Exhibit 1(b)
MASTER U.S. HIGH YIELD TRUST
DECLARATION OF TRUST
Dated: June 9, 2000
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TABLE OF CONTENTS
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ARTICLE I NAME AND DEFINITIONS........................................................1
Section 1.1. Name................................................................1
Section 1.2. Definitions.........................................................1
ARTICLE II TRUSTEES....................................................................3
Section 2.1. Number of Trustees and Qualification................................3
Section 2.2. Term and Election...................................................4
Section 2.3. Resignation, Retirement and Removal.................................4
Section 2.4. Vacancies...........................................................4
Section 2.5. Meetings............................................................5
Section 2.6. Officers; Chairman..................................................5
Section 2.7. By-Laws.............................................................5
ARTICLE III POWERS OF TRUSTEES..........................................................6
Section 3.1. General.............................................................6
Section 3.2. Activities and Investments..........................................6
Section 3.3. Legal Title.........................................................8
Section 3.4. Sale of Interests; Reclassification.................................8
Section 3.5. Borrowing Money; Pledging Trust Assets; Lending Property............8
Section 3.6. Delegation; Committees..............................................8
Section 3.7. Collection and Payment..............................................8
Section 3.8. Expenses............................................................9
Section 3.9. Common Items........................................................9
Section 3.10. Litigation..........................................................9
Section 3.11. Tax Matters.........................................................9
Section 3.12. Miscellaneous Powers................................................9
Section 3.13. Manner of Acting...................................................10
ARTICLE IV MANAGEMENT, ADMINISTRATIVE SERVICES AND
PLACEMENT AGENT ARRANGEMENTS; CUSTODIAN..................................10
Section 4.1. Management and Other Arrangements..................................10
Section 4.2. Parties to Contract................................................10
Section 4.3. Custodian..........................................................11
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ARTICLE V INTERESTS IN THE TRUST.....................................................11
Section 5.1. Interests..........................................................11
Section 5.2. Classes of Interests...............................................11
Section 5.3. Rights of Holders..................................................12
Section 5.4. Purchase of or Increase in Interests...............................12
Section 5.5. Register of Interests..............................................12
Section 5.6. Non-Transferability................................................12
Section 5.7. Notices............................................................12
Section 5.8. Limitation on Number of Holders....................................13
Section 5.9. No Liability of Holders............................................13
ARTICLE VI DECREASES AND WITHDRAWALS..................................................13
Section 6.1. Decreases and Withdrawals..........................................13
ARTICLE VII DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES,
NET INCOME AND DISTRIBUTIONS.............................................13
Section 7.1. Book Capital Account Balances......................................13
Section 7.2. Allocations and Distributions to Holders...........................14
Section 7.3. Power to Modify Foregoing Procedures...............................14
ARTICLE VIII LIABILITY FOR TRUST OBLIGATIONS............................................14
Section 8.1. No Personal Liability of Trustees, etc.............................14
Section 8.2. Indemnification....................................................15
Section 8.3. No Protection Against Certain 1940 Act Liabilities.................16
Section 8.4. No Bond Required of Trustees.......................................16
Section 8.5. No Duty of Investigation; Notice in Trust Instruments, etc.........16
Section 8.6. Insurance..........................................................16
Section 8.7. Reliance on Experts, etc...........................................16
Section 8.8. Accounting.........................................................17
ARTICLE IX HOLDERS....................................................................17
Section 9.1. Meetings of Holders................................................17
Section 9.2. Notice of Meetings.................................................17
Section 9.3. Record Date for Meetings...........................................17
Section 9.4. Proxies, etc.......................................................17
Section 9.5. Reports............................................................18
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Section 9.6. Inspection of Records..............................................18
Section 9.7. Holder Action by Written Consent...................................18
ARTICLE X DURATION; TERMINATION OF TRUST; AMENDMENT;
MERGERS; ETC.............................................................18
Section 10.1. Duration...........................................................18
Section 10.2. Dissolution of Trust...............................................18
Section 10.3. Termination of Trust...............................................19
Section 10.4. Amendment Procedure................................................19
Section 10.5. Merger, Consolidation, Conversion and Sale of Assets...............20
ARTICLE XI MISCELLANEOUS..............................................................21
Section 11.1. Certificate of Trust; Registered Agent.............................21
Section 11.2. Governing Law......................................................21
Section 11.3. Counterparts.......................................................21
Section 11.4. Reliance by Third Parties..........................................21
Section 11.5. Provisions in Conflict with Law or Regulations.....................22
Section 11.6. Trust Only.........................................................22
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DECLARATION OF TRUST
OF
MASTER U.S. HIGH YIELD TRUST
DECLARATION OF TRUST of Master U.S. High Yield Trust, organized on
June 9, 2000, made the 9th day of June, 2000, by Terry K. Glenn, Ronald W.
Forbes, Cynthia A. Montgomery, Charles C. Reilly, Kevin A. Ryan, Roscoe S.
Suddarth, Richard R. West, Arthur Zeikel and Edward D. Zinbarg, as trustees
(such individuals, so long as they continue in office in accordance with the
provisions of this 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, being hereinafter called "Trustees").
W I T N E S S E T H:
WHEREAS, the Trustees desire to establish a business trust under the
Delaware Business Trust Act (the "Act") for the investment and reinvestment of
funds contributed thereto;
NOW, THEREFORE, the Trustees hereby declare that all money and
property hereafter contributed to the Trust shall be held and managed in trust
for the benefit of the Holders of beneficial interests issued hereunder from
time to time and subject to the provisions hereof, to wit:
ARTICLE I
NAME AND DEFINITIONS
--------------------
Section 1.1. Name. The name of the trust established hereby (the
"Trust") is "Master U.S. High Yield Trust," and, insofar as may be practicable,
the Trust shall conduct its activities, execute all documents and sue or be sued
under that name, which name (and the word "Trust" wherever herein used) shall
refer to the Trust as a separate legal entity, and shall not refer to the
Trustees, officers, agents, employees or Holders. If the Trustees determine that
the Trust's use of such name is not advisable, the Trustees may adopt such other
name for the Trust as they deem proper and the Trust may hold its property and
conduct its activities under such other name. Any name change shall become
effective upon the execution by a majority of the then Trustees of an instrument
setting forth the new name and the filing of a Certificate of Amendment under
the Act. Any such instrument shall have the status of an amendment to this
Declaration.
