1
EXHIBIT (1)
================================================================================
CADRE NETWORK HEALTH FINANCIAL SERVICES TRUST,
A CALIFORNIA TRUST
--------------------------------------
DECLARATION OF TRUST
(AMENDED AND RESTATED)
March 14, 1997
--------------------------------------
================================================================================
2
TABLE OF CONTENTS
PAGE
ARTICLE 1 THE TRUST ....................................................... 1
1.1 Name............................................................. 1
1.2 Nature of Trust.................................................. 2
1.3 Definitions...................................................... 2
ARTICLE 2 PORTFOLIOS, SHARES OF BENEFICIAL
OWNERSHIP, ETC ................................................. 3
2.1 Authorized Shares............................................... 3
2.2 Powers, Preferences and Participations.......................... 4
2.3 Investment in the Trust......................................... 5
2.4 Status of Shares................................................ 5
2.5 No Certificates; Nontransferability of Interests................ 5
2.6 Redemption...................................................... 6
2.7 Exchange........................................................ 6
ARTICLE 3 VALUATION ...................................................... 7
ARTICLE 4 POWERS OF THE TRUSTEES ......................................... 7
4.1 General.......................................................... 7
4.2 Legal Title..................................................... 8
4.3 Disposition of Assets............................................ 8
4.4 Taxes............................................................ 8
4.5 Rights as Holders of Trust Property.............................. 8
4.6 Delegation; Committees........................................... 9
4.7 Collection....................................................... 9
4.8 Payment of Expenses.............................................. 10
4.9 Deposits......................................................... 10
4.10 Valuation....................................................... 10
4.11 Fiscal Year; Accounts........................................... 10
4.12 Concerning the Trust and Certain Affiliates..................... 10
4.13 Investment Program.............................................. 11
4.14 Power to Contract, Appoint, Retain and Employ................... 11
4.15 Insurance....................................................... 12
4.16 Indemnification................................................. 12
4.17 Remedies........................................................ 12
4.18 Further Powers.................................................. 13
ARTICLE 5 LIMITATIONS OF LIABILITY ....................................... 13
5.1 Liability to Third Persons....................................... 13
5.2 Liability to the Trust or the Participants....................... 13
5.3 Indemnification.................................................. 13
5.4 Surety Bonds..................................................... 15
3
5.5 Apparent Authority............................................... 15
5.6 Trust Obligations................................................ 15
5.7 Reliance on Experts, Etc......................................... 16
5.8 Liability Insurance.............................................. 16
ARTICLE 6 RECORD OF SHARES ................................................ 16
6.1 Share Register................................................... 16
6.2 Owner of Record.................................................. 16
6.3 No Transfers or Pledges of Shares................................ 17
6.4 Limitation of Fiduciary Responsibility........................... 17
6.5 Notices.......................................................... 17
ARTICLE 7 PARTICIPANTS .................................................... 17
7.1 Voting........................................................... 17
7.2 Meetings of Participants......................................... 18
7.3 Quorum........................................................... 18
7.4 Notice of Meetings............................................... 18
7.5 Record Date for Meetings and Votes............................... 18
7.6 Proxies, Etc..................................................... 19
7.7 Financial Records; Reports; Etc.................................. 19
7.8 Inspection of Records............................................ 20
ARTICLE 8 TRUSTEES AND OFFICERS ........................................... 20
8.1 Number........................................................... 20
8.2 Qualifications of Trustees....................................... 20
8.3 Term and Election................................................ 20
8.4 Resignation and Removal.......................................... 20
8.5 Vacancies........................................................ 20
8.6 Meetings......................................................... 21
8.7 Officers......................................................... 22
8.8 Bylaws........................................................... 22
ARTICLE 9 AMENDMENT OR TERMINATION OF TRUST;
DURATION OF TRUST ............................................... 22
9.1 Amendments to Declaration........................................ 22
9.2 Duration and Termination......................................... 22
ARTICLE 10 MISCELLANEOUS ........................................................ 23
10.1 Governing Law................................................... 23
10.2 Reliance by Third Parties....................................... 23
10.3 Provisions in Conflict with Law................................. 24
10.4 Gender; Section Headings........................................ 24
ii
4
DECLARATION OF TRUST
(AMENDED AND RESTATED)
THIS AMENDED AND RESTATED DECLARATION OF TRUST is made as of
_______________, 1997, by the Hospital Council of Northern and Central
California, a California nonprofit mutual benefit corporation (the "Declarant"):
W I T N E S S E T H:
WHEREAS, Declarant established and organized a California common law trust
pursuant to a Declaration of Trust made as of February 12, 1992 for the joint
investment of funds in order to enhance the investment opportunities available
to persons who are Eligible Participants and become Participants;
WHEREAS, the beneficial interest in the Trust's assets are divided into
non-transferable Shares of beneficial interest which are evidenced by a share
register maintained by the Trust or its agent;
WHEREAS, the Trust was being formed to act as an open-end, diversified
management investment company registered with the Securities and Exchange
Commission under the Investment Company Act of 1940; and
WHEREAS, Declarant desires to amend and restate the Declaration of Trust as
hereinafter set forth.
NOW, THEREFORE, Declarant hereby declares that all monies, securities, and
other property now or hereafter acquired pursuant to this Declaration of Trust
shall be held and managed in trust, upon the terms and conditions set forth in
this Amended and Restated Declaration for the proportionate benefit of the
holders of record from time to time of Shares of beneficial interest issued and
to be issued hereunder.
ARTICLE 1
THE TRUST
1.1 NAME. The name of the trust (the "Trust") created by this Declaration
of Trust shall be Cadre Network Health Financial Services Trust and, so far as
may be practicable, the Trustees shall conduct the Trust's activities under that
name. The name of the Trust (and the word "Trust" wherever used in this
Declaration, except where the context otherwise requires) shall refer to the
Trustees in their capacity as Trustees, and not individually or personally.
Should the Trustees determine that
5
the use of such name is not legal or convenient, they may use such other
designation or they may adopt such other name for the Trust as they deem proper,
and the Trust may hold property and conduct its activities under such
designation or name. The Trustees shall have full and complete power to change
the name of the Trust at any time and from time to time, in their sole
discretion, without the vote of the Participants; provided, that notice of any
such change of name shall be promptly given to the Participants.
1.2 NATURE OF TRUST. The Trust shall be a common law trust organized and
existing under the laws of the State of California. The Trust is not intended to
be and shall not be deemed to be a general partnership, limited partnership,
joint venture, corporation, joint stock company or other entity. The
Participants shall be beneficiaries of the Trust, and their relationship to the
Trustees shall be solely in their capacity as Participants and trust
beneficiaries in accordance with the rights conferred upon them hereunder.
