Exhibit 99.(a)
BLACKROCK ALTERNATIVE ENERGY AND RESOURCE TRUST
AGREEMENT AND DECLARATION OF TRUST
Dated as of June 13, 2007
TABLE OF CONTENTS
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Page
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ARTICLE I
The Trust
1.1 Name............................................................... 1
1.2 Definitions........................................................ 1
ARTICLE II
Trustees
2.1 Number and Qualification........................................... 2
2.2 Term and Election.................................................. 2
2.3 Resignation and Removal............................................ 3
2.4 Vacancies.......................................................... 3
2.5 Meetings........................................................... 3
2.6 Trustee Action by Written Consent.................................. 4
2.7 Officers........................................................... 4
ARTICLE III
Powers and Duties of Trustees
3.1 General............................................................ 4
3.2 Investments........................................................ 4
3.3 Legal Title........................................................ 4
3.4 Issuance and Repurchase of Shares.................................. 5
3.5 Borrow Money or Utilize Leverage................................... 5
3.6 Delegation; Committees............................................. 5
3.7 Collection and Payment............................................. 5
3.8 Expenses........................................................... 5
3.9 By-Laws............................................................ 6
3.10 Miscellaneous Powers............................................... 6
3.11 Further Powers..................................................... 6
ARTICLE IV
Advisory, Management and Distribution Arrangements
4.1 Advisory and Management Arrangements............................... 6
4.2 Distribution Arrangements.......................................... 7
4.3 Parties to Contract................................................ 7
ARTICLE V
Limitations of Liability and Indemnification
5.1 No Personal Liability of Shareholders, Trustees, etc............... 7
5.2 Mandatory Indemnification.......................................... 7
5.3 No Bond Required of Trustees....................................... 9
5.4 No Duty of Investigation; Notice in Trust Instruments, etc......... 9
5.5 Reliance on Experts, etc........................................... 9
ARTICLE VI
Shares of Beneficial Interest
6.1 Beneficial Interest................................................ 9
6.2 Other Securities................................................... 9
6.3 Rights of Shareholders............................................. 9
6.4 Trust Only......................................................... 10
6.5 Issuance of Shares................................................. 10
6.6 Register of Shares................................................. 10
6.7 Transfer Agent and Registrar....................................... 10
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6.8 Transfer of Shares................................................. 10
6.9 Notices............................................................ 11
ARTICLE VII
Custodians
7.1 Appointment and Duties............................................. 11
7.2 Central Certificate System......................................... 11
ARTICLE VIII
Redemption
8.1 Redemptions........................................................ 11
8.2 Disclosure of Holding.............................................. 11
ARTICLE IX
Determination of Net Asset Value, Net Income and Distributions
9.1 Net Asset Value.................................................... 12
9.2 Distributions to Shareholders...................................... 12
9.3 Power to Modify Foregoing Procedures............................... 12
ARTICLE X
Shareholders
10.1 Meetings of Shareholders........................................... 12
10.2 Voting............................................................. 13
10.3 Notice of Meeting and Record Date.................................. 13
10.4 Quorum and Required Vote........................................... 13
10.5 Proxies, etc....................................................... 13
10.6 Reports............................................................ 14
10.7 Inspection of Records.............................................. 14
10.8 Shareholder Action by Written Consent.............................. 14
ARTICLE XI
Duration; Termination of Trust; Amendment; Mergers, Etc.
11.1 Duration........................................................... 14
11.2 Termination........................................................ 14
11.3 Amendment Procedure................................................ 15
11.4 Merger, Consolidation and Sale of Assets........................... 15
11.5 Subsidiaries....................................................... 16
11.6 Conversion......................................................... 16
11.7 Certain Transactions............................................... 16
ARTICLE XII
Miscellaneous
12.1 Filing............................................................. 17
12.2 Resident Agent..................................................... 17
12.3 Governing Law...................................................... 17
12.4 Counterparts....................................................... 18
12.5 Reliance by Third Parties.......................................... 18
12.6 Provisions in Conflict with Law or Regulation...................... 18
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BLACKROCK ALTERNATIVE ENERGY AND RESOURCE TRUST
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AGREEMENT AND DECLARATION OF TRUST
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AGREEMENT AND DECLARATION OF TRUST made as of the 13th day of June, 2007,
by the Trustees hereunder, and by the holders of shares of beneficial interest
issued hereunder as hereinafter provided.
WHEREAS, this Trust has been formed to carry on business as set forth more
particularly hereinafter;
WHEREAS, this Trust is authorized to issue an unlimited number of its
shares of beneficial interest all in accordance with the provisions hereinafter
set forth;
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as Trustees of a Delaware statutory trust in accordance with the
provisions hereinafter set forth; and
WHEREAS, the parties hereto intend that the Trust created by this
Declaration and the Certificate of Trust filed with the Secretary of State of
the State of Delaware on June 13h, 2007 shall constitute a statutory trust under
the Delaware Statutory Trust Act and that this Declaration shall constitute the
governing instrument of such statutory trust.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities, and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the benefit of the holders from time to time
of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
The Trust
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1.1 Name. This Trust shall be known as the "BlackRock Alternative Energy
and Resource Trust" and the Trustees shall conduct the business of the Trust
under that name or any other name or names as they may from time to time
determine.
1.2 Definitions. As used in this Declaration, the following terms shall
have the following meanings:
The "1940 Act" refers to the Investment Company Act of 1940 and the rules
and regulations promulgated thereunder and exemptions granted therefrom, as
amended from time to time.
