6/30/05
NORTHEAST INVESTORS TRUST
DECLARATION OF TRUST
Dated March 1, 1950
As Amended
December 9, 1953
December 10, 1958
January 23, 1964
June 30, 1969
December 31, 1973
December 8, 1976
February 15, 1979
December 14, 1983
December 11, 1985
February 9, 1987
June 27, 2005
NORTHEAST INVESTORS TRUST
DECLARATION OF TRUST
THIS AGREEMENT and DECLARATION OF TRUST made at Boston,
Massachusetts, this First day of March, 1950, by
XXXXXX X. XXXXXXX
XXXXXXX X. XXXXXXXX
XXXXXX XXXXXX
(hereinafter with their successors referred to as "the Trustees") and the
holders of shares of beneficial interest to be issued hereunder as
hereinafter provided,
WITNESSETH that
WHEREAS the Trustees have agreed to manage all property coming into
their hands as trustees in accordance with the provisions hereinafter set
forth,
NOW, THEREFORE, the said Trustees hereby declare that they will
hold all cash, securities and other property which they may from time to
time acquire in any manner as Trustees hereunder IN TRUST to manage and
dispose of the same upon the following terms and conditions for the pro rata
benefit of the holders from time to time of certificates representing shares
in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Name
Section 1. This Trust shall be known as "Northeast Investors
Trust" and the Trustees shall conduct the business of the Trust under such
name.
Definition of "Beneficiary"
Section 2. The term "beneficiaries" wherever it appears in this
Declaration of Trust shall mean the holders of certificates representing the
shares of beneficial interest issued by the Trustees as hereinafter
provided. Every such beneficiary by the acceptance of a certificate
representing one or more of such shares shall be held to have expressly
assented and agreed to the terms hereof and to have become a party hereto,
A beneficiary of record appearing upon the books of the Trustees
shall be deemed by the Trustees for all purposes to be the owner of the
shares standing in his name.
Definition of "Trust Property"
Section 3. The term "Trust Property" wherever the same appears
herein shall mean all of the Trust Property held by the Trustees as trustees
hereunder.
Marginal Notes
Section 4. The Article headings and marginal notes inserted in
this Declaration are for convenience of reference and are not to be taken to
control or affect the meaning, construction, or effect thereof.
ARTICLE II
PURPOSE OF TRUST
Purpose of Trust
The purpose of the Trust is to provide investors with a managed,
diversified investment program, the primary objective of which shall be the
production of income. Capital appreciation shall also be an objective of
the Trust, but its achievement must be compatible with the primary objective.
ARTICLE III
ISSUANCE OF SHARES
Par Value Shares
Section 1. The beneficial ownership of the of Property shall be
divided into an unlimited number of transferable shares of One Dollar ($1)
par value each. Such shares shall be represented by certificates in such
form as the Trustees may from time to time determine, transferable by the
holders thereof in person or by attorney upon the books of the Trustees upon
surrender of such certificate properly endorsed for transfer. The Trustees
may authorize the certificates to bear the facsimile signatures of any one
or more of the Trustees provided such certificates are signed by an
authorized officer of a duly appointed transfer agent or registrar of the
Trust. The Trustees shall have full power and authority as to the issue and
transfer of certificates in place of any certificates lost or destroyed.
Such shares may be issued in such fractions as the Trustees shall
determine from time to time, such fractional shares to have pro rata the
same rights and privileges, including voting power, rights to dividends and
other pro rata rights as full shares, and wherever the term 'share' or
'shares' is used herein it shall be deemed for all purposes to include such
fractional shares to the extent of such fractions as full shares. The Trust
at any time at the discretion of the Trustees may purchase, and the record
holders shall be obligated to sell, all of such fractional shares at the
liquidating value thereof in effect at the time of such purchase and the
amount of such liquidating value shall be distributed to such record holders
whereupon all such fractional shares shall become void and such holders of
fractional shares shall have no rights in respect thereof. In lieu of
issuing certificates for full or fractional shares, the Trustees may either
issue receipts therefor in such form as they may determine or may keep
accounts upon their books for the record holders of such shares, who shall
in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and
shall be held to have expressly assented and agreed to the terms hereof.
The record holders of the full or fractional shares of the Trust shall be
entitled to obtain certificates therefor at any time upon request to the
Trustees, but the Trust at the discretion of the Trustees may purchase, and
such record holder shall be obligated to sell, any fractional shares of such
holder at the liquidating value thereof in effect at the time of such
request.
