THE CLEARWATER INVESTMENT FUND
AGREEMENT AND DECLARATION OF TRUST
THE CLEARWATER INVESTMENT FUND
AGREEMENT AND DECLARATION OF TRUST
Table of Contents
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ARTICLE I Name and Definitions
1.1 Name...................................... 1
1.2 Definitions............................... 1
ARTICLE II Purpose of Trust................................ 2
ARTICLE III The Trustees
3.1 Number, Designation, Election,
Term, etc. ............................... 2
(a) Initial Trustee
(b) Number
(c) Election and Term
(d) Resignation and Retirement
(e) Removal
(f) Vacancies
(g) Effect of Death, Resignation, etc.
(h) No Accounting
(i) Meetings
(j) Reliance on Experts, Etc.
3.2 Standard of Care of Trustees............... 5
3.3 Powers of Trustees......................... 5
(a) By-Laws
(b) Series of Shares
(c) Officers, Agents, etc.
(d) Committees
(e) Advisory Boards
(f) Advice and Custody
(g) Transfer and Dividend Agents
(h) Distribution
(i) Record Dates
(j) Compensation
(k) Delegation
(l) Investments
(m) Disposition of Assets
(n) Ownership Powers
(o) Subscription
(p) Form of Holding
(q) Reorganization
(r) Voting Trusts, etc.
(s) Compromise
(t) Partnerships
(u) Borrowing and Security
(v) Guarantees, etc.
(w) Indemnification
(x) Insurance
(y) Pensions, etc.
(z) Minimum Total Investment
(aa) General Powers
3.4 Certain Contracts............................ 8
(a) Advisory
(b) Administration
(c) Distribution
(d) Custodian and Depository
(e) Transfer and Dividend Disbursing Agency
(f) Shareholder Servicing
(g) Accounting
3.5 Parties to Contracts....................... 9
3.6 Payment of Trust Expenses and
Compensation of Trustees................... 10
3.7 Ownership of Assets of the Trust........... 11
ARTICLE IV Shares
4.1 Description of Shares...................... 11
(a) Series of Shares
(b) Classes of Shares
(c) Number and Issuance of Shares
4.2 Establishment and Designation of
Series of Shares........................... 12
(a) Assets Belonging to Series of Shares
(b) Liabilities Belonging to Series of Shares
(c) Income and Capital
(d) Dividends and Distributions
(e) Liquidation
(f) Voting
(g) Redemption by Shareholder
(h) Redemption by Trust
(i) Net Asset Value
(j) Transfer
(k) Equality
(l) Fractions
(m) Conversion and Exchange Rights
4.3 Ownership of Shares..................... 18
4.4 Investments in the Trust................ 18
4.5 No Preemptive Rights.................... 18
4.6 Trust Only.............................. 18
4.7 Status of Shares and Limitation of
Personal Liability...................... 18
4.8 Rights of Shareholders.................. 18
ARTICLE V Shareholders' Voting Powers and Meetings
5.1 Voting Powers........................... 19
5.2 Proxies................................. 19
5.3 Meetings................................ 20
5.4 Place of Meetings....................... 20
5.5 Record Dates............................ 20
5.6 Quorum and Required Vote................ 21
5.7 Action by Written Consent............... 21
5.8 Additional Provisions................... 21
ARTICLE VI Limitation of Liability; Indemnification
6.1 Trustees, Shareholders, etc. Not
Personally Liable; Notice............... 21
6.2 Trustee's Good Faith Action; Expert
Advice; No Bond or Surety............... 22
6.3 Indemnification of Shareholders......... 22
6.4 Indemnification of Trustees,
Officers, etc. ......................... 23
6.5 Exceptions to Indemnification............. 23
6.6 Indemnification Not Exclusive, etc. ...... 23
6.7 Liability of Third Persons Dealing
with Trustee.............................. 24
ARTICLE VII Miscellaneous
7.1 Duration and Termination of Trust......... 24
7.2 Reorganization............................ 24
7.3 Amendments................................ 25
7.4 Resident Agent............................ 25
7.5 Filing of Copies; References; Headings.... 25
7.6 Applicable Law............................ 26
7.7 Reliance by Third Parties................. 26
7.8 Provisions in Conflict with Law
or Regulations............................ 26
THE CLEARWATER INVESTMENT FUND
_______________________
AGREEMENT AND DECLARATION OF TRUST
_______________________
AGREEMENT AND DECLARATION OF TRUST, made at Palm Harbor, Florida,
this 26th day of September, 2003, by the Trustees hereunder.
W I T N E S S E T H
WHEREAS, this Trust has been formed to carry on the business of an
investment company and exercise all powers necessary and appropriate to
the conduct of such operations;
WHEREAS, this Trust is authorized to issue its shares of
beneficial interest in separate series, all 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 Delaware voluntary association with
transferable shares, 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 pro
rata benefit of the holders from time to time of shares of beneficial
interest in this Trust or in the separate series of shares created
hereunder as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 NAME. This Trust shall be known as "THE CLEARWATER
INVESTMENT FUND," and the Trustees shall conduct the business of the
Trust, have all documents executed and xxx or be sued 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 Delaware statutory trust
established by this Declaration of Trust under the Delaware Act, as
amended from time to time, inclusive of each and every Series of Shares
established and designated hereunder.
(b) "Trustees" refers to the Trustees of the Trust named herein
so long as they shall continue in office and to all other individuals
who may from time to time be duly appointed or elected, qualified and
serving as Trustees in accordance with the provisions hereof, and
reference herein to a Trustee or the Trustees shall refer to each such
individual in his or her capacity as a trustee hereunder, and not
individually or personally.
(c) "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust and each Series of Shares
(as the context may require) shall be divided from time to time, and
includes (i) fractions of Shares as well as whole Shares and (ii) each
separate class of Shares into which each Series of Shares shall be
divided from time to time.
(d) "Series of Shares" refers to series of Shares established and
designated under or in accordance with the provisions of Article IV.
(e) "Shareholder" means a record owner of Shares.
(f) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations there under, all as amended from time to
time.
(g) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time.
(h) "By-Laws" shall mean the By-Laws of the Trust as amended or
restated from time to time.
(i) "Affiliated Person", "Assignment", "Commission", "Interested
Person", "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), "Prospectus" and "Principal Underwriter" shall have the
meanings given them in the 1940 Act.
(j) "Trust Property" shall mean as of any particular time any and
all property, real or personal, tangible or intangible, which at such
time is owned or held by or for the account of the Trust or the
Trustees.
(k) "Delaware Act" shall mean Chapter 38 of Title 12 of the
Delaware Code entitled "Treatment.
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to operate as an investment company
and to offer Shareholders one or more investment programs primarily in
securities, debt instruments and other instruments and rights of a
financial character.
ARTICLE III
THE TRUSTEES
Section 3.1 NUMBER, DESIGNATION, ELECTION, TERM, ETC.
(a) INITIAL TRUSTEE. Upon the execution by him of this
Declaration of Trust or a counterpart hereof or some other writing in
which he accepts such Trusteeship and agrees to the provisions hereof,
Xxxxx X. Xxxxxx, whose address is 000 Xxxxxxxxx Xxxx, Xxxx Xxxxxx,
Xxxxxxx, 00000, shall become a Trustee of the Trust.
(b) NUMBER. The Trustees serving as such, whether named above or
hereafter becoming a Trustee, may increase or decrease the number of
Trustees to a number other than the number theretofore determined;
provided that after the initial meeting of Trustees, the number may not
be decreased to less than three. No decrease in the number of Trustees
shall have the effect of removing any Trustee from office prior to the
expiration of his term, but the number of Trustees may be decreased in
conjunction with the removal of a Trustee pursuant to subsection (e) of
this Section 3.1.
