Exhibit a.
PIMCO MUNICIPAL INCOME FUND II
AGREEMENT AND DECLARATION OF TRUST
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March 29, 2002
PIMCO MUNICIPAL INCOME FUND II
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AGREEMENT AND DECLARATION OF TRUST
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AGREEMENT AND DECLARATION OF TRUST made this 29th day of March, 2002,
by the Trustees hereunder, and by the holders of shares of beneficial interest
to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the pro rata benefit of the holders from
time to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Name
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Section 1. This Trust shall be known as "PIMCO Municipal Income
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Fund II" 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.
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Definitions
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Section 2. Whenever used herein, unless otherwise required by the
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context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Declaration, as amended or restated from time to
time;
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable
units of interest into which the beneficial interest in the Trust shall
be divided from time to time or, if more than one class or series of
Shares is authorized by the Trustees, the equal proportionate
transferable units into which each class or series of shares shall be
divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of
1940 and the rules and regulations thereunder, all as amended from time
to time;
(f) The terms "Affiliated Person", "Interested Person",
and "Principal Underwriter" shall have the applicable meanings given
them in the 1940 Act;
(g) "Declaration" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time;
(h) "Bylaws" shall mean the Bylaws of the Trust as amended
or restated from time to time;
(i) The term "class" or "class of Shares" refers to the
division of Shares into two or more classes as provided in Article III,
Section 1 hereof;
(j) The term "series" or "series of Shares" refers to the
division of Shares representing any class into two or more series as
provided in Article III, Section 1 hereof; and
(k) The term "Continuing Trustee" shall have the meaning
given to such term in Article IV, Section 2 hereof.
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ARTICLE II
PURPOSE
The purpose of the Trust is to provide investors a managed investment
primarily in securities, debt instruments and other instruments and rights of a
financial character and to carry on such other business as the Trustees may from
time to time determine pursuant to their authority under this Declaration.
ARTICLE III
SHARES
Division of Beneficial Interest
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Section 1. The Trustees may, without Shareholder approval,
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authorize one or more classes of Shares (which classes may be divided into two
or more series), Shares of each such class or series having such par value and
such preferences, voting powers, terms of redemption, if any, and special or
relative rights or privileges (including conversion rights, if any) as the
Trustees may determine. Subject to applicable law, the Trustees may, without
Shareholder approval, authorize the Trust to issue subscription or other rights
representing interests in Shares to existing Shareholders or other persons
subject to such terms and conditions as the Trustees may determine. The number
of Shares of each class or series authorized shall be unlimited, except as the
Bylaws may otherwise provide, and the Shares so authorized may be represented
in part by fractional shares. The Trustees may from time to time divide or
combine the Shares of any class or series into a greater or lesser number
without thereby changing the proportionate beneficial interest in the class or
series.
Ownership of Shares
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Section 2. The ownership of Shares shall be recorded on the books
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of the Trust or a transfer or similar agent. Except as provided in the Bylaws
or as the Trustees may otherwise determine from time to time, no certificates
certifying the ownership of Shares shall be issued. The Trustees may make such
rules as they consider appropriate for the issuance of Share certificates, the
transfer of Shares and similar matters. The record books of the Trust as kept
by the Trust or any transfer or similar agent, as the case may be, shall be
conclusive as to who are the Shareholders of each class and series and as to
the number of Shares of each class and series held from time to time by each
Shareholder.
Investments in the Trust
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Section 3. The Trustees shall accept investments in the Trust
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from such persons and on such terms and, subject to any requirements of law,
for such consideration, which may consist of cash or tangible or intangible
property or a combination thereof, as the Trustees or the Bylaws from time to
time authorize.
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No Preemptive Rights
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Section 4. Shareholders shall have no preemptive or other right to
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receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
Derivative Claims
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Section 5. No Shareholder shall have the right to bring or
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maintain any court action, proceeding or claim on behalf of the Trust or any
series or class of Shares without first making demand on the Trustees
requesting the Trustees to bring or maintain such action, proceeding or claim.
Such demand shall not be excused under any circumstances, including claims of
alleged interest on the part of the Trustees, unless the plaintiff makes a
specific showing that irreparable nonmonetary injury to the Trust or series or
class of Shares would otherwise result. Such demand shall be mailed to the
Secretary of the Trust at the Trust's principal office and shall set forth with
particularity the nature of the proposed court action, proceeding or claim and
the essential facts relied upon by the Shareholder to support the allegations
made in the demand. The Trustees shall consider such demand within 45 days of
its receipt by the Trust. In their sole discretion, the Trustees may submit
the matter to a vote of Shareholders of the Trust or a series or class of
Shares, as appropriate. Any decision by the Trustees to bring, maintain or
settle (or not to bring, maintain or settle) such court action, proceeding or
claim, or to submit the matter to a vote of Shareholders, shall be binding upon
the Shareholders. Any decision by the Trustees to bring or maintain a court
action, proceeding or suit on behalf of the Trust or a series or class of
Shares shall be subject to the right of the Shareholders under Article V hereof
to vote on whether or not such court action, proceeding or suit should or
should not be brought or maintained.