Amount Received by Trust
Section 2. The shares of ownership in the Trust Property may be
issued by the Trustees at not less than the par value thereof to such person
or persons and at such price or prices for cash and/or such other property
as they may from time to time determine. Upon the issue of shares in
exchange for property whether acquired by merger or otherwise, the value of
such property shall be appraised by the Trustees in such manner as shall be
deemed by them to reflect its fair value, and the value thereof when so
determined in good faith shall be conclusive. In no event shall any issue
or sale, subsequent to the issue and sale of the first 10,400 shares, be at
a rate which will yield to the Trust a sum or value less than the fair net
asset value per share of the then outstanding shares of the Trust as
determined by the Trustees as hereinafter provided. Provided, anything
herein to the contrary notwithstanding, that the Trustees may also issue
shares pro rata to the beneficiaries at any time as a stock dividend and may
issue to the beneficiaries from time to time rights to subscribe pro rata to
new shares in the Trust at any price fixed by the Trustees.
Paid-In Surplus
Section 3. Any excess received by the Trustees upon the issue and
sale of the shares of the Trust over the par value thereof may be carried
upon the books of the Trustees as paid-in surplus. The shares may at any
time and from time to time in the discretion of the Trustees be changed to
shares either of no par value or of such other par value as the Trustees may
determine, and the difference between such other par value, or the
difference between the stated value of the shares if they are changed to
shares of no par value, and the then book value of the shares, exclusive of
earned surplus, may be carried as paid-in or capital surplus.
Status of Shares
Section 4. Shares herein shall be deemed to be personal property
giving only the rights in this instrument and in the certificates
specifically set forth. The death of a beneficiary during the continuance
of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased beneficiary to an accounting or to take any
action in court or elsewhere against the Trustees, but only to the rights of
said decedent under this Trust upon the surrender of the certificate or
certificates for the shares owned by him. Ownership of shares shall not
entitle the beneficiary to any title in or to the whole or any part of the
Trust Property or right to call for a partition or division of the same or
for an accounting, nor shall the ownership of shares constitute the holders
thereof partners.
Limitation of Personal Liability
Section 5. The Trustees shall have no power to bind the
beneficiaries personally or to call upon them for the payment of any sum of
money or assessment whatsoever other than such as said beneficiaries may at
any time personally agree to pay by way of subscription to any shares or
otherwise.
ARTICLE IV
RIGHTS AND PRIVILEGES OF BENEFICIARIES
Section 1. The beneficiaries shall have the right to vote
regarding the following matters:
(a) The election of Trustees as provided in Article V, Section 1;
(b) The authorization of any proposed sale of the Trust Property
as a whole as provided in Article VI, Section 1; and
(c) The authorization of any proposed alteration or amendment of
this Declaration of Trust as provided in Article VI, Section 4.
Voting Power and Meetings
Meetings of the Beneficiaries may be called by the Trustees from
time to time for the purpose of taking action upon any matter requiring the
vote or authority of the Beneficiaries as herein provided or for any other
purpose.
Notice of any meeting of the beneficiaries shall be given by the
Trustees at least ten (10) days before such meeting by mailing postage
prepaid, a written or printed notice thereof stating the time, place and
purpose of the meeting to each beneficiary at his address as the same
appears upon the books of the Trust.
Each beneficiary of record shall be entitled at any such meeting to
one vote, either in person or by lawful proxy in writing filed with the
Trustees, for each share of the Trust standing on its books in his name. At
any meeting of the beneficiaries a quorum for the transaction of business
shall consist of holders of a majority of the shares of the Trust then
outstanding present in person or by proxy; provided that a lesser number may
make reasonable adjournments of such meeting until a quorum is obtained. If
the Trustees shall fail or refuse to call or give notice of any meeting
provided for above for a period of thirty (30) days after request in writing
made by beneficiaries holding an aggregate of at least ten per cent (10%) of
the shares of the Trust then outstanding, then beneficiaries holding a like
percentage of such shares may call and give notice of such meeting, and
thereupon the meeting shall be held in the manner provided for herein in
case of call thereof by the Trustees.
At each meeting of the beneficiaries, the Trustees shall appoint
one of their number or one of the beneficiaries to preside thereat. The
Trustees shall appoint a Clerk for each such meeting, who shall be duly
sworn to the faithful discharge of his duties, to keep the minutes of such
meeting, which minutes shall be signed and attested by him and filed with
the records of the Trust.
