastern Time) on the 10th day immediatelyfollowing the day on which such public announcement is first made by the Trust.

 

(d)           For purposes of this Section 2.14, (i) “ShareholderAssociated Person” of any shareholder shall mean (A) any person acting inconcert with, such shareholder, (B) any direct or indirect beneficialowner of shares of beneficial interest of the Trust owned of record orbeneficially by such shareholder and (C) any person controlling,controlled by or under common control with such shareholder or a ShareholderAssociated Person; (ii) “Proposed Nominee Associated Person” of anyProposed 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 undercommon control with such Proposed Nominee or a Proposed Nominee AssociatedPerson; (iii) “Derivative Transaction” by a person shall mean any (A) transactionin, or arrangement, agreement or understanding with respect to, any option,warrant, convertible security, stock appreciation right or similar right withan exercise, conversion or exchange privilege, or settlement payment ormechanism related to, any security of the Trust, or similar instrument with avalue derived in whole or in part from the value of a security of the Trust, inany such case whether or not it is subject to settlement in a security of theTrust or otherwise or (B) any transaction, arrangement, agreement or

 

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

 

Section 2.14.2.          Shareholder Nominations or Other Proposals CausingCovenant 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 detailedplan for 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 themanagement and policies of the Trust without the approval of the lenders;accordingly, a shareholder nomination or proposal which implicates thesecovenants shall be accompanied by a waiver of these covenants duly executed bythe banks or by evidence satisfactory to the Board of Trustees of theavailability of funding to the Trust to repay outstanding indebtedness underthis credit facility and of the availability of a new credit facility on termsas favorable to the Trust as the existing credit facility.

 

Section 2.14.3.          Shareholder Nominations or Other Proposals RequiringGovernmental Action. If (a) submission of any shareholder nomination or proposal of otherbusiness to be considered at a shareholders meeting that could not beconsidered or, if approved, implemented by the Trust without the Trust, anysubsidiary of the Trust, the proponent shareholder, any Proposed Nominee ofsuch shareholder, any Proposed Nominee Associated Person of such ProposedNominee, any Shareholder Associated Person of such shareholder, the holder ofproxies or their respective affiliates or associates filing with or otherwisenotifying or obtaining the consent, approval or other action of any federal,state, municipal or other governmental or regulatory body (a “GovernmentalAction”) or (b) such shareholder’s ownership 

 

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of shares of theTrust or any solicitation of proxies or votes or holding or exercising proxiesby such shareholder, any Proposed Nominee of such shareholder, any ProposedNominee Associated Person of such Proposed Nominee, any Shareholder AssociatedPerson of such shareholder, or their respective affiliates or associates wouldrequire Governmental 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 notobtainable from a governmental or regulatory body by such time despite theshareholder’s diligent and best efforts, a detailed plan for making orobtaining the Governmental Action prior to the election of any such ProposedNominee or the implementation of such proposal, which plan must be satisfactoryto the Board of Trustees in its discretion. As an example and not as a limitation, at the time these Bylaws arebeing amended and restated, the Trust holds a controlling ownership position ina company being formed and licensed as an insurance company in the State ofIndiana.  The laws of the State ofIndiana have certain regulatory requirements for any person who seeks tocontrol (as defined under Indiana law) a company which itself controls aninsurance company domiciled in the State of Indiana, including by exercisingproxies representing 10% or more of its voting securities.  Accordingly, a shareholder who seeks toexercise proxies for a nomination or a proposal affecting the governance of theTrust shall obtain any applicable approvals from the Indiana insuranceregulatory authorities prior to exercising such proxies.  Similarly, as a further example and not as alimitation, at the time these Bylaws are being amended and restated, the Trustowns healthcare facilities in various states; such facilities are governed byand subject to the regulatory and licensing requirements of the state in whichsuch facility is located.  The licensingterms or regulatory regime of certain states with jurisdiction over the Trustmay require that certain consents or approvals be obtained prior to the Trustconsidering or implementing certain actions, including potentially requiringthat a Proposed Nominee obtain regulatory approval or consent prior to beingnominated for or elected as a Trustee. Accordingly, a shareholder nomination or shareholder proposal that, ifapproved, would require the Trust to obtain the consent or approval of a stateauthority due to the fact that the Trust owns licensed healthcare facilities insuch state, shall be accompanied by evidence that the shareholder or ProposedNominee has either secured the required approvals or consents from allapplicable state regulatory authorities or if such required approvals have notbeen obtained, then the shareholder nomination or other proposal shall beaccompanied by a copy of any applications or forms required to be completed bythe Proposed Nominee or shareholder as submitted or to be submitted to theapplicable state authorities so that the Board of Trustees may determine thelikelihood that the shareholder or the Proposed Nominee, as applicable, willreceive any such required approval.

