CORNERSTONE PROGRESSIVE RETURN FUND
AGREEMENT AND DECLARATION OF TRUST
TABLE OF CONTENTS
ARTICLE I The Trust ..........................................................1
1.1 Name..................................................................1
1.2 Definitions...........................................................1
1.3 Purpose and Powers of Trust...........................................2
ARTICLE II Trustees ..........................................................2
2.1 Number and Qualification..............................................2
2.2 Term and Election.....................................................3
2.3 Resignation and Removal...............................................3
2.4 Vacancies.............................................................3
2.5 Meetings..............................................................3
2.6 Officers..............................................................4
ARTICLE III Powers and Duties of Trustees.....................................4
3.1 General...............................................................4
3.2 Investments...........................................................4
3.3 Legal Title...........................................................5
3.4 Issuance and Repurchase of Shares.....................................5
3.5 Borrow Money..........................................................5
3.6 Collection and Payment................................................5
3.7 Expenses..............................................................6
3.8 By-Laws...............................................................6
3.9 Officers and Agents...................................................6
3.10 Miscellaneous Powers..................................................6
3.11 Delegation; Committees................................................6
3.12 Further Powers........................................................7
ARTICLE IV Limitations of Liability and Indemnification.......................7
4.1 No Personal Liability of Shareholders, Trustees, etc..................7
4.2 Mandatory Indemnification.............................................7
4.3 No Duty of Investigation; Notice in Trust Instruments, etc............8
4.4 Reliance on Experts, etc..............................................9
ARTICLE V Shares of Beneficial Interest.......................................9
5.1 Beneficial Interest...................................................9
5.2 Classes and Series....................................................9
5.3 Issuance of Shares....................................................9
5.4 Rights of Shareholders................................................9
5.5 Trust Only...........................................................10
5.6 Register of Shares...................................................10
5.7 Transfer Agent and Registrar.........................................10
5.8 Transfer of Shares...................................................10
5.9 Notices..............................................................11
5.10 Net Asset Value......................................................11
5.11 Distributions to Shareholders........................................11
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ARTICLE VI Shareholders......................................................11
6.1 Meetings of Shareholders.............................................11
6.2 Voting...............................................................11
6.3 Notice of Meeting, Shareholder Proposals and Record Date.............12
6.4 Quorum and Required Vote.............................................12
6.5 Proxies, etc.........................................................13
6.6 Reports..............................................................13
6.7 Shareholder Action by Written Consent................................13
ARTICLE VII Duration: Termination of Trust; Amendment; Mergers, Etc..........13
7.1 Duration.............................................................13
7.2 Termination..........................................................13
7.3 Amendment Procedure..................................................14
7.4 Merger, Consolidation and Sale of Assets.............................15
7.5 Redemption; Conversion of Investment Company.........................15
7.6 Certain Transactions.................................................15
ARTICLE VIII Miscellaneous...................................................17
8.1 References; Headings; Counterparts...................................17
8.2 Filing...............................................................17
8.3 Resident Agent.......................................................17
8.4 Governing Law........................................................17
8.5 Counterparts.........................................................18
8.6 Reliance by Third Parties............................................18
8.7 Provisions in Conflict with Law or Regulation........................18
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AGREEMENT AND DECLARATION OF TRUST
CORNERSTONE PROGRESSIVE RETURN FUND
AGREEMENT AND DECLARATION OF TRUST made as of the 26th day of April,
2007, by the Trustees hereunder, and by the holders of shares of beneficial
interest to be issued hereunder as hereinafter provided.
WHEREAS, this Trust, created by the Certificate of Trust filed with the
Secretary of State of the State of Delaware on April 26, 2007, shall constitute
a statutory trust under the Delaware Statutory Trust Act and this Agreement and
Declaration of Trust shall constitute the governing instrument of such trust;
WHEREAS, this Trust has been formed to carry on business as set forth
more particularly hereinafter;
WHEREAS, this Trust is authorized to issue an unlimited number of 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 Delaware statutory trust in accordance with the
provisions of the Delaware Statutory Trust Act, as amended from time to time,
and 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 as hereinafter set forth.
ARTICLE I
THE TRUST
1.1 NAME. This Trust shall be known as the "Cornerstone Progressive
Return Fund", and the Trustees shall conduct the business of the Trust under
that name or any other name or names as they may from time to time determine.
1.2 DEFINITIONS. As used in this Declaration, the following terms shall
have the following meanings:
The terms "Affiliated Person", "Assignment", "Commission", "Interested
Person" and "Principal Underwriter" shall have the meanings given them in the
1940 Act.
"By-Laws" shall mean the By-Laws of the Trust as amended from time to
time by the Trustees.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.
"Declaration" shall mean this Agreement and Declaration of Trust, as
amended and restated from time to time, including by way of any classifying or
reclassifying Shares of any class or any series of any such class or determining
any designations, powers, preferences, voting, conversion and other rights,
limitations, qualifications and terms and conditions thereof.
"Delaware Statutory Trust Act" shall mean the provisions of the
Delaware Statutory Trust Act, 12 Del. C. Section 3801 et. seq., as such Act may
be amended from time to time.
"Person" shall mean and include natural persons, corporations,
partnerships, trusts, limited liability companies, associations, joint ventures
and other entities, whether or not legal entities, and governments and agencies
and political subdivisions thereof.
"Prospectus" shall mean the currently effective Prospectus of the
Trust, if any, under the Securities Act of 1933, as amended.
"Shareholder" shall mean as of any particular time any owner of
beneficial interest in the Trust at such time.
"Shareholder of Record" shall mean any Shareholder or, if such
Shareholder has elected to hold his or her Shares in nominee name, such nominee.
"Shares" shall mean the transferable units of beneficial interest in
the Trust and includes fractions of Shares as well as whole Shares. All
references to Shares shall be deemed to be Shares of any or all series thereof
as the context may require.
"Trust" shall mean the trust established by this Declaration, as
amended from time to time, inclusive of each such amendment.
"Trustees" shall mean the signatory to this Declaration, so long as he
shall continue in office in accordance with the terms hereof, and all other
persons who at the time in question have been duly elected or appointed and have
qualified as trustees in accordance with the provisions hereof and are then in
office.
"Trust Property" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is owned
or held by or for the account of the Trust or the Trustees in such capacity.
