WRITTEN INSTRUMENT AMENDING
AGREEMENT AND DECLARATION OF TRUST
OF
PILGRIM PRIME RATE TRUST
This Amendment to the Agreement and Declaration of Trust ("Declaration") of
Pilgrim Prime Rate Trust (the "Trust") is made this 20th day of October, 2000 by
the parties signatory hereto, as Trustees of the Trust (the "Trustees").
WITNESSETH
WHEREAS, the Declaration of Trust was made on December 2, 1987 and the
Trustees now desire to amend the Declaration; and
WHEREAS, Article IX, Section 7 of the Declaration provides that the
Trustees may amend the Declaration by an instrument signed by a majority of the
Trustees when authorized to do so by vote of Shareholders holding a majority of
the Shares of each series entitled to vote; and
WHEREAS, Shareholders of the Trust approved these amendments at a meeting
held on August 25, 2000;
NOW, THEREFORE, the Trustees hereby declare that the Declaration is amended
as follows:
1. Subsection (c) of Section 2 of Article I of the Agreement and
Declaration of Trust is amended to read in its entirety as follows:
(c) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided
from time to time or, if more than one class or series of Shares is
authorized by the Trustees, the equal proportionate transferable units into
which each class or series of Shares shall be divided from time to time;
2. Subsections (g) and (h) of Section 2 of Article I of the Agreement and
Declaration of Trust are amended to read in their entirety, and new subsections
(i), (j), (k) and (l) are added immediately thereafter, as follows:
(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time;
(h) "By-laws" shall mean the By-laws of the Trust as amended from time
to time;
(i) "Certificate" shall mean the Certificate of Designation for the
Preferred Shares;
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(j) The term "class" or "class of Shares" refers to the division of
Shares into two or more classes as provided in Article III, Section 1
hereof;
(k) The term "series" or "series of Shares" refers to the division of
Shares representing any class into two or more series as provided in
Article III, Section 1 hereof; and
(l) The "1940 Act" shall mean the Investment Company Act of 1940.
3. Sections 1 and 2 of Article III of the Agreement and Declaration of
Trust are amended to read in their entirety as follows:
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The Shares of the Trust
shall be issued in one or more classes of Shares (which classes may be
divided into two or more series) as the Trustees may, without shareholder
approval, authorize. Subject to the foregoing, Shares of each such class or
series shall have such preferences, voting powers, terms of redemption, if
any, and special or relative rights or privileges (including conversion
rights, if any) as the Trustees may determine and as shall be set forth in
the By-laws or the Certificate establishing the terms of any such class or
series which may be filed with the Secretary of the Commonwealth,
Corporations Division; provided, however, that to the extent required by
the 1940 Act no such series shall have a preference or priority over any
other series within its class upon the distribution of assets or in respect
of payment of dividends; and provided, further, the By-laws or the
Certificate shall set forth such other terms and conditions as may be
required by the 1940 Act with respect to stock which is a senior security.
The beneficial interest in each class or series shall at all times be
divided into Shares, without par value, each of which shall represent an
equal proportionate interest in that class or series with each other Share
of the same class or series, none having priority or preference over
another. The number of Shares of each class or series authorized shall be
unlimited, except as the By-laws may otherwise provide, and the Shares so
authorized may be represented in part by fractional Shares. The Trustees
may from time to time divide or combine the Shares of any class or series
into a greater or lesser number without thereby changing the proportionate
beneficial interests in the class or series.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent. No
certificates certifying the ownership of Shares shall be issued except as
the Trustees may otherwise determine from time to time. The Trustees may
make such rules as they consider appropriate for the issuance of Share
certificates, the transfer of Shares and similar matters. The record books
of the Trust as kept by the Trust or any transfer or similar agent, as the
case may be, shall be conclusive as to who are the Shareholders of each
class or series and as to the number of Shares of each class or series held
from time to time by each Shareholder.