 

Section 2.14.4.          SpecialMeetings of Shareholders.  As setforth in Section 2.6, only business brought before the meeting pursuant tothe Trust’s notice of meeting shall be conducted at a special meeting ofshareholders.  Nominations of individualsfor election to the Board of Trustees only may be made at a special meeting ofshareholders at which Trustees are to be elected: (a) pursuant to theTrust’s notice of meeting; (b) otherwise properly brought before themeeting by or at the direction of the Board of Trustees; or (c) providedthat the Board of 

 

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Trustees hasdetermined that Trustees shall be elected at such special meeting, by anyshareholder of the Trust who is a shareholder of record both at the time ofgiving of notice provided for in this Section 2.14.4 through and includingthe time of the special meeting, who is entitled to vote at the meeting on suchelection and who has complied with the notice procedures 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’s notice contains the informationrequired by Section 2.14 and the shareholder has given timely noticethereof in writing to the secretary of the Trust at the principal executiveoffices of the Trust.  To be timely, ashareholder’s notice shall be delivered to the secretary of the Trust at theprincipal executive offices of the Trust not earlier than the 150th day priorto such special meeting and not later than 5:00 p.m. (Eastern Time) on thelater of (i) the 120th day prior to such special meeting or (ii) 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 to this Section 2.14by any shareholder proposing a nominee for election as a Trustee or anyproposal for other business at a meeting of shareholders shall be deemed by theBoard of Trustees incomplete or inaccurate, any authorized officer or the Boardof Trustees or any committee thereof may treat such information as not havingbeen 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 secretary of theTrust or the Board of Trustees or any committee thereof (which may be made fromtime to time), any shareholder proposing a nominee for election as a Trustee orany proposal for other business at a meeting of shareholders shall provide,within three business days after such request (or such other period as may bespecified in such request), (i) written verification, satisfactory to thesecretary or any other authorized officer or the Board of Trustees or anycommittee thereof, in his, her or its discretion, to demonstrate the accuracyof any information submitted by the shareholder pursuant to this Section 2.14,(ii) written responses to information reasonably requested by thesecretary, the Board of Trustees or any committee thereof and (iii) awritten update, to a current date, of any information submitted by theshareholder pursuant to this Section 2.14 as of an earlier date.  If a shareholder fails to provide suchwritten verification, information or update within such period, the secretaryor any other authorized officer or the Board of Trustees may treat theinformation which was previously provided and to which the verification,request or update relates as not having been provided in accordance with this Section 2.14;provided, however, that no such written verification, response or update shallcure any incompleteness, inaccuracy or failure in any notice 

 

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providedby 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 shall create anyduty of the Trust, the Board of Trustees or any committee thereof nor anyofficer of the Trust to inform a shareholder that the information submittedpursuant to this Section 2.14 by or on behalf of such shareholder isincomplete or inaccurate or not otherwise in accordance with this Section 2.14nor require the Trust, the Board of Trustees, any committee of the Board ofTrustees or any officer of the Trust to request clarification or updating ofinformation provided by any shareholder, but the Board of Trustees, a committeethereof or the secretary acting on behalf of the Board of Trustees or acommittee, may do so in its, his or her discretion.

 

(b)           Only such individuals who are nominated in accordancewith this Section 2.14 shall be eligible for election by shareholders asTrustees and only such business shall be conducted at a meeting of shareholdersas shall have been properly brought before the meeting in accordance with this Section 2.14.  The chairperson of the meeting and the Boardof Trustees shall each have the power to determine whether a nomination or anyother business proposed to be brought before the meeting was made or proposed,as the case may be, in accordance with this Section 2.14 and, if 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) “publicannouncement” shall mean disclosure in (A) a press release reported by theDow Jones News Service, Associated Press, Business Wire, PR Newswire or anyother widely circulated news or wire service or (B) a document publiclyfiled by the Trust with the United States Securities and Exchange Commissionpursuant to the Exchange Act; and (ii) “subsidiary” shall include, withrespect to a person, any corporation, partnership, joint venture or otherentity of which such person (A) owns, directly or indirectly, 10% or moreof the outstanding voting securities or other interests or (B) has aperson designated by such person serving on, or a right, contractual orotherwise, to designate a person, so to serve on, the board of directors (oranalogous governing body).