The "1933 Act" refers to the Securities Act of 1933 and the rules and
regulations promulgated thereunder and exemptions therefrom covering the Trust
and its affiliated persons, as amended from time to time.
The "1940 Act" refers to the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder and exemptions therefrom, as
amended from time to time.
1.3 PURPOSE AND POWERS OF TRUST. The Trust is established for the
purpose of engaging in any activity not prohibited by Delaware law and shall
have the power to engage in any such activity and in any activity incidental or
related to any such activity.
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ARTICLE II
TRUSTEES
2.1 NUMBER AND QUALIFICATION. Prior to a public offering of Shares,
there may be a sole Trustee. Thereafter, the number of Trustees shall be such
number, not less than three nor more than fifteen, as shall be set forth in a
written instrument signed or adopted by a majority of the Trustees then in
office. No reduction in the number of Trustees shall have the effect of removing
any Trustee from office prior to the expiration of his term. An individual
nominated as a Trustee shall be at least 21 years of age and shall not be under
a legal disability. Trustees need not own Shares and may succeed themselves in
office.
2.2 TERM AND ELECTION.
(a) Unless the Board of Trustees adopts resolutions provided
for under Section 2.2(b) of this Article, each Trustee shall be elected
by a plurality of the Shares voting at an annual meeting of the
Shareholders, or special meeting in lieu thereof called for that
purpose, except as provided in Section 2.4 of this Article, and each
Trustee elected shall hold office until his successor shall have been
elected and shall have qualified, until his death, or until he shall
have resigned or have been removed as provided in this Declaration. The
Trustees shall be elected at an annual meeting of the Shareholders or
special meeting in lieu thereof called for that purpose, except as
provided in Section 2.4 of this Article, and each Trustee elected shall
hold office until his or her successor shall have been elected and
shall have qualified, except as provided in Section 2.3 of this
Article.
(b) The Board of Trustees, by resolution, may divide the
Trustees into three classes. Within the limits specified in Section
2.1, the number of the Trustees in each class shall be determined by
resolution of the Board of Trustees. The initial term of office of the
first class shall expire on the date of the first annual meeting of
Shareholders, or special meeting in lieu thereof, held after such
classification becomes effective. The initial term of office of the
second class shall expire on the date of the second annual meeting of
Shareholders, or special meeting in lieu thereof, held after such
classification becomes effective. The initial term of office of the
third class shall expire on the date of the third annual meeting of
Shareholders, or special meeting in lieu thereof, held after such
classification becomes effective. Upon expiration of the initial term
of office of each class as set forth above and the expiration of each
subsequent term of office of such class, the number of Trustees in such
class, as determined by the Board of Trustees, shall be elected for a
term expiring on the date of the third annual meeting of Shareholders
or special meeting in lieu thereof following such expiration to succeed
the Trustees whose terms of office expire. The Trustees shall be
elected at an annual meeting of the Shareholders or special meeting in
lieu thereof called for that purpose, except as provided in Section 2.4
of this Article, and each Trustee elected shall hold office until his
or her successor shall have been elected and shall have qualified,
except as provided in Section 2.3.
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2.3 RESIGNATION AND REMOVAL. Any Trustee may resign his trust (without
need for prior or subsequent accounting) by an instrument in writing signed by
him and delivered or mailed to the Chairman, if any, the President or the
Secretary and such resignation shall be effective upon such delivery, or at a
later date according to the terms of the instrument. Any Trustee may be removed
(provided the aggregate number of Trustees after such removal shall not be less
than the minimum number required by Section 2.1 hereof), for or without cause,
at any time by a written instrument, signed or adopted by a vote of a majority
of the Shares entitled to vote in the election of such Trustee, specifying the
date when such removal shall become effective. Upon the resignation or removal
of a Trustee, or such persons otherwise ceasing to be a Trustee, such persons
shall execute and deliver such documents as the remaining Trustees shall require
for the purpose of conveying to the Trust or the remaining Trustees any Trust
Property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, such Trustee's legal representative shall
execute and deliver on such Trustee's behalf such documents as the remaining
Trustees shall require as provided in the preceding sentence.
2.4 VACANCIES. Subject to the provisions of the 1940 Act, any vacancies
in the Board of Trustees, whether arising from death, resignation, removal or
any other cause except an increase in the number of Trustees, shall be filled by
a vote of the majority of the Board of Trustees then in office even though that
majority is less than a quorum, provided that no vacancy or vacancies shall be
filled by action of the remaining Trustees if, after the filling of the vacancy
or vacancies, fewer than two-thirds of the Trustees then holding office shall
have been elected by the Shareholders. A majority of the entire Board may fill a
vacancy that results from an increase in the number of Trustees. Any Trustee
appointed by the Board of Trustees to fill a vacancy shall hold office only
until the next annual meeting of Shareholders and until a successor has been
elected and qualifies or until his earlier resignation or removal. Any Trustee
elected by the Shareholders to fill a vacancy shall hold office for the balance
of the term of the Trustee whose death, resignation or removal occasioned the
vacancy and until a successor has been elected and qualifies or until his
earlier resignation or removal. No vacancy shall operate to annul this
Declaration or to revoke any existing agency created pursuant to the terms of
this Declaration. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided herein, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by this
Declaration.
2.5 MEETINGS. Meetings of the Trustees shall be held from time to time
upon the call of the Chairman, if any, the President, the Secretary or any three
Trustees. Regular meetings of the Trustees may be held without call or notice at
a time and place fixed by the By-Laws or by resolution of the Trustees. Notice
of any other meeting shall be mailed not less than 48 hours before the meeting
or otherwise actually delivered orally or in writing not less than 24 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 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 consent of a majority of the Trustees or such other
proportion as shall be specified herein for action at a meeting at which all
Trustees then in office are present.
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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 provided otherwise
in this Declaration, 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 without
a meeting by written consent of a majority of the members or such other
proportion as shall be specified herein for action at a meeting at which all
committee members are present.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons in any action to be taken may be
counted for quorum purposes under this Section and shall be entitled to vote to
the extent not prohibited by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other; participation in a meeting pursuant to any such
communications system shall constitute presence in person at such meeting except
as otherwise provided by the 1940 Act.
