1
THE SIERRA PRIME INCOME TRUST
AGREEMENT AND DECLARATION OF TRUST
October 4, 1995
2
AGREEMENT AND DECLARATION OF TRUST
PAGE
ARTICLE I. NAME AND DEFINITIONS 2
Section 1.1 Name 2
Section 1.2 Definitions 2
a) "Trust" 2
b) "Trustees" 2
c) "Shares" 2
d) "Shareholder" 2
e) "1940 Act" 2
f) "Affiliated Person,"
"Assignment," "Commission,"
"Interested Person,"
"Principal Underwriter," and
"Majority Shareholder Vote" 2
g) "Declaration of Trust" 2
h) "By-Laws" 2
ARTICLE II. PURPOSE OF THE TRUST 2
Section 2.1 Purpose of the Trust 2
ARTICLE III. THE TRUSTEES 3
Section 3.1 Election, Resignation, Vacancies, etc. 3
a) Election 3
b) Effect of Death, Resignation, etc. 3
c) No Accounting 3
d) Vacancies 3
Section 3.2 Powers of Trustees 4
a) Investments 4
b) Disposition of Assets 4
c) Act as Distributor, Underwriter,
Broker, Dealer 5
d) Ownership Powers 5
e) Subscription 5
f) Form of Holding 5
g) Allocation of Assets and
Liabilities 5
h) Reorganization, etc. 5
i) Voting Trusts, etc. 5
j) Compromise 5
k) Partnerships, etc. 6
l) Borrowing 6
(i)
3
m) Guarantees, etc. 6
n) Insurance 6
o) Pensions 6
p) Any Other Lawful Activity 6
Section 3.3 Advisory, Management and Distribution 7
Section 3.4 Payment of Expenses by the Trust 8
Section 3.5 Ownership of Assets of the Trust 9
ARTICLE IV. SHARES 9
Section 4.1 Beneficial Interest 9
Section 4.2 Ownership of Shares 9
Section 4.3 Investment in the Trust 9
Section 4.4 No Preemption Rights 10
Section 4.5 Status of Shares and Limitation
of Personal Liability 10
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS 10
Section 5.1 Shareholders' Voting Powers and Meetings 10
ARTICLE VI. DISTRIBUTIONS AND REPURCHASES 10
Section 6.1 Distributions 10
Section 6.2 Repurchases 11
Section 6.3 Dividends, Distributions and Repurchases 11
ARTICLE VII. COMPENSATION AND LIMITATION OF LIABILITY
OF TRUSTEES 11
Section 7.1 Compensation 11
Section 7.2 Limitation of Liability 11
ARTICLE VIII. INDEMNIFICATION 12
(ii)
4
Section 8.1 Trustees, Officers, etc. 12
Section 8.2 Compromise Payment 12
Section 8.3 Indemnification Not Exclusive 13
Section 8.4 Shareholders 13
ARTICLE IX. MISCELLANEOUS 14
Section 9.1 Trustees, Shareholders, etc. Not
Personally Liable; Notice 14
Section 9.2 Trustee's Good Faith Action,
Expert Advice, No Bond or Surety 14
Section 9.3 Liability of Third Persons Dealing
with Trustees 15
Section 9.4 Merger of Classes of Shares of the
Trust 15
Section 9.5 Duration and Termination of Trust 15
Section 9.6 Merger, Consolidation and Sale of Assets 15
Section 9.7 Conversion to Open-End Management
Investment Company 16
Section 9.8 Certain Transactions 16
Section 9.9 Amendments 18
Section 9.10 Resident Agent 18
Section 9.11 Filing of Copies; References; Headings 18
Section 9.12 Applicable Law 19
Section 9.13 Provisions in Conflict with Laws
or Regulations 19
Section 9.14 Use of Name 20
(iii)
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THE SIERRA PRIME INCOME TRUST
CROSS-REFERENCE SHEET
Pursuant to CMR 116.00:
116.03 (a) Name of organization or trust:
The Sierra Prime Income Trust
(b) Date of organization:
October 4, 1995
(c) Names and address of the trustees:
F. Xxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(d) Original signatures of all trustees:
See page 20.
