VERNON'S TEXAS CIVIL STATUTES
CHAPTER 3. REAL ESTATE INVESTMENT TRUSTS
Art. 6138A. Texas Real Estate Investment Trust Act
Text of article effective until January 1, 2010
Short title
Sec. 1.10. This Act shall be known and may be cited as the "Texas
Real Estate Investment Trust Act."
Real estate investment trust defined
Sec. 2.10. A real estate investment trust is an unincorporated
trust formed by one or more trust managers under Section 3.10 of
this Act and managed in accordance with this Act.
Formation of real estate investment trust
Sec. 3.10. (A) One or more persons, may act as trust manager(s) of a
real estate investment trust by subscribing and acknowledging to a
declaration of trust before an officer duly authorized to take
acknowledgments of deeds, which shall set forth:
(1) The name of the real estate investment trust and a statement
that an assumed name certificate setting forth such name has been
filed in the manner prescribed by law.
(2) A statement that it is formed pursuant to the provisions of this
Act and has the following as its purpose:
To purchase, hold, lease, manage, sell, exchange, develop,
subdivide and improve real property and interests in real property,
and in general, to carry on any other business and do any other acts
in connection with the foregoing and to have and exercise all powers
conferred by the laws of the State of Texas upon real estate
investment trusts formed under the Texas Real Estate Investment
Trust Act, and to do any or all of the things hereinafter set forth
to the same extent as natural persons might or could do. The term
"real property" and the term "interests in real property" for the
purposes stated herein shall not include severed mineral, oil or
gas royalty interests.
(3) The post office address of its initial principal office and
place of business.
(4) The street address of its registered office and the name of its
registered agent at that address.
(5) The name and business address, and post office address, if
different from the business address, of each trust manager.
(6) The period of its duration, which may be for a term of years or
perpetual.
(7) The aggregate number of shares of beneficial interest the real
estate investment trust shall have authority to issue and the par
value to be received by the real estate investment trust for the
issuance of each of such shares. If the shares are divided into
classes as permitted by Section 3.30 of this Act, the declaration
shall provide a description of each class, including any
preferences, conversion, and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption.
(8) A statement that the trust manager(s) shall manage the money or
property received for the issuance of shares for the benefit of the
shareholders of the real estate investment trust .
(9) A statement that the real estate investment trust will not
commence business until it has received for the issuance of shares
of beneficial interest consideration of at least a $1,000 value,
consisting of any tangible or intangible benefit to the real estate
investment trust, including cash, promissory notes, services
performed, contracts for services to be performed, or other
securities of the real estate investment trust.
(10) Any provision, not inconsistent with law, including any
provision which under this Act is permitted to be set forth in the
bylaws, which the trust manager(s) elect to set forth in the
declaration of trust for the regulation of the internal affairs of
the real estate investment trust.
(B) The declaration of trust shall be filed for record with the
County Clerk of the county of the principal place of business of the
real estate investment trust. The existence of the real estate
investment trust begins when the declaration of trust is filed as
required by this subsection.
(C) After the real estate investment trust has been formed, an
organizational meeting of the initial trust managers named in the
declaration of trust shall be held, at the call of a majority of the
trust managers named in the declaration of trust, to adopt bylaws,
elect officers, and transact other business that may come before
the trust managers at the meeting. The trust managers who call the
meeting shall give each trust manager named in the declaration of
trust at least three days' notice of the meeting by mail. The
notice must state the time and place of the meeting.
Defense of ultra vires
Sec. 3.20. (A) Lack of capacity of a real estate investment trust
may never be the basis of a claim or defense at law or in equity.
(B) An act of a real estate investment trust or a conveyance or
transfer of real or personal property to or by a real estate
investment trust may not be declared invalid because the act,
conveyance, or transfer was beyond the scope of the purpose or
purposes of the real estate investment trust as expressed in the
declaration of trust or because there are limitations expressed in
the declaration of trust on the authority of the officers and trust
managers of the real estate investment trust to exercise any
statutory power of the real estate investment trust.
(C) The fact that an act, conveyance, or transfer was or is beyond
the scope of the purpose or purposes of the real estate investment
trust as expressed in its declaration of trust or inconsistent with
any expressed limitations of authority may be asserted:
(1) In a proceeding by a shareholder against the real estate
investment trust to enjoin an act or acts or the transfer of real or
personal property by or to the real estate investment trust. If the
unauthorized act or transfer sought to be enjoined is being, or is
to be, performed or made pursuant to any contract to which the real
estate investment trust is a party, the court may set aside and
enjoin the performance of the contract, if all of the parties to the
contract are parties to the proceeding and if the court considers
the action to be equitable. If the court sets aside and enjoins the
performance of the contract, the court may allow compensation to
the real estate investment trust or to the other parties to the
contract for the loss or damage sustained as a result of the court's
action. The court may not award anticipated profits to be derived
from the performance of the contract as a part of loss or damage
sustained.
(2) In a proceeding by the real estate investment trust against the
incumbent or former officers or trust managers of the real estate
investment trust for exceeding their authority, whether the real
estate investment trust is acting directly or through a receiver,
trustee, or other legal representative, or through shareholders in
a representative suit.
Classification of shares
Sec. 3.30. (A) A real estate investment trust may provide by its
declaration of trust:
(1) that any specified class of shares is preferred over another
class as to its distributive share of the assets on voluntary or
involuntary liquidation of the real estate investment trust and the
amount of the preference;
(2) that any specified class of shares may be redeemed at the option
of the real estate investment trust or of the holders of the shares
and the terms and conditions of redemption, including the time and
price of redemption;
(3) that any specified class of shares is convertible into shares of
one or more other classes and the terms and conditions of
conversion;
(4) that the holders of any specified securities issued or to be
issued by the real estate investment trust have any voting or other
rights which, by law, are or may be conferred on shareholders;
(5) for any other preferences, rights, restrictions, including
restrictions on transferability, and qualifications not
inconsistent with law; provided, however, that no shareholder
shall have a preemptive right to acquire securities unless
specifically provided for in the declaration of trust; and
(6) that the trust manager(s) may classify or reclassify any
unissued shares from time to time by setting or changing the
preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or
terms or conditions of redemption of the shares.
(B) If, under a power contained in the declaration of trust, the
trust manager(s) classifies or reclassifies any unissued shares by
setting or changing the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption, the trust
manager(s), before issuing any of the shares, shall file a
statement of designation for record with the county clerk of the
county of the principal place of business of the real estate
investment trust, which shall include:
(1) A description of the shares, including the preferences,
conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and
conditions of redemption, as set or changed by the trust
manager(s); and
(2) A statement that the shares have been classified or
reclassified by the trust manager(s) under the authority contained
in the declaration of trust.
Operation of real estate investment trust; trust managers and
officers
Sec. 4.10. (A) The control, operation, disposition, investment,
reinvestment and management of the trust estate and, whether
included in the foregoing or not, all powers necessary or
appropriate to effect any or all of the purposes for which the real
estate investment trust is organized shall be vested in one or more
trust manager(s) named in the declaration of trust or successor(s)
selected in accordance therewith; provided that naming successor
trust manager(s) shall be considered an amendment to the
declaration of trust. Trust managers must be natural persons but do
not need to be residents of this state or shareholders of the real
estate investment trust unless the declaration of trust or bylaws
so require. The declaration of trust or bylaws may prescribe other
qualifications for the trust manager(s).
(B) The number of trust managers shall be fixed by, or in the manner
provided in, the declaration of trust or the bylaws, except for the
number of initial trust managers, which shall be fixed by the
declaration of trust. The number of trust managers may be increased
or decreased from time to time by amendment to, or in the manner
provided in, the declaration of trust or the bylaws. A decrease in
the number of trust managers does not shorten the term of any
incumbent trust manager. Unless otherwise provided in the
declaration of trust or the bylaws, a trust manager shall serve
until the manager's successor has been elected by the requisite
vote. A trust manager may succeed himself or herself in office. If
no successor trust manager is elected, the existing trust manager
shall remain in office until the manager's successor is elected.
(C) The bylaws of a real estate investment trust may provide that
the trust managers be divided into two or three classes, each class
to be as nearly equal in number as possible. The bylaws may provide
that the terms of office of trust managers of the first class expire
on the election of a successor at the first annual meeting of
shareholders after their election, that the terms of office of
trust managers of the second class expire on the election of a
successor at the second annual meeting after their election, and
that the terms of office of trust managers of the third class, if
any, expire on the election of a successor at the third annual
meeting after their election. If the bylaws provide for the
classification of trust managers, (1) an annual election for the
whole number of trust managers is not necessary, and (2) at each
annual meeting after the classification, the number of trust
managers equal to the number of the class whose terms expire at the
time of the meeting shall stand for election to office until the
second succeeding annual meeting if there are two classes or until
the third succeeding annual meeting if there are three classes. A
classification of trust managers does not take effect before the
next annual meeting of shareholders at which trust managers are
elected unless the classification is effected by a bylaw adopted by
the shareholders. A classification of trust managers is not
effective for any real estate investment trust if any shareholder
has the right to cumulate his votes for the election of trust
managers of the real estate investment trust unless there are nine
or more trust managers.
(D) Any vacancy occurring in the trust managers may be filled by the
vote of a majority of the remaining trust managers, though less than
a quorum; provided, however, that the declaration of trust or
bylaws may provide an alternative procedure for filling vacancies,
including simple majority or super-majority votes of the
shareholders. A trust manager elected to fill a vacancy shall be
elected for the unexpired term of the trust manager's predecessor
in office and until the trust manager's successor is elected and
qualified.
(E) A majority of the number of trust managers shall constitute a
quorum for the transaction of business unless a greater number is
required by the declaration of trust or the bylaws.