Direct Claims
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Section 6. No class of Shareholders shall have the right to bring
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or maintain a direct action or claim for monetary damages against the Trust or
the Trustees predicated upon an express or implied right of action under this
Declaration or the 1940 Act (excepting rights of action permitted under section
36(b) of the 1940 Act), nor shall any single Shareholder, who is similarly
situated to one or more other Shareholders with respect to the alleged injury,
have the right to bring such an action, unless the class of Shareholders or
Shareholder has obtained authorization from the Trustees to bring the action.
The requirement of authorization shall not be excused under any circumstances,
including claims of alleged interest on the part of the Trustees. A request for
authorization shall be mailed to the Secretary of the Trust at the Trust's
principal office and shall set forth with particularity the nature of the
proposed court action, proceeding or claim and the essential facts relied upon
by the class of Shareholders or Shareholder to support the allegations made in
the request. The Trustees shall consider such request within 45 days of its
receipt by the Trust. In their sole discretion, the Trustees may submit the
matter to a vote of Shareholders of the Trust or series or class of Shares, as
appropriate. Any decision by the Trustees to settle or to authorize (or not to
settle or to authorize) such court action, proceeding or claim, or to submit
the matter to a vote of Shareholders, shall be binding upon the class of
Shareholders or Shareholder seeking authorization. Any decision by the Trustees
to authorize a court action, proceeding or suit by a class of Shareholders
shall be subject to the right of the
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Shareholders under Article V hereof to vote on whether or not such court
action, proceeding or suit should or should not be brought or maintained.
Status of Shares and Limitation of Personal Liability
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Section 7. Shares shall be deemed to be personal property giving
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only the rights provided in this Declaration or the Bylaws. Every Shareholder
by virtue of having become a Shareholder shall be held to have expressly
assented and agreed to the terms of this Declaration and the Bylaws and to have
become a party hereto and thereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle
the representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust, shall have any power to bind personally any Shareholder,
nor except as specifically provided herein to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
ARTICLE IV
THE TRUSTEES
Number and Classes of Trustees and Term of Office
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Section 1. Subject to the voting powers of one or more classes or
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series of Shares as set forth in the Bylaws, the number of Trustees shall be
such number as shall be fixed from time to time by a written instrument signed
by a majority of the Trustees; provided, however, that the number of Trustees
shall in no event be less than three (3) from and after the date when Shares
are first sold pursuant to a public offering. The initial Trustees, each of
whom shall serve until the first meeting of Shareholders at which Trustees are
elected and until his or her successor is elected and qualified, or until he or
she sooner dies, resigns or is removed, shall be Xxxxxxx Xxxx and such other
persons as the Trustee or Trustees then in office shall, prior to any sale of
Shares pursuant to a public offering, elect, subject in each case to the
Classes of Trustees and terms created pursuant to this Article IV.
An initial annual meeting of Shareholders or special meeting in lieu
thereof shall be called to be held not more than fifteen months after Shares
are first sold pursuant to a public offering; subsequent annual meetings of
Shareholders or special meetings in lieu thereof (each an "annual meeting")
shall be held as specified in the Bylaws. Prior to any sale of Shares pursuant
to a public offering, the Trustees shall be classified, with respect to the
time for which they severally hold office, into the following three classes:
Class I, whose term expires at the initial annual meeting; Class II, whose term
expires at the next succeeding annual meeting after the initial annual meeting
(the "second annual meeting"); and Class III, whose term expires at the
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next succeeding annual meeting after the second annual meeting. Each Class
shall consist, as nearly as may be possible, of one-third of the total number
of Trustees constituting the entire Board of Trustees. At each annual meeting
beginning with the initial annual meeting, the successors of the Class of
Trustees whose term expires at that meeting shall be elected to hold office for
a term expiring at the annual meeting held in the third year following the year
of their election, with each Trustee holding office until the expiration of the
term of the relevant Class and the election and qualification of his or her
successor, or until he or she sooner dies, resigns, retires, or is disqualified
or removed from office.