Right to Dividends
Section 2. The beneficiaries shall be entitled to receive pro rata
annually or oftener dividends in cash or additional shares of the Trust
equal approximately to the net income of the Trust. Such distributions may
be made even though the capital of the Trust may be impaired at the time of
distribution.
In addition, the Trustees may make further distributions among the
beneficiaries in cash or shares out of any available net assets of the
Trust, provided however, that any distributions made from any source other
than earnings shall be accompanied by a statement in writing advising
beneficiaries of the source of funds so distributed together with a basis of
calculation. In the case of a distribution payable in cash or stock, at the
election of any of the shareholders, the Trustees may prescribe whether a
beneficiary failing to express his election before a given time, shall be
deemed to have elected to take shares rather than cash, or to take cash
rather than shares, or to take shares with cash adjustments for fractions.
Definition of "Net Income"
Section 3. The term "net income" is hereby defined as the gross
earnings of the Trust, excluding gains on sales of securities and stock
dividends received, less the expenses of the Trust. The expenses shall
include (1) taxes attributable to the income of the Trust exclusive of gains
on sales, (2) the compensation of the Trustees, and (3) other charges
properly deductible for the maintenance and administration of the Trust; but
there shall not be deducted from gross or net income any losses on
securities, realized or unrealized. The Trustees shall otherwise have full
discretion to determine which items shall be treated as income and which
items as capital and their determination shall be binding upon the
beneficiaries.
Right to Sell Shares to Trust
Section 4. The holders of the shares of the Trust shall be
entitled at any time to sell, and the Trust shall be obligated to buy, their
shares at the net asset value thereof in effect at the time the sale is made
less any liquidating charge that may be imposed by the Trustees in their
discretion from time to time, which charge, if imposed, shall be at a rate
determined by the Trustees not exceeding one per cent (1%) of such net asset
value, upon surrender of the certificate or certificates representing the
same to the Trustees properly endorsed for transfer together with a request
that the Trustees purchase the same at the liquidating value thereof in the
manner herein provided and pay the same to the beneficiary in exchange for
the shares so surrendered. Any such liquidating charge shall be retained as
a part of the Trust Property. The Trustees shall be entitled to pay for the
shares so surrendered out of any funds of the Trust or to sell such of the
Trust Property as may be necessary for such purpose.
For the protection of the remaining beneficiaries the Trustees
reserve the right (1) to demand not more than seven (7) days' written notice
of the request to purchase such shares at such liquidating value, which
period may be extended by the Trustees for such time (a) during which the
New York Stock Exchange may at any time be closed for business other than
the customary weekend and holiday closing or open upon a restricted basis;
(b) during which an emergency exists as a result of which disposal by the
Trust of securities owned by it is not reasonably practicable, or it is not
reasonably practical for the Trust fairly to determine the value of its net
assets; or (c) during such other periods as the Securities and Exchange
Commission may by order permit for the protection of security holders of the
Trust, and (2) to deliver assets in whole or in part in kind in lieu of
cash, all under such reasonable rules and regulations as may be determined
by the Trustees from time to time.
Shares tendered for repurchase which are received by the Trust at
or before the close of the New York Stock Exchange on a day, other than
Saturday, on which the Exchange is open will be purchased on the basis of
the net asset value determined as of the close of the Exchange that day; but
if the day of deposit is not such a day or if the deposit is made after the
close of the Exchange on such a day, the repurchase price will be based on
the net asset value determined as of the close of the Exchange on the next
day, other than Saturday, on which it is open. Payments for shares so
deposited shall be made by the Trust to the beneficiary of record within
seven days after the date upon which the shares are deposited. In case of a
suspension of determination of asset value, the right of redemption will
also be suspended and the beneficiary may either withdraw his certificate
from deposit or receive payment of the net asset value determined as of the
close of business on the first full day, after the suspension, upon which
such Exchange is open.
Determination of Asset Value
Section 5. For all purposes under this Indenture the asset value
shall be determined by or under authority of the Trustees as of the close of
the New York Stock Exchange on each business day upon which such Exchange is
open for unrestricted trading, such asset value to become effective as of
the date and time as of which it is computed and shall remain in effect
until a new asset value shall be determined and become effective.
