1
Sierra Prime Income Fund
AMENDED AGREEMENT AND DECLARATION OF TRUST
January 18, 1996
2
AMENDED AGREEMENT AND DECLARATION OF TRUST
PAGE
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ARTICLE I. NAME AND DEFINITIONS 2
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Section 1.1 Name 2
Section 1.2 Definitions 2
a) "Trust" 2
b) "Trustees" 2
c) "Shares" 2
d) "Shareholder" 2
e) "1940 Act" 2
f) "Affiliated Person,"
"Assignment," "Commission,"
"Interested Person,"
"Principal Underwriter," and
"Majority Shareholder Vote" 2
g) "Declaration of Trust" 2
h) "By-Laws" 2
ARTICLE II. PURPOSE OF THE TRUST 2
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Section 2.1 Purpose of the Trust 2
ARTICLE III. THE TRUSTEES 3
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Section 3.1 Election, Resignation, Vacancies, etc. 3
a) Election 3
b) Effect of Death, Resignation, etc. 3
c) No Accounting 3
d) Vacancies 3
Section 3.2 Powers of Trustees 4
a) Investments 4
b) Disposition of Assets 4
c) Act as Distributor, Underwriter,
Broker, Dealer 5
d) Ownership Powers 5
e) Subscription 5
f) Form of Holding 5
g) Allocation of Assets and
Liabilities 5
h) Reorganization, etc. 5
i) Voting Trusts, etc. 5
j) Compromise 5
k) Partnerships, etc. 6
l) Borrowing 6
m) Guarantees, etc. 6
n) Insurance 6
(i)
3
o) Pensions 6
p) Any Other Lawful Activity 6
Section 3.3 Advisory, Management and Distribution 7
Section 3.4 Payment of Expenses by the Trust 8
Section 3.5 Ownership of Assets of the Trust 9
ARTICLE IV. SHARES 9
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Section 4.1 Beneficial Interest 9
Section 4.2 Ownership of Shares 9
Section 4.3 Investment in the Trust 9
Section 4.4 No Preemption Rights 10
Section 4.5 Status of Shares and Limitation
of Personal Liability 10
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS 10
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Section 5.1 Shareholders' Voting Powers and Meetings 10
ARTICLE VI. DISTRIBUTIONS AND REPURCHASES 10
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Section 6.1 Distributions 10
Section 6.2 Repurchases 11
Section 6.3 Dividends, Distributions and Repurchases 11
ARTICLE VII. COMPENSATION AND LIMITATION OF LIABILITY
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OF TRUSTEES 11
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Section 7.1 Compensation 11
Section 7.2 Limitation of Liability 11
ARTICLE VIII. INDEMNIFICATION 12
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Section 8.1 Trustees, Officers, etc. 12
Section 8.2 Compromise Payment 12
(ii)
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Section 8.3 Indemnification Not Exclusive 13
Section 8.4 Shareholders 13
ARTICLE IX. MISCELLANEOUS 14
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Section 9.1 Trustees, Shareholders, etc. Not
Personally Liable; Notice 14
Section 9.2 Trustee's Good Faith Action,
Expert Advice, No Bond or Surety 14
Section 9.3 Liability of Third Persons Dealing
with Trustees 15
Section 9.4 Merger of Classes of Shares of the
Trust 15
Section 9.5 Duration and Termination of Trust 16
Section 9.6 Merger, Consolidation and Sale of Assets 16
Section 9.7 Conversion to Open-End Management
Investment Company 17
Section 9.8 Certain Transactions 17
Section 9.9 Amendments 19
Section 9.10 Resident Agent 19
Section 9.11 Filing of Copies; References; Headings 19
Section 9.12 Applicable Law 20
Section 9.13 Provisions in Conflict with Laws
or Regulations 20
Section 9.14 Use of Name 21
(iii)
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Sierra Prime Income Fund
CROSS-REFERENCE SHEET
Pursuant to CMR 116.00:
116.03 (a) Name of organization or trust:
Sierra Prime Income Fund
(b) Date of organization:
October 4, 1995
(c) Names and address of the trustees:
F. Xxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(d) Original signatures of all trustees:
See page 21.
(e) Principal place of business:
Xxx Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
(f) Statement that beneficial interest is
divided into transferable certificates of
participation or shares;
See Section 4.1, page 9.
(g) Ability to merge:
See Section 9.6, page 16.
(h) The name and address of the resident agent in
Massachusetts:
The Xxxxxxxx-Xxxx Corporation System,
Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
6
SIERRA PRIME INCOME FUND
AMENDED AGREEMENT AND DECLARATION OF TRUST
AMENDED AGREEMENT AND DECLARATION OF TRUST made at Boston,
Massachusetts this 18th day of January, 1996, by the Trustees hereunder, and by
the holders of shares of beneficial interest to be issued hereunder as
hereinafter provided.