(c) ELECTION AND TERM. The Trustees shall be elected by the
Shareholders of the Trust at the first meeting of Shareholders. Each
Trustee, whether named above or hereafter becoming a Trustee, shall
serve as a Trustee of the Trust during the lifetime of this Trust and
until its termination as hereinafter provided except as such Trustee
sooner dies, resigns, retires or is removed. The Trustees may elect
successor Trustees and may, pursuant to Section 3.1(f) hereof, appoint
Trustees to fill vacancies. Trustees need not own Shares.
(d) RESIGNATION AND RETIREMENT. Any Trustee may resign his or
her trust or retire as a Trustee, by written instrument signed by him
or her and delivered to the other Trustees or to the Chairman, if any,
and the President or the Secretary of the Trust, and such resignation
or retirement shall take effect upon such delivery or upon such later
date as is specified in such instrument.
(e) REMOVAL. Any Trustee may be removed with or without cause at
any time:(i) by action of two-thirds of the Trustees prior to such
removal; or (ii) by vote of Shareholders holding not less than two-
thirds of the Shares then outstanding, cast in person or by proxy at
any meeting called for the purpose. Any such removal shall be
effective as of the date of such action or such later date as may be
specified in such action.
(f) VACANCIES. Any vacancy or anticipated vacancy resulting from
any reason, including without limitation the death, resignation,
retirement or removal of any of the Trustees, or resulting from an
increase in the number of Trustees by the other Trustees may be filled
by action of a majority of the remaining Trustees through the
appointment in writing of such other person as such remaining Trustees
in their discretion shall determine. Until a vacancy is filled, the
Trustees in office, regardless of their number, shall have all the
powers granted to the Trustees and shall discharge all the duties
imposed on the Trustees by this Declaration of Trust. An appointment
as Trustee 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 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
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.
(g) EFFECT OF DEATH, RESIGNATION, ETC. The death, resignation,
retirement, removal, or incapacity of the Trustees, or any one of them,
shall not operate to annul or terminate the Trust or to revoke or
terminate any existing agency or contract created or entered into
pursuant to the terms of this Declaration of Trust. When a Trustee
ceases to be a Trustee, his right, title and interest in the assets of
the Trust shall automatically cease and vest in the remaining Trustees.
Such cessation and vesting shall be effective whether or not
conveyancing documents have been executed and delivered, but the
individual (or his legal representative) shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of
recording the conveyance to the remaining Trustees or the Trust of any
Trust Property held in the name of that individual.
(h) NO ACCOUNTING. Except to the extent required by law or under
circumstances which would justify his removal for cause, no person
ceasing to be a Trustee as a result of his 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.
(i) MEETINGS. Regular meetings of the Trustees may be held
without call or notice at a time and place fixed by the By-Laws or by
resolution of the Trustees. Special meetings of the Trustees shall be
held from time to time upon the call of the Chairman, if any, the
President, the Secretary or any two Trustees. Notice of any special
meeting shall be mailed or otherwise given as specified in the By-Laws.
A quorum for all meetings of the Trustees shall be a majority of the
Trustees then in office. Unless provided otherwise in this Declaration
of Trust or the By-Laws, any action of the Trustees may be taken at
a meeting by vote of a majority of the Trustees presents (a quorum
being present).
All or any one or more Trustees may participate in a meeting of
the Trustees by means of a conference telephone or similar
communications equipment by means of which all persons participating in
the meeting can hear each other and participation in a meeting pursuant
to such communications systems shall constitute presence in person at
such meeting.
Unless provided otherwise in this Declaration of Trust, any action
that may be taken at a meeting by the Trustees may be taken without a
meeting by written consents of a majority of the Trustees then in
office.
(j) RELIANCE ON EXPERTS, ETC. Each Trustee, officer, agent and
employee of the Trust shall, in the performance of his duties, be fully
and completely justified and protected by relying in good faith upon
the books of account or other records of the Trust, or upon reports
made to the Trustees (i) by any of the officers or employees of the
Trust, (ii) by any of the Trust's material service providers including
without limitation the investment adviser, principal underwriter,
custodian or transfer agent, or (iii) by any accountants, selected
dealers or appraisers or other agents, experts or consultants selected
with reasonable care by the Trustees. The Trustees, officers, agents
and employees of the Trust may take advice of counsel with respect to
the meaning and operation of this Declaration of Trust and with respect
to other legal matters or questions, and shall be under no liability
for any act or omission in accordance with such advice or for failing
to follow such advice.
Section 3.2 STANDARD OF CARE OF TRUSTEES. The exercise by the
Trustees of their powers and discretion hereunder and the construction
in good faith by the Trustees of the meaning or effect of any provision
of this Declaration shall be binding upon everyone interested. A
Trustee, officer, agent or employee shall be liable to the Trust for
his own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office, and for
nothing else, and shall not be liable for errors of judgment or
mistakes of fact or law.
Section 3.3 POWERS OF TRUSTEES. Subject to the provisions of
this 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 and the purpose of the Trust. The
Trustees shall have power to conduct the business of the Trust and
carry on its operations in any and all of its branches and maintain
offices both within and outside of The State of Delaware, in any and
all states of the United States of America, in the District of
Columbia, in any and all foreign countries and in any and all
commonwealths, territories, dependencies, colonies, possessions,
agencies or instrumentalities of the United States of America and of
foreign governments, and to do all such other things and execute all
such instruments as they deem necessary, proper or desirable in order
to promote the interests of the Trust although such things are not
herein specifically mentioned. 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. 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.
The Trustees will not be required to obtain any court order to deal
with trust property.
Without limiting the foregoing, the Trustees may:
(a) BY-LAWS. Adopt By-Laws, not inconsistent with this
Declaration of Trust, providing for the conduct of the business and
affairs of the Trust and may amend and repeal them to the extent that
such By-Laws do not reserve that right to the Shareholders;
(b) SERIES OF SHARES. From time to time in accordance with the
provisions hereof establish Series of Shares, each such Series of
Shares to operate as a separate investment medium; allocate assets,
liabilities and expenses of the Trust to a particular Series of Shares
or apportion the same among two or more Series of Shares provided that
any liabilities or expenses incurred or arising in connection with a
particular Series of Shares, as determined by the Trustees, shall be
payable solely out of the assets of that Series of Shares;
(c) OFFICERS, AGENTS, ETC. As they consider appropriate, elect
and remove officers and appoint and terminate agents and consultants
and hire and terminate employees, any one or more of the foregoing of
whom may be a Trustee, and may provide for the compensation of all of
the foregoing;
(d) COMMITTEES. Appoint from their own number, and terminate,
any one or more committees consisting of two or more Trustees,
including without implied limitation 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; notice,
quorum, voting and other procedures for each committee shall be as
determined by the Trustees or, in the absence of such determination,
shall be the same as the procedures that apply to meetings and
other proceedings of the Trustees;
(e) ADVISORY BOARDS. Appoint one or more advisory boards for the
Trust or for one or more Series of Shares, the members of each of which
shall not be Trustees and need not be Shareholders;
(f) ADVICE AND CUSTODY. Employ one or more advisers,
administrators, depositories and custodians and may authorize any
depository or custodian to employ domestic and foreign sub-custodians
or agents and to deposit all or any part of such assets in one or more
domestic and foreign systems for the central handling of securities;
(g) TRANSFER AND DIVIDEND AGENTS. Retain transfer, dividend,
accounting or Shareholder servicing agents or any of the foregoing;
(h) DISTRIBUTION. Provide for the distribution of Shares by the
Trust through one or more distributors, principal underwriters or
otherwise;
(i) RECORD DATES. Set record dates or times for the