1.3 DEFINITIONS. As used in this Declaration of Trust, the following terms
shall have the following meanings unless the context hereof otherwise requires:
"AFFILIATE" shall mean, with respect to any Person, another Person directly
or indirectly controlling, controlled by or under common control with such other
Person, or any officer, director, partner or employee of such other Person.
"ASSETS BELONGING TO" a Portfolio shall have the meaning defined in Section
2.2(a).
"DECLARATION OF TRUST" shall mean this Amended and Restated Declaration of
Trust, as amended, restated or modified from time to time. References in this
Declaration of Trust to "Declaration", "hereof", "herein", "hereby" and
"hereunder" shall be deemed to refer to this Amended and Restated Declaration of
Trust and shall not be limited to the particular text, article or section in
which such words appear.
"ELIGIBLE PARTICIPANT" shall mean a person who is a hospital, health
system, health facility, medical group, health insuring organization, or other
health care institution, provider or payor.
"INVESTMENT COMPANY ACT" shall mean the Investment Company Act of 1940, as
amended, and the regulations promulgated thereunder.
2
6
"NET ASSET VALUE OF THE SHARES" and "NET ASSET VALUE OF THE RESPECTIVE
PORTFOLIOS" shall mean values determined as provided in Article 3.
"PARTICIPANTS" shall have the meaning defined in Section 2.3.
"PERSON" shall mean and include natural persons, corporations,
partnerships, joint stock companies, joint ventures, associations, trusts,
business trusts and other entities.
"PORTFOLIO" shall mean an investment portfolio represented by a separate
class of Shares established by the Trustees in accordance with Article 2.
"PROSPECTUS" shall mean the prospectus for each Portfolio distributed by
the Trust to Participants and to potential Participants, as the same may be
amended from time to time.
"SHARE" or "SHARES" shall mean the unit used to denominate and measure the
respective pro rata beneficial interests of the Participants in the Trust and
any Portfolio as provided in Article 2.
"TRUST" shall have the meaning defined in Section 1.1.
"TRUSTEES" shall mean the Persons who become fiduciaries of the Trust
pursuant to Article 8.
"TRUST PROPERTY" shall mean, as of any particular time, any and all
property, real, personal or otherwise, tangible or intangible, which has been
transferred, conveyed or paid to the Trust or Trustees and all income, profits
and gains therefrom and which, at such time, is owned or held by, or for the
account of, the Trust or the Trustees.
ARTICLE 2
PORTFOLIOS, SHARES OF BENEFICIAL OWNERSHIP, ETC.
2.1 AUTHORIZED SHARES. The beneficial interest in the Trust shall be
divided into Shares and fractions thereof, and the Trust shall have authority to
issue an unlimited number of Shares without par value. The Shares shall be
divided into Portfolios. The initial Portfolio shall be known as the "Cadre
Network Health Financial Services Liquid Asset Fund," which shall have the
investment objective of seeking to obtain a high level of current income and
stability of principal by investing in short-term securities.
3
7
A portion of the assets of each Portfolio may be held, without limitation
on amount, in cash equivalents. Cash equivalents are short-term interest-bearing
instruments in which funds are invested temporarily pending longer-term
investment or in which funds are invested when market conditions dictate a more
"defensive" investment strategy. The instruments may include, but are not
limited to, commercial paper, certificates of deposit, repurchase agreements,
bankers acceptances and United States Treasury Bills.
The Trustees shall have full power and authority, without obtaining any
prior authorization or vote of any of the Participants: (i) to create and
establish any additional, Portfolio or Portfolios with preferences, voting
powers, rights and privileges as the Trustees may from time to time determine,
(ii) to divide or combine the Shares of any Portfolio or Portfolios into a
greater or less number, (iii) to classify or reclassify any issued Shares into
one or more Portfolios so long as such classification or reclassification will
not have a material adverse effect on Participants that own Shares of any of the
Portfolios, (iv) to terminate any Portfolio upon sixty (60) days' notice to the
Participants owning shares of that Portfolio in the event that the net asset
value of such Portfolio is less than $5,000,000 on the date of such notice, and
(v) take such other action with respect to the Shares of any Portfolio or
Portfolios as the Trustees may deem desirable, subject to the terms of this
Declaration.
2.2 POWERS, PREFERENCES AND PARTICIPATIONS. Each Portfolio shall have the
following powers, preferences and participating or other special rights, and the
qualifications, restrictions and limitations thereof shall be as follows:
(a) All consideration received by the Trust for the issue and sale of
Shares of each Portfolio, together with all income, earnings, profits and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong for all
purposes to the Portfolio with respect to such assets, payments or funds were
received by the Trust, subject only to the rights of creditors of the Trust, and
shall be so handled on the books of account of the Trust. Such assets, income,
earnings, profits and proceeds derived from the sale, exchange or liquidation
and any assets derived from any reinvestment of such proceeds in whatever form
the same may be, are herein referred to as "assets belonging to" such Portfolio.
(b) The Trustees may from time to time declare and pay dividends or
distributions to the Participants, in Shares or in cash, on all or any of the
Portfolios, the amount of such
4
8
dividends or distributions, and the payment of them, being wholly in the
discretion of the Trustees. Dividends or distributions on any Portfolio shall be
paid only out of the earnings or other lawfully available assets belonging to
such Portfolio.
(c) In the event of the liquidation or dissolution of the Trust,
Participants owning Shares of each Portfolio shall be entitled to receive, as a
class, out of the assets of the Trust available for distribution to
Participants, the assets belonging to such Portfolio, and the assets so
distributed among such Participants shall be distributed among such Participants
in proportion to the number of Shares of such Portfolio held by them and
recorded on the books of the Trust. In the event that there are any general
assets not belonging to any particular Portfolio and available for distribution,
then, after the distribution of the assets belonging to each Portfolio, a
distribution of such general assets shall be made to all Portfolios in
proportion to the net asset value of the respective Portfolios prior to the
distribution of assets belonging to each Portfolio.
(d) The assets belonging to any Portfolio shall be charged with the
liabilities in respect to such Portfolio, and shall also be charged with a share
of the general liabilities of the Trust in a fair and equitable manner under
policies and procedures established by the Trustees. The determination of the
Trustees shall be conclusive as the amount of liabilities, including accrued
expenses and reserves, as to the allocation of the same as to a given Portfolio
and as to whether the same or general assets of the Trust are allocable to one
or more Portfolios.