(F) The trust manager(s) may designate one or more persons,
regardless of whether the persons are trust managers, to constitute
officers of the real estate investment trust to the extent provided
in the declaration of trust or in the bylaws of the real estate
investment trust, who shall have and may exercise all of the
authorities of the trust manager(s) in the business and affairs of
the real estate investment trust except where action of the trust
manager(s) is specified by this Act or other applicable laws, but
the designation of such officers and the delegation thereto of
authority shall not operate to relieve the trust manager(s), or any
member thereof, of any responsibility imposed upon them or him by
law. All officers and agents of the real estate investment trust
shall have such authority and perform such duties in the management
of the real estate investment trust as may be provided in the bylaws
or as may be determined by the trust manager(s) not inconsistent
with the bylaws. Any officer or agent elected or appointed by the
trust manager(s) may be removed by the trust manager(s) whenever in
their judgment the best interests of the real estate investment
trust will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself
create contract rights.
(G) The trust manager(s) or officers shall have the power to
exercise complete discretion with respect to the investment of the
trust estate so long as the investment is not contrary to or
inconsistent with this Section or with the sections of the Internal
Revenue Code of 1986 (or any successor statute) which relate to or
govern real estate investment trusts or the regulations adopted
under such sections.
(H) The trust manager(s) and the officers of the real estate
investment trust shall receive such compensation as may be fixed
by, or in the manner provided in, the declaration of trust or the
bylaws. If the declaration of trust or bylaws does not contain a
provision for compensation to the trust managers and officers of
the real estate investment trust, the compensation for the trust
managers and officers shall be determined by vote of the trust
managers.
(I) To the extent any provision of this Act is contrary to or
inconsistent with the sections of the Internal Revenue Code of 1986
(or any successor statute) which relate to or govern real estate
investment trusts or the regulations adopted under those sections,
or requires any trust formed hereunder to take (or prohibits any
trust formed hereunder from taking) any action required to secure
or maintain its status as a real estate investment trust under such
sections or regulations, the sections and regulations of the
Internal Revenue Code of 1986 (or any successor statute) shall
prevail over the provisions of this Act as to any real estate
investment trust qualifying or attempting to qualify under such
sections and regulations.
Interested trust managers and officers
Sec. 4.20. (A) A contract or transaction between a real estate
investment trust and one or more of the trust managers or officers
of the real estate investment trust, or between a real estate
investment trust and any other real estate investment trust,
corporation, partnership, association, or other organization, is
not void or voidable solely because one or more of the trust
managers or officers of the real estate investment trust are trust
managers, directors, or officers or have a financial interest in
the other real estate investment trust, corporation, partnership,
association, or other organization; solely because the trust
manager or officer is present at or participates in the meeting of
the trust managers or committee of trust managers that authorizes
the contract or transaction; or solely because the trust manager's
or officer's votes are counted for the authorization if:
(1) the material facts as to the trust manager's or officer's
relationship or interest and as to the contract or transaction are
disclosed or are known to the trust managers or the committee, and
the trust managers or committee in good faith authorizes the
contract or transaction by the affirmative vote of a majority of the
disinterested trust managers, even though the number of
disinterested trust managers is less than a quorum;
(2) the material facts as to the trust manager's or officer's
relationship or interest and as to the contract or transaction are
disclosed or are known to the shareholders entitled to vote on the
contract or transaction, and the contract or transaction is
specifically approved in good faith by vote of the shareholders; or
(3) the contract or transaction is fair as to the real estate
investment trust as of the time the contract or transaction is
authorized, approved, or ratified by the trust managers, a
committee of trust managers, or the shareholders.
(B) Common or interested trust managers may be counted in
determining the presence of a quorum at a meeting of the trust
managers or of a committee of trust managers that authorizes the
contract or transaction.
Committees of the trust managers
Sec. 4.30. (A) If the declaration of trust or the bylaws provide for
the designation of committees of trust managers, the trust
managers, by resolution adopted by a majority of the trust
managers, may designate from among the members of the trust
managers one or more committees. The committees must be composed of
one or more of the members of the trust managers. The trust
managers may designate one or more of their members as alternate
members of any committee who, subject to any limitations imposed by
the trust managers, may replace absent or disqualified members at
any meeting of that committee. To the extent provided in the
resolution or in the declaration of trust or the bylaws, a committee
has and may exercise all of the authority of the trust managers
subject to the limitations set forth in Subsections (B) and (C) of
this Section.
(B) A committee of trust managers does not have the authority of the
trust managers with regard to:
(1) amending the declaration of trust, except that a committee, to
the extent provided in the resolution designating that committee or
in the declaration of trust or the bylaws, may exercise the
authority of the trust managers to classify or reclassify shares in
accordance with Section 3.30 of this Act;
(2) proposing a reduction of the stated capital of the real estate
investment trust;
(3) approving a plan of merger or share exchange of the real estate
investment trust;
(4) recommending to the shareholders the sale, lease, or exchange
of all or substantially all of the property and assets of the real
estate investment trust other than in the usual and regular course
of its business;
(5) recommending to the shareholders a voluntary dissolution of the
real estate investment trust or a revocation of the trust;
(6) amending, altering, or repealing the bylaws or adopting new
bylaws of the real estate investment trust;
(7) filling vacancies in the trust managers;
(8) filling vacancies in or designating alternate members of the
committee;
(9) filling any trust manager vacancy occurring because of an
increase in the number of trust managers;
(10) electing or removing officers of the real estate investment
trust or members or alternate members of the committee;
(11) fixing the compensation of any member or alternate member of
the committee; or
(12) altering or repealing any resolution of the trust managers
that by its terms provides that it may not be altered in that manner
or repealed.
(C) A committee of the trust managers may not authorize a
distribution or the issuance of shares of the real estate
investment trust, unless the distribution or issuance is authorized
by the resolution designating that committee or the declaration of
trust or the bylaws.
(D) The designation of a committee of trust managers and the
delegation to the committee of the trust managers' authority does
not relieve any trust manager of any responsibility imposed by law.
Registered office and registered agent
Sec. 5.10. (A) Each real estate investment trust shall have and
continuously maintain in this state:
(1) a registered office that may be, but need not be, the same as the
principal office and place of business of the real estate
investment trust; and
(2) a registered agent that may be either:
(a) an individual resident in this state whose business office is
the same as the registered office of the real estate investment
trust; or
(b) a domestic corporation or real estate investment trust or a
foreign corporation authorized to transact business in this state
that has a business office that is the same as the registered office
of the real estate investment trust.
(B) A real estate investment trust may change its registered
office, its registered agent, or both, on filing with the county
clerk of the county where the declaration of trust was filed a
statement that is executed by an officer on behalf of the real
estate investment trust and that sets forth:
(1) the name of the real estate investment trust;
(2) the post-office address of the registered office of the real
estate investment trust;
(3) if the post-office address of the registered office of the real
estate investment trust is to be changed, the post-office address
to which the registered office is to be changed;
(4) the name of the registered agent of the real estate investment
trust;
(5) if the registered agent of the real estate investment trust is
to be changed, the name of the successor registered agent;
(6) a statement that the post-office address of the registered
office of the real estate investment trust or the post-office
address of the business office of the registered agent, as changed,
will be the same; and
(7) a statement that the proposed change was authorized by the trust
managers of the real estate investment trust or by an officer of the
real estate investment trust who is authorized by the trust
managers to make a decision regarding the proposed change.
(C) Any registered agent of a real estate investment trust may
resign:
(1) by giving written notice to the real estate investment trust at
the last known address of the real estate investment trust; and
(2) by filing written notice with the county clerk of the county
where the declaration of trust was filed within 10 days after the
date on which the notice described by Subdivision (1) of this
Subsection was mailed or delivered to the real estate investment
trust.
(D) The notice described by Subsection (C)(2) of this Section must
include the last known address of the real estate investment trust,
a statement that written notice of resignation has been given to the
real estate investment trust, and the date of the resignation.
(E) On complying with the notice requirements of Subsections (C)
and (D) of this Section, the appointment of a registered agent who
wants to resign as agent terminates on the expiration of 30 days
after the date on which the notice is filed with the county clerk of
the county where the declaration of trust was filed.
(F) The address of the location of the registered office in this
state for a real estate investment trust may be changed to another
address on filing with the county clerk of the county where the
declaration of trust was filed a statement that is executed by the
registered agent for the real estate investment trust, or if the
agent is a corporation or real estate investment trust, by an
officer on behalf of the corporation or the real estate investment
trust, and that sets forth:
(1) the name of the real estate investment trust represented by the
registered agent;
(2) the address at which the registered agent has maintained the
registered office for the real estate investment trust;
(3) the new address at which the registered agent will maintain the
registered office for the real estate investment trust; and
(4) a statement that written notice of the change of address has
been given to the real estate investment trust at least 10 days
before the filing of the statement required by this Section.
Service of process
Sec. 5.20. (A) The president, all vice presidents, and the
registered agent of the real estate investment trust are agents of
the real estate investment trust on whom any process, notice, or
demand required or permitted by law to be served on the real estate
investment trust may be served.
(B) When a real estate investment trust fails to appoint or maintain
a registered agent in this state or when the registered agent of the
real estate investment trust cannot with reasonable diligence be
found at the registered office, the secretary of state shall be an
agent of the real estate investment trust on whom any process,
notice, or demand may be served. Service of any process, notice, or
demand on the secretary of state shall be made by delivering to and
leaving with the secretary of state, the assistant secretary of
state, or any clerk having charge of the corporation department of
the office of the secretary of state, duplicate copies of the
process, notice, or demand. If any process, notice, or demand is
served on the secretary of state under this Section, the secretary
of state shall immediately forward by registered mail one of the
copies of the process, notice, or demand to the real estate
investment trust at its registered office. Any service made on the
secretary of state shall be returnable in not less than 30 days.
(C) The secretary of state shall keep a record of all processes,
notices, and demands served on the secretary of state under this
Section. The record must include the time of the service and the
action of the secretary of state with regard to the process, notice,
or demand.