 

(d)           Notwithstanding the foregoing provisions of this Section 2.14,a shareholder shall also comply with all applicable legal requirements,including, without limitation, applicable requirements of state law and theExchange Act and the rules and regulations thereunder, with respect to thematters set forth in this Section 2.14. Nothing in this Section 2.14 shall be deemed to require that ashareholder nomination of an individual for election to the Board of Trusteesor a shareholder proposal relating to other business be included in the Trust’sproxy statement, except as may be required by law.

 

(e)           The Board of Trustees may from time to time requireany individual nominated to serve as a Trustee to agree in writing with regardto matters of business ethics and confidentiality while such nominee serves asa Trustee, such agreement to be on the terms and in a form (the “Agreement”)determined satisfactory by the Board of Trustees, as amended and supplementedfrom time to time in the discretion of the Board of Trustees.  The terms of the Agreement may besubstantially similar to the Code of 

 

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Business Conduct and Ethics of the Trust or any similar codepromulgated by the Trust (the “Code of Business Conduct”) or may differ from orsupplement the Code of Business Conduct.

 

(f)            Determinations required or permitted to be made underthis Section 2.14 by the Board of Trustees may be delegated by the Boardof Trustees to a committee of the Board of Trustees, subject to applicable law.

 

Section 2.15.          NoShareholder Actions by Written Consent. Shareholders shall not be authorized or permitted to take any actionrequired or permitted to be taken at a meeting of shareholders by writtenconsent, and may take such action only at shareholders meeting of the Trust.

 

Section 2.16.          Votingby Ballot.  Voting on any question orin any election may be voice vote unless the chairperson of the meeting or anyshareholder shall demand that voting be by ballot.

 

Section 2.17.          Proposalsof Business Which Are Not Proper Matters For Action By Shareholders.  Notwithstanding anything in these Bylaws tothe contrary, subject to applicable law, any shareholder proposal for businessthe subject matter or effect of which would be within the exclusive purview ofthe Board of Trustees or would reasonably likely, if considered by theshareholders or approved or implemented by the Trust, result in an impairmentof the limited liability status for the Trust’s shareholders, shall be deemednot to be a matter upon which the shareholders are entitled to vote.  The Board of Trustees in its discretion shallbe entitled to determine whether a shareholder proposal for business is not amatter upon which the shareholders are entitled to vote pursuant to this Section 2.17,and its decision shall be final and binding unless determined by a court ofcompetent jurisdiction to have been made in bad faith.

 

**ARTICLE IIITRUSTEES**

** **

Section 3.1.            GeneralPowers; Qualifications; Trustees Holding Over.  The business and affairs of the Trust shallbe managed under the direction of its Board of Trustees.  A Trustee shall be an individual at least 21years of age who is not under legal disability. To qualify for nomination or election as a Trustee, an individual, atthe time of nomination and election, shall, without limitation, (a) havesubstantial expertise or experience relevant to the business of the Trust andits subsidiaries, (b) not have been convicted of a felony and (c) meetthe qualifications of an Independent Trustee or a Managing Trustee, each asdefined in Section 3.2, as the case may be, depending upon the positionfor 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.            IndependentTrustees and Managing Trustees.  Amajority of the Trustees holding office shall at all times be IndependentTrustees; provided, however, that upon a failure 

 

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to comply withthis requirement as a result of the creation of a temporary vacancy which shallbe filled by an Independent Trustee, whether as a result of enlargement of theBoard of Trustees or the resignation, removal or death of a Trustee who is anIndependent Trustee, such requirement shall not be applicable.  An “Independent Trustee” is one who is not anemployee of the Advisor (as defined in the Declaration of Trust), who is notinvolved in the Trust’s day to day activities, who meets the qualifications ofan independent trustee under the Declaration of Trust and who meets thequalifications 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 exchangeupon which shares of the Trust are listed for trading and the Securities andExchange Commission, as those requirements may be amended from time totime.  If the number of Trustees, at anytime, is set at less than five, at least one Trustee shall be a ManagingTrustee.  So long as the number ofTrustees shall be five or greater, at least two Trustees shall be ManagingTrustees.  “Managing Trustees” shall meanTrustees who are not Independent Trustees and who have been employees of theAdvisor or involved in the day to day activities of the Trust for at least oneyear prior to their election.  If at anytime the Board of Trustees shall not be comprised of a majority of IndependentTrustees, the Board of Trustees shall take such actions as will cure suchcondition; provided that the fact that the Board of Trustees does not have amajority of Independent Trustees or has not taken such action at any time orfrom time to time shall not affect the validity of any action taken by theBoard of Trustees.  If at any time theBoard of Trustees shall not be comprised of a number of Managing Trustees as isrequired under this Section 3.2, the Board of Trustees shall take suchactions as will cure such condition; provided that the fact that the Board ofTrustees does not have the requisite number of Managing 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.