Section 1.2. Definitions. Wherever they are used herein, the
following terms have the respective meanings assigned to them below:
(a) "Administrator" means any party furnishing services
to the Trust pursuant to any administrative services contract
described in Section 4.1.
(b) "Act" means the Delaware Business Trust Act, as the
same may be amended from time to time.
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(c) "Affiliated Person" has the meaning assigned to it
in Section 2(a)(3) of the 1940 Act.
(d) "Book Capital Account" means, for any Holder at any
time, the Book Capital Account of the Holder at such time with
respect to such Holder's interest in the Trust Property, determined
in accordance with generally accepted accounting principles and the
provisions of the 1940 Act.
(e) "By-Laws" means the By-Laws referred to in Section
2.7 hereof, as amended and in effect from time to time.
(f) "Code" means the Internal Revenue Code of 1986 and
the rules and regulations thereunder, each as amended from time to
time.
(g) "Commission" means the Securities and Exchange
Commission.
(h) "Custodian" means the party, other than the Trust,
to the agreement described in Section 4.3 hereof.
(i) "Declaration" means this Declaration of Trust, as
amended and in effect from time to time. Reference in this
Declaration of Trust to "Declaration," "hereof," "herein," "hereby"
and "hereunder" shall be deemed to refer to this Declaration rather
than the article or section in which such words appear.
(j) "Fundamental Policies" means the investment policies
and restrictions of the Trust that are set forth and designated as
fundamental policies in the Registration Statement.
(k) "Holders" means as of any particular time any
Institutional Investor that is a holder of record of Interests in
the Trust Property of any class at such time.
(l) "Institutional Investor(s)" means any registered
investment company (including a unit investment trust), insurance
company separate account, common or commingled trust fund, group
trust or similar organization or entity that is an "accredited
investor" within the meaning of Regulation D under the Securities
Act of 1933, as amended, and shall not include any individual, S
corporation, partnership, or grantor trust beneficially owned by any
individual, S corporation or partnership.
(m) "Interested Person" has the meaning ascribed to it
in Section 2(a)(19) of the 1940 Act.
(n) "Interest(s)" shall mean the interest of a Holder in
the Trust Property of any class, including all rights, powers and
privileges accorded to Holders in this Declaration, which interest
may be expressed as a percentage, determined by calculating, as the
Trustees shall from time to time determine, the ratio of each
Holder's Book Capital Account balance in the Trust Property of any
class to the
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total of all Holders' Book Capital Account balances in the Trust
Property of any class. Reference herein to a specific percentage in,
or fraction of, Interests of the Holders means Holders whose
combined Book Capital Accounts represent such specified percentage
or fraction of the Book Capital Accounts of all Holders of the Trust
Property of any class or of the Trust as a whole (as the context may
require).
(o) "Investment Adviser" means the party, other than the
Trust, to any investment management contract described in Section
4.1 hereof.
(p) "1940 Act" means the provisions of the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder as amended from time to time and any order or orders
thereunder which may from time to time be applicable to the Trust.
(q) "Person" means and includes individuals,
corporations, partnerships, trusts, associations, joint ventures and
other entities, whether or not legal entities, and governments and
agencies and political subdivisions thereof.
(r) "Registration Statement" means any Registration
Statement filed by the Trust under the 1940 Act, as it may be
amended or supplemented from time to time.
(s) "Trust" means the master trust established hereby by
whatever name it may then be known.
(t) "Trust Property" means any and all assets, real or
personal, tangible or intangible, which are owned or held by the
Trust.
(u) "Trustees" means the individuals who have signed
this Declaration, so long as such Persons shall continue in office
in accordance with the provisions hereof, and all other Persons who
may from time to time be duly elected or appointed, qualified and
serving as Trustees in accordance with the provisions hereof, and
reference herein to a Trustee or the Trustees shall refer to such
individual or Persons in their capacity as trustees hereunder.
(v) The use herein of the masculine or feminine gender
or the neutral shall be construed to refer to the other gender or
the neutral as well, and the use herein of the singular shall be
construed to include the plural and the plural to include the
singular, as the context may require.
ARTICLE II
TRUSTEES
----------
Section 2.1. Number of Trustees and Qualification. The number of
Trustees shall initially be nine (9) and shall thereafter be such number as
shall be fixed from time to time by a written instrument signed by a majority of
the Trustees then in office, provided, however, that
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the number of Trustees shall, subsequent to any sale of Interests other than
sales made solely for the purposes of meeting any applicable seed money
requirement under the 1940 Act, in no event be less than three (3) or more than
fifteen (15). Any vacancy created by an increase in Trustees may be filled by
the appointment of any Person having the qualifications described in this
Article made by a written instrument signed by a majority of the Trustees then
in office. Any such appointment shall not become effective, however, until the
Person named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of this
Declaration. No reduction in the number of Trustees shall have the effect of
removing any Trustee from office. Whenever a vacancy in the number of Trustees
shall occur, until such vacancy is filled as provided in this Section and
Section 2.4 hereof, 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.
Section 2.2. Term and Election. Each Trustee named herein, or
elected or appointed prior to the first meeting of the Holders, shall (except in
the event of resignations or removals or vacancies pursuant to Section 2.3 or
2.4 hereof) hold office until his successor has been elected at such meeting and
has qualified to serve as Trustee, as required under the 1940 Act. Beginning
with the Trustees elected at the first meeting of Holders, each Trustee shall
hold office during the lifetime of this Trust and until its termination as
hereinafter provided or until December 31 of the year in which he shall have
reached 72 years of age unless such Trustee resigns or is removed as provided in
Section 2.3 below.