The terms "Affiliated Person", "Assignment", "Commission", "Interested
Person" and "Principal Underwriter" shall have the meanings given them in the
1940 Act.
"By-Laws" shall mean the By-Laws of the Trust as amended from time to time
by the Trustees.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"Commission" shall mean the Securities and Exchange Commission.
"Declaration" shall mean this Agreement and Declaration of Trust, as
amended, supplemented or amended and restated from time to time.
"Delaware Statutory Trust Statute" shall mean the provisions of the
Delaware Statutory Trust Act, 12 Del. C. 3801, et. seq., as such Act may be
amended from time to time.
"Delaware General Corporation Law" means the Delaware General Corporation
Law, 8 Del. C. 100, et. seq., as amended from time to time.
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"Fundamental Policies" shall mean the investment policies and restrictions
as set forth from time to time in any Registration Statement of the Trust filed
with the Commission and designated as fundamental policies therein, as they may
be amended from time to time in accordance with the requirements of the 1940
Act.
"Majority Shareholder Vote" shall mean a vote of "a majority of the
outstanding voting securities" (as such term is defined in the 0000 Xxx) of the
Trust with each class and series of Shares voting together as a single class,
except to the extent otherwise required by the 1940 Act or this Declaration with
respect to any one or more classes or series of Shares, in which case the
applicable proportion of such classes or series of Shares voting as a separate
class or series, as the case may be, also will be required.
"Person" shall mean and include individuals, corporations, partnerships,
trusts, limited liability companies, associations, joint ventures and other
entities, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"Prospectus" shall mean the Prospectus of the Trust, if any, as in effect
from time to time under the Securities Act of 1933, as amended.
"Shareholders" shall mean as of any particular time the holders of record
of outstanding Shares of the Trust, at such time.
"Shares" shall mean the transferable units of beneficial interest into
which the beneficial interest in the Trust shall be divided from time to time
and includes fractions of Shares as well as whole Shares. In addition, Shares
also means any preferred shares or preferred units of beneficial interest which
may be issued from time to time, as described herein. All references to Shares
shall be deemed to be Shares of any or all series or classes as the context may
require.
"Trust" shall mean the trust established by this Declaration, as amended
from time to time, inclusive of each such amendment.
"Trust Property" shall mean as of any particular time any and all property,
real or personal, tangible or intangible, which at such time is owned or held by
or for the account of the Trust or the Trustees in such capacity.
"Trustees" shall mean the signatories to this Declaration, so long as they
shall continue in office in accordance with the terms hereof, and all other
persons who at the time in question have been duly elected or appointed and have
qualified as trustees in accordance with the provisions hereof and are then in
office.
ARTICLE II
Trustees
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2.1 Number and Qualification. Prior to a public offering of Shares there
may be a sole Trustee. Thereafter, the number of Trustees shall be determined by
a written instrument signed by a majority of the Trustees then in office,
provided that the number of Trustees shall be no less than two or more than
fifteen. No reduction in the number of Trustees shall have the effect of
removing any Trustee from office prior to the expiration of his term. An
individual nominated as a Trustee shall be at least 21 years of age and not
older than 80 years of age at the time of nomination and not under legal
disability. Trustees need not own Shares and may succeed themselves in office.
2.2 Term and Election. The Board of Trustees shall be divided into three
classes, designated Class I, Class II and Class III. Each class shall consist,
as nearly as may be possible, of one-third of the total number of trustees
constituting the entire Board of Trustees. Within the limits above specified,
the number of the Trustees in each class shall be determined by resolution of
the Board of Trustees. The term of office of the first class shall expire on the
date of the first annual meeting of Shareholders or special meeting in lieu
thereof following the effective date of the Registration Statement relating to
the Shares under the Securities Act of 1933, as amended. The term of office of
the second class shall expire on the date of the second annual meeting of
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Shareholders or special meeting in lieu thereof following the effective date of
the initial Registration Statement relating to the Shares under the Securities
Act of 1933, as amended. The term of office of the third class shall expire on
the date of the third annual meeting of Shareholders or special meeting in lieu
thereof following the effective date of the initial Registration Statement
relating to the Shares under the Securities Act of 1933, as amended. Upon
expiration of the term of office of each class as set forth above, the number of
Trustees in such class, as determined by the Board of Trustees, shall be elected
for a term expiring on the date of the third annual meeting of Shareholders or
special meeting in lieu thereof following such expiration to succeed the
Trustees whose terms of office expire. The Trustees shall be elected at an
annual meeting of the Shareholders or special meeting in lieu thereof called for
that purpose, except as provided in Section 2.3 of this Article, and each
Trustee elected shall hold office until his or her successor shall have been
elected and shall have qualified. The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of the death, resignation,
removal, bankruptcy, adjudicated incompetence or other incapacity to perform the
duties of the office, or removal, of a Trustee.
2.3 Resignation and Removal. Any of the Trustees may resign their trust
(without need for prior or subsequent accounting) by an instrument in writing
signed by such Trustee and delivered or mailed to the Trustees or the Chairman,
if any, the President or the Secretary and such resignation shall be effective
upon such delivery, or at a later date according to the terms of the instrument.
Any of the Trustees may be removed (provided the aggregate number of Trustees
after such removal shall not be less than the minimum number required by Section
2.1 hereof) for cause only, and not without cause, and only by action taken by a
majority of the remaining Trustees followed by the holders of at least
seventy-five percent (75%) of the Shares then entitled to vote in an election of
such Trustee. Upon the resignation or removal of a Trustee, each such resigning
or removed Trustee 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 the name of such resigning or
removed Trustee. Upon the incapacity or death of any Trustee, such Trustee's
legal representative shall execute and deliver on such Trustee's behalf such
documents as the remaining Trustees shall require as provided in the preceding
sentence.