2.3 INVESTMENT IN THE TRUST. Shares may be owned only by Eligible
Participants. An Eligible Participant shall become a participant ("Participant")
as of the date on which the payment of consideration to the Trust for Shares is
accepted by the Trustees for one or more Portfolios. The Trustees in their sole
discretion may decline to accept payments of consideration from any Eligible
Participant or Participant. The Trustees may establish minimum dollar amounts of
initial or additional consideration to be paid for Shares. Shares shall be
issued to Participants on the basis of the net asset value of the Shares of such
Portfolio next determined after receipt by the Trust of the Participant's
consideration for such Shares. Any Participant may have an interest in more than
one Portfolio.
2.4 STATUS OF SHARES. Shares acquired by Participants in the manner
described in Section 2.3 shall be fully paid and nonassessable. No Participant
shall have preemptive rights.
2.5 NO CERTIFICATES; NONTRANSFERABILITY OF INTERESTS. Ownership of Shares
shall be recorded on the books of the Trust
5
9
or its transfer agent as provided in Article 6. No certificate or other document
shall be issued evidencing Shares or any interest in the Trust. No Participant
shall have the right or power to sell, assign or otherwise transfer any Share or
any part of its interest in the Trust, or use the same as security for a loan.
2.6 REDEMPTION. A Participant may require the Trust, to the extent that the
class of Shares in question has assets lawfully available therefor and out of
such assets but not otherwise, to redeem all or any part of the Shares
outstanding on the books of the Trust in the name of such Participant, payable
as provided in the Investment Company Act. Shares will be redeemed at the net
asset value of such Shares next determined after receipt by the Trust of a
request for redemption. The Trust shall make payment for any such redemption in
cash, or if in the opinion of the Trustees, which shall be conclusive,
conditions exist which make payment wholly or partly in securities or other
property belonging to the Trust, the value of which shall be determined as
provided in Article 3, provided that all distributions made as of any one
valuation date shall be made pro rata on the same basis. The Trust may, to the
extent necessary, sell or cause to be sold any securities belonging to a
Portfolio to provide cash to pay for Shares of such Portfolio that are redeemed.
The Trustees may not suspend the right of the holders of the Shares of any
Portfolio to require the Trust to redeem Shares of such Portfolio except as
permitted by the Investment Company Act.
2.7 EXCHANGES. A Participant shall be entitled, subject to such limitations
as the Trustees in their sole discretion may adopt, to convert all or any part
of the Shares of any Portfolio owned by such Participant into Shares of any
other Portfolio. Shares may be exchanged at the net asset value next determined
after receipt by the Trustees of a request for exchange in proper form. The
Trustees shall determine the net asset value of the Shares to be converted, and
within five business days after receipt of such request, shall transfer to such
Participant on the books of the Trust such number of Shares of the Portfolio
desired as, taken at the net asset value thereof determined in the same manner
and at the same time as that of the Shares exchanged, shall equal the net asset
value of the Shares exchanged. Any amount representing a fraction of a Share
shall be paid in fractional Shares. Upon any conversion, proper transfer shall
be made between the assets belonging to the various Portfolios of Shares
involved.
6
10
ARTICLE 3
VALUATION
The net asset value per Share of each Portfolio shall be determined by
dividing the total value of the Portfolio's assets less any liabilities,
including the fees payable for advisory and other services, by the number of
outstanding Shares. The Portfolio shall be charged with the liabilities in
respect to such Portfolio, and shall also be charged with a share of the general
liabilities of the Trust proportionate to the net asset value of such Portfolio.
The determination of the net asset value of Shares may be delegated by the
Trustees.
The net asset value of Shares shall be determined at such time or times and
in such manner as is determined by the Trustees and as required by the
Investment Company Act. The method of determining the value of Portfolio assets
shall be established by the Trustees and shall be set forth in the Prospectus.
ARTICLE 4
POWERS OF THE TRUSTEES
4.1 GENERAL. Subject to the rights of the Participants as provided herein,
the Trustees shall have, to the extent permitted by applicable law, full,
exclusive and absolute power, control and authority over the Trust Property and
over the affairs of the Trust to the same extent as if the Trustees were the
sole and absolute owners of the Trust Property. The Trustees may do and perform
such acts and things as in their sole judgment and discretion are necessary and
proper for conducting the affairs of the Trust or promoting the interests of the
Trust and the Participants. The enumeration of any specific power or authority
herein shall not be construed as limiting the aforesaid general power or
authority or any specific power or authority. The Trustees may exercise or
delegate to others any power authorized and granted to them by this Declaration
of Trust. Such powers of the Trustees may be exercised without the necessity of
any order of, or resort to, any court.
Except as otherwise provided in this Declaration of Trust, the Trustees
shall not be limited by any law now or hereafter in effect limiting the
investments which may be held or retained by trustees or other fiduciaries, and
they shall have full authority and power to make any and all Trust investments
within the limitations of this Declaration of Trust, that they, in their
absolute discretion, shall determine to be advisable and appropriate. The
Trustees shall have no liability for loss with respect to Trust investments made
as permitted by this Declaration of Trust, even though such investments shall be
of a
7
11
character or in an amount not otherwise considered proper for the investment of
trust funds by trustees or other fiduciaries. Notwithstanding the foregoing or
anything herein to the contrary, the Trustees shall make Trust investments for
each Portfolio only in accordance with the investment objectives and policies of
such Portfolio as set forth in its Prospectus.
4.2 LEGAL TITLE. Legal title to all of the Trust Property shall be vested
in the Trustees and be held by and transferred to the Trustees, except that the
Trustees shall have full power to cause legal title to any Trust Property to be
held by or in the name of the Trust, or in the name of any other Person as
nominee, on such terms, in such manner, and with such powers as the Trustees may
determine. The right, title and interest of the Trustees in and to the Trust
Property shall vest automatically in all persons who may hereafter become
Trustees upon their due election and qualification without any further act. Upon
the resignation, disability, removal, adjudication as an incompetent, or death
of a Trustee, he (and in the event of his death, his estate) shall automatically
cease to have any right, title or interest in or to any of the Trust Property,
and the right, title and interest of such Trustee in and to the Trust Property
shall vest automatically in the remaining Trustees without any further act.
4.3 DISPOSITION OF ASSETS. The Trustees shall have full power to sell,
exchange or otherwise dispose of any and all Trust Property free and clear of
any and all trusts, at public or private sale, for cash or on terms, with or
without advertisement, and subject to such restrictions, stipulations,
agreements and reservations as they shall deem proper, and to execute and
deliver any deed, power, assignment, xxxx of sale, or other instrument in
connection with the foregoing. The Trustees shall also have full power in
furtherance of the affairs and purposes of the Trust, to give consents and make
contracts relating to Trust Property or its use.
4.4 TAXES. The Trustees shall have full power: (i) to pay all taxes or
assessments, of whatever kind or nature, validly and lawfully imposed upon or
against the Trust or the Trustees in connection with the Trust Property or upon
or against the Trust Property or income or any part thereof; (ii) to settle and
compromise disputed tax liabilities; and (iii) for the foregoing purposes to
make such returns and do all such other acts and things as may be deemed by the
Trustees to be necessary or desirable.