Section 2.3. Resignation, Retirement and Removal. Any Trustee may
resign his trust (without need for prior or subsequent accounting) by an
instrument in writing signed by him and delivered to the other Trustees, and
such resignation shall be effective upon such delivery or at any later date
according to the terms of the instrument. Any of the Trustees may be removed by
the action of two-thirds of the remaining Trustees; provided, that if the
removal of one or more Trustees would have the effect of reducing the number of
remaining Trustees below the minimum number prescribed by Section 2.1 hereof,
then subject to Section 16(a) of the 1940 Act, at the time of the removal of
such Trustee or Trustees, the remaining Trustees shall elect or appoint a number
of additional Trustees at least sufficient to increase the number of Trustees
holding office to the minimum number prescribed by Section 2.1 hereof. Upon the
resignation, retirement or removal of a Trustee, or his otherwise ceasing to be
a Trustee due to death or legal disability, he shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of conveying
to the Trust or the remaining Trustees any Trust Property held in his name. Upon
the death or legal disability of any Trustee, his legal representative shall
execute and deliver on his behalf such documents as the remaining Trustees shall
require as provided in the preceding sentence. However, the execution and
delivery of such documents by a former Trustee or his legal representative shall
not be requisite to the vesting of title to the Trust Property in the remaining
Trustees as provided in Section 3.3 hereof.
Section 2.4. Vacancies. The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of such Trustee's death,
resignation, retirement, removal, bankruptcy, adjudicated incompetence or other
legal disability to perform the duties of the office of Trustee. No such vacancy
shall operate to annul this Declaration or to revoke any existing obligations
created pursuant to the terms of this Declaration. In the case of a vacancy, the
Holders of at least a majority of the Interests cast, acting at any meeting of
the Holders held in
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accordance with Section 9.1 hereof, or, to the extent permitted by the 1940 Act,
a majority vote of the Trustees continuing in office acting by written
instrument or instruments, may fill such vacancy, and any Trustee so elected by
the Trustees or the Holders shall hold office as provided in this Declaration.
Section 2.5. Meetings. Regular meetings of the Trustees may be held
on such notice at such place or places and times as may be fixed by the By-Laws
or by resolution of the Trustees. Special Meetings of the Trustees shall be held
upon the call of the Chairman, if any, the president, the secretary, or any
Trustee, by oral or electronic or written notice duly served on or sent, mailed
or sent by telecopy or e-mail to each Trustee not less than one day before the
meeting. No notice need be given to any Trustee who attends in person or to any
Trustee who, in writing signed and filed with the records of the meeting either
before or after the holding thereof, waives notice. Notice or waiver of notice
need not state the purpose or purposes of the meeting. The Trustees may act with
or without a meeting, subject to the requirements of the 1940 Act. A quorum for
all meetings of the Trustees shall be a majority of the Trustees. Unless
provided otherwise in this Declaration, any action of the Trustees may be taken
at a meeting by vote of a majority of the Trustees present (a quorum being
present) or without a meeting by written consent of a majority of the Trustees.
Any committee of the Trustees, including an executive committee, if
any, may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Declaration, any action of any such committee may be taken at a meeting
by vote of a majority of the members present (a quorum being present) or without
a meeting by written consent of a majority of the members.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons of the Trust within the meaning of
Section 1.2 hereof or otherwise interested in any action to be taken may be
counted for quorum purposes under this Section 2.5 and shall be entitled to vote
to the extent permitted by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and participation in a meeting pursuant to such
communications system shall constitute presence in person at such meeting.
Section 2.6. Officers; Chairman. The Trustees shall, from time to
time, elect a President, a Secretary and a Treasurer. The Trustees may elect or
appoint, from time to time, a Chairman who shall preside at all meetings of the
Trustees and carry out such other duties as the Trustees shall designate. The
Trustees may elect or appoint or authorize the President to appoint such other
officers or agents with such powers as the Trustees may deem to be advisable.
The President, the Secretary and the Treasurer may, but need not, be Trustees,
and shall be agents of the Trust within the meaning of Section 3806(b)(7) of the
Act.
Section 2.7. By-Laws. The Trustees may adopt By-Laws not
inconsistent with this Declaration for the conduct of activities of the Trust
and may amend or repeal such By-Laws to the extent such power is not reserved to
the Holders by express provision of such By-Laws.
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This Declaration and the By-Laws shall together constitute the "governing
instrument" of the Trust within the meaning of Section 3801(f) of the Act.
ARTICLE III
POWERS OF TRUSTEES
------------------
Section 3.1. General. The Trustees shall have exclusive and absolute
control over the Trust Property and over the activities of the Trust to the
fullest extent permitted by Section 3806(a) of the Act and other applicable law,
but with such powers of delegation as may be permitted by this Declaration. The
Trustees shall have power to conduct the activities of the Trust and to carry on
their operations and maintain offices both within and without the State of
Delaware, in any and all states of the United States of America, and in the
District of Columbia, in any foreign country, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies or instrumentalities
of the United States of America and of foreign governments, and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of this Declaration, the presumption shall be in
favor of a grant of power to the Trustees. The Trustees will not be required to
obtain any court order to deal with Trust Property.
The enumeration of any specific power herein shall not be construed
as limiting the aforesaid powers. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 3.2. Activities and Investments. The Trustees shall have the
power with respect to the Trust:
(a) to conduct, operate and carry on the activities of
an investment company, and, in connection therewith:
(i) to subscribe for, purchase or otherwise
acquire and invest and reinvest in, to hold for
investment or otherwise, to sell, transfer, assign,
negotiate, exchange, lend or otherwise dispose of, and
to turn to account or realize upon and generally deal in
and with, domestic or foreign securities (which term,
"securities," shall include without limitation any and
all bills, notes, bonds, debentures or other obligations
or evidences of indebtedness, certificates of deposit,
bankers acceptances, commercial paper, repurchase
agreements or other money market instruments; stocks,
shares or other equity ownership interests (including
non-publicly traded or illiquid securities and those
securities the disposition of which is restricted under
the Federal securities laws); convertible securities;
mortgage-backed or other asset-backed securities; and
warrants, options or other instruments representing
rights to subscribe for, purchase, receive or otherwise
acquire or to sell, transfer, assign or otherwise
dispose of, and scrip, certificates, receipts or other
instruments
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evidencing any ownership rights or interests in, any of
the foregoing; and "forward commitment", "when issued"
and "delayed delivery" contracts for securities, issued,
guaranteed or sponsored by any governments, political
subdivisions or governmental authorities, agencies or
instrumentalities, by any individuals, firms, companies,
corporations, syndicates, associations or trusts, or by
any other organizations or entities whatsoever,
irrespective of their forms or the names by which they
may be described, whether or not they be organized and
operated for profit, and whether they be domestic or
foreign with respect to the State of Delaware or the
United States of America); and
(ii) to acquire and become the owner of or
interested in any securities by delivering or issuing in
exchange or payment therefor, in any lawful manner, any
of the Trust Property; and
(iii) to exercise while the owner of any
securities or interests therein any and all of the
rights, powers and privileges of ownership of such
securities or interests, including without limitation
any and all voting rights and rights of assent, consent
or dissent pertaining thereto, and to do any and all
acts and things for the preservation, protection,
improvement and enhancement in value thereof; and
(iv) 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; and
(v) to enter into futures and forward
contracts, and to purchase and write put and call
options on futures contracts, securities, currencies and
securities indexes; and
(vi) to make loans to the extent provided in
the Registration Statement from time to time; and
(vii) to engage in such other activities as
may be disclosed in the Registration Statement from time
to time; and
(b) to conduct, operate and carry on any other lawful
activities which the Trustees, in their sole and absolute
discretion, consider to be (i) incidental to the activities of the
Trust as an investment company, (ii) conducive to or expedient for
the benefit or protection of the Trust or the Holders, or (iii)
calculated in any other manner to promote the interests of the Trust
or the Holders.
