AGREEMENT AND DECLARATION OF TRUST of FAITHSHARES TRUST a Delaware Statutory Trust Principal Place of Business: 3555 Northwest 58th Street, Suite 410 Oklahoma City, Oklahoma 73112
Exhibit 99.A2
AGREEMENT AND DECLARATION OF TRUST
of
a Delaware Statutory Trust
Principal Place of Business:
0000 Xxxxxxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
TABLE OF CONTENTS
ARTICLE I. Name and Definitions |
1 | |||
Section 1. Name |
1 | |||
Section 2. Definitions |
1 | |||
(a) The “Trust” |
1 | |||
(b) The “Trust Property” |
1 | |||
(c) “Trustees” |
1 | |||
(d) “Shares” |
1 | |||
(e) “Shareholder” |
2 | |||
(f) “Person” |
2 | |||
(g) The “1940 Act |
2 | |||
(h) The terms “Commission” and “Principal Underwriter” |
2 | |||
(i) “Declaration of Trust” |
2 | |||
(j) “By-Laws” |
2 | |||
(k) The term “Interested Person” |
2 | |||
(l) “Investment Adviser” or “Adviser” |
2 | |||
(m) “Series” |
2 | |||
ARTICLE II. Purpose of Trust |
2 | |||
ARTICLE III. Shares |
3 | |||
Section 1. Division of Beneficial Interest |
3 | |||
Section 2. Ownership of Shares |
3 | |||
Section 3. Investments in the Trust |
3 | |||
Section 4. Status of Shares and Limitation of Personal Liability |
4 | |||
Section 5. Power of Board of Trustees to Change Provisions Relating to Shares |
4 | |||
Section 6. Establishment and Designation of Shares |
4 | |||
(c) Dividends, Distributions, Redemptions, and Repurchases |
5 | |||
(d) Voting |
6 | |||
(e) Equality |
6 | |||
(f) Fractions |
6 | |||
(g) Exchange Privilege |
6 |
i
(h) Combination of Series |
6 | |||
(i) Elimination of Series |
6 | |||
ARTICLE IV. The Board of Trustees |
6 | |||
Section 1. Number, Election and Tenure |
6 | |||
Section 2. Effect of Death, Resignation, etc. of a Trustee |
7 | |||
Section 3. Powers |
7 | |||
Section 4. Payment of Expenses by the Trust |
10 | |||
Section 5. Ownership of Assets of the Trust |
10 | |||
Section 6. Service Contracts |
10 | |||
ARTICLE V. Shareholders’ Voting Powers and Meetings |
11 | |||
Section 1. Voting Powers |
11 | |||
Section 2. Voting Power and Meetings |
12 | |||
Section 3. Quorum and Required Vote |
12 | |||
Section 4. Action by Written Consent |
12 | |||
Section 5. Record Dates |
13 | |||
ARTICLE VI. Net Asset Value, Distributions, and Redemptions |
13 | |||
Section 1. Determination of Net Asset Value, Net Income, and Distributions |
13 | |||
Section 2. Redemptions and Repurchases |
13 | |||
Section 3. Redemptions at the Option of the Trust |
14 | |||
Section 4. Transfer of Shares |
14 | |||
ARTICLE VII. Compensation and Limitation of Liability |
14 | |||
Section 1. Compensation of Trustees |
14 | |||
Section 2. Indemnification and Limitation of Liability |
14 | |||
Section 3. Trustee’s Good Faith Action, Expert Advice, No Bond or Surety |
15 | |||
Section 4. Insurance |
15 | |||
ARTICLE
VIII. Miscellaneous |
15 | |||
Section 1. Liability of Third Persons Dealing with Trustees |
15 | |||
Section 2. Termination of Trust or Series |
15 | |||
Section 3. Merger and Consolidation |
16 | |||
Section 4. Amendments |
16 | |||
Section 5. Filing of Copies, References, Headings |
16 |
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Section 6. Applicable Law |
16 | |||
Section 7. Provisions in Conflict with Law or Regulations |
17 | |||
Section 8. Statutory Trust Only |
17 |
iii
AGREEMENT AND DECLARATION OF TRUST
OF
WHEREAS, this AGREEMENT AND DECLARATION OF TRUST is made and entered into as of the date set
forth below by the Trustee named hereunder for the purpose of forming a Delaware statutory trust in
accordance with the provisions hereinafter set forth,
NOW, THEREFORE, the Trustee hereby directs that a Certificate of Trust be filed with the
Office of the Secretary of State of the State of Delaware and do hereby declare that the Trustees
will hold IN TRUST all cash, securities and other assets which the Trust now possesses or may
hereafter acquire from time to time in any manner and manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders of Shares in this Trust.
ARTICLE I.