4.5 RIGHTS AS HOLDERS OF TRUST PROPERTY. The Trustees shall have full power
to exercise all of the rights, powers and privileges appertaining to the
ownership of all Trust Property to the same extent that any individual might,
and, without limiting
8
12
the generality of the foregoing, to vote or give any consent, request or notice
or waiver, any notice either in person or by proxy or power of attorney, with or
without the power of substitution, to one or more Persons, which proxies and
powers of attorney may be for meetings or actions generally, or for any
particular meeting or action, and may include the exercise of discretionary
powers.
4.6 DELEGATION; COMMITTEES. The Trustees shall have full power (consistent
with their continuing exclusive authority over the management of the Trust, the
conduct of its affairs, their duties and obligations as Trustees, and the
management and disposition of Trust Property) to delegate from time to time to
such one or more of their number (who may be designated as constituting a
Committee of the Trustees) or to officers, employees or agents of the Trust the
doing of such acts and things and the execution of such instruments either in
the name of the Trust, or the names of the Trustees or as their attorney or
attorneys, or otherwise as the Trustees may from time to time deem expedient and
appropriate in the furtherance of the business affairs and purposes of the
Trust.
4.7 COLLECTION. The Trustees shall have full power: (i) to collect, xxx
for, receive and give receipt for all sums of money or other property due to the
Trust; (ii) to consent to extensions of the time for payment, or to the renewal
of any securities, investments or obligations; (iii) to engage or intervene in,
prosecute, defend, compromise, abandon or adjust by arbitration or otherwise any
actions, suits, proceedings, disputes, claims, demands or things relating to the
Trust Property; (iv) to foreclose any collateral, security or instrument
securing any investments, notes, bills, bonds, obligations or contracts by
virtue of which any sums of money are owed to the Trust; (v) to exercise any
power of sale held by them, and to convey good title thereunder free of any and
all trusts, and in connection with any such foreclosure or sale, to purchase or
otherwise acquire title to any property; (vi) to be parties to reorganization
and to transfer to and deposit with any corporation, committee, voting trustee
or other Person any securities, investments or obligations of any Person which
form a part of the Trust Property, for the purpose of such reorganization or
otherwise; (vii) to participate in any arrangement for enforcing or protecting
the interests of the Trustees as the owners or holders of such securities,
investments or obligations and to pay any assessment levied in connection with
such reorganization or arrangement; (viii) to extend the time (with or without
security) for the payment or delivery of any debts or property and to execute
and enter into releases, agreements and other instruments; and (ix) to pay or
satisfy any debts or claims upon any evidence that the Trustees shall think
sufficient.
9
13
4.8 PAYMENT OF EXPENSES. The Trustees shall have full power: (i) to incur
and pay any charges or expenses which in the opinion of the Trustees are
necessary or incidental to or proper for carrying out any of the purposes of
this Declaration of Trust; (ii) to reimburse others for the payment thereof; and
(iii) to pay appropriate compensation or fees from the funds of the Trust to
Persons with whom the Trust has contracted or transacted business. The Trustees
shall fix the compensation, if any, of all officers and employees of the Trust.
The Trustees shall not be paid compensation for their general services as
Trustees hereunder. The Trustees may reimburse themselves or any other Person
for any and all charges or expenses incurred or paid by any of them on behalf of
the Trust or any Portfolio. The Trustees may allocate such expenses among
various Portfolios in such manner and proportion as appropriate in the
discretion of the Trustees.
4.9 DEPOSITS. The Trustees shall have full power to deposit any monies or
funds included in the Trust Property, and intended to be used for the payment of
expenses of the Trust or the Trustees, with one or more banks, trust companies
or other banking institutions whether or not such deposits will draw interest so
long as the depository enters into a custodian agreement acceptable to the
Trustees. Such deposits are to be subject to withdrawal in such manner as the
Trustees may determine, and the Trustees shall have no responsibility for any
loss which may occur by reason of the failure of the bank, trust company or
other banking institution with whom the monies, investments, or securities have
been deposited.
4.10 VALUATION. Subject to the requirements of the Investment Company Act,
the Trustees shall have full and complete power to determine in good faith or
cause other Persons to determine conclusively the value of any of the Trust
Property and the method by which the Trust Property is to be valued.
4.11 FISCAL YEAR; ACCOUNTS. Subject to the requirements of the Investment
Company Act, the Trustees shall have full power to determine the fiscal year of
the Trust and the method or form in which its accounts shall be kept and from
time to time to change the fiscal year or method or form of accounts. The
Trustees may establish different fiscal years for the various Portfolios as
appropriate in the discretion of the Trustees.
4.12 CONCERNING THE TRUST AND CERTAIN AFFILIATES.
(a) Subject to the requirements of the Investment Company Act, the
Trustees may (but need not), in their discretion, from time to time, adopt
standards with respect to conflicts of interest, trading on the basis of
material nonpublic information, the appropriateness of the Trust paying its
10
14
distribution and marketing expenses and similar matters to govern (i) Trustees,
officers, directors, employees and agents of the Trust and their Affiliates and
(ii) such other Persons and their Affiliates as the Trustees may deem
appropriate.
(b) Any Trustee or officer, employee, or agent of the Trust may, in
his personal capacity, or in a capacity as trustee, officer, director,
stockholder, partner, member, agent, adviser or employee of any Person, have
business interests and engage in business activities in addition to those
relating to the Trust, which interests and activities may be similar to those of
the Trust and include the acquisition, syndication, holding, management,
operation or disposition of securities, investments and funds, for his own
account or for the account of such Person. Each Trustee, officer, employee and
agent of the Trust shall be free of any obligation to present to the Trust any
investment opportunity which comes to him in any capacity other than solely as
Trustee, officer, employee or agent of the Trust, even if such opportunity is of
a character which, if presented to the Trust, could be taken by the Trust.
4.13 INVESTMENT PROGRAM. The Trustees shall use their best efforts to
obtain through qualified Persons a continuing and suitable investment program,
consistent with the investment objectives and policies of each Portfolio. The
Trustees shall also have full power to contract for or otherwise obtain from or
through qualified Persons for the benefit of, and to make available to, the
Participants of the Trust from time to time, additional investment and
noninvestment programs and services distinct from the Trust's program of
investments measured by Shares, but consistent with the objectives of the Trust
and the general purposes of this Declaration of Trust. The Trustees shall have
the power to review and approve or reject, in their sole discretion, such
additional investment and noninvestment programs as may be presented to the
Trustee by such qualified Persons.