The Trustees shall not be limited to investing in securities maturing before the
possible termination of the Trust, nor shall the Trustees be limited by any law
limiting the investments that may be made by fiduciaries. Notwithstanding
anything to the contrary herein contained but consistent with the applicable
investment objectives, the Trust shall be managed in compliance with the
requirements of the Code applicable to regulated investment companies.
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Section 3.3. Legal Title. Legal title to all the Trust Property
shall be vested in the Trust as a separate legal entity, 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
the interest of the Trust therein is appropriately protected. The right, title
and interest of the Trustees in the Trust Property shall vest automatically in
each Person who may hereafter become a Trustee. Upon the termination of the term
of office of a Trustee as provided in Section 2.2 or 2.4 hereof, such Trustee
shall automatically cease to have any right, title or interest in any of the
Trust Property, and all 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 as provided in Section 2.3 hereof.
Section 3.4. Sale of Interests; Reclassification. Subject to more
detailed provisions set forth in Article V and the Trustees' duty of
impartiality to the Holders, the Trustees shall have the power to permit any
Institutional Investor to purchase Interests and to add to or reduce, in whole
or in part, their Interests in any class, provided that from and after the
commencement of the private placement of Interests, Interests shall be sold only
to Institutional Investors, and the original Holders shall withdraw their entire
Interests from the class. The Trustees shall also have the power to acquire,
hold, resell, dispose of, transfer, classify, reclassify and otherwise deal in
Interests of the Trust or class. The Trustees may hold as treasury Interests
(without such Interests being deemed to be canceled), re-issue for such
consideration and on such terms as they determine, or cancel, in their
discretion from time to time, any Interests in any class thereof reacquired by
the Trust.
Section 3.5. Borrowing Money; Pledging Trust Assets; Lending
Property. Subject to any applicable Fundamental Policies of the Trust or any
applicable provision of the By-Laws, the Trustees shall have power, on behalf of
the Trust, to borrow money or otherwise obtain credit and to secure the same by
mortgaging, pledging or otherwise subjecting as security any of the Trust
Property, to endorse, guarantee, or undertake the performance of any obligation,
contract or engagement of any other Person and to lend Trust Property.
Section 3.6. Delegation; Committees. The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such committee or
committees as they may from time to time appoint from among their own number or
to such officers, employees or agents of the Trust as they may from time to time
designate the doing of such things and the execution of such instruments either
in the name of the Trust or the names of the Trustees or otherwise as the
Trustees may deem expedient.
Section 3.7. Collection and Payment. The Trustees shall have power
to collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.
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Section 3.8. Expenses. The Trustees shall have the power to incur
and pay, out of the income or the principal of the Trust Property, any expenses
which, in the opinion of the Trustees, are necessary or incidental to carrying
out any of the purposes of this Declaration, and to pay reasonable compensation
from the funds of the Trust to themselves as Trustees. The Trustees shall not be
obligated to account to the Holders for the retention of compensation, and each
Holder agrees that compliance with the accounting requirements of the 1940 Act
and of this Declaration shall constitute satisfactory accounting with respect to
all acts of the Trustees. The Trustees shall fix the compensation of all
officers, employees and Trustees of the Trust and may pay such compensation out
of the Trust Property without reduction of the Trustees' compensation.
Section 3.9. Common Items. All expenses and other items of the Trust
shall be borne by or allocated to each Holder proportionately based upon the
relative net asset values of each Holder. Such common items shall include, but
not be limited to, Trustees' fees; 1940 Act registration expenses;
organizational expenses of the Trust; and accounting expenses relating to the
Trust.
Section 3.10. 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
Holder in such Holder's own name or in the name of the Trust, whether or not the
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 3.11. Tax Matters. 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 Holders
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 Holder'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.
Section 3.12. Miscellaneous Powers. The Trustees shall have the
power to: (a) employ or contract with such Persons as the Trustees may deem
desirable for the transaction of the activities of the Trust and eliminate such
employees or contractual relationships as they consider appropriate; (b) enter
into joint ventures, partnerships and any other combinations or associations;
(c) remove Trustees or fill vacancies in or add to their number, subject to and
in
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accordance with Sections 2.3 and 2.4 hereof; elect and remove at will such
officers and appoint and terminate such agents or employees as they consider
appropriate; and appoint from their own number and terminate at will any one or
more committees that may exercise some or all of the power and authority of the
Trustees as the Trustees may determine; (d) purchase, and pay for out of Trust
Property, insurance policies insuring the Trust Property, and, to the extent
permitted by law and not inconsistent with any applicable provision of this
Declaration or the By-Laws, insuring the Investment Adviser, Administrator,
placement agent, Holders, Trustees, officers, employees, agents or independent
contractors of the Trust against all claims arising by reason of holding any
such position or by reason of any action taken or omitted to be taken by any
such Person in such capacity, whether or not constituting negligence, or whether
or not the Trust would have the power to indemnify such Person against such
liability; (e) indemnify any person with whom the Trust has dealings, including
the Holders, Trustees, officers, employees, agents, Investment Adviser,
Administrator, placement agent and independent contractors of the Trust, to such
extent permitted by law and not inconsistent with the applicable provisions of
this Declaration; (f) subject to applicable Fundamental Policies, guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Trust and the method by which its accounts shall be kept; and
(g) adopt a seal for the Trust, but the absence of such seal shall not impair
the validity of any instrument executed on behalf of the Trust.