(D) The secretary of state shall collect for state use the fee for
maintaining a record of service of any process, notice, or demand on
the secretary of state as agent for any real estate investment trust
under this Section that is established by Section 405.031(a),
Government Code.
General powers of real estate investment trust
Sec. 6.10. (A) Subject to the provisions of paragraphs (B) and (C)
of this Section, each real estate investment trust shall have
power:
(1) To have perpetual succession by its trust name unless a limited
period of duration is stated in its declaration of trust.
(2) To sue and be sued, complain and defend, in its trust name.
(3) To purchase, receive, lease, or otherwise acquire, own, hold,
improve, use and otherwise deal in and with, real or personal
property or any interest therein, wherever situated, as the
purposes of the real estate investment trust shall require.
(4) To sell, convey, mortgage, pledge, lease, exchange, transfer
and otherwise dispose of all or any part of its property and assets.
(5) To lend money to, and otherwise assist, the employees,
officers, and trust managers of the real estate investment trust if
the loan or assistance may reasonably be expected to benefit,
directly or indirectly, the lending or assisting real estate
investment trust.
(6) To purchase, receive, subscribe for, or otherwise acquire, own,
hold, vote, use, employ, mortgage, lend, pledge, sell or otherwise
dispose of, and otherwise use and deal in and with, securities,
shares or other interests in, or obligations of, domestic or
foreign corporations, associations, partnerships, other real
estate investment trusts, or individuals, or direct or indirect
obligations of the United States or of any other government, state,
territory, government district, or municipality, or of any
instrumentality thereof.
(7) To purchase or otherwise acquire its own bonds, debentures, or
other evidences of its indebtedness or obligations; to purchase or
otherwise acquire its own unredeemable shares and hold those
acquired shares as treasury shares or cancel or otherwise dispose
of those acquired shares; and to redeem or purchase shares made
redeemable by the provisions of its declaration of trust.
(8) To make contracts, and incur liabilities, borrow money at such
rates of interest as the trust may determine, issue its notes,
bonds, and other obligations, and secure any of its obligations by
mortgage or pledge of all or any of its property, franchises, and
income.
(9) To lend money for its trust purposes, invest and reinvest its
funds, and take and hold real and personal property as security for
the payment of funds so loaned or invested.
(10) To conduct its business, carry on its operations, and have
offices and exercise the powers granted by this Act in any state,
territory, district or possession of the United States, or in any
foreign country.
(11) To elect or appoint officers and agents of the trust for such
period of time as the real estate investment trust may determine,
and define their duties and fix their compensation.
(12) To make and alter bylaws, not inconsistent with its
declaration of trust or with the laws of this state, for the
administration and regulation of the affairs of the real estate
investment trust.
(13) To make donations for the public welfare or for charitable,
scientific, or educational purposes.
(14) To transact any lawful business that the trust managers find
will aid government policy.
(15) To indemnify trust managers, officers, employees, and agents
of the real estate investment trust and to purchase and maintain
liability insurance for those persons.
(16) To pay pensions and establish pension plans, pension trusts,
profit sharing plans, stock option plans, stock bonus plans, and
other incentive plans for any or all of, or any class or classes of,
its trust managers, officers, or employees.
(17) To be an organizer, partner, member, associate, or manager of
any partnership, joint venture, or other enterprise, and to the
extent permitted in any other jurisdiction, to be an incorporator
of any other corporation of any type or kind.
(18) To cease its trust activities and terminate its existence by
voluntary dissolution.
(19) To engage in activities that are mandated or authorized by
sections of the Internal Revenue Code of 1986, or any successor
statute, that relate to or govern real estate investment trusts or
the regulations adopted under that law.
(20) Whether included in the foregoing or not, to have and exercise,
all powers necessary or appropriate to effect any or all of the
purposes for which the real estate investment trust is organized.
(B) Nothing in this Section grants any authority to officers or
trust manager(s) of a real estate investment trust to perform any of
the foregoing powers inconsistent with the limitations on any of
the same which may be expressly set forth in this Act or in the
declaration of trust or in any other laws of this state. Authority
of officers and trust manager(s) to act beyond the scope of the
purpose or purposes of a real estate investment trust is not granted
by any provision of this Section.
(C) Nothing contained in this Act shall be deemed to authorize any
action in violation of the antitrust laws of this state as now
existing or hereafter amended.
Subscription for shares
Sec. 7.10. (A) Unless otherwise provided in the subscription, a
subscription for shares of a real estate investment trust to be
organized may not be revoked within six months, except with the
consent of all other subscribers.
(B) In the case of a real estate investment trust to be organized,
the filing of the declaration of trust with the county clerk of the
county of the principal place of business of the real estate
investment trust constitutes acceptance by the real estate
investment trust of all subscriptions for shares that are contained
in a list of subscriptions filed with the declaration of trust. The
list of subscriptions shall contain the name, post-office address,
number of shares, and amount paid by each subscriber. Failure to
include a subscription for shares in the list of subscriptions
constitutes a rejection of the offer.
(C) In the case of an existing real estate investment trust,
acceptance of a subscription for shares is effected by a resolution
of acceptance by the trust managers or by a written memorandum of
acceptance of the subscription for shares executed by a person
authorized to execute the memorandum by the trust managers and
delivered to the subscriber or the subscriber's assignee.
(D) Subscriptions for shares, whether made before or after the
organization of a real estate investment trust, shall be paid in
full at a time determined by the trust managers or in installments
and at times determined by the trust managers. Any call made by the
trust managers for payment on subscriptions must be uniform for all
shares of the same class or all shares of the same series, as the
case may be. In case of default in the payment of any installment or
call when the payment is due, the real estate investment trust may
proceed to collect the amount due in the same manner as the real
estate investment trust would collect any debt due the real estate
investment trust. The bylaws may prescribe other penalties for
failure to pay installments or calls that may become due, but a
penalty working a forfeiture of a subscription, or of the amounts
paid on the subscription, may not be declared against any
subscriber unless the amount due on the subscription remains unpaid
on the 21st day after the day on which written demand is made for
payment. If mailed, the written demand is considered to be made
when deposited in the United States mail in a sealed envelope, with
prepaid postage, addressed to the subscriber at the subscriber's
last post-office address known to the real estate investment trust.
If the demand remains unsatisfied for the 20-day period, and if the
real estate investment trust is solvent, the real estate investment
trust may declare the subscription to be forfeited. The effect of
the declaration of forfeiture is to terminate all the rights and
obligations of the subscriber as a subscriber of shares.
Certificates representing shares
Sec. 7.20. (A) A real estate investment trust shall deliver
certificates representing shares to which shareholders are
entitled, or the shares of a real estate investment trust may be
uncertificated shares. Unless otherwise provided by the
declaration of trust or bylaws, the trust managers of a real estate
investment trust by resolution may provide that some or all of any
or all classes and series of its shares shall be uncertificated
shares, provided that the resolution may not apply to shares
represented by a certificate until the certificate is surrendered
to the real estate investment trust. Certificates representing
shares shall be signed by the officer or officers prescribed by the
bylaws of the real estate investment trust to sign the shares and
may be sealed with the seal of the real estate investment trust, if
any, or a facsimile of the seal. The signatures of the officer or
officers on a certificate may be facsimiles. If an officer who has
signed or whose facsimile signature has been placed on the
certificate ceases to serve as an officer before the certificate is
issued, the real estate investment trust may issue the certificate,
and the certificate has the same effect as if that officer were
serving as an officer on the date of the certificate's issuance.
(B) If a real estate investment trust is authorized to issue shares
of more than one class or series, each certificate representing
shares issued by the real estate investment trust shall
conspicuously:
(1) set forth on the face or back of the certificate a full
statement of all the designations, preferences, limitations, and
relative rights of the shares of each class or series to the extent
they have been fixed and determined and the authority of the trust
managers to fix and determine the designations, preferences,
limitations, and relative rights of subsequent series; or
(2) state on the face or back of the certificate that:
(a) a statement that contains the information required in
Subdivision (1) of this Subsection is set forth in the declaration
of trust on file with the county clerk of the county of the
principal place of business of the real estate investment trust;
and
(b) the real estate investment trust, on written request to the real
estate investment trust at its principal place of business or
registered office, will furnish a copy of the statement to the
record holder of the certificate without charge.
(C) Each certificate representing shares shall state on the face of
the certificate:
(1) that the real estate investment trust is organized under the
laws of this state;
(2) the name of the person to whom the certificate was issued;
(3) the number and class of shares and the designation of the
series, if any, that the certificate represents; and
(4) the par value of each share represented by the certificate, or a
statement that the shares are without par value.
(D) In accordance with Chapter 8, Business & Commerce Code, a real
estate investment trust, after the issuance or transfer of
uncertificated shares, shall send to the registered owner of
uncertificated shares a written notice containing the information
required to be set forth or stated on certificates under this Act.
Except as otherwise expressly provided by law, the rights and
obligations of the holders of uncertificated shares and the rights
and obligations of the holders of certificates representing shares
of the same class and series must be identical. A share may not be
issued until the consideration for the share, fixed as provided by
law, has been fully paid.
(E) A requirement of this Act regarding matters to be set forth on
certificates representing shares of a real estate investment trust
may not apply to or affect certificates outstanding when the
requirement first becomes applicable to the certificates, but the
requirement shall apply to all certificates issued after the
requirement becomes applicable, whether the requirement relates to
an original issue of shares, a transfer of shares, or otherwise.
(F) If any restriction on the transfer or registration of the
transfer of shares is imposed or agreed to by the real estate
investment trust, as permitted by this Act, each certificate
representing shares restricted in this manner:
(1) shall conspicuously set forth a full or summary statement of the
restriction on the face of the certificate;
(2) shall set forth the statement on the back of the certificate and
conspicuously refer to the statement on the face of the
certificate; or
(3) shall conspicuously state on the face or back of the certificate
that such a restriction exists pursuant to a specified document
and:
(a) that the real estate investment trust, on written request to the
real estate investment trust at its principal place of business,
shall furnish to the record holder of the certificate a copy of the
specific document without charge; or
(b) if the document is one required or permitted to be and has been
filed under this Act, that the specified document is on file with
the county clerk of the county of the principal place of business of
the real estate investment trust and contains a full statement of
the restriction.