Such asset value shall be determined in the following manner:
(1)(a) Any security (except a security deemed restricted as to
public resale) listed or traded on a national securities exchange which is
deemed by the Trustees to be the primary market for such security (the
"primary market exchange") shall be valued at the price of the last quoted
sale on the primary market exchange for that day prior to the close of the
New York Stock Exchange if such sale price is readily available, or, in the
absence of any sale on the primary market exchange on that day or if the
last quoted sale price is not readily available, then at the bid price last
quoted prior to the close of the New York Stock Exchange if market
quotations are readily available; otherwise at the fair value thereof as
determined by the Trustees;
(b) Any other security (except a security deemed restricted as to
public resale) shall be valued at the bid price for that day last quoted
prior to the close of the New York Stock Exchange if there are market
quotations readily available, or in the absence of said market quotations,
then at the fair value thereof as determined by the Trustees;
(c) All other assets of the Trust, including any securities deemed
restricted as to public resale, shall be valued at the fair value thereof as
determined by the Trustees.
(2) From the total value of the Trust Property as so determined
shall be deducted the liabilities of the Trust, including borrowings from
banks, accounts payable for investments purchased, and for shares of the
Trust tendered for redemption and not redeemed which are to be stated at
amounts payable therefor, reserves for taxes, Trustees' compensation and
such other expenses and liabilities of the Trust as may be determined by the
Trustees to be accruing liabilities. For the purpose of determining such
asset value in the case of repurchase there may also be deducted a reserve
estimated by the Trustees to be reasonable for such taxes and expenses as
would be then or thereafter incurred by the Trust if the Trust had sold all
of its assets at the liquidating value thereof at the time of such
determination.
(3) The resulting amount shall represent the asset value of the
Trust Property and shall be divided by the number of shares of the Trust
then outstanding, exclusive of any shares of the Trust held in its Treasury,
to determine the net asset value per share. The asset value of the Trust
property and shares as so determined shall be final and conclusive.
During periods, when, in the opinion of the Trustees, an emergency
exists or violent changes in securities prices are taking place, the
Trustees may adopt such other method or methods of appraising the value of
the assets of the Trust as they shall reasonably deem in the best interest
of all beneficiaries of the Trust.
Reports to Beneficiaries
Section 6. The Trustees shall keep accurate books of accounts and
shall make reports to the beneficiaries at least semiannually, such reports
to contain a list of the investments of the Trust and a balance sheet and
income statement for the period covered thereby in such detail as the
Trustees shall deem proper. For the purpose of such reports the Trustees
shall have the financial statements audited and certified by an independent
public accountant and all lists of investments, copies of which are included
in such reports, shall be certified by the Custodian. The reports will show
the aggregate dollar amount of purchases and sales of investment securities,
a statement of the aggregate remuneration paid by the Trust to the Trustees
and in addition a statement of all amounts paid to any firm, corporation,
bank or trust company having a partner, officer or director who is also a
Trustee of the Trust.
Record Date
Section 7. The Trustees may fix a date not exceeding forty (40)
days preceding the date of any meeting of beneficiaries, any dividend
payment date, or any date for the allotment of rights, as a record date for
the determination of the beneficiaries entitled to notice of and to vote at
such meeting, or entitled to receive such dividend or rights.
ARTICLE V
ELECTION, TERM OF OFFICE
POWERS AND DUTIES OF TRUSTEES
Election
Section 1. The Trustees named herein shall serve until the first
annual meeting of the Beneficiaries or until the election and qualification
of their successors. The Beneficiaries may at a special meeting called for
the purpose at any time elect Trustees in addition to those previously
elected. The vote of Beneficiaries holding an aggregate of the majority of
the shares of the Trust represented at such a meeting at which a quorum is
present shall be necessary for the election of Trustees.
Resignations
Any Trustee hereunder may resign his Trust by written instrument
signed by him and deposited with the remaining Trustee or Trustees. Any
vacancy occurring in the number of the Trustees from any cause whatsoever,
whether by reason of the death, resignation or disability of any Trustee or
Trustees, may be filled by the beneficiaries at a meeting called for that
purpose in the same manner provided for in the case of the election of
Trustees; provided, however, that until action by the beneficiaries, the
remaining Trustee or Trustees shall have the power to fill any such vacancy
by an instrument in writing deposited with said Trustee or Trustees, but a
meeting of beneficiaries shall be called forthwith and held as promptly as
possible and in any event within sixty (60) days to ratify such appointment
if a majority of the then existing Trustees have been so appointed since the
last election by the beneficiaries. Anything herein to the contrary
notwithstanding, any vacancy or vacancies which reduce the number of the
Trustees below three (3) shall be filled by the beneficiaries or the
remaining Trustee or Trustees within six (6) months of the creation thereof.