WITNESSETH
WHEREAS this Trust has been formed to carry on the business of
an investment company; and
WHEREAS this Trust is authorized to issue its shares of
beneficial interest in accordance with the provisions hereinafter set forth;
and
WHEREAS the Trustees have agreed to manage all property coming
into their hands as trustees of a Massachusetts business trust in accordance
with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will
hold all cash, securities and other assets which they may from time to time
acquire in any manner as Trustees hereunder IN TRUST to manage and dispose of
the same upon the following terms and conditions for the benefit of the holders
from time to time of shares of beneficial interest in this Trust.
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ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name. This Trust shall be known as the "Sierra
Prime Income Fund" and the Trustees shall conduct the business of the Trust
under that name or any other name or names as they may from time to time
determine.
Section 1.2 Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business
trust established by an Agreement and Declaration of Trust dated October 4,
1995, as amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust
hereunder named herein or elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest
into which the beneficial interest in the Trust shall be divided from time to
time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act
of 1940 and the Rules and Regulations thereunder, all as amended from time to
time;
(f) The terms "Affiliated Person," "Assignment,"
"Commission," "Interested Person," "Principal Underwriter" and "Majority
Shareholder Vote" (the 67% or 50% requirement of the third sentence of Section
2(a)(42) of the 1940 Act, whichever may be applicable) shall have the meanings
given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Amended
Agreement and Declaration of Trust as amended or restated from time to time;
and
(h) "By-Laws" shall mean the By-Laws of the Trust as
amended from time to time.
ARTICLE II
PURPOSE OF THE TRUST
Section 2.1 Purpose of the Trust. The purpose of the Trust
is to operate as an investment company and to provide investors a managed
investment primarily in securities and to carry on such other business as the
Trustees may from time to time
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determine pursuant to their authority under this Amended Agreement and
Declaration of Trust.
ARTICLE III
THE TRUSTEES
Section 3.1 Election, Resignation, Vacancies, etc..
(a) Election. There shall initially be one Trustee who
shall be F. Xxxxx Xxxxxx. The number of Trustees shall be as provided in the
By-laws or as fixed from time to time by the Trustees. The Shareholders may
elect Trustees at any meeting of Shareholders called by the Trustees for that
purpose. Each Trustee shall serve during the continued lifetime of the Trust
until he or she dies, resigns or is removed, or, if sooner, until the next
meeting of Shareholders called for the purpose of electing Trustees and the
election and qualification of his or her successor. Any Trustee may resign at
any time by written instrument signed by him or her and delivered to any
officer of the Trust, to each other Trustee or to a meeting of the Trustees.
Such resignation shall be effective upon receipt unless specified to be
effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his
resignation or removal, or any right to damages on account of such removal.
(b) Effect of Death, Resignation, etc. of a Trustee. The
death, declination, resignation, retirement, removal or incapacity of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Amended Declaration
of Trust.
(c) No Accounting. Except to the extent required by the
1940 Act or under circumstances which would justify his or her removal for
cause, no person ceasing to be a Trustee as a result of his or her death,
resignation, retirement, removal or incapacity (nor the estate of any such
person) shall be required to make an accounting to the Shareholders or
remaining Trustees upon such cessation.
(d) Vacancies. Any vacancy or anticipated vacancy
resulting from any reason, including without limitation the death, resignation,
retirement, removal or incapacity of any of the Trustees, or resulting from an
increase in the number of Trustees by the other Trustees may (but so long as
there are at least two remaining Trustees, need not unless required by the 0000
Xxx) be filled by a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, through the
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appointment in writing of such other person as such remaining Trustees in their
discretion shall determine and such appointment shall be effective upon the
written acceptance of the person named therein to serve as a Trustee and
agreement by such person to be bound by the provisions of this Amended
Agreement and Declaration of Trust, except that any such appointment in
anticipation of a vacancy to occur by reason of retirement, resignation, or
increase in number of Trustees to be effective at a later date shall become
effective only at or after the effective date of said retirement, resignation,
or increase in number of Trustees. As soon as any Trustee so appointed shall
have accepted such appointment and shall have agreed in writing to be bound by
this Amended Agreement and Declaration of Trust and the appointment is
effective, the Trust estate shall vest in the new Trustee, together with the
continuing Trustees, without any further act or conveyance.
Section 3.2. Powers. Subject to the provisions of this
Amended Agreement and Declaration of Trust, the business of the Trust shall be
managed by the Trustees, and they shall have all powers necessary or convenient
to carry out that responsibility. Without limiting the foregoing, the Trustees
may adopt By-laws not inconsistent with this Declaration of Trust providing for
the conduct of the business of the Trust and may amend and repeal them to the
extent that such By-laws do not reserve that right to the Shareholders; they
may enlarge or reduce their number, may fill vacancies in their number,
including vacancies caused by enlargement of their number, and may remove
Trustees with or without cause; they may elect and remove, with or without
cause, such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the power and authority of the Trustees as the Trustees may determine; they
may employ one or more custodians of the assets of the Trust and may authorize
such custodians to employ subcustodians and to deposit all or any part of such
assets in a system or systems for the central handling of securities, retain a
transfer agent or a Shareholder servicing agent, or both, provide for the
distribution of Shares by the Trust, through one or more principal underwriters
or otherwise, set record dates for the determination of Shareholders with
respect to various matters, and in general delegate such authority as they
consider desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such custodian or
underwriter.