Name and Definitions
Section 1. Name. This trust shall be known as “FAITHSHARES TRUST” and the
Trustees shall conduct the business of the Trust under that name or any other name as they may from
time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) The “Trust” refers to the Delaware statutory trust established by this Agreement and
Declaration of Trust, as amended from time to time;
(b) The “Trust Property” means any and all property, real or personal, tangible or
intangible, which is owned or held by or for the account of the Trust;
(c) “Trustees” refers to the persons who have signed this Agreement and Declaration of Trust,
so long as they continue in office in accordance with the terms hereof, and all other persons who
may from time to time be duly elected or appointed to serve on the Board of Trustees in accordance
with the provisions hereof, and reference herein to a Trustee or the Trustees shall refer to such
person or persons in their capacity as Trustees hereunder;
(d) “Shares” means the shares of beneficial interest into which the beneficial interest of
each Series of the Trust or class thereof shall be divided from time to time and includes fractions
of Shares as well as whole Shares;
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(e) “Shareholder” means a record owner of outstanding Shares;
(f) “Person” means and includes individuals, corporations, partnerships, limited liability
companies, trusts, foundations, plans, associations, joint ventures, estates and other entities,
whether or not legal entities, and governments and agencies and political subdivisions thereof,
whether domestic or foreign;
(g) The “1940 Act” refers to the Investment Company Act of 1940 and the rules and regulations
thereunder, all as amended from time to time. References herein to specific sections of the 1940
Act shall be deemed to include such rules and regulations as are applicable to such sections as
determined by the Trustees or their designees;
(h) The terms “Commission” and “Principal Underwriter” shall have the respective meanings
given them in Section 2(a)(7) and Section (2)(a)(29) of the 1940 Act;
(i) “Declaration of Trust” shall mean this Agreement and Declaration of Trust, as amended or
restated from time to time;
(j) “By-Laws” shall mean the By Laws of the Trust as amended from time to time;
(k) The term “Interested Person” has the meaning given it in Section 2(a)(19) of the 1940
Act;
(l) “Investment Adviser” or “Adviser” means a party furnishing services to the Trust pursuant
to any contract described in Article IV, Section 6(a) hereof; and
(m) “Series” refers to each Series of Shares established and designated under or in
accordance with the provisions of Article III.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the business of a management
investment company registered under the 1940 Act through one or more Series investing primarily in
securities.
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ARTICLE III.
Shares
Section 1. Division of Beneficial Interest. The beneficial interest in the
Trust shall at all times be divided into an unlimited number of Shares, with a par value of $ .001
per Share. The Trustees may authorize the division of Shares into separate Series and the division
of Series into separate classes of Shares. The different Series shall be established and
designated, and the variations in the relative rights and preferences as between the different
Series shall be fixed and determined, by the Trustees. If only one Series shall be established,
the Shares shall have the rights and preferences provided for herein and in Article III, Section 6
hereof to the extent relevant and not otherwise provided for herein.
Subject to the provisions of Article III, Section 6, each Share shall have voting rights as
provided in Article V hereof, and holders of the Shares of any Series shall be entitled to receive
dividends, when, if and as declared with respect thereto in the manner provided in Article VI,
Section 1 hereof. No Share shall have any priority or preference over any other Share of the same
Series with respect to dividends or distributions of the Trust or otherwise. All dividends and
distributions shall be made ratably among all Shareholders of a Series (or class) from the assets
held with respect to such Series according to the number of Shares of such Series (or class) held
of record by such Shareholders on the record date for any dividend or distribution or on the date
of termination of the Trust, as the case may be. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the Trust or any Series.
The Trustees may from time to time divide or combine the Shares of a Series into a greater or
lesser number of Shares of such Series without thereby materially changing the proportionate
beneficial interest of such Shares in the assets held with respect to that Series or materially
affecting the rights of Shares of any other Series.
Section 2. Ownership of Shares. The ownership of Shares shall be recorded on
the books of the Trust or a transfer or similar agent for the Trust, which books shall be
maintained separately for the Shares of each Series. No certificates evidencing the ownership of
Shares shall be issued except as the Board of Trustees may otherwise determine from time to time.
The Trustees may make such rules as they consider appropriate for the transfer of Shares of each
Series (or class) 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 the identity of the
Shareholders of each Series and as to the number of Shares of each Series held from time to time by
each Shareholder.
Section 3. Investments in the Trust. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such consideration as the Trustees
from time to time may authorize. Each investment shall be credited to the Shareholder’s account in
the form of full and fractional Shares of the Trust, in such Series (or class) as the purchaser
shall select, at the net asset value per Share next determined for such Series (or class) after
receipt of
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the investment; provided, however, that the Trustees may, in their sole discretion, impose a sales
charge or reimbursement fee upon investments in the Trust.
Section 4. Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in this instrument and the
By-Laws of the Trust. Every Shareholder by virtue of having become a Shareholder shall be held to
have expressly assented and agreed to the terms hereof. The death of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust, 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 shall entitle such representative only to the rights of said deceased
Shareholder under this Declaration of Trust. Ownership of Shares shall not entitle a 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 as partners or joint venturers. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any Shareholder, or 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 agree to pay.