determination of Shareholders or several of them with respect to
various matters;
(j) COMPENSATION. Compensate or provide for the compensation of
the Trustees, officers, advisers, administrators, custodians, other
agents, consultants and employees of the Trust or the Trustees on such
terms as they may deem appropriate;
(k) DELEGATION. In general, delegate to any officer of the
Trust, to any committee of the Trustees and to any employee, adviser,
administrator, distributor, depository, custodian, transfer and
dividend disbursing agent, or any other agent or consultant of the
Trust such authority, powers, functions and duties as they consider
desirable or appropriate for the conduct of the business and affairs of
the Trust, including without implied limitation the power and authority
to act in the name of the Trust and of the Trustees, to sign documents
and to act as attorney-in-fact for the Trustees;
(l) INVESTMENTS. In accordance with the then current Prospectus
of the Trust or a Series of Shares, as applicable, invest and reinvest
cash and other property, and hold cash or other property uninvested;
(m) DISPOSITION OF ASSETS. In accordance with the then current
Prospectus of the Trust or a Series of Shares, as applicable, sell,
exchange, lend, pledge, mortgage, hypothecate, write options on and
lease any or all of the assets of the Trust;
(n) OWNERSHIP POWERS. Vote or give assent, or exercise any
rights of ownership with respect to stock or other securities,
including without limitation debt instruments, or other property; and
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
other property as the Trustees shall deem proper;
(o) SUBSCRIPTION. Exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities;
(p) FORM OF HOLDING. Hold any security or other 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 of
any Series of Shares or in the name of a custodian, sub-custodian or
other depository or a nominee or nominees or otherwise;
(q) REORGANIZATION, ETC. 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; consent to
any contract, lease, mortgage, purchase or sale of property by such
corporation or issuer; and pay calls or subscriptions with respect to
any security held in the Trust;
(r) VOTING TRUSTS, ETC. Join with other holders of any
securities in acting through a committee, depository, voting trustee or
otherwise, and in that connection deposit any security with, or
transfer any security to, any such committee, depository or trustee,
and 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 agree to pay, and pay, such portion of the
expenses and compensation of such committee, depository or
trustee as the Trustees shall deem proper;
(s) COMPROMISE. Compromise, prosecute, defend, arbitrate or
otherwise adjust any claims, actions, suits, proceedings, or demands in
favor of or against the Trust or any Series of Shares or any matter in
controversy, including but not limited to claims for taxes;
(t) PARTNERSHIPS, ETC. Enter into joint ventures, general or
limited partnerships and any other combinations or associations;
(u) BORROWING, LENDING AND SECURITY. In accordance with the then
current Prospectus of the Trust or a Series of Shares, as applicable,
lend assets of the Trust or borrow funds and mortgage and pledge the
assets of the Trust or any part thereof to secure obligations arising
in connection with such borrowing;
(v) GUARANTEES, ETC. To the extent permitted by law and in
accordance with the then current Prospectus of the Trust or a Series of
Shares, as applicable, endorse or guarantee the payment of any notes or
other obligations of any person; make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof; and
mortgage and pledge the Trust Property or any part thereof to secure
any of or all such obligations;
(w) INDEMNIFICATION. To the extent permitted by law, provide for
the indemnification out of the assets of the Trust of any person with
whom the Trust has dealings, including any investment adviser,
administrator, transfer agent, distributor, principal underwriter and
selected dealers to such extent as the Trustees shall determine;
(x) INSURANCE. 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,
consultants, investment advisers, managers, administrators,
distributors, principal underwriters, or independent contractors, or
any thereof (or any person connected therewith), of the Trust
individually against all claims and liabilities of every nature arising
by reason of holding 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 in any such capacity, 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;
(y) PENSIONS, ETC. Pay pensions for faithful service, as deemed
appropriate by the Trustees, and 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
(z) MINIMUM TOTAL INVESTMENT. Establish, from time to time, a
minimum total investment for Shareholders of any Series of Shares, and
require redemption of the Shares of any Shareholders whose investment
is less than such minimum.
(aa) GENERAL POWERS. To take such actions as are authorized,
incidental or required to be taken by the Trustees pursuant to this
Declaration of Trust, to carry on any other business in connection with
or incidental to any of the objects and purposes of the Trust, to do
everything necessary, suitable or proper for the accomplishment of any
purpose or the attainment of any object or the furtherance of any power
herein set forth, either alone or in association with others, and to
take any action incidental or appurtenant to or growing out of or
connected with the business, purposes, objects or powers of the
Trustees.
Section 3.4 CERTAIN CONTRACTS. Notwithstanding any limitations
of any present or future law or custom in regard to delegation of
powers by trustees generally, the Trustees may, at any time and from
time to time and without limiting the generality of their power and
authority otherwise set forth herein, enter into one or more contracts
with any one or more corporations, trusts, associations, partnerships,
limited partnerships, limited liability companies, other types of
organizations, and individuals ("Contracting Parties"), to provide for
the performance and assumption of services, duties and responsibilities
to, for or on behalf of the Trust, with respect to the entire Trust or
any Series of Shares, or on behalf of the Trustees, including but not
limited to those set forth in paragraphs (a) to (g) below, as the
Trustees may determine appropriate.
(a) ADVISORY. Subject to the general supervision of the Trustees
and in conformity with the stated policy of the Trustees with respect
to the investments of the Trust or of the assets belonging to any
Series of Shares, to manage such investments and assets, make
investment decisions with respect thereto, furnish statistical and
research facilities and services, and to place purchase and sale orders
for portfolio transactions relating to such investments and assets.
The Trustees may authorize the investment adviser to employ one or more
sub advisers, from time to time, to perform such of the acts and
services of the investment adviser, and upon such terms and conditions,
as may be agreed upon between the investment adviser and sub adviser;
(b) ADMINISTRATION. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees with
respect to the operations of the Trust and each Series of Shares, to
supervise all or any part of the operations of the Trust and each
Series of Shares, and to provide all or any part of the administrative
and clerical personnel, office space and office equipment and services
appropriate for the efficient administration and operations of the
Trust and each Series of Shares;
(c) DISTRIBUTION. To distribute the Shares of the Trust and each
Series of Shares, to be principal underwriter of such Shares and to act
as agent of the Trust and each Series of Shares in the sale or
repurchase of Shares and the acceptance or rejection of orders for the
purchase of Shares;
(d) CUSTODIAN AND DEPOSITORY. To act as a depository for and to
maintain custody of property of the Trust and each Series of Shares and
accounting records in connection therewith;
(e) TRANSFER AND DIVIDEND DISBURSING AGENCY. To maintain records
of the ownership of outstanding Shares, the issuance and redemption and
the transfer thereof, and to disburse any dividends declared by the
Trustees and in accordance with the policies of the Trustees and the
instructions of any particular Shareholder to reinvest any such
dividends;
(f) SHAREHOLDER SERVICING. To provide service with respect to
the relationship of the Trust and its Shareholders, records with
respect to Shareholders and their Shares, and similar matters; and
(g) ACCOUNTING. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust Property,
Shareholders or otherwise.
Section 3.5 PARTIES TO CONTRACTS. The same person may be the
Contracting Party for some or all of the services, duties and
responsibilities to, for and of the Trust and the Trustees, and the
contracts with respect thereto may contain such terms interpretive of
or in addition to the delineation of the services, duties and
responsibilities provided for, including provisions relating to the
standard duty of and the rights to indemnification of the Contracting
Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from
entering into sub contractual arrangements relative to any of the
matters referred to in Sections 3.4(a) through (g) hereof.