The Trustees shall assign by resolution from their number Trustees to
each of the three Classes. The Trustees may also determine by resolution those
Trustees in each Class that shall be elected by Shareholders of a particular
class of Shares (e.g., by a class of preferred Shares issued by the Fund). If
the number of Trustees is changed, any increase or decrease shall be apportioned
among the Classes, as of the annual meeting of Shareholders next succeeding any
such change, so as to maintain a number of Trustees in each Class as nearly
equal as possible. No reduction in the number of Trustees shall have the effect
of removing any Trustee from office prior to the expiration of his or her term
unless the Trustee is specifically removed pursuant to Section 3 of this Article
at the time of the decrease. Except as provided in this Section 1 or Section 3
of this Article, Trustees shall be elected only at an annual meeting of
Shareholders.
Continuing Trustee; Definition
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Section 2. For purposes of this Declaration and the Bylaws, the
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term "Continuing Trustee" shall mean any member of the Board of Trustees who
either (a) has been a member of the Board of Trustees for a period of at least
thirty-six months (or since the commencement of the Trust's operations, if less
than thirty-six months) or (b) was nominated to serve as a member of the Board
of Trustees by a majority of the Continuing Trustees then members of the Board
of Trustees.
Vacancies; Resignation; Removal
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Section 3. From and after the date when Shares are first sold
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pursuant to a public offering and subject to any voting powers of one or more
classes or series of Shares as set forth in this Declaration or in the Bylaws
or by resolution of the Board of Trustees, any vacancies occurring in the Board
of Trustees may be filled by the Trustees as set forth below. Prior to the date
when Shares are first sold pursuant to a public offering, subject to any
limitations imposed by the 1940 Act or other applicable law, any vacancies
occurring in the Board of Trustees may be filled by the Trustees without any
action by or meeting of Shareholders.
Subject to any limitations imposed by the 1940 Act or other applicable
law, any vacancy occurring in the Board of Trustees that results from an
increase in the number of Trustees may be filled by a majority of the entire
Board of Trustees, and any other vacancy occurring in the Board of Trustees may
be filled by a majority of the Trustees then in office, whether or not
sufficient to constitute a quorum, or by a sole remaining Trustee; provided,
however, that if the Shareholders of any class or series of Shares are entitled
separately to elect one or more Trustees, a majority of
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the remaining Trustees elected by that class or series or the sole remaining
Trustee elected by that class or series may fill any vacancy among the number
of Trustees elected by that class or series. A Trustee elected by the Board of
Trustees to fill any vacancy occurring in the Board of Trustees shall serve
until the next annual meeting of Shareholders and until his successor shall be
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. At any annual meeting of
Shareholders, any Trustee elected to fill any vacancy occurring in the Board of
Trustees that has arisen since the preceding annual meeting of Shareholders
(whether or not any such vacancy has been filled by election of a new Trustee
by the Board of Trustees) shall hold office for a term which coincides with the
remaining term of the Class of Trustee to which such office was previously
assigned, if such vacancy arose other than by an increase in the number of
Trustees, and until his successor shall be elected and shall qualify. In the
event such vacancy arose due to an increase in the number of Trustees, any
Trustee so elected to fill such vacancy at an annual meeting shall hold office
for a term which coincides with that of the Class of Trustee to which such
office has been apportioned as heretofore provided, and until his successor
shall be elected and shall qualify.
Any Trustee may resign his trust or retire as a Trustee (without need
for prior or subsequent accounting except in the event of removal) by an
instrument in writing signed by him and delivered to the President or Secretary
or a Trustee of the Trust, and such resignation or retirement shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any Trustee may be removed from office only for "Cause" (as
hereinafter defined) and only (i) by action of at least seventy-five percent
(75%) of the outstanding Shares of the classes or series of Shares entitled to
vote for the election of such Trustee, or (ii) by written instrument, signed by
at least seventy-five percent (75%) of the remaining Trustees, specifying the
date when such removal shall become effective. "Cause" for these purposes shall
require willful misconduct, dishonesty or fraud on the part of the Trustee in
the conduct of his office or such Trustee being convicted of a felony.
Effect of Death, Resignation, etc. of a Trustee
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Section 4. The death, declination, resignation, retirement,
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removal, disqualification or incapacity of the Trustees, or any one of them,
shall not operate to annul the Trust or to revoke any existing agency created
pursuant to the terms of this Declaration.