Section 5. Power of Board of Trustees to Change Provisions Relating to
Shares. Notwithstanding any other provision of this Declaration of Trust to the contrary, and
without limiting the power of the Board of Trustees to amend this Declaration of Trust as provided
elsewhere herein, the Board of Trustees shall have the power to amend this Declaration of Trust, at
any time and from time to time, in such manner as the Board of Trustees may determine in their sole
discretion, without the need for Shareholder action, so as to add, delete, replace or otherwise
modify any provisions relating to the Shares contained in this Declaration of Trust, provided that
before adopting any such amendment without Shareholder approval the Board of Trustees shall
determine that it is consistent with the fair and equitable treatment of all Shareholders and that
Shareholder approval is not required by the 1940 Act or other applicable law. If Shares have been
issued, Shareholder approval shall be required to adopt any amendments to this Declaration of Trust
which would adversely affect to a material degree the rights and preferences of the Shares of any
Series (or class) or to increase or decrease the par value of the Shares of any Series (or class).
Section 6. Establishment and Designation of Shares. The establishment and
designation of any Series (or class) of Shares shall be effective upon the adoption by a majority
of the Trustees of a resolution which sets forth such establishment and designation and the
relative rights and preferences of such Series (or class). Each such resolution shall be
incorporated herein by reference upon adoption.
Shares of each Series (or class) established pursuant to this Section 6, unless otherwise
provided in the resolution establishing such Series, shall have the following relative rights and
preferences:
(a) Assets Held with Respect to a Particular Series. All consideration received by the Trust
for the issue or sale of Shares of a Series, including dividends and distributions paid by, and
reinvested in, such Series, together with all assets in which such consideration is invested or
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reinvested, all income, earnings, profits, and proceeds thereof from whatever source derived,
including, without limitation, any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form
the same may be, shall irrevocably be held with respect to that Series for all purposes, subject
only to the rights of creditors, and shall be so recorded upon the books of account of the Trust.
Such consideration, assets, income, earnings, profits and proceeds thereof, from whatever source
derived, including, without limitation, any proceeds derived from the sale, exchange or liquidation
of such assets, and any funds or payments derived from any reinvestment of such proceeds, in
whatever form the same may be, are herein referred to as “assets held with respect to” that Series.
In the event that there are any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as assets held with respect to any particular Series
(collectively “General Assets”), the Trustees shall allocate such General Assets to, between or
among any one or more of the Series in such manner and on such basis as the Trustees, in their sole
discretion, deem fair and equitable, and any General Asset so allocated to a particular Series
shall be held with respect to that Series. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series for all purposes in absence of manifest
error.
(b) Liabilities Held with Respect to a Particular Series. The assets of the Trust held with
respect to each Series shall be charged with the liabilities of the Trust with respect to such
Series and all expenses, costs, charges and reserves attributable to such Series, and any general
liabilities of the Trust which are not readily identifiable as being held in respect of a Series
shall be allocated and charged by the Trustees to and among any one or more Series in such manner
and on such basis as the Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to a Series are herein referred to
as “liabilities held with respect to” that Series. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive and binding upon the holders of all
Series for all purposes in absence of manifest error. All Persons who have extended credit which
has been allocated to a particular Series, or who have a claim or contract which has been allocated
to a Series, shall look exclusively to the assets held with respect to such Series for payment of
such credit, claim, or contract. In the absence of an express agreement so limiting the claims of
such creditors, claimants and contracting parties, each creditor, claimant and contracting party
shall be deemed nevertheless to have agreed to such limitation unless an express provision to the
contrary has been incorporated in the written contract or other document establishing the
contractual relationship.
(c) Dividends, Distributions, Redemptions, and Repurchases. No dividend or distribution
including, without limitation, any distribution paid upon termination of the Trust or of any Series
(or class) with respect to, or any redemption or repurchase of, the Shares of any Series (or class)
shall be effected by the Trust other than from the assets held with respect to such Series, nor
shall any Shareholder of any Series otherwise have any right or claim against the assets held with
respect to any other Series except to the extent that such Shareholder has such a right or claim
hereunder as a Shareholder of such other Series. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital and each such
determination and allocation shall be conclusive and binding upon the Shareholders in absence of
manifest error.
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(d) Voting. All Shares of the Trust entitled to vote on a matter shall vote without
differentiation between the separate Series on a one vote per each dollar (and a fractional vote
for each fractional dollar) of the net asset value of each Share (including fractional Shares)
basis; provided, however, if a matter to be voted on affects only the interests of certain Series
(or class of a Series), then only the Shareholders of such affected Series (or class) shall be
entitled to vote on the matter.
(e) Equality. All the Shares of each Series shall represent an equal proportionate undivided
interest in the assets held with respect to such Series (subject to the liabilities of such Series
and such rights and preferences as may have been established and designated with respect to classes
of Shares within such Series), and each Share of a Series shall be equal to each other Share of
such Series.
(f) Fractions. Any fractional Share of a Series shall have proportionately all the rights
and obligations of a whole Share of such Series, including rights with respect to voting, receipt
of dividends and distributions and redemption of Shares.
(g) Exchange Privilege. The Trustees shall have the authority to provide that the holders of
Shares of any Series shall have the right to exchange such Shares for Shares of one or more other
Series in accordance with such requirements and procedures as may be established by the Trustees.