 

Section 3.3.            Numberand Tenure.  Pursuant to the ArticlesSupplementary accepted for record by the State Department of Assessments andTaxation (the “SDAT”) as of May 11, 2000, the number of Trusteesconstituting the entire Board of Trustees may be increased or decreased fromtime to time only by a vote of the Trustees; provided however that the tenureof office of a Trustee shall not be affected by any decrease in the number ofTrustees.  The number of Trustees shallbe five until increased or decreased by the Board of Trustees.

 

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

 

Section 3.4.            Annualand Regular Meetings.  An annualmeeting of the Trustees shall be held immediately after the annual meeting ofshareholders, no notice other than this Bylaw being necessary.  The time and place of the annual meeting ofthe Trustees may be changed by the Board of Trustees.  The Trustees may provide, by resolution, thetime and place, either within or without the State of Maryland, for the holdingof regular meetings of the Trustees without other notice than suchresolution.  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.            SpecialMeetings.  Special meetings of theTrustees may be called at any time by any Managing Trustee, the president orpursuant to the request of any two Trustees then 

 

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in office.  The person or personsauthorized to call special meetings of the Trustees may fix any place, eitherwithin or without the State of Maryland, as the place for holding any specialmeeting 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, notwithstanding the withdrawal of a numberof Trustees resulting in less than a quorum then being present at the meeting.

 

Section 3.8.            Voting.  The action of the majority of the Trusteespresent at a meeting at which a quorum is or was present shall be the action ofthe Trustees, unless the concurrence of a greater proportion is required forsuch action by specific provision of an applicable statute, the Declaration ofTrust or these Bylaws.  If enoughTrustees have withdrawn from a meeting to leave fewer than are required toestablish a quorum, but the meeting is not adjourned, the action of 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.            TelephoneMeetings.  Trustees may participatein a meeting by means of a conference telephone or similar communicationsequipment if all persons participating in the meeting can hear each other at thesame time.  Participation in a meeting bythese means shall 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.

 

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Section 3.10.          Actionby Written Consent of Trustees. Unless specifically otherwise provided in the Declaration of Trust, anyaction required or permitted to be taken at any meeting of the Trustees may betaken without a meeting, if a majority of the Trustees shall individually orcollectively consent in writing to such action. Such written consent or consents shall be filed with the records of theTrust and shall have the same force and effect as the affirmative vote of suchTrustees at a duly held meeting of the Trustees at which a quorum was present.

 

Section 3.11.          Waiverof Notice.  The actions taken at anymeeting of the Trustees, however called and noticed or wherever held, shall beas valid as though taken at a meeting duly held after regular call and noticeif a quorum is present and if, either before or after the meeting, each of theTrustees not present waives notice, consents to the holding of such meeting orapproves the minutes 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 other capacity, and such services may include,without limitation, services as an officer of the Trust, services as anemployee of the Advisor, legal, accounting or other professional services, orservices as a broker, transfer agent or underwriter, whether performed by aTrustee or any person affiliated with a Trustee.

 

Section 3.14.          Removalof Trustees.  A Trustee may beremoved at any time with or without cause by the affirmative vote either of allthe remaining Trustees or, at a meeting of the shareholders properly called forthat purpose, by the affirmative vote of the holders of not less thantwo-thirds of the shares of the Trust then outstanding and entitled to votegenerally in the election of Trustees.

 

Section 3.15.          SuretyBonds.  Unless specifically requiredby law, no Trustee shall be obligated to give any bond or surety or othersecurity for the performance of any of his or her duties.

 

Section 3.16.          Reliance.  Each Trustee, officer, employee and agent ofthe Trust shall, in the performance of his or her duties with respect to theTrust, be entitled to rely on any information, opinion, report or statement,including any financial statement or other financial 

 

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data, prepared or presented by an officer or employee of the Trust orby the Advisor, accountants, appraisers or other experts or consultantsselected by the Board of Trustees or officers of the Trust, regardless ofwhether such counsel or expert may also be a Trustee.

 

Section 3.17.          InterestedTrustee Transactions.  Section 2-419of the Maryland General Corporation Law shall be available for and apply to anycontract or other transaction between the Trust and any of its Trustees orbetween the Trust and any other trust, corporation, firm or other entity inwhich any of its Trustees is a trustee or director or has a material financialinterest.

