Exhibit (a)(3)
SECOND AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
of
THE XXXXXXXX MULTI-STRATEGY TRUST
a Delaware Statutory Trust
Principal Place of Business:
000 Xxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
TABLE OF CONTENTS
Page
ARTICLE I Name and Definitions...............................................4
Section 1. Name..........................................................4
Section 2. Definitions...................................................4
ARTICLE II Purpose of Trust..................................................6
ARTICLE III Shares...........................................................7
Section 1. Division of Beneficial Interest...............................7
Section 2. Ownership of Shares...........................................8
Section 3. Transfer of Shares............................................8
Section 4. Transfer of Shares Only with Consent..........................8
Section 5. Investments in the Trust......................................9
Section 6. Status of Shares and Limitation of Personal Liability.........9
Section 7. Establishment and Designation of Class........................9
Section 8. Indemnification of Shareholders..............................10
ARTICLE IV The Board of Trustees............................................10
Section 1. Number, Election and Tenure..................................10
Section 2. Effect of Death, Resignation, etc. of a Trustee..............11
Section 3. Powers.......................................................11
Section 4. Chairman of the Board of Trustees............................15
Section 5. Payment of Expenses by the Trust.............................15
Section 6. Payment of Expenses by Shareholders..........................15
Section 7. Ownership of Assets of the Trust.............................16
Section 8. Service Contracts............................................16
Section 9. Trustees and Officers as Shareholders........................17
Section 10. Action by Trustees..........................................17
Section 11. Litigation..................................................17
Section 12. Tax Matters.................................................18
ARTICLE V Shareholders' Voting Powers and Meetings..........................18
Section 1. Voting Powers, Meetings, Notice and Record Dates.............18
Section 2. Quorum and Required Vote.....................................19
Section 3. Record Dates.................................................19
Section 4. Additional Provisions........................................19
ARTICLE VI Valuation; Distributions; Repurchases and Redemptions............20
Section 1. Determination of Net Asset Value.............................20
Section 2. Dividends and Distributions..................................20
Section 3. Repurchases and Redemptions..................................20
ARTICLE VII Allocation of Profits and Losses................................21
Section 1. Capital Accounts.............................................21
Section 2. Allocations; Valuation Dates; Performance Fees...............21
Section 3. Allocation of Profit and Loss for Federal Income Tax
Purposes.....................................................22
ARTICLE VIII Compensation and Limitation of Liability of Trustees...........22
Section 1. Compensation.................................................22
Section 2. No Personal Liability of Trustees, etc.......................23
Section 3. Indemnification..............................................25
Section 4. No Bond Required of Trustees.................................26
Section 5. No Duty of Investigation; Notice in Trust Instruments, etc...26
Section 6. Insurance....................................................26
Section 7. Reliance on Experts, etc.....................................26
Section 8. Accounting...................................................26
ARTICLE IX Miscellaneous....................................................27
Section 1. Registered Agent.............................................27
Section 2. Fiscal Year..................................................27
Section 3. Dissolution and Termination of Trust or Classes..............27
Section 4. Reorganization and Sale of Assets............................27
Section 5. Amendments...................................................29
Section 6. Filing of Copies, References, Headings, Rules of
Construction.................................................29
Section 7. Applicable Law...............................................29
Section 8. Provisions in Conflict with Law or Regulations...............30
Section 9. Statutory Trust Only.........................................30
Section 10. Derivative Actions..........................................31
Section 11. Counterparts................................................31
Section 12. Reliance by Third Parties...................................31
3
SECOND AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
THE XXXXXXXX MULTI-STRATEGY TRUST
Dated: December 12, 2005
THIS SECOND AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST is
made and entered into as of the date set forth above by the trustees named
hereunder (such individuals, so long as they continue in office in accordance
with the provisions of this Second Amended and Restated Agreement and
Declaration of Trust, and all other persons who may hereafter be duly elected
or appointed, qualified and serving as trustees in accordance with the
provisions hereof, the "Trustees") for the purpose of amending and restating
in its entirety the Declaration of Trust, dated as of June 29, 2005 (the
"Existing Trust Agreement") executed by the Trustees, in accordance with the
provisions hereinafter set forth.
WHEREAS, the Trustees, pursuant to Section 5 of the Existing Trust
Agreement, desire to amend and restate the Existing Trust Agreement and have
determined that this Agreement shall make specific amendments to the Existing
Trust Agreement that will not have a material adverse effect on the
Shareholders existing as of the date hereof.
NOW, THEREFORE, the Trustees hereby declare that the Trustees shall hold
IN TRUST all cash, securities, financial instruments and other assets which
the Trust now possesses or may hereafter acquire from time to time in any
manner and manage and dispose of the same upon the following terms and
conditions for the benefit of the holders of units of beneficial interest in
this Trust.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust known as THE XXXXXXXX MULTI-STRATEGY TRUST
was formed under the Delaware Act pursuant to the Certificate of Trust and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine under this Section; provided that
the Trustees may, without Shareholder approval, change the name of the Trust.
Any name change shall become effective upon the execution and filing by a
majority of the then Trustees of a certificate of amendment or a restated
certificate pursuant to Section 3810 of the Delaware Act. In the event of any
such change, the Trustees shall cause notice to be given to the affected
Shareholders within a reasonable time after the implementation of such change.
Section 2. Definitions. Whenever used herein, unless otherwise required
by the context or specifically provided, the following terms have the
respective meanings assigned to them below:
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(1) "Administrator" means any party furnishing services to the Trust
pursuant to any administrative services agreement;
(2) "Affiliated Person" has the meaning assigned to it in Section 2(a)(3)
of the 1940 Act;
(3) "Bylaws" shall mean the Bylaws of the Trust as amended from time to
time, which Bylaws are expressly herein incorporated by reference as part of
the "governing instrument" within the meaning of the Delaware Act;
(4) "Certificate of Conversion" means the certificate of conversion from
a limited liability company to a statutory trust filed by the Trustees in the
Office of the Secretary of State of the State of Delaware in accordance with
the Delaware Act;
(5) "Certificate of Trust" means the certificate of trust, as amended or
restated from time to time, filed pursuant to the Declaration of Trust, dated
as of June 29, 2005, in the Office of the Secretary of State of the State of
Delaware in accordance with the Delaware Act;
(6) "Class" means a class of Shares of the Trust established in
accordance with the provisions of Article III hereof;
(7) "Code" means the Internal Revenue Code of 1986 and the rules and
regulations thereunder, each as amended from time to time;
(8) "Commission" shall mean the Securities and Exchange Commission;
(9) "Declaration of Trust" means this Second Amended and Restated
Agreement and Declaration of Trust, as amended, supplemented or restated from
time to time;
(10) "Delaware Act" means the Delaware Statutory Trust Act, 12 Del. C.,
Section 3801, et seq., as amended from time to time;
(11) "Interested Person" shall have the meaning given it in Section
2(a)(19) of the 1940 Act;
(12) "Investment Adviser" means a party furnishing services to the Trust
pursuant to any contract described in Article IV, Section 8(1) hereof;
(13) "1940 Act" means the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to time and any order or
orders thereunder which may from time to time be applicable to the Trust;
(14) "Performance Fee" has the meaning assigned to it in Section 2(2).
(15) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures, estates and other entities, whether or
not legal entities,
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and governments and agencies and political subdivisions thereof, whether
domestic or foreign;
(16) "principal underwriter" shall have the meaning given it in the 1940
Act;
(17) "Registration Statement" means the Trust's currently effective
registration statement under the 1940 Act, as it may be amended or
supplemented from time to time;
(18) "Shareholder" means a record owner of outstanding Shares;
(19) "Shares" means the units into which the beneficial interest in the
Trust shall be divided from time to time and includes fractions of Shares as
well as whole Shares;
(20) "Trust" means the Delaware statutory trust established under the
Delaware Act pursuant to the filing of the Certificate of Trust in the Office
of the Secretary of State of the State of Delaware;
(21) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is from time to time owned or held by or for the
account of the Trust or the Trustees; and
(22) "Trustees" means the persons who have signed this Declaration of
Trust and all other Person or Persons who may from time to time be duly
elected or appointed to serve as Trustees in accordance with the provisions
hereof and the Bylaws, in each case so long as such Person or Persons shall
continue in office in accordance with the terms of this Declaration of Trust
and the Bylaws, and reference herein to a Trustee or the Trustees shall refer
to such Person or Persons in his, her or their capacities as trustee or
trustees hereunder. Unless otherwise required by the context or specifically
provided, any reference herein to the Trustees shall refer to the Trustee at
any time that there is only one Trustee of the Trust.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the
business of a closed-end, non-diversified management investment company
registered under the 1940 Act by investing in securities and other financial
instruments, and to carry on such other business as the Trustees may from time
to time determine pursuant to their authority under this Declaration of Trust.