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4. The second paragraph of Section 3 of Article III of the Agreement and
Declaration of Trust is deleted.
5. Section 1 of Article IV of the Agreement and Declaration of Trust is
amended to read in its entirety as follows:
SECTION 1. ELECTION. The persons who shall act as Trustees until the
first annual meeting or until their successors are duly chosen and qualify
are the initial Trustees executing this Agreement and Declaration of Trust
or any counterpart thereof. The number of Trustees shall be as provided in
the By-laws or as fixed from time to time by the Trustees. The Shareholders
may elect Trustees at any meeting of Shareholders called by the Trustees
for that purpose by a vote, and in accordance with the procedures, as set
forth in the By-laws and in compliance with the provisions of the 1940 Act
with respect to a class of senior securities which are stock to the extent
it requires that a specified number of Trustees be elected by the holders
of the class of senior securities. Each Trustee shall serve during the
continued lifetime of the Trust until he dies, resigns or is removed, or,
if sooner, until the next meeting of Shareholders called for the purpose of
electing Trustees and the election and qualification of his successor. Any
Trustee may resign at any time by written instrument signed by him and
delivered to any officer of the Trust, to each other Trustee or to a
meeting of the Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee
resigning and no Trustee removed shall have any right to any compensation
for any period following his resignation or removal, or any right to
damages on account of such removal.
6. The first paragraph of Section 3 of Article IV of the Agreement and
Declaration of Trust is amended to read in its entirety as follows:
SECTION 3. POWERS. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Trustees, and they
shall have all powers necessary or convenient to carry out that
responsibility. Without limiting the foregoing, the Trustees may adopt
By-laws not inconsistent with this Declaration of Trust providing for the
conduct of the business of the Trust and may amend and repeal them to the
extent that such By-laws do not reserve that right to the Shareholders of
one or more classes or series. The Trustees may enlarge or reduce their
number and, subject to the voting power of one or more classes or series of
Shares as set forth in the By-laws, the Trustees may fill vacancies in
their number, including vacancies caused by enlargement of their number,
and may remove Trustees with or without cause; they may elect and remove,
with or without cause, such officers and appoint and terminate such agents
as they consider appropriate; they may appoint from their own number, and
terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the power and authority of the Trustees as
the Trustees may determine; they may employ one or more custodians of the
assets of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a system or
systems for the central handling of securities, retain a transfer agent or
a Shareholder servicing agent, or both, provide for the distribution of
Shares by the Trust, through one or more principal underwriters or
otherwise, set record dates for the determination of Shareholders with
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respect to various matters, and in general delegate such authority as they
consider desirable to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such custodian
or underwriter.
7. Subsection (g) of Section 3 of Article IV of the Agreement and
Declaration of Trust is amended to read in its entirety as follows:
(g) To allocate assets, liabilities and expenses of the Trust to a
particular class or series of Shares or to apportion the same among two or
more classes or series;
8. Sections 4 and 5 of Article IV of the Agreement and Declaration of Trust
are amended to read in their entirety as follows:
SECTION 4. PAYMENT OF EXPENSES BY TRUST. The Trustees are authorized
to pay or to cause to be paid out of the principal or income of the Trust,
or partly out of principal and partly out of income, as they deem fair, all
expenses, fees, charges, taxes and liabilities incurred arising in
connection with the Trust, in connection with the management thereof, or in
connection with the financing of the sale of Shares, including, but not
limited to, the Trustees compensation and such expenses and charges for the
services of the Trust's officers, employees, any investment adviser,
manager, or sub-adviser, principal underwriter, auditor, counsel,
custodian, transfer agent, shareholder servicing agent, and such other
agents or independent contractors and such other expenses and charges as
the Trustees may deem necessary or proper to incur.
SECTION 5. OWNERSHIP OF ASSETS OF THE TRUST. Title to all of the
assets of the Trust shall at all times be considered as vested in the
Trustees.