Powers
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Section 5. Subject to the provisions of this Declaration, the
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business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt Bylaws not inconsistent with
this Declaration providing for the conduct of the business of the Trust and may
amend and repeal them to the extent and as provided in Article IX, Section 7(c)
of this Declaration. Subject to the voting power of one or more classes or
series of Shares as set forth in this Declaration or in the Bylaws or by
resolution of the Board of Trustees, the Trustees may fill vacancies in or add
to their number, including vacancies resulting from increases in their number,
and may elect and remove such officers and appoint and terminate such agents as
they
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consider appropriate; they may appoint from their own number, and terminate,
any one or more committees consisting of one or more Trustees, including an
executive committee which may, when the Trustees are not in session, exercise
some or all of the power and authority of the Trustees as the Trustees may
determine; they may appoint an advisory board, the members of which shall not
be Trustees and need not be Shareholders; they may employ one or more
custodians of the assets of the Trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of securities, retain a transfer agent or a
shareholder servicing agent, or both, provide for the distribution of Shares by
the Trust, through one or more principal underwriters or otherwise, set record
dates for the determination of Shareholders with respect to various matters,
and in general delegate such authority as they consider desirable to any
officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash
uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate,
write options on and lease any or all of the assets of the Trust;
(c) To 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;
(d) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form, or in the name of the Trustees or of the Trust or in
the name of a custodian, subcustodian or other depository or a nominee
or nominees or otherwise;
(f) To the extent necessary or appropriate to give effect
to the preferences, special or relative rights and privileges of any
classes or series of Shares, to allocate assets, liabilities, income
and expenses of the Trust to a particular class or classes or series of
Shares or to apportion the same among two or more classes or series;
(g) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer,
any security of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security held in the Trust;
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(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security with, or transfer any security to,
any such committee, depositary or trustee, and to delegate to them such
power and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and compensation
of such committee, depositary or trustee as the Trustees shall deem
proper;
(i) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust on any matter in controversy, including
but not limited to claims for taxes;
(j) To enter into joint ventures, general or limited
partnerships, limited liability companies, and any other combinations
or associations;
(k) To borrow funds;
(l) 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;
(m) To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate for the
conduct of the business of the Trust, including, without limitation,
insurance policies insuring the assets of the Trust and payment of
distributions and principal on its portfolio investments, and insurance
policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, sub-advisers or managers, principal
underwriters or independent contractors of the Trust individually
against all claims and liabilities of every nature arising by reason
of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such
person as Shareholder, Trustee, officer, employee, agent, investment
adviser, sub-adviser or manager, principal underwriter or independent
contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would
have the power to indemnify such person against such liability;
(n) To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out
pension, profit-sharing, share bonus, share purchase, savings, thrift
and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and agents of the
Trust;
(o) To purchase or otherwise acquire Shares; and
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(p) To engage in any other lawful act or activity in which
business corporations organized under the laws of The Commonwealth of
Massachusetts may engage.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by trustees. Except as otherwise
provided herein or from time to time in the Bylaws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
the Trustees (a quorum being present), within or without Massachusetts. Except
as otherwise provided herein or from time to time in the Bylaws, any action to
be taken by the Trustees may be taken at a meeting held by means of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office (or such
greater number as may be required by this Declaration, the Bylaws or applicable
law).
Payment of Expenses by the Trust
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Section 6. The Trustees are authorized to pay, or to cause to be
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paid out of the principal or income of the Trust, or partly out of principal
and partly out of income, as they deem fair, all expenses, fees, charges, taxes
and liabilities incurred or arising in connection with the Trust, 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, sub-adviser or manager,
principal underwriter, auditor, counsel, custodian, transfer agent, shareholder
servicing agent, and such other agents or independent contractors and such
other expenses and charges as the Trustees may deem necessary or proper to
incur.
Ownership of Assets of the Trust
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Section 7. Title to all of the assets of the Trust and each
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series and class of Shares shall at all times be considered as vested in the
Trustees.