 

Section 3.18.          QualifyingShares Not Required.  Trustees neednot be shareholders of the Trust.

 

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

 

Section 3.20.                EmergencyProvisions.  Notwithstanding anyother provision in the Declaration of Trust or these Bylaws, this Section 3.20shall apply during the existence of any catastrophe, or other similar emergencycondition, as a result of which a quorum of the Board of Trustees under ARTICLEIII cannot readily be obtained (an “Emergency”).  During any Emergency, unless otherwiseprovided by the Board of Trustees, (a) a meeting of the Board of Trusteesmay be called by any Managing Trustee or officer of the Trust by any meansfeasible under the circumstances and (b) notice of any meeting of theBoard of Trustees during such an Emergency may be given less than 24 hoursprior to the meeting to as many Trustees and by such means as it may befeasible at the time, including publication, television or radio.

 

**ARTICLE IVCOMMITTEES**

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Section 4.1.            Number;Tenure and Qualifications.  The Boardof Trustees shall appoint an Audit Committee, a Compensation Committee and aNominating and Governance Committee. Each of these committees shall be composed of three or more Trustees, toserve at the pleasure of the Board of Trustees. The Board of Trustees may also appoint other committees from time totime composed of one or more members, at least one of which shall be a Trustee,to serve at the pleasure of the Board of Trustees.  The Board of Trustees shall adopt a charterwith respect to the Audit Committee, the Compensation Committee and theNominating and Governance Committee, which charter shall specify the purposes,the criteria for membership and the responsibility and duties and may specifyother matters with respect to each committee. The Board of Trustees may also adopt a charter with respect to othercommittees.

 

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 

 

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Board of Trustees necessary to carry out the purposes, responsibilitiesand duties of a committee provided in the charter or reasonably related tothose 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 thanone, of the members of any committee shall be present in person at any meetingof a committee in order to constitute a quorum for the transaction of businessat a meeting, and the act of a majority present at a meeting at the time of avote if a quorum is then present shall be the act of a committee.  The Board of Trustees or, if authorized bythe Board in a committee charter or otherwise, the committee members maydesignate a chairman of any committee, and the chairman or, in the absence of achairman, a majority of any committee may fix the time and place of itsmeetings unless the Board shall otherwise provide.  In the absence or disqualification of anymember of any committee, the members thereof present at any meeting and notdisqualified from voting, whether or not they constitute a quorum, may unanimouslyappoint another Trustee to act at the meeting in the place of absent ordisqualified members.

 

Each committee shall keepminutes of its proceedings and shall periodically report its activities to thefull Board of Trustees and, except as otherwise provided by law or under the rules ofthe Securities and Exchange Commission and applicable stock exchanges on whichthe Trust’s shares are listed, any action by any committee shall be subject torevision and alteration by the Board of Trustees, provided that no rights ofthird persons shall be affected by any such revision or alteration.

 

Section 4.4.            TelephoneMeetings.  Members of a committee mayparticipate in a meeting by means of a conference telephone or similarcommunications equipment and participation in a meeting by these means shallconstitute presence in person at the meeting.

 

Section 4.5.            Actionby Written Consent of Committees. Any action required or permitted to be taken at any meeting of acommittee of the Trustees may be taken without a meeting, if a consent inwriting to such action is signed by a majority of the committee and suchwritten consent is filed with the minutes of proceedings of such committee.

 

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

 

**ARTICLE VOFFICERS**

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Section 5.1.            GeneralProvisions.  The officers of theTrust shall include a president, a secretary and a treasurer and may include achairman of the board, a vice chairman of the board, a chief executive officer,a chief operating officer, a chief financial officer, one or more vicepresidents, one or more assistant secretaries and one or more assistanttreasurers.  In addition, the 

 

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Trustees may fromtime to time appoint such other officers with such powers and duties as theyshall deem necessary or desirable.  Theofficers of the Trust shall be elected annually by the Trustees at the firstmeeting of the Trustees 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.  Electionof an officer or agent shall not of itself create contract rights between theTrust and such officer or agent.