2.6 OFFICERS. The Trustees shall elect a President, a Secretary and a
Treasurer and may elect a Chairman who shall serve at the pleasure of the
Trustees or until their successors are elected. The Trustees may elect or
appoint or may authorize the Chairman, if any, or President to appoint such
other officers or agents with such other titles and powers as the Trustees may
deem to be advisable. A Chairman shall, and the President, Secretary and
Treasurer may, but need not, be a Trustee.
ARTICLE III
POWERS AND DUTIES OF TRUSTEES
3.1 GENERAL. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust to the same extent as
if the Trustees were the sole owners of the Trust Property and business in their
own right, but with such powers of delegation as may be permitted by this
Declaration. The Trustees shall have power to engage in any activity not
prohibited by Delaware law. The enumeration of any specific power herein shall
not be construed as limiting the aforesaid power. The Trustees may perform such
acts as in their sole discretion are proper for conducting the business of the
Trust. The powers of the Trustees may be exercised without order of or resort to
any court. No Trustee shall be obligated to give any bond or other security for
the performance of any of his duties or powers hereunder.
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3.2 INVESTMENTS. The Trustees shall have power to:
(a) manage, conduct, operate and carry on the business of an
investment company, and exercise all the powers necessary and
appropriate to the conduct of such operations;
(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange,
distribute or otherwise deal in or dispose of any and all sorts of
property, tangible or intangible, including but not limited to
securities of any type whatsoever, whether equity or non-equity, of any
issuer, evidences of indebtedness of any person and any other rights,
interests, instruments or property of any sort and to exercise any and
all rights, powers and privileges of ownership or interest in respect
of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act
with respect thereto, with power to designate one or more Persons to
exercise any of said rights, powers and privileges in respect of any of
said investments. The Trustees shall not be limited by any law limiting
the investments which may be made by fiduciaries.
3.3 LEGAL TITLE. Legal title to all the Trust Property shall be vested
in the Trustees as joint tenants except that the Trustees shall have power to
cause legal title to any Trust Property to be held by or in the name of one or
more of the Trustees, or in the name of the Trust, or in the name of any other
Person as nominee, custodian or pledgee, on such terms as the Trustees may
determine, provided that the interest of the Trust therein is appropriately
protected.
The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each person who may hereafter become a Trustee upon
his due election and qualification. Upon the ceasing of any person to be a
Trustee for any reason, such person shall automatically cease to have any right,
title or interest in any of the Trust Property, and the right, title and
interest of such Trustee in the Trust Property shall vest automatically in the
remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
3.4 ISSUANCE AND REPURCHASE OF SHARES. Subject to the provisions of
this Declaration and applicable law, the Trustees shall have the power to issue,
sell, repurchase, redeem, retire, cancel, acquire, hold, resell, reissue,
dispose of, transfer and otherwise deal in, Shares, including Shares in
fractional denominations, to hold reacquired shares as treasury shares or
otherwise, or to cancel the same, and to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares, any funds or
property, whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of the State of Delaware governing business
corporations.
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3.5 BORROW MONEY. The Trustees shall have the power to borrow money or
otherwise obtain credit or utilize leverage in connection with the activities of
the Trust to the maximum extent permitted by law, regulation or order and to
secure the same by mortgaging, pledging or otherwise subjecting as security the
assets of the Trust, including the lending of portfolio securities, and to
endorse, guarantee or undertake the performance of any obligation, contract or
engagement of any other person, firm, association or corporation.
3.6 COLLECTION AND PAYMENT. The Trustees shall have power to collect
all property due to the Trust; to pay all claims, including taxes, against the
Trust Property or the Trust, the Trustees or any officer, employee or agent of
the Trust; to prosecute, defend, compromise or abandon any claims relating to
the Trust Property or the Trust, or the Trustees or any officer, employee or
agent of the Trust; to foreclose any security interest securing any obligations,
by virtue of which any property is owed to the Trust; and to enter into
releases, agreements and other instruments. Except to the extent required for a
Delaware business corporation, the Shareholders shall have no power to vote as
to whether or not a court action, legal proceeding or claim should or should not
be brought or maintained derivatively or as a class action on behalf of the
Trust or the Shareholders.
3.7 EXPENSES. The Trustees shall have power to incur and pay out of the
assets or income of the Trust any expenses which in the opinion of the Trustees
are necessary or appropriate to carry out any of the purposes of this
Declaration, and the business of the Trust, and to pay reasonable compensation
from the funds of the Trust to themselves as Trustees. The Trustees shall fix
the compensation of all officers, employees and Trustees. The Trustees may pay
themselves such compensation for special services, including legal,
underwriting, syndicating and brokerage services, as they in good faith may deem
reasonable and reimbursement for expenses reasonably incurred by themselves on
behalf of the Trust.
3.8 BY-LAWS. All By-Laws of the Corporation, whether adopted by the
Trustees, or the Shareholders, shall be subject to amendment, alteration or
repeal, and new By-Laws may be made, by the affirmative vote of a majority of
either (a) the Shareholders of Record of the outstanding Shares entitled to
vote, at any annual or special meeting the notice or waiver of notice of which
shall have specified or summarized the proposed amendment, alteration, repeal or
new By-Law; or (b) the Trustees, at any regular or special meeting the notice or
waiver of notice of which shall have specified or summarized the proposed
amendment, alteration, repeal or new By-Law.
3.9 OFFICERS AND AGENTS. The Trustees may elect and remove such
officers and appoint and terminate such agents as they deem appropriate, in
accordance with this Declaration of Trust and the By-Laws.
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3.10 MISCELLANEOUS POWERS. The Trustees shall have the power to: (a)
employ or contract with such Persons as the Trustees may deem desirable for the
transaction of the business of the Trust, including investment advisors,
administrators, custodians, transfer agents, shareholder services providers,
accountants, counsel, brokers, dealers and others; (b) enter into joint
ventures, partnerships and any other combinations or associations; (c) purchase,
and pay for out of Trust Property, insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisors, distributors,
selected dealers or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (d) establish pension, profit-sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (e) make donations, irrespective of
benefit to the Trust, for charitable, religious, educational, scientific, civic
or similar purposes; (f) to the extent permitted by applicable law, indemnify
any Person with whom the Trust has dealings, including without limitation any
investment adviser, administrator, manager, transfer agent, custodian,
distributor or selected dealer, or any other person as the Trustees may see fit
to such extent as the Trustees shall determine; (g) guarantee indebtedness or
contractual obligations of others; (h) determine and change the fiscal year of
the Trust and the method in which its accounts shall be kept; (i) adopt a seal
for the Trust but the absence of such seal shall not impair the validity of any
instrument executed on behalf of the Trust; (j) adopt any policy of the Trust
and designate the same as fundamental or not fundamental; and (k) set record
dates in the manner provided for herein or in the By-Laws.