4.14 POWER TO CONTRACT, APPOINT, RETAIN AND EMPLOY. The Trustees shall have
full power to appoint or discharge, employ or dismiss, retain or terminate, or
contract or cancel the contract with any Person as the Trustees may deem
necessary or desirable for the transaction of the affairs of the Trust, or the
transaction of the affairs of any additional investment programs or services or
noninvestment programs or services of any nature affiliated with the Trust or
otherwise contracted for or by the Trust, including any Person or Persons who,
may, among other things: (i) serve as the Trust's investment adviser; (ii) serve
as the Trustee's administrator or co-administrator; (iii) serve as the Trust's
marketing agent; (iv) furnish reports to the Trustees and provide research,
economic and statistical data in connection with the Trust's investments; (v)
act as managers,
11
15
consultants, accountants, technical advisers, attorneys, brokers, underwriters,
corporate fiduciaries, escrow agents, depositories, custodians or agents for
collection, insurers or insurance agents, registrars for Shares or in any other
capacity deemed by the Trustees to be necessary or desirable; (vi) investigate,
select, and, on behalf of the Trust, conduct relations with Persons acting in
such capacities and pay appropriate fees to, and enter into appropriate
contracts with, or employ, or retain services performed or to be performed by,
any of them in connection with the investments acquired, sold, or otherwise
disposed of, or committed, negotiated, or contemplated to be acquired, sold or
otherwise disposed of; (vii) act as attorney-in-fact or agent in the purchase or
sale or other disposition of investments, and in the handling, prosecuting or
other enforcement of any lien or security securing investments; (viii) assist in
the performance of such ministerial functions necessary in the management of the
Trust as may be agreed upon with the Trustees; and (ix) any of the foregoing as
may be agreed upon by the Trustees with regard to any additional investment and
noninvestment programs and services for the benefit of the Participants.
4.15 INSURANCE. The Trustees shall have full power to purchase and pay for,
entirely out of Trust Property, insurance policies insuring the Trust and the
Trustees, officers, employees and agents, 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, for by reason of any action alleged to have
been taken or omitted by the Trust or any such Person as Trustee, officer,
employee and agent, including any action taken or omitted that may be determined
to constitute negligence, whether or not the Trustee would have the power to
indemnify such Person against such liability.
4.16 INDEMNIFICATION. In addition to the mandatory indemnification provided
for in Section 5.3, the Trustees shall have full power, to the extent permitted
by applicable laws, including without limitation, the Investment Company Act, to
indemnify or enter into agreements with respect to indemnification with any
Person with whom the Trust has dealings, to such extent as the Trustees shall
determine.
4.17 REMEDIES. Notwithstanding any provision in this Declaration of Trust,
when the Trustees deem that there is a significant risk that an obligor to the
Trust may default or is in default under the terms of any obligation to the
Trust, the Trustees shall have full power to pursue any remedies permitted by
law which, in their sole judgment, are in the interests of the Trust, and the
Trustees shall have full power to enter into any investment, commitment or
obligation of the Trust resulting from
12
16
the pursuit of such remedies as are necessary or desirable to dispose of
property acquired in the pursuit of such remedies.
4.18 FURTHER POWERS. The Trustees shall have full power to take all such
actions, do all such matters and things and execute all such instruments as they
deem necessary, proper or desirable in order to carry out, promote or advance
the interests and purposes of the Trust although such actions, matters or things
are not herein specifically mentioned. Any determination as to what is in the
best 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
shall not be required to obtain any court order to deal with the Trust Property.
ARTICLE 5
LIMITATIONS OF LIABILITY
5.1 LIABILITY TO THIRD PERSONS. No Participant shall be subject to any
personal liability whatsoever, in tort, contract or otherwise, to any other
Person in connection with Trust Property or the affairs of the Trust; and no
Trustee, officer, employee of the Trust or other Person designated by the
Trustees shall be subject to any personal liability whatsoever, in tort,
contract or otherwise, to any other Person in connection with Trust Property or
the affairs of the Trust, except for that arising from bad faith, willful
misconduct, gross negligence or reckless disregard of duties; and all such other
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust.
5.2 LIABILITY TO THE TRUST OR THE PARTICIPANTS. No Trustee, officer,
employee or agent of the Trust shall be liable to the Trust or to any
Participant, trustee, officer, employee or agent of the Trust for any action or
failure to act (including, without limitation, the failure to compel in any way
any former or acting Trustee to redress any breach of trust) except for his own
bad faith, willful misconduct, gross negligence or reckless disregard of his
duties; provided, that the provisions of this Section 5.2 shall not limit the
liability of any Person with respect to breaches by it of a contract between it
and the Trust.
5.3 INDEMNIFICATION.
(a) The Trust shall indemnify and hold each Participant harmless from
and against all claims and liabilities, whether they proceed to judgment or are
settled or otherwise brought to a conclusion, to which such Participant may
become subject by reason of its being or having been a Participant, and shall
13
17
reimburse such Participant for all legal and other expenses reasonably incurred
by it in connection with any such claim or liability. The rights accruing to a
Participant under this Section 5.3 shall not exclude any other right to which
such Participant may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Participant in any
appropriate situation even though not specifically provided herein.
(b) The Trust shall indemnify each of its Trustees, officers,
employees and agents and other Persons designated by the Board of Trustees to
receive such indemnification, against all liabilities and expenses (including,
without limitation, amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and counsel fees) reasonably incurred by him in
connection with the defense or disposition of any action, suit or other
proceeding by the Trust or any other Person, whether civil or criminal, in which
he may be involved or with which he may be threatened, while an officer or
thereafter, by reason of his being or having been such a Trustee, officer,
employee, agent or otherwise designated person, except as to any matter as to
which he shall have been adjudicated to have acted in bad faith or with willful
misconduct or reckless disregard of his duties or gross negligence; provided,
that the provisions of this Section 5.3(b) shall not be construed to permit the
indemnification of any Person with respect to breaches by it of a contract
between it and the Trust; further provided, that as to any matters disposed of
by a compromise payment by such Trustee, officer, employee, agent or otherwise
designated Person, pursuant to a consent decree or otherwise, no indemnification
either for said payment or for any other expenses shall be provided unless the
Trust shall have determined that the officer, Trustee, employee, agent or
otherwise designated Person acted in good faith in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Trust and, with
respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful. The determination of whether such officer, Trustee,
employee, or agent has met the standard set forth in the preceding sentence
shall be made: (i) by the Trustees by a majority vote of a quorum consisting of
Trustees who were not parties to the action, suit or other proceeding; (ii) if
such quorum is not obtainable or if obtainable and, a majority vote of a quorum
of disinterested Trustees so directs, by independent legal counsel in a written
opinion; or (iii) by a majority vote of the Participants. The rights accruing to
any Trustee, officer, employee, agent or otherwise designated Person under the
provisions of this Section 5.3(b) shall not exclude any other right to which he
may be lawfully entitled; provided, that no Trustee, officer, employee, agent or
otherwise designated Person may satisfy any right of indemnity or reimbursement
granted herein or to which he may be otherwise entitled except out of the
14
18
Trust Property, and no Participant shall be personally liable to any Person with
respect to any claim for indemnity or reimbursement or otherwise. The Trustees
may make advance payments in connection with indemnification under this Section
5.3(b), provided that the indemnified Trustee, officer, employee, agent or
otherwise designated Person shall have given a written undertaking to reimburse
the Trust in the event that it is subsequently determined that he is not
entitled to such indemnification.