Advisory, Management and Distribution
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Section 8. The Trustees may, at any time and from time to time,
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contract for exclusive or nonexclusive advisory and/or management services with
any corporation, trust, association or other organization (the "Manager"),
every such contract to comply with such requirements and restrictions as may be
set forth in the Bylaws; and any such contract may provide for one or more
sub-advisers or other agents who shall perform all or part of the obligations
of the Manager under such contract and contain such other terms interpretive of
or in addition to said requirements and restrictions as the Trustees may
determine, including, without limitation, authority to determine from time to
time what investments shall be purchased, held, sold, or exchanged and what
portion, if any, of the assets of the Trust shall be held uninvested and to
make changes in the Trust's investments. The Trustees may also, at any time and
from time to time, contract with the Manager or any other corporation, trust,
association or other
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organization, appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the Bylaws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of
the Trust is a shareholder, director, officer, partner,
trustee, employee, manager, adviser, sub-adviser, principal
underwriter or distributor or agent of or for any corporation,
trust, association or other organization, or of or for any
parent or affiliate of any organization, with which an
advisory, sub-advisory or management contract, or principal
underwriter's or distributor's contract, or transfer,
shareholder servicing or other agency contract may have been
or may hereafter be made or that any such organization, or any
parent or affiliate thereof, is a Shareholder or has an
interest in the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory, sub-advisory or
management contract or principal underwriter's or
distributor's contract or transfer, shareholder servicing or
other agency contract may have been or may hereafter be made
also has an advisory, sub-advisory or management contract, or
principal underwriter's or distributor's contract or transfer,
shareholder servicing or other agency contract with one or
more other corporations, trusts, associations or other
organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
Agent for Service of Process
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Section 9. The name and address of the resident agent of the
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Trust on the date hereof in the Commonwealth of Massachusetts is Corporation
Service Company, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. For the
avoidance of doubt, the Trustees may appoint a new or successor resident agent
of the Trust at any time in their sole discretion.
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ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
General
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Section 1. Except as otherwise provided in this Article V or
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elsewhere in this Declaration, Shareholders shall have such power to vote as is
provided for in, and shall and may hold meetings and take actions pursuant to,
the provisions of the Bylaws.
Voting Powers as to Certain Transactions
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Section 2.
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(a) Except as otherwise provided in paragraph (b) of this
Section 2, the affirmative vote or consent of at least seventy-five percent
(75%) of the Trustees of the Trust and at least seventy-five percent (75%) of
the Shares outstanding and entitled to vote thereon shall be necessary to
authorize any of the following actions:
(i) the merger or consolidation or share exchange of
the Trust or any series or class of Shares with or into any
other person or company (including, without limitation, a
partnership, corporation, joint venture, business trust,
common law trust or any other business organization) or of any
such person or company with or into the Trust or any series or
class of Shares;
(ii) the issuance or transfer by the Trust or any
series or class of Shares (in one or more series of
transactions in any twelve-month period) of any securities of
the Trust or such series or class to any other person or
entity for cash, securities or other property (or combination
thereof) having an aggregate fair market value of $1,000,000
or more, excluding (i) sales of any securities of the Trust or
a series or class in connection with a public offering
thereof, (ii) issuance of securities of the Trust or a series
or class pursuant to a dividend reinvestment plan adopted by
the Trustees and (iii) issuances of securities of the Trust or
a series or class upon the exercise of any stock subscription
rights distributed by the Trust or a series or class;
(iii) a sale, lease, exchange, mortgage, pledge,
transfer or other disposition by the Trust or any series or
class of Shares (in one or a series of transactions in any
twelve-month period) to or with any person of any assets of
the Trust or such series or class having an aggregate fair
market value of $1,000,000 or more, except for transactions in
securities effected by the Trust or a series or class in the
ordinary course of business;
(iv) any Shareholder proposal as to specific
investment decisions made or to be made with respect to the
assets of the Trust or a series or class of Shares.
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(b) Notwithstanding anything to the contrary in paragraph (a) of
this Section 2, so long as each action is approved by both a majority of the
entire Board of Trustees and seventy-five percent (75%) of the Continuing
Trustees, and so long as all other conditions and requirements, if any, provided
for in the Bylaws and applicable law have been satisfied, then no Shareholder
vote or consent shall be necessary or required to approve any of the actions
listed in paragraphs (a)(i), (a)(ii), (a)(iii) or (a)(iv) of this Section 2,
except to the extent such Shareholder vote or consent is required by the 1940
Act or other applicable law.
Conversion to Open-End Company
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Section 3. Notwithstanding any other provisions in this
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Declaration or the Bylaws, the conversion of the Trust or any series of Shares
from a "closed-end company" to an "open-end company", as those terms are
defined in Sections 5(a)(2) and 5(a)(1), respectively, of the 1940 Act (as in
effect on the date of this Declaration), together with any necessary amendments
to this Declaration to permit such a conversion, shall require the affirmative
vote or consent of at least seventy-five percent (75%) of each class of Shares
outstanding and entitled to vote on the matter, unless a majority of the
Trustees and seventy-five percent (75%) of the Continuing Trustees entitled to
vote on the matter approve such conversion and related actions. In the event of
such approval by the Trustees and the Continuing Trustees as referred to in the
preceding sentence, the 1940 Act shall govern whether and to what extent a vote
or consent of Shares shall be required to approve such conversion and related
actions. Any affirmative vote or consent required under this Section 3 shall be
in addition to the vote or consent of the Shareholders otherwise required by
law or by any agreement between the Trust and any national securities exchange.