(e) Principal place of business:
Xxx Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
(f) Statement that beneficial interest is
divided into transferable certificates of
participation or shares;
See Section 4.1, page 9.
(g) Ability to merge:
See Section 9.6, page 15.
(h) The name and address of the resident agent in
Massachusetts:
The Xxxxxxxx-Xxxx Corporation System, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
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SIERRA PRIME INCOME TRUST
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts this
4th day of October, 1995, by the Trustees hereunder, and by the holders of
shares of beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH
WHEREAS this Trust has been formed to carry on the business of an investment
company; and
WHEREAS this Trust is authorized to issue its shares of beneficial
interest in accordance with the provisions hereinafter set forth; and
WHEREAS the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts business trust in accordance with
the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same
upon the following terms and conditions for the benefit of the holders from
time to time of shares of beneficial interest in this Trust.
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ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name. This Trust shall be known as "The Sierra Prime
Income Trust" and the Trustees shall conduct the business of the Trust under
that name or any other name or names as they may from time to time determine.
Section 1.2 Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Trust Agreement, as amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust hereunder named
herein or elected in accordance with Article III;
(c) "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Principal Underwriter" and "Majority Shareholder Vote"
(the 67% or 50% requirement of the third sentence of Section 2(a)(42) of the
1940 Act, whichever may be applicable) shall have the meanings given them in
the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE OF THE TRUST
Section 2.1 Purpose of the Trust. The purpose of the Trust is to
operate as an investment company and to provide investors a managed investment
primarily in securities and to carry
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on such other business as the Trustees may from time to time determine pursuant
to their authority under this Declaration of Trust.
ARTICLE III
THE TRUSTEES
Section 3.1 Election, Resignation, Vacancies, etc..
(a) Election. There shall initially be one Trustee who shall be
F. Xxxxx Xxxxxx. The number of Trustees shall be as provided in the By-laws or
as fixed from time to time by the Trustees. The Shareholders may elect
Trustees at any meeting of Shareholders called by the Trustees for that
purpose. Each Trustee shall serve during the continued lifetime of the Trust
until he or she dies, resigns or is removed, or, if sooner, until the next
meeting of Shareholders called for the purpose of electing Trustees and the
election and qualification of his or her successor. Any Trustee may resign at
any time by written instrument signed by him or her and delivered to any
officer of the Trust, to each other Trustee or to a meeting of the Trustees.
Such resignation shall be effective upon receipt unless specified to be
effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his
resignation or removal, or any right to damages on account of such removal.
(b) Effect of Death, Resignation, etc. of a Trustee. The death,
declination, resignation, retirement, removal or incapacity of the Trustees, or
any one of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of this Declaration of Trust.
(c) No Accounting. Except to the extent required by the 1940 Act
or under circumstances which would justify his or her removal for cause, no
person ceasing to be a Trustee as a result of his or her death, resignation,
retirement, removal or incapacity (nor the estate of any such person) shall be
required to make an accounting to the Shareholders or remaining Trustees upon
such cessation.
(d) Vacancies. Any vacancy or anticipated vacancy resulting from
any reason, including without limitation the death, resignation, retirement,
removal or incapacity of any of the Trustees, or resulting from an increase in
the number of Trustees by the other Trustees may (but so long as there are at
least two
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remaining Trustees, need not unless required by the 0000 Xxx) be filled by a
majority of the remaining Trustees, subject to the provisions of Section 16(a)
of the 1940 Act, through the appointment in writing of such other person as
such remaining Trustees in their discretion shall determine and such
appointment shall be effective upon the written acceptance of the person named
therein to serve as a Trustee and agreement by such person to be bound by the
provisions of this 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.
Section 3.2. Powers. 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.