Section 3.13. Manner of Acting. Except as otherwise provided herein,
in the By-Laws, in the 1940 Act or in any other applicable provision of law, any
action to be taken by the Trustees may be taken in the manner set forth in
Section 2.5 hereof.
ARTICLE IV
MANAGEMENT, ADMINISTRATIVE SERVICES
AND PLACEMENT AGENT ARRANGEMENTS; CUSTODIAN
-------------------------------------------
Section 4.1. Management and Other Arrangements. The Trustees may in
their discretion, from time to time, enter into management and administrative
services contracts or placement agent agreements whereby the other party to such
contract or agreement shall undertake to furnish such management,
administrative, placement agent and/or other services as the Trustees shall,
from time to time, consider desirable with respect to the Trust and upon such
terms and conditions as the Trustees may in their discretion determine.
Notwithstanding any other provisions of this Declaration, the Trustees may
authorize any Investment Adviser (subject to such general or specific
instructions as the Trustees may, from time to time, adopt) to effect purchases,
sales, loans or exchanges of Trust Property or may authorize any officer,
employee or Trustee to effect such purchases, sales, loans or exchanges pursuant
to recommendations of any such Investment Adviser (and all without further
action by the Trustees). Any such purchase, sales, loans and exchanges shall be
deemed to have been authorized by all of the Trustees.
Section 4.2. Parties to Contract. Any contract of the character
described in Section 4.1 of this Article IV or in the By-Laws of the Trust may
be entered into with any corporation, firm, trust or association, although one
or more of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract; and no such
contract shall be invalidated or rendered voidable by reason of the existence of
any such relationship, nor shall any person holding such relationship be liable
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merely by reason of such relationship for any loss or expense to the Trust under
or by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article IV
or the By-Laws. The same Person (including a firm, corporation, trust, or
association) may be the other party to contracts entered into pursuant to
Section 4.1 above or the By-Laws of the Trust, and any individual may be
financially interested or otherwise affiliated with Persons who are parties to
any or all of the contracts mentioned in this Section 4.2.
Section 4.3. Custodian. The Trustees may appoint one or more banks
or trust companies as custodian of the securities and cash belonging to the
Trust. The agreement providing for such appointment shall contain such terms and
conditions as the Trustees in their discretion determine to be not inconsistent
with this Declaration, the applicable provisions of the 1940 Act and any
applicable provisions of the By-Laws of the Trust. One or more subcustodians may
be appointed in a manner not inconsistent with this Declaration, the applicable
provisions of the 1940 Act and any applicable provisions of the By-Laws of the
Trust.
ARTICLE V
INTERESTS IN THE TRUST
----------------------
Section 5.1. Interests. Subject to the limitations contained in
Section 5.8 relating to the number of permitted Holders, the beneficial
interests in the Trust Property shall consist of an unlimited number of
non-transferable Interests that shall be denominated in dollars corresponding to
the value of such Interests determined by reference to the corresponding Book
Capital Accounts. All Interests shall be validly issued, fully paid and
nonassessable when issued for such consideration as the Trustees shall
determine. The Trustees may permit the purchase of Interests (for cash or other
consideration acceptable to the Trustees, subject to the requirements of the
1940 Act) but only if the purchaser is an Institutional Investor. Subject to
applicable law, the provisions hereof and such restrictions as may be adopted by
the Trustees, any Holder may increase its Interest by contributions or decrease
its Interest by withdrawals without limitation.
Section 5.2. Classes of Interests. The Trustees may, without
approval of the Holders of any Interests, establish and designate classes of
Interests or divide Interests into two or more classes, Interests of each class
having such preferences and special or relative rights and privileges (including
conversion rights, if any) as the Trustees may determine in their sole
discretion.
The establishment and designation of any class of Interests shall be
effective upon the execution by the Secretary or an Assistant Secretary of the
Trust, pursuant to authorization by a majority of the Trustees, of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such class. The Trustees may amend the By-laws providing for
class votes and meetings and related matters. Notwithstanding anything set forth
in Section 5.10, classes of Interests shall not be required to vote or receive
distributions on a pro rata basis unless required by applicable law or the terms
of the instrument establishing such class.
The Interests shall have the following relative rights and
preferences: on each matter submitted to a vote of the Holders, each Holder of
an Interest shall be entitled to a vote
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proportionate to its Interest as recorded on the books of the Trust and all
Holders of Interests shall vote as a separate class except as to voting for
Trustees and as otherwise required by the 1940 Act, in which case all Holders
shall vote together as a single class. As to any matter that does not affect the
interest of a particular class, only the Holders of Interests of the one more
affected class shall be entitled to vote.
Section 5.3. Rights of Holders. The ownership of the Trust Property
of every description and the right to conduct any activities hereinbefore
described shall be vested exclusively in the Trust, and the Holders shall have
no interest therein other than the beneficial interest conferred by their
Interests, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust. The Interests shall be
personal property giving only the rights specifically set forth in this
Declaration. The Holders shall have no right to demand payment for their
Interests or any other rights of dissenting shareholders in the event the Trust
participates in any transaction that would give rise to appraisal or dissenter's
rights by a shareholder of a corporation organized under the General Corporation
Law of the State of Delaware or otherwise. Holders shall have no preemptive or
other rights to subscribe for additional Interests or other securities issued by
the Trust. No action may be brought by a Holder on behalf of the Trust unless
Holders owning not less than 25% of the then-outstanding Interests join in the
bringing of such action. All Persons, by virtue of acquiring an Interest in the
Trust and being registered as a Holder in accordance with Section 5.5 hereof,
shall be deemed to have assented to, and shall be bound by, this Declaration to
the same extent as if such Person was a party hereto.