ARTICLE VI
DISTRIBUTIONS AND DETERMINATION OF NET ASSET VALUE
Distributions
-------------
Section 1. The Trustees may each year, or more frequently if they
----------
so desire, but need not, distribute to the Shareholders of any or all classes
or series of Shares such income and gains, accrued or realized, as the Trustees
may determine, after providing for actual and accrued expenses and liabilities
(including such reserves as the Trustees may establish) determined in
accordance with good accounting practices and subject to the preferences,
special or relative rights and privileges of the various classes or series of
Shares. The Trustees shall have full discretion to determine which items shall
be treated as income and which items as capital and their determination shall
be binding upon the Shareholders. Distributions of income for each year or
other period, if any be made, may be made in one or more payments, which shall
be in Shares, in cash or otherwise and on a date or dates and as of a record
date or dates determined by the Trustees. At any time and from time to time in
their discretion, the Trustees may distribute to the Shareholders as of a
record date or dates determined by the Trustees, in Shares, in cash or
otherwise, all or part of any gains realized on the sale or disposition of
property or otherwise, or
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all or part of any other principal of the Trust. Each distribution pursuant to
this Section 1 to the Shareholders of a particular class or series shall be
made ratably according to the number of Shares of such class or series held by
the several Shareholders on the applicable record date thereof, provided that
no distribution need be made on Shares purchased pursuant to orders received,
or for which payment is made, after such time or times as the Trustees may
determine. Any such distribution paid in Shares will be paid at the net asset
value thereof as determined in accordance with Section 2 of this Article VI, or
at such other value as may be specified by the Bylaws or as the Trustees may
from time to time determine, subject to applicable laws and regulations then in
effect.
Determination of Net Asset Value
--------------------------------
Section 2. The net asset value per share of each class and each
----------
series of Shares of the Trust shall be determined in accordance with the 1940
Act and any related procedures adopted by the Trustees from time to time.
Determinations made under and pursuant to this Section 2 in good faith and in
accordance with the provisions of the 1940 Act shall be binding on all parties
concerned.
ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES
Compensation
------------
Section 1. The Trustees as such shall be entitled to reasonable
----------
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking, underwriting,
brokerage or other services and payment for the same by the Trust.
Limitation of Liability
-----------------------
Section 2. The Trustees shall not be responsible or liable in any
----------
event for any neglect or wrongdoing of any officer, agent, employee, adviser,
sub-adviser, manager or principal underwriter of the Trust, nor shall any
Trustee be responsible for the act or omission of any other Trustee, but
nothing herein contained shall protect any Trustee against any liability to
which he or she would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Every note, bond, contract, instrument, certificate, Share or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
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ARTICLE VIII
INDEMNIFICATION
Trustees, Officers etc.
-----------------------
Section 1. The Trust shall indemnify each of its Trustees and
----------
officers (including persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has any
interest as a shareholder, creditor or otherwise) (hereinafter referred to as a
"Covered Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Covered Person, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in a decision on the merits
in any such action, suit or other proceeding not to have acted in good faith in
the reasonable belief that such Covered Person's action was in the best
interests of the Trust and except that no Covered Person shall be indemnified
against any liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office. Expenses, including counsel fees so incurred by
any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid from time to
time by the Trust in advance of the final disposition of any such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Covered
Person to repay amounts so paid to the Trust if it is ultimately determined
that indemnification of such expenses is not authorized under this Article,
provided, that (a) such Covered Person shall provide security for his or her
undertaking, (b) the Trust shall be insured against losses arising by reason of
such Covered Person's failure to fulfill his or her undertaking, or (c) a
majority of the Trustees who are disinterested persons and who are not
Interested Persons of the Trust (provided that a majority of such Trustees then
in office act on the matter), or independent legal counsel in a written opinion
shall determine, based on a review of readily available facts (but not a full
trial-type inquiry), that there is reason to believe such Covered Person
ultimately will be entitled to indemnification.