 

Section 5.2.            Removaland Resignation.  Any officer oragent of the Trust may be removed by the Trustees if in their judgment the bestinterests of the Trust would be served thereby, but the removal shall be withoutprejudice to the contract 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.            ChiefExecutive Officer.  The Trustees maydesignate a chief executive officer from among the Trustees or electedofficers.  The chief executive officershall have responsibility for implementation of the policies of the Trust, asdetermined by the Trustees, and for the administration of the business affairsof the Trust.  In the absence of both thechairman and vice chairman of the board, the chief executive officer shallpreside over the meetings of the Board of Trustees at which he shall bepresent.  In the absence of a differentdesignation, the Managing Trustees, or any of them, shall function as the chiefexecutive officer of the Trust.

 

Section 5.5.            ChiefOperating Officer.  The Trustees maydesignate a chief operating officer from among the elected officers.  Said officer will have the responsibilitiesand duties as set forth by the Trustees or the chief executive officer.

 

Section 5.6.            ChiefFinancial Officer.  The Trustees maydesignate a chief financial officer from among the elected officers.  Said officer will have the responsibilitiesand duties as set forth by the Trustees or the chief executive officer.

 

Section 5.7.            Chairmanand Vice Chairman of the Board.  Thechairman of the board, if any, and the vice chairman of the board, if any,shall perform such duties as may be assigned to him, her or them by theTrustees.  In the absence of a chairmanand vice chairman of the board or if none are appointed, the Managing Trustees,or any of them, shall preside at meetings of the Board of Trustees.

 

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

 

Section 5.9.            VicePresidents.  In the absence orunavailability of the president, the vice president (or in the event there bemore than one vice president, any vice president) shall perform the duties ofthe president and when so acting shall have all the powers of the president;and shall perform such other duties as from time to time may be assigned to himor her by the president, 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 shall also have such otherresponsibilities as may be assigned to him or her by the chief executiveofficer or the Trustees.

 

Section 5.12.          AssistantSecretaries and Assistant Treasurers. The assistant secretaries and assistant treasurers, in general, shallperform such duties as shall be assigned to them by the secretary or treasurer,respectively, or by the chief executive officer or the Trustees.

** **

**ARTICLE VICONTRACTS, 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.

 

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Section 6.2.            Checksand Drafts.  All checks, drafts orother orders for the payment of money, notes or other evidences of indebtednessissued in the name of the Trust shall be signed by such officer or agent of theTrust in such manner as shall from time to time be determined by the treasurer,the chief executive 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 VIISHARES**

** **

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 be transferable in themanner provided by applicable law, the Declaration of Trust and theseBylaws.  Certificates shall be treated asnegotiable and title thereto and to the shares they represent shall betransferred by delivery thereof to the same extent as those of a Maryland stockcorporation.

 

(b)           The Trust shall be entitled to treat the holder ofrecord 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 or interest insuch share or shares on the part of any other person, whether or not it shallhave express or other notice thereof, except as otherwise provided in theseBylaws or by the laws of the State of Maryland.

 

Section 7.3.            LostCertificates.  For shares evidencedby certificates, any officer designated by the Trustees may direct a newcertificate to be issued in place of any certificate previously issued by theTrust alleged to have been lost, stolen or destroyed upon the making of anaffidavit of that fact by the person claiming the certificate to be lost,stolen or destroyed.  When authorizingthe issuance of a new certificate, an officer designated by the Trustees may,in such officer’s discretion and as a condition precedent to the issuancethereof, require the owner of such lost, stolen or destroyed certificate or theowner’s legal representative to advertise the same in such manner as he shallrequire and/or to give bond, with sufficient surety, to the Trust to indemnifyit against any loss or claim which may arise as a result of the issuance of anew certificate.

 

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Section 7.4.            Closingof Transfer Books or Fixing of Record Date.

 

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

 

(b)           In lieu of fixing a recorddate, the Trustees may provide that the share transfer books shall be closedfor a stated period but not longer than 20 days.  If the share transfer books are closed forthe purpose of determining shareholders entitled to notice of or to vote at ameeting of shareholders, such books shall be closed for at least 10 days beforethe date of such meeting.

 

(c)           If no record date is fixedand the share transfer books are not closed for the determination ofshareholders, (i) the record date for the determination ofshareholders entitled to notice of or to vote at a meeting of shareholdersshall be at the close of business on the day on which the notice of meeting ismailed or the 30th day before the meeting, whichever is the closer date to themeeting; and (ii) the record date for the determination of shareholdersentitled to receive payment of a dividend or an allotment of any other rightsshall be the close of business on the day on which the resolution of theTrustees, declaring the dividend or allotment of rights, is adopted.

 

(d)           When a determination of shareholders entitled to voteat any meeting of shareholders has been made as provided in this section, suchdetermination shall apply to any adjournment thereof unless the Board ofTrustees shall set a new record date with respect thereto.