Without limiting the foregoing, the Trustees may adopt By-laws not inconsistent
with this Declaration of Trust providing for the conduct of the business of the
Trust and may amend and repeal them to the extent that such By-laws do not
reserve that right to the Shareholders; they may enlarge or reduce their
number, may fill vacancies in their number, including vacancies caused by
enlargement of their number, and may remove Trustees with or without cause;
they may elect and remove, with or without cause, such officers and appoint and
terminate such agents as they consider appropriate; they may appoint from their
own number, and terminate, any one or more committees consisting of two or more
Trustees, including an executive committee which may, when the Trustees are not
in session, exercise some or all of the power and authority of the Trustees as
the Trustees may determine; they may employ one or more custodians of the
assets of the Trust and may authorize such custodians to employ subcustodians
and to deposit all or any part of such assets in a system or systems for the
central handling of securities, retain a transfer agent or a Shareholder
servicing agent, or both, provide for the distribution of Shares by the Trust,
through one or more principal underwriters or otherwise, set record dates for
the determination of Shareholders with respect to various matters, and in
general delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees and to any agent or employee of the
Trust or to any such custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and
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authority:
(a) To invest and reinvest cash, and to hold cash
uninvested;
(b) To sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the assets of
the Trust;
(c) To act as a distributor of shares and as underwriter
of, or broker or dealer in, securities or other property;
(d) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and
to execute and deliver proxies or powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities or
property as the Trustees shall deem proper;
(e) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities;
(f) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the Trust or in
the name of a custodian, subcustodian or other depository or a nominee
or nominees or otherwise;
(g) To allocate assets, liabilities and expenses of the
Trust to a particular class of Shares or to apportion the same among
two or more classes of Shares, provided that any liabilities or
expenses incurred by a particular class of Shares shall be payable
solely out of the assets of that class.
(h) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer,
any security of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security held in the Trust;
(i) To join with other security holders in acting through
a committee depositary, voting trustee or
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otherwise, and in that connection to deposit any security with, or
transfer any security to, any such committee, depositary or trustee,
and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees
shall deem proper, and to agree to pay, and to pay, such portion of
the expenses and compensation of such committee, depositary or trustee
as the Trustees shall deem proper;
(j) To compromise, arbitrate or otherwise adjust claims
in favor of or against the Trust or any matter in controversy,
including but not limited to claims for taxes;
(k) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(l) To borrow funds;
(m) To endorse or guarantee the payment of any notes or
other obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof; and to
mortgage and pledge the Trust property or any part thereof to secure
any of or all such obligations;
(n) To purchase and pay for entirely out of Trust
property such insurance as they may deem necessary or appropriate for
the conduct of the business, including without limitation, insurance
policies insuring the assets of the Trust and payment of distributions
and principal on its portfolio investments, and insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
investment advisers or managers, principal underwriters, or
independent contractors of the Trust individually against all claims
and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as
Shareholder, Trustee, officer, employee, agent, investment adviser or
manager, principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify
such person against such liability;
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(o) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out
pension, profit-sharing, share bonus, share purchase, savings, thrift
and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and agents of the
Trust; and
(p) To engage in any other lawful act or activity in
which corporations organized under the Massachusetts Business
Corporation Law may engage.
The Trustees shall not in any way be bound or limited by any present
or future law or custom in regard to investments by trustees. Except as
otherwise provided herein or from time to time in the By-laws, any action to be
taken by the Trustees may be taken by a majority of the Trustees present at a
meeting of Trustees (a quorum being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office.
Section 3.3 Advisory, Management and Distribution. The Trustees may,
at any time and from time to time, contract for exclusive or nonexclusive
advisory and/or management services with any corporation, trust, association or
other organization (the "Advisor"), every such contract to comply with such
requirements and restrictions as may be set forth in the By-laws; and any such
contract may provide for one or more Sub-advisers who shall perform all or part
of the obligations of the Advisor under such contract and may contain such
other terms interpretive of or in addition to said requirements and
restrictions as the Trustees may determine, including, without limitation,
authority to determine from time to time what investments shall be purchased,
held, sold or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested and to make changes in the Trust's investments. The
Trustees may also, at any time and from time to time, contract with the Advisor
or any other corporation, trust, association or other organization, appointing
it exclusive or nonexclusive distributor or principal underwriter for the
Shares, every such contract to comply with such requirements and restrictions
as may be set forth in the By-laws; and any such contract may contain such
other terms interpretive of or in addition to said requirements and
restrictions as the Trustees may determine.