In furtherance of the foregoing, it shall be the purpose of the Trust to do
everything necessary, suitable, convenient or proper for the conduct,
promotion and attainment of any businesses and purposes which at any time may
be incidental or may appear conducive or expedient for the accomplishment of
the business of a closed-end, non-diversified management investment company
registered under the 1940 Act and which may be engaged in or carried on by a
trust organized under the Delaware Act, and in connection therewith the Trust
shall have and may exercise all of the powers conferred by the laws of the
State of Delaware upon a Delaware statutory trust.
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More generally, the Trust's business and purpose is to trade, buy, sell,
swap or otherwise acquire, hold or dispose of any and all securities and
commodities (including, but not limited to, foreign currencies,
mortgage-backed securities, money market instruments, financial instruments,
and any other securities or items which are now, or may hereafter be, the
subject of futures contract trading), domestic and foreign futures contracts,
forward contracts, foreign exchange commitments, options on physical
commodities and on futures contracts, spot (cash) commodities and currencies,
and any rights pertaining thereto, as well as swaps and other derivatives,
whether traded on an organized exchange or otherwise, and to engage in all
activities necessary, convenient or incidental thereto. The Trust may also
engage in "hedge," arbitrage and cash trading of any of the foregoing
instruments. The Trust may engage in such business and purpose either directly
or through joint ventures, entities or partnerships, provided that the Trust's
participation in any of the foregoing has no adverse economic or liability
consequences for the Shareholders, which consequences would not be present had
the Trust engaged in that same business or purpose directly.
ARTICLE III
Shares
Section 1. Division of Beneficial Interest. Beneficial interests in the
Trust may consist of one Class or may be divided into two or more Classes or may
consist of no Classes. Subject to the further provisions of this Article III
and any applicable requirements of the 1940 Act, the Trustees shall have full
power and authority, in their sole and exclusive discretion, and without
obtaining any authorization or vote of the Shareholders of the Trust or any
Class thereof, (i) to divide the beneficial interest in the Trust, or in any
Class thereof that may be established from time to time, into an unlimited
number of Shares, with or without par value as the Trustees shall determine,
(ii) to issue and sell Shares without limitation as to number (including
fractional Shares), to such Persons and for such amount and type of
consideration, subject to any restriction set forth in the Bylaws, including
cash or securities, at such time or times and on such terms as the Trustees
may deem appropriate, (iii) to establish and designate and to change in any
manner the beneficial interest in the Trust, or any Class thereof, and to fix
such preferences, voting powers, rights, duties and privileges as the Trustees
may from time to time determine, which preferences, voting powers, rights,
duties and privileges may be senior or subordinate to (or in the case of
business purpose, different from) any existing Class, (iv) to divide or
combine the Shares of the Trust, or any Class thereof, into a greater or
lesser number without thereby materially changing the proportionate beneficial
interest of the Shares of the Trust, or any Class, in the assets held with
respect to the Trust, (v) to classify or reclassify any issued Shares of the
Trust, into shares of one or more Classes thereof and (vi) to take such other
action with respect to the Shares as the Trustees may deem desirable.
Subject to the distinctions permitted among Classes of Shares of the
Trust, as established by the Trustees consistent with the requirements of the
1940 Act, each Share of the Trust shall represent an equal beneficial interest
in the net assets of the Trust, and each holder of Shares of the Trust shall
be entitled to receive such holder's pro rata share of distributions of income
and capital gains, if any, made with respect thereto.
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All references to Shares in this Declaration of Trust shall be deemed to
be Shares of the Trust or of any or all Classes thereof established from time
to time, as the context may require. All provisions herein relating to the
Trust shall apply equally to each Class thereof as established from time to
time, except as the context otherwise requires.
All Shares issued hereunder, including Shares issued in connection with
a dividend in Shares or a split or reverse split of Shares, shall be fully
paid and nonassessable. Except as otherwise provided by the Trustees,
Shareholders shall have no preemptive or other right to subscribe to any
additional Shares or other securities issued by the Trust.
The Trustees may hold as treasury Shares, reissue for such consideration
and on such terms as they may determine, or cancel, at their discretion from
time to time, any Shares of any Class thereof reacquired by the Trust.
Section 2. Ownership of Shares. The ownership of Shares shall be recorded
on the books of the Trust or a transfer or similar agent for the Trust, which
books shall be maintained separately for the Shares of any Class. No
certificates certifying the ownership of Shares shall be issued except as the
Trustees may otherwise determine from time to time. The Trustees may make such
rules as they consider appropriate for the issuance of Share certificates, the
transfer of Shares and similar matters. The record books of the Trust as kept
by the Trust or any transfer or similar agent, as the case may be, shall be
conclusive as to the identity of the Shareholders of the Trust or any Class,
as to the number of Shares of the Trust or any Class held from time to time by
each Shareholder and the Persons who shall be entitled to payments of
distributions or otherwise to exercise or enjoy the rights of Shareholders.
Section 3. Transfer of Shares. Subject to Section 4 of this Article III
and except as otherwise provided by the Trustees, Shares shall be transferable
on the books of the Trust only by the record holder thereof or by his duly
authorized agent upon delivery to the Trustees or the Trust's transfer agent
of a duly executed instrument of transfer, together with a Share certificate
if one is outstanding, and such evidence of the genuineness of each such
execution and authorization and of such other matters as may be required by
the Trustees. Upon such delivery, and subject to any further requirements
specified by the Trustees or contained in the Bylaws, the transfer shall be
recorded on the books of the Trust. Until a transfer is so recorded, the
Shareholder of record of Shares shall be deemed to be the holder of such
Shares for all purposes hereunder and neither the Trustees nor the Trust, nor
any transfer agent or registrar or any officer, employee or agent of the
Trust, shall be affected by any notice of a proposed transfer.
Section 4. Transfer of Shares Only with Consent. Shares in the Trust will
be offered privately, and, accordingly, any resales may be made only in
compliance with the restrictions imposed by applicable securities laws. Each
Shareholder expressly agrees that such Shareholder will not directly or
indirectly assign, transfer or dispose of, by gift, pledge, hypothecation or
otherwise, any of such Shareholder's Shares or any part or all of such
Shareholder's right, title or interest in the capital or profits of the Trust
without giving written notice of the assignment, transfer or disposition to
the Trust, and receiving the Trustees' consent thereto. Such consent may be
withheld in the Trustees' sole and absolute discretion. No assignment,
transfer or disposition shall be effective against the Trust until the first
day of the month following the month in which the Trustees consent thereto.
Each assignee shall be admitted as a Shareholder,
8
and be subject to all the obligations and liabilities consequent upon such
status under the Delaware Act, and it shall be a condition of the Trustees'
consent that such assignee agree to execute all documents which the Trustees
consider necessary or desirable to effect the substitution of such assignee as
a substituted Shareholder. If an assignment, transfer or disposition occurs by
reason of the death of a Shareholder, written notice of assignment shall be
given by the duly authorized representative of the estate of the Shareholder
and shall be supported by such proof of legal authority and valid assignment
as may reasonably be requested by the Trustees. The consent of the Trustees is
not required for any assignment by reason of death. Each Shareholder agrees
that with the consent of the Trustees any assignee may become a substituted
Shareholder without the further act or consent of any Shareholder. Each
Shareholder agrees that such Shareholder has no right to consent to and will
not consent to any person or entity becoming a substituted Shareholder, except
as set forth in the preceding sentence. An assigning Shareholder shall remain
liable to the Trust as provided in the Delaware Act.
Section 5. Investments in the Trust. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize. The Trustees
may authorize any distributor, principal underwriter, custodian, transfer
agent or other person to accept orders for the purchase of Shares that conform
to such authorized terms and to reject any purchase orders for Shares whether
or not conforming to such authorized terms.
Section 6. Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in
this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to be bound by the terms
hereof. The death, incapacity, dissolution, termination or bankruptcy of a
Shareholder during the existence of the Trust shall not operate to dissolve or
terminate the Trust or any Class thereof, nor entitle the representative of
any such Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but entitles such representative
only to the rights of such Shareholder under this Trust. Ownership of Shares
shall not entitle the Shareholder to any title in or to the whole or any part
of the Trust Property or right to call for a partition or division of the same
or for an accounting, nor shall the ownership of Shares constitute the
Shareholders as partners. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any
Shareholders, nor, except as specifically provided herein, to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
Section 7. Establishment and Designation of Class. The establishment and
designation of any Class of Shares shall be effective upon the adoption by a
majority of the then Trustees of a resolution that sets forth such
establishment and designation whether directly in such resolution or by
reference to, or approval of, another document that sets forth each such Class
including the Registration Statement, or as otherwise provided in such
resolution. The relative rights and preferences of each Class thereof shall be
as set forth herein and as set forth in the Registration Statement, unless
otherwise provided in the resolution establishing such Class.