2.4 Vacancies. Whenever a vacancy in the Board of Trustees shall occur, the
remaining Trustees may fill such vacancy by appointing an individual having the
qualifications described in this Article by a written instrument signed by a
majority of the Trustees then in office or may leave such vacancy unfilled or
may reduce the number of Trustees; provided the aggregate number of Trustees
after such reduction shall not be less than the minimum number required by
Section 2.1 hereof; provided, further, that if the Shareholders of any class or
series of Shares are entitled separately to elect one or more Trustees, a
majority of the remaining Trustees or the sole remaining Trustee elected by that
class or series may fill any vacancy among the number of Trustees elected by
that class or series. Any vacancy created by an increase in Trustees may be
filled by the appointment of an individual having the qualifications described
in this Article made by a written instrument signed by a majority of the
Trustees then in office. No vacancy shall operate to annul this Declaration or
to revoke any existing agency created pursuant to the terms of this Declaration.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided herein, 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.
2.5 Meetings. Meetings of the Trustees shall be held from time to time upon
the call of the Chairman, if any, or the President or any two Trustees. Regular
meetings of the Trustees may be held without call or notice at a time and place
fixed by the By-Laws or by resolution of the Trustees. Notice of any other
meeting shall be given by the Secretary and shall be delivered to the Trustees
orally not less than 24 hours, or in writing not less than 72 hours, before the
meeting, but may be waived in writing by any Trustee either before or after such
meeting. The attendance of a Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Trustee attends a meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting has not been properly called or convened. Any time there is more than
one Trustee, a quorum for all meetings of the Trustees shall be one-third, but
not less than two, of the Trustees. Unless provided otherwise in this
Declaration and except as required under the 1940 Act, any action of the
Trustees
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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 one-third, but not less than two, 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 all of the members.
With respect to actions of the Trustees and any committee of the Trustees,
Trustees who are Interested Persons in any action to be taken may be counted for
quorum purposes under this Section and shall be entitled to vote to the extent
not prohibited 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; participation in a meeting pursuant to any such
communications system shall constitute presence in person at such meeting.
2.6 Trustee Action by Written Consent. Any action which may be taken by
Trustees by vote may be taken without a meeting if that number of the Trustees,
or members of a committee, as the case may be, required for approval of such
action at a meeting of the Trustees or of such committee consent to the action
in writing and the written consents are filed with the records of the meetings
of Trustees. Such consent shall be treated for all purposes as a vote taken at a
meeting of Trustees.
2.7 Officers. The Trustees shall elect a President, a Secretary and a
Treasurer and may elect a Chairman who shall serve at the pleasure of the
Trustees or until their successors are elected. The Trustees may elect or
appoint or may authorize the Chairman, if any, or President to appoint such
other officers or agents with such powers as the Trustees may deem to be
advisable. A Chairman shall, and the President, Secretary and Treasurer may, but
need not, be a Trustee.
ARTICLE III
Powers and Duties of Trustees
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3.1 General. The Trustees shall owe to the Trust and its Shareholders the
same fiduciary duties as owed by directors of corporations to such corporations
and their stockholders under the Delaware General Corporation Law. The Trustees
shall have exclusive and absolute control over the Trust Property and over the
business of the Trust to the same extent as if the Trustees were the sole owners
of the Trust Property and business in their own right, but with such powers of
delegation as may be permitted by this Declaration. The Trustees may perform
such acts as in their sole discretion are proper for conducting the business of
the Trust. The enumeration of any specific power herein shall not be construed
as limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
3.2 Investments. The Trustees shall have power, subject to the Fundamental
Policies in effect from time to time with respect to the Trust to:
(a) manage, conduct, operate and carry on the business of an
investment company;
(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, exchange, distribute or
otherwise deal in or dispose of any and all sorts of property, tangible or
intangible, including but not limited to securities of any type whatsoever,
whether equity or non-equity, of any issuer, evidences of indebtedness of
any person and any other rights, interests, instruments or property of any
sort and to exercise any and all rights, powers and privileges of ownership
or interest in respect of any and all such investments of every kind and
description, including, without limitation, the right to consent and
otherwise act with respect thereto, with power to designate one or more
Persons to exercise
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any of said rights, powers and privileges in respect of any of said
investments. The Trustees shall not be limited by any law limiting the
investments which may be made by fiduciaries.
3.3 Legal Title. Legal title to all the Trust Property shall be vested in
the Trustees as joint tenants 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 the Trust, or in the name of any other Person as
nominee, custodian or pledgee, 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 his
due election and qualification. Upon the ceasing of any person to be a Trustee
for any reason, such person shall automatically cease to have any right, title
or interest in any of the Trust Property, and the right, title and interest of
such Trustee in the Trust Property shall vest automatically in the remaining
Trustees. Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
3.4 Issuance and Repurchase of Shares. The Trustees shall have the power to
issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell, reissue,
dispose of, transfer, and otherwise deal in, Shares, including Shares in
fractional denominations, and, subject to the more detailed provisions set forth
in Articles VIII and IX, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares any funds or property whether
capital or surplus or otherwise, to the full extent now or hereafter permitted
corporations formed under the Delaware General Corporation Law.