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The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent of or
for any corporation, trust, association, or other organization, or of
or for any parent or affiliate of any organization, with which an
advisory or management contract, or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or other
agency contract may have been or may hereafter be made, or that any
such organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory or management contract or
principal underwriter's or distributor's contract, or transfer,
shareholder servicing or other agency contract may have been or may
hereafter be made also has an advisory or management contract, or
principal underwriter's or distributor's contract, or transfer,
Shareholder servicing or other agency contract with one or more other
corporations, trusts, associations, or other organizations, or has
other business or interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its
Shareholders.
Section 3.4 Payment of Expenses by the Trust. The Trustees are
authorized to pay or to cause to be paid out of the principal or income of the
Trust, or partly out of principal and partly out of income, as they deem fair,
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust, in connection with the management thereof, or in
connection with the financing of the sale of Shares, including, but not limited
to, the Trustees' compensation and such expenses and charges for the services
of the Trust's officers, employees, any investment adviser, manager, or
sub-adviser, principal underwriter, auditor, counsel, custodian, transfer
agent, shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur; provided, however, that all expenses, fees,
charges, taxes and liabilities incurred or arising in connection with a
particular series or class of Shares as determined by the Trustees, shall be
payable solely out of the assets of that series
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or class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular series
shall be allocated and charged by the Trustees between or among any one or more
of the series in such manner as the Trustees in their sole discretion deem fair
and equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all series for all purposes. Any creditor of any series may
look only to the assets of that series to satisfy such creditor's debt.
The Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder to pay directly, in advance or arrears,
for any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
Section 3.5 Ownership of Assets of the Trust. Title to all of the
assets of the Trust shall at all times be considered as vested in the Trustees.
ARTICLE IV
SHARES
Section 4.1 Beneficial Interest. The Shares of the Trust shall have
no par value and shall be issued in one or more classes as the Trustees may,
without shareholder approval, authorize. Each class of Shares shall represent
an equal proportionate interest in the assets and liabilities of the Trust,
with no class having priority or preference over another. If the Trustees have
authorized the issuance of two or more classes of Shares, then the classes may
have such variations as to dividend, redemption, voting rights, net asset
values, expenses borne by the classes, and other matters as the Trustees have
authorized. The number of Shares authorized shall be unlimited.
Section 4.2 Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the issuance of Share certificates, the
transfer of Shares and similar matters. The record books of the Trust as kept
by the Trust or any transfer or similar agent, as the case may be, shall be
conclusive as to who are the Shareholders of each class
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and as to the number of Shares of each class held from time to time by each
Shareholder.
Section 4.3 Investment in the Trust. The Trustees shall accept
investments in the Trust from such persons and on such terms and for such
consideration, which may consist of cash or tangible or intangible property or
a combination thereof, as they from time to time authorize.
All consideration received by the Trust for the issue or sale of
Shares of each class of Shares, together with all income, earnings, profits,
and proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation thereof, and any funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be, shall irrevocably belong to the
class of Shares with respect to which the same were received by the Trust for
all purposes, subject only to the rights of creditors, and shall be so handled
upon the books of account of the Trust and are herein referred to as "assets
of" such class of shares.
Section 4.4 No Preemptive Rights. Shareholders shall have no
preemptive or other right to subscribe to any additional Shares or other
securities issued by the Trust.
Section 4.5 Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the continuance
of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not
entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
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ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 5.1 Shareholders' Voting Powers and Meetings. Shareholders
shall have such power to vote as is provided for in, and may hold meetings and
take actions pursuant to the provisions of the By-laws.
ARTICLE VI
DISTRIBUTIONS AND REPURCHASES
Section 6.1 Distributions. The Trustees may each year, or more
frequently if they so determine, distribute to the Shareholders of each class
of Shares such income and capital gains, accrued or realized, as the Trustees
may determine, after providing for actual and accrued expenses and liabilities
(including such reserves as the Trustees may establish) determined in
accordance with good accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each class of Shares shall be
distributed pro rata to Shareholders in proportion to the number of Shares of
each class held by each of them. Such distributions shall be made in cash or
Shares or a combination thereof as determined by the Trustees. Any such
distribution paid in Shares will be paid at the net asset value thereof as
determined in accordance with the By-laws.
