BY-LAWS
OF
THE BAUPOST FUND
ARTICLE 1
Agreement and Declaration
of Trust and Principal Office
1.1. Agreement and Declaration of Trust. These By-Laws shall be subject
to the Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of The Baupost Fund (the "Trust"), the Massachusetts
business trust established by the Declaration of Trust.
1.2. Principal Office of the Trust. The principal office of the Trust
shall be located in Cambridge, Massachusetts.
ARTICLE 2
Meetings of Trustees
2.1. Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2. Special Meetings. Special meetings of the Trustees may be held, at
any time and at any place designated in the call of the meeting, when called by
the Chairman of the Board, if any, the President or the Treasurer or by two or
more Trustees, sufficient notice thereof being given to each Trustee by the
Clerk or an Assistant Clerk or by the officer or the Trustees calling the
meeting.
2.3. Notice. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram or
telecopy at least twenty-four hours before the meeting addressed to the Trustee
at his or her usual or last known business or residence address or to give
notice to him or her in person or by telephone at least twenty-four hours before
the meeting. Notice of a meeting need not be given to any Trustee if a written
waiver of notice, executed by him or her before or after the meeting, is filed
with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
2.4. Quorum. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5. Action by Vote. When a quorum is present at any meeting, a
majority of Trustees present may take any action, except when a larger vote is
expressly required by law, by the Declaration of Trust or by these By-Laws.
2.6. Action by Writing. Except as required by law, any action required
or permitted to be taken at any meeting of the Trustees may be taken without a
meeting if a majority of the Trustees (or such larger proportion thereof as
shall be required by any express provision of the Declaration of Trust or these
By-Laws) consent to the action in writing and such written consents are filed
with the records of the meetings of Trustees. Such consent shall be treated for
all purposes as a vote taken at a meeting of Trustees.
2.7. Presence Through Communications Equipment. Except as required by
law, the Trustees may participate in a meeting of Trustees by means of a
conference telephone or similar 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.
ARTICLE 3
Officers
3.1. Enumeration; Qualification. The officers of the Trust shall be a
President, a Treasurer, a Clerk, and such other officers, if any, as the
Trustees from time to time may in their discretion elect. The Trust may also
have such agents as the Trustees from time to time may in their discretion
appoint. If a Chairman of the Board is elected, he or she shall be a Trustee and
may but need not be a Shareholder; and any other officer may be but none need be
a Trustee or Shareholder. Any two or more offices may be held by the same
person.
3.2. Election and Tenure. The President, the Treasurer, the Clerk and
such other officers as the Trustees may in their discretion from time to time
elect shall each be elected by the Trustees to serve until his or her successor
is elected or qualified, or until he or she sooner dies, resigns, is removed or
becomes disqualified. Each officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.
3.3. Powers. Subject to the other provisions of these By-Laws, in
addition to the duties and powers herein and set forth in the Declaration of
Trust and in addition to such duties and powers as may be determined by the
Trustees, the President shall have such duties and powers with respect to the
Trust as are commonly incident to the president of a Massachusetts business
corporation as if the Trust were organized as a Massachusetts business
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corporation; each other officer shall have such duties and powers as are
commonly incident to the office occupied by him or her as if the Trust were
organized as a Massachusetts business corporation.
3.4. President and Vice Presidents. The President shall have the duties
and powers specified in these By-laws and shall have such other duties and
powers as may be determined by the Trustees.
Any Vice Presidents shall have such duties and powers as shall be
designated from time to time by the Trustees.
3.5. Chief Executive Officer. The Chief Executive Officer of the Trust
shall be the Chairman of the Board, if any, the President or such other officer
as is designated by the Trustees and shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust and,
unless there is a Chairman of the Board, or except as the Trustees (or the
Chairman of the Board if the Trustees do not act) shall otherwise determine,
preside at all meetings of the stockholders and of the Trustees. If no such
designation is made, the President shall be the Chief Executive Officer.
3.6. Chairman of the Board. If a Chairman of the Board of Trustees is
elected, he or she shall have the duties and powers specified in these By-Laws
and shall have such other duties and powers as may be determined by the
Trustees. The Chairman of the Board shall, unless the Trustees (or the Chairman
of the Board if the Trustees do not act) shall otherwise determine, preside at
all meetings of the stockholders and of the Trustees.
3.7. Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the Chief Executive
Officer.