(1) Dividends and Distributions. Dividends and distributions on
Shares of a particular Class may be paid with such frequency as the
Trustees may determine, which
9
may be daily or otherwise, pursuant to a standing resolution or
resolution adopted only once or with such frequency as the Trustees may
determine, to the Shareholders of Shares in that Class, from such of the
income and capital gains, accrued or realized, from the Trust Property
allocable to that Class, as the Trustees may determine, after providing
for actual and accrued liabilities. All dividends and distributions on
Shares in a particular Class shall be distributed pro rata to the
Shareholders of Shares in that Class in proportion to the total
outstanding Shares in that Class held by such Shareholders at the date
and time of record established for the payment of such dividends or
distribution, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any Class.
Such dividends and distributions may be made in cash or Shares of that
Class or a combination thereof as determined by the Trustees or pursuant
to any program that the Trustees may have in effect at the time for the
election by each Shareholder of the mode of the making of such dividend
or distribution to that Holder.
(2) Equality. Except as provided herein or in the resolution
designating and establishing any Class, all the Shares shall represent an
equal proportionate interest in the assets of the Trust, and each Share
shall be equal to each other Share (subject to such rights and
preferences as may have been established and designated with respect to
any Classes). The relative rights and preferences of the Classes may
differ in such other respects as the Trustees may determine to be
appropriate in their sole discretion.
(3) Fractions. Any fractional Share of a Class shall carry
proportionately all the rights and obligations of a whole Share of that
Class, including rights and obligations with respect to voting, receipt
of dividends and distributions, redemption of Shares and termination of
the Trust.
(4) No Appraisal Rights. Shareholders shall have no right to demand
payment for their Shares or to any other rights of dissenting
Shareholders in the event the Trust participates in any transaction which
would give rise to appraisal or dissenters' rights by a stockholder of a
corporation organized under the General Corporation Law of Delaware, or
otherwise.
Section 8. Indemnification of Shareholders. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating to such Person being or having been a Shareholder, and not because of
such Person's acts or omissions, the Shareholder or former Shareholder (or
such Person's heirs, executors, administrators or other legal representatives,
or, in the case of a corporation or other entity, its corporate or other
general successor) shall be entitled to be held harmless from and indemnified
out of the assets of the Trust against all loss and expense arising from such
claim or demand.
ARTICLE IV
The Board of Trustees
Section 1. Number, Election and Tenure. The number of Trustees shall
initially be four, who shall be Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxxx
X. Xxxxxxx and Xxxxxx X.
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Xxxxxxx. Thereafter, the number of Trustees shall at all times be at least one
and no more than fifteen as determined, from time to time, by the Trustees
pursuant to Section 3 of this Article IV. Each Trustee shall serve during the
continued lifetime of the Trust or, if sooner, until he or she dies, resigns,
retires, or until he or she is removed as herein provided. Any Trustee may
resign at any time by written instrument signed by the Trustee and delivered
to the Chairman or any officer of the Trust or to a meeting of the Trustees.
Such resignation shall be effective upon receipt unless specified to be
effective at some other time. Any Trustee may be removed at any meeting of
Shareholders by the affirmative vote of the majority of the outstanding Shares
of the Trust, or by the Trustees as set forth in Section 3 of this Article IV,
with or without cause. Except to the extent expressly provided in a written
agreement with the Trust, no Trustee resigning and no Trustee removed shall
have any right to any compensation for any period following the effective date
of his or her resignation or removal, or any right to damages on account of
such removal.
If there is more than one Trustee, in the event that less than
two-thirds of the Trustees holding office have been elected by the
Shareholders, to the extent required by the 1940 Act, but only to such extent,
the Trustees then in office shall call a Shareholders' meeting for the
election of Trustees. Any Shareholder meeting held for such purpose shall be
held on a date fixed by the Trustees and the Trustees shall be elected by
Shareholders owning of record a plurality of Shares voting at any such
meeting.
Section 2. Effect of Death, Resignation, etc. of a Trustee. The death,
declination to serve, resignation, retirement, removal or incapacity of one or
more Trustees, or all of them, shall not operate to dissolve or terminate the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust. Whenever there shall be fewer than the designated number
of Trustees, until additional Trustees are elected or appointed as provided
herein to bring the total number of Trustees equal to the designated number,
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 of Trust. As conclusive evidence of such vacancy,
a written instrument certifying the existence of such vacancy may be executed
by an officer of the Trust or by a majority of the Trustees. In the event of
the death, declination, resignation, retirement, removal, or incapacity of all
the then Trustees within a short period of time and without the opportunity
for at least one Trustee being able to appoint additional Trustees to replace
those no longer serving, the Trust's Investment Adviser(s) are empowered to
appoint new Trustees subject to the provisions of Section 16(a) of the 1940
Act.
Section 3. Powers. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be under the exclusive and absolute
control of the Trustees and shall be managed by the Trustees (but with such
powers of delegation as may be permitted by this Declaration of Trust, the
Bylaws and the Delaware Act), and the Trustees shall have all powers necessary
or convenient to carry out that responsibility including the power to engage
in securities and commodities transactions of all kinds on behalf of the
Trust. Without limiting the foregoing, the Trustees may: adopt Bylaws not
inconsistent with this Declaration of Trust providing for the regulation and
management of the affairs of the Trust and may amend and repeal them to the
extent that such Bylaws do not reserve that right to the Shareholders; enlarge
or reduce their number; remove any Trustee with or without cause at any time
by written instrument signed by at least two-thirds of the number of Trustees
prior to such removal,
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specifying the date when such removal shall become effective, and fill
vacancies caused by enlargement of their number or by the death, resignation
or removal of a Trustee; elect and remove, with or without cause, such
officers and appoint and terminate such agents as they consider appropriate;
appoint from their own number and establish and terminate one or more
committees consisting of one or more Trustees which may exercise the powers
and authority of the Board of Trustees to the extent that the Trustees
determine; employ one or more custodians of the assets of the Trust and
authorize such custodians to employ subcustodians and to deposit all or any
part of such assets in a system or systems for the central handling of
securities or with a Federal Reserve Bank; retain a transfer agent or a
shareholder servicing agent, or both; provide for the issuance and
distribution of Shares by the Trust directly or through one or more principal
underwriters or otherwise; redeem, repurchase and transfer Shares pursuant to
applicable law; set record dates for the determination of Shareholders with
respect to various matters; declare and pay dividends and distributions to
Shareholders; and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee of the Trustees and to
any agent or employee of the Trust or to any such custodian, transfer or
Shareholder servicing agent, or principal underwriter. Any determination as to
what is in the interests of the Trust made by the Trustees in good faith shall
be conclusive. In construing the provisions of this Declaration of Trust, the
presumption shall be in favor of a grant of power to the Trustees.