3.11 DELEGATION; COMMITTEES. The Trustees shall have the power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust, the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Trustees or otherwise as the Trustees may deem expedient. The
Trustees may designate one or more committees each of which shall have all or
such lesser portion of the power and authority of the entire Board of Trustees
as the Trustees shall determine from time to time, except to the extent action
by the entire Board of Trustees or particular Trustees is required by the 0000
Xxx.
3.12 FURTHER POWERS. The Trustees shall have the power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, and in
any and all commonwealths, territories, dependencies, colonies, possessions,
agencies or instrumentalities of the United States of America and of foreign
governments, and to do all such other things and execute all such instruments as
they deem necessary, proper or desirable in order to promote the interests of
the Trust although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust made by the Trustees
in good faith shall be conclusive. In construing the provisions of this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
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ARTICLE IV
LIMITATIONS OF LIABILITY AND INDEMNIFICATION
4.1 NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, ETC. No
Shareholder of the Trust shall be subject in such capacity to any personal
liability whatsoever to any Person in connection with Trust Property or the
acts, obligations or affairs of the Trust. Shareholders shall have the same
limitation of personal liability as is extended to stockholders of a private
corporation for profit incorporated under the General Corporation Law of the
State of Delaware. No Trustee or officer of the Trust shall be subject in such
capacity to any personal liability whatsoever to any Person in connection with
Trust Property or the affairs of the Trust, save only liability to the Trust or
its Shareholders arising from bad faith, willful misfeasance, gross negligence
or reckless disregard for his duty to such Person; and, subject to the foregoing
exception, all Persons shall look solely to the Trust Property for satisfaction
of claims of any nature arising in connection with the affairs of the Trust. If
any Shareholder, Trustee or officer of the Trust, as such, is made a party to
any suit or proceeding to enforce any such liability, subject to the foregoing
exception, he shall not, on account thereof, be held to any personal liability.
4.2 MANDATORY INDEMNIFICATION.
(a) The Trust shall indemnify the Trustees and officers of the
Trust (each such person being an "indemnitee") against any liabilities
and expenses, including amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and reasonable counsel fees
reasonably incurred by such indemnitee in connection with the defense
or disposition of any action, suit or other proceeding, whether civil
or criminal, before any court or administrative or investigative body
in which he may be or may have been involved as a party or otherwise
(other than, except as authorized by the Trustees, as the plaintiff or
complainant) or with which he may be or may have been threatened, while
acting in any capacity set forth in this Section 4.2 by reason of his
having acted in any such capacity, except with respect to any matter as
to which he shall not have acted in good faith in the reasonable belief
that his action was in the best interest of the Trust or, in the case
of any criminal proceeding, as to which he shall have had reasonable
cause to believe that the conduct was unlawful, provided, however, that
no indemnitee shall be indemnified hereunder against any liability to
any person or any expense of such indemnitee arising by reason of (i)
willful misfeasance, (ii) bad faith, (iii) gross negligence (negligence
in the case of Affiliated Indemnitees), or (iv) reckless disregard of
the duties involved in the conduct of his position (the conduct
referred to in such clauses (i) through (iv) being sometimes referred
to herein as "disabling conduct"). Notwithstanding the foregoing, with
respect to any action, suit or other proceeding voluntarily prosecuted
by any indemnitee as plaintiff, indemnification shall be mandatory only
if the prosecution of such action, suit or other proceeding by such
indemnitee was authorized by a majority of the Trustees.
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(b) Notwithstanding the foregoing, no indemnification shall be
made hereunder unless there has been a determination (i) by a final
decision on the merits by a court or other body of competent
jurisdiction before whom the issue of entitlement to indemnification
hereunder was brought that such indemnitee is entitled to
indemnification hereunder or, (ii) in the absence of such a decision,
by (1) a majority vote of a quorum of those Trustees who are neither
Interested Persons of the Trust nor parties to the proceeding
("Disinterested Non-Party Trustees"), that the indemnitee is entitled
to indemnification hereunder, or (2) if such quorum is not obtainable
or even if obtainable, if such majority so directs, independent legal
counsel in a written opinion conclude that the indemnitee should be
entitled to indemnification hereunder. All determinations to make
advance payments in connection with the expense of defending any
proceeding shall be authorized and made in accordance with the
succeeding paragraph (c) below.
(c) The Trust shall make advance payments in connection with
the expenses of defending any action with respect to which
indemnification might be sought hereunder if the Trust receives a
written affirmation by the indemnitee of the indemnitee's good faith
belief that the standards of conduct necessary for indemnification have
been met and a written undertaking to reimburse the Trust unless it is
subsequently determined that he is entitled to such indemnification and
if a majority of the Trustees determine that the applicable standards
of conduct necessary for indemnification appear to have been met. In
addition, at least one of the following conditions must be met: (i) the
indemnitee shall provide adequate security for his undertaking, (ii)
the Trust shall be insured against losses arising by reason of any
lawful advances, or (iii) a majority of a quorum of the Disinterested
Non-Party Trustees, or if a majority vote of such quorum so direct,
independent legal counsel in a written opinion, shall conclude, based
on a review of readily available facts (as opposed to a full trial-type
inquiry), that there is substantial reason to believe that the
indemnitee ultimately will be found entitled to indemnification.
(d) The rights accruing to any indemnitee under these
provisions shall not exclude any other right to which he may be
lawfully entitled.
(e) Notwithstanding the foregoing, subject to any limitations
provided by the 1940 Act and this Declaration, the Trust shall have the
power and authority to indemnify Persons providing services to the
Trust to the full extent provided by law provided that such
indemnification has been approved by a majority of the Trustees.