Without limiting the foregoing, the Trustees shall have power and authority:
(a) To invest and reinvest cash, and to hold cash
uninvested;
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(b) To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the
assets of the Trust;
(c) To act as a distributor of shares and as
underwriter of, or broker or dealer in, securities or other
property;
(d) To vote or give assent, or exercise any
rights of ownership, with respect to stock or other securities
or property; and to execute and deliver proxies or powers of
attorney to such person or persons as the Trustees shall deem
proper, granting to such person or persons such power and
discretion with relation to securities or property as the
Trustees shall deem proper;
(e) To exercise powers and rights of subscription
or otherwise which in any manner arise out of ownership of
securities;
(f) To hold any security or property in a form
not indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of
the Trust or in the name of a custodian, subcustodian or other
depository or a nominee or nominees or otherwise;
(g) To allocate assets, liabilities and expenses
of the Trust to a particular class of Shares or to apportion
the same among two or more classes of Shares, provided that
any liabilities or expenses incurred by a particular class of
Shares shall be payable solely out of the assets of that
class.
(h) To consent to or participate in any plan for
the reorganization, consolidation or merger of any corporation
or issuer, any security of which is or was held in the Trust;
to consent to any contract, lease, mortgage, purchase or sale
of property by such corporation or issuer, and to pay calls or
subscriptions with respect to any security held in the Trust;
(i) To join with other security holders in acting
through a committee depositary, voting trustee or otherwise,
and in that connection to deposit any security with, or
transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree
to pay, and to pay, such portion of the expenses and
compensation of such
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committee, depositary or trustee as the Trustees shall deem
proper;
(j) To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any matter in
controversy, including but not limited to claims for taxes;
(k) To enter into joint ventures, general or
limited partnerships and any other combinations or
associations;
(l) To borrow funds;
(m) To endorse or guarantee the payment of any
notes or other obligations of any person; to make contracts of
guaranty or suretyship, or otherwise assume liability for
payment thereof; and to mortgage and pledge the Trust property
or any part thereof to secure any of or all such obligations;
(n) To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or
appropriate for the conduct of the business, including without
limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents,
investment advisers or managers, principal underwriters, or
independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of
holding, being or having held any such office or position, or
by reason of any action alleged to have been taken or omitted
by any such person as Shareholder, Trustee, officer, employee,
agent, investment adviser or manager, principal underwriter,
or independent contractor, including any action taken or
omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify
such person against such liability;
(o) To pay pensions for faithful service, as
deemed appropriate by the Trustees, and to adopt, establish
and carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing
of life insurance and annuity contracts as a means of
providing such retirement and other benefits, for any or all
of the Trustees, officers, employees and agents of the Trust;
and
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(p) To engage in any other lawful act or activity
in which corporations organized under the Massachusetts
Business Corporation Law may engage.
The Trustees shall not in any way be bound or limited by any
present or future law or custom in regard to investments by trustees. Except
as otherwise provided herein or from time to time in the By-laws, any action to
be taken by the Trustees may be taken by a majority of the Trustees present at
a meeting of Trustees (a quorum being present), within or without
Massachusetts, including any meeting held by means of a conference telephone or
other communications equipment by means of which all persons participating in
the meeting can hear each other at the same time and participation by such
means shall constitute presence in person at a meeting, or by written consents
of a majority of the Trustees then in office.
Section 3.3 Advisory, Management and Distribution. The
Trustees may, at any time and from time to time, contract for exclusive or
nonexclusive advisory and/or management services with any corporation, trust,
association or other organization (the "Advisor"), every such contract to
comply with such requirements and restrictions as may be set forth in the
By-laws; and any such contract may provide for one or more Sub-advisers who
shall perform all or part of the obligations of the Advisor under such contract
and may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested and to make changes in the Trust's
investments. The Trustees may also, at any time and from time to time,
contract with the Advisor or any other corporation, trust, association or other
organization, appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers
of the Trust is a shareholder, director, officer, partner,
trustee, employee, manager, adviser, principal underwriter or
distributor or agent of or for any corporation, trust,
association, or other organization, or of or for any parent or
affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or
other agency contract
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may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory or management contract or
principal underwriter's or distributor's contract, or
transfer, shareholder servicing or other agency contract may
have been or may hereafter be made also has an advisory or
management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or
other agency contract with one or more other corporations,
trusts, associations, or other organizations, or has other
business or interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its
Shareholders.