(h) Combination of Series. The Trustees shall have the authority, without the approval of
the Shareholders of any Series unless otherwise required by applicable law, to combine the assets
and liabilities held with respect to any two or more Series into assets and liabilities held with
respect to a single Series.
(i) Elimination of Series. At any time that there are no Shares outstanding of a Series (or
class), the Trustees may abolish such Series (or class).
ARTICLE IV.
The Board of Trustees
Section 1. Number, Election and Tenure. The number of Trustees constituting
the Board of Trustees shall be fixed from time to time by a written instrument signed, or by
resolution approved at a duly constituted meeting, by a majority of the Board of Trustees;
provided, however, that the number of Trustees shall in no event be less than one (1) nor more than
fifteen (15). Subject to the requirements of Section 16(a) of the 1940 Act, the Board of Trustees,
by action of a majority of the then Trustees at a duly constituted meeting, may fill vacancies in
the Board of Trustees and remove Trustees with or without cause. Each Trustee shall serve during
the continued lifetime of the Trust until he or she dies, resigns, is declared bankrupt or
incompetent by a court of competent jurisdiction, or is removed. Any Trustee may resign at any
time by written instrument signed by him and delivered to any officer of the Trust
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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 or her resignation or removal, or any right to damages or
other payment on account of such removal. Any Trustee may be removed at any time by a vote of at
least two-thirds of the number of Trustees prior to such removal. Any Trustee may also be removed
at any meeting of Shareholders by a vote of two thirds of the total combined net asset value of all
Shares of the Trust issued and outstanding. A meeting of Shareholders for the purpose of electing
or removing one or more Trustees may be called (i) by the Trustees upon their own vote, or (ii)
upon the demand of Shareholders owning 10% or more of the Shares of the Trust in the aggregate.
Section 2. Effect of Death, Resignation, etc. of a Trustee. The death,
declination, resignation, retirement, removal, or incapacity of one or more Trustees, or all of
them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust. Whenever a vacancy in the Board of Trustees shall occur, until
such vacancy is filled as provided in Article IV, Section 1, the Trustees in office, regardless of
their number, shall have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration of Trust.
Section 3. Powers. Subject to the provisions of this Declaration of Trust,
the business of the Trust shall be managed by the Board of Trustees, and such Board shall have all
powers necessary or convenient to carry out that responsibility including the power to engage in
transactions of all kinds on behalf of the Trust. Trustees, in all instances, shall act as
principals and are and shall be free from the control of the Shareholders. The Trustees shall have
full power and authority to do any and all acts and to make and execute any and all contracts,
documents and instruments that they may consider desirable, necessary or appropriate in connection
with the administration of the Trust. Without limiting the foregoing, the Trustees may: adopt,
amend and repeal By-Laws not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust; elect and remove such officers and appoint
and terminate such agents as they consider appropriate; appoint from their own number and establish
and terminate one or more committees consisting of two or more Trustees who may exercise the powers
and authority of the Board of Trustees to the extent that the Trustees determine; 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 or with a Federal Reserve Bank, retain a transfer agent or a shareholder
servicing agent, or both; provide for the issuance and distribution of Shares by the Trust directly
or through one or more Principal Underwriters or otherwise; redeem, repurchase and transfer Shares
pursuant to applicable law; set record dates for the determination of Shareholders with respect to
various matters; declare and pay dividends and distributions to Shareholders of each Series from
the assets of such Series; establish from time to time, in accordance with the provisions of
Article III, Section 6 hereof, any Series of Shares, each such Series to operate as a separate and
distinct investment medium and with separately defined investment objectives and policies and
distinct investment purpose; 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, transfer or shareholder
7
servicing agent, Investment Adviser or Principal Underwriter. Any determination as to what is in
the interests of the Trust made by the Trustees in good faith shall be conclusive. In construing
the provisions of this Declaration of Trust, the presumption shall be in favor of a grant of power
to the Trustees and unless otherwise specified herein or required by the 1940 Act or other
applicable law, any action by the Board of Trustees shall be deemed effective if approved or taken
by a majority of the Trustees then in office or a majority of any duly constituted committee of
Trustees. Any action required or permitted to be taken at any meeting of the Board of Trustees, or
any committee thereof, may be taken without a meeting if all members of the Board of Trustees or
committee (as the case may be) consent thereto in writing or electronically, and the consents are
filed with the minutes of the proceedings of the Board of Trustees, or committee, except as
otherwise provided in the 1940 Act.