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4.3 NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS, ETC. No
purchaser, lender, transfer agent or other person dealing with the Trustees or
with 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 said officer, employee or agent or be liable for the application
of money or property paid, loaned or delivered to or on the order of the
Trustees or of said officer, employee or agent. Every obligation, contract,
undertaking, instrument, certificate, Share, other security of the Trust, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively taken to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. The Trustees may maintain
insurance for the protection of the Trust Property, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible liability, and such other insurance as the Trustees
in their sole judgment shall deem advisable or is required by the 1940 Act.
4.4 RELIANCE ON EXPERTS, ETC. Each Trustee and officer or employee of
the Trust shall, in the performance of its 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
the Trust's officers or employees or by any adviser, administrator, manager,
distributor, selected dealer, accountant, appraiser or other expert or
consultant selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or other person may also be a
Trustee.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
5.1 BENEFICIAL INTEREST. The beneficial interest in the Trust shall be
divided into an unlimited number of transferable shares, and each share shall
have no par value per share or such other amount as the Trustees may establish.
All Shares issued in accordance with the terms hereof, including, without
limitation, Shares issued in connection with a dividend in Shares or a split of
Shares, shall be fully paid and nonassessable when the consideration determined
by the Trustees (if any) therefor shall have been received by the Trust.
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5.2 CLASSES AND SERIES. The Trustees shall have the authority, without
the approval of the holders of any Shares of the Trust, to classify and
reclassify issued and unissued Shares into one or more classes and one or more
series of any or all of such classes, each of which classes and series thereof
shall have such designations, powers, preferences, voting, conversion and other
rights, limitations, qualifications and terms and conditions as the Trustees
shall determine from time to time with respect to each such class or series;
provided, however, that no reclassification of any issued and outstanding Shares
and no modifications of any of the designations, powers, preferences, voting,
conversion or other rights, limitations, qualifications and terms and conditions
of any issued and outstanding Shares may be made by the Trustees without the
affirmative vote of the holders of Shares specified in Section 7.3(a) to the
extent required thereby. The initial class of Shares of the Trust is hereby
designated as "Common Shares", subject to redesignation as aforesaid. To the
extent expressly determined by the Trustees as aforesaid, all consideration
received by the Trust for the issue or sale of Shares of a class, 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 such class subject only to the rights
of the creditors, and all liabilities allocable to such class shall be charged
thereto.
5.3 ISSUANCE OF SHARES. The Trustees, in their discretion, may from
time to time without vote of the Shareholders issue Shares of any class or any
series of any such class to such party or parties and for such amount and type
of consideration, including cash or property, at such time or times, and on such
terms as the Trustees may determine, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with the
assumption of, liabilities) and businesses. The Trustees may from time to time
divide or combine the Shares of any class or any series of any such class into a
greater or lesser number without thereby changing the proportionate beneficial
interest in such Shares. Issuances and repurchases of Shares may be made in
whole Shares and/or 1/1,000ths of a Share or multiples thereof as the Trustees
may determine.
5.4 RIGHTS OF SHAREHOLDERS. The Shares shall be personal property
giving only the rights in this Declaration specifically set forth. The ownership
of the Trust Property of every description and the right to conduct any business
herein described are vested exclusively in the Trustees, and the Shareholders
shall have no interest therein other than the beneficial interest conferred by
their Shares, and they shall have no right to call for any partition or division
of any property, profits, rights or interests of the Trust nor can they be
called upon to share or assume any losses of the Trust or, subject to the right
of the Trustees to charge certain expenses directly to Shareholders, as provided
in the last sentence of Section 3.7, suffer an assessment of any kind by virtue
of their ownership of Shares. The Shares shall not entitle the holder to
preference, preemptive, appraisal, conversion or exchange rights (except as
specified in this Section 5.4, in Section 7.4 or as specified by the Trustees in
the designation or redesignation of any class or series thereof of the Shares).
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5.5 TRUST ONLY. It is the intention of the Trustees to create only the
relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
5.6 REGISTER OF SHARES. A register shall be kept at the Trust or any
transfer agent duly appointed by the Trustees under the direction of the
Trustees which shall contain the names and addresses of the Shareholders and the
number of Shares held by them respectively and a record of all transfers
thereof. Separate registers shall be established and maintained for each class
and each series of each class. Each such register shall be conclusive as to who
are the holders of the Shares of the applicable class and series and who shall
be entitled to receive dividends or distributions or otherwise to exercise or
enjoy the rights of Shareholders. No Shareholder shall be entitled to receive
payment of any dividend or distribution, nor to have notice given to him as
herein provided, until he has given his address to a transfer agent or such
other officer or agent of the Trustees as shall keep the register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate fees therefore and rules and regulations
as to their use.
5.7 TRANSFER AGENT AND REGISTRAR. The Trustees shall have power to
employ a transfer agent or transfer agents, and a registrar or registrars, with
respect to the Shares. The transfer agent or transfer agents may keep the
applicable register and record therein, the original issues and transfers, if
any, of the said Shares. Any such transfer agent and registrars shall perform
the duties usually performed by transfer agents and registrars of stock in a
corporation, as modified by the Trustees.
5.8 TRANSFER OF SHARES. Shares shall be transferable on the records of
the Trust only by the record holder thereof or by its agent thereto duly
authorized in writing, upon delivery to the Trustees or a transfer agent of the
Trust of a duly executed instrument of transfer, together with such evidence of
the genuineness of each such execution and authorization and of other matters as
may reasonably be required. Upon such delivery the transfer shall be recorded on
the applicable register of the Trust. Until such record is made, the Shareholder
of Record shall be deemed to be the holder of such Shares for all purposes
hereof and neither the Trustees nor any transfer agent or registrar nor any
officer, employee or agent of the Trust shall be affected by any notice of the
proposed transfer.
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Any person becoming entitled to any Shares in consequence of the death,
bankruptcy or incompetence of any Shareholder, or otherwise by operation of law,
shall be recorded on the applicable register of Shares as the holder of such
Shares upon production of the proper evidence thereof to the Trustees or a
transfer agent of the Trust, but until such record is made, the Shareholder of
Record shall be deemed to be the holder of such for all purposes hereof, and
neither the Trustees nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such death, bankruptcy or
incompetence or other operation of law.
5.9 NOTICES. Any and all notices to which any Shareholder hereunder may
be entitled and any and all communications to any Shareholder shall be deemed
duly served or given if mailed, postage prepaid, addressed to any Shareholder of
Record at his last known address as recorded on the applicable register of the
Trust and may be sent together with any such notice or other communication to
another Shareholder at the same address.