The fact that:
(a) 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 Contracting Party, or of or for any parent or affiliate of any
Contracting Party or that the Contracting Party or any parent or
affiliate thereof is a Shareholder or has an interest in the Trust or
any Series of Shares, or that
(b) any Contracting Party may have a contract providing for the
rendering of any similar services to one or more other corporations,
trusts, associations, partnerships, limited partnerships or other
organizations, or have other business or interests, shall not affect
the validity of any contract for the performance and assumption of
services, duties and responsibilities to, for or of the Trust or any
Series of Shares or the Trustees 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, any Series of
Shares or Shareholders, provided that in the case of any relationship
or interest referred to in the preceding clause (a) on the part of any
Trustee or officer of the Trust either:
(c) the material facts as to such relationship or interest have
been disclosed to or are known by the Trustees not having any such
relationship or interest and the contract involved is approved in good
faith by a majority of such Trustees not having any such relationship
or interest (even though such unrelated or disinterested Trustees are
less than a quorum of all the Trustees),
(d) the material facts as to such relationship or interest and as
to the contract have been disclosed to or are known by the Shareholders
entitled to vote thereon and the contract involved is specifically
approved in good faith by vote of the Shareholders, or
(e) the specific contract involved is fair to the Trust as of the
time it is authorized, approved or ratified by the Trustees or by the
Shareholders.
Section 3.6 PAYMENT OF TRUST EXPENSES AND COMPENSATION OF
TRUSTEES. The Trustees are authorized to pay or cause to be paid out of
the assets of the Trust or any Series of Shares and to charge or
allocate the same to, between or among such one or more of the Series
of Shares that may be established and designated pursuant to Article
IV, as the Trustees deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust or any
Series of Shares, 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 adviser, administrator, distributor, principal
underwriter, auditor, counsel, depository, custodian, transfer agent,
dividend disbursing agent, accounting agent, Shareholder servicing
agent, and such other agents, consultants, and 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 of Shares, as determined by the Trustees, shall be
payable solely out of the assets of that Series of Shares. Without
limiting the generality of any other provision hereof, the Trustees
shall be entitled to reasonable compensation from the Trust for their
services as Trustees and may fix the amount of such compensation.
Section 3.7 OWNERSHIP OF ASSETS OF THE TRUST. Title to all of
the assets of each Series of Shares and of the Trust shall at all times
be considered as vested in the Trustees. No Shareholder shall be
deemed to have a severable ownership in any individual asset of the
Trust or any Series of Shares or any right of partition or possession
thereof, but each Shareholder shall have an undivided beneficial
interest in each Series of Shares in which he or she is a Shareholder.
ARTICLE IV
SHARES
Section 4.1 DESCRIPTION OF SHARES. The beneficial interest in
the Trust shall be divided into Shares, par value $0.01 per share.
(a) SERIES OF SHARES. The Trustees shall have the authority,
without action or approval of the Shareholders, from time to time to
divide the Shares into two or more Series of Shares as they deem
necessary or desirable. Each Series of Shares shall be separate from
each other Series of Shares. The Trustees shall have exclusive power
without the requirement of shareholder approval to establish and
designate such separate Series of Shares, and to fix and determine the
relative rights and preferences as between the Shares of the separate
Series of Shares as to purchase price, right of redemption and the
price, terms and manner of redemption, special and relative rights as
to dividends and other distributions and on liquidation, sinking or
purchase fund provisions, conversion rights, and conditions under which
the several Series of Shares shall have separate voting rights or no
voting rights.
Each Share of a Series of Shares shall represent a beneficial
interest only in the assets belonging to that Series of Shares, and
such interest shall not extend to the assets of any other Series of
Shares or to the assets of the Trust generally. Shareholders of a
particular Series of Shares shall not be entitled to participate in a
derivative or class action on behalf of any other Series of Shares or
the Shareholders of any other Series of Shares.
The establishment and designation of any Series of Shares in
addition to those established and designated in Section 4.2 shall be
effective upon the execution by a majority of the Trustees of an
instrument setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series of Shares.
Any Trustee, officer or other agent of the Trust, and any
organization in which any such person is interested, may acquire, own,
hold and dispose of Shares of any Series of Shares to the same extent
as if such person were not a Trustee, officer or other agent of the
Trust; and the Trust may issue and sell or cause to be issued and sold
and may purchase Shares of any Series of Shares from any such person or
any such organization subject only to the general limitations,
restrictions or other provisions applicable to the sale or purchase of
Shares of such Series of Shares generally.
(b) CLASSES OF SHARES. The Trustees shall have authority,
without action or approval of the Shareholders, from time to time to
divide the Shares of any Series of Shares into two or more classes as
they deem necessary or desirable. The Trustees may allocate liabilities
and expenses of a Series of Shares to a particular class of Shares of
that Series of Shares or apportion the same among two or more classes
of Shares of that Series of Shares. The liabilities and expenses being
borne solely by a class of Shares shall be appropriately reflected (in
the manner determined by the Trustees) in the net asset value,
dividends and liquidation rights of the Shares of such class. As
provided in Section 4.2(f), a class may have exclusive voting rights
with respect to the liabilities and expenses being borne solely by such
class and with respect to any other matter which does not affect the
interest of any other class.
(c) NUMBER AND ISSUANCE OF SHARES. The number of authorized
Shares is unlimited as is the number of Shares of each Series of Shares
and of each class that may be issued. The Trustees may issue Shares of
any Series of Shares and of any class for such consideration and on
such terms as they may determine (or for no consideration if pursuant
to a Share dividend or split-up), all without action or approval of the
Shareholders. All Shares when so issued on the terms and for the
consideration determined by the Trustees shall be fully paid and
non-assessable. The Trustees may classify or reclassify any unissued
Shares or any Shares previously issued and reacquired into one or more
Series of Shares that may be established and designated from time to
time. The Trustees may hold as treasury shares, reissue for such
consideration and on such terms as they may determine, or cancel, at
their discretion from time to time, any Shares of any Series of Shares
reacquired by the Trust. The Trustees may from time to time divide or
combine the Shares of any Series of Shares or any class into a greater
or lesser number without thereby changing the proportionate beneficial
interest in the Series of Shares or class. The Trustees may from time
to time close the transfer books or establish record dates and time for
the purposes of determining the holders of Shares entitled to be
treated as such, to the extent provided or referred to in Section 5.5.
Section 4.2 ESTABLISHMENT AND DESIGNATION OF SERIES OF SHARES.
Without limiting the authority of the Trustees set forth in Section 4.1
to establish and designate any further Series of Shares, the Trustees
hereby establish and designate four Series of Shares:
1. Clearwater Quantum Trust;
2. Clearwater Aggressive Opportunities Trust;
3. Clearwater Quantum Fixed Income Trust;
4. Clearwater Small Cap Trust;
The Shares of these Series of Shares and any Shares of any further
Series of Shares that may from time to time be established and
designated by the Trustees shall have the relative rights and
preferences described below in this Section 4.2; provided that the
Trustees may determine otherwise with respect to some further Series of
Shares at the time of establishing and designating the same; and
provided further that the Trustees, in their absolute discretion, may
amend any previously established relative rights and preferences as
they may deem necessary or desirable to enable the Trust to comply with
the 1940 Act or other applicable law.
(a) ASSETS BELONGING TO SERIES OF SHARES. All consideration
received by the Trust for the issue or sale of Shares of a particular
Series of Shares, together with all assets in which such consideration
is invested or reinvested, all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, loan, 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
(collectively, "Specific Asset Items"), shall be held by the Trustees
in trust for the benefit of the holders of Shares of that Series of
Shares and shall irrevocably belong to that Series of Shares for all
purposes, and shall be so recorded upon the books of account of the
Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds or payments which are not readily
identifiable as belonging to any particular Series of Shares
(collectively "General Asset Items"), the Trustees shall allocate such
General Asset Items to and among any one or more of the Series of
Shares established and designated from time to time in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable; and any General Asset Items so allocated to a particular
Series of Shares shall belong to that Series of Shares. Each
allocation of assets by the Trustees shall be conclusive and binding
upon the Shareholders of all Series of Shares for all purposes.
Separate and distinct records shall be maintained by the Trustees for
each Series of Shares and the assets associated with any such Series of
Shares shall be held and accounted for separately from the other assets
of the Trust, or any other Series of Shares thereof. The Specific
Asset Items of a Series of Shares together with any General Asset Items
allocated to that Series of Shares are hereby referred
to as "assets belonging to" that Series of Shares.