 

Section 7.5.            ShareLedger.  The Trust shall maintain atits principal office or at the office of its counsel, accountants or transferagent a share ledger containing the name and address of each shareholder andthe number of shares of each class held by such shareholder.

 

Section 7.6.            FractionalShares; Issuance of Units.  TheTrustees may issue fractional shares or provide for the issuance of scrip, allon such terms and under such conditions as they may determine.  Notwithstanding any other provision of theDeclaration of Trust or these Bylaws, the Trustees may issue units consistingof different securities of the Trust. Any security issued in a unit shall have the same characteristics as anyidentical securities issued by the Trust, except that the Trustees may providethat for a specified period securities of the Trust issued in such unit may betransferred on the books of the Trust only in such unit.

 

**ARTICLE VIIIREGULATORY COMPLIANCE AND DISCLOSURE**

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Section 8.1.            ActionsRequiring Regulatory Compliance Implicating the Trust.  If any shareholder (whether individually orconstituting a group, as determined by the Board of 

 

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Trustees), byvirtue of such shareholder’s ownership interest in the Trust or actions takenby the shareholder affecting the Trust, triggers the application of anyrequirement or regulation of any federal, state, municipal or othergovernmental or regulatory body on the Trust or any subsidiary (for purposes ofthis ARTICLE VIII, as defined in Section 2.14.5(c)) of the Trust or any oftheir respective businesses, assets or operations, including, withoutlimitation, any obligations to make or obtain a Governmental Action (as definedin Section 2.14.3), such shareholder shall promptly take all actionsnecessary and fully cooperate with the Trust to ensure that such requirementsor regulations are satisfied without restricting, imposing additionalobligations on or in any way limiting the business, assets, operations orprospects 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.

 

As an example and not as a limitation, at the time these Bylaws are beingamended and restated, the Trust holds a controlling ownership position in acompany being formed and licensed as an insurance company in the State ofIndiana.  The laws of the State ofIndiana have certain regulatory requirements for any person who seeks tocontrol (as defined under Indiana law) a company which itself controls aninsurance company domiciled in the State of Indiana, including by exercisingproxies representing 10% or more of the Trust’s voting securities.  Accordingly, if a shareholder seeks toexercise proxies for a matter to be voted upon at a meeting of the Trust’sshareholders without having obtained any applicable approvals from the Indianainsurance regulatory authorities, such proxies representing 10% or more of theTrust’s voting securities will, subject to Section 8.3, be void and of nofurther force or effect.

 

As a further example and not as a limitation, at the time these Bylawsare being amended and restated, the Trust owns healthcare facilities in variousstates which are subject to state regulatory and licensing requirements in eachsuch state.  Under the licensing terms orregulatory regime of certain states with jurisdiction over the Trust, ashareholder which acquires a controlling equity position in the Trust may berequired to obtain regulatory approval or consent prior to or as a result ofobtaining such ownership.  Accordingly,if a shareholder which acquires a controlling equity position in the Trust thatwould require the shareholder or the Trust to obtain the consent or approval ofa state authority due to the fact that the Trust owns licensed healthcarefacilities in such state, and the shareholder refuses to provide the Trust withinformation required 

 

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to be submitted tothe applicable state authority or if the state authority declines to approvethe shareholder’s ownership of the Trust, then, in either event, shares of theTrust owned by the shareholder necessary to reduce its ownership to an amountso that the shareholder’s ownership of Trust shares would not require it toprovide any such information to, or for consent to be obtained from, the stateauthority, may be deemed by the Board of Trustees to be shares held in violationof the ownership limitation in Article VII of the Declaration of Trust andshall be subject to the provisions of Article VII of the Declaration ofTrust.

 

Section 8.2.            ComplianceWith Law.  Shareholders shall complywith all applicable requirements 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 oroperations and which require action or inaction on the part of the shareholder.

 

Section 8.3.            Limitationon Voting Shares or Proxies.  Withoutlimiting the provisions of Section 8.1, if a shareholder (whetherindividually or constituting a group, as determined by the Board of Trustees),by virtue of such shareholder’s ownership interest in the Trust or its receiptor exercise of proxies to vote shares owned by other shareholders, would not bepermitted to vote the shareholder’s shares of the Trust or proxies for sharesof the Trust in excess of a certain amount pursuant to applicable law(including by way of example, applicable state insurance regulations) but theBoard of Trustees determines that the excess shares or shares represented bythe excess proxies are necessary to obtain a quorum, then such shareholdershall not be entitled to vote any such excess shares or proxies, and insteadsuch excess shares or proxies may, to the fullest extent permitted by law, bevoted by the Advisor (or by another person designated by the Trustees) inproportion to the total shares otherwise voted on such matter.