5.10 NET ASSET VALUE. The value of the assets of the Trust, the amount
of liabilities of the Trust and the net asset value of each outstanding Common
Share of the Trust shall be determined at such time or times on such days as the
Trustees may determine, in accordance with the 1940 Act. The method of
determination of net asset value shall be determined by the Trustees. The power
and duty to make net asset value determinations and calculations may be
delegated by the Trustees.
5.11 DISTRIBUTIONS TO SHAREHOLDERS.
(a) The Trustees shall from time to time distribute among the
Shares such proportion of the net profits, surplus (including paid-in
surplus), capital or assets held by the Trustees as they may deem
proper or as may otherwise be determined in the instrument setting
forth the terms of such Shares, such class or series of Shares, which
need not be ratable with respect to distributions in respect of Shares
of any other class or series thereof of the Trust. Such distributions
may be made in cash or property (including without limitation any type
of obligations of the Trust or any assets thereof) or any combination
thereof.
(b) Distributions may be made to the Shareholders of Record
entitled to such distribution at the time such distribution is declared
or at such later date as shall be determined by the Trust prior to the
date of payment.
(c) The Trustees may always retain from any source such amount
as they may deem necessary to pay the debts or expenses of the Trust or
to meet obligations of the Trust, or as they otherwise may deem
desirable to use in the conduct of its affairs or to retain for future
requirements or extensions of the business of the Trust.
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ARTICLE VI
SHAREHOLDERS
6.1 MEETINGS OF SHAREHOLDERS. The Trust may, but shall not be required
to, hold annual meetings of the holders of any class or series of Shares. Any
meeting of Shareholders shall be held within or without the State of Delaware on
such day and at such time as the Trustees shall designate.
6.2 VOTING. Shareholders shall have no power to vote on any matter
except matters on which a vote of Shares is required by applicable law, this
Declaration or resolution of the Trustees. Any matter required to be submitted
for approval of any of the Shares and affecting one or more classes or series
shall require approval by the required vote of Shares of the affected class,
classes or series voting together as a single class. If such matter affects a
class, classes or series thereof differently from the other classes or series
thereof or from one or more series of the same class, approval by the required
vote of Shares of such class, classes or series commonly affected, voting
together as a separate class, shall be required in order to be approved with
respect to such class, classes or series. Notwithstanding the foregoing, except
to the extent required by the 1940 Act, there shall be no separate class votes
on the election or removal of Trustees or the selection of auditors for the
Trust. Shareholders of a particular class or series thereof shall not be
entitled to vote on any matter that affects the rights or interests of only the
other class, classes or series of such other class or classes or only one or
more other series of the same class. There shall be no cumulative voting in the
election or removal of Trustees.
6.3 NOTICE OF MEETING, SHAREHOLDER PROPOSALS AND RECORD DATE. Notice of
all meetings of Shareholders, stating the time, place and purposes of the
meeting, shall be given by the Trustees to each Shareholder of Record entitled
to vote thereat at its registered address, sent at least 10 days before the
meeting or otherwise in compliance with applicable law. Except with respect to
an annual meeting, at which any business required by the 1940 Act may be
conducted, only the business stated in the notice of the meeting shall be
considered at the meeting. Notice of adjournment of a Shareholders' meeting to
another time (not more than 120 days after the original record date) or place
need not be given, if such time and place are announced at the meeting.
Irregularities in the notice or in the giving thereof as well as the accidental
omission to give notice of any meeting to, or the non-receipt of any such notice
by, any of the Shareholders shall not invalidate any action taken by or at any
such meeting. For the purposes of determining the Shareholders who are entitled
to notice of and to vote at any meeting the Trustees may, without closing the
transfer books, fix a date not more than 120 days prior to the date of such
meeting of Shareholders as a record date for the determination of the Persons to
be treated as Shareholders of Record for such purposes.
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6.4 QUORUM AND REQUIRED VOTE.
(a) The holders of one-third of the outstanding Shares of the
Trust on the record date present in person or by proxy shall constitute
a quorum at any meeting of the Shareholders for purposes of conducting
business on which a vote of all Shareholders of the Trust is being
taken. The holders of one-third of the outstanding Shares of a class or
classes on the record date present in person or by proxy shall
constitute a quorum at any meeting of the Shareholders of such class or
classes for purposes of conducting business on which a vote of
Shareholders of such class or classes is being taken. The holders of
one-third of the outstanding Shares of a series on the record date
present in person or by proxy shall constitute a quorum at any meeting
of the Shareholders of such series for purposes of conducting business
on which a vote of Shareholders of such series is being taken.
(b) Subject to any provision of applicable law, this
Declaration or resolution of the Trustees specifying or requiring a
greater or lesser vote requirement for the transaction of any matter of
business at any meeting of Shareholders, (i) the affirmative vote of a
plurality of the Shares entitled to vote for the election of any
Trustee or Trustees shall be the act of such Shareholders with respect
to the election of such Trustee or Trustees, (ii) the affirmative vote
of a majority of the Shares present in person or represented by proxy
and entitled to vote on any other matter shall be the act of the
Shareholders with respect to such matter, and (iii) where a separate
vote of one or more classes or series is required on any matter, the
affirmative vote of a majority of the Shares of such class or classes
or series present in person or represented by proxy and entitled to
vote on such matter shall be the act of the Shareholders of such class
or classes or series with respect to such matter.
6.5 PROXIES, ETC. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat 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, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or one or more of the officers or employees
of the Trust. Only Shareholders of Record on the record date shall be entitled
to vote. Each full Share shall be entitled to one vote and each fractional Share
shall be entitled to a vote equal to its fraction of a full Share. When any
Share is held jointly by several persons, any one of them may vote at any
meeting in person or by proxy in respect of such Share, but if more than one of
them shall be present at such meeting in person or by proxy, and such joint
owners or their proxies so present disagree as to any vote to be cast, such vote
shall not be received in respect of such Share. A proxy purporting to be given
by or on behalf of a Shareholder of Record on the record date for a meeting
shall be deemed valid unless challenged at or prior to its exercise, and the
burden of proving invalidity shall rest on the challenger. If the holder of any
such Share is a minor or a person of unsound mind, and subject to guardianship
or to the legal control of any other person as regards the charge or management
of such Share, he may vote by his guardian or such other person appointed or
having such control, and such vote may be given in person or by proxy. The
Trustees shall have the authority to make and modify from time to time
regulations regarding the validity of proxies. In addition to signed proxies,
such regulations may authorize facsimile, telephonic, Internet and other methods
of appointing a proxy that are subject to such supervision by or under the
direction of the Trustees as the Trustees shall determine.