3.5 Borrow Money or Utilize Leverage. Subject to the Fundamental Policies
in effect from time to time with respect to the Trust, the Trustees shall have
the power to borrow money or otherwise obtain credit or utilize leverage to the
maximum extent permitted by law or regulation as such may be needed from time to
time and to secure the same by mortgaging, pledging or otherwise subjecting as
security the assets of the Trust, including the lending of portfolio securities,
and to endorse, guarantee, or undertake the performance of any obligation,
contract or engagement of any other person, firm, association or corporation.
3.6 Delegation; Committees. The Trustees shall have the 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 of their number or to
officers, employees or agents of the Trust the doing of such things, including
any matters set forth in this Declaration, 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. The Trustees may designate one or more committees
which shall have all or such lesser portion of the authority of the entire Board
of Trustees as the Trustees shall determine from time to time except to the
extent action by the entire Board of Trustees or particular Trustees is required
by the 0000 Xxx.
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 or the Trust, the Trustees or any officer, employee or agent of the
Trust; to prosecute, defend, compromise or abandon any claims relating to the
Trust Property or the Trust, or the Trustees or any officer, employee or agent
of the Trust; 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. Except to the extent required for a
corporation formed under the Delaware General Corporation Law, the Shareholders
shall have no power to vote as to whether or not a court action, legal
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders.
3.8 Expenses. The Trustees shall have power to incur and pay out of the
assets or income of the Trust any expenses which in the opinion of the Trustees
are necessary or incidental to carry out any of the purposes of this
Declaration, and the business of the Trust, and to pay reasonable compensation
from the funds of the Trust to themselves as Trustees. The Trustees shall fix
the compensation of all officers, employees and Trustees. The Trustees may pay
themselves such compensation for special services, including legal,
underwriting, syndicating and brokerage services, as they in good faith may deem
reasonable and
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reimbursement for expenses reasonably incurred by themselves on behalf of the
Trust. The Trustees shall have the power, as frequently as they may determine,
to cause each Shareholder to pay directly, in advance or arrears, for charges of
distribution, of the custodian or transfer, Shareholder servicing or similar
agent, a pro rata amount as defined from time to time by the Trustees, by
setting off such charges due from such Shareholder from declared but unpaid
dividends or distributions owed such Shareholder and/or by reducing the number
of shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
3.9 By-Laws. The Trustees shall have the exclusive authority to adopt and
from time to time amend or repeal By-Laws for the conduct of the business of the
Trust.
3.10 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 business of the Trust; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) purchase, and pay
for out of Trust Property, insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisors, distributors,
selected dealers 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 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; (d) establish pension, profit-sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (e) make donations, irrespective of
benefit to the Trust, for charitable, religious, educational, scientific, civic
or similar purposes; (f) to the extent permitted by law, indemnify any Person
with whom the Trust has dealings, including without limitation any advisor,
administrator, manager, transfer agent, custodian, distributor or selected
dealer, or any other person as the Trustees may see fit to such extent as the
Trustees shall determine; (g) guarantee indebtedness or contractual obligations
of others; (h) determine and change the fiscal year of the Trust and the method
in which its accounts shall be kept; (i) notwithstanding the Fundamental
Policies of the Trust, convert the Trust to a master-feeder structure; provided,
however, the Trust obtains the approval of shareholders holding at least a
majority of the Trust's Shares present at a meeting of Shareholders at which a
quorum is present; and (j) 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.
3.11 Further Powers. The Trustees shall have the power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, 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 the Trust Property.
ARTICLE IV
Advisory, Management and Distribution Arrangements
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4.1 Advisory and Management Arrangements. Subject to the requirements of
applicable law as in effect from time to time, the Trustees may in their
discretion from time to time enter into advisory, administration or management
contracts (including, in each case, one or more sub-advisory, sub-administration
or sub-management contracts) whereby the other party to any such contract shall
undertake to furnish such advisory, administrative and management services with
respect to the Trust as the Trustees shall from time to time consider desirable
and all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration, the Trustees may
authorize any advisor, administrator or manager (subject to such general or
specific instructions as the Trustees may from time to time
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adopt) to exercise any of the powers of the Trustees, including to effect
investment transactions with respect to the assets on behalf of the Trust to the
full extent of the power of the Trustees to effect such transactions or may
authorize any officer, employee or Trustee to effect such transactions pursuant
to recommendations of any such advisor, administrator or manager (and all
without further action by the Trustees). Any such investment transaction shall
be deemed to have been authorized by all of the Trustees.
4.2 Distribution Arrangements. Subject to compliance with the 1940 Act, the
Trustees may retain underwriters and/or placement agents to sell Shares and
other securities of the Trust. The Trustees may in their discretion from time to
time enter into one or more contracts, providing for the sale of securities of
the Trust, whereby the Trust may either agree to sell such securities to the
other party to the contract or appoint such other party its sales agent for such
securities. In either case, the contract shall be on such terms and conditions
as the Trustees may in their discretion determine not inconsistent with the
provisions of this Article IV or the By-Laws; and such contract may also provide
for the repurchase or sale of securities of the Trust by such other party as
principal or as agent of the Trust and may provide that such other party may
enter into selected dealer agreements with registered securities dealers and
brokers and servicing and similar agreements with persons who are not registered
securities dealers to further the purposes of the distribution or repurchase of
the securities of the Trust.
4.3 Parties to Contract. Any contract of the character described in
Sections 4.1 and 4.2 of this Article IV or in Article VII hereof may be entered
into with any Person, although one or more of the Trustees, officers or
employees 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 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 may be the other party to contracts entered into
pursuant to Sections 4.1 and 4.2 above or Article VII, 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 4.3.