Section 6.2 Repurchases. The Trustees may in their business judgment
authorize the Trust to repurchase all or a portion of its outstanding classes
of Shares at the net asset value of such Shares thereof as determined in
accordance with the By-Laws. Such Share repurchases are expected to be in the
form of tender offers by the Trust to the Shareholders.
Section 6.3 Dividends, Distributions and Repurchases. No dividend or
distribution (including, without limitation, any distribution paid upon
termination of the Trust or of a class of Shares) with respect to the Shares
shall be effected by the Trust other than from the assets of such Trust. The
Trust may borrow against its assets for the purpose of funding said repurchase
of Shares.
ARTICLE VII
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COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
Section 7.1 Compensation. the Trustees as such shall be entitled to
reasonable compensation from the Trust; they may fix the amount of their
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking,
underwriting, brokerage, or investment dealer or other services and payment for
the same by the Trust.
Section 7.2. Limitation of Liability. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any
officer, agent, employee, manager or principal underwriter of the Trust, nor
shall any Trustee be responsible for the act or omission of any other Trustee,
but nothing herein contained shall protect any Trustee against any liability to
which he or she would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate, Share or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Trustees, Officers, etc. The Trust shall indemnify each
of its Trustees and officers (including persons who serve at the Trust's
request as directors, officers or trustees of another organization in which the
Trust has any interest as a shareholder, creditor or otherwise) (hereinafter
referred to as a "Covered Person") against all liabilities and expenses,
including but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and counsel fees reasonably incurred by
any Covered Person in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such Covered Person
may be or may have been threatened, while in office or thereafter, by reason of
being or having been such a Covered Person except with respect to any matter as
to which such Covered Person shall have been finally adjudicated in any such
action, suit or other proceeding to
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be liable to the Trust or its Shareholders by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person (but excluding amounts paid in satisfaction
of judgments, in compromise or as fines or penalties), shall be paid from time
to time by the Trust in advance of the final disposition of any such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Trust if it is ultimately
determined that indemnification of such expenses is not authorized under this
Article; provided, however, that either (a) such Covered Person shall have
provided appropriate security for such undertaking, (b) the Trust shall be
insured against losses arising from any such advance payments or (c) either a
majority of the disinterested Trustees acting on the matter (provided that a
majority of the disinterested Trustees then in office act on the matter), or
independent legal counsel in a written opinion, shall have determined, based
upon a review of readily available facts (as opposed to a full trial type
inquiry) that there is reason to believe that such Covered Person will be found
entitled to indemnification under this Article.
Section 8.2 Compromise Payment. As to any matter disposed of
(whether by a compromise payment, pursuant to a consent decree or otherwise)
without an adjudication by a court, or by any other body before which the
proceeding was brought, that such Covered Person is liable to the Trust or its
Shareholders by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office,
indemnification shall be provided if (a) approved, after notice that it
involves such indemnification, by at least a majority of the disinterested
Trustees acting on the matter (provided that a majority of the disinterested
Trustees then in office act on the matter) upon a determination, based upon a
review of readily available facts (as opposed to a full trial type inquiry)
that such Covered Person is not liable to the Trust or its Shareholders by
reasons of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office, or (b)
there has been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (as opposed to a full trial type
inquiry) to the effect that such indemnification would not protect such Person
against any liability to the Trust or to its shareholders to which he or she
would otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Any approval pursuant to this Section shall not prevent the recovery
from any Covered Person of any amount paid to such Covered Person in accordance
with this Section as indemnification
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if such Covered Person is subsequently adjudicated by a court of competent
jurisdiction to have been liable to the Trust or its Shareholders by reason of
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
Section 8.3 Indemnification Not Exclusive. The right of
indemnification hereby provided shall not be exclusive of or affect any other
rights to which such Covered Person may be entitled. As used in this Article
VIII, the term "Covered Person" shall include such person's heirs, executors
and administrators and a "disinterested Trustee" is a Trustee who is not an
"interested person" of the Trust as defined in Section 2 (a)(19) of the
Investment Company Act of 1940, as amended, (or who has been exempted from
being an "interested person" by any rule, regulation or order of the
Commission) and against whom none of such actions, suits or other proceedings
or another action, suit or other proceeding on the same or similar grounds is
then or has been pending. Nothing contained in this Article shall affect any
rights to indemnification to which personnel of the Trust, other than Trustees
or officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.