Without limiting the foregoing, the Trust shall have power and authority:
(a) To invest and reinvest cash and cash items, to hold cash uninvested, and to subscribe
for, invest in, reinvest in, purchase or otherwise acquire, own, hold, pledge, sell, assign,
transfer, exchange, distribute, write options on, lend or otherwise deal in or dispose of contracts
for the future acquisition or delivery of all types of securities, futures contracts and options
thereon, and forward currency contracts of every nature and kind, including, without limitation,
all types of bonds, debentures, stocks, preferred stocks, negotiable or non-negotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or indebtedness, commercial paper,
repurchase agreements, bankers’ acceptances, and other securities of any kind, issued, created,
guaranteed, or sponsored by any and all Persons, including, without limitation, states,
territories, and possessions of the United States and the District of Columbia and any political
subdivision, agency, or instrumentality thereof, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any international instrumentality
or organization, or by any bank or savings institution, or by any corporation or organization
organized under the laws of the United States or of any state, territory, or possession thereof, or
by any corporation or organization organized under any foreign law, or in “when issued” contracts
for any such securities, futures contracts and options thereon, swap agreements, forward currency
contracts, and other derivatives, to change the investments of the assets of the Trust; and to
exercise any and all rights, powers, and privileges of ownership or interest in respect of any and
all such investments of every kind and description, including, without limitation, the right to
consent and otherwise act with respect thereto, with power to designate one or more Persons, to
exercise any of said rights, powers, and privileges in respect of any of said instruments;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or write options with
respect to or otherwise deal in any property rights relating to any or all of the assets of the
Trust or any Series;
(c) 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;
8
(d) To exercise powers and right of subscription or otherwise which in any manner arise out
of ownership of securities;
(e) To hold any security or property in a form not indicating that it is trust property,
whether in bearer, unregistered or other negotiable form, or in its own name or in the name of a
custodian or subcustodian or a nominee or nominees or otherwise or to authorize the custodian or a
subcustodian or a nominee or nominees to deposit the same in a securities depository, subject in
each case to the applicable provisions of the 1940 Act;
(f) To consent to, or participate in, any plan for the reorganization, consolidation or
merger of any corporation or issuer of any security which is 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;
(g) To join with other security holders in acting through a committee, depository, voting
trustee or otherwise, and in that connection to deposit any security with, or transfer any security
to, any such committee, depository 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
committee, depository or trustee as the Trustees shall deem proper;
(h) To litigate, compromise, arbitrate, settle or otherwise adjust claims in favor of or
against the Trust or a Series, or any matter in controversy, including but not limited to claims
for taxes;
(i) To enter into joint ventures, general or limited partnerships and any other combinations
or associations;
(j) To borrow funds or other property in the name of the Trust or Series exclusively for
Trust purposes;
(k) 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;
(l) To purchase and pay for entirely out of Trust Property such insurance as the Trustees may
deem necessary, desirable or appropriate for the conduct of the business, including, without
limitation, insurance policies insuring the assets of the Trust or payment of distributions and
principal on its portfolio investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, Investment Advisers, Principal Underwriter, or independent contractors
of the Trust, individually against all claims and liabilities of every nature arising by reason of
holding Shares, 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 Trustee, officer, employee,
agent, Investment Adviser, Principal Underwriter, or independent contractor,
9
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 liability; and
(m) 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.
The Trust shall not be limited to investing in obligations maturing before the possible
termination of the Trust or one or more of its Series. The Trust shall not in any way be bound or
limited by any present or future law or custom in regard to investment by fiduciaries. The Trust
shall not be required to obtain any court order to deal with any assets of the Trust or take any
other action hereunder.
Section 4. Payment of Expenses by the Trust. Subject to the provisions of
Article III, Section 6(b), the Trustees are authorized to pay or cause to be paid out of the
principal or income of the Trust or Series, or partly out of the principal and partly out of
income, and to charge or allocate the same to, between or among such one or more of the Series that
may be established or designated pursuant to Article III, Section 6, all expenses, fees, charges,
taxes and liabilities incurred or arising in connection with the Trust or Series, or in connection
with the management thereof, including, but not limited to, the Trustees’ compensation and such
expenses and charges for the services of the Trust’s officers, employees, Investment Advisers,
Principal Underwriter, auditors, 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.
Section 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 Trust, except that the Trustees shall
have power to cause legal title to any Trust Property to be held by or in the name of one or more
of the Trustees, or in the name of the Trust, or in the name of any other Person as nominee, on
such terms as the Trustees may determine. Upon the resignation, incompetency, bankruptcy, removal,
or death of a Trustee he or she shall automatically cease to have any such title in any of the
Trust Property, and the title of such Trustee in the Trust Property shall vest automatically in the
remaining Trustees. Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered. The Trustees may determine that the Trust
or the Trustees, acting for and on behalf of the Trust, shall be deemed to hold beneficial
ownership of any income earned on the securities owned by the Trust, whether domestic or foreign.
Section 6. Service Contracts.
(a) The Trustees may, at any time and from time to time, contract for exclusive or
nonexclusive advisory, management and/or administrative services for the Trust or for any Series
with any Person; and any such contract may contain such other terms as the Trustees may determine,
including without limitation, authority for the Investment Adviser to determine from
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time to time without prior consultation with the Trustees 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, and such other responsibilities as may
specifically be delegated to such Person.