ARTICLE V
Limitations of Liability and Indemnification
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5.1 No Personal Liability of Shareholders, Trustees, etc. No Shareholder of
the Trust shall be subject in such capacity to any personal liability whatsoever
to any Person in connection with Trust Property or the acts, obligations or
affairs of the Trust. Shareholders shall have the same limitation of personal
liability as is extended to stockholders of a private corporation for profit
incorporated under the Delaware General Corporation Law. No Trustee or officer
of the Trust shall be subject in such capacity to any personal liability
whatsoever to any Person, save only liability to the Trust or its Shareholders
arising from bad faith, willful misfeasance, gross negligence or reckless
disregard for his duty to such Person; and, subject to the foregoing exception,
all such Persons shall look solely to the Trust Property for satisfaction of
claims of any nature arising in connection with the affairs of the Trust. If any
Shareholder, Trustee or officer, as such, of the Trust, is made a party to any
suit or proceeding to enforce any such liability, subject to the foregoing
exception, he shall not, on account thereof, be held to any personal liability.
Any repeal or modification of this Section 5.1 shall not adversely affect any
right or protection of a Trustee or officer of the Trust existing at the time of
such repeal or modification with respect to acts or omissions occurring prior to
such repeal or modification.
5.2 Mandatory Indemnification. (a) The Trust hereby agrees to indemnify
each person who at any time serves as a Trustee or officer of the Trust (each
such person being an "indemnitee") against any liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and reasonable counsel fees reasonably incurred by such
indemnitee in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, before any court or administrative
or investigative body in which he may be or may have been involved as a party or
otherwise or with which he
7
may be or may have been threatened, while acting in any capacity set forth in
this Article V by reason of his having acted in any such capacity, except with
respect to any matter as to which he shall not have acted in good faith in the
reasonable belief that his action was in the best interest of the Trust or, in
the case of any criminal proceeding, as to which he shall have had reasonable
cause to believe that the conduct was unlawful, provided, however, that no
indemnitee shall be indemnified hereunder against any liability to any person or
any expense of such indemnitee arising by reason of (i) willful misfeasance,
(ii) bad faith, (iii) gross negligence, or (iv) reckless disregard of the duties
involved in the conduct of his position (the conduct referred to in such clauses
(i) through (iv) being sometimes referred to herein as "disabling conduct").
Notwithstanding the foregoing, with respect to any action, suit or other
proceeding voluntarily prosecuted by any indemnitee as plaintiff,
indemnification shall be mandatory only if the prosecution of such action, suit
or other proceeding by such indemnitee (1) was authorized by a majority of the
Trustees or (2) was instituted by the indemnitee to enforce his or her rights to
indemnification hereunder in a case in which the indemnitee is found to be
entitled to such indemnification. The rights to indemnification set forth in
this Declaration shall continue as to a person who has ceased to be a Trustee or
officer of the Trust and shall inure to the benefit of his or her heirs,
executors and personal and legal representatives. No amendment or restatement of
this Declaration or repeal of any of its provisions shall limit or eliminate any
of the benefits provided to any person who at any time is or was a Trustee or
officer of the Trust or otherwise entitled to indemnification hereunder in
respect of any act or omission that occurred prior to such amendment,
restatement or repeal.
(b) Notwithstanding the foregoing, no indemnification shall be made
hereunder unless there has been a determination (i) by a final decision on the
merits by a court or other body of competent jurisdiction before whom the issue
of entitlement to indemnification hereunder was brought that such indemnitee is
entitled to indemnification hereunder or, (ii) in the absence of such a
decision, by (1) a majority vote of a quorum of those Trustees who are neither
"interested persons" of the Trust (as defined in Section 2(a)(19) of the 0000
Xxx) nor parties to the proceeding ("Disinterested Non-Party Trustees"), that
the indemnitee is entitled to indemnification hereunder, or (2) if such quorum
is not obtainable or even if obtainable, if such majority so directs,
independent legal counsel in a written opinion concludes that the indemnitee
should be entitled to indemnification hereunder. All determinations to make
advance payments in connection with the expense of defending any proceeding
shall be authorized and made in accordance with the immediately succeeding
paragraph (c) below.
(c) The Trust shall make advance payments in connection with the expenses
of defending any action with respect to which indemnification might be sought
hereunder if the Trust receives a written affirmation by the indemnitee of the
indemnitee's good faith belief that the standards of conduct necessary for
indemnification have been met and a written undertaking to reimburse the Trust
unless it is subsequently determined that the indemnitee is entitled to such
indemnification and if a majority of the Trustees determine that the applicable
standards of conduct necessary for indemnification appear to have been met. In
addition, at least one of the following conditions must be met: (i) the
indemnitee shall provide adequate security for his undertaking, (ii) the Trust
shall be insured against losses arising by reason of any lawful advances, or
(iii) a majority of a quorum of the Disinterested Non-Party Trustees, or if a
majority vote of such quorum so direct, independent legal counsel in a written
opinion, shall conclude, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is substantial reason to
believe that the indemnitee ultimately will be found entitled to
indemnification.
(d) The rights accruing to any indemnitee under these provisions shall not
exclude any other right which any person may have or hereafter acquire under
this Declaration, the By-Laws of the Trust, any statute, agreement, vote of
stockholders or Trustees who are "disinterested persons" (as defined in Section
2(a)(19) of the 0000 Xxx) or any other right to which he or she may be lawfully
entitled.
(e) Subject to any limitations provided by the 1940 Act and this
Declaration, the Trust shall have the power and authority to indemnify and
provide for the advance payment of expenses to employees, agents and other
Persons providing services to the Trust or serving in any capacity at the
request of the Trust to the full extent corporations organized under the
Delaware General Corporation Law may indemnify or provide for the
8
advance payment of expenses for such Persons, provided that such indemnification
has been approved by a majority of the Trustees.