(c) Any action taken by, or conduct on the part of, a Trustee, an
officer, an employee, an agent of the Trust or other Person designated by the
Trustees, in conformity with, or in good faith reliance upon, the provisions of
Section 5.7 hereof shall not, for the purpose of this Declaration of Trust
(including, without limitation, Sections 5.1, 5.2 and 5.3) constitute bad faith,
willful misconduct, gross negligence or reckless disregard of his duties.
(d) Notwithstanding the foregoing, any indemnification shall be made
by the Trust only as permitted by the Securities Act of 1933, as amended, and
the Investment Company Act.
5.4 SURETY BONDS. No Trustee shall, as such, be obligated to give any bond
or surety or other security for the Performance of any of his duties.
5.5 APPARENT AUTHORITY. Unless otherwise required by or pursuant to
applicable law, no purchaser, seller, transfer agent or other Person dealing
with the Trustees or any officer, employee or agent of the Trust shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made by the Trustees or by such officer, employee or agent or make inquiry
concerning or be liable for the application of money or property paid,
transferred or delivered to or on the order of the Trustees or of such officer,
employee or agent.
5.6 TRUST OBLIGATIONS. Any written instrument creating an obligation of the
Trust shall be conclusively taken to have been executed by a Trustee or an
officer, employee or agent of the Trust only in his capacity as a Trustee under
this Declaration of Trust or in his capacity as an officer, employee or agent of
the Trust. Any written instrument creating an obligation of the Trust may refer
to this Declaration of Trust and contain a statement or acknowledgement to the
effect that the obligations thereunder are not personally binding upon, nor
shall resort be had to the property of, any of the Trustees, Participants,
officers, employees or agents of the Trust, and that only the Trust Property or
a specific portion thereof shall be bound; provided, that the omission of any
recital pursuant to this Section 5.6 shall not operate to impose personal
liability on any
15
19
of the Trustees, Participants, officers, employees or agents of the Trust.
5.7 RELIANCE ON EXPERTS, ETC. Each Trustee, officer, employee and agent of
the Trust shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel or upon reports made to the Trust by any of
its officers or employees or by any investment adviser, distributor, manager,
custodian, accountant, appraiser or other expert or consultant selected with
reasonable care by the Trustees or officers of the Trust.
5.8 LIABILITY INSURANCE. The Trustees may maintain insurance for the
protection of the Trust Property, and the Trustees, Participants, officers,
employees and agents of the Trust, in such amount as the Trustees shall deem
adequate to cover all foreseeable tort and contract liability to the extent
available at reasonable rates.
ARTICLE 6
RECORD OF SHARES
6.1 SHARE REGISTER. A share register shall be kept by or on behalf of the
Trustees, and shall contain the names and addresses of the Participants, the
number of Shares held by them, and a record of all allocations and redemptions
thereof. Such share register shall be conclusive as to the identity of the
holders of the Shares. Only Participants whose ownership of Shares is recorded
on such share register shall be entitled to receive distributions with respect
to Shares or otherwise to exercise or enjoy the rights and benefits related to
the ownership of Shares. No Participant shall be entitled to receive any
distribution, nor to have notices given to it as herein provided, until it has
given its appropriate address to such officer or agent of the Trust as shall
keep the share register for entry thereon.
6.2 OWNER OF RECORD. No Person becoming entitled to any Shares in
consequence of the merger, reorganization, consolidation, bankruptcy or
insolvency of any Participant or otherwise by operation of law who is not an
Eligible Participant, shall be recorded as the holder of such Shares and shall
only be entitled to the redemption value of such Shares. Until the Person
becoming entitled to such redemption value shall apply for the payment thereof
and present such proof of such entitlement as the Trustees may in their sole
discretion deem appropriate, the holder of record of such Shares shall be deemed
to be the holder of such Shares for all purposes hereof, and neither the
Trustees, the transfer agent nor any officer or other agent of the Trust
16
20
shall be affected by any notice of such merger, reorganization, consolidation,
bankruptcy, insolvency or other event.
6.3 NO TRANSFERS OR PLEDGES OF SHARES. The beneficial interest evidenced,
represented or measured by the Shares shall not be assignable or transferable
other than to the Trust itself for purposes of redemption.
6.4 LIMITATION OF FIDUCIARY RESPONSIBILITY. The Trustees shall not, nor
shall the Participants or any officer, transfer agent or other agent of the
Trust, be bound to see the execution of any trust, express, implied or
constructive, or of any charge, pledge or equity to which any of the Shares or
any interest thereof are subject, or to ascertain or inquire whether any
redemption of any such Shares by any Participant or its representatives is
authorized by such trust, charge, pledge or equity, or to recognize any Person
as having any interest therein except the Participant recorded as the holder of
such Shares. The receipt of the Participant in whose name any Share is recorded
or of the duly authorized agent of such Participant shall be a sufficient
discharge for all monies payable or deliverable in respect of such Shares and
from all liability to see to the proper application thereof.
6.5 NOTICES. Any and all notices to which Participants may be entitled and
any and all communications shall be deemed duly served or given if mailed,
postage prepaid, addressed to Participants of record at their last known post
office addresses as recorded on the share register provided for in Section 6.1.
ARTICLE 7
PARTICIPANTS
7.1 VOTING. On any matter submitted to a vote of the Participants, all
Shares then issued and outstanding shall be entitled to vote, shall be voted in
the aggregate and not by Portfolio, except
(a) when required by the Investment Company Act, Shares shall be
voted by individual Portfolio; and
(b) when the matter affects an interest of less than all Portfolios,
then only Participants that own Shares of the affected Portfolio or Portfolios
shall be entitled to vote.
Each Participant shall be entitled to exercise the voting rights of Shares
registered in the name of such Participant or the nominee thereof. Each full
Share shall be entitled to one vote and each fractional Share shall be entitled
to a corresponding fractional vote. All matters shall be decided by a
17
21
majority of the votes validly cast, except as otherwise required by law or this
Declaration of Trust. Participants shall not be entitled to cumulative voting.