Section 3.4 Payment of Expenses by the Trust. The Trustees
are authorized to pay or to cause to be paid out of the principal or income of
the Trust, or partly out of principal and partly out of income, as they deem
fair, all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust, in connection with the management thereof, or in
connection with the financing of the sale of Shares, including, but not limited
to, the Trustees' compensation and such expenses and charges for the services
of the Trust's officers, employees, any investment adviser, manager, or
sub-adviser, principal underwriter, auditor, counsel, custodian, transfer
agent, shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur; provided, however, that all expenses, fees,
charges, taxes and liabilities incurred or arising in connection with a
particular series or class of Shares as determined by the Trustees, shall be
payable solely out of the assets of that series or class. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular series shall be allocated
and charged by the Trustees between or among any one or more of the series in
such manner as the Trustees in their sole discretion deem fair and equitable.
Each such allocation shall be conclusive and binding upon the Shareholders of
all series for all purposes. Any creditor of any series may look only to the
assets of that series to satisfy such creditor's debt.
The Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder to pay directly, in advance or arrears,
for any and all expenses of the Trust, an
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amount fixed from time to time by the Trustees, by setting off such charges due
from such Shareholder from declared but unpaid dividends owed such Shareholder
and/or by reducing the number of Shares in the account of such Shareholder by
that number of full and/or fractional Shares which represents the outstanding
amount of such charges due from such Shareholder.
Section 3.5 Ownership of Assets of the Trust. Title to all
of the assets of the Trust shall at all times be considered as vested in the
Trustees.
ARTICLE IV
SHARES
Section 4.1 Beneficial Interest. The Shares of the Trust
shall have no par value and shall be issued in one or more classes or series as
the Trustees may, without shareholder approval, authorize. Each class or
series of Shares shall represent an equal proportionate interest in the assets
and liabilities of the Trust, with no class or series having priority or
preference over another. If the Trustees have authorized the issuance of two
or more classes or series of Shares, then the classes or series may have such
variations as to dividend, redemption, voting rights, net asset values,
expenses borne by the classes, and other matters as the Trustees have
authorized. The number of Shares authorized shall be unlimited.
Section 4.2 Ownership of Shares. The ownership of Shares
shall be recorded on the books of the Trust or a transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the issuance of Share certificates, the
transfer of Shares and similar matters. The record books of the Trust as kept
by the Trust or any transfer or similar agent, as the case may be, shall be
conclusive as to who are the Shareholders of each class or series and as to the
number of Shares of each class or series held from time to time by each
Shareholder.
Section 4.3 Investment in the Trust. The Trustees shall
accept investments in the Trust from such persons and on such terms and for
such consideration, which may consist of cash or tangible or intangible
property or a combination thereof, as they from time to time authorize.
All consideration received by the Trust for the issue or sale
of Shares of each class or series of Shares, together with all income,
earnings, profits, and proceeds thereof, including any proceeds derived from
the sale, exchange or liquidation thereof, and any funds or payments derived
from any reinvestment of such
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proceeds in whatever form the same may be, shall irrevocably belong to the
class or series of Shares with respect to which the same were received by the
Trust for all purposes, subject only to the rights of creditors, and shall be
so handled upon the books of account of the Trust and are herein referred to as
"assets of" such class or series of shares.
Section 4.4 No Preemptive Rights. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust.
Section 4.5 Status of Shares and Limitation of Personal
Liability. Shares shall be deemed to be personal property giving only the
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms hereof and to have become a party hereto. The death of a Shareholder
during the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares
shall not entitle the Shareholder to any title in or to the whole or any part
of the Trust property or right to call for a partition or division of the same
or for an accounting, nor shall the ownership of Shares constitute the
Shareholders partners. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any
Shareholder, nor except as specifically provided herein to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 Shareholders' Voting Powers and Meetings.
Shareholders shall have such power to vote as is provided for in, and may hold
meetings and take actions pursuant to the provisions of the By-laws.
ARTICLE VI
DISTRIBUTIONS AND REPURCHASES
Section 6.1 Distributions. The Trustees may each year, or
more frequently if they so determine, distribute to the Shareholders of each
class or series of Shares such income and capital gains, accrued or realized,
as the Trustees may determine, after providing for actual and accrued expenses
and liabilities (including such reserves as the Trustees may establish)
determined
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in accordance with good accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each class or series of Shares shall be
distributed pro rata to Shareholders in proportion to the number of Shares of
each class or series held by each of them. Such distributions shall be made in
cash or Shares or a combination thereof as determined by the Trustees. Any
such distribution paid in Shares will be paid at the net asset value thereof as
determined in accordance with the By-laws.
Section 6.2 Repurchases. The Trustees may in their business
judgment authorize the Trust to repurchase all or a portion of its outstanding
classes or series of Shares at the net asset value of such Shares thereof as
determined in accordance with the By-Laws. Such Share repurchases are expected
to be in the form of tender offers by the Trust to the Shareholders.