5.3 No Bond Required of Trustees. No Trustee shall, as such, be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
5.4 No Duty of Investigation; No Notice in Trust Instruments, etc. No
purchaser, lender, transfer agent 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, loaned, or delivered to or on the order of the
Trustees or of said officer, employee or agent. Every obligation, contract,
undertaking, instrument, certificate, Share, other security of the Trust, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively taken 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. The Trustees may maintain
insurance for the protection of the Trust Property, the Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable or is required by the 1940
Act.
5.5 Reliance on Experts, etc. Each Trustee and officer or employee of the
Trust shall, in the performance of its 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 the
Trust's officers or employees or by any advisor, administrator, manager,
distributor, selected dealer, accountant, appraiser or other expert or
consultant selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE VI
Shares of Beneficial Interest
-----------------------------
6.1 Beneficial Interest. The interest of the beneficiaries hereunder shall
be divided into an unlimited number of transferable shares of beneficial
interest, par value $.001 per share. All Shares issued in accordance with the
terms hereof, including, without limitation, Shares issued in connection with a
dividend in Shares or a split of Shares, shall be fully paid and, except as
provided in the last sentence of Section 3.8, nonassessable when the
consideration determined by the Trustees (if any) therefor shall have been
received by the Trust.
6.2 Other Securities. The Trustees may, subject to the Fundamental Policies
and the requirements of the 1940 Act, authorize and issue such other securities
of the Trust as they determine to be necessary, desirable or appropriate, having
such terms, rights, preferences, privileges, limitations and restrictions as the
Trustees see fit, including preferred interests, debt securities or other senior
securities. To the extent that the Trustees authorize and issue preferred shares
of any class or series, they are hereby authorized and empowered to amend or
supplement this Declaration as they deem necessary or appropriate, including to
comply with the requirements of the 1940 Act or requirements imposed by the
rating agencies or other Persons, all without the approval of Shareholders. Any
such supplement or amendment shall be filed as is necessary. The Trustees are
also authorized to take such actions and retain such persons as they see fit to
offer and sell such securities.
6.3 Rights of Shareholders. The Shares shall be personal property giving
only the rights in this Declaration specifically set forth. The ownership of the
Trust Property of every description and the right to conduct any business herein
before described are vested exclusively in the Trustees, and the Shareholders
shall have no interest therein other than the beneficial interest conferred by
their Shares, and they shall have no right to call for any partition or division
of any property, profits, rights or interests of the Trust nor can they be
called upon to share or assume any losses of the Trust or, subject to the right
of the Trustees to charge certain expenses directly to Shareholders, as provided
in the last sentence of Section 3.8, suffer an assessment of any kind by virtue
of their ownership of Shares. The Shares shall not entitle the holder to
preference, preemptive,
9
appraisal, conversion or exchange rights (except as specified in this Section
6.3, in Section 11.4 or as specified by the Trustees when creating the Shares,
as in preferred shares).
6.4 Trust Only. It is the intention of the Trustees to create only the
relationship of Trustee and beneficiary between the Trustees and each
Shareholder 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 trust.
Nothing in this Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
6.5 Issuance of Shares. The Trustees, in their discretion, may from time to
time without vote of the Shareholders issue Shares including preferred shares
that may have been established pursuant to Section 6.2, in addition to the then
issued and outstanding Shares and Shares held in the treasury, to such party or
parties and for such amount and type of consideration, including cash or
property, at such time or times, and on such terms as the Trustees may
determine, 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. The Trustees may from time to time divide or
combine the Shares into a greater or lesser number without thereby changing the
proportionate beneficial interest in such Shares. Issuances and redemptions of
Shares may be made in whole Shares and/or l/l,000ths of a Share or multiples
thereof as the Trustees may determine.
6.6 Register of Shares. A register shall be kept at the offices of the
Trust or any transfer agent duly appointed by the Trustees under the direction
of the Trustees which shall contain the names and addresses of the Shareholders
and the number of Shares held by them respectively and a record of all transfers
thereof. Separate registers shall be established and maintained for each class
or series of Shares. Each such register shall be conclusive as to who are the
holders of the Shares of the applicable class or series of Shares and who shall
be entitled to receive dividends or distributions or otherwise to exercise or
enjoy the rights of Shareholders. No Shareholder shall be entitled to receive
payment of any dividend or distribution, nor to have notice given to him as
herein provided, until he has given his address to a transfer agent or such
other officer or agent of the Trustees as shall keep the register for entry
thereon. It is not contemplated that certificates will be issued for the Shares;
however, the Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate fees therefore and rules and regulations
as to their use.
6.7 Transfer Agent and Registrar. The Trustees shall have power to employ a
transfer agent or transfer agents, and a registrar or registrars, with respect
to the Shares. The transfer agent or transfer agents may keep the applicable
register and record therein, the original issues and transfers, if any, of the
said Shares. Any such transfer agents and/or registrars shall perform the duties
usually performed by transfer agents and registrars of certificates of stock in
a corporation, as modified by the Trustees.