Compromise Payment
------------------
Section 2. As to any matter disposed of (whether by a compromise
----------
payment, pursuant to a consent decree or otherwise) without an adjudication in
a decision on the merits by a court, or by any other body before which the
proceeding was brought, that such Covered Person either (a) did not act in good
faith in the reasonable belief that such Covered Person's action was in the
best interests of the Trust or (b) is liable to the Trust or its Shareholders
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's
office, indemnification shall be provided if
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(x) approved as in the best interest of the Trust, after notice that it
involves such indemnification, by at least a majority of the Trustees who are
disinterested persons and are not Interested Persons of the Trust (provided
that a majority of such Trustees then in office act on the matter), upon a
determination, based upon a review of readily available facts (but not a full
trial-type inquiry) that such Covered Person acted in good faith in the
reasonable belief that such Covered Person's action was in the best interests
of the Trust and is not liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office, or (y) there
has been obtained an opinion in writing of independent legal counsel, based
upon a review of readily available facts (but not a full trial-type inquiry),
to the effect that such Covered Person appears to have acted in good faith in
the reasonable belief that such Covered Person's action was in the best
interests of the Trust and that such indemnification would not protect such
Covered Person against any liability to the Trust to which such Covered Person
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
or her office. Any approval pursuant to this Section 2 shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with this Section 2 as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's action was in
the best interests of the Trust or to have been liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office.
Rebuttable Presumption
----------------------
Section 3. For purposes of the determination or opinion referred
----------
to in clause (c) of Section 1 of this Article VIII or clauses (x) or (y) of
Section 2 of this Article VIII, the majority of disinterested Trustees acting
on the matter or independent legal counsel, as the case may be, shall be
entitled to rely upon a rebuttable presumption that the Covered Person has not
engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office.
Indemnification Not Exclusive
-----------------------------
Section 4. The right of indemnification hereby provided shall not
----------
be exclusive of or affect any other rights to which any such Covered Person may
be entitled. As used in this Article VIII, the term "Covered Person" shall
include such person's heirs, executors and administrators, and a "disinterested
person" is a person against whom none of the actions, suits or other
proceedings in question or another action, suit or other proceeding on the same
or similar grounds is then or has been pending. Nothing contained in this
Article VIII shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other persons may be entitled
by contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of such person; provided, however, that
-------- -------
the Trust shall not purchase or maintain any such liability insurance in
contravention of the 1940 Act or other applicable law.
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Shareholders
------------
Section 5. In case any Shareholder or former Shareholder shall be
----------
held to be personally liable solely by reason of his or her being or having
been a Shareholder and not because of his or her acts or omissions or for some
other reason, the Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or, in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled to be held harmless from and indemnified against all loss and expense
arising from such liability.
ARTICLE IX
MISCELLANEOUS
Trustees, Shareholders etc. Not Personally Liable; Notice
---------------------------------------------------------
Section 1. All persons extending credit to, contracting with or
----------
having any claim against the Trust or a particular series or class of Shares
shall look only to the assets of the Trust or the assets of that particular
series or class of Shares for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally
liable therefor. Nothing in this Declaration shall protect any Trustee against
any liability to which such Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officer or officers shall give notice
that this Declaration is on file with the Secretary of State of The
Commonwealth of Massachusetts and shall recite that the same was executed or
made by or on behalf of the Trust or by them as Trustee or Trustees or as
officer or officers and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually
but are binding only upon the assets and property of the Trust, and may contain
such further recital as he or she or they may deem appropriate, but the
omission thereof shall not operate to bind any Trustee or Trustees or officer
or officers or Shareholder or Shareholders individually.
Trustees and Officers Good Faith Action, Expert Advice, No Bond or Surety
-------------------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and
----------
discretions hereunder shall be binding upon everyone interested. A Trustee or
officer shall be liable for his or her own willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee or officer, and for nothing else, and shall not be liable
for errors of judgment or mistakes of fact or law. The Trustees or officers may
take advice of counsel or other experts with respect to the meaning and
operation of this Declaration, and shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such
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advice. The Trustees and officers shall not be required to give any bond as
such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
------------------------------------------------
Section 3. No person dealing with the Trustees shall be bound to
----------
make any inquiry concerning the validity of any transaction made or to be made
by the Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
Duration and Termination of Trust
---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall
----------
continue without limitation of time. Subject to the voting powers of one or
more classes or series of Shares as set forth in the Bylaws, the Trust may be
terminated at any time (i) by vote or consent of Shareholders holding at least
seventy-five percent (75%) of the Shares entitled to vote or (ii) by vote or
consent of majority of the entire Board of Trustees and seventy-five percent
(75%) of the Continuing Trustees upon written notice to the Shareholders. Any
series or class of Shares may be terminated at any time (x) by vote or consent
of Shareholders holding at least seventy-five percent (75%) of the Shares of
such series of class entitled to vote or (y) by vote or consent of majority of
the entire Board of Trustees and seventy-five percent (75%) of the Continuing
Trustees upon written notice to the Shareholders of such series or class. For
the avoidance of any doubt and notwithstanding anything to the contrary in this
Declaration, Shareholders shall have no separate right to vote with respect to
the termination of the Trust or a series of class of Shares if the Trustees
(including the Continuing Trustees) exercise their right to terminate the Trust
or such series or class pursuant to clauses (ii) and (y) of this Section 4.