Title of Successors
The title to the Trust Property shall vest in any Trustee or
Trustees elected or appointed as above provided after written acceptance of
such election or appointment by him or them, without any further act, and he
or they shall thereupon have the same powers. duties and exemptions as
though originally named as Trustee herein. Such written acceptances shall
be filed with the records of the Trust, and any certificate signed by a
majority of the Trustees as to who are or were Trustees at any time shall be
conclusive and binding for all purposes.
Vacancies
During any vacancy the remaining Trustee or a majority of the
remaining Trustees may exercise any and all of the powers of the Trustees
hereunder. The determination of a vacancy or vacancies in the number of
Trustees by reason of death, resignation or disability when made by the
remaining Trustee or Trustees and set forth in any instrument filling such
vacancy or vacancies shall be final and conclusive for all purposes.
Delegation of Authority
Any Trustee may by power of attorney delegate his powers for a
period not exceeding six (6) months at any one time to any other Trustee or
Trustees hereunder, provided that in no case shall less than a majority of
the Trustees personally exercise their powers hereunder except as herein
otherwise expressly provided. Any instrument executed under the provisions
of this section may be deposited with a custodian duly appointed for the
Trust Property and the depositing in such manner shall have the same force
and effect as the deposit with the Trustee or Trustees hereinbefore provided.
No Direct Sales or Purchases of Securities Between Trust and Trustees
Section 2.
No Trustee shall directly or indirectly purchase or
sell any securities or other property from or to the Trust other than shares
of the Trust. Anything herein to the contrary notwithstanding, any Trustee
or any organization with which any Trustee may be associated may act as
broker for the Trust but not as principal in making purchases and sales of
securities for or to the Trust for its investment portfolio, and may charge
and receive from the Trust the usual and customary commission for such
service. Any organization with which a Trustee may be associated in acting
as broker for the Trust shall be responsible only for the proper execution
of transactions in accordance with the instructions of the Trust and shall
be subject to no further liability of any sort whatever.
No Loans to Trustees or Distributor
Section 3. No Trustee or general distributor of the shares of the
Trust or any officer or director of such distributor shall directly or
indirectly borrow any money or other property from the Trust.
Investment Powers and Restrictions
Section 4. The Trustees shall have full power and authority to buy
and invest the funds in their hands in bonds, stocks, voting trust
certificates, notes, certificates of indebtedness, acceptances, certificates
of interest, call loans, commercial paper and any negotiable instruments
however named or described, except as specifically limited in this Section
4. The Trustees shall not in any wise be bound or limited by any present or
future law or custom in regard to trust investments but shall have full
authority and power to make any and all investments within the above
limitations which they in their uncontrolled discretion may deem proper to
accomplish the purposes of the Trust, including, without implied limitation,
investments in securities of investment companies and investment trusts to
the extent permitted herein; and the Trustees' right to receive compensation
hereunder shall not be diminished by the making of any such investments.
The Trustees shall not purchase the securities of any one issuer if
such purchase at the time thereof would cause more than five percent (5%) of
the Trust Property to be invested in the securities of any one issuer; but
this restriction shall not apply to obligations of the government of the
United States of America or to obligations of any corporation organized
under a general Act of Congress if such corporation is an instrumentality of
the United States. The Trustees shall not purchase the securities of any
issuer if such purchase at the time thereof would cause more than ten
percent (10%) of any class of securities of such issuer (as disclosed by the
last available financial statement of such issuer) to be held by the Trust.
The Trustees shall not invest in any corporation or association for the
purpose of exercising control of management.
The Trustees shall not invest in or retain in the portfolio of the
Trust the securities of any issuer in which the combined holdings of the
Trustees individually are more than 1/2 of 1% of the outstanding shares of
securities of such issuer; nor shall the Trustees invest in the securities
of any issuer that together with any predecessor thereof has been in
continuous operation for less than three years; nor shall the Trustees
engage in any operations for the account of the Trust generally or
technically known as short sales or marginal transactions, provided that
such limitation shall not prevent any sale of securities by the Trust where
the Trust owns at the time of such sale securities equivalent in kind and
amount to those sold or where the Trust owns at the time of such sale
securities convertible into securities equivalent in kind and amount to
those sold. The Trustees shall not engage in buying or selling for the
Trust any commodities or commodities contracts or any real estate, provided,
however, that the Trustees may, to the extent otherwise permitted herein,
invest in securities of organizations which deal in commodities or real
estate and in securities secured by interests in real estate. The Trustees
shall not engage. in buying or selling for the account of the Trust
so-called puts, calls, straddles or spreads.