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6.6 REPORTS. The Trustees shall cause to be prepared and sent to
Shareholders at least annually and more frequently to the extent and in the form
required by law, regulation or any exchange on which Shares are listed, a report
of operations containing financial statements of the Trust prepared in
conformity with generally accepted accounting principles and applicable law.
6.7 SHAREHOLDER ACTION BY WRITTEN CONSENT. Any action which may be
taken by Shareholders by vote may be taken without a meeting if the holders of
all of the Shares entitled to vote thereon consent to the action in writing and
the written consents are filed with the records of the meetings of Shareholders.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
ARTICLE VII
DURATION: TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.
7.1 DURATION. Subject to termination in accordance with the provisions
of Section 7.2 hereof, the Trust created hereby shall have perpetual existence.
7.2 TERMINATION.
(a) The Trust may be dissolved, after two thirds of the
Trustees have approved a resolution therefor, upon approval by Shares
having at least 50% of the votes of all of the Shares outstanding on
the record date for such meeting, voting as a single class, except to
the extent required by the 1940 Act. Upon the dissolution of the Trust:
(i) The Trust shall carry on no further business
except for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the
affairs of the Trust and all of the powers of the Trustees
under this Declaration shall continue until the affairs of the
Trust shall have been wound up, including the power to fulfill
or discharge the contracts of the Trust, collect its assets,
sell, convey, assign, exchange, merge where the Trust is not
the survivor, transfer or otherwise dispose of all or any part
of the remaining Trust Property to one or more Persons at
public or private sale for consideration which may consist in
whole or in part in cash, securities or other property of any
kind, discharge or pay its liabilities and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, merger in which the Trust is
not the survivor, transfer or other disposition of all or
substantially all the Trust Property of the Trust shall
require approval of the principal terms of the transaction and
the nature and amount of the consideration with the same vote
as required for dissolution pursuant to paragraph (a) above.
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(iii) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such releases,
indemnities and refunding agreements, as they deem necessary
for their protection, the Trustees may distribute the
remaining Trust Property, in cash or in kind or partly each,
among the Shareholders according to their respective rights.
(b) After the winding up and termination of the Trust
and distribution to the Shareholders as herein provided, a
majority of the Trustees shall execute and lodge among the
records of the Trust an instrument in writing setting forth
the fact of such termination and shall execute and file a
certificate of cancellation with the Secretary of State of the
State of Delaware. Upon termination of the Trust, the Trustees
shall thereupon be discharged from all further liabilities and
duties hereunder, and the rights and interests of all
Shareholders shall thereupon cease.
7.3 AMENDMENT PROCEDURE.
(a) Other than Sections 2.2, 2.3, 3.8, 6.1, 6.7, 7.2, 7.3,
7.4, 7.5 and 7.6 and other than as set forth in the last sentence of
this Section 7.3(a), this Declaration may be amended, after a majority
of the Trustees have approved a resolution therefor, by the affirmative
vote of the holders of not less than a majority of the affected Shares
outstanding on the record date and present and voting on such
amendment. Sections 2.2, 2.3, 3.8, 6.1, 6.7, 7.2, 7.3, 7.4, 7.5 and 7.6
may be amended, after a majority of the Trustees have approved a
resolution therefor by the affirmative vote of the holders of not less
than 50% of the affected Shares outstanding on the record date. The
Trustees also may amend this Declaration without any vote of
Shareholders for any of the purposes set forth in Section 6.2, to
change the name of the Trust or any class or series, to make any change
that does not adversely affect the relative rights or preferences of
any class or series of Shares or to conform this Declaration to the
requirements of the 1940 Act or any other applicable law, but the
Trustees shall not be liable for failing to do so.
(b) Nothing contained in this Declaration shall permit the
amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents
of the Trust or to permit assessments upon Shareholders.
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(c) An amendment duly adopted by the requisite vote of the
Board of Trustees and, if required, Shareholders as aforesaid, shall
become effective at the time of such adoption or at such other time as
may be designated by the Board of Trustees or Shareholders, as the case
may be. A certification signed by a majority of the Trustees setting
forth an amendment and reciting that it was duly adopted by the
Trustees and, if required, Shareholders as aforesaid, or a copy of the
Declaration, as amended, and executed by a majority of the Trustees,
shall be conclusive evidence of such amendment when lodged among the
records of the Trust or at such other time designated by the Board.
Notwithstanding any other provision hereof, until such time as Shares
are issued and outstanding, this Declaration may be terminated or amended in any
respect by the affirmative vote of a majority of the Trustees or by an
instrument signed by a majority of the Trustees.
7.4 MERGER, CONSOLIDATION AND SALE OF ASSETS. Subject to Section 7.6,
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 or the property, including its goodwill, upon such
terms and conditions and for such consideration when and as authorized by
two-thirds of the Trustees and approved by the affirmative vote of the holders
of not less than 50% of the affected Shares outstanding on the record date for
the meeting of Shareholders to approve such transaction, and any such merger,
consolidation, sale, lease or exchange shall be determined for all purposes to
have been accomplished under and pursuant to the statutes of the State of
Delaware; provided, however, that any merger where the Trust is the successor
entity may be approved by two-thirds of the Board of Trustees without
shareholder approval.
7.5 REDEMPTION; CONVERSION OF INVESTMENT COMPANY. No holder of Shares
of any class or series, other than in accordance with the provisions of Section
23(c) (excluding Rule 23c-3 thereunder) of the 1940 Act and other than to the
extent expressly determined by the Trustees with respect to Shares qualifying as
preferred stock pursuant to Section 18(a) of the 1940 Act, shall have any right
to require the Trust or any person controlled by the Trust to purchase any of
such holder's Shares. The Trust may be converted at any time from a "closed-end
investment company" to an "open-end investment company" as those terms are
defined by the 1940 Act or a company obligated to repurchase shares under Rule
23c-3 of the 1940 Act (an "interval company"), upon the approval of such a
proposal, together with the necessary amendments to this Declaration to permit
such a conversion, by a majority of the Trustees then in office, by the holders
of not less than 50% of the Trust's outstanding Shares entitled to vote thereon
and by such vote or votes of the holders of any class or classes or series of
Shares as may be required by the 1940 Act. From time to time, the Trustees may
consider recommending to the Shareholders a proposal to convert the Trust from a
"closed-end company" to an "open-end company" or "interval company." Upon the
recommendation and subsequent adoption of such a proposal and the necessary
amendments to this Declaration to permit such a conversion of the Trust's
outstanding Shares entitled to vote, the Trust shall, upon complying with any
requirements of the 1940 Act and state law, become an "open-end investment
company."