Section 6.3 Dividends, Distributions and Repurchases. No
dividend or distribution (including, without limitation, any distribution paid
upon termination of the Trust or of a class or series of Shares) with respect
to the Shares shall be effected by the Trust other than from the assets of such
Trust. The Trust may borrow against its assets for the purpose of funding said
repurchase of Shares.
ARTICLE VII
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
Section 7.1 Compensation. the Trustees as such shall be
entitled to reasonable compensation from the Trust; they may fix the amount of
their compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, legal, accounting, investment banking,
underwriting, brokerage, or investment dealer or other services and payment for
the same by the Trust.
Section 7.2. Limitation of Liability. The Trustees shall not
be responsible or liable in any event for any neglect or wrongdoing of any
officer, agent, employee, manager or principal underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any other Trustee,
but nothing herein contained shall protect any Trustee against any liability to
which he or she would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate,
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Share or undertaking and every other act or thing whatsoever executed or done
by or on behalf of the Trust or the Trustees or any of them in connection with
the Trust shall be conclusively deemed to have been executed or done only in or
with respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Trustees, Officers, etc. The Trust shall
indemnify each of its Trustees and officers (including persons who serve at the
Trust's request as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or otherwise)
(hereinafter referred to as a "Covered Person") against all liabilities and
expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees reasonably
incurred by any Covered Person in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, in which such Covered Person may
be or may have been involved as a party or otherwise or with which such Covered
Person may be or may have been threatened, while in office or thereafter, by
reason of being or having been such a Covered Person except with respect to any
matter as to which such Covered Person shall have been finally adjudicated in
any such action, suit or other proceeding to be liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office. Expenses, including counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), shall be paid from time to time by the
Trust in advance of the final disposition of any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Covered
Person to repay amounts so paid to the Trust if it is ultimately determined
that indemnification of such expenses is not authorized under this Article;
provided, however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust shall be insured
against losses arising from any such advance payments or (c) either a majority
of the disinterested Trustees acting on the matter (provided that a majority of
the disinterested Trustees then in office act on the matter), or independent
legal counsel in a written opinion, shall have determined, based upon a review
of readily available facts (as opposed to a full trial type inquiry) that there
is reason to believe that such Covered Person will be found entitled to
indemnification under this Article.
Section 8.2 Compromise Payment. As to any matter
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disposed of (whether by a compromise payment, pursuant to a consent decree or
otherwise) without an adjudication by a court, or by any other body before
which the proceeding was brought, that such Covered Person is liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
or her office, indemnification shall be provided if (a) approved, after notice
that it involves such indemnification, by at least a majority of the
disinterested Trustees acting on the matter (provided that a majority of the
disinterested Trustees then in office act on the matter) upon a determination,
based upon a review of readily available facts (as opposed to a full trial type
inquiry) that such Covered Person is not liable to the Trust or its
Shareholders by reasons of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office,
or (b) there has been obtained an opinion in writing of independent legal
counsel, based upon a review of readily available facts (as opposed to a full
trial type inquiry) to the effect that such indemnification would not protect
such Person against any liability to the Trust or to its shareholders to which
he or she would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office. Any approval pursuant to this Section shall not prevent
the recovery from any Covered Person of any amount paid to such Covered Person
in accordance with this Section as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction to have been
liable to the Trust or its Shareholders by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
Section 8.3 Indemnification Not Exclusive. The right of
indemnification hereby provided shall not be exclusive of or affect any other
rights to which such Covered Person may be entitled. As used in this Article
VIII, the term "Covered Person" shall include such person's heirs, executors
and administrators and a "disinterested Trustee" is a Trustee who is not an
"interested person" of the Trust as defined in Section 2 (a)(19) of the
Investment Company Act of 1940, as amended, (or who has been exempted from
being an "interested person" by any rule, regulation or order of the
Commission) and against whom none of such actions, suits or other proceedings
or another action, suit or other proceeding on the same or similar grounds is
then or has been pending. Nothing contained in this Article shall affect any
rights to indemnification to which personnel of the Trust, other than Trustees
or officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
Section 8.4 Shareholders. In case any Shareholder or
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former Shareholder shall be held to be personally liable solely by reason of
his or her being or having been a Shareholder and not because of his or her
acts or omissions or for some other reason, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled to be held harmless from and
indemnified against all loss and expense arising from such liability, but only
out of the assets of the particular class or series of Shares of which he or
she is or was a Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Trustees, Shareholders, etc. Not Personally
Liable; Notice. All persons extending credit to, contracting with or having
any claim against the Trust shall look only to the assets of the Trust for
payment under such credit, contract or claim; and neither the Shareholders nor
the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or
undertaking made or issued by the Trustees or by any officer or officers shall
give notice that this Amended Agreement and Declaration of Trust is on file
with the Secretary of the Commonwealth of Massachusetts and shall recite that
the same was executed or made by or on behalf of the Trust or by them as
Trustee or Trustees or as officers or officer and not individually and that the
obligations of such instrument are not binding upon any of them or the
Shareholders individually but are binding only upon the assets and property of
the Trust, and may contain such further recital as he or she or they may deem
appropriate, but the omission thereof shall not operate to bind any Trustee or
Trustees or officer or officers or Shareholder or Shareholders individually.