Without limiting the foregoing, the Trustees shall have the power and
authority to cause the Trust (or to act on behalf of the Trust):
(1) To invest and reinvest cash, to hold cash uninvested and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire,
own, hold, pledge, sell, assign, transfer, exchange, distribute, write
options on, lend or otherwise deal in or dispose of contracts for the
future acquisition or delivery of fixed income or other securities, and
securities of every nature and kind, including all types of bonds,
debentures, stocks, negotiable or non-negotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, bankers'
acceptances and other securities and financial instruments of any kind,
issued, created, guaranteed or sponsored by any and all Persons,
including states, territories and possessions of the United States and
the District of Columbia and any political subdivision, agency or
instrumentality thereof, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality, or by any bank or savings institution, or
by any corporation or organization organized under the laws of the United
States or of any state, territory or possession thereof, or by any
corporation or organization organized under any foreign law, or in "when
issued" contracts for any such securities, to change the investments of
the assets of the Trust; and to exercise any and all rights, powers and
privileges of ownership or interest and to fulfill any and all
obligations in respect of any and all such investments of every kind and
description, including 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
instruments;
(2) To purchase, sell and hold currencies and enter into contracts
for the future purchase or sale of currencies, including but not limited
to forward foreign currency exchange contracts;
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(3) To sell, exchange, lend, pledge, mortgage, hypothecate, lease or
write options (including, options on futures and forward contracts) with
respect to or otherwise deal in any property rights relating to any or
all of the assets of the Trust;
(4) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such Person or Persons as the
Trustees shall deem proper, granting to such Person or Persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(5) To exercise powers and right of subscription or otherwise which
in any manner arise out of ownership of securities;
(6) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in
its own name or in the name of a custodian or subcustodian or a nominee
or nominees or otherwise;
(7) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or issuer; and to pay
calls or subscriptions with respect to any security held in the Trust;
(8) To join with other security holders in acting through a
committee, depository, voting trustee or otherwise, and in that
connection to deposit any security with, or transfer any security to, any
such committee, depository or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so deposited
or transferred) as the Trustees shall deem proper, and to agree to pay,
and to pay, such portion of the expenses and compensation of such
committee, depository or trustee as the Trustees shall deem proper;
(9) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including, but not
limited to, claims for taxes;
(10) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(11) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes and in connection therewith issue notes or
other evidence of indebtedness; and to mortgage and pledge the Trust
Property or any part thereof to secure any or all of such indebtedness;
(12) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship,
or otherwise assume liability for payment thereof; and to mortgage and
pledge the Trust Property or any part thereof to secure any of or all of
such obligations;
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(13) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the
conduct of the business, including insurance policies insuring the assets
of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, the
Trustees, officers, employees, agents, investment advisers, principal
underwriters, or independent contractors of the Trust, individually
against all claims and liabilities of every nature arising by reason of
holding Shares, holding, being or having held any such office or
position, or by reason of any action alleged to have been taken or
omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power to
indemnify such Person against liability;
(14) To adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans and trusts, including the purchasing of life
insurance and annuity contracts as a means of providing such retirement
and other benefits, for any or all of the Trustees, officers, employees
and agents of the Trust;
(15) To operate as and carry out the business of an investment
company, and exercise all the powers necessary or appropriate to the
conduct of such operations;
(16) To enter into contracts of any kind and description;
(17) To employ one or more banks, trust companies or companies that
are members of a national securities exchange or such other entities as
the Commission may permit as custodians of any assets of the Trust
subject to any conditions set forth in this Declaration of Trust or in
the Bylaws;
(18) To interpret the investment policies, practices or limitations
of the Trust or any Class established from time to time;
(19) To invest part or all of the Trust Property, or to dispose of
part or all of the Trust Property and invest the proceeds of such
disposition, in securities issued by one or more other investment
companies registered under the 1940 Act (including investment by means of
transfer of part or all of the Trust Property in exchange for an interest
or interests in such one or more investment companies) all without any
requirement of approval by Shareholders unless required by the 1940 Act.
Any such other investment company may (but need not) be a trust (formed
under the laws of the State of Delaware or of any other state) which is
classified as a partnership for federal income tax purposes;
(20) To establish one or more committees, to delegate any powers of
the Trustees to such committees and to adopt a committee charter
providing for such responsibilities, membership (including Trustees,
officers or other agents of the Trust therein) and other characteristics
of such committees as the Trustees may deem proper. Notwithstanding the
provisions of this Article IV, and in addition to such provisions or any
other provision of this Declaration of Trust or of the Bylaws, the
Trustees may by
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resolution appoint a committee consisting of fewer than the whole number
of the Trustees then in office, which committee may be empowered to act
for and bind the Trustees and the Trust, as if the acts of such committee
were the acts of all the Trustees then in office, with respect to any
matter including the institution, prosecution, dismissal, settlement,
review or investigation of any action, suit or proceeding that may be
pending or threatened to be brought before any court, administrative
agency or other adjudicatory body;
(21) To provide for separate classes, groups or series of Trustees
with respect to any Class thereof or any Trust property having such
relative rights, powers and duties as the Trustees may determine; and
(22) Subject to the 1940 Act, to engage in any other lawful act or
activity in which a statutory trust organized under the Delaware Act may
engage.
The Trust shall not be limited to investing in obligations maturing
before the possible termination of the Trust. The Trust shall not in any way
be bound or limited by any present or future law or custom in regard to
investment by fiduciaries. The Trust shall not be required to obtain any court
order to deal with any assets of the Trust or take any other action hereunder.
Section 4. Chairman of the Board of Trustees. A Chairman of the Board of
Trustees shall be elected by the Board of Trustees from among the Trustees of
the Trust who are not Interested Persons of the Trust ("Independent
Trustees"). The Chairman of the Board of Trustees shall preside over the
meetings of the Board of Trustees, shall set the agendas for the Board of
Trustees meetings, and shall have substantially the same responsibilities as
would a typical chairman of a board of directors of a corporation. The Board
of Trustees may elect Co-Chairmen of the Board of Trustees, provided each is
an Independent Trustee of the Trust. In the absence of the Chairman of the
Board of Trustees, another Independent Trustee shall be designated by the
Board of Trustees to preside over the meeting of the Board of Trustees, to set
the agenda for the meeting and to perform the other responsibilities of the
Chairman of the Board of Trustees in his or her absence. The Chairman of the
Board of Trustees shall not be an officer of the Trust.
Section 5. Payment of Expenses by the Trust. The Trustees are authorized
to pay or cause to be paid out of the principal or income of the Trust, or
partly out of the principal and partly out of income, as they deem fair, all
expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust, or in connection with the management thereof,
including, but not limited to, the Trustees' compensation and such expenses
and charges for the services of the Trust's officers, employees, Investment
Adviser, principal underwriter, auditors, counsel, custodian, transfer agent,
shareholder servicing agent, and such other agents or independent contractors
and such other expenses and charges as the Trustees may deem necessary or
proper to incur.
Section 6. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder to
pay directly, in advance or arrears, for charges of the Trust's custodian or
transfer agent, Shareholder servicing or similar agent, an amount fixed from
time to time by the Trustees, by setting off such charges
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due from such Shareholder from declared but unpaid dividends owed such
Shareholder and/or by reducing the number of Shares in the account of such
Shareholder by that number of full and/or fractional Shares which represents
the outstanding amount of such charges due from such Shareholder.
Section 7. Ownership of Assets of the Trust. Title to all of the assets
of the Trust shall at all times be considered as vested in the Trust, 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
any other Person as nominee, on such terms as the Trustees may determine,
provided that any such Person hold such legal title on behalf of the Trust.
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 the
resignation, removal or death of a Trustee, he or she 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.
Section 8. Service Contracts.
(1) Subject to such requirements and restrictions as may be set
forth under federal law and in the Bylaws, including the requirements of
Section 15 of the 1940 Act, the Trustees may, at any time and from time
to time, contract for exclusive or nonexclusive advisory, management
and/or administrative services for the Trust with any corporation, trust,
association or other organization; and any such contract may contain such
other terms as the Trustees may determine, including authority for the
Investment Adviser or Administrator to delegate certain or all of its
duties under such contracts to qualified investment advisers and
administrators and to determine from time to time without prior
consultation with the Trustees what investments shall be purchased, held,
sold or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested and to make changes in the Trust's investments,
or such other activities as may specifically be delegated to such party.
(2) The Trustees may also, at any time and from time to time,
contract with any corporation, trust, association or other organization,
appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares of the Trust or other securities to be issued
by the Trust. Every such contract shall comply with such requirements and
restrictions as may be set forth under federal law and in the Bylaws,
including the requirements of Section 15 of the 1940 Act, and any such
contract may contain such other terms as the Trustees may determine.
(3) The Trustees are also empowered, at any time and from time to
time, to contract with any corporations, trusts, associations or other
organizations, appointing it or them the custodian, transfer agent and/or
Shareholder servicing agent for the Trust. Every such contract shall
comply with such requirements and restrictions as may be set forth under
federal law and in the Bylaws or stipulated by resolution of the
Trustees.
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(4) Subject to applicable federal law, including the 1940 Act, the
Trustees are further empowered, at any time and from time to time, to
contract with any entity to provide such other services to the Trust as
the Trustees determine to be in the best interests of the Trust.
(5) The fact that: (a) any of the Shareholders, Trustees, or
officers of the Trust is a shareholder, director, officer, partner,
trustee, employee, manager, adviser, principal underwriter, distributor,
or affiliate or agent of or for any corporation, trust, association, or
other organization, or for any parent or affiliate of any organization
with which an advisory, management or administration contract, or
principal underwriter's or distributor's contract, or transfer,
shareholder servicing or other type of service contract may have been or
may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
(b) any corporation, trust, association or other organization with which
an advisory, management or administration contract or principal
underwriter's or distributor's contract, or transfer, shareholder
servicing or other type of service contract may have been or may
hereafter be made also has an advisory, management or administration
contract, or principal underwriter's or distributor's contract, or
transfer, shareholder servicing or other service contract with one or
more other corporations, trusts, associations, or other organizations, or
has other business or interests, shall not affect the validity of any
such contract or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same, or create any liability or
accountability to the Trust or its Shareholders, provided approval of
each such contract is made pursuant to the requirements of the 1940 Act.