(G) Unless the document described by Subdivision (3) of Subsection
(F) of this Section was on file with the county clerk of the county
of the principal place of business of the real estate investment
trust at the time of the request, a real estate investment trust
that fails within a reasonable time to furnish without charge to a
record holder of a certificate who requested a copy of the specified
document may not be permitted to enforce its rights under the
restriction imposed on the shares represented by the certificate.
(H) If a real estate investment trust has by its declaration of
trust provided for a preemptive right of shareholders to acquire
unissued securities of the real estate investment trust, each
certificate representing shares issued by the real estate
investment trust shall conspicuously set forth on the face or back
of the certificate a full statement of the existence of preemptive
rights.
Consideration and payment for shares
Sec. 7.30. (A) Shares may be issued for such consideration as shall
be fixed from time to time by the trust manager(s). If the shares
have a par value, the consideration for the shares may not be less
than the par value.
(B) The consideration paid for the issuance of shares shall consist
of any tangible or intangible benefit to the real estate investment
trust, including cash, promissory notes, services performed,
contracts for services to be performed, or other securities of the
real estate investment trust. Shares may not be issued until the
full amount of the consideration has been paid. When such
consideration shall have been paid to the real estate investment
trust or to another entity of which all of the outstanding shares of
each class of capital stock are owned, directly or indirectly, by
the real estate investment trust, the shares shall be deemed to have
been issued, and the shareholder entitled to receive such issue,
shall be a shareholder with respect to such shares, and the shares
shall be considered fully paid and non-assessable.
(C) In the absence of fraud in the transaction, the judgment of the
trust manager(s) or the shareholders, as the case may be, as to the
value of the consideration received for shares shall be conclusive.
Transfer of shares and other securities and restrictions on
transfer
Sec. 7.40. (A) Except as otherwise provided in this Act, the shares
and other securities of a real estate investment trust are personal
property for all purposes and are transferable in accordance with
Chapter 8, Business & Commerce Code.
(B) A restriction on the transfer or registration of transfer of a
security may be imposed by the declaration of trust or bylaws, or by
a written agreement among any number of the holders of the
securities or a written agreement among any number of the holders
and the real estate investment trust, provided the real estate
investment trust places on file a counterpart of the agreement at
its principal place of business or its registered office. The
counterpart of the agreement shall be subject to the same right of
examination by a shareholder of the real estate investment trust,
in person or by agent, attorney, or accountant, as are the books and
records of the real estate investment trust. A restriction on the
transfer or registration of transfer of a security imposed as
described by this Subsection is not valid with respect to any
security issued before the adoption of the restriction unless the
holder of the security voted in favor of the restriction or is a
party to the agreement imposing the restriction.
(C) Any restriction on the transfer or registration of transfer of a
security of a real estate investment trust shall be specifically
enforceable against the holder of the restricted security or any
successor or transferee of the holder if the restriction is:
(1) reasonable and noted conspicuously on the certificate or other
instrument representing the security; or
(2) in the case of an uncertificated security, reasonable and
notation of the restriction is contained in the notice sent
pursuant to Subsection (D) of Section 7.20 of this Act with respect
to the security.
(D) A restriction, even though otherwise enforceable, is
ineffective against a transferee for value without actual knowledge
of the restriction at the time of the transfer or against any
subsequent transferee (whether or not for value), unless the
restriction is noted conspicuously on the certificate or other
instrument representing the security or, in the case of an
uncertificated security, notation of the restriction is contained
in the notice sent pursuant to Subsection (D) of Section 7.20 of
this Act with respect to the security. The restriction shall be
specifically enforceable against any other person who is not a
transferee for value from and after the time that the person
acquires actual knowledge of the existence of the restriction.
(E) In particular and without limiting the general power granted in
Subsections (B), (C), and (D) of this Section to impose reasonable
restrictions, a restriction on the transfer or registration of
transfer of securities of a real estate investment trust is valid if
it reasonably:
(1) obligates the holders of the restricted securities to offer to
the real estate investment trust or to any other holders of
securities of the real estate investment trust or to any other
person, or to any combination of those persons, a prior
opportunity, to be exercised within a reasonable time, to acquire
the restricted securities;
(2) obligates the real estate investment trust, to the extent
permitted by this Act, or any holder of securities of the real
estate investment trust or any other person, or any combination of
those persons, to purchase the securities that are the subject of an
agreement regarding the purchase and sale of the restricted
securities;
(3) requires the real estate investment trust or the holders of any
class of securities of the real estate investment trust to consent
to any proposed transfer of the restricted securities or to approve
the proposed transferee of the restricted securities for the
purpose of preventing violations of federal or state laws;
(4) prohibits the transfer of the restricted securities to
designated persons or classes of persons, and the designation is
not manifestly unreasonable; or
(5) maintains any tax advantage to the real estate investment
trust, including maintaining its status as a real estate investment
trust under the applicable provisions of the Internal Revenue Code
of 1986 or the regulations adopted under that law.
(F)(1) A real estate investment trust that has adopted a bylaw, or
that is a party to an agreement restricting the transfer of its
shares or other securities, may file the bylaw or agreement as a
matter of public record with the county clerk of the county of the
principal place of business of the real estate investment trust, as
provided in this Subsection.
(2) The real estate investment trust shall file a copy of the bylaw
or agreement with the county clerk and a statement attached to the
copy setting forth:
(a) the name of the real estate investment trust;
(b) that the copy of the bylaw or agreement is a true and correct
copy of the bylaw or agreement; and
(c) that the filing has been duly authorized by the trust managers
or the shareholders, as the case may be.
(3) The statement shall be executed by an officer on behalf of the
real estate investment trust.
(4) After the filing of the statement with the county clerk, the
bylaw or agreement restricting the transfer of shares or other
securities becomes a matter of public record and the fact of the
filing of the bylaw or agreement shall be stated on any certificate
representing the shares or other securities restricted by the bylaw
or agreement if required by Subsection (F) of Section 7.20 of this
Act.
(G) By complying with the provisions of this Act or amending the
declaration of trust, a real estate investment trust that is a party
to an agreement restricting the transfer of its shares or other
securities may make that agreement part of its declaration of trust
without restating the provisions of the agreement in the
declaration of trust. If the agreement alters any provision of the
original or amended declaration of trust, the articles of amendment
must identify the altered provision by reference or description.
If the agreement is to be an addition to the original or amended
declaration of trust, the articles of amendment shall state that
fact. A copy of the agreement restricting the transfer of shares or
other securities must be attached to the articles of amendment. The
articles of amendment shall state that the attached copy of the
agreement is a true and correct copy of the agreement and that its
inclusion as part of the declaration of trust has been duly
authorized in the manner required by this Act to amend the
declaration of trust.
(H) When shares are registered on the books of a real estate
investment trust in the names of two or more persons as joint owners
with the right of survivorship, after the death of a joint owner and
before the time that the real estate investment trust receives
actual written notice that parties other than the surviving joint
owner or owners claim an interest in the shares of or any
distributions from the real estate investment trust, the real
estate investment trust may record on its books and otherwise
effect the transfer of those shares to any person, firm, or entity
(including that surviving joint owner individually) and may pay any
distributions made in respect of those shares, in each case as if
the surviving joint owner or owners were the absolute owners of the
shares. A real estate investment trust permitting such a transfer
by and making any distribution to a surviving joint owner or owners
before the receipt of written notice from other parties claiming an
interest in those shares or distributions is discharged from all
liability for the transfer or payment so made; provided, however,
that the discharge of the real estate investment trust from
liability and the transfer of full legal and equitable title of the
shares does not affect, reduce, or limit any cause of action
existing in favor of any owner of an interest in those shares or
distributions against the surviving owner or owners.
Liability of subscribers and shareholders
Sec. 8.10. (A) A holder of shares, an owner of any beneficial
interest in shares, or a subscriber for shares whose subscription
has been accepted is not under an obligation to the real estate
investment trust or to its obligees with respect to:
(1) the shares other than the obligation to pay to the real estate
investment trust the full amount of the consideration, fixed in
compliance with Section 7.30 of this Act, for which the shares were
or are to be issued;
(2) any contractual obligation of the real estate investment trust
on the basis that the holder, owner, or subscriber is or was the
alter ego of the real estate investment trust, or on the basis of
actual fraud or constructive fraud, a sham to perpetrate a fraud, or
other similar theory, unless the obligee demonstrates that the
holder, owner, or subscriber caused the real estate investment
trust to be used for the purpose of perpetrating and did perpetrate
an actual fraud on the obligee primarily for the direct personal
benefit of the holder, owner, or subscriber; or
(3) any obligation of the real estate investment trust on the basis
of the failure of the real estate investment trust to observe any
formality, including the failure to:
(a) comply with any requirement of this Act or of the declaration of
trust or bylaws of the real estate investment trust; or
(b) observe any requirement prescribed by this Act or by the
declaration of trust or bylaws for acts taken by the real estate
investment trust, its trust managers, or its shareholders.
(B) The liability of a holder, owner, or subscriber of shares of a
real estate investment trust for an obligation that is limited by
Subsection (A) of this Section is exclusive and preempts any other
liability imposed on a holder, owner, or subscriber of shares of a
real estate investment trust for that obligation under common law
or otherwise, except that this Section does not limit the
obligation of a holder, owner, or subscriber to an obligee of the
real estate investment trust when:
(1) the holder, owner, or subscriber has expressly assumed,
guaranteed, or agreed to be personally liable to the obligee for the
obligation; or
(2) the holder, owner, or subscriber is otherwise liable to the
obligee for the obligation under this Act or another applicable
statute .