(b) LIABILITIES BELONGING TO SERIES OF SHARES. The assets
belonging to each particular Series of Shares shall be charged with all
the liabilities, expenses, costs, charges and reserves which, as
determined by the Trustees, are readily identifiable as belonging to
that particular Series of Shares collectively "Specific Liability
Items"). Any general liabilities, expenses, costs, charges or reserves
of the Trust which are not readily identifiable as belonging to any
particular Series of Shares (collectively "General Liability Items")
shall be allocated and charged by the Trustees to and among any one or
more of the Series of Shares established and designated from time to
time in such manner and on such basis as the Trustees, in their sole
discretion, deem fair and equitable. Expenses related to the
distribution of the Shares of a class may be borne solely by that class
(as shall be determined by the Trustees). Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the Shareholders of all Series of
Shares and of all classes for all purposes. The Specific Liability
Items of a Series of Shares together with any General Liability Items
allocated to that Series of Shares are herein referred to as
"liabilities belonging to" that Series of Shares. Distribution
expenses being borne solely by a class of Shares are herein referred to
as "expenses being borne solely" by a class. Without limiting the
foregoing, the liabilities existing with respect to a particular Series
of Shares shall be enforceable against the assets of such Series of
Shares only and not against the assets of the Trust generally. All
persons who have extended credit which the Trustees have allocated to a
particular Series of Shares, or who have a claim or contract which the
Trustees have allocated to a particular Series of Shares, shall look
only to the assets of that particular Series of Shares for payment of
such credit, claim or contract. No Shareholder or former Shareholder
of any Series of Shares shall have any claim on or any right to any
assets allocated to or belonging to any other Series of Shares. Notice
of this limitation on liabilities belonging to any Series of Shares
may, in the Trustees' sole discretion, be set forth in the certificate
of trust as filed or to be filed in the Office of the Secretary of
State of the State of Delaware pursuant to the Delaware Act, and upon
the giving of such notice in the certificate of trust, the statutory
provisions of Section 3804 of the Delaware Act relating to limitations
on liability of Series of Shares shall become applicable to the Trust
and each Series of Shares.
(c) INCOME AND CAPITAL. 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.
(d) DIVIDENDS AND DISTRIBUTIONS. The Trustees shall from time to
time distribute pro-rata among the Shareholders of a Series of Shares
such proportion of the net profits, surplus (including paid-in
surplus), capital, or assets held by the Trustees with respect to that
Series of Shares as they may deem proper with any expenses being borne
solely by a class of Shares of that Series of Shares being reflected in
the net profits or other assets being distributed to such class.
Dividends and distributions may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise, pursuant to a
standing resolution or resolutions adopted only once or with such
frequency as the Trustees may determine. Distributions may be made in
cash or property (including without limitation any type of obligations
of the Trust or any assets thereof), and the Trustees may distribute
pro-rata among the Shareholders additional Shares issuable hereunder
in such manner, at such times, and on such terms as the Trustees deem
proper. Such distributions may be among the Shareholders of record at
the time of declaring a distribution or among the Shareholders of
record at such later date as the Trustees shall determine. The Trustees
may always retain from the net profits of a Series of Shares such
amount as they may deem necessary to pay the liabilities belonging to
the Series of Shares or to meet obligations of the Series of Shares, or
as they may deem desirable to use in the conduct of its affairs or to
retain for future requirements or extensions of the business. The
Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or related plans as the Trustees
shall deem appropriate.
Inasmuch as the computation of net income and gains for Federal
income tax purposes may vary from the computation thereof on the books,
the above provisions shall be interpreted to give the Trustees the
power in their discretion to distribute for any fiscal year as ordinary
dividends and as capital gains distributions, respectively, additional
amounts sufficient to enable the Trust and the Series of Shares to
avoid or reduce liability for taxes.
(e) LIQUIDATION. In the event of the liquidation or dissolution
of the Trust or of any Series of Shares, the Shareholders of each
affected Series of Shares shall be entitled to receive, when and as
declared by the Trustees, the excess of the assets belonging to that
Series of Shares over the liabilities belonging to that Series of
Shares. The assets so distributable to the Shareholders of any
particular Series of Shares shall be distributed among the Shareholders
of each class according to their respective rights taking into account
the proper allocation of expenses being borne solely by any class of
Shares of that Series of Shares.
(f) VOTING. Shareholders shall be entitled to vote only with
respect to such matters as may be required by law, the Declaration of
Trust or the By-Laws and such additional matters as the Trustees may
consider necessary or desirable. On each matter submitted to a vote of
the Shareholders, each holder of a Share shall be entitled to one vote
for each whole Share and to a proportionate fractional vote for each
fractional Share standing in his name on the books of the Trust. All
Shares of the Trust then entitled to vote shall be voted by Series of
Shares, except that when voting for the election of Trustees and when
otherwise permitted by the 1940 Act, Shares shall be voted in the
aggregate and not by Series of Shares. As to any matter which does not
affect the interest of a particular Series of Shares, only the holders
of Shares of the one or more affected Series of Shares shall be
entitled to vote. As to any matter relating to expenses being borne
solely by a class of a Series of Shares or to any other matter which
does not affect the interest of a particular class of a particular
Series of Shares, only the holders of Shares of the one or more
affected classes of the Series of Shares shall be entitled to vote.
(g) REDEMPTION BY SHAREHOLDER. Each holder of Shares of a
particular Series of Shares shall have the right at such time as may be
permitted by the Trust to require the Trust to redeem all or any part
of his Shares of that Series of Shares, subject to the terms and
conditions set forth in this Declaration of Trust and to such
additional terms and conditions that may be adopted by the Trustees.
Shares of any particular Series of Shares may be redeemed solely out of
the assets belonging to that Series of Shares. Payment of the
redemption price shall be in cash; provided, however, that if the
Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or
undesirable, the Trust may make payment wholly or partly in securities
or other assets belonging to the Series of Shares of which the Shares
being redeemed are part of the value of such securities or assets used
in such determination of net asset value. The amount per Share at which
the Trust redeems or repurchases Shares shall be determined by the
application of a formula adopted for such purpose by resolution of the
Trustees provided that (i) such amount per Share shall not exceed the
cash equivalent of the proportionate interest of each Share in the
assets of the particular Series of Shares at the time of the purchase
or redemption and (ii) if so authorized by the Trustees, the Trust may,
at any time and from time to time, charge fees for effecting such
redemption, at such rates as the Trustees may establish.
Notwithstanding the foregoing, the Trust, at the discretion of the
Trustees, may postpone payment of the redemption price and may suspend
the right of the holders of Shares of any Series of Shares to require
the Trust to redeem Shares of that Series of Shares during any period
or at any time when and to the extent permissible under the 1940 Act.
(h) REDEMPTION BY TRUST. Each Share of each Series of Shares is
subject to redemption by the Trust at the redemption price determined
pursuant to subsection (g) of this Section 4.2: (i) at any time, if
the Trustees determine in their sole discretion that failure to so
redeem may have materially adverse consequences to the holders of the
other Shares of the Trust or any Series of Shares, or (ii) upon such
other conditions as may from time to time be determined by the Trustees
and described in the then current Prospectus for the Trust or a Series
of Shares, as applicable, with respect to maintenance of Shareholder
accounts of a minimum or maximum amount, number of Shares or percentage
of Shares in that Series of Shares. Upon such redemption the holders
of the Shares so redeemed shall have no further right with respect
thereto other than to receive payment of such redemption price.