3.8. Clerk. The Clerk shall record all proceedings of the Shareholders
and the Trustees in books to be kept therefor, which books or a copy thereof
shall be kept at the principal office of the Trust. In the absence of the Clerk
from any meeting of the Shareholders or Trustees, an assistant Clerk, or if
there be none or if he or she is absent, a temporary clerk chosen at such
meeting shall record the proceedings thereof in the aforesaid books.
3.9. Resignations and Removals. Any officer may resign at any time by
written instrument signed by him or her and delivered to the President or the
Clerk or to a meeting of the Trustees. Such resignation shall be effective upon
receipt unless specified to be effective at some other time. The Trustees may
remove any officer with or without cause. Except to
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the extent expressly provided in a written agreement with the Trust, no officer
resigning and no officer removed shall have any right to any compensation for
any period following his or her resignation or removal, or any right to damages
on account of such removal.
ARTICLE 4
Reports
4.1. General. The Trustees and officers shall render reports at the
time and in the manner required by the Declaration of Trust or any applicable
law. Officers shall render such additional reports as they may deem desirable or
as may from time to time be required by the Trustees.
ARTICLE 5
Fiscal Year
5.1. General. Except as from time to time otherwise provided by the
Trustees, the initial fiscal year of the Trust shall end on such date as is
determined in advance or in arrears by the Treasurer, and subsequent fiscal
years shall end on such date in subsequent years.
ARTICLE 6
Seal
6.1. General. The seal of the Trust shall consist of a flat-faced die
with the word "Massachusetts," together with the name of the Trust and the year
of its organization cut or engraved thereon, but, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on, and its absence
shall not impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
ARTICLE 7
Execution of Papers
7.1. General. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all checks, notes,
drafts and other obligations and all registration statements and amendments
thereto and all applications and amendments thereto to the Securities and
Exchange Commission shall be signed by the Chairman, if any, the President, any
Vice President or the Treasurer or any of such other officers or agents as shall
be designated for that purpose by a vote of the Trustees.
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ARTICLE 8
Provisions Relating to the
Conduct of the Trust's Business
8.1. Certain Definitions. When used herein the following words shall
have the following meanings: "Distributor" shall mean any one or more
partnerships, corporations, firms or associations which have distributor's or
principal underwriter's contracts in effect with the Trust providing that
redeemable shares of any class or series issued by the Trust shall be offered
and sold by such Distributor. "Adviser" shall mean any partnership, corporation,
firm or association which may at the time have an advisory or management
contract with the Trust.
8.2. Limitation on Dealings with Officers or Trustees. The Trust will
not lend any of its assets to the Distributor or Adviser or to any officer or
director of the Distributor or Adviser or any officer or Trustee of the Trust
and shall not permit any officer or Trustee or any officer or director of the
Distributor or Adviser, to deal for or on behalf of the Trust with himself as
principal or agent, or with any partnership, association or corporation in which
he or she has a financial interest; provided that the foregoing provisions shall
not prevent (a) officers and Trustees of the Trust or officers and directors of
the Distributor or Adviser from buying, holding or selling shares in the Trust
or from being partners, officers or directors of or otherwise financially
interested in the Distributor or the Adviser; (b) a purchase or sale of
securities or other property if such transaction is permitted by or is exempt or
exempted from the provisions of the Investment Company Act of 1940, as amended
(the "1940 Act"), and does not involve any commission or profit to any
securities dealer who is, or one or more of whose partners, shareholders,
officers or directors is, an officer or Trustee of the Trust or an officer or
director of the Distributor or Adviser; (c) employment of legal counsel,
registrars, transfer agents, shareholder servicing agents, dividend disbursing
agents or custodians who are, or any one of which has a partner, shareholder,
officer or director who is, an officer or Trustee of the Trust or an officer or
director of the Distributor or Adviser if only customary fees are charged for
services to the Trust; or (d) sharing of statistical, research, legal and
management expenses and office hire and expenses with any other investment
company in which an officer or Trustee of the Trust or an officer or director of
the Distributor or Adviser is an officer or director or otherwise financially
interested.