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7.6 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
fifty percent (50%) of the Shares of each class outstanding and
entitled to vote, voting as a class, 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 Shares otherwise required by law
or by the terms of any class or series of preferred stock, whether now
or hereafter authorized, or any agreement between the Trust and any
national securities exchange.
(b) The term "Principal Shareholder" shall mean any Person
which is the beneficial owner, directly or indirectly, of five percent
(5%) or more of the outstanding Shares and shall include any affiliate
or associate, as such terms are defined in clause (ii) below, of such
Person. For the purposes of this Section, in addition to the Shares
which a Person beneficially owns directly, (a) any Person 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 Person with which 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 of the General
Rules and Regulations under the Securities Exchange Act of 1934 as in
effect on the date of initial adoption of this Declaration, and (b) the
outstanding Shares shall include Shares deemed owned through
application of clauses (i) and (ii) above but shall not include any
other Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights or warrants, or otherwise.
(c) This Section shall apply to the following transactions:
(i) The merger or consolidation of the Trust or any
subsidiary of the Trust with or into any Principal
Shareholder.
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(ii) The issuance of any securities of the Trust to
any Principal Shareholder for cash (other than pursuant to any
automatic dividend reinvestment plan or pursuant to any
offering in which such Principal Shareholder acquires
securities that represent no greater a percentage of any class
or series of securities being offered than the percentage of
any class of Shares beneficially owned by such Principal
Shareholder immediately prior to such offering or, in the case
of securities, offered in respect of another class or series,
the percentage of such other class or series beneficially
owned by such Principal Shareholder immediately prior to such
offering).
(iii) 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.)
(iv) 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).
(v) The purchase by the Trust or any Person
controlled by the Trust of any Common Shares of the Trust from
such Principal Shareholder or any person to whom such
Principal Shareholder shall have transferred such Common
Shares.
(d) The provisions of this Section shall not be applicable to
(i) any of the transactions described in paragraph (c) of this Section
if two-thirds of the Board of Trustees of the Trust shall by resolution
have approved a memorandum of understanding with such Principal
Shareholder with respect to and substantially consistent with such
transaction prior to the time such Person shall have become a Principal
Shareholder, or (ii) any such transaction with any corporation of which
a majority of the outstanding shares of all classes of a stock normally
entitled to vote in elections of directors is owned of record or
beneficially by the Trust and its subsidiaries and of which such Person
is not a Principal Shareholder.
(e) The Board of 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 Person beneficially owns five percent
(5%) or more of the outstanding Shares, (ii) a Person 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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ARTICLE VIII
MISCELLANEOUS
8.1 REFERENCES; HEADINGS; COUNTERPARTS. In this Declaration of Trust
and in any restatements and/or amendments, references to this instrument and all
expressions of similar effect to "herein," "hereof' and "hereunder," shall be
deemed to refer to this instrument as amended or affected by any such
restatements an/or amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. Whenever the singular number
is used herein, the same shall include the plural; and the neuter, masculine and
feminine genders shall include each other, as applicable. Any references herein
to specific sections of the Delaware Statutory Trust Act, the Code or the 1940
Act shall refer to such sections as amended from time to time or any successor
sections thereof.
8.2 FILING. This Declaration and any amendment (including any
supplement) hereto shall be filed in such places as may be required or as the
Trustees deem appropriate. Each amendment shall be accompanied by a certificate
signed and acknowledged by a Trustee stating that such action was duly taken in
a manner provided herein, and shall, upon insertion in the Trust's minute book,
be conclusive evidence of all amendments contained therein. A restated
Declaration, containing the original Declaration and all amendments theretofore
made, may be executed from time to time by a majority of the Trustees and shall,
upon insertion in the Trust's minute book, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the
original Declaration and the various amendments thereto.
8.3 RESIDENT AGENT. The Trust shall maintain a resident agent in the
State of Delaware, which agent shall initially be named in the Trust's
Certificate of Trust. The Trustees may designate a successor resident agent,
provided, however, that such appointment shall not become effective until an
amendment or other necessary document is delivered to the office of the
Secretary of State.
8.4 GOVERNING LAW. This Declaration is executed by a majority of the
Trustees and delivered in the State of Delaware and with reference to the laws
thereof, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to the laws
of said State and reference shall be specifically made to the business
corporation law of the State of Delaware as to the construction of matters not
specifically covered herein or as to which an ambiguity exists, although such
law shall not be viewed as limiting the powers otherwise granted to the Trustees
hereunder and any ambiguity shall be viewed in favor of such powers.
8.5 COUNTERPARTS. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
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8.6 RELIANCE BY THIRD PARTIES. Any certificate executed by an
individual who, according to the records of the Trust, or of any recording
office in which this Declaration may be recorded, appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the name of the Trust, (c) the due authorization of the
execution of any instrument or writing, (d) the form of any vote passed at a
meeting of Trustees or Shareholders, (e) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (f) the form of any By Laws
adopted by or the identity of any officers elected by the Trustees, or (g) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so certified in favor of
any person dealing with the Trustees and their successors.
8.7 PROVISIONS IN CONFLICT WITH LAW OR REGULATION.
(a) The provisions of this Declaration are severable, and if
the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the regulated
investment company provisions of the Code or with other applicable laws
and regulations, the conflicting provision shall be deemed never to
have constituted a part of this Declaration to the extent of such
conflict; provided, however, that such determination shall not affect
any of the remaining provisions of this Declaration or render invalid
or improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid
or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision in any
other jurisdiction or any other provision of this Declaration in any
jurisdiction.
* * *
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ XXXXX X. XXXXXXXX
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Initial Trustee
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