(i) NET ASSET VALUE. The net asset value of a Series of Shares
shall be the amount determined by subtracting the liabilities belonging
to that Series of Shares from the assets belonging to that Series of
Shares. The net asset value of each outstanding Share of each Series
of Shares shall be determined at such time or times on such days as the
Trustees may determine. The method of determination of the net asset
value of a Series of Shares shall be determined by the Trustees from
time to time with any expenses being borne solely by a class of Shares
being reflected in the net asset value of such Shares. The power and
duty to make the calculations may be delegated by the Trustees to the
adviser, administrator, manager, custodian, transfer agent or such
other person as the Trustees may determine. The Trustees may suspend
the determination of net asset value to the extent permitted by the
1940 Act.
The Trustees may determine to maintain the net asset value per
Share of any of the classes of any Series of Shares at a designated
constant dollar amount and in connection therewith may adopt procedures
for the continuing declarations of income and capital gains
attributable to that Series of Shares as dividends payable in
additional Shares of that Series of Shares at the designated constant
dollar amount and for the handling of any losses attributable to that
Series of Shares. Such procedures may provide that in the event of any
loss each Shareholder shall be deemed to have contributed to the
capital of the Trust attributable to that Series of Shares his pro rata
portion of the total number of Shares required to be cancelled in order
to permit the net asset value per Share of that Series of Shares to be
maintained, after reflecting such loss, at the designated constant
dollar amount. Each Shareholder of the Trust shall be deemed to have
agreed, by his investment in any Series of Shares with respect to which
the Trustees shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the event of any
such loss.
(j) TRANSFER. Subject to such limitations as may be set forth
herein or in the By-Laws, all Shares shall be transferable, but
transfers of Shares of a particular Series of Shares will be recorded
on the Share transfer records of the Trust applicable to that Series of
Shares only at such times as Shareholders shall have the right to
require the Trust to redeem Shares of that Series of Shares and at such
other times as may be permitted by the Trustees. Shares shall be
transferable on the records of the Trust upon delivery to the Trust or
its transfer agent of such evidence of assignment, transfer, succession
or authority to transfer as the Trustees or the transfer agent may
reasonably require, accompanied by any certificate or certificates
representing such shares previously issued to the transferor. Upon
such delivery the transfer shall be recorded on the books of the Trust.
The Trust shall be entitled to treat the record holder of Shares as
shown on its books as the owner of such Shares for all purposes,
including the payment of dividends and the right to receive notice and
to vote with respect thereto, regardless of any transfer, pledge or
other disposition of such Shares until the Shares have been transferred
on the books of the Trust in accordance with the requirements of this
Declaration of Trust.
(k) EQUALITY. All Shares of each Series of Shares shall
represent an equal proportionate interest in the assets belonging to
that Series of Shares (subject to the liabilities belonging to that
Series of Shares), and each Share of each Series of Shares shall be
equal to each other Share of that Series of Shares; provided that such
equality need not be maintained among all Shares of a Series of Shares
but shall be maintained among all Shares of each class of that Series
of Shares whenever the Trustees divide the Shares of the Series of
Shares into classes pursuant to Section 4.1.
(l) FRACTIONS. Any fractional Share of any class or any Series
of Shares, if any such fractional Share is outstanding, shall carry
proportionately all the rights and obligations of a whole Share of that
class of that Series of Shares, including rights and obligations with
respect to voting, receipt of dividends and distributions, redemption
of Shares, and liquidation of the Trust.
(m) CONVERSION AND EXCHANGE RIGHTS. The Trustees shall have the
authority to provide that holders of Shares of any class of any Series
of Shares shall have the right to convert such Shares into or to
exchange such Shares for, Shares of the same or one or more other
Series of Shares in accordance with such requirements and procedures as
may be established by the Trustees.
Section 4.3 OWNERSHIP OF SHARES. The ownership of Shares shall
be recorded on the books of the Trust or of a transfer or similar agent
for the Trust. No certificates certifying the ownership of Shares need
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 Shares certificates, the use of facsimile
signatures, 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 for all purposes as to
who are the Shareholders of the Trust and of any Series or class
of Shares and as to the number of Shares of each class of each Series
of Shares held from time to time by each such Shareholder.
Section 4.4 INVESTMENTS IN THE TRUST. The Trustees may accept
investments in the Trust from such persons and on such terms and for
such consideration, as they from time to time authorize. The Trustees
may authorize any distributor, principal underwriter, custodian,
transfer agent or other person to accept orders for the purchase of
Shares that conform to such authorized terms and to reject any purchase
orders for Shares whether or not conforming to such authorized terms.
Section 4.5 NO PREEMPTIVE RIGHTS. Shareholders shall have no
preemptive or other right to receive, purchase or subscribe to any
additional Shares or other securities issued by the Trust.
Section 4.6 TRUST ONLY. It is the intention of the Trustees to
create only the relationship of Trustee and beneficiary between the
Trustees and each Shareholder from time to time. It is not the
intention of the Trustees to create a general partnership, limited
partnership, joint stock association, corporation, bailment or any form
of legal relationship other than a trust on the terms and conditions
described herein. 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.
Section 4.7 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 Trust or any Series of Shares thereof 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 decent 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 neither 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.
Section 4.8 RIGHTS OF SHAREHOLDERS. Shares shall be deemed to
be personal property giving only the rights provided in this
Declaration of Trust. Each Shareholder shall be held to have expressly
assented and agreed to the terms hereof and to have become a party
hereto. The right to conduct any business described in this
Declaration of Trust are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial
interest conferred by their Shares, and they shall have no right to
call for any partition or division of any property, profits, rights or
interests of the Trust or any Series thereof nor can they be called
upon to share or assume any losses of the Trust or any Series thereof
or suffer an assessment of any kind by virtue of their ownership of
Shares. The death of a Shareholder during the continuance of the Trust
shall not operate to terminate the Trust or any Series of Shares nor to
entitle the legal representative of such Shareholder to an accounting
or to take any action in any court or otherwise against other
Shareholders or the Trustees or the Trust Property, but only to the
rights of such Shareholder hereunder. The Shares shall not entitle the
holder to preference, preemptive, appraisal, conversion or exchange
rights.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 VOTING POWERS. The Shareholders shall have power to
vote only (i) for the election or removal of Trustees as provided in
Section 3.1, (ii) with respect to any contract with a Contracting Party
as provided in Section 3.4 as to which Shareholder approval is
contemplated by the 1940 Act,(iii) with respect to any termination or
reorganization of the Trust or any Series of Shares to the extent and
as provided in Sections 7.1 and 7.2,(iv)with respect to any amendment
of the Declaration of Trust to the extent and as provided in Section
7.3, (v) to the same extent as the stockholders of a Delaware statutory
trust as to whether or not a court action, proceeding or claim should
or should not be brought or maintained derivatively or as a class
action on behalf of the Trust or any Series of Shares thereof or the
Shareholders (provided, however, that a Shareholder of a particular
Series of Shares shall not be entitled to bring, maintain or
participate in a derivative or class action on behalf of any other
Series of Shares (or Shareholder of any other Series of Shares)) and
(vi) with respect to such additional matters relating to the Trust as
may be required by this Declaration of Trust, the By-Laws or any
registration of the Trust with the Commission(or any successor agency)
or any state, or as the Trustees may consider necessary or desirable.
Only Shareholders of record shall be entitled to vote. There shall be
no cumulative voting in the election of Trustees. Until Shares of any
Series or class of Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required by law, this
Declaration of Trust or the By-Laws to be taken by Shareholders as to
such Series or class of Shares.