(C) Any person becoming an assignee or transferee of certificated
shares or of uncertificated shares or of a subscription for shares
in good faith and without knowledge or notice that the full
consideration therefor has not been paid to the real estate
investment trust shall not be personally liable to the real estate
investment trust or its creditors for any unpaid portion of such
consideration.
(D) An executor, administrator, conservator, guardian, trustee,
assignee for the benefit of creditors, or receiver, shall not be
liable personally as a holder of shares of a real estate investment
trust, but the estate and funds in his hands shall be liable to pay
to the real estate investment trust the full amount of the
consideration for which such shares were issued or to be issued.
(E) No pledgee or other holder of shares as collateral security
shall be personally liable as a shareholder.
Bylaws
Sec. 9.10. (A) The initial bylaws of the real estate investment
trust shall be adopted by the trust manager(s). The bylaws may
contain any provisions for the regulation and management of the
affairs of the real estate investment trust not inconsistent with
law or the declaration of trust.
(B) The trust manager(s) of a real estate investment trust may amend
or repeal the real estate investment trust's bylaws, or adopt new
bylaws, unless:
(1) the declaration of trust or this Act reserves the power
exclusively to the shareholders in whole or part; or
(2) the shareholders in amending, repealing, or adopting a
particular bylaw provision expressly provide that the trust
manager(s) may not amend or repeal that bylaw.
(C) Unless the declaration of trust or a bylaw adopted by the
shareholders provides otherwise as to all or some portion of a real
estate investment trust's bylaws, a real estate investment trust's
shareholders may amend, repeal, or adopt the real estate investment
trust's bylaws even though the bylaws may also be amended,
repealed, or adopted by its trust manager(s).
Indemnification
Sec. 9.20. (A) In this Section:
(1) "Trust Manager" means any person who is or was a trust manager
of the real estate investment trust and any person who, while a
trust manager of the real estate investment trust, is or was
serving, at the request of the real estate investment trust as a
trust manager, director, officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary of another real
estate investment trust, foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise.
(2) "Expenses" include court costs and attorney's fees.
(3) "Official capacity":
(a) when used with respect to a trust manager, means the office of
trust manager in the real estate investment trust; and
(b) when used with respect to a person other than a trust manager,
means the elective or appointive office in the real estate
investment trust held by the officer or the employment or agency
relationship undertaken by the employee or agent in behalf of the
real estate investment trust; but
(c) in both paragraphs (a) and (b) does not include service for any
other real estate investment trust or foreign or domestic
corporation or any partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise.
(4) "Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such
an action, suit, or proceeding, and any inquiry or investigation
that could lead to such an action, suit, or proceeding.
(5) "Real estate investment trust" includes any domestic or foreign
predecessor of the real estate investment trust in a merger,
consolidation, or other transaction in which the liabilities of the
predecessor are transferred to the real estate investment trust by
operation of law and in any other transaction in which the real
estate investment trust assumes the liabilities of the predecessor
but does not specifically exclude liabilities that are the subject
matter of this Section.
(B) A real estate investment trust may indemnify a person who was,
is, or is threatened to be made a named defendant or respondent in a
proceeding because the person is or was a trust manager only if it
is determined in accordance with Subsection (F) of this Section
that the person:
(1) conducted himself in good faith;
(2) reasonably believed:
(a) in the case of conduct in his official capacity as a trust
manager of the real estate investment trust, that his conduct was in
the real estate investment trust's best interests; and
(b) in all other cases, that his conduct was at least not opposed to
the real estate investment trust's best interests; and
(3) in the case of any criminal proceeding, had no reasonable cause
to believe that his conduct was unlawful.
(C) Except to the extent permitted by Subsection (E) of this
Section, a trust manager may not be indemnified under Subsection
(B) of this Section in respect of a proceeding:
(1) in which the person is found liable on the basis that personal
benefit was improperly received by him, whether or not the benefit
resulted from an action taken in the person's official capacity; or
(2) in which the person is found liable to the real estate
investment trust.
(D) The termination of a proceeding by judgment, order, settlement,
or conviction, or on a plea of nolo contendere or its equivalent is
not of itself determinative that the person did not meet the
requirements set forth in Subsection (B) of this Section. A person
shall be deemed to have been found liable in respect of any claim,
issue, or matter only after the person shall have been so adjudged
by a court of competent jurisdiction after exhaustion of all
appeals therefrom.
(E) A person may be indemnified under Subsection (B) of this Section
against judgments, penalties (including excise and similar taxes),
fines, settlements, and reasonable expenses actually incurred by
the person in connection with the proceeding; but if the person is
found liable to the real estate investment trust or is found liable
on the basis that personal benefit was improperly received by the
person, the indemnification (1) is limited to reasonable expenses
actually incurred by the person in connection with the proceeding,
and (2) shall not be made in respect of any proceeding in which the
person shall have been found liable for wilful or intentional
misconduct in the performance of his duty to the real estate
investment trust.
(F) A determination to furnish indemnification under Subsection (B)
of this Section shall be made only:
(1) by a majority vote of a quorum consisting of trust managers who
at the time of the vote are not named defendants or respondents in
the proceeding;
(2) if such a quorum cannot be obtained, by a majority vote of a
committee of the trust managers, designated to act in the matter by
a majority vote of all trust managers, consisting solely of two or
more trust managers who at the time of the vote are not named
defendants or respondents in the proceeding;
(3) by special legal counsel selected by the trust managers or a
committee thereof by vote as set forth in Subdivision (1) or (2) of
this Subsection, or, if such a quorum cannot be obtained and such a
committee cannot be established, by a majority vote of all trust
managers; or
(4) by the shareholders in a vote that excludes the shares of
beneficial interest held by trust managers who are named defendants
or respondents in the proceeding.
(G) Authorization of indemnification and determination as to
reasonableness of expenses must be made in the same manner as the
determination that indemnification is permissible, except that if
the determination that indemnification is permissible is made by
special legal counsel, authorization of indemnification and
determination as to reasonableness of expenses must be made in the
manner specified by Subdivision (3) of Subsection (F) of this
Section for the selection of special legal counsel. A provision
contained in the declaration of trust, the bylaws, or an agreement
that makes mandatory the indemnification permitted under
Subsection (B) of this Section shall be deemed to constitute
authorization of indemnification in the manner required by this
Subsection even though such provision may not have been adopted or
authorized in the same manner as the determination that
indemnification is permissible.
(H) A real estate investment trust shall indemnify a trust manager
against reasonable expenses incurred by him in connection with a
proceeding in which he is a named defendant or respondent because he
is or was a trust manager if he has been wholly successful, on the
merits or otherwise, in the defense of the proceeding.
(I) If, in a suit for the indemnification required by Subsection (H)
of this Section, a court of competent jurisdiction determines that
the trust manager is entitled to indemnification under that
Subsection, the court shall order indemnification and shall award
to the trust manager the expenses incurred in securing the
indemnification.
(J) If, upon application of a trust manager, a court of competent
jurisdiction determines, after giving any notice the court
considers necessary, that the trust manager is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not he has met the requirements set forth
in Subsection (B) of this Section or has been found liable in the
circumstances described by Subsection (C) of this Section, the
court may order the indemnification that the court determines is
proper and equitable; but if the trust manager is found liable to
the real estate investment trust or is found liable on the basis
that personal benefit was improperly received by the trust manager,
the indemnification shall be limited to reasonable expenses
actually incurred by the trust manager in connection with the
proceeding.
(K) Reasonable expenses incurred by a trust manager who was, is, or
is threatened to be made a named defendant or respondent in a
proceeding may be paid or reimbursed by the real estate investment
trust, in advance of the final disposition of the proceeding and
without the determination specified in Subsection (F) of this
Section or the authorization or determination specified in
Subsection (G) of this Section, after the real estate investment
trust receives a written affirmation by the trust manager of his
good faith belief that he has met the standard of conduct necessary
for indemnification under this Section and a written undertaking by
or on behalf of the trust manager to repay the amount paid or
reimbursed if it is ultimately determined that he has not met that
standard or if it is ultimately determined that indemnification of
the trust manager against expenses incurred by him in connection
with that proceeding is prohibited by Subsection (E) of this
Section. A provision contained in the declaration of trust, the
bylaws, a resolution of shareholders or trust managers, or an
agreement that makes mandatory the payment or reimbursement
permitted under this Subsection shall be deemed to constitute
authorization of that payment or reimbursement.
(L) The written undertaking required by Subsection (K) of this
Section must be an unlimited general obligation of the trust
manager but need not be secured. It may be accepted without
reference to financial ability to make repayment.
(M) A provision for a real estate investment trust to indemnify or
to advance expenses to a trust manager who was, is, or is threatened
to be made a named defendant or respondent in a proceeding, whether
contained in the declaration of trust, the bylaws, a resolution of
shareholders or trust managers, an agreement, or otherwise, except
in accordance with Subsection (R) of this Section, is valid only to
the extent it is consistent with this Section as limited by the
declaration of trust, if such a limitation exists.
(N) Notwithstanding any other provision of this Section, a real
estate investment trust may pay or reimburse expenses incurred by a
trust manager in connection with his appearance as a witness or
other participation in a proceeding at a time when he is not a named
defendant or respondent in the proceeding.
(O) An officer of the real estate investment trust shall be
indemnified as, and to the same extent, provided by Subsections
(H), (I), and (J) of this Section for a trust manager and is
entitled to seek indemnification under those Subsections to the
same extent as a trust manager. A real estate investment trust may
indemnify and advance expenses to an officer, employee, or agent of
the real estate investment trust to the same extent that it may
indemnify and advance expenses to trust managers under this
Section.