Section 8.4 Shareholders. In case any Shareholder or former
Shareholder shall be held to be personally liable solely by reason of his or
her being or having been a Shareholder and not because of his or her acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his or her heirs, executors, administrators or other legal representatives or
in the case of a corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and indemnified against
all loss and expense arising from such liability, but only out of the assets of
the particular series of Shares of which he or she is or was a Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Trustees, Shareholders, etc. Not Personally Liable;
Notice. All persons extending credit to, contracting with or having any claim
against the Trust shall look only to the assets of the Trust for payment under
such credit, contract or claim; and neither the Shareholders nor the Trustees,
nor any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor. Nothing in this Declaration of
Trust shall protect any Trustee against any liability to which
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such Trustee would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officer or officers shall give notice
that this Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts and shall recite that the same was executed or
made by or on behalf of the Trust or by them as Trustee or Trustees or as
officers or officer and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually
but are binding only upon the assets and property of the Trust, and may contain
such further recital as he or she or they may deem appropriate, but the
omission thereof shall not operate to bind any Trustee or Trustees or officer
or officers or Shareholder or Shareholders individually.
Section 9.2 Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall be liable for his
or her own wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or
for failing to follow such advice. The Trustees shall not be required to give
any bond as such, nor any surety if a bond is required.
Section 9.3 Liability of Third Persons Dealing with Trustees. No
person dealing with the Trustees shall be bound to make any inquiry concerning
the validity of any transaction made or to be made by the Trustees or to see to
the application of any payments made or property transferred to the Trust or
upon its order.
Section 9.4 Merger of Classes of Shares of the Trust. If the Trust
issues more than one class of Shares, then such classes may be merged,
consolidated or combined at any time by the vote of Shareholders holding at
least a majority of the Shares of each class entitled to vote or by the
Trustees by written notice to the Shareholders of each class of Shares.
Section 9.5 Duration and Termination of Trust. Unless terminated as
provided herein, the Trust shall continue without limitation of time. The
Trust may be terminated at any time by the
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vote of Shareholders holding at least a majority of the Shares entitled to vote
or by the Trustees by written notice to the Shareholders. Any class of Shares
may be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of such class entitled to vote or by the Trustees by
written notice to the Shareholders of such class.
Upon termination of the Trust or of any one or more classes of Shares,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the Trust or of the
particular class as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees shall consider appropriate,
reduce the remaining assets to distributable form in cash or shares or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the series involved, ratably according to the aggregate net
asset value of Shares of such class of Shares held by the several Shareholders
of such class of Shares on the date of termination.
Section 9.6 Merger, Consolidation and Sale of Assets. Subject to
Section 9.8, the Trust may merge or consolidate with any other corporation,
association, trust or other organization, or may sell, lease or exchange all or
substantially all of the Trust Property, including its goodwill, upon such
terms and conditions and for such consideration when and as authorized at any
meeting of the Shareholders called for the purpose by the affirmative vote of
the holders of not less than two-thirds of the the Shares outstanding and
entitled to vote, or by an instrument or instruments in writing without a
meeting, consented to by the holders of not less than two-thirds of the Shares,
provided, however, that if such merger, consolidation, sale, lease or exchange
is recommended by the Trustees, the vote or written consent of the holders of a
majority of the Shares outstanding and entitled to vote shall be sufficient
authorization and any such merger, consolidation, sale, lease or exchange shall
be deemed for all purposes to have been accomplished under and pursuant to the
statutes of the Commonwealth of Massachusetts.
Section 9.7 Conversion to Open-End Management Investment Company.
Notwithstanding any other provisions of this Declaration or the By- Laws, an
amendment to this Declaration that makes the Common Shares a "redeemable
security" (as that term is defined in the 1940 Act) shall be required to be
approved by at least (a) a majority of the Trustees, including a majority of
the Trustees who are not Interested Persons; and (b) a Majority Shareholder
Vote.