Section 5.2 PROXIES. At any meeting of Shareholders, any holder
of Shares entitled to vote thereat may vote in person or by proxy,
provided that no proxy shall be voted at any meeting unless it shall
have been placed on file with the Secretary, or with such other officer
or agent of the Trust as the Secretary may direct, for verification
prior to the time at which such vote shall be taken. Pursuant to a
resolution of the Trustees, proxies may be solicited in the name of one
or more persons, including one or more Trustees or one or more of the
officers of the Trust. When any Shares are held in the names of two or
more persons, any one of them may vote at any meeting in person or by
proxy in respect of such Shares, but if more than one of them shall be
present at such meeting in person or by proxy and such joint owners or
their proxies so present disagree as to any vote to be cast; such vote
shall not be received in respect of such Shares. If the holder of any
Shares is a minor or a person of unsound mind, and subject to
guardianship or to the legal control of any other person as regards the
charge or management of such Shares, he may vote by his guardian or
such other person appointed or having such control, and such vote may
be given 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 5.3 MEETINGS. Meetings of Shareholders of the Trust or
of any Series of Shares may be called by the Trustees (or such other
person or persons as may be specified in the By-Laws) from time to time
for the purpose of taking action upon any matter requiring the vote or
authority of such Shareholders as herein provided or upon any other
matter deemed by the Trustees to be necessary or desirable. Written
notice of any meeting of Shareholders shall be given at least seven
days before such meeting by mailing such notice, postage prepaid
stating the time, place and purpose of the meeting, to each Shareholder
entitled to vote at such meeting at the Shareholder's address as it
appears on the records of the Trust. If the Trustees (or such other
person or persons as may be specified in the By-Laws) fail to call or
give notice of any meeting of Shareholders for 30 days after written
application by Shareholders holding at least 25% of the Shares issued
and outstanding, and entitled to vote at the meeting, requesting a
meeting be called for a purpose requiring action by the Shareholders as
provided herein or in the By-Laws, then Shareholders holding at least
25% of such Shares then outstanding may call and give notice of such
meeting, and thereupon the meeting shall be held in the manner provided
for herein in case of call thereof by the Trustees. The preceding
sentence shall apply upon written application by Shareholders holding
less than 25% of the Shares issued and outstanding, and entitled to
vote at the meeting, when the By-Laws so provide. Notice of a meeting
need not be given to any Shareholder if a written waiver of notice,
executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Shareholder who attends the meeting
without protesting prior thereto or at its commencement the lack of
notice to him or her.
Section 5.4 PLACE OF MEETINGS. All meetings of the Shareholders
shall be held at the principal office of the Trust or at such other
place within the United States as shall be designated by the Trustees
or the Chairman or President of the Trust.
Section 5.5 RECORD DATES. For the purpose of determining the
Shareholders who are entitled to notice of and to vote or act at any
meeting or any adjournment thereof, or who are entitled to receive any
dividend or distribution, or for the purpose of any other action, the
Trustees may from time to time close the transfer books for such
period, not exceeding 30 days (except at or in connection with the
termination of the Trust), as the Trustees may determine; or without
closing the transfer books, the Trustees may fix a date and time not
more than 60 days prior to the date of any meeting of Shareholders or
other action as the date and time of record for the determination of
Shareholders entitled to notice of and to vote at such meeting or any
adjournment thereof or to be treated as Shareholders of record for
purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at
such meeting or any adjournment thereof or to be treated as a
Shareholder of record for purposes of such other action, even though he
has since that date and time disposed of his Shares, and no Shareholder
becoming such after that date and time shall be so entitled to vote at
such meeting or any adjournment thereof or to be treated as a
Shareholder of record for purposes of such other action.
Section 5.6 QUORUM AND REQUIRED VOTE. Thirty percent of the
Shares entitled to vote on a matter shall be a quorum for the
transaction of business on that matter at a Shareholders' meeting, but
any lesser number shall be sufficient for adjournments. Any adjourned
session or sessions may be held, within a reasonable time after the
date set for the original meeting, without the necessity of further
notice. A majority of the Shares voted, at a meeting at which a quorum
is present, shall decide any questions and a plurality shall elect a
Trustee, except when a different vote is required or permitted by any
provision of the 1940 Act or other applicable law or by this
Declaration of Trust or the By-Laws. If voting is by a Series of
Shares or a class of Shares, the aforesaid quorum and voting
requirements shall apply to the action to be taken on those matters by
the Shareholders of such Series of Shares or class of Shares.
Section 5.7 ACTION BY WRITTEN CONSENT. Any action taken by
Shareholders may be taken without a meeting if the Shareholders of a
majority of the outstanding shares entitled to vote on the matter (or
such larger proportion thereof as shall be required by the 1940 Act or
by any express provision of this Declaration of Trust or the By-Laws)
consent to the action in writing and such written consents are filed
with the records of the meetings of Shareholders. Such consents shall
be treated for all purposes as a vote taken at a meeting of
Shareholders.
Section 5.8 ADDITIONAL PROVISIONS. The By-Laws may include
further provisions for Shareholders' votes and meetings and related
matters not inconsistent with the provisions hereof.
ARTICLE VI
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 6.1 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 Series of
Shares with respect to which such persons extended credit or
contracted, or with respect to which such claim arose for payment under
such credit, contract or claim; and neither the Shareholders of any
Series of Shares nor the Trustees nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other
Series of Shares shall be personally liable therefore. Every note,
bond, contract, instrument, certificate or undertaking and every other
act or thing whatsoever executed or done by or on behalf of the Trust,
any Series of Shares or the Trustees or any of them shall be
conclusively deemed to have been executed or done only by or for the
Trust (or the Series of Shares) or the Trustees and not personally.
Nothing in this Declaration of Trust shall protect any Trustee or
officer against any liability to the Trust or the Shareholders to which
such Trustee or officer would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee or of such
officer.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officers or officer shall give
notice that this Declaration of Trust is on file with the Secretary of
State of Delaware and shall recite that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee 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 belonging to the
Trust, or the particular Series of Shares in question, as the case may
be, but the omission thereof shall not operate to bind any Trustees or
Trustee or officers or officer or Shareholders or Shareholder
individually.
Section 6.2 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 own willful 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. Subject to
the foregoing, (a) the Trustees shall not be responsible or liable in
any event for any neglect or wrongdoing of any officer, agent,
employee, consultant, adviser, administrator, distributor or principal
underwriter, custodian, or transfer, dividend disbursing, Shareholder
servicing or accounting agent of the Trust, nor shall any Trustee be
responsible for the act or omission of any other Trustee; (b) the
Trustees may take advice of counsel or other experts with respect to
the meaning and operation of this Declaration of Trust and their duties
as Trustees, and shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice; and
(c) in discharging their duties, the Trustees, when acting in good
faith, shall be entitled to rely upon the books of account of
the Trust and upon written reports made to the Trustees by any officer
appointed by them, any independent public accountant, and (with respect
to the subject matter of the contract involved) any officer, partner or
responsible employee of a Contracting Party appointed by the Trustees
pursuant to Section 3.4. The Trustees as such shall not be required to
give any bond or surety or any other security for the performance of
their duties.
Section 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any
Shareholder (or former Shareholder) of any Series of Shares shall be
charged or held to be personally liable solely by reason of being or
having been a Shareholder and not because of such Shareholder's acts or
omissions or for some other reason, the Trust (upon proper and timely
request by the Shareholder) shall assume the defense against such
charge and satisfy any judgment thereon, and the Shareholder or former
Shareholder (or his 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 in each case only out of the assets of such Series
of Shares.
Section 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. The
Agreement and Declaration of Trust of the Trust provide that the Trust
shall indemnify each of its Trustees and officers against all
liabilities, including but not limited to amounts paid in satisfaction
of judgments, in compromise or as fines and penalties, and against all
expenses, including but not limited to accountants and counsel fees,
reasonably incurred 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 Trustee
or officer may be or may have been involved as a party or otherwise or
with which such person may be or may have been threatened, while in
office or thereafter, by reason of being or having been such a Trustee
or officer.