Section 9.2 Trustee's Good Faith Action, Expert Advice, No
Bond or Surety. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this
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Amended Agreement and Declaration of Trust, and shall be under no liability for
any act or omission in accordance with such advice or for failing to follow
such advice. The Trustees shall not be required to give any bond as such, nor
any surety if a bond is required.
Section 9.3 Liability of Third Persons Dealing with Trustees.
No person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the Trustees
or to see to the application of any payments made or property transferred to
the Trust or upon its order.
Section 9.4 Merger or Combination of Classes or Series of
Shares of the Trust. If permitted by regulatory authorities, the Trust, by
resolution of its Board of Trustees, may direct that the separate portfolios of
two or more classes or series of the Trust's shares be combined into a single
portfolio on such terms as the Board of Trustees may deem appropriate or which
regulatory authorities may require for the protection of the rights of holders
of each class or series of shares. If portfolios are combined, the following
provisions shall apply to the classes or series of shares:
(a) The assets of the combined portfolio and the
income from investment and reinvestment of the assets shall be
allocated to each class or series of shares in accordance with
the number of shares of that class or series outstanding for
purposes of determining the net asset value of each class or
series of shares, the amounts distributable to holders of
shares of each class or series of shares in the event of
dissolution and liquidation of the Trust and the dividends
payable with respect to shares of each class or series of
shares.
(b) The liabilities and expenses of the Trust
with respect to a class or series of the Trust's shares shall
be charged to that class or series. Liabilities and expenses
chargeable to more than one class of shares shall be allocated
by or in accordance with procedures adopted by the Board of
Trustees. The determination of the Board of Trustees shall be
conclusive as to the charging or allocation of liabilities.
(c) Each class or series of shares shall be
entitled to such dividends or distributions, in shares or cash
or both, as may be declared by the Board of Trustees with
respect to such class or series. Dividends or distributions
may be paid only out of net income or surplus of that class or
series.
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(d) In the event of the liquidation or
dissolution of the Trust, the holders of each class or series
of the Trust's shares shall be entitled to receive that class
or series share of the assets of the Trust less the
liabilities of the Trust allocable to that class or series as
determined by or in accordance with procedures adopted by the
Board of Trustees. The assets so distributable to the holders
of a particular class or series shall be distributed among
them in proportion to the number of shares of the class or
series held by each of them and recorded on the books of the
Trust.
If the Board of Trustees orders the combination of portfolios of classes or
series of shares, it may at any time thereafter by resolution order that the
portfolios be segregated or combined with portfolios of other classes or series
on such terms as the Board of Trustees determines are desirable for the
protection of the interests of the Trust and its shareholders or to comply with
regulatory requirements.
Section 9.5 Duration and Termination of Trust. Unless
terminated as provided herein, the Trust shall continue without limitation of
time. The Trust may be terminated at any time by the vote of Shareholders
holding at least a majority of the Shares entitled to vote or by the Trustees
by written notice to the Shareholders. Any class or series of Shares may be
terminated at any time by vote of Shareholders holding at least a majority of
the Shares of such class or series entitled to vote or by the Trustees by
written notice to the Shareholders of such class or series.
Upon termination of the Trust or of any one or more classes or
series of Shares, after paying or otherwise providing for all charges, taxes,
expenses and liabilities, whether due or accrued or anticipated, of the Trust
or of the particular class or series as may be determined by the Trustees, the
Trust shall, in accordance with such procedures as the Trustees shall consider
appropriate, reduce the remaining assets to distributable form in cash or
shares or other securities, or any combination thereof, and distribute the
proceeds to the Shareholders of the series involved, ratably according to the
aggregate net asset value of Shares of such class or series of Shares held by
the several Shareholders of such class or series of Shares on the date of
termination.
Section 9.6 Merger, Consolidation and Sale of Assets.
Subject to Section 9.8, the Trust may merge or consolidate with any other
corporation, association, trust or other organization, or may sell, lease or
exchange all or substantially all of the Trust Property, including its
goodwill, upon such terms and conditions and for such consideration when and as
authorized at any meeting of the Shareholders called for the purpose by the
affirmative vote of the holders of not less than two-thirds of the the Shares
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outstanding and entitled to vote, or by an instrument or instruments in writing
without a meeting, consented to by the holders of not less than two-thirds of
the Shares, provided, however, that if such merger, consolidation, sale, lease
or exchange is recommended by the Trustees, the vote or written consent of the
holders of a majority of the Shares outstanding and entitled to vote shall be
sufficient authorization and any such merger, consolidation, sale, lease or
exchange shall be deemed for all purposes to have been accomplished under and
pursuant to the statutes of the Commonwealth of Massachusetts.