The Trust shall notify the holders of all capital securities
of the approval, in accordance with the preceding
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paragraph of this Section 9.7, of any amendment to this Declaration that makes
the Shares a "redeemable security" (as that term is defined in the 1940 Act) no
later than thirty (30) days prior to the date of filing of such amendment with
the Secretary of State of the Commonwealth of Massachusetts; provided, however,
that such amendment may not be so filed until the later of ninety (90) days
following the date of approval of such amendment by the holders of the Shares
in accordance with the preceding paragraph of this Section 9.7 or thirty (30)
days following the date on which notice of the approval of such amendment is
first given to Shareholders.
Section 9.8 Certain Transactions. (a) Notwithstanding any other
provision of this Declaration and subject to the exceptions provided in
paragraph (d) of this Section, the types of transactions described in paragraph
(c) of this Section shall require the affirmative vote or consent of the
holders of not less than two-thirds of the Shares outstanding and entitled to
vote when a Principal Shareholder (as defined in paragraph (b) of this Section)
is a party to the transaction. Such affirmative vote or consent shall be in
addition to the vote or consent of the holders of the Shares otherwise required
by law or any agreement between the Trust and any national securities exchange.
(b) The term "Principal Shareholder" shall mean any
corporation, person or other entity which is the beneficial owner, directly or
indirectly, of more than five percent (5%) of the outstanding Shares and shall
include any affiliate or associate, as such terms are defined in clause (ii)
below, of a Principal Shareholder. For the purposes of this Section, in
addition to the Shares which a corporation, person or other entity beneficially
owns directly, (a) any corporation, person or other entity shall be deemed to
be the beneficial owner of any Shares (i) which it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights or warrants, or
otherwise (but excluding share options granted by the Trust), or (ii) which are
beneficially owned, directly or indirectly (including Shares deemed owned
through application of clause (i) above, by any other corporation, person or
entity with which it or its "affiliate" or "associate" (as defined below) has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of Shares, or which is its "affiliate" or
"associate" as those terms are defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended, and (b) the outstanding Shares shall include
Shares deemed owned through application of clauses (i) and (ii) above but shall
not include any other Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights or warrants, or otherwise.
(c) This Section shall apply to the following
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transactions:
(1) The merger or consolidation of the
Trust or any subsidiary of the Trust with or into any Principal
Shareholder.
(2) The issuance of any securities of
the Trust to any Principal Shareholder for cash.
(3) The sale, lease or exchange of all
or any substantial part of the assets of the Trust to any Principal
Shareholder (except assets having an aggregate fair market value of
less than $1,000,000, aggregating for the purpose of such computation
all assets sold, leased or exchanged in any series of similar
transactions within a twelve-month period).
(4) The sale, lease or exchange to the
Trust or any subsidiary thereof, in exchange for securities of the
Trust of any assets of any Principal Shareholder (except assets having
an aggregate fair market value of less than $1,000,000, aggregating
for the purposes of such computation all assets sold, leased or
exchanged in any series of similar transactions within a twelve-month
period).
(d) The provisions of this Section shall not be
applicable to (i) any of the transactions described in paragraph (c) of this
Section if the Trustees shall by resolution have approved a memorandum of
understanding with such Principal Shareholder with respect to and substantially
consistent with such transaction, or (ii) any such transaction with any
corporation of which a majority of the outstanding shares of all classes of
stock normally entitled to vote in elections of directors is owned of record or
beneficially by the Trust and its subsidiaries.
(e) The Trustees shall have the power and duty to
determine for the purposes of this Section, on the basis of information known
to the Trust, whether (i) a corporation, person or entity beneficially owns
more than five percent (5%) of the outstanding Shares, (ii) a corporation,
person or entity is an "affiliate" or "associate" (as defined above) of
another, (iii) the assets being acquired or leased to or by the Trust, or any
subsidiary thereof, constitute a substantial part of the assets of the Trust
and have an aggregate fair market value of less than $1,000,000, and (iv) the
memorandum of understanding referred to in paragraph (d) hereof is
substantially consistent with the transaction covered thereby. Any such
determination shall be conclusive and binding for all purposes of this Section.