The Trustees shall not invest in securities of any other open-end
investment company. The Trustees shall not invest in the securities issued
by other investment trusts or investment companies except by purchases in
the open market from which (so far as is known to the Trustees) no
commission or profit results to a distributor or dealer other than the
customary broker's commission. Nothing contained in this paragraph shall
prevent any purchase for the purpose of effecting a merger, consolidation,
or other acquisition of assets.
The Trustees shall also have full power and authority to sell or
otherwise dispose of free and clear from any of the provisions of this Trust
and from any of the liens created hereby all such investments and to invest
the proceeds or any part thereof with continuing powers to so invest and
reinstate during the continuance of the Trust.
All Property Held by Custodian
Section 5. All securities, cash and other property owned by the
Trust shall be held by a Custodian which shall be a bank or trust company in
good standing and having a capital, surplus and undivided profits of at
least $5,000,000 and doing business in the United States of America. For
purposes of this paragraph, securities owned by the Trust shall be deemed
"held by a Custodian" if such securities are deposited by the Trust's
Custodian in a system for the central handling of securities in a manner
consistent with the applicable Federal securities laws and the rules and
regulations thereunder. The Custodian shall be employed under a Custodian's
Agreement in substantially the form of the agreement between the Trustees
and The Merchants National Bank of Boston, dated March 1, 1950, a copy of
which is on file with the Commissioner of Corporations and Taxation of the
Commonwealth of Massachusetts provided that the form thereof may be amended
or modified with the approval of holders of a majority of the shares either
in writing or by vote at a meeting called for the purpose, and further
provided that a change in the bank or trust company acting as Custodian at
any time shall not be deemed to be such an amendment or modification.
Section 6. Without limiting the generality of any other power or
authority herein granted to the Trustees, they shall have full power and
authority to do any of the following acts:
Power to Pay Taxes
(a) To pay any and all taxes or liens of whatever nature or kind
imposed upon or against the Trust Property or any part thereof, or imposed
individually or jointly upon any of the Trustees hereunder by reason of the
Trust Property or the income or profits thereof, such payment to be out of
the Trust Property available for that purpose.
Power to Make Distributions
(b) To make distribution of income and of available net assets to
the beneficiaries in the manner designated in Article IV, Section 2, hereof.
Borrowing Power
(c) To borrow money from banks for the purposes of this Trust if
in the opinion of the Trustees such borrowing may be advantageously made to
increase the earning power of the Trust but only up to twenty-five per cent
(25%) of the gross assets of the Trust taken at cost at the time the
borrowings are made. The Trustees may also borrow from banks if such
borrowings are made temporarily for extraordinary or emergency purposes but
only to an amount that the aggregate of all bank borrowings of the Trust
shall not exceed thirty per cent (30%) of such gross assets. Such
borrowings may be made with or without collateral security and, the Trustees
may, in their discretion, pledge, mortgage, charge or hypothecate or
otherwise encumber the gross assets of the Trust as security for any loan or
loans; provided however, that no loan shall be made which when added to the
amount of the then outstanding loans, except those to be paid or refunded
therefrom, shall cause the aggregate amount of such loans to exceed thirty
per cent (30%) of the gross assets of the Trust taken at cost at the time of
the loan, and provided further that the Trustees shall have no power so to
pledge, mortgage, charge or hypothecate or otherwise encumber the gross
assets of the Trust without a written consent of the holders of not less
than two-thirds of the issued Trust certificates.
Owner to Sell, Convey and Deal with Trust Property
(d) In all matters and respects to sell, convey and generally to
deal with the Trust Property and to manage and conduct the Trust hereby
created (including the giving or furnishing of proxies for voting at
meetings in respect of any shares of stock, bonds or other securities at any
time included in the Trust Property) as fully as if the Trustees were the
absolute owners thereof, and to execute any and all instruments and to do
any and all things incidental to said Trust not inconsistent with the
provisions hereof, the execution or performance of which the Trustees may
deem expedient.
To Employ Custodian
(e) To employ such custodian or custodians for the safekeeping of
the Trust Property, such dividend disbursing agent or agents, and such
transfer agent or transfer agents and registrar or registrars for the shares
of the Trust, and to make and perform such contracts for the aforesaid
purposes as in their opinion may be reasonable, necessary, or proper for the
conduct of the affairs of the Trust, and to pay the fees and disbursements
of such custodians, dividend disbursing agents, transfer agents and
registrars out of the Trust Property. The Trustees may, notwithstanding any
other provisions herein, cause any or all of the Trust Property to be
transferred or to be acquired or held in the name of the custodian or in the
name of any nominee or nominees of the Trustees or nominee or nominees of
the custodian satisfactory to the Trustees.