 

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 besimultaneously made to, for the benefit of and enforceable by, the Trust andany applicable subsidiary of the Trust.

 

Section 8.5.            Board of Trustees’ Determinations. The Board of Trustees shall be empowered to make all determinationsregarding the interpretation, application, enforcement and compliance with anymatters referred to or contemplated by this ARTICLE VIII.

 

**ARTICLE IXFISCAL YEAR**

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Section 9.1.            FiscalYear.  The fiscal year of the Trustshall be the calendar year.

 

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**ARTICLE XDIVIDENDS AND OTHER DISTRIBUTIONS**

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Section 10.1.          Dividendsand Other Distributions.  Dividendsand other distributions upon the shares of beneficial interest of the Trust maybe authorized and declared by the Trustees. Dividends and other distributions may be paid in cash, property orshares of the Trust.

 

**ARTICLE XISEAL**

** **

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.          AffixingSeal.  Whenever the Trust ispermitted or required to affix its seal to a document, it shall be sufficientto meet the requirements of any law, rule or regulation relating to a sealto place the word “(SEAL)” adjacent to the signature of the person authorizedto execute the document on behalf of the Trust.

 

**ARTICLE XIIWAIVER OF NOTICE**

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Section 12.1.          Waiverof Notice.  Whenever any notice isrequired to be given pursuant to the Declaration of Trust, these Bylaws orapplicable law, a waiver thereof in writing, signed by the person or personsentitled to such notice, or a waiver by electronic transmission by the personor persons entitled to such notice, whether before or after the time statedtherein, shall be deemed equivalent to the giving of such notice.  Neither the business to be transacted at northe purpose of any meeting need be set forth in the waiver of notice or waiverby electronic transmission, unless specifically required by statute.  The attendance of any person at any meetingshall constitute a waiver of notice of such meeting, except where such personattends a meeting for the express purpose of objecting to the transaction ofany business on the ground that the meeting is not lawfully called or convened.

** **

**ARTICLE XIIIAMENDMENT OF BYLAWS**

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Section 13.1.          Amendmentof Bylaws.  Except for any change forwhich these Bylaws requires approval by more than a majority vote of theTrustees, these Bylaws may be amended or repealed or new or additional Bylawsmay be adopted only by the vote or written consent of a majority of theTrustees.

 

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**ARTICLE XIVMISCELLANEOUS**

** **

Section 14.1.          Referencesto Declaration of Trust.  Allreferences to the Declaration of Trust shall include any amendments thereto.

 

Section 14.2.          Costsand Expenses.  In addition to, and asfurther clarification of each shareholder’s obligation to indemnify and holdthe Trust harmless from and against all costs, expenses, penalties, fines andother amounts, including, without limitation, attorneys’ and other professionalfees, whether third party or internal, arising from such shareholder’sviolation of any provision of the Declaration of Trust or these Bylaws pursuantto Section 8.7 of the Declaration of Trust, to the fullest extentpermitted by law, each shareholder will be liable to the Trust for, and indemnifyand hold harmless the Trust (and any subsidiaries or affiliates thereof) fromand against, all costs, expenses, penalties, fines or other amounts, including,without limitation, reasonable attorneys’ and other professional fees, whetherthird party or internal, arising from such shareholder’s breach of anyprovision of these Bylaws or the Declaration of Trust or any action against theTrust in which such shareholder is not the prevailing party, and shall pay suchamounts on demand, together with interest on such amounts, which interest willaccrue at the lesser of the Trust’s highest marginal borrowing rate, per annumcompounded, and the maximum amount permitted by law, from the date such costsor the like are incurred until the receipt of payment.

 

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

 

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

 

Section 14.5.          Inspectionof Bylaws.  The Trustees shall keepat the principal office for the transaction of business of the Trust theoriginal or a copy of the Bylaws as amended or otherwise altered to date,certified by the secretary, which shall be open to inspection by theshareholders at all reasonable times during office hours.

 

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

 

Section 14.7.          SpecialVoting Provisions relating to 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 (orany successor statute) shall not applyto any acquisition by any person of shares of beneficial interest of theTrust.  This section may be repealed, inwhole or in part, at any time, whether before or after an acquisition ofcontrol shares and, upon such repeal, may, to the extent provided by anysuccessor bylaw, apply to any prior or subsequent control share acquisition.

 

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