7.2 MEETINGS OF PARTICIPANTS. Meetings of the Participants for such
purposes as may be permitted or required by law or this Declaration of Trust
shall be held at such time and place as may be determined by the Trustees and
specified in the notice of the meeting. The Participants shall, by an instrument
or concurrent instruments in writing delivered to the Board of Trustees signed
by the holders of at least ten percent (10%) of the Shares, have the right to
initiate a vote of the Participants as to any matter with regard to which
Participants have a right to vote. Within sixty (60) days of receipt of such
instrument or instruments, the Trustees shall cause a ballot to be sent to each
Participant, setting forth the matter to be voted on and the manner in which
such ballots should be executed and delivered or shall hold a meeting of the
Participants.
7.3 QUORUM. The presence at any meeting, in person or by proxy, of
Participants that hold one-third of the issued and outstanding Shares shall
constitute a quorum for transaction of business of the Trust, except that when a
provision of law or this Declaration of Trust permits or requires that the
Shares be voted by Portfolio, then the Participants that hold one-third of the
issued and outstanding Shares of that Portfolio shall constitute a quorum for
transaction of business of that Portfolio.
In the absence of a quorum, the Participants that are present in person or
represented by proxy, by majority vote, may adjourn the meeting to another time
and place. No notice of adjournment need be given, and the business that might
have been transacted at the meeting originally called may be transacted at any
adjourned meeting at which a quorum is present.
7.4 NOTICE OF MEETINGS. Notice of meetings of the Participants, stating the
date, time, place and purposes of the meeting, and notice of any vote without a
meeting stating the purpose and method thereof, shall be given by the Trustees
by mail to each Participant at its registered address, mailed at least ten (10)
days before the date of the meeting. Only the business stated in the notice of
the meeting, shall be considered at such meeting.
7.5 RECORD DATE FOR MEETINGS AND VOTES. For the purpose of determining the
Participants that are entitled to notice of and to vote at any meeting or any
adjournment thereof, or that are entitled to participate in any dividend or
distribution, or for the purpose of any other action, the Trustees may from time
to time fix a date not more than thirty (30) days prior to the date
18
22
of any meeting or vote of Participants or other action as a record date for the
determination of Participants entitled to notice of and to vote at such meeting
or any adjournment thereof or to be treated as holders of record of Shares for
purposes of such other action. Any Participant who was a Participant at the time
so fixed shall be entitled to notice of and to vote at such meeting, even though
it holds no Shares at the time of the meeting. No Person becoming a Participant
after the record date shall be entitled to vote at such meeting or to cast a
ballot in such vote or to be treated as a holder of record of Shares for
purposes of such other action.
7.6 PROXIES, ETC. At any meeting of Participants, any Participant entitled
to vote may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Secretary of the Trust, or
with such other officer or agent of the Trust as the Trustees 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
Trustees or nominees for Trustees. A proxy purporting to be executed by or on
behalf of a Participant shall be deemed valid unless challenged at or prior to
its exercise, and the burden of proving invalidity shall rest on the challenger.
7.7 FINANCIAL RECORDS; REPORTS; ETC.
(a) The Trustees shall cause the Trust to keep full accounts of all
of its receipts and disbursements in accordance with the requirements of the
Investment Company Act and generally accepted accounting principles. The
Trustees shall at least once during each period of twelve months cause an audit
to be made of the Trust's financial records by independent, certified public
accountants responsible to the Trustees.
(b) The Trustees shall cause the Trust to maintain a separate account
on the books of the Trust for each Participant. All transactions for such
Participant shall be recorded by the Trusts in such account. Statements showing
transactions of and the number of Shares held by each Participant shall be
rendered by the Trust on a regular, periodic basis as determined by the
Trustees, but not less than annually.
(c) In addition to any reports, statements and opinions prepared
pursuant to Section 7.7(a) and (b), the Trustees may cause to be prepared or
conducted by the Trust's independent accountant such other reports and
examinations as the Trustees shall, in their discretion, deem appropriate.
7.8 INSPECTION OF RECORDS. The records of the Trust shall be open to
inspection for reasonable purpose by Participants at
19
23
all reasonable times, provided that five (5) days written notice thereof is
given to the Trustees.
ARTICLE 8
TRUSTEES AND OFFICERS
8.1 NUMBER. The number of Trustees shall be not less than five, and the
number of Trustees may be changed from time to time by the Trustees; provided,
that the number of Trustees shall in no event be less than five or more than
fifteen. No reduction in the number of Trustees shall have the effect of
removing any Trustee from office prior to the expiration of his term.
8.2 QUALIFICATIONS OF TRUSTEES. The members of the Board of Trustees shall
be persons who are eligible to serve as directors of a registered investment
company under the Investment Company Act, including without limitation the
requirement under the Investment Company Act that a majority of the Board of
Trustees shall be persons who are not "interested persons" (as defined in the
Investment Company Act) of any Portfolio's principal underwriters and no more
than sixty percent of the Board of Trustees shall be persons who are "interested
persons" of the Trust.
8.3 TERM AND ELECTION. Each Trustee named, elected or appointed as
provided herein shall, except as otherwise provided in Section 8.4 or 8.5, hold
office until his successor has been elected or appointed and has qualified to
serve as a Trustee.
8.4 RESIGNATION AND REMOVAL. Any Trustee may resign (without need for
prior or subsequent accounting) by an instrument in writing delivered to the
remaining Trustees and such resignation shall be effective upon such delivery,
or at a later date according to the terms of the notice. Any Trustee may be
removed by the action of two-thirds of the other Trustees.
8.5 VACANCIES. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of the death, resignation, bankruptcy,
adjudicated incompetence or other incapacity to exercise the duties of the
office, or removal of a Trustee. No such vacancy shall operate to annul this
Declaration of Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust, and title to any Trust Property held in the
name of such Trustee and the other Trustees or otherwise, shall, in the event of
the death, resignation, removal, bankruptcy, adjudicated incompetence or other
incapacity to exercise the duties of the office of such Trustee, vest in the
continuing or surviving Trustees without necessity of any further act or
conveyance.
20
24
In the case of a vacancy, including a vacancy resulting from an increase
in the number of Trustees, a majority of the remaining Trustees, regardless of
whether they constitute a quorum, or the Participants fill such vacancy, and any
Trustee so elected by the Trustees shall hold office until his successor has
been elected and has qualified to serve as a Trustee.