Section 6.5 EXCEPTIONS TO INDEMNIFICATION. Indemnification shall
not be provided to a Covered Person under Section 6.4 if it shall have
been finally adjudicated in a decision on the merits by the court or
other body before which the proceeding was brought that such Covered
Person (i) did not act in good faith in the reasonable belief that such
Covered Person's action was in the best interests of the Trust or (ii)
is liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office (either
and both of the conduct described in (i) and (ii) being referred to
hereafter as "Disabling Conduct"). As to any matter disposed of
(whether by a compromise payment, pursuant to a consent decree or
otherwise) without a final adjudication in a decision on the merits
that such Covered Person is liable by reason of Disabling Conduct,
indemnification shall be provided if there has been (i) a determination
by the court or other body before which the proceeding was brought that
the Covered Person was not liable by reason of Disabling Conduct, (ii)
a dismissal of a court action or any administrative or other proceeding
against a Covered Person for insufficiency of evidence of Disabling
Conduct, or (iii) a reasonable determination, based upon a review of
the readily available facts (as opposed to a full trial-type inquiry),
that the Covered Person was not liable by reason of Disabling Conduct
either by a vote a majority of a quorum of disinterested Trustees who
are not parties to the proceeding, or by an independent legal counsel
in a written opinion. Approval by the Trustees or by independent legal
counsel of indemnification as to any matter disposed of by a compromise
payment by the Covered Person shall not prevent the recovery from the
covered Person of any amount paid to such Covered Person as
indemnification for such payment or for any other expenses if such
Covered Person is subsequently adjudicated by a court of competent
jurisdiction to be liable by reason of Disabling Conduct.
Section 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article shall not be exclusive of or
affect any other rights to which any such Covered Person may be
entitled. As used in this Article, "Covered Person" shall include such
person's heirs, executors and administrators. Nothing contained in
this Article shall affect any rights to indemnification to which
personnel of the Trust, other than Trustees and 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 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEE. 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.
ARTICLE VII
MISCELLANEOUS
Section 7.1 DURATION AND TERMINATION OF TRUST AND SERIES OF
SHARES. Unless terminated as provided herein, the Trust shall continue
without limitation of time and, without limiting the generality of the
foregoing, no change, alteration or modification with respect to any
Series of Shares shall operate to terminate the Trust. The Trust may
be terminated at any time by the Trustees by written notice to the
Shareholders or by a Majority Shareholder Vote of the outstanding
Shares of each Series of Shares. Any Series of Shares may be
terminated at any time by the Trustees by written notice to the
Shareholders of that Series of Shares or by a Majority Shareholder Vote
of the Shares of that Series of Shares.
Upon termination of the Trust or any Series of Shares, after
paying or otherwise providing for all charges, taxes, expenses and
liabilities, 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 to
distributable form in cash, securities or other property, or any
combination thereof, and distribute the proceeds to the Shareholders of
the Series of Shares involved, in conformity with provisions of
subsection (e) of Section 4.2.
Section 7.2 REORGANIZATION. The Trust or one or more Series of
Shares may merge or consolidate with any other trust, partnership,
association, corporation or other organization and the Trustees may
sell, convey and transfer the assets of the Trust, or the assets
belonging to any one or more Series of Shares ("Transferor Series of
Shares"), to another trust, partnership, association, corporation or
other organization, or to the Trust to be held as assets belonging to
another Series of Shares, in exchange for cash, securities or other
consideration (including, in the case of a transfer to another Series
of Shares of the Trust, Shares of such other Series of Shares) with
such transfer being made subject to, or with the assumption by the
transferee of, the liabilities belonging to each Transferor Series of
Shares; provided, however, that no merger, consolidation or sale of all
or substantially all the assets belonging to any particular Series of
Shares shall be effected unless the terms of such transaction shall
have first been approved by a Majority Shareholder Vote of the
Shareholders of that Series of Shares. Pursuant to and in accordance
with the provisions of Section 3815(f) of the Delaware Act, and
notwithstanding anything to the contrary contained in this Declaration
of Trust, an agreement of merger or consolidation approved in
accordance with this Section 7.2 may effect any amendment to the
Declaration of Trust or effect the adoption of a new trust instrument
of the Trust if it is the surviving or resulting trust in the merger or
consolidation.
Section 7.3 AMENDMENTS. All rights granted to the Shareholders
under this Declaration of Trust are granted subject to the reservation
of the right to amend this Declaration of Trust as herein provided,
except that no amendment shall limit the rights of indemnification
provided herein, repeal the limitations on personal liability of any
Shareholder or Trustee, or repeal the prohibition of assessment upon
the Shareholders without the express consent of each Shareholder or
Trustee involved. Subject to the foregoing, the provisions of this
Declaration of Trust (whether or not related to the rights of
Shareholders) may be amended at any time by an instrument in writing
signed by a majority of the then Trustees (or by an officer of the
Trust pursuant to the vote of a majority of such Trustees): (a) for one
or more of the following purposes: to change the name of the Trust, to
supply any omission, to cure, correct or supplement any ambiguous,
defective or inconsistent provision hereof or, as the Trustees deem
necessary or advisable, to conform this Declaration of Trust to the
requirements of applicable federal laws or regulations, including the
requirements of the Internal Revenue Code with respect to regulated
investment companies, but the Trustees shall not be liable for failing
to do so; and (b) for any other purpose so long as such amendment does
not adversely affect the rights of any Shareholder with respect to
which such amendment is or purports to be applicable. Any amendment to
this Declaration of Trust that adversely affects the rights of
Shareholders may be effected at any time by an instrument in writing
signed by a majority of the then Trustees (or by an officer of the
Trust pursuant to a vote of a majority of such Trustees) when
authorized to do so by a Majority Shareholder Vote in accordance with
subsection (f) of Section 4.2. An amendment which would adversely
affect the Shareholders of one or more Series of Shares but not the
Shareholders of all Series of Shares shall be authorized by a Majority
Shareholder Vote of the Shareholders of each Series of Shares so
affected, and no vote of Shareholders of a Series of Shares not so
affected shall be required.
Section 7.4 RESIDENT AGENT. The Trustees shall have power to
appoint on behalf of the Trust a resident agent and maintain a resident
agent for the Trust in The State of Delaware, and from time to time, to
replace the resident agent so appointed.
Section 7.5. 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 State of
Delaware and with the County Clerk, as well as any other governmental
office where such 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. A restated Declaration of
Trust, containing the original Declaration of Trust and all amendments
theretofore made, may be executed from time to time by a majority of
Trustees and shall, upon filing with the Secretary of The State of
Delaware, be conclusive evidence of all amendments contained therein
and may thereafter be referred to in lieu of the original Declaration
of Trust and the various amendments thereto. 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. 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 7.6 APPLICABLE LAW. This Declaration of Trust is made in
The State of Florida and is created under and is to be governed by and
construed and administered according to the laws of The State of
Delaware. The Trust shall be of the type referred to in Title 12 Part
V, Section 3801 of chapter 38 of the Delaware Code and of the type
commonly called a "Delaware trust" or "business trust", and without
limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust.
Section 7.7 RELIANCE BY THIRD PARTIES. Any certificate executed
by an individual who, according to the records of the Trust, appears to
be a Trustee hereunder, or Secretary or Assistant Secretary of the
Trust, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any
instrument or writing, (c) the form of any vote passed at a meeting of
Trustees or Shareholders, (d) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written instrument
satisfies the requirement of this Declaration of Trust, (e) the form
of any By-Laws adopted by or the identity of any officers elected by
the Trustees, or (f) the existence of any fact or facts which in any
manner relate to the affairs of the Trust, shall be conclusive evidence
as to the matters so certified in favor of any person dealing with the
Trustees and their successors.
Section 7.8 PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS. The
provisions of this Declaration 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, the laws of The State of
Delaware or other applicable laws and regulations, the conflicting
provisions shall be deemed superseded by such law or regulation to the
extent necessary to eliminate such conflict; 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.
If any provision of this Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall pertain 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.
CLEARWATER INVESTMENT FUND 6
CLEARWATER INVESTMENT FUND 1