(P) A real estate investment trust may indemnify and advance
expenses to persons who are not or were not officers, employees, or
agents of the real estate investment trust but who are or were
serving at the request of the real estate investment trust as a
trust manager, director, officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary of another real
estate investment trust or of a foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise to the same extent that it may
indemnify and advance expenses to trust managers under this
Section.
(Q) A real estate investment trust may indemnify and advance
expenses to an officer, employee, agent, or person identified in
Subsection (P) of this Section and who is not a trust manager to
such further extent, consistent with law, as may be provided by its
declaration of trust, bylaws, general or specific action of its
trust managers, or contract or as permitted or required by common
law.
(R) A real estate investment trust may purchase and maintain
insurance or another arrangement on behalf of any person who is or
was a trust manager officer, employee, or agent of the real estate
investment trust or who is or was serving at the request of the real
estate investment trust as a trust manager or a director, officer,
partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another real estate investment trust or of a
foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise,
against any liability asserted against him and incurred by him in
such a capacity or arising out of his status as such a person,
whether or not the real estate investment trust would have the power
to indemnify him against that liability under this Section. If the
insurance or other arrangement is with a person or entity that is
not regularly engaged in the business of providing insurance
coverage, the insurance or arrangement may provide for payment of a
liability with respect to which the real estate investment trust
would not have the power to indemnify the person only if including
coverage for the additional liability has been approved by the
shareholders of the real estate investment trust. Without limiting
the power of the real estate investment trust to procure or maintain
any kind of insurance or other arrangement, a real estate
investment trust may, for the benefit of persons indemnified by the
real estate investment trust, (1) create a trust fund; (2)
establish any form of self-insurance; (3) secure its indemnity
obligation by grant of a security interest or other lien on the
assets of the real estate investment trust; or (4) establish a
letter of credit, guaranty, or surety arrangement. The insurance
or other arrangement may be procured, maintained, or established
within the real estate investment trust or with any insurer or other
person deemed appropriate by the trust manager(s) regardless of
whether all or part of the stock or other securities of the insurer
or other person are owned in whole or part by the real estate
investment trust. In the absence of fraud, the judgment of the
trust manager(s) as to the terms and conditions of the insurance or
other arrangement and the identity of the insurer or other person
participating in an arrangement shall be conclusive and the
insurance or arrangement shall not be voidable and shall not
subject the trust manager(s) approving the insurance or arrangement
to liability, on any ground, regardless of whether a trust manager
participating in the approval is a beneficiary of the insurance or
arrangement.
(S) Any indemnification of or advance of expenses to any person who
is or was a trust manager, officer, employee, or agent of the real
estate investment trust or who is or was serving at the request of
the real estate investment trust as a trust manager or a director,
officer, partner, venturer, proprietor, trustee, employee, agent,
or similar functionary of another real estate investment trust or
of a foreign or domestic corporation, partnership, joint venture,
sole proprietorship, trust, employee benefit plan, or other
enterprise in accordance with this Section shall be reported in
writing to the shareholders with or before the notice or waiver of
notice of the next shareholders meeting or with or before the next
submission to shareholders of a consent to action without a meeting
pursuant to Section 10.30 of this Act and, in any case, within the
12-month period immediately following the date of the
indemnification or advance.
(T) For purposes of this Section, the real estate investment trust
is deemed to have requested a trust manager to serve an employee
benefit plan whenever the performance by him of his duties to the
real estate investment trust also imposes duties on or otherwise
involves services by him to the plan or participants or
beneficiaries of the plan. Excise taxes assessed on a trust manager
with respect to an employee benefit plan pursuant to applicable law
are deemed fines. Action taken or omitted by him with respect to an
employee benefit plan in the performance of his duties for a purpose
reasonably believed by him to be in the interest of the participants
and beneficiaries of the plan is deemed to be for a purpose which is
not opposed to the best interests of the real estate investment
trust.
(U) The declaration of trust of a real estate investment trust may
restrict the circumstances under which the real estate investment
trust is required or permitted to indemnify a person under
Subsection (H), (I), (J), (O), (P), or (Q) of this Section.
Meetings of shareholders
Sec. 10.10. (A) Meetings of shareholders shall be held at such
place, either within or without the state, as may be provided in the
bylaws. In the absence of any such provision, all meetings shall be
held at the principal office of the real estate investment trust.
(B) An annual meeting of the shareholders shall be held at such time
as may be provided in the bylaws. In the event the trust manager(s)
fail to call the annual meeting at the designated time, any
shareholder may make demand that such meeting be held within a
reasonable time, such demand to be made in writing by registered
mail directly to any officer or trust manager of the real estate
investment trust. If the annual meeting of the shareholders is not
called within sixty (60) days following such demand, any
shareholder may compel the holding of such annual meeting by legal
action directed against said trust manager(s), and all of the
extraordinary writs of the common law and of a court of equity shall
be available to such shareholder to compel the holding of such
annual meeting. Each and every shareholder is hereby declared to
have a justiciable interest sufficient to enable him to institute
and prosecute such legal proceedings. Failure to hold the annual
meeting at the designated time may not cause the dissolution of the
real estate investment trust.
(C) Special meetings of the shareholders may be called by the trust
manager(s), any officer of the real estate investment trust, or
such other persons as may be provided in the declaration of trust or
the bylaws. Special meetings of the shareholders may also be called
by the holders of at least 10 percent of all the shares entitled to
vote at the proposed special meeting, unless the declaration of
trust provides for a number of shares greater than or less than 10
percent, in which event special meetings of the shareholders may be
called by the holders of at least the percentage of shares so
specified in the declaration of trust. The declaration of trust may
not provide for a number of shares greater than 50 percent.
Trust manager meetings and notice of meetings
Sec. 10.20. (A) Meetings of the trust manager(s), whether regular
or special, may be held either within or without this State.
(B) Regular meetings of the trust manager(s) may be held with or
without notice as prescribed in the bylaws. Special meetings of the
trust manager(s) shall be held upon such notice as is prescribed in
the bylaws. Attendance of a trust manager at a meeting shall
constitute a waiver of notice of such meeting, except where a trust
manager attends a meeting for the express purpose of objecting to
the transaction of any business on the ground that the meeting is
not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of
the trust manager(s) need be specified in the notice or waiver of
notice of such meeting, unless required by the bylaws.
Actions without a meeting; telephone meetings
Sec. 10.30. (A) Unless otherwise provided by the declaration of
trust or bylaws, any action required or permitted to be taken at a
meeting of the shareholders of a real estate investment trust may be
taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof. Such action
shall then have the same force and effect as action taken at a
meeting, and may be stated as such in any declaration of trust or
document filed with the county clerk of the county of the principal
place of business of the real estate investment trust.
(B) Unless otherwise provided by the declaration of trust or
bylaws, any action required or permitted to be taken at a meeting of
the trust manager(s) or any committee may be taken without a meeting
if a consent in writing, setting forth the action so taken, is
signed by all the trust managers or members of such committee, as
the case may be. Such action shall then have the same force and
effect as action taken at a meeting, and may be stated as such in any
document or instrument filed with the county clerk of the county of
the principal place of business of the trust .
(C) Subject to the provisions required or permitted by this Act for
notice of meetings, unless otherwise restricted by the declaration
of trust or bylaws, shareholders, trust manager(s), or members of
any committee designated by such trust manager(s), may participate
in and hold a meeting of such shareholders, trust manager(s) or
committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and participation
in a meeting pursuant to this Section shall constitute presence in
person at such meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction of
any business on the ground that the meeting is not lawfully called
or convened.
(D) If action is taken with respect to a particular matter by the
holders of shares of a class or series by means of a written consent
in compliance with Subsection (A) of this Section, any provision of
this Act that requires advance notice of a meeting or of the
proposed action does not apply as to that class or series for that
action.
Notice of shareholders meetings
Sec. 11.10. (A) Written or printed notice stating the place, day and
hour of the meeting and, in case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not
less than ten (10) nor more than sixty (60) days before the date of
the meeting, either personally or by mail, by or at the direction of
the trust manager(s) or any officer or person calling the meeting,
to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited
in the United States Mail addressed to the shareholder at his
address as it appears on the books of the trust, with postage
thereon prepaid.
(B) Any notice otherwise required to be given to any shareholder
under this Act or the declaration of trust or bylaws of any real
estate investment trust is not required for the shareholder if:
(1) notice of two consecutive annual meetings and all notices of
meetings held during the period between those annual meetings, if
any, have been mailed to the shareholder at the address shown on the
share transfer records of the real estate investment trust and the
notice has been returned undeliverable; or
(2) all (but in no event less than two) payments (if sent by first
class mail) of distributions or interest on securities during a
12-month period have been mailed to the shareholder at the address
shown on the share transfer records of the real estate investment
trust, and the payments have been returned undeliverable.
(C) Any action or meeting taken or held without notice to a
shareholder described by Subsection (B) of this Section has the
same force and effect as if the notice had been duly given to the
shareholder. If the action taken by the real estate investment
trust is reflected in any document filed with the secretary of
state, that document may state that notice was duly given to all
persons to whom notice was required to be given. If a shareholder
described by Subsection (B) of this Section delivers to the real
estate investment trust a written notice setting forth the
shareholder's current address, the requirement that notice be given
to the shareholder shall be reinstated.
Registered holders of shares, closing of share transfer records,
and record date
Sec. 11.20. (A) Unless otherwise provided in this Act, and subject
to the provisions of Chapter 8, Business & Commerce Code, a real
estate investment trust may regard the person in whose name any
shares issued by the real estate investment trust are registered in
the share transfer records of the real estate investment trust at
any particular time, including shares registered as of a record
date fixed under Subsection (C) or (D) of this Section, as the owner
of those shares at that time for purposes of:
(1) voting those shares;
(2) receiving distributions on or notices in respect of those
shares;
(3) transferring those shares;
(4) exercising rights of dissent with respect to those shares;
(5) exercising or waiving any preemptive right with respect to
those shares;
(6) entering into agreements with respect to those shares in
accordance with Section 7.40 or 13.20 of this Act; or
(7) giving proxies with respect to those shares.