To Appoint Distributor
(f) To appoint a distributor or distributors and/or an agent or
agents for the sale of the shares of the Trust and to allow such distributor
or distributors and/or agent or agents a commission or discount upon the
sale of such shares not to exceed eight per cent (8%) of the selling price
thereof, and to enter into such contract or contracts with such distributor
or distributors and/or agent or agents as the Trustees may in their
discretion deem reasonable and proper. Any such contract for the sale or
distribution of the shares of this Trust may be made with any Trustee or any
beneficiary or any firm or corporation in which any Trustee or beneficiary
is interested, and in the absence of any such contract the commission
hereinabove provided may be paid to any Trustee or beneficiary or any firm
or corporation in which any Trustee or beneficiary is interested effecting
any such sale. Such distributor shall purchase shares from the Trust only as
principal against orders therefor and from anyone else only as agent of the
Trust and neither the Trustees nor the distributor nor any of the officers
or directors of the distributor shall take "long" or "short" positions in
purchasing or selling such shares.
To Employ Accountants, Auditors and Legal Counsel
(g) To employ accountants and auditors and legal counsel when
deemed necessary or proper for the purposes of the Trust and to pay their
compensation and expenses out of the Trust Property.
To Incur Other Expenses
(h) To incur and pay out of the Trust Property such expenses and
liabilities, including without implied limitation bookkeeping expenses, not
herein otherwise expressly provided, as may be deemed by the Trustees to be
necessary or proper for the purposes of the Trust.
To Establish Fiscal Year
(i) To establish a fiscal year and from time to time change and
alter the same.
Trustees to Hold Legal Title
Section 7. The Trustees shall hold legal title to and have
absolute and exclusive control and management of all property at any time
belonging to the Trust subject only to the specific limitations herein
contained. The naming of any special duties and powers herein shall not be
construed as limiting the general powers conferred upon the Trustees and
each of the powers herein named shall be deemed separate and distinct powers.
Signatures and Action by Trustees
Section 8. The Trustees may authorize any one or more of their
number to sign, execute, acknowledge and deliver any note, deed, certificate
or other instrument in the name or on behalf of the Trust and upon such
authorization such signature, acknowledgment or delivery shall have full
force and effect as the act of all of the Trustees. The Trustees may select
from their own number a chairman and such other officers as the Trustees
shall from time to time designate, such chairman and officers to have such
powers as the Trustees may from time to time determine. The Trustees may
act with or without a meeting and the action of a majority of the Trustees
for the time being either at a meeting or evidenced by a writing signed by
such majority shall be valid and binding as the action of the Trustees.
Trustees' Compensation
Section 9. As compensation for their services the Trustees shall
be entitled to receive as an aggregate fee, within ten (10) days after the
close of each quarter year, a sum equal to one-eighth of one per cent (1/8
of 1%) of the principal of the Trust at the close of such quarter. The
principal of the Trust for this purpose shall be taken as the total value of
the Trust Property less all liabilities, except borrowings from banks and
accrued Trustees' fees, valued as provided in Article IV, Section 5.
Such compensation shall cover the personal services of the Trustees
to the Trust, and, in addition, the Trustees shall for such compensation
furnish and pay for (1) all research and statistical services to the Trust,
and (2) such office space as the Trust may require. The Trustees, however,
shall not be obligated to pay for any charges or liabilities herein
authorized to be charged directly against the Trust Property.
Liability of Third Persons Dealing with Trustees
Section 10. No person dealing with the Trustees shall be bound to
make any inquiry concerning the validity of any transaction made or to be
made by the Trustees pursuant hereto or be made liable for the application
of money or property paid, loaned or delivered. Every note, bond, contract,
instrument, certificate, share, or undertaking and every other act or thing
whatsoever executed or done by the Trustees or any of them in connection
with the Trust shall be conclusively deemed to have been executed or done
only in their or his capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon. Every note, bond, contract,
instrument, certificate, share, or undertaking made or issued by the
Trustees shall recite that the same was executed or made by them as Trustee
or Trustees and not individually and that the obligations of such instrument
are not binding only upon the Trust Property, and may contain such further
recital as he or they may deem appropriate, but the omission thereof shall
not operate to bind any Trustee or Trustees individually.