Section 5.4. Purchase of or Increase in Interests. The Trustees, in
their discretion, may, from time to time, without a vote of the Holders, permit
the purchase of additional Interests by such Institutional Investor or
Institutional Investors (including existing Holders), subject to the provisions
of Section 5.1 hereof, and for such type of consideration, including cash or
property, at such time or times (including, without limitation, each business
day), and on such terms as the Trustees may deem best, and may in such manner
acquire other assets (including the acquisition of assets subject to, and in
connection with the assumption of, liabilities) and businesses.
Section 5.5. Register of Interests. A register shall be kept by the
Trust that shall contain the names and addresses of the Holders and the Book
Capital Account balances of each Holder. Each such register shall be conclusive
as to who the Holders are and who shall be entitled to payments of distributions
or otherwise to exercise or enjoy the rights of Holders. No Holder shall be
entitled to receive payment of any distribution, nor to have notice given to it
as herein provided, until it has given its address to such officer or agent of
the Trust as shall keep the said register for entry thereon.
Section 5.6. Non-Transferability. To the fullest extent permitted by
law, Interests shall not be transferable and no transferee shall be recognized
as a Holder except with the prior written consent of all of the Trustees and all
remaining Holders of Interests.
Section 5.7. Notices. Any and all notices to which any Holder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage
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prepaid, addressed to any Holder of record at its last known address as recorded
on the register of the Trust or transmitted to the Holders by any other method
permitted by law.
Section 5.8. Limitation on Number of Holders. Notwithstanding any
provision hereof to the contrary, the number of Holders of Interests shall be
limited to fewer than 100. Solely for purposes of determining the number of
Holders of Interests under this Section 5.8, each beneficial owner of a grantor
trust that is itself a Holder shall be treated as a Holder of such Interest.
Section 5.9. No Liability of Holders. All Interests, when issued in
accordance with this Declaration, shall be fully paid and nonassessable. Holders
shall be entitled to the full protection against personal liability for the
obligations of the Trust under Section 3803(a) of the Act. The Trust shall
indemnify and hold each Holder harmless from and against any claim or liability
to which such Holder may become subject solely by reason of his or her being or
having been a Holder and not because of such Holder's acts or omissions or for
some other reason, and shall reimburse such Holder for all legal and other
expenses reasonably incurred by him or her in connection with any such claim or
liability (upon proper and timely request by the Holder).
ARTICLE VI
DECREASES AND WITHDRAWALS
-------------------------
Section 6.1. Decreases and Withdrawals. A Holder shall have the
right on any day the New York Stock Exchange is open to decrease its Interest in
the Trust and to withdraw completely from, at the next determined net asset
value attributable to the Interest (or portion thereof) being withdrawn, and an
appropriate adjustment therefor shall be made to such Holder's Book Capital
Account. The rights of a Holder upon withdrawal from the Trust shall be limited
to the assets belonging to the Trust which the withdrawal is made. The Trust
may, subject to compliance with the 1940 Act, charge fees for effecting such
decrease or withdrawal, at such rates as the Trustees may establish, and may at
any time and from time to time, suspend such right of decrease or withdrawal.
The procedures for effecting decreases or withdrawals shall be as determined by
the Trustees from time to time, subject to the requirements of the 1940 Act.
ARTICLE VII
DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES,
NET INCOME AND DISTRIBUTIONS
-----------------------------------------------
Section 7.1. Book Capital Account Balances. The Book Capital Account
balances of Holders of the Trust shall be determined on such days and at such
time or times as the Trustees may determine, consistent with the requirements of
the 1940 Act, with income, gains and losses of each class thereof determined in
accordance with generally accepted accounting principles to be allocated among
the Holders of such class thereof in accordance with their Interests. The power
and duty to make calculations of the Book Capital Account balances of the
Holders may be delegated by the Trustees to the Investment Adviser,
Administrator, Custodian, or such other person as the Trustees may determine.
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Section 7.2. Allocations and Distributions to Holders. In compliance
with the Treasury Regulations promulgated under applicable provisions of the
Code, the Trustees shall (i) allocate items of taxable income, gain, loss and
deduction with respect to each Holder, provided that, except as may otherwise be
specifically provided in the Treasury Regulations, in all cases allocations of
specific types of income shall be proportionate to the Interests of the Holders
in a particular class thereof, and (ii) upon liquidation of the Interests of a
Holder, make final distribution of the net assets of such a particular Holder in
accordance with such Holder's respective Book Capital Accounts. The Trustees
shall provide each Holder that is a regulated investment company, as defined in
Section 851(a) of the Code, information that will enable it to take into account
its share of items of taxable income, gain, loss and deduction as they are taken
into account by the Trust in order to facilitate compliance with Code Section
4982. Any income tax withholding or other withholding of taxes required by law
with respect to the allocable share of income of, or distributions to, a Holder
shall be accounted for as a distribution to and charged to the Book Capital
Account of such Holder at the time of payment of such taxes to the applicable
taxing authority.
Section 7.3. Power to Modify Foregoing Procedures. Notwithstanding
any of the foregoing provisions of this Article VII, the Trustees may prescribe,
in their absolute discretion, such other bases and times for determining the net
income and net assets of the Trust and of each class as they may deem necessary
or desirable to enable the Trust to comply with any provision of the 1940 Act,
any rule or regulation thereunder, or any order of exemption issued by said
Commission, all as in effect now or hereafter amended or modified.
ARTICLE VIII
LIABILITY FOR TRUST OBLIGATIONS
-------------------------------
Section 8.1. No Personal Liability of Trustees, etc.
(a) Trustees. The Trustees shall be entitled to the protection
against personal liability for the obligations of the Trust under
Section 3803(b) of the Act. No Trustee shall be liable to the Trust,
its Holders, 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.
(b) 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 Act. No officer, employee or
agent of the Trust shall be liable to the Trust, its Holders, 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.
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(c) The provisions of this Declaration, to the extent that
they expand or restrict the duties and liabilities of the Trustees,
officers, employees or agents of the Trust otherwise existing at law
or in equity, are agreed by the Holders to modify to that extent
such other duties and liabilities.