(B) Neither the real estate investment trust nor any of the
officers, trust managers, employees, or agents of the real estate
investment trust are liable for regarding a person described by
Subsection (A) of this Section as the owner of those shares at that
time for those purposes, regardless of whether that person does not
possess a certificate for those shares.
(C) For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment of a
meeting of shareholders, or shareholders entitled to receive a
distribution by a real estate investment trust (other than a
distribution involving a purchase or redemption by the real estate
investment trust of any of its own shares) or a share dividend, or
in order to make a determination of shareholders for any other
proper purpose (other than determining shareholders entitled to
consent to action by shareholders proposed to be taken without a
meeting of shareholders), the trust managers of a real estate
investment trust may provide that the share transfer records shall
be closed for a stated period not to exceed 60 days. If the share
transfer records are closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of
shareholders, the share transfer records shall be closed for at
least 10 days immediately before the meeting. In lieu of closing
the share transfer records, the bylaws, or in the absence of an
applicable bylaw, the trust managers, may fix in advance a date as
the record date for the determination of shareholders. The record
date for any such determination of shareholders may not be more than
60 days and, in the case of a meeting of shareholders, not less than
10 days, before the date on which the particular action requiring
the determination of shareholders is to be taken. If the share
transfer records are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a
meeting of shareholders, or shareholders entitled to receive a
distribution (other than a distribution involving a purchase or
redemption by the real estate investment trust of any of its own
shares) or a share dividend, the date on which notice of the meeting
is mailed or the date on which the resolution of the trust managers
declaring such distribution or share dividend is adopted, as the
case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made in the manner
provided in this Section, the determination of shareholders shall
apply to any adjournment of the meeting of shareholders except
where the determination has been made through the closing of the
share transfer records and the stated period of closing has
expired.
(D) Unless a record date has previously been fixed or determined
under this Section, when action by shareholders is proposed to be
taken by written consent without a meeting of shareholders, the
trust managers may fix a record date for the purpose of determining
shareholders entitled to consent to that action. The record date
may not precede and may not be more than 10 days after the date on
which the trust managers adopt the resolution fixing the record
date. If no record date has been fixed by the trust managers and the
prior action of the trust managers is not required by this Act, the
record date for determining shareholders entitled to consent to
action in writing without a meeting shall be the first date on which
a signed written consent setting forth the action taken or proposed
to be taken is delivered by hand or by certified or registered mail,
return receipt requested, to the real estate investment trust as
provided by Subsection (A) of Section 10.30 of this Act. Delivery
to the real estate investment trust's principal place of business
shall be addressed to the president or the principal executive
officer of the real estate investment trust. If no record date
shall have been fixed by the trust managers and prior action of the
trust managers is required by this Act, the record date for
determining shareholders entitled to consent to action in writing
without a meeting shall be at the close of business on the date on
which the trust managers adopt a resolution taking such prior
action.
(E) Distributions made by a real estate investment trust, including
those distributions that were payable but not paid to a holder of
shares or to the holder's heirs, successors, or assigns and have
been held in suspense by the real estate investment trust or were
paid or delivered by the real estate investment trust into an escrow
account or to a trustee or custodian, shall be payable by the real
estate investment trust, escrow agent, trustee, or custodian of the
distributions to the holder of the shares as of the record date
determined for that distribution as provided in Subsection (C) of
this Section, or to the holder's heirs, successors, or assigns.
Quorum of and voting by shareholders
Sec. 12.10. (A) Unless otherwise provided in the declaration of
trust in accordance with this Section, with respect to any meeting
of shareholders, a quorum shall be present for any matter to be
presented at that meeting if the holders of a majority of the shares
entitled to vote at the meeting are represented at the meeting in
person or by proxy. The declaration of trust may provide:
(1) that a quorum is present at a meeting of shareholders only if
the holders of a specified greater portion of the shares entitled to
vote are represented at the meeting in person or by proxy; or
(2) that a quorum is present at a meeting of shareholders if the
holders of a specified lesser portion, but not less than one-third,
of the shares entitled to vote are represented at the meeting in
person or by proxy.
(B) Unless otherwise provided in the declaration of trust or the
bylaws, once a quorum is present at a meeting of shareholders, the
shareholders represented in person or by proxy at the meeting may
conduct such business as may be properly brought before the meeting
until the meeting is adjourned. The subsequent withdrawal of any
shareholder from the meeting or the refusal of any shareholder
represented in person or by proxy to vote does not affect the
presence of a quorum at the meeting. Unless otherwise provided in
the declaration of trust or the bylaws, the shareholders
represented in person or by proxy at a meeting of shareholders at
which a quorum is not present may adjourn the meeting until such
time and to such place as may be determined by a vote of the holders
of a majority of the shares represented in person or by proxy at
that meeting.
(C) With respect to any matter, other than the election of trust
managers or a matter for which the affirmative vote of the holders
of a specified portion of the shares entitled to vote is required by
this Act, the affirmative vote of the holders of a majority of the
shares entitled to vote on, and that voted for or against or
expressly abstained with respect to, that matter at a meeting of
shareholders at which a quorum is present shall be the act of the
shareholders, unless otherwise provided in the declaration of trust
or the bylaws in accordance with this Section. With respect to any
matter, other than the election of trust managers or a matter for
which the affirmative vote of the holders of a specified portion of
the shares entitled to vote is required by this Act, the declaration
of trust or the bylaws may provide:
(1) that the act of the shareholders shall be the affirmative vote
of the holders of a specified portion, but not less than a majority,
of the shares entitled to vote on that matter;
(2) that the act of the shareholders shall be the affirmative vote
of the holders of a specified portion, but not less than a majority,
of the shares entitled to vote on that matter and represented in
person or by proxy at a meeting of shareholders at which a quorum is
present;
(3) that the act of the shareholders shall be the affirmative vote
of the holders of a specified portion, but not less than a majority,
of the shares entitled to vote on, and voted for or against, that
matter at a meeting of shareholders at which a quorum is present;
or
(4) that the act of the shareholders shall be the affirmative vote
of the holders of a specified portion, but not less than a majority,
of the shares entitled to vote on, and that voted for or against or
expressly abstained with respect to, that matter at a meeting of
shareholders at which a quorum is present.
(D) Unless otherwise provided in the declaration of trust or the
bylaws in accordance with this Section, trust managers shall be
elected by two-thirds of the votes cast by the holders of shares
entitled to vote in the election of trust managers at a meeting of
shareholders at which a quorum is present. The declaration of trust
or the bylaws may provide:
(1) that a trust manager shall be elected only if the trust manager
receives the vote of the holders of a specified portion, but not
less than a majority, of the shares entitled to vote in the election
of trust managers;
(2) that a trust manager shall be elected only if the trust manager
receives the vote of the holders of a specified portion, but not
less than a majority, of the shares entitled to vote in the election
of trust managers and represented in person or by proxy at a meeting
of shareholders at which a quorum is present; or
(3) that a trust manager shall be elected only if the trust manager
receives a specified portion, but not less than a majority, of the
votes cast by the holders of shares entitled to vote in the election
of trust managers at a meeting of shareholders at which a quorum is
present.
(E) With respect to any matter for which the affirmative vote of the
holders of a specified portion of the shares entitled to vote is
required by this Act, the declaration of trust may provide that the
act of the shareholders on that matter shall be the affirmative vote
of the holders of a specified portion, but not less than a majority,
of the shares entitled to vote on that matter, rather than the
affirmative vote otherwise required by this Act. With respect to
any matter for which the affirmative vote of the holders of a
specified portion of the shares of any class or series is required
by this Act, the declaration of trust also may provide that the act
of the holders of shares of that class or series on that matter
shall be the affirmative vote of the holders of a specified portion,
but not less than a majority, of the shares of that class or series,
rather than the affirmative vote of the holders of shares of that
class or series otherwise required by this Act. If any provision of
the declaration of trust provides that the act of the shareholders
on any matter shall be the affirmative vote of the holders of a
specified portion of the shares entitled to vote on that matter that
is greater than a majority of the shares so entitled to vote, that
provision of the declaration of trust may not be amended or
modified, directly or indirectly, without the affirmative vote of
the holders of that greater portion of the shares entitled to vote
on that matter, unless otherwise provided in the declaration of
trust. If any provision of the declaration of trust provides that
the act of the holders of shares of any class or series on any matter
shall be the affirmative vote of the holders of a specified portion
of the shares of that class or series that is greater than a
majority of the shares of that class or series, that provision of
the declaration of trust may not be amended or modified, directly or
indirectly, without the affirmative vote of the holders of that
greater portion of the shares of that class or series, unless
otherwise provided in the declaration of trust.
(F) A real estate investment trust may establish procedures in its
bylaws, consistent with this Act, for determining the validity of
proxies and whether shares that are held of record by a bank,
broker, or other nominee are represented at a meeting of
shareholders with respect to any matter. Those procedures may
incorporate or look to rules and determinations of self regulatory
organizations regulating that bank, broker, or other nominee.
Voting of shares
Sec. 13.10. (A)(1) Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders, except:
(a) to the extent that the declaration of trust provides for more or
less than one vote per share or (if and to the extent permitted by
this Act) limits or denies voting rights to the holders of the
shares of any class or series; or
(b) as otherwise provided by this Act.
(2) If the declaration of trust provides for more or less than one
vote per share for all the outstanding shares or for the shares of
any class or any series on any matter, every reference in this Act
or in the declaration of trust or bylaws, unless expressly stated
otherwise in the declaration of trust or bylaws, in connection with
such matter to a specified portion of those shares shall mean the
portion of the votes entitled to be cast in respect of the shares by
virtue of the provisions of the declaration of trust.