9. Section 1 of Article VI of the Agreement and Declaration of Trust is
amended to read in its entirety as follows:
SECTION 1. DISTRIBUTIONS. The Trustees may each year, or more
frequently if they so determine, distribute to the Shareholders such income
and capital gains, accrued or realized, as the Trustees may determine,
after providing for actual and accrued expenses and liabilities (including
such reserves as the Trustees may establish) determined in accordance with
good accounting practices and subject to the preferences, special or
relative rights and privileges of the various classes or series of Shares,
as permitted by the 1940 Act. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital
and their determination shall be binding upon the Shareholders.
Distributions of each year's income shall be distributed pro rata to
Shareholders of a class or series in proportion to the number of Shares of
such class or series held by each of them. Such distributions shall be made
in cash or Shares or a combination thereof as determined by the Trustees.
Any such distribution paid in Shares of a class or series will be paid at
the net asset value thereof as determined in accordance with the By-laws.
10. Section 3 of Article VI of the Agreement and Declaration of Trust is
deleted.
11. Section 4 of Article VIII of the Agreement and Declaration of Trust is
amended to read in its entirety as follows:
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SECTION 4. SHAREHOLDERS. In case any Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his or her being
or having been a Shareholder and not because of his or her acts or
omissions or for some other reason, the Shareholder or former Shareholder
(or his or her heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled to be held harmless
from and indemnified against all loss and expense arising from such
liability out of the assets of the Trust.
12. The first paragraph of Section 1 of Article IX of the Agreement and
Declaration of Trust is amended to read in its entirety as follows:
SECTION 1. TRUSTEES, SHAREHOLDERS, ETC. Not Personally Liable; Notice.
All persons extending credit to, contracting with or having any claim
against the Trust or a particular class or series of Shares shall look only
to the assets of the Trust for payment under such credit, contract or
claim; and neither the Shareholders nor the Trustees, nor any of the
Trust's officers, employees or agents, whether past, present or future,
shall be personally liable therefor. Nothing in this Declaration of Trust
shall protect any Trustee against any liability to which such Trustee would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
the office of Trustee.
13. Section 4 of Article IX of the Agreement and Declaration of Trust is
amended to read in its entirety as follows:
SECTION 4. DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time.
Except to the extent that the By-laws or applicable law, including the 1940
Act, may require a higher vote or the separate vote of one or more classes
or series of Shares, the Trust may be terminated at any time by the vote of
Shareholders holding a majority of the Shares of all classes entitled to
vote, voting together as one class, or by the vote of a majority of the
Trustees and by written notice to the Shareholders.
Upon termination of the Trust, after paying or otherwise providing for
all charges, taxes, expenses and liabilities, whether due or accrued or
anticipated, of the Trust or of the particular class or series as may be
determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets
to distributable form in cash or shares or other securities, or any
combination thereof, and distribute the proceeds to the Shareholders of
each class or series, ratably according to the number of Shares of such
class or series held by the several Shareholders of such class or series on
the date of termination.
14. Section 7 of Article IX of the Agreement and Declaration of Trust is
amended to read in its entirety as follows:
SECTION 7. AMENDMENTS. Except to the extent that the By-laws or
applicable law, including the 1940 Act, may require a higher vote or the
separate vote of one or more classes or series of Shares, this Declaration
of Trust may be amended at any time by an instrument in writing signed by a
majority of the Trustees when authorized to do so by the vote of
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Shareholders holding a majority of the Shares of all classes entitled to
vote, voting together as one class. Amendments having the purpose of
changing the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require the authorization
by Shareholder vote.
The Trustees hereby agree that this document may be signed in
counterparts but treated as one document.
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IN WITNESS WHEREOF, the undersigned have executed this instrument this 20th
day of October, 2000.
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Al Burton Robert W. Stallings
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Paul S. Doherty John G. Turner
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Robert B. Goode David W. Wallace
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Alan L. Gosule
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Walter H. May
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Jock Patton
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David W.C. Putnam
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John R. Smith
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