Section 8.2. Indemnification. 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 willful misfeasance, bad faith, 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 8.2; 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:
(a) the Trustee, officer, employee or agent to be indemnified
provides a security for his undertaking; or
(b) the Trust shall be insured against losses arising by reason of
any lawful advances; or
(c) 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:
(i) a majority of a quorum of Trustees who are neither
Interested Persons of the Trust nor parties to the Proceedings; or
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(ii) an independent legal counsel in a written opinion.
Section 8.3. No Protection Against Certain 1940 Act Liabilities.
Nothing contained in Sections 8.1 or 8.2 hereof shall protect any Trustee or
officer of the Trust from any liability to the Trust or its Holders to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Nothing contained in Sections 8.1 or 8.2 hereof or in any agreement of
the character described in Section 4.1 or 4.2 hereof shall protect any
Investment Adviser to the Trust against any liability to the Trust to which he
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his or its duties to the Trust, or by reason of
his or its reckless disregard to his or its obligations and duties under the
agreement pursuant to which he serves as Investment Adviser to the Trust.
Section 8.4. 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 8.5. 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 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 Holders, 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 Holders,
Trustees, officers, employees or agents of the Trust.
Section 8.6. Insurance. The Trustees may maintain insurance for the
protection of the Trust Property, its Holders, 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 8.7. 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, the
Administrator, accountant, appraiser or other expert or consultant selected with
reasonable care by the Trustees,
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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.
Section 8.8. 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 Holders of Interests of the Trust, or on the court's own
motion.
ARTICLE IX
HOLDERS
----------
Section 9.1. Meetings of Holders. Meetings of the Holders may be
called at any time by a majority of the Trustees and shall be called by any
Trustee upon written request of Holders holding, in the aggregate, not less than
10% of the Interests of the Trust, such request specifying the purpose or
purposes for which such meeting is to be called. Any such meeting shall be held
within or without the State of Delaware on such day and at such time as the
Trustees shall designate. Holders of at least one-third of the Interests of the
Trust, present in person or by proxy, shall constitute a quorum for the
transaction of any business, except as may otherwise be required by the 1940 Act
or other applicable law or by this Declaration or the By-Laws of the Trust. If a
quorum is present at a meeting, an affirmative vote by the Holders present, in
person or by proxy, holding more than 50% of the total Interests of the Holders
present, either in person or by proxy, at such meeting constitutes the action of
the Holders, unless the 1940 Act, other applicable law, this Declaration or the
By-Laws of the Trust require a greater number of affirmative votes.
Section 9.2. Notice of Meetings. Notice of all meetings of the
Holders stating the time, place and purposes of the meeting, shall be given by
the Trustees by mail to each Holder of the Trust, as the case may be, at his
registered address or transmitted to the Holders by any other method permitted
by law, sent at least 10 days and not more than 90 days before the meeting. At
any such meeting, any business properly before the meeting may be considered
whether or not stated in the notice of the meeting. Any adjourned meeting may be
held as adjourned without further notice.
Section 9.3. Record Date for Meetings. For the purpose of
determining Holders who are entitled to notice of and to vote at any meeting, or
to participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time fix a date, not more than 90 days prior to the
date of any meeting of the Holders or payment of distributions or other action,
as the case may be, as a record date for the determination of the Persons to be
treated as Holders of record of the Trust for such purposes.
Section 9.4. Proxies, etc. At any meeting of Holders, any Holder
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
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Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or one or more of the officers of the Trust.
Only Holders of record shall be entitled to vote. Each Holder shall be entitled
to vote proportionate to his Interest in the Trust. When Interests are held
jointly by several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Interest, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Interest. A proxy purporting to be executed by or on
behalf of a Holder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. If
the Holder is a minor or a person of unsound mind, and subject to guardianship
or to the legal control of any other person as regards the charge or management
of his Interest, he may vote by his guardian or such other person appointed or
having such control, and such vote may be given in person or by proxy.
Section 9.5. Reports. The Trustees shall cause to be prepared, at
least annually, a report of operations containing a balance sheet and statement
of income and undistributed income of the Trust prepared in conformity with
generally accepted accounting principles and an opinion of an independent public
accountant on such financial statements. The Trustees shall, in addition,
furnish to the Holders at least semi-annually interim reports containing an
unaudited balance sheet as of the end of such period and an unaudited statement
of income and surplus for the period from the beginning of the current fiscal
year to the end of such period.
Section 9.6. Inspection of Records. The records of the Trust shall
be open to inspection by Holders during normal business hours for any purpose
not harmful to the Trust.
Section 9.7. Holder Action by Written Consent. Any action that may
be taken by Holders may be taken without a meeting if Holders holding more than
50% of the total Interests entitled to vote (or such larger proportion thereof
as shall be required by any express provision of this Declaration) shall consent
to the action in writing or by any other method permitted by law and evidence of
the consents are filed with the records of the meetings of Holders. Such consent
shall be treated for all purposes as a vote taken at a meeting of Holders.
ARTICLE X
DURATION; TERMINATION OF
TRUST; AMENDMENT; MERGERS; ETC.
-------------------------------
Section 10.1. Duration. Subject to possible termination or
dissolution in accordance with Sections 10.2 and 10.3, respectively, the Trust
created hereby shall have perpetual existence.
Section 10.2. Dissolution of Trust. The Trust shall be dissolved by
a resolution adopted by a majority of the Trustees followed by notice of
dissolution to the Holders of the Interests in the Trust.
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Section 10.3. Termination of Trust.
(a) Upon an event of dissolution of the Trust, the Trust shall be
terminated in accordance with the following provisions:
(i) The Trust shall thereafter carry on no business except for
the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the
Trust and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust shall have been wound
up, including the power to fulfill or discharge the contracts of the
Trust, collect its assets, sell, convey, assign, exchange, transfer
or otherwise dispose of all or any part of the remaining Trust
Property to one or more persons at public or private sale for
consideration that may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay its
liabilities, and to do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all of the
Trust Property other than for cash, shall require approval of the
principal terms of the transaction and the nature and amount of the
consideration by the vote at a meeting, or by written consent, of
Holders holding more than 50% of the total outstanding Interests of
the Trust entitled to vote.
(iii) After paying or adequately providing for the payment of
all liabilities and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection,
the Trustees may distribute the remaining Trust Property, in cash or
in kind or partly each, among the Holders according to their Book
Capital Accounts.