Section 9. Trustees and Officers as Shareholders. Any Trustee, officer or
agent of the Trust may acquire, own and dispose of Shares to the same extent
as if he were not a Trustee, officer or agent; and the Trustees may issue and
sell and cause to be issued and sold Shares to, and redeem such Shares from,
any such Person or any firm or company in which such Person is interested,
subject only to the general limitations contained herein, in the Bylaws, or in
the Registration Statement relating to the sale and repurchase of such Shares.
Section 10. Action by Trustees. Unless otherwise specified herein or in
the Bylaws or required by law, any action by the Trustees shall be deemed
effective if approved or taken by a majority of the Trustees present at a
meeting of Trustees at which a quorum (as defined in the Bylaws as the same
may be amended from time to time) of Trustees are present, within or without
the State of Delaware.
Section 11. Litigation. The Trustees shall have the power to engage in
and to prosecute, defend, compromise, abandon, or adjust, by arbitration or
otherwise, any actions, suits, proceedings, disputes, claims, and demands
relating to the Trust or the Trust Property, and, out of the Trust Property,
to pay or to satisfy any debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall include without
limitation the power of the Trustees or any appropriate committee thereof, in
the exercise of their or its good faith business judgment, consenting to
dismiss any action, suit, proceeding, dispute, claim or demand, brought by any
Person, including, to the extent permitted by applicable law, a Shareholder in
such Shareholder's own name or in the name of the Trust, whether or not the
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Trust, or any of the Trustees may be named individually therein or the subject
matter arises by reason of business for or on behalf of the Trust.
Section 12. Tax Matters.
(1) The Trustees shall have the exclusive power, authority and
responsibility with respect to the Trust regarding: (i) preparation and
filing of tax returns; (ii) providing reports to the Shareholders
regarding tax information necessary to the filing of their respective tax
returns; (iii) making any and all available elections with respect to the
tax treatment of the Trust and its investments; (iv) representing the
Trust before the Internal Revenue Service and/or any state taxing
authority and exercising the powers and authorities of a tax matters
partner under the Code with respect to the Trust's tax returns; (v)
exercising such responsibility as may be imposed by law with respect to
withholding from a Shareholder's share of income or distributions; (vi)
providing to the accountants of the Trust such instructions regarding
allocations of realized income, gains and losses as may be necessary or
appropriate to assure compliance by the Trust with applicable provisions
of the Code and Treasury Regulations; and (vii) any and all other tax
matters.
(2) The Trustees and Shareholders intend that the Trust will be
classified as a partnership for U.S. federal income tax purposes, and the
Trustees intend to operate the Trust in a manner so as not to jeopardize
this classification. The Trustees will not take any action (including by
filing Form 8832 to elect to be classified as an association taxable as a
corporation) that would cause the Trust to be classified other than as a
partnership.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers, Meetings, Notice and Record Dates. The
Shareholders shall have power to vote only (i) for the election or removal of
Trustees as and to the extent provided in Article IV, Section 1, and (ii) with
respect to such additional matters relating to the Trust as may be required by
the 1940 Act, Section 5 of Article IX of this Declaration of Trust, the Bylaws
or as the Trustees may consider necessary or desirable. As determined by the
Trustees without the vote or consent of Shareholders (except as required by
the 1940 Act), on any matter submitted to a vote of Shareholders, either (i)
each whole Share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote or (ii) each dollar of net asset value (number
of Shares owned times net asset value per share of the Trust) shall be
entitled to one vote on any matter on which such Shares are entitled to vote
and each fractional dollar amount shall be entitled to a proportionate
fractional vote. Without limiting the power of the Trustees in any way to
designate otherwise in accordance with the preceding sentence, the Trustees
hereby establish that each whole Share shall be entitled to one vote as to any
matter on which it is entitled to vote and each fractional Share shall be
entitled to a proportionate fractional vote. Notwithstanding any other
provision of this Declaration of Trust, on any matter submitted to a vote of
the Shareholders, all Shares of the Trust then entitled to vote shall be voted
in aggregate, except when the matter involves any action that the Trustees
have determined will affect only the interests of one or
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more Classes, then only the Shareholders of such Class or Classes shall be
entitled to vote thereon. There shall be no cumulative voting in the election
of Trustees. Shares may be voted in person or by proxy. A proxy may be given
in writing. The Bylaws may provide that proxies may also, or may instead, be
given by any electronic or telecommunications device or in any other manner.
Notwithstanding anything else contained herein or in the Bylaws, and to the
fullest extent permitted by applicable law, in the event a proposal by anyone
other than the officers or the Trustees of the Trust is submitted to a vote of
the Shareholders of the Trust or any one or more Classes thereof, or in the
event of any proxy contest or proxy solicitation or proposal in opposition to
any proposal by the officers or the Trustees of the Trust, then, solely with
respect to such proposal, proxy contest or proxy solicitation, Shares may be
voted only in person or by written proxy at a meeting. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration of Trust or the Bylaws to be taken by
the Shareholders. Meetings of the Shareholders shall be called and notice
thereof and record dates therefore shall be given and set as provided in the
Bylaws.
Section 2. Quorum and Required Vote. Except when a larger quorum is
required by federal law, including the 1940 Act, by the Bylaws or by this
Declaration of Trust, the holders of Shares entitled to cast one-third of the
votes, present in person or by proxy, shall constitute a quorum at a
Shareholders' meeting. When any one or more Class is to vote as a single class
separate from any other Shares, the holders of Shares of each such Class
entitled to cast one-third of the votes, present in person or by proxy, shall
constitute a quorum at a Shareholders' meeting of that Class. Except when a
larger vote is required by any provision of this Declaration of Trust or the
Bylaws or by federal law, including the 1940 Act, when a quorum is present at
any meeting, a plurality of the Shares voted shall elect a Trustee and a
majority of the Shares voted shall decide any other matters, provided that
where any provision of federal law, including the 1940 Act, or of this
Declaration of Trust requires or permits the holders of any Class to vote as a
Class, then a majority of the Shares of that Class voted on the matter (or a
plurality with respect to the election of a Trustee) shall decide that matter
insofar as that Class is concerned.
Section 3. Record Dates. For the purpose of determining the Shareholders
of the Trust, or any Class, who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix
a date, which shall be before the date for the payment of such dividend or
such other payment, as the record date for determining the Shareholders of
such Class having the right to receive such dividend or distribution. Without
fixing a record date, the Trustees may for distribution purposes close the
register or transfer books for the Trust, or any one or more Classes, at any
time prior to the payment of a distribution. Nothing in this Section shall be
construed as precluding the Trustees from setting different record dates for
different Classes.
Section 4. Additional Provisions. The Bylaws may include further
provisions for Shareholders' votes and meetings and related matters.
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ARTICLE VI
Valuation; Distributions; Repurchases and Redemptions
Section 1. Determination of Net Asset Value. The Trustees, in their
absolute discretion, may prescribe such basis and time for determining the net
asset value of the Shares of the Trust, or any Class, or net income
attributable to the Shares of the Trust, or any Class, as they may deem
necessary or desirable. The net asset value of the Trust at any date shall be
determined by the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America.
Section 2. Dividends and Distributions. The Trustees, in their absolute
discretion, may prescribe such basis and time for determining the declaration
and payment of dividends and distributions on the Shares of the Trust or any
Class.
Section 3. Repurchases and Redemptions.
(1) No Shareholder will have the right to require the Trust to
redeem its Shares. The Trust intends to conduct repurchase offers at such
times and pursuant to such procedures as determined by the Trustees from
time to time, subject to the requirements of the 1940 Act. The repurchase
price shall be equal to the net asset value of the Shares, less
applicable fees permitted under applicable law.
(2) The repurchase price may in any case or cases be paid wholly or
partly in kind if the Trustees determine that such payment is advisable
in the interest of the remaining Shareholders of the Trust, or any Class
for which the Shares are being redeemed. Subject to the foregoing, the
fair value, selection and quantity of securities or other property so
paid or delivered as all or part of the repurchase price shall be
determined by or under the authority of the Trustees. In no case shall
the Trust be liable for any delay of any corporation or other Person in
transferring securities selected for delivery as all or part of any
payment in kind.
(3) The Trustees may require any Shareholder or any group of
Shareholders (including some or all of the Shareholders of any Class) to
redeem Shares for any reason under terms set by the Trustees, including,
but not limited to, (i) the failure of a Shareholder to supply a tax
identification number if required to do so or any other identifying
information as required by applicable law, (ii) the failure of a
Shareholder to have the minimum investment required, or (iii) the failure
of a Shareholder to pay when due the purchase price of Shares issued to
him. Any such redemption shall be effected at net asset value on the date
determined by the Trustees and, unless extraordinary circumstances exist,
payment for said Shares shall be made by the Trust to the Shareholder
within seven (7) days after the date on which the Trust notifies such
Shareholder of its intention to repurchase the Shares.