(b) The Trustees may also, at any time and from time to time, contract with any Persons,
appointing such Persons exclusive or nonexclusive distributor or Principal Underwriter for the
Shares of one or more of the Series or other securities to be issued by the Trust. Every such
contract may contain such other terms as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time to time, to contract with any
Persons, appointing such Person(s) to serve as custodian(s), transfer agent and/or shareholder
servicing agent for the Trust or one or more of its Series. Every such contract shall comply with
such terms as may be required by the Trustees.
(d) The Trustees are further empowered, at any time and from time to time, to contract with
any Persons to provide such other services to the Trust or one or more of the Series, as the
Trustees determine to be in the best interests of the Trust and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of the Trust is a shareholder, director,
officer, partner, trustee, employee, Investment Adviser, Principal Underwriter, distributor, or
affiliate or agent of or for any Person with which an advisory, management or administration
contract, or Principal Underwriter’s or distributor’s contract, or transfer, shareholder servicing
or other type of service contract may be made, or that
(ii) any Person with which an advisory, management or administration contract or Principal
Underwriter’s or distributor’s contract, or transfer, shareholder servicing or other type of
service contract may be made also has an advisory, management or administration contract, or
principal underwriter’s or distributor’s contract, or transfer, shareholder servicing or other
service contract, or has other business or interests with any other Person,
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, provided approval of each such contract is made
pursuant to the applicable requirements of the 1940 Act.
ARTICLE V.
Shareholders’ Voting Powers and Meetings
Section 1. Voting Powers. Subject to the provisions of Article III, Sections
5 and 6(d), the Shareholders shall have right to vote only (i) for the election or removal of
Trustees as provided in Article IV, Section 1, and (ii) with respect to such additional matters
relating to the
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Trust as may be required by the applicable provisions of the 1940 Act, including Section 16(a)
thereof, and (iii) on such other matters as the Trustees may consider necessary or desirable. Each
Shareholder shall have one vote for each dollar (and a fractional vote for each fractional dollar)
of the net asset value of each Share (including fractional Shares) held by such Shareholder on the
record date on each matter submitted to a vote at a meeting of Shareholders. For purposes of this
section, net asset value shall be determined pursuant to Article VIII, Section 3 of the Trust’s
By-Laws as of the record date for such meeting set pursuant to Article II, Section 5 of such
By-Laws. There shall be no cumulative voting in the election of Trustees. Votes may be made in
person or by proxy. A proxy purporting to be executed by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger.
Section 2. Voting Power and Meetings. Meetings of the Shareholders may be
called by the Trustees for the purposes described in Section 1 of this Article V. A meeting of
Shareholders may be held at any place designated by the Trustees. Written or electronic notice of
any meeting of Shareholders shall be given or caused to be given by the Trustees by delivering
personally, electronically or mailing such notice not more than ninety (90), nor less than ten (10)
days before such meeting, postage prepaid, stating the time and place of the meeting, to each
Shareholder at the Shareholder’s address as it appears on the records of the Trust. Whenever
notice of a meeting is required to be given to a Shareholder under this Declaration of Trust, a
written or electronic waiver thereof, executed before or after the meeting by such Shareholder or
his or her attorney thereunto authorized and filed with the records of the meeting, or actual
attendance at the meeting of Shareholders in person or by proxy, shall be deemed equivalent to such
notice.
Section 3. Quorum and Required Vote. Except as otherwise provided by the
1940 Act or in this Declaration of Trust, at any meeting of Shareholders, the presence in person or
by proxy of the holders of record of Shares issued and outstanding and entitled to vote
representing more than twenty-five percent of the total combined net asset value of all Shares
issued and outstanding and entitled to vote shall constitute a quorum for the transaction of any
business at the meeting. Any meeting of Shareholders may be adjourned from time to time by a
majority of the votes properly cast upon the question of adjourning a meeting to another date and
time, whether or not a quorum is present, and the meeting may be held as adjourned within a
reasonable time after the date set for the original meeting without further notice. Subject to the
provisions of Article III, Section 6(d) and the applicable provisions of the 1940 Act, when a
quorum is present at any meeting, a majority vote of the combined net asset value of all Shares
entitled to vote that are present in person or by proxy shall decide any questions, except only a
plurality vote shall be necessary to elect trustees.
Section 4. Action by Written Consent. Any action taken by Shareholders may
be taken without a meeting if all the holders of Shares entitled to vote on the matter are provided
with not less than 7 days written or electronic notice thereof and written or electronic consent to
the action is filed with the records of the meetings of Shareholders by the holders of the number
of votes that would be required to approve the matter as provided in Article V, Section 3. Such
consent shall be treated for all purposes as a vote taken at a meeting of Shareholders.
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Section 5. Record Dates. For the purpose of determining the Shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, the Trustees may fix a time,
which shall be not more than ninety (90) nor less than ten (10) days before the date of any meeting
of Shareholders, as the record date for determining the Shareholders having the right to notice of
and to vote at such meeting and any adjournment thereof, and in such case only Shareholders of
record on such record date shall have such right, notwithstanding any transfer of Shares on the
books of the Trust after the record date. For the purpose of determining the Shareholders who are
entitled to receive payment of any dividend or of any other distribution, the Trustees may fix a
date, which shall be before the date for the payment of such dividend or distribution, as the
record date for determining the Shareholders having the right to receive such dividend or
distribution. Nothing in this Section 5 shall be construed as precluding the Trustees from setting
different record dates for different Series.