8.6 MEETINGS.
(a) Meetings of the Trustees shall be held from time to time upon
the call of the Chairman or any three Trustees. Regular meetings of the Trustees
may be held without call or notice at a time and place fixed by resolution of
the Trustees. Notice of any other meeting shall be mailed or otherwise given not
less than 48 hours before the meeting but may be waived in writing by any
Trustee either before or after such meeting. The attendance of a Trustee at a
meeting shall constitute a waiver of notice of such meeting, except where a
Trustee attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting has not been lawfully
called or convened. The Trustees may act with or without a meeting. A quorum for
all meetings of the Trustees shall be a majority of the Trustees. Unless
specifically provided otherwise in this Declaration of Trust, any action of the
Trustees may be taken at a meeting by vote of a majority of the Trustees present
(a quorum being present) or without a meeting, by written consents of a majority
of the Trustees. Any agreement, or other instrument or writing executed by one
or more of the Trustees or by any authorized Person, shall be valid and binding
upon the Trustees and upon the Trust when authorized or ratified by action of
the Trustees as provided in this Declaration of Trust.
(b) Any committee of the Trustees, including an Executive Committee,
if any, may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless otherwise
specifically provided in this Declaration of Trust, any action of any such
committee may be taken at a meeting by vote of a majority of the members present
(a quorum being present) or by written consent of a majority of the members.
(c) All or any one or more Trustees may participate in a meeting of
the Trustees or any committee thereof by utilizing 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 shall constitute presence in person at such meeting. The minutes
of any meeting of Trustees held by utilizing such communications equipment shall
be prepared in the same manner as those of a meeting of Trustees held in person.
21
25
8.7 OFFICERS. The Trustees may elect, from among their numbers, a Chairman
who shall be the chief executive officer of the Trust, and a Treasurer, who
shall be the chief financial officer of the Trust. The Trustees may elect or
appoint, from among their number or otherwise, or may authorize the Chairman to
appoint, a Secretary, and such other officers or agents, who shall have such
powers, duties and responsibilities as the Trustees may deem to be advisable and
appropriate. Two or more offices, except those of Chairman and Secretary, may be
held by the same person. The Secretary, if not a Trustee, shall attend meetings
of the Trustees but shall have no voting power.
8.8 BYLAWS. The Trustees may adopt and, from time to time, amend or
repeal, Bylaws for the conduct of the business of the Trust, and in such Bylaws,
among other things, may define the duties of the respective officers, agents,
employees and representatives of the Trust.
ARTICLE 9
AMENDMENT OR TERMINATION OF TRUST;
DURATION OF TRUST
9.1 AMENDMENTS TO DECLARATION. This Declaration of Trust may be amended by
the Trustees or the Participants at any time or from time to time and in any
respect and, if determined by the Trustees or the Participants to be necessary
to comply with applicable law, retroactively; provided, that any such amendment
which amends Sections 2.1, 2.4, 5.1, 5.3, 7.1, 9.1 or 9.2 and adversely affects
the rights of the Participants shall be approved by the Participants at a
meeting or by a vote as provided in Article 7. No such amendment shall divert
any part of the Trust Property that equitably belongs to any Participant for
purposes other than the exclusive benefit of the Participant at any time prior
to the satisfaction of all liabilities with respect to such Participant.
9.2 DURATION AND TERMINATION. This Trust shall continue until termination
of the last Portfolio existing under this Trust. Portfolios may be terminated in
the following manner:
(a) The Trustees, with the approval of Participants that own at
least a majority of the outstanding Shares of any Portfolio may sell and convey
the assets of such Portfolio to another trust or corporation organized under the
laws of any state of the United States for a consideration that may include the
assumption of all or a part of the outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Portfolio and which may include
shares of beneficial interest or stock or other securities of such trust or
corporation. Upon making provision for the payment of all such liabilities, by
such
22
26
assumption or otherwise, the Trustees shall distribute the remaining proceeds
ratably among the Participants owning outstanding Shares of such Portfolio.
(b) The Trustees, with the approval of Participants that own at
least a majority of the outstanding Shares of any Portfolio, or, as otherwise
provided in Section 2.1, may terminate that Portfolio. Upon such termination,
the Trustees shall sell and convert into money all the assets of such Portfolio.
Upon making provision for the payment of all outstanding obligations, taxes and
other liabilities, accrued or contingent, of the Portfolio, the Trustees shall
distribute the remaining assets of the Portfolio ratably among the Participants
owning outstanding shares of the Portfolio.
(c) Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in subsections (a) through (b), the Trust shall
terminate as to the Portfolio and the Trustees shall be discharged of any and
all further liabilities and duties hereunder with respect to such Portfolio.
Further, the right, title and interest of all parties of that Portfolio shall be
cancelled and discharged.
ARTICLE 10
MISCELLANEOUS
10.1 GOVERNING LAW. This Declaration of Trust is adopted in the State of
California and with reference to the laws thereof, and the rights of all parties
and the validity, construction and effect of every provision hereof shall be
subject to and construed according to the laws of the State of California.
10.2 RELIANCE BY THIRD PARTIES. Any certificate executed by an individual
who, according to the records of the Trust, or of any official or public body or
office in which this Declaration of Trust may be recorded or filed, appears to
be a Trustee or the Secretary of the Trust, certifying to: (i) the number or
identity of Trustees or Participants; (ii) the due authorization of the
execution of any instrument or writing; (iii) the form of any vote passed at a
meeting of the Trustees or Participants; (iv) the fact that the number of
Trustees or Participants present at any meeting or executing any written
instrument satisfies the requirements of this Declaration of Trust; (v) the form
of any Bylaw adopted by or the identity of any officers elected by the Trustees;
or (vi) 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 or any of them or the
Trust and the successors of such Person.
23
27
10.3 PROVISIONS IN CONFLICT WITH LAW. The provisions of this Declaration
of Trust are severable, and if the Trustees shall determine, with the advise of
counsel, that any one or more of such provisions (the "Conflicting Provisions")
are in conflict with applicable federal or California laws, the Conflicting
Provisions shall be deemed never to have constituted a part of this Declaration
of Trust; provided, that such determination by the Trustees shall not affect or
impair any of the remaining provisions of this Declaration of Trust or render
invalid or improper any action taken or omitted (including, but not limited to,
the election of Trustees) prior to such determination.
10.4 GENDER; SECTION HEADINGS.
(a) Words of the masculine gender shall mean and include correlative
words of the feminine and neuter gender and words importing the singular number
shall mean and include the plural number and vice versa.
(b) Any headings preceding the texts of the several Articles and
Sections of this Declaration of Trust and any table of contents or marginal
notes appended to copies hereof, shall be solely for convenience of reference
and shall neither constitute a part of this Declaration of Trust nor affect its
meaning, construction or effect.
IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated
Declaration of Trust to be executed by its proper and duly authorized officers
as of the date first above written.
HOSPITAL COUNCIL OF NORTHERN
AND CENTRAL CALIFORNIA
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Its Chairman
---------------------------------
24