6.8 Transfer of Shares. Shares shall be transferable on the records of the
Trust only by the record holder thereof or by its agent thereto duly authorized
in writing, upon delivery to the Trustees or a transfer agent of the Trust of a
duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters
(including compliance with any securities laws and contractual restrictions) as
may reasonably be required. Upon such delivery the transfer shall be recorded on
the applicable register of the Trust. Until such record is made, the Shareholder
of record shall be deemed to be the holder of such Shares for all purposes
hereof and neither the Trustees nor any transfer agent or registrar nor any
officer, employee or agent of the Trust shall be affected by any notice of the
proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the applicable register of Shares as the holder of
such Shares upon production of the proper evidence thereof to the Trustees or a
transfer agent of the Trust, but until such record is made, the Shareholder of
record shall be deemed to be the holder of such for all purposes hereof, and
neither the Trustees nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such death, bankruptcy or
incompetence, or other operation of law.
10
6.9 Notices. Any and all notices to which any Shareholder hereunder may be
entitled and any and all communications shall be deemed duly served or given if
mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the applicable register of the Trust.
ARTICLE VII
Custodians
----------
7.1 Appointment and Duties. The Trustees shall at all times employ a
custodian or custodians, meeting the qualifications for custodians for portfolio
securities of investment companies contained in the 1940 Act, as custodian with
respect to the assets of the Trust. Any custodian shall have authority as agent
of the Trust as determined by the custodian agreement or agreements, but subject
to such restrictions, limitations and other requirements, if any, as may be
contained in the By-Laws of the Trust and the 1940 Act, including without
limitation authority:
(1) to hold the securities owned by the Trust and deliver the same
upon written order;
(2) to receive any receipt for any moneys due to the Trust and deposit
the same in its own banking department (if a bank) or elsewhere as the
Trustees may direct;
(3) to disburse such funds upon orders or vouchers;
(4) if authorized by the Trustees, to keep the books and accounts of
the Trust and furnish clerical and accounting services; and
(5) if authorized to do so by the Trustees, to compute the net income
or net asset value of the Trust;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian.
The Trustees may also authorize each custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall meet the qualifications for custodians
contained in the 1940 Act.
7.2 Central Certificate System. Subject to such rules, regulations and
orders as the Commission may adopt, the Trustees may direct the custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934, or such other Person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act, pursuant to which
system all securities of any particular class of any issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of such securities, provided that all such
deposits shall be subject to withdrawal only upon the order of the Trust.
ARTICLE VIII
Redemption
----------
8.1 Redemptions. The Shares of the Trust are not redeemable by the holders.
8.2 Disclosure of Holding. The holders of Shares or other securities of the
Trust shall upon demand disclose to the Trustees in writing such information
with respect to direct and indirect ownership of Shares or other securities of
the Trust as the Trustees deem necessary to comply with the provisions of the
Code, the 1940 or other applicable laws or regulations, or to comply with the
requirements of any other taxing or regulatory authority.
11
ARTICLE IX
Determination of Net Asset Value
Net Income and Distributions
----------------------------
9.1 Net Asset Value. The net asset value of each outstanding Share of the
Trust shall be determined at such time or times on such days as the Trustees may
determine, in accordance with the 1940 Act. The method of determination of net
asset value shall be determined by the Trustees and shall be as set forth in the
Prospectus or as may otherwise be determined by the Trustees. The power and duty
to make the net asset value calculations may be delegated by the Trustees and
shall be as generally set forth in the Prospectus or as may otherwise be
determined by the Trustees.
9.2 Distributions to Shareholders. (a) The Trustees shall from time to time
distribute ratably among the Shareholders of any class of Shares, or any series
of any such class, in accordance with the number of outstanding full and
fractional Shares of such class or any series of such class, such proportion of
the net profits, surplus (including paid-in surplus), capital, or assets held by
the Trustees as they may deem proper or as may otherwise be determined in
accordance with this Declaration. Any such distribution may be made in cash or
property (including without limitation any type of obligations of the Trust or
any assets thereof) or Shares of any class or series or any combination thereof,
and the Trustees may distribute ratably among the Shareholders of any class of
shares or series of any such class, in accordance with the number of outstanding
full and fractional Shares of such class or any series of such class, additional
Shares of any class or series in such manner, at such times, and on such terms
as the Trustees may deem proper or as may otherwise be determined in accordance
with this Declaration.
(b) Distributions pursuant to this Section 9.2 may be among the
Shareholders of record of the applicable class or series of Shares at the time
of declaring a distribution or among the Shareholders of record at such later
date as the Trustees shall determine and specify.
(c) The Trustees may always retain from the net profits such amount as they
may deem necessary to pay the debts or expenses of the Trust or to meet
obligations of the Trust, or as they otherwise may deem desirable to use in the
conduct of its affairs or to retain for future requirements or extensions of the
business.
(d) Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust to avoid or reduce liability for taxes.
9.3 Power to Modify Foregoing Procedures. Notwithstanding any of the
foregoing provisions of this Article IX, the Trustees may prescribe, in their
absolute discretion except as may be required by the 1940 Act, such other bases
and times for determining the per share asset value of the Trust's Shares or net
income, or the declaration and payment of dividends and distributions as they
may deem necessary or desirable for any reason, including to enable the Trust to
comply with any provision of the 1940 Act, or any securities exchange or
association registered under the Securities Exchange Act of 1934, or any order
of exemption issued by the Commission, all as in effect now or hereafter amended
or modified.
ARTICLE X
Shareholders
------------
10.1 Meetings of Shareholders. The Trust shall hold annual meetings of the
Shareholders (provided that the Trust's initial annual meeting of Shareholders
may occur up to one year after the completion of its initial fiscal year). A
special meeting of Shareholders may be called at any time by a majority of the
Trustees or the President and shall be called by any Trustee for any proper
purpose upon written request of Shareholders of the Trust holding in the
aggregate not less than fifty-one percent (51%) of the outstanding Shares of the
Trust or class or series of Shares having voting rights on the matter, such
request specifying the purpose or
12
purposes for which such meeting is to be called. Any shareholder meeting,
including a Special Meeting, shall be held within or without the State of
Delaware on such day and at such time as the Trustees shall designate.