ARTICLE VI.
Net Asset Value, Distributions, and Redemptions
Section 1. Determination of Net Asset Value, Net Income, and Distributions.
Subject to Article III, Section 6 hereof, the Trustees, in their absolute discretion, may prescribe
and shall set forth in the By-Laws or in a duly adopted resolution of the Trustees such bases and
time for determining the per Share net asset value of the Shares of any Series and the declaration
and payment of dividends and distributions on the Shares of any Series, as they may deem necessary
or desirable.
Section 2. Redemptions and Repurchases. The Trust shall purchase such Shares
as are offered by any Shareholder for redemption, upon receipt by the Trust or a Person designated
by the Trust of a request in proper form that the Trust redeem such Shares or in accordance with
such other procedures for redemption, including without limitation, prescribed numbers of Shares
which must be presented together for redemption, as the Trustees may from time to time authorize;
and the Trust will pay therefor the net asset value thereof, in accordance with the By-Laws and the
applicable provisions of the 1940 Act. Payment for said Shares shall be made by the Trust to the
Shareholder within seven days after the date on which the request for redemption is received in
proper form. The obligation set forth in this Section 2 is subject to the provision that in the
event the New York Stock Exchange (the “Exchange”) is closed for other than weekends or holidays,
or if permitted by the rules of the Commission during periods when trading on the Exchange is
restricted or during any emergency which makes it impracticable for the Trust to dispose of the
investments of the applicable Series or to determine fairly the value of the net assets held with
respect to such Series or during any other period permitted by order of the Commission for the
protection of investors, such obligations may be suspended or postponed by the Trustees.
The redemption price may in any case or cases be paid in cash or wholly or partly in kind in
accordance with Rule 18f-1 under the 1940 Act if the Trustees determine that such payment is
advisable in the interest of the remaining Shareholders of the Series of which the Shares are being
redeemed. Subject to the foregoing, the selection and quantity of securities or
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other property so paid or delivered as all or part of the redemption price shall be determined by
or under authority of the Trustees. In no case shall the Trust be liable for any delay of any
corporation or other Person in transferring securities selected for delivery as all or part of any
payment in kind.
Section 3. Redemptions at the Option of the Trust. The Trust shall have the
right, at its option, upon 30 days notice to the affected Shareholder at any time to redeem Shares
of any Shareholder at the net asset value thereof as described in Section 1 of this Article VI:
(i) if at such time such Shareholder owns Shares of any Series having an aggregate net asset value
of less than a minimum value determined from time to time by the Trustees; or (ii) to the extent
that such Shareholder owns Shares of a Series equal to or in excess of a maximum percentage of the
outstanding Shares of such Series determined from time to time by the Trustees; or (iii) to the
extent that such Shareholder owns Shares equal to or in excess of a maximum percentage, determined
from time to time by the Trustees, of the outstanding Shares of the Trust.
Section 4. Transfer of Shares. The Trust shall transfer Shares held of
record by any Person to any other Person upon receipt by the Trust or a Person designated by the
Trust of a written request therefor in such form and pursuant to such procedures as may be approved
by the Trustees.
ARTICLE VII.
Compensation and Limitation of Liability
Section 1. Compensation of Trustees. The Trustees as such shall be entitled
to reasonable compensation from the Trust, and they may fix the amount of such compensation from
time to time. Nothing herein shall in any way prevent the employment of any Trustee to provide
advisory, management, legal, accounting, investment banking or other services to the Trust and to
be specially compensated for such services by the Trust.
Section 2. Indemnification and Limitation of Liability. The Trustees shall
not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent,
employee, Adviser or Principal Underwriter of the Trust, nor shall any Trustee be responsible for
the act or omission of any other Trustee, and, subject to the provisions of the By-Laws, the Trust
out of its assets may indemnify and hold harmless each and every Trustee and officer of the Trust
from and against any and all claims, demands, costs, losses, expenses, and damages whatsoever
arising out of or related to such Trustee’s or officer’s performance of his or her duties as a
Trustee or officer of the Trust; provided that nothing herein contained shall indemnify, hold
harmless or protect any Trustee or officer from or against any liability to the Trust or any
Shareholder to which he or she would otherwise be subject by reason of willful 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 or undertaking and every other act or
thing whatsoever issued, executed or done by or on behalf of the Trust or the Trustees or
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any of them in connection with the Trust shall be conclusively deemed to have been issued, 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.
Section 3. Trustee’s Good Faith Action, Expert Advice, No Bond or Surety.