(4) The Trustees may suspend the determination of net asset value
and limit or suspend the payment of redemption proceeds under certain
circumstances, including the closure or suspension of trading on any
relevant exchange, a breakdown in the means
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normally employed to value assets or during any emergency which makes it
impracticable for the Trust to dispose of its investments. In the case of
such suspension or postponement of a redemption described in this Section
3(4) of Article VI, the Trust shall redeem the Shares based on the net
asset value per share next determined, less applicable fees.
(5) The holders of Shares shall upon demand disclose to the Trustees
in writing such information with respect to direct and indirect ownership
of Shares as the Trustees deem necessary to comply with the provisions of
the Code (or any successor statute thereto), or to comply with the
requirements of any other taxing authority.
ARTICLE VII
Allocation of Profits and Losses
Section 1. Capital Accounts. A capital account shall be established and
maintained for each Shareholder. The initial balance of each Shareholder's
capital account shall be the amount initially contributed to that account, and
shall be appropriately adjusted to reflect allocations of net profits, net
losses and distributions of cash or other property, whether through
redemption, repurchase or otherwise pursuant to Section 2 of this Article VII.
Section 2. Allocations; Valuation Dates; Performance Fees.
(1) Allocations and Valuation Dates. As of the close of business on
the last day of each month and on each repurchase date, the following
determinations and allocations shall be made: (i) any increase or
decrease in the net assets (prior to the accrual of all fees and other
charges) of the Trust shall be determined; (ii) fees and charges shall
then be charged against net assets; (iii) accrued performance fees shall
then be charged against net assets; (iv) any remaining increase or
decrease in the net assets as compared to the last such determination of
net assets shall be credited or charged to the capital accounts of each
Shareholder in the ratio that the balance of each account bears to the
balance of all accounts; and (v) the amount of any distribution to a
Shareholder and any amount paid to a Shareholder on redemption or
repurchase of Shares shall be charged to such Shareholder's capital
account.
(2) Performance Fees. The Trust shall pay the Investment Adviser a
quarterly Performance Fee of 20% of the aggregate cumulative appreciation
(if any) of the Trust's net assets, including interest income, and as
adjusted for subscriptions and repurchases, on a cumulative high water
xxxx basis. "Aggregate cumulative appreciation" means the total increase
in Share value from the commencement of trading, minus the total increase
in Share value for all prior quarters, multiplied by the number of Shares
outstanding. The Performance Fee is paid only on profits attributable to
Shares outstanding. The Performance Fee is accrued monthly and paid
quarterly.
If any payment is made by the Trust to the Investment Adviser with
respect to a Performance Fee, and the Trust thereafter incurs a net
loss, the Investment Adviser will retain the amount previously paid.
Thus, the Investment Adviser may be paid a
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Performance Fee during a year in which the Trust overall incurred net
losses. Trading losses shall be carried forward and no further
Performance Fees may be paid until the prior losses have been recovered.
Similarly, the Investment Adviser's performance based compensation will
be based on unrealized, as well as realized, gains.
Section 3. Allocation of Profit and Loss for Federal Income Tax Purposes.
(1) As of the end of each fiscal year, the items of income, gain,
deduction, loss and credit for federal, state and local income tax
purposes shall be determined and allocated among the Shareholders by the
Trustees. In making such allocations, the Trustees may determine the
items to be allocated using any method selected by the Trustees permitted
by Section 704 of the Code and the regulations thereunder, including a
"Qualified Income Offset." The Trustees shall make such allocations
taking into account Shareholders' distributive shares of profit and loss
for such fiscal year pursuant to Section 2 of this Article VII, any
special allocations made to less than all Shareholders, the admission of
new Shareholders, distributions and withdrawals, timing differences
between income for tax purposes and profitability for accounting purposes
and any other special circumstances which may arise; provided, however,
that no such allocation by the Trustees shall unfairly discriminate
against any Shareholder; and provided further that such allocations, to
the maximum extent practicable in the judgment of the Trustees, will
reduce or eliminate the difference between (i) the aggregate net
increases or decreases in the Net Assets which have been allocated to the
capital account of each Shareholder for the fiscal year then ending as
well as all prior fiscal years and (ii) the aggregate income, gain,
deductions, loss and credits that has been allocated to such Shareholder
for federal income tax purposes during the fiscal year then ending as
well as all prior fiscal years.
(2) The Trust may allocate specially an amount of the Trust's
capital gain or loss (including short-term capital gain or loss) and
ordinary income or loss for U.S. federal income tax purposes to a
withdrawing Shareholder to the extent that the Shareholder's U.S. federal
income tax basis in the Shares exceeds (or is less than) his, her or its
capital account.
(3) Allocations of gain, income or loss for U.S. federal income tax
purposes may be adjusted at any time by the Trust to the extent the Trust
determines in good faith that such adjustments (i) would more equitably
reflect the economic allocations or (ii) would otherwise be in the
overall best interests of the Shareholders.
ARTICLE VIII
Compensation and Limitation of Liability of Trustees
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and the Trustees may fix the amount of
such compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, legal, accounting, investment banking or
other services and payment for the same by the Trust.
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Section 2. No Personal Liability of Trustees, etc.
(1) Trustees. The Trustees shall be entitled to the protection
against personal liability for the obligations of the Trust under Section
3803(b) of the Delaware Act. No Trustee shall be liable to the Trust, its
Shareholders, or to any Trustee, officer, employee, or agent thereof for
any action or failure to act (including, without limitation, the failure
to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any
officer, agent, employee, manager, adviser, sub-adviser or principal
underwriter of the Trust.
(2) Officers, Employees or Agents of the Trust. The officers,
employees and agents of the Trust shall be entitled to the protection
against personal liability for the obligations of the Trust under Section
3803(c) of the Delaware Act. No officer, employee or agent of the Trust
shall be liable to the Trust, its Shareholders, or to any Trustee,
officer, employee, or agent thereof for any action or failure to act
(including, without limitation, the failure to compel in any way any
former or acting Trustee to redress any breach of trust) except for his
own bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties.
(3) Fiduciary Duty.
(i) To the extent that, at law or in equity, a Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the
Trust, the Shareholders or to any other Person, a Trustee acting under
this Declaration of Trust shall not be liable to the Trust, the
Shareholders or to any other Person for its good faith reliance on the
provisions of this Declaration of Trust. The provisions of this
Declaration of Trust, to the extent that they restrict the duties and
liabilities of the Trustees otherwise existing at law or in equity, are
agreed by the parties hereto to replace such other duties and liabilities
of such Trustees.
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(ii) Unless otherwise expressly provided herein: (a) whenever a
conflict of interest exists or arises between any Trustee or any of its
Affiliates, on the one hand, and the Trust or any Shareholders or any
other Person, on the other hand, or (b) whenever this Declaration of
Trust or any other agreement contemplated herein or therein provides that
the Trustees shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust, any Shareholder or any other Person,
the Trustees shall resolve such conflict of interest, take such action or
provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Trustees, the resolution, action or terms so
made, taken or provided by the Trustees shall not constitute a breach of
this Declaration of Trust or any other agreement contemplated herein or
of any duty or obligation of the Trustees at law or in equity or
otherwise.
(iii) Notwithstanding any other provision of this Declaration of
Trust or any applicable law, whenever in this Declaration of Trust the
Trustees are permitted or required to make a decision (a) in their
"discretion" or under a grant of similar authority, the Trustees shall be
entitled to consider such interests and factors as they desire, including
their own interests, and, to the fullest extent permitted by applicable
law, shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust, the Shareholders or any other
Person, or (b) in its "good faith" or under another express standard, the
Trustees shall act under such express standard and shall not be subject
to any other or different standard.
(iv) Any Trustee and any Affiliate of any Trustee may engage in or
possess an interest in other profit-seeking or business ventures of any
nature or description, independently or with others, whether or not such
ventures are competitive with the Trust and the doctrine of corporate
opportunity, or any analogous doctrine, shall not apply to any Trustee.