Liability of Trustees
Section 11. Provided the Trustees have exercised reasonable care
in their selection, they shall not be responsible or liable in any event for
any neglect or wrongdoing of their agents or employees nor shall any Trustee
be responsible for the act or omission to act of any other Trustee, provided
further that nothing herein contained shall protect any Trustee against any
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE VI
MISCELLANEOUS
Power to Sell Trust
Section 1. Without limiting any of the powers or authorities
hereinbefore set forth, the Trustees shall have the power and authority when
authorized by the affirmative vote of the holders of a majority of the
shares of the Trust then outstanding to sell all of the Trust Property as a
whole to any person, firm, association, trust, or corporation for such price
in cash and/or securities of any such persons, firms, association, trust or
corporation, and upon such terms and conditions as the Trustees may deem
proper; and thereupon this Trust shall terminate.
Indemnity
Section 2. Each person who is or has been a Trustee or beneficiary
of the Trust shall be indemnified by the Trust against expenses reasonably
incurred by him in connection with any claim or in connection with any
action, suit or proceeding to which he may be a party, by reason of his
being or having been a Trustee or beneficiary of the Trust. The term
expenses includes amounts paid in satisfaction of judgments or in settlement
other than amounts paid to the Trust itself. Except as hereinafter provided
the Trust shall not, however, indemnify such Trustee or beneficiary if there
is a claim of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office, unless there
is an adjudication of freedom from such charges. In the case of settlement
or in the case of an adjudication in which the existence of such aforesaid
charges if not established, the Trustees shall, prior to authorizing
reimbursement for any such settlement or adjudication, determine that the
Trustee or beneficiary is not liable to the Trust or its beneficiaries for
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office. In making such
determination the Trustees may be guided, in their discretion, by an opinion
of counsel. Such determination by the Trustees, however, shall not prevent
a beneficiary from challenging such indemnification by appropriate legal
proceedings. The foregoing right of indemnification shall be in addition to
any other rights to which any such Trustee or beneficiary may be entitled as
a matter of law.
Termination of Trust
Section 3. The Trust shall have perpetual existence, provided,
however, that the Trust may be terminated at any time by the unanimous vote
of the Trustees or by a vote or assent representing not less than two-thirds
of the outstanding beneficial interests thereof.
Upon the termination of this Trust either by expiration or
otherwise the Trustees shall make provision for the payment of the expenses
and liabilities of the Trust and of the Trustees and upon the surrender of
the certificates representing the shares of this Trust then outstanding
distribute the remaining assets, or sell and dispose of all or any part
thereof and distribute the net proceeds thereof in cash and/or securities
among the holders of such shares in proportion to their holdings and
thereupon the Trustees shall be discharged from all further obligation
hereunder. The distributive share of any beneficiary not so surrendering
his certificate or certificates may be deposited by the Trustees with any
bank or trust company having an office in Boston, Massachusetts, with
authority to such depository to make delivery thereof to such beneficiary
upon surrender to the depository for the account of the Trustees of such
certificate or certificates as above provided, and such deposit shall be
deemed to be full payment of such distributive share.
Amendment of Trust
Section 4. This Declaration of Trust may be altered or amended at
any time by an instrument in writing signed by all of the then Trustees when
authorized so to do by the written consent of the holders of two-thirds of
the shares then outstanding, said instrument in writing to certify that such
authority or assent has been obtained and to state when such alteration or
amendment shall become effective.
A copy of any alteration or amendment of this Declaration of Trust
shall be filed with the Commissioner of Corporations and Taxation of The
Commonwealth of Massachusetts within thirty (30) days after its execution or
effective date.
Section 5. The Trustees shall covenant to open the records of the
Trust to the inspection of the Commissioner of Corporations of the State of
California at all times and to such other officials of such other states as
the Trustees shall from time to time determine.
IN WITNESS WHEREOF, Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxxx and
Xxxxxx Xxxxxx have hereunto set their hands and seals, for themselves and
their assigns, as of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. Boston, March 1, 1950
Then personally appeared the above named Xxxxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxxxxx and Xxxxxx Xxxxxx, and acknowledged the foregoing
instrument to be their free act and deed, before me
/s/ Xxxxx X. Xxxxxxx
Notary Public
Xxxxx X. Xxxxxxx
Comm. exp. April 21, 1950
(Notary Seal)
TRADOCS: 1044031.1 (mdkv01!.doc)