(B) Shares of the stock of a real estate investment trust that are
owned by another real estate investment trust or corporation, if a
majority of the voting stock of the other real estate investment
trust or corporation is owned or controlled by the real estate
investment trust, may not be voted, directly or indirectly, at any
meeting and may not be counted in determining the total number of
outstanding shares at any given time. Nothing in this Subsection
shall be construed as limiting the right of any real estate
investment trust to vote stock, including voting its own stock,
held or controlled by the real estate investment trust in a
fiduciary capacity or with respect to which the real estate
investment trust otherwise exercises voting power in a fiduciary
capacity.
(C) Any shareholder may vote either in person or by proxy executed
in writing by the shareholder. A telegram, telex, cablegram, or
similar transmission by the shareholder or a photographic,
photostatic, facsimile, or similar reproduction of a writing
executed by the shareholder shall be treated as an execution in
writing for purposes of this Section. No proxy shall be valid after
11 months from the date of its execution unless provided otherwise
in the proxy. A proxy shall be revocable unless the proxy form
conspicuously states that the proxy is irrevocable and the proxy is
coupled with an interest. Proxies coupled with an interest include
the appointment as proxy of:
(1) a pledgee;
(2) a person who purchased or agreed to purchase or who owns or
holds an option to purchase the shares;
(3) a creditor of the real estate investment trust who extended to
the real estate investment trust credit under terms requiring the
appointment;
(4) an employee of the real estate investment trust whose
employment contract requires the appointment; or
(5) a party to a voting agreement created under Subsection (B) of
Section 13.20 of this Act.
(D) An irrevocable proxy, if noted conspicuously on the certificate
representing the shares that are subject to the irrevocable proxy
or, in the case of uncertificated shares, if notation of the
irrevocable proxy is contained in the notice sent pursuant to
Subsection (D) of Section 7.20 of this Act with respect to the
shares that are subject to the irrevocable proxy, shall be
specifically enforceable against the holder of those shares or any
successor or transferee of the holder. Unless noted conspicuously
on the certificate representing the shares that are subject to the
irrevocable proxy or, in the case of uncertificated shares, unless
notation of the irrevocable proxy is contained in the notice sent
pursuant to Subsection (D) of Section 7.20 of this Act with respect
to the shares that are subject to the irrevocable proxy, an
irrevocable proxy, even though otherwise enforceable, is
ineffective against a transferee for value without actual knowledge
of the existence of the irrevocable proxy at the time of the
transfer or against any subsequent transferee, whether or not for
value. The irrevocable proxy shall be specifically enforceable
against any other person who is not a transferee for value from and
after the time that the person acquires actual knowledge of the
existence of the irrevocable proxy.
(E)(1) At each election of trust managers, every shareholder
entitled to vote at the election shall have the right to vote, in
person or by proxy, the number of shares owned by the shareholder
for as many persons as there are trust managers to be elected and
for whose election the shareholder has a right to vote.
(2) Cumulative voting, whereby a shareholder gives one candidate as
many votes as the number of trust managers multiplied by the
shareholder's shares equals, or by distributing such votes on the
same principle among any number of candidates, may not be permitted
unless specifically authorized in the declaration of trust. If
cumulative voting is authorized in the declaration of trust, any
shareholder who intends to cumulate the shareholder's votes
accordingly must give written notice of the shareholder's intention
to cumulate the shareholder's votes to the trust managers on or
before the day preceding the election at which the shareholder
intends to cumulate the shareholder's votes.
(F) Shares standing in the name of another real estate investment
trust or corporation, domestic or foreign, may be voted by an
officer, agent, or proxy that is authorized to vote those shares by
the bylaws of the real estate investment trust or corporation or, in
the absence of such authorization, by an officer, agent, or proxy as
determined by the trust managers or board of directors of the real
estate investment trust or corporation. When any foreign real
estate investment trust or corporation without a permit to do
business in this state lawfully owns or may lawfully own or acquire
stock in a Texas real estate investment trust, the foreign real
estate investment trust or corporation may vote that stock and
participate in the management and control of the business and
affairs of the Texas real estate investment trust, as other
shareholders, subject to all laws and rules governing real estate
investment trusts in this state, including especially the
provisions of the antitrust laws of this state.
(G) Shares held by a person who is an administrator, executor,
guardian, or conservator may be voted by the person so long as the
shares forming a part of an estate are in the possession and forming
a part of the estate being served by the person, either personally
or by proxy, without a transfer of such shares into the person's
name. Shares standing in the name of a trustee may be voted by the
trustee, either personally or by proxy, but a trustee is not
entitled to vote shares held by the trustee without a transfer of
those shares into the trustee's name as trustee.
(H) Shares standing in the name of, held by, or under the control of
a receiver may be voted by the receiver, without transferring the
shares into the receiver's name, if authority to vote the shares is
contained in an appropriate court order by which the receiver was
appointed to serve as receiver.
(I) A shareholder whose shares are pledged is entitled to vote those
shares until the shares have been transferred into the pledgee's
name. After the shares have been transferred into the pledgee's
name, the pledgee shall be entitled to vote the transferred shares
Voting trusts and voting agreements
Sec. 13.20. (A) Any number of shareholders of a real estate
investment trust may enter into a written voting trust agreement to
confer on a trustee or trustees the right to vote or otherwise
represent shares of the real estate investment trust. The shares
that are to be subject to the agreement shall be transferred to the
trustee or trustees for purposes of the agreement, and a
counterpart of the agreement shall be deposited with the real
estate investment trust at its principal place of business or
registered office. The counterpart of the voting trust agreement
deposited with the real estate investment trust shall be subject to
the same right of examination by a shareholder of the real estate
investment trust, in person or by agent or attorney, as are the
books and records of the real estate investment trust and shall be
subject to examination by any holder of a beneficial interest in the
voting trust, either in person or by agent or attorney, at any
reasonable time for any proper purpose.
(B) Any number of shareholders of a real estate investment trust, or
any number of shareholders of a real estate investment trust and the
real estate investment trust itself, may enter into a written
voting agreement for the purpose of providing that shares of the
real estate investment trust must be voted in the manner prescribed
in the agreement. A counterpart of the agreement shall be deposited
with the real estate investment trust at its principal place of
business or registered office and shall be subject to the same right
of examination by a shareholder of the real estate investment
trust, in person or by agent or attorney, as are the books and
records of the real estate investment trust. The agreement is
specifically enforceable against the holders of those shares or any
successor or transferee of the holder, if the agreement is noted
conspicuously on the certificate representing the shares that are
subject to the agreement or, in the case of uncertificated shares,
if notation of the agreement is contained in the notice sent
pursuant to Subsection (D) of Section 7.20 of this Act with respect
to the shares that are subject to the agreement. Unless noted
conspicuously on the certificate representing the shares that are
subject to the agreement or, in the case of uncertificated shares,
unless notation of the agreement is contained in the notice sent
pursuant to Subsection (D) of Section 7.20 of this Act with respect
to the shares that are subject to the agreement, the agreement, even
though otherwise enforceable, is ineffective against a transferee
for value without actual knowledge of the existence of the
agreement at the time of the transfer or against any subsequent
transferee, whether or not for value. The agreement is
specifically enforceable against any other person who is not a
transferee for value from and after the time that the person
acquires actual knowledge of the existence of the agreement. A
voting agreement entered into pursuant to this Subsection is not
subject to Subsection (A) of this Section.
Distributions
Sec. 14.10. (A) The trust managers may authorize and the real estate
investment trust may make distributions subject to any restrictions
in the declaration of trust and to the limitations set forth in this
Section.
(B) A real estate investment trust may not make a distribution if:
(1) after giving effect to the distribution, the real estate
investment trust would be insolvent; or
(2) the distribution exceeds the surplus of the real estate
investment trust.
(C) Notwithstanding the limitation set forth in Subdivision (2) of
Subsection (B) of this Section, if the net assets of a real estate
investment trust are not less than the amount of the proposed
distribution, the real estate investment trust may make a
distribution involving a purchase or redemption of any of its own
shares if the purchase or redemption is made by the real estate
investment trust to:
(1) eliminate fractional shares;
(2) collect or compromise indebtedness owed by or to the real estate
investment trust;
(3) pay dissenting shareholders entitled to payment for their
shares under this Act; or
(4) effect the purchase or redemption of redeemable shares in
accordance with this Act.
(D) A real estate investment trust's indebtedness to a shareholder
incurred by reason of a distribution made in accordance with this
Section shall be at parity with the real estate investment trust's
indebtedness to its general, unsecured creditors, except to the
extent the indebtedness is subordinated, or payment of that
indebtedness is secured, by agreement.
Share dividends
Sec. 14.20. (A) The trust managers of a real estate investment trust
may authorize and the real estate investment trust may pay share
dividends subject to any restrictions in the declaration of trust
of the real estate investment trust and to the limitations set forth
in this Section.
(B) A real estate investment trust may not pay a share dividend
payable in authorized but unissued shares if the surplus of the real
estate investment trust is less than the amount required by this
Section to be transferred to stated capital at the time that share
dividend is paid.
(C) If a share dividend is payable in authorized but unissued shares
having a par value, those shares shall be issued at the par value.
At the time that share dividend is paid, an amount of surplus
designated by the trust managers, in an amount not less than the
aggregate par value of the shares to be issued as a share dividend,
shall be transferred to stated capital.
(D) If a share dividend is payable in authorized but unissued shares
without par value, those shares shall be issued at the value fixed
by resolution of the trust managers adopted at the time the share
dividend is authorized. At the time the share dividend is paid, an
amount of surplus equal to the aggregate value fixed in respect of
those shares shall be transferred to stated capital.
(E) A share dividend payable in shares of any class may not be paid
to the holders of shares of any other class unless the declaration
of trust so provides or unless the payment is authorized by the
affirmative vote or the written consent of the holders of at least a
majority of the outstanding shares of the class in which the payment
is to be made.
Split-up or division without stated cap