Section 9.7 Conversion to Open-End Management Investment
Company. Notwithstanding any other provisions of this Declaration or the
By-Laws, an amendment to this Declaration that makes the Common Shares a
"redeemable security" (as that term is defined in the 1940 Act) shall be
required to be approved by at least (a) a majority of the Trustees, including a
majority of the Trustees who are not Interested Persons; and (b) a Majority
Shareholder Vote.
The Trust shall notify the holders of all capital
securities of the approval, in accordance with the preceding paragraph of this
Section 9.7, of any amendment to this Declaration that makes the Shares a
"redeemable security" (as that term is defined in the 1940 Act) no later than
thirty (30) days prior to the date of filing of such amendment with the
Secretary of State of the Commonwealth of Massachusetts; provided, however,
that such amendment may not be so filed until the later of ninety (90) days
following the date of approval of such amendment by the holders of the Shares
in accordance with the preceding paragraph of this Section 9.7 or thirty (30)
days following the date on which notice of the approval of such amendment is
first given to Shareholders.
Section 9.8 Certain Transactions. (a) Notwithstanding any
other provision of this Declaration and subject to the exceptions provided in
paragraph (d) of this Section, the types of transactions described in paragraph
(c) of this Section shall require the affirmative vote or consent of the
holders of not less than two-thirds of the Shares outstanding and entitled to
vote when a Principal Shareholder (as defined in paragraph (b) of this Section)
is a party to the transaction. Such affirmative vote or consent shall be in
addition to the vote or consent of the holders of the Shares otherwise required
by law or any agreement between the Trust and any national securities exchange.
(b) The term "Principal Shareholder" shall mean
any corporation, person or other entity which is the beneficial owner, directly
or indirectly, of more than five percent (5%) of the outstanding Shares and
shall include any affiliate or associate, as such terms are defined in clause
(ii) below, of a Principal Shareholder. For the purposes of this Section, in
addition to the Shares which a corporation, person or other entity beneficially
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owns directly, (a) any corporation, person or other entity shall be deemed to
be the beneficial owner of any Shares (i) which it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights or warrants, or
otherwise (but excluding share options granted by the Trust), or (ii) which are
beneficially owned, directly or indirectly (including Shares deemed owned
through application of clause (i) above, by any other corporation, person or
entity with which it or its "affiliate" or "associate" (as defined below) has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of Shares, or which is its "affiliate" or
"associate" as those terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended, and (b) the outstanding Shares shall include
Shares deemed owned through application of clauses (i) and (ii) above but shall
not include any other Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights or warrants, or otherwise.
(c) This Section shall apply to the following
transactions:
(1) The merger or consolidation of
the Trust or any subsidiary of the Trust with or into any
Principal Shareholder.
(2) The issuance of any securities of
the Trust to any Principal Shareholder for cash.
(3) The sale, lease or exchange of all
or any substantial part of the assets of the Trust to any
Principal Shareholder (except assets having an aggregate fair
market value of less than $1,000,000, aggregating for the
purpose of such computation all assets sold, leased or
exchanged in any series of similar transactions within a
twelve-month period).
(4) The sale, lease or exchange to the
Trust or any subsidiary thereof, in exchange for securities of
the Trust of any assets of any Principal Shareholder (except
assets having an aggregate fair market value of less than
$1,000,000, aggregating for the purposes of such computation
all assets sold, leased or exchanged in any series of similar
transactions within a twelve-month period).
(d) The provisions of this Section shall
not be applicable to (i) any of the transactions described in paragraph (c) of
this Section if the Trustees shall by resolution have approved a memorandum of
understanding with such Principal Shareholder with respect to and substantially
consistent with such transaction, or (ii) any such transaction with any
corporation of
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which a majority of the outstanding shares of all classes of stock normally
entitled to vote in elections of trustees is owned of record or beneficially by
the Trust and its subsidiaries.
(e) The Trustees shall have the power
and duty to determine for the purposes of this Section, on the basis of
information known to the Trust, whether (i) a corporation, person or entity
beneficially owns more than five percent (5%) of the outstanding Shares, (ii) a
corporation, person or entity is an "affiliate" or "associate" (as defined
above) of another, (iii) the assets being acquired or leased to or by the
Trust, or any subsidiary thereof, constitute a substantial part of the assets
of the Trust and have an aggregate fair market value of less than $1,000,000,
and (iv) the memorandum of understanding referred to in paragraph (d) hereof is
substantially consistent with the transaction covered thereby. Any such
determination shall be conclusive and binding for all purposes of this Section.