8.3. Limitation on Dealing in Securities of the Trust by Certain
Officers, Trustees, Distributor or Adviser. Neither the Distributor nor Adviser,
nor any officer or Trustee of the Trust or officer, director or partner of the
Distributor or Adviser shall take long or short positions in securities issued
by the Trust; provided, however, that:
(a) The Distributor may purchase from the Trust and otherwise deal in
shares issued by the Trust pursuant to the terms of its contract with the Trust;
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(b) Any officer or Trustee of the Trust or officer or director or
partner of the Distributor or Adviser or any trustee or fiduciary for the
benefit of any of them may at any time, or from time to time, purchase from the
Trust or from the Distributor shares issued by the Trust at the price available
to the public or to such officer, Trustee, director, partner or fiduciary, no
such purchase to be in contravention of any applicable state or federal
requirement; and
(c) The Distributor or the Adviser may at any time, or from time to
time, purchase for investment shares issued by the Trust.
8.4. Securities and Cash of the Trust to be Held by Custodian Subject
to Certain Terms and Conditions.
(d) All securities and cash owned by the Trust shall, as hereinafter
provided, be held by or deposited with one or more banks or trust companies
having (according to its last published report) not less than $2,000,000
aggregate capital, surplus and undivided profits (any such bank or trust company
being hereby designated as "Custodian"), provided such a Custodian can be found
ready and willing to act. The Trust may, or may permit any Custodian to, deposit
all or any part of the securities owned by any class or series of shares of the
Trust in a system for the central handling of securities established by a
national securities exchange or national securities association registered with
the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended (the "1934 Act"), or such other person as may be permitted by
said Commission, including, without limitation, a clearing agency registered
under Section 17A of the 1934 Act, pursuant to which system all securities of
any particular class or series of any issue deposited within the system are
treated as fungible and may be transferred or pledged by bookkeeping entry,
without physical delivery of such securities.
(e) The Trust shall enter into a written contract with each Custodian
regarding the powers, duties and compensation of such Custodian with respect to
the cash and securities of the Trust held by such Custodian. Said contract and
all amendments thereto shall be approved by the Trustees.
(f) The Trust shall upon the resignation or inability to serve of any
Custodian or upon change of any Custodian:
(i) in case of such resignation or inability to serve, use its
best efforts to obtain a successor Custodian;
(ii) require that the cash and securities owned by any class
or series of shares of the Trust and in the possession of the resigning
or disqualified Custodian be delivered directly to the successor
Custodian; and
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(iii) in the event that no successor Custodian can be found,
submit to the Shareholders, before permitting delivery of the cash and
securities owned by any class or series of shares of the Trust and in
the possession of the resigning or disqualified Custodian otherwise
than to a successor Custodian, the question whether that class or
series shall be liquidated or shall function without a Custodian.
8.5. Determination of Net Asset Value. The Trustees or any officer or
officers or agent or agents of the Trust designated from time to time for this
purpose by the Trustees shall determine at least once daily the net income and
the value of all the assets attributable to any class or series of shares of the
Trust on each day (other than on a day on which no shares of the Trust were
tendered for redemption and no order to purchase shares was received by the
Fund) upon which the New York Stock Exchange is open for unrestricted trading or
at such other times as the Trustees shall, consistent with the 1940 Act and the
rules of the Commission, designate. In determining asset values, all securities
for which representative market quotations are readily available shall be valued
at market value and other securities and assets shall be valued at fair value,
all as determined in good faith by the Trustees or an officer or officers or
agent or agents, as aforesaid, in accordance with accounting principles
generally accepted at the time. Notwithstanding the foregoing, the assets
belonging to any class or series of shares of the Trust may, if so authorized by
the Trustees, be valued in accordance with the amortized cost method, subject to
the power of the Trustees to alter the method for determining asset values. The
value of such assets so determined, less total liabilities belonging to that
class or series of shares (exclusive of capital stock or surplus) shall be the
net asset value, until a new asset value is determined by the Trustees or such
officers or agents. In determining the net asset value, the Trustees or such
officers or agents may include in liabilities such reserves for taxes, estimated
accrued expenses and contingencies in accordance with accounting principles
generally accepted at the time as the Trustees or such officers or agents may in
their best judgment deem fair and reasonable under the circumstances. The manner
of determining net asset value may from time to time be altered as necessary or
desirable in the judgment of the Trustees to conform it to any other method
prescribed or permitted by applicable law or regulation. Determinations of net
asset value made by the Trustees or such officers or agents in good faith shall
be binding on all parties concerned. The foregoing sentence shall not be
construed to protect any Trustee, officer or agent of the Trust against any
liability to the Trust or its security holders to which he or she would
otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
ARTICLE 9
Amendments to the By-Laws
9.1. General. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees.
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