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Section 9.9 Amendments. This Declaration of Trust may be amended at
any time by an instrument in writing signed by a majority of the then Trustees
when authorized to do so by vote of Shareholders holding a majority of the
Shares of each series entitled to vote, except that an amendment which shall
affect the holders of one or more series of Shares but not the holders of all
outstanding series shall be authorized by vote of the Shareholders holding a
majority of the Shares entitled to vote of each series affected and no vote of
Shareholders of a series not affected shall be required. Any amendment which
shall affect the holders of Shares of one or more classes of a series but not
the holders of all Shares of a series shall be authorized by vote of the
Shareholders holding a majority of the Shares of such classes affected by the
amendment voting together as a single class, and no vote of Shareholders of the
classes not affected shall be required. Amendments having the purpose of
changing the name of the Trust, of establishing, changing, or eliminating the
par value of the shares or of supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or inconsistent provision
contained herein shall not require authorization by Shareholder vote.
Section 9.10 Resident Agent. The Trust may appoint and maintain a
resident agent in the Commonwealth of Massachusetts.
Section 9.11 Filing of Copies; References; Headings. The original or
a copy of this instrument and of each amendment hereto shall be kept at the
office of the Trust where it may be inspected by any Shareholder. A copy of
this instrument and of each amendment hereto shall be filed by the Trust with
the Secretary of the Commonwealth of Massachusetts and with the Boston City
Clerk, as well as any other governmental office where such filing may from time
to time be required, but the failure to make any such filing shall not impair
the effectiveness of this instrument or any such amendment. Anyone dealing
with the Trust may rely on a certificate by an officer of the Trust as to
whether or not any such amendments have been made, as to the identities of the
Trustees and officers, and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such amendments. In this instrument and in any such amendment, references
to this instrument, and all expressions like "herein", "hereof" and "hereunder"
shall be deemed to refer to this instrument as a whole as the same may be
amended or affected by any such amendments. The masculine gender shall include
the feminine and neuter genders. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This
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instrument may be executed in any number of counterparts each of which shall be
deemed an original.
Section 9.12 Applicable Law. This Declaration of Trust is made in
the Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth, including the Massachusetts Business Corporation Law as the same
may be amended from time to time, to which reference is made with the intention
that matters not specifically covered herein or as to which an ambiguity may
exist shall be resolved as if the Trust were a business corporation organized
in Massachusetts, but the reference to said Business Corporation Law is not
intended to give the Trust, the Trustees, the Shareholders or any other person
any right, power, authority or responsibility available only to or in
connection with an entity organized in corporate form. The Trust shall be of
the type referred to in Section 1 of Chapter 182 of the Massachusetts General
Laws and of the type commonly called a Massachusetts business trust, and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust.
Section 9.13 Provisions in Conflict with Laws and Regulations. (a)
The provisions of the 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 of 1986, or any amendments or successor statute thereto,
or with other applicable laws and regulations, the conflicting provision shall
be deemed not to constitute and never to have constituted a part of the
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of the Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of the Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall apply only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of the Declaration in any jurisdiction.
Section 9.14 Use of the Name. Sierra Investment Advisors
Corporation ("Sierra") has consented to the use by the Trust of the identifying
word or name "Sierra" in the name of the Trust. Such consent is conditioned
upon the employment of Sierra, its successors or any affiliate thereof as
Investment Advisor or administrator of the Trust. As between the Trust and
Sierra, Sierra controls the use of the name of the Trust insofar as such
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name contains "Sierra." The name or identifying word "Sierra" may be used from
time to time in other connections and for other purposes by Sierra or
affiliated entities. Sierra may require the Trust to cease using "Sierra" in
the name of the Trust if the Trust ceases to employ, for any reason, Sierra, an
affiliate or any successor as Investment Advisor of the Trust.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
for himself and his assigns, as of the 4th day of October, 1995.
/s/ F. Xxxxx Xxxxxx
---------------------------
F. Xxxxx Xxxxxx
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THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
October 4, 1995
Then personally appeared the above-named F. Xxxxx Xxxxxx and
acknowledged the foregoing instrument to be his free act and deed, before me.
/s/ Xxxx Xxxxxxx
---------------------------
Notary Public
My. Commission expires: 2/26/1999
[Notary Seal]
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