No Trustee who acquires knowledge of a potential transaction, agreement,
arrangement or other matter that may be an opportunity for the Trust
shall have any duty to communicate or offer such opportunity to the
Trust, and such Trustee shall not be liable to the Trust or to the
Shareholders for breach of any fiduciary or other duty by reason of the
fact that such Trustee pursues or acquires for, or directs such
opportunity to another Person or does not communicate such opportunity or
information to the Trust. Neither the Trust nor any Shareholders shall
have any rights or obligations by virtue of this Declaration of Trust or
the trust relationship created hereby in or to such independent ventures
or the income or profits or losses derived therefrom, and the pursuit of
such ventures, even if competitive with the activities of the Trust,
shall not be deemed wrongful or improper. Any Trustee may engage or be
interested in any financial or other transaction with the Trust, the
Shareholders or any Affiliate of the Trust or the Shareholders.
(4) No Protection Against Certain 1940 Act Liabilities. Nothing
contained in this Article VIII shall protect any Trustee or officer of
the Trust from any liability to the Trust or its Shareholders to which he
would otherwise be subject by reason of his own
24
bad faith, willful misfeasance, gross negligence or reckless disregard of
the duties involved in the conduct of his office.
Section 3. Indemnification. The Trust shall indemnify each Person who is,
or has been, a Trustee, officer, employee or agent of the Trust and any Person
who is serving or has served at the Trust's request as a director, officer,
trustee, employee or agent of another organization in which the Trust has any
interest as a shareholder, creditor or otherwise to the extent and in the
manner provided in the Bylaws. The Trust shall indemnify each of its Trustees,
officers, employees, and agents (including persons who serve at its request as
directors, officers or trustees of another organization in which it has any
interest, as a shareholder, creditor or otherwise) against all liabilities and
expenses (including amounts paid in satisfaction of judgments, in compromise,
as fines and penalties, and as counsel fees) reasonably incurred by him in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he may be involved or with
which he may be threatened, while in office or thereafter, by reason of his
being or having been such a Trustee, officer, employee or agent, except with
respect to any matter as to which he shall have been adjudicated to have acted
in bad faith, willful misfeasance, gross negligence or reckless disregard of
his duties; provided, however, that as to any matter disposed of by a
compromise payment by such Person, pursuant to a consent decree or otherwise,
no indemnification either for said payment or for any other expenses shall be
provided unless there has been a determination that such Person did not engage
in bad faith, willful misfeasance, gross negligence or reckless disregard of
the duties involved in the conduct of his office by the court or other body
approving the settlement or other disposition or, in the absence of a judicial
determination, by a reasonable determination, based upon a review of readily
available facts (as opposed to a full trial-type inquiry), that he did not
engage in such conduct, which determination shall be made by a majority of a
quorum of Trustees who are neither Interested Persons of the Trust nor parties
to the action, suit or proceeding, or by written opinion from independent
legal counsel approved by the Trustees. The rights accruing to any Person
under these provisions shall not exclude any other right to which he may be
lawfully entitled; provided that no Person may satisfy any right of indemnity
or reimbursement granted herein or to which he may be otherwise entitled
except out of the Trust Property. The Trustees may make advance payments in
connection with indemnification under this Section 3 of Article VIII; provided
that any advance payment of expenses by the Trust to any Trustee, officer,
employee or agent shall be made only upon the undertaking by such Trustee,
officer, employee or agent to repay the advance unless it is ultimately
determined that he is entitled to indemnification as above provided, and only
if one of the following conditions is met:
(1) the Trustee, officer, employee or agent to be indemnified
provides a security for his undertaking; or
(2) the Trust shall be insured against losses arising by reason of
any lawful advances; or
(3) there is a determination, based on a review of readily available
facts, that there is reason to believe that the Trustee, officer,
employee or agent to be indemnified ultimately will be entitled to
indemnification, which determination shall be made by (a) a majority of a
quorum of Trustees who are neither Interested Persons of the Trust nor
parties to the Proceedings; or (b) an independent legal counsel in a
written opinion.
25
Section 4. No Bond Required of Trustees. No Trustee shall be obligated to
give any bond or other security for the performance of any of his duties
hereunder.
Section 5. No Duty of Investigation; Notice in Trust Instruments, etc. No
purchaser, lender, seller 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, lent or delivered to or on the order of
the Trustees or of said officer, employee or agent. Every contract,
undertaking, instrument, certificate, interest or obligation or other security
of the Trust, and every other act or thing whatsoever executed in connection
with the Trust, shall be conclusively presumed to have been executed or done
by the executors thereof only in their capacity as Trustees under this
Declaration of Trust or in their capacity as officers, employees or agents of
the Trust. Every written obligation, contract, instrument, certificate or
other interest or undertaking of the Trust made or sold by the Trustees or by
any officer, employee or agent of the Trust, in his capacity as such, may
contain an appropriate recital to the effect that the Shareholders, Trustees,
officers, employees and agents of the Trust shall not personally be bound by
or liable thereunder, nor shall resort be had to their private property for
the satisfaction of any obligation or claim thereunder, and appropriate
references shall be made therein to the Declaration, and may contain any
further recital that they may deem appropriate, but the omission of such
recital shall not operate to impose personal liability on any of the
Shareholders, Trustees, officers, employees or agents of the Trust.
Section 6. Insurance. 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 tort liability, and such other insurance as the Trustees in
their sole judgment shall deem advisable.
Section 7. Reliance on Experts, etc. Each Trustee, officer or employee of
the Trust shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the Trust by any of
its officers or employees or by any Investment Adviser, Administrator,
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 expert may also be a Trustee; provided that nothing in
this Section shall be deemed to exonerate the Trustees from their duties of
reasonable care, diligence and prudence or any other duties imposed by the
1940 Act. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall
be under no liability for any act or omission in accordance with such advice
nor for failing to follow such advice.
Section 8. Accounting. The Trustees shall not be required to file any
inventory or accounting with any court or officer of any court, unless
specifically ordered to do so on the application of the Trustees or on the
application of the Shareholders of the Trust, or on the court's own motion.
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ARTICLE IX
Miscellaneous
Section 1. Registered Agent. The registered agent is Corporation Trust
Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000.
Section 2. Fiscal Year. The fiscal year of the Trust shall begin on
January 1 of each year and end on the following December 31.
Section 3. Dissolution and Termination of Trust or Classes.
(1) Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be dissolved at any time by the
Trustees by written notice to the Shareholders. Any Class of Shares may
be terminated at any time by the Trustees by written notice to the
Shareholders of such Class. Any action to dissolve the Trust shall be
deemed also to be an action to dissolve each Class thereof.
(2) Upon the requisite action by the Trustees to dissolve the Trust,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the Trust as may
be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining
assets of the Trust to distributable form in cash or Shares (if the Trust
has not dissolved) or other securities, or any combination thereof, and
distribute the proceeds to the Shareholders of the Trust, ratably
according to the number of Shares of the Trust held by the several
Shareholders on the date of distribution. Thereupon, the Trust shall
terminate and the Trustees and the Trust shall be discharged of any and
all further liabilities and duties relating thereto or arising therefrom,
and the right, title and interest of all parties shall be canceled and
discharged.
(3) Following completion of winding up of the Trust's business, the
Trustees shall cause a certificate of cancellation of the Trust's
Certificate of Trust to be filed in accordance with the Delaware Act,
which certificate of cancellation may be signed by any one Trustee. Upon
termination of the Trust, the Trustees, subject to Section 3808 of the
Delaware Act, shall be discharged of any and all further liabilities and
duties relating thereto or arising therefrom, and the right, title and
interest of all parties with respect to the Trust shall be canceled and
discharged.
Section 4. Reorganization and Sale of Assets.
(1) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval, unless such approval is required by the 1940 Act,
(i) cause the Trust to convert into or merge, reorganize or consolidate
with or into one or more trusts, partnerships, limited liability
companies, associations, corporations or other business entities (or a
series of any of the foregoing to the extent permitted by law) (including
trusts, partnerships, limited liability companies, associations,
corporations or other business entities created by the Trustees to
accomplish such conversion, merger or consolidation) so long as the
surviving or resulting entity is a closed-end management
27
investment company under the 1940 Act, or is a series thereof to the
extent permitted by law, and that, in the case of any trust, partnership,
limited liability company, association, corporation or other business
entity created by the Trustees to accomplish such conversion, merger or
consolidation, may succeed to or assume the Trust's registration under
the 1940 Act and that, in any case, is formed, organized or existing
under the laws of the United States or of a state, commonwealth,
possession or colony of the United States, (ii) cause the Shares to be
exchanged under or pursuant to any state or federal statute to the extent
permitted by law, (iii) cause the Trust to incorporate under the laws of
a state, commonwealth, possession or colony of the United States, (iv)
sell or convey all or substantially all of the assets of the Trust to
another trust, partnership, limited liability company, association,
corporation or other business entity (or a series of any of the foregoing
to the extent permitted by law) (including a trust, partnership, limited
liability company, association, corporation or other business entity
created by the Trustees to accomplish such sale and conveyance),
organized under the laws of the United States or of any state,
commonwealth, possession or colony of the United States so long as such
trust, partnership, limited liability company, association, corporation
or other business entity is a closed-end management investment company
under the 1940 Act and, in the case of any trust, partnership, limited
liability company, association, corporation or other business entity
created by the Trustees to accomplish such sale and conveyance, may
succeed to or assume the Trust's registration under the 1940 Act, for
adequate consideration as determined by the Trustees which may include
the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent of the Trust and which may include
shares of beneficial interest, stock or other ownership interest of such
trust, partnership, limited liability company, association, corporation
or other business entity (or series thereof) or (v) at any time sell or
convert into money all or any part of the assets of the Trust. Any
agreement of merger, reorganization, consolidation, exchange or
conversion or certificate of merger, certificate of conversion or other
applicable certificate may be signed by a majority of the Trustees or an
authorized officer of the Trust and facsimile signatures conveyed by
electronic or telecommunication means shall be valid.