Section 9.9 Amendments. This Declaration of Trust may be
amended at any time by an instrument in writing signed by a majority of the
then Trustees when authorized to do so by vote of Shareholders holding a
majority of the Shares of each class or series entitled to vote, except that an
amendment which shall affect the holders of one or more classes or series of
Shares but not the holders of all outstanding class or series shall be
authorized by vote of the Shareholders holding a majority of the Shares
entitled to vote of each class or series affected and no vote of Shareholders
of a class or series not affected shall be required. Any amendment which shall
affect the holders of Shares of one or more classes of a series but not the
holders of all Shares of a series shall be authorized by vote of the
Shareholders holding a majority of the Shares of such classes affected by the
amendment voting together as a single class, and no vote of Shareholders of the
classes not affected shall be required. Amendments having the purpose of
changing the name of the Trust, of establishing, changing, or eliminating the
par value of the shares or of supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
Section 9.10 Resident Agent. The Trust may appoint and
maintain a resident agent in the Commonwealth of Massachusetts.
Section 9.11 Filing of Copies; References; Headings. The
original or a copy of this instrument and of each amendment hereto shall be
kept at the office of the Trust where it may be inspected by any Shareholder.
A copy of this instrument and of each amendment hereto shall be filed by the
Trust with the Secretary of the Commonwealth of Massachusetts and with the
Boston City Clerk, as well as any other governmental office where such
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filing may from time to time be required, but the failure to make any such
filing shall not impair the effectiveness of this instrument or any such
amendment. Anyone dealing with the Trust may rely on a certificate by an
officer of the Trust as to whether or not any such amendments have been made,
as to the identities of the Trustees and officers, and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were
the original, may rely on a copy certified by an officer of the Trust to be a
copy of this instrument or of any such amendments. In this instrument and in
any such amendment, references to this instrument, and all expressions like
"herein", "hereof" and "hereunder" shall be deemed to refer to this instrument
as a whole as the same may be amended or affected by any such amendments. The
masculine gender shall include the feminine and neuter genders. Headings are
placed herein for convenience of reference only and shall not be taken as a
part hereof or control or affect the meaning, construction or effect of this
instrument. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.
Section 9.12 Applicable Law. This Amended Agreement and
Declaration of Trust is made in the Commonwealth of Massachusetts, and it is
created under and is to be governed by and construed and administered according
to the laws of said Commonwealth, including the Massachusetts Business
Corporation Law as the same may be amended from time to time, to which
reference is made with the intention that matters not specifically covered
herein or as to which an ambiguity may exist shall be resolved as if the Trust
were a business corporation organized in Massachusetts, but the reference to
said Business Corporation Law is not intended to give the Trust, the Trustees,
the Shareholders or any other person any right, power, authority or
responsibility available only to or in connection with an entity organized in
corporate form. The Trust shall be of the type referred to in Section 1 of
Chapter 182 of the Massachusetts General Laws and of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust.
Section 9.13 Provisions in Conflict with Laws and
Regulations. (a) The provisions of this Amended Agreement and Declaration of
Trust are severable, and if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with the 1940 Act, the
regulated investment company provisions of the Internal Revenue Code of 1986,
or any amendments or successor statute thereto, or with other applicable laws
and regulations, the conflicting provision shall be deemed not to constitute
and never to have constituted a part of the Declaration; provided, however,
that such determination shall not affect any of the remaining provisions of the
Amended Agreement and Declaration of Trust or render invalid or improper any
action taken or omitted
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prior to such determination.
(b) If any provision of the Amended Agreement and
Declaration of Trust shall be held invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall apply only to such
provision in such jurisdiction and shall not in any manner affect such
provision in any other jurisdiction or any other provision of the Declaration
in any jurisdiction.
Section 9.14 Use of the Name. Sierra Investment
Advisors Corporation ("Sierra Advisors") has consented to the use by the Trust
of the identifying word or name "Sierra" in the name of the Trust. Such
consent is conditioned upon the employment of Sierra Advisors, its successors
or any affiliate thereof as Investment Advisor or administrator of the Trust.
As between the Trust and Sierra, Sierra controls the use of the name of the
Trust insofar as such name contains "Sierra." The name or identifying word
"Sierra" may be used from time to time in other connections and for other
purposes by Sierra or affiliated entities. Sierra may require the Trust to
cease using "Sierra" in the name of the Trust if the Trust ceases to employ,
for any reason, Sierra, an affiliate or any successor as Investment Advisor of
the Trust.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal for himself and his assigns, as of the 29th day of January, 1996.
/s/ F. Xxxxx Xxxxxx
-----------------------------------
F. Xxxxx Xxxxxx
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THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES January 29th, 1996
Then personally appeared the above-named F. Xxxxx Xxxxxx and
acknowledged the foregoing instrument to be his free act and deed, before me.
/s/ Xxxx Xxxxxxx
-----------------------------------
Notary Public
My. Commission expires: 2/26/99
[Notary Seal]
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