(b) After termination of the Trust and distribution to the Holders
as herein provided, a majority of the Trustees shall execute and lodge
among the records of the Trust an instrument in writing setting forth the
fact of such termination. Upon termination of the Trust, the Trustees
shall file a certificate of cancellation in accordance with Section 3810
of the Act and such Trustees shall, subject to Section 3808 of the Act
thereupon be discharged from all further liabilities and duties hereunder,
and the rights and interests of all Holders shall thereupon cease.
Section 10.4. Amendment Procedure.
(a) Two-thirds (2/3) of the Trustees then in office may amend this
Declaration at any time for any purpose without the approval of the
Holders of Interests; provided, that the vote or a written or other
legally permissible form of consent of Holders holding more than 50% of
the total outstanding Interests or of Holders of 67% or more of the
Interests voting or consenting, if Holders of at least 50% of such
Interests vote or consent, shall be necessary to approve any amendment
whenever such vote or consent is required under the 1940 Act.
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(b) Nothing contained in this Declaration shall permit the amendment
of this Declaration to impair the exemption from personal liability of
Holders, Trustees, officers, employees and agents of the Trust.
(c) A certificate signed by a Trustee or by the Secretary or any
Assistant Secretary of the Trust, setting forth an amendment and reciting
that it was duly adopted by the Holders or by the Trustees as aforesaid or
a copy of the Declaration, as amended, certified by a Trustee or the
Secretary or any Assistant Secretary of the Trust, certifying that such
Declaration is a true and correct copy of the Declaration as amended,
shall be conclusive evidence of such amendment when lodged among the
records of the Trust.
Notwithstanding any other provision hereof, until such time as Interests
are first sold to an Institutional Investor, this Declaration may be
terminated or amended in any respect by vote or written consent of the
Trustees.
Section 10.5. Merger, Consolidation, Conversion and Sale of Assets.
(a) The Trust may convert or merge into or consolidate with any
corporation, association, other trust or other organization or the Trust
thereof may sell, lease or exchange all or substantially all of the Trust
Property including its good will, upon such terms and conditions and for
such consideration when and as authorized by vote or written or other
legally permissible form of consent of two-thirds (2/3) of the Trustees
then in office. In accordance with Section 3815(f) of the Act, an
agreement of merger or consolidation may effect any amendment to this
Declaration or the By-Laws or effect the adoption of a new declaration or
by-laws of the Trust if the Trust is the surviving or resulting entity.
(b) The Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, association or other organization to take over
all of the Trust Property, or to carry on any business in which the Trust
shall directly or indirectly have any interest, and to sell, convey and
transfer the Trust Property to any such corporation, trust, association or
organization in exchange for the equity interests thereof or otherwise,
and to lend money to, subscribe for the equity interests of, and enter
into any contracts with any such corporation, trust, partnership,
association or organization, or any corporation, partnership, trust,
association or organization in which the Trust holds or is about to
acquire equity interests. The Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and
to the extent permitted by law, as provided under the law then in effect.
Nothing contained herein shall be construed as requiring approval of the
Holders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations
and selling, conveying or transferring a portion of the Trust Property to
such organizations or entities.
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ARTICLE XI
MISCELLANEOUS
-------------
Section 11.1. Certificate of Trust; Registered Agent. The initial
Trustees shall file a certificate of trust in accordance with Section 3810 of
the Act. The registered agent is the Corporation Trust Company, 1209 Orange
Street, Wilmington, DE 19801.
Section 11.2. Governing Law. This Declaration is executed by all of
the Trustees and delivered with reference to Act and the laws of the State of
Delaware, and the rights of all parties and the validity and construction of
every provision hereof shall be governed by, subject to and construed according
to the Act and the laws of the State of Delaware (unless and to the extent
otherwise provided for and/or preempted by the 1940 Act or other applicable
federal securities laws); provided, however, that there shall not be applicable
to the Trust, the Trustees, the Holders or this Declaration (a) the provisions
of Section 3540 of Title 12 of the Delaware Code or (b) any provisions of the
laws (statutory or common) of the State of Delaware (other than the Act)
pertaining to trusts that are inconsistent with the rights, duties, powers,
limitations or liabilities of the Trustees or the Holders set forth or
referenced in this Declaration.
Section 11.3. Counterparts. The Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 11.4. 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
Holders, (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 Holders,
(d) the fact that the number of Trustees or Holders present at any meeting or
executing any written instrument satisfies the requirements of this Declaration,
(e) the form of any By-Laws 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.
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Section 11.5. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Code, the Act or, consistent with Section 11.2,
any other applicable Delaware law regarding administration of trusts, or
with other applicable laws and regulations, the conflicting provisions
shall be deemed superseded by such law or regulation to the extent
necessary to eliminate such conflict; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted
prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall pertain only to such provision in such jurisdiction and shall not in
any manner affect such provision in any other jurisdiction or any other
provision of this Declaration in any jurisdiction.
Section 11.6. Trust Only. It is the intention of the Trustees to
create only a business trust under the Act with the relationship of trustee and
beneficiary between the Trustees and each Holder from time to time. It is not
the intention of the Trustees to create a general partnership, limited
partnership, joint stock association, corporation, bailment, or any form of
legal relationship other than a Delaware business trust except to the extent
such trust is deemed to constitute a partnership under the Code and applicable
state tax laws. Nothing in this Declaration shall be construed to make the
Holders, either by themselves or with the Trustees, partners or members of a
joint stock association.
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IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the 9th day of June, 2000.
By: ____________________________
Name: Terry K. Glenn
Title: Trustee
By: ____________________________
Name: Ronald W. Forbes
Title: Trustee
By: ____________________________
Name: Cynthia A. Montgomery
Title: Trustee
By: ____________________________
Name: Charles C. Reilly
Title: Trustee
By: ____________________________
Name: Kevin A. Ryan
Title: Trustee
By: ____________________________
Name: Roscoe S. Suddarth
Title: Trustee
By: ____________________________
Name: Richard R. West
Title: Trustee
By: ____________________________
Name: Arthur Zeikel
Title: Trustee
By: ____________________________
Name: Edward D. Zinbarg
Title: Trustee