The exercise by the Trustees of their powers hereunder shall be binding upon everyone interested in
or dealing with the Trust. A Trustee shall be liable to the Trust and to any Shareholder solely
for his or her own willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, 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 Declaration of Trust, and shall be under no liability
for any act or omission in accordance with such advice nor 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 4. Insurance. The Trustees shall be entitled and empowered to the
fullest extent permitted by law to purchase with Trust assets insurance for liability and for all
expenses reasonably incurred or paid or expected to be paid by a Trustee or officer in connection
with any claim, action, suit or proceeding in which he or she becomes involved by virtue of his or
her capacity or former capacity with the Trust, whether or not the Trust would have the power to
indemnify him or her against such liability under the provisions of this Article VII.
ARTICLE VIII.
Miscellaneous
Section 1. 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 2. Termination of Trust or Series. Unless terminated as provided
herein, the Trust shall continue without limitation of time. The Trust may be terminated at any
time by the Trustees upon 60 days prior written notice to the Shareholders. Any Series or class
thereof may be terminated at any time by the Trustees upon 60 days prior written notice to
the Shareholders of that Series or class.
Upon termination of the Trust (or any Series, as the case may be), after paying or otherwise
providing for all charges, taxes, expenses and liabilities held, severally, with respect to each
Series (or the applicable Series, as the case may be), whether due or accrued or anticipated as may
be determined by the Trustees, the Trust shall, in accordance with such procedures as the Trustees
consider appropriate, reduce the remaining assets held, severally, with respect to each Series (or
the applicable Series, as the case may be), to distributable form in cash or shares or other
securities, and any combination thereof, and distribute the proceeds held with respect to each
Series (or the applicable Series, as the case may be), to the Shareholders of that Series, as a
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Series, ratably according to the number of Shares of that Series held by the several Shareholders
on the date of termination.
Section 3. Merger and Consolidation. The Trustees may cause (i) the Trust or
one or more of its Series to the extent consistent with applicable law to be merged into or
consolidated with another Trust, Series or Person, (ii) the Shares of the Trust or any Series to be
converted into beneficial interests in another statutory trust (or series thereof), (iii) the
Shares to be exchanged for assets or property under or pursuant to any state or federal statute to
the extent permitted by law, or (iv) a sale of assets of the Trust or one or more of its Series.
In all respects not governed by statute or applicable law, the Trustees shall have power to
prescribe the procedure necessary or appropriate to accomplish a sale of assets, Share exchange,
merger, or consolidation, including the power to create one or more separate statutory trusts to
which all or any part of the assets, liabilities, profits or losses of the Trust may be transferred
and to provide for the conversion of Shares of the Trust or any Series into beneficial interests in
such separate statutory trust or trusts (or series thereof).
Section 4. Amendments. This Declaration of Trust may be restated and/or
amended at any time by an instrument in writing signed by a majority of the Trustees then holding
office. Any such restatement and/or amendment hereto shall be effective immediately upon execution
and approval. The Certificate of Trust of the Trust may be restated and/or amended by a similar
procedure, and any such restatement and/or amendment shall be effective immediately upon filing
with the Office of the Secretary of State of the State of Delaware or upon such future date as may
be stated therein.
Section 5. Filing of Copies, References, Headings. The original or a copy of
this instrument and of each restatement and/or amendment hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such restatements and/or amendments
have been made 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 restatements and/or amendments. In this instrument and in
any such restatements and/or amendment, references to this instrument, and all expressions like
“herein,” “hereof” and “hereunder,” shall be deemed to refer to this instrument as amended or
affected by any such restatements and/or amendments. 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. Whenever the singular number is used herein, the same
shall include the plural; and the neuter, masculine and feminine genders shall include each other,
as applicable. This instrument may be executed in any number of counterparts each of which shall
be deemed an original.
Section 6. Applicable Law. This Declaration of Trust is created under and is
to be governed by and construed and administered according to the laws of the State of Delaware and
the Delaware Statutory Trust Act, as amended from time to time (the “Act”). The Trust shall be a
Delaware statutory trust pursuant to such Act, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a statutory trust.
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Section 7. Provisions in Conflict with Law or Regulations.
(a) The provisions of this 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 or with other
applicable laws and regulations, the conflicting provision shall be deemed never to have
constituted a part of this Declaration of Trust; provided, however, that such determination shall
not affect any of the remaining provisions of this Declaration of Trust or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration of Trust shall be held invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall attach 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 this Declaration of Trust in any jurisdiction.
Section 8. Statutory Trust Only. It is the intention of the Trustees to
create a statutory trust pursuant to the Act, and thereby to create only the relationship of
trustee and beneficial owners within the meaning of such Act between the Trustees and each
Shareholder. It is not the intention of the Trustees to create a general partnership, limited
partnership, joint stock association, corporation, bailment, joint venture, or any form of legal
relationship other than a statutory trust pursuant to such Act. Nothing in this Declaration of
Trust shall be construed to make the Shareholders, either by themselves or with the Trustees,
partners or members of a joint stock association.
IN WITNESS WHEREOF, the Initial Trustee named below does hereby make and enter into this
Declaration of Trust as of the 13th day of October, 2009.
For and on behalf of FAITHSHARES TRUST.
| NAME | TITLE | |
/s/ Xxxxxxxx X. Xxxxxxxx, Xx. |
President and Initial Trustee |
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS
0000 Xxxxxxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
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