Upon termination of the Trust or of any one or more series or classes
of Shares, after paying or otherwise providing for all charges, taxes, expenses
and liabilities, whether due or accrued or anticipated, of the Trust or of the
particular series or class, as may be determined by the Trustees, the Trust
shall in accordance with such procedures as the Trustees consider appropriate
reduce the remaining assets to distributable form in cash or shares or other
property, or any combination thereof, and distribute the proceeds to the
Shareholders of the series or class(es) involved, ratably according to the
number of Shares of such series or class held by the several Shareholders on
the date of termination, except to the extent otherwise required or permitted
by the preferences and special or relative rights and privileges of any classes
or series of Shares.
Filing of Copies, References, Headings
--------------------------------------
Section 5. The original or a copy of this instrument and of each
----------
amendment hereto shall be kept at the office of the Trust, where it may be
inspected by any Shareholder. A copy of this instrument and of each amendment
hereto shall be filed by the Trust with the Secretary of State of The
Commonwealth of Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time be required.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such
-19-
amendments 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 amendments. In this instrument and in any such amendment, references
to this instrument, and all expressions like "herein", "hereof", and
"hereunder", shall be deemed to refer to this instrument as amended or affected
by any such amendments. Headings are placed herein for convenience of reference
only and shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument may be executed in
any number of counterparts, each of which shall be deemed an original.
Applicable Law
--------------
Section 6. This Declaration is made in The Commonwealth of
----------
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth. The Trust shall be
of the type commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust.
Amendments
----------
Section 7. (a) Except to the extent that the Bylaws or applicable
----------
law may require a higher vote or the separate vote of one or more classes or
series of Shares, and except as provided in paragraph (b) of this Section 7,
this Declaration may be amended at any time by an instrument in writing signed
by a majority of the then Trustees (1) when authorized so to do by a vote of
Shareholders holding a majority of the Shares entitled to vote or (2) without
Shareholder approval as may be necessary or desirable in order to authorize one
or more classes or series of Shares as in Section 1 of Article III. Amendments
having the purpose of changing the name of the Trust or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
(b) Except to the extent that the Bylaws or applicable law may require
a higher vote or the separate vote of one or more classes or series of Shares,
no amendment may be made under this Section 7 which shall amend, alter, change
or repeal any of the provisions of Article III, Sections 4, 5, 6 or 7; Article
IV, Sections 1, 2 and 3; each Section of Article V; Article VII, Section 2;
each Section of Article VIII; or this Article IX, Sections 1, 2, 3, 4, 7(b) or
7(c) unless, in each case, the amendment effecting such amendment, alteration,
change or repeal shall be effected by an instrument in writing signed by a
majority of the then Trustees and seventy-five percent (75%) of the Continuing
Trustees and shall receive the affirmative vote or consent of at least
seventy-five percent (75%) of the Shares entitled to vote; provided, however,
that such affirmative vote or consent shall be in addition to the vote or
consent of the Shareholders otherwise required by applicable law or by the
terms of any agreement between the Trust and any national securities exchange.
-20-
(c) Except to the extent that the Bylaws or applicable law requires a
vote or consent of Shareholders, the Board of Trustees shall have the sole
power and authority to adopt, amend, alter, change or repeal any Bylaw of the
Trust, if the resolution or writing adopting, amending, altering, changing or
repealing any such Bylaw is approved or signed by a majority of the Board of
Trustees; provided, however, that the approval of a majority of the Board of
-------- -------
Trustees and seventy-five percent (75%) of the Continuing Trustees shall be
required for (i) any amendment, alteration, change or repeal of Section 10 of
the Bylaws and (ii) any amendment, alteration, change or repeal of any other
Section or provision of the Bylaws designated from time to time by resolution
of a majority of the Board of Trustees and seventy-five percent (75%) of the
Continuing Trustees to require such approval.
-21-
IN WITNESS HEREOF, all of the Trustees as aforesaid do hereto set their
hands this 29th day of March, 2002.
__________________
Xxxxxxx Xxxx
COMMONWEALTH OF MASSACHUSETTS )
)
COUNTY OF SUFFOLK ) ss
Then personally appeared before me Xxxxxxx Xxxx, who acknowledged the
foregoing instrument to be his free act and deed.
__________________
Notary Public
My commission expires on:
March 29, 2002
Trustee and Address
-------------------
Xxxxxxx Xxxx
c/o Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Trust Address
-------------
PIMCO Municipal Income Fund II
c/o Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
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