(2) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, and notwithstanding anything to the contrary
contained in this Declaration of Trust, an agreement of merger or
consolidation approved by the Trustees in accordance with this Section 4
of Article IX may effect any amendment to the governing instrument of the
Trust or effect the adoption of a new trust instrument of the Trust or
change the name of the Trust if the Trust is the surviving or resulting
trust in the merger or consolidation.
(3) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval, unless such approval is required by the 1940 Act,
create one or more statutory or business trusts to which all or any part
of the assets, liabilities, profits or losses of the Trust may be
transferred and may provide for the conversion of Shares in the Trust
into beneficial interests in any such newly created trust or trusts.
(4) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval, invest all or a portion of the Trust Property, or
dispose of all or a
28
portion of the Trust Property, and invest the proceeds of such
disposition in interests issued by one or more other investment companies
registered under the 1940 Act. Any such other investment company may (but
need not) be a trust (formed under the laws of the State of Delaware or
any other state or jurisdiction) (or subtrust thereof) which is
classified as a partnership for federal income tax purposes.
Section 5. Amendments. Except as specifically provided in this Section,
the Trustees may, without Shareholder vote, restate, amend or otherwise
supplement this Declaration of Trust. Shareholders shall have the right to
vote (i) on any amendment that is required to be approved by Shareholders by
the 1940 Act or by the Registration Statement and (ii) on any amendment
submitted to them by the Trustees. Any amendment required or permitted to be
submitted to the Shareholders that, as the Trustees determine, shall only
affect the Shareholders of any one or more Classes shall be authorized by a
vote of only the Shareholders of each Class affected and no vote of
Shareholders of a Class not affected shall be required. Notwithstanding
anything else herein, no amendment hereof shall limit the rights to insurance
provided by Article VIII, Section 6 of this Declaration of Trust with respect
to any acts or omissions of Persons covered thereby prior to such amendment
nor shall any such amendment limit the rights to indemnification referenced in
Article VIII, Section 3 of this Declaration of Trust or as provided in the
Bylaws with respect to any actions or omissions of Persons covered thereby
prior to such amendment. The Trustees may, without Shareholder vote, restate,
amend, or otherwise supplement the Bylaws and the Certificate of Trust as the
Trustees deem necessary or desirable.
Section 6. Filing of Copies, References, Headings, Rules of Construction.
The original or a copy of this instrument and of each restatement, amendment
and/or supplement hereto shall be kept at the office of the Trust where it may
be inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such
restatements, amendments and/or supplements have been made and as to any
matters in connection with the Trust hereunder; and, with the same effect as
if it were the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such restatements, amendments
and/or supplements. In this instrument and in any such restatements,
amendments and/or supplements, references to this instrument, and all
expressions such as "herein", "hereof" and "hereunder", shall be deemed to
refer to this instrument as amended or affected by any such restatements,
amendments and/or supplements. 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. The
terms "include," "includes" and "including" and any comparable terms shall be
deemed to mean "including, without limitation."
Section 7. Applicable Law.
(1) The Trust is created under, and this Declaration of Trust is to
be governed by, and construed and enforced in accordance with, the laws
of the State of Delaware. The Trust shall be of the type commonly called
a statutory trust, and without limiting the provisions hereof, the Trust
specifically reserves the right to exercise any of the powers or
privileges afforded to statutory trusts or actions that may be engaged in
by statutory trusts under the Delaware Act, and the absence of a specific
reference herein to any such
29
power, privilege or action shall not imply that the Trust may not
exercise such power or privilege or take such actions.
(2) Notwithstanding the first sentence of Section 7(1) of this
Article IX, there shall not be applicable to the Trust, the Trustees, the
Shareholders or this Declaration of Trust, the provisions of Sections
3540 and 3561 of Title 12 of the Delaware Code or any provisions of the
laws (statutory or common) of the State of Delaware (other than the
Delaware Act) pertaining to trusts that relate to or regulate: (i) the
filing with any court or governmental body or agency of trustee accounts
or schedules of trustee fees and charges, (ii) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust,
(iii) the necessity for obtaining a court or other governmental approval
concerning the acquisition, holding or disposition of real or personal
property, (iv) fees or other sums applicable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and
expenditures to income or principal, (vi) restrictions or limitations on
the permissible nature, amount or concentration of trust investments or
requirements relating to the titling, storage or other manner of holding
of trust assets, or (vii) the establishment of fiduciary or other
standards or responsibilities or limitations on the acts or powers of
trustees that are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees set forth or referenced in this
Declaration of Trust.
Section 8. Provisions in Conflict with Law or Regulations.
(1) The provisions of the Declaration of Trust are severable, and if
the Trustees shall determine, with the advice of counsel, that any of
such provision is in conflict with the 1940 Act, the regulated investment
company provisions of the Code, the Delaware Act or with any other
applicable laws and regulations, the conflicting provision shall be
deemed never to have constituted a part of the Declaration of Trust;
provided, however, that such determination shall not affect any of the
remaining provisions of the Declaration of Trust or render invalid or
improper any action taken or omitted prior to such determination.
(2) If any provision of the Declaration of Trust 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 the Declaration of Trust in any
jurisdiction.
Section 9. Statutory Trust Only. It is the intention of the Trustees to
create a statutory trust pursuant to the Delaware Act. 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 statutory trust pursuant to the Delaware Act, except inasmuch as
the Trust is to be a partnership for tax purposes. Nothing in this Declaration
of Trust shall be construed to make the Shareholders, either by themselves or
with the Trustees, partners or members of a joint stock association, except
inasmuch as the Trust is to be a partnership for tax purposes.
30
Section 10. Derivative Actions. In addition to the requirements set forth
in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(1) The Shareholder or Shareholders must make a pre-suit demand upon
the Trustees to bring the subject action unless an effort to cause the
Trustees to bring such an action is not likely to succeed. For purposes
of this Section 10(1), a demand on the Trustees shall only be deemed not
likely to succeed and therefore excused if a majority of the Board of
Trustees, or a majority of any committee established to consider the
merits of such action, is composed of Trustees who are not "independent
trustees" (as that term is defined in the Delaware Act);
(2) Unless a demand is not required under paragraph (1) of this
Section 10, Shareholders eligible to bring such derivative action under
the Delaware Act who collectively hold at least 10% of the outstanding
Shares of the Trust, or who collectively hold at least 10% of the
outstanding Shares of any Class to which such action relates, shall join
in the request for the Trustees to commence such action; and
(3) Unless a demand is not required under paragraph (1) of this
Section 10, the Trustees must be afforded a reasonable amount of time to
consider such Shareholder request and to investigate the basis of such
claim. The Trustees shall be entitled to retain counsel or other advisors
in considering the merits of the request and shall require an undertaking
by the Shareholders making such request to reimburse the Trust for the
expense of any such advisors in the event that the Trustees determine not
to bring such action.
For purposes of this Section 10, the Board of Trustees may designate a
committee of one Trustee to consider a Shareholder demand if necessary to
create a committee with a majority of Trustees who do not have a personal
financial interest in the transaction at issue.
Section 11. Counterparts. The Declaration of Trust 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.
Section 12. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust, appears to be a Trustee
hereunder, or Secretary, Assistant Secretary, Treasurer or Assistant Treasurer
of the Trust, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders present
at any meeting or executing any written instrument satisfies the requirements
of this Declaration of Trust, (e) the form of any Bylaws adopted by or the
identity of any officers elected by the Trustees, or (f) the existence of any
fact or facts that 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.
31
IN WITNESS WHEREOF, the Trustees named below do hereby make and enter
into this Agreement and Declaration of Trust as of the 12th day of December,
2005.
/s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS:
000 Xxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
32