10.2 Voting. Shareholders shall have no power to vote on any matter except
matters on which a vote of Shareholders is required by applicable law, this
Declaration or resolution of the Trustees. This Declaration expressly provides
that no matter for which voting is required by the Statutory Trust Act in the
absence of the contrary provision in the Declaration shall require any vote.
Except as otherwise provided herein, any matter required to be submitted to
Shareholders and affecting one or more classes or series of Shares shall require
approval by the required vote of all the affected classes and series of Shares
voting together as a single class; provided, however, that as to any matter with
respect to which a separate vote of any class or series of Shares is required by
the 1940 Act, such requirement as to a separate vote by that class or series of
Shares shall apply in addition to a vote of all the affected classes and series
voting together as a single class. Shareholders of a particular class or series
of Shares shall not be entitled to vote on any matter that affects only one or
more other classes or series of Shares. There shall be no cumulative voting in
the election or removal of Trustees.
10.3 Notice of Meeting and Record Date. Notice of all meetings of
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail to each Shareholder of record entitled to vote
thereat at its registered address, mailed at least 10 days and not more than 90
days before the meeting or otherwise in compliance with applicable law. Only the
business stated in the notice of the meeting shall be considered at such
meeting. Any adjourned meeting may be held as adjourned one or more times
without further notice not later than 120 days after the record date. For the
purposes of determining the Shareholders who are entitled to notice of and to
vote at any meeting the Trustees may, without closing the transfer books, fix a
date not more than 90 nor less than 10 days prior to the date of such meeting of
Shareholders as a record date for the determination of the Persons to be treated
as Shareholders of record for such purposes.
10.4 Quorum and Required Vote. (a) The holders of a majority of the Shares
entitled to vote on any matter at a meeting present in person or by proxy shall
constitute a quorum at such meeting of the Shareholders for purposes of
conducting business on such matter. The absence from any meeting, in person or
by proxy, of a quorum of Shareholders for action upon any given matter shall not
prevent action at such meeting upon any other matter or matters which may
properly come before the meeting, if there shall be present thereat, in person
or by proxy, a quorum of Shareholders in respect of such other matters.
(b) Subject to any provision of applicable law, this Declaration or a
resolution of the Trustees specifying a greater or a lesser vote requirement for
the transaction of any item of business at any meeting of Shareholders, (i) the
affirmative vote of a majority of the Shares present in person or represented by
proxy and entitled to vote on the subject matter shall be the act of the
Shareholders with respect to such matter, and (ii) where a separate vote of one
or more classes or series of Shares is required on any matter, the affirmative
vote of a majority of the Shares of such class or series of Shares present in
person or represented by proxy at the meeting shall be the act of the
Shareholders of such class or series with respect to such matter.
10.5 Proxies, etc. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat may vote by properly executed 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. 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 or employees of the Trust. No proxy shall be valid after the expiration
of 11 months from the date thereof, unless otherwise provided in the proxy. Only
Shareholders of record shall be entitled to vote. Each full Share shall be
entitled to one vote and fractional Shares shall be entitled to a vote of such
fraction. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect of such Share, 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 Share. A proxy
purporting to be executed by or on behalf of a Shareholder 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 of any such Share is a
minor or a person of unsound mind, and subject to guardianship or to the
13
legal control of any other person as regards the charge or management of such
Share, 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.
10.6 Reports. The Trustees shall cause to be prepared at least annually and
more frequently to the extent and in the form required by law, regulation or any
exchange on which Trust Shares are listed 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. Copies
of such reports shall be mailed to all Shareholders of record within the time
required by the 1940 Act, and in any event within a reasonable period preceding
the meeting of Shareholders. The Trustees shall, in addition, furnish to the
Shareholders at least semi-annually to the extent required by law, interim
reports containing an unaudited balance sheet of the Trust 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.
10.7 Inspection of Records. The records of the Trust shall be open to
inspection by Shareholders to the same extent as is permitted shareholders of a
corporation formed under the Delaware General Corporation Law.
10.8 Shareholder Action by Written Consent. Any action which may be taken
by Shareholders by vote may be taken without a meeting if the holders entitled
to vote thereon of the proportion of Shares required for approval of such action
at a meeting of Shareholders pursuant to Section 10.4 consent to the action in
writing and the written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote taken at
a meeting of Shareholders.
ARTICLE XI
Duration; Termination of Trust;
Amendment; Mergers, Etc.
------------------------
11.1 Duration. Subject to possible termination in accordance with the
provisions of Section 11.2 hereof, the Trust created hereby shall have perpetual
existence.
11.2 Termination. (a) The Trust may be dissolved, only upon approval of not
less than eighty percent (80%) of the Trustees. Upon the dissolution of the
Trust:
(i) The Trust shall 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, merge where the Trust is not the
survivor, 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 which may consist in whole or in part in cash, securities or
other property of any kind, discharge or pay its liabilities, and do all
other acts appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, merger in which the Trust is not the
survivor, transfer or other disposition of all or substantially all the
Trust Property of the Trust shall require approval of the principal terms
of the transaction and the nature and amount of the consideration by
Shareholders with the same vote as required to open-end the Trust.
(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 Shareholders according to their respective rights.
14
(b) After the winding up and termination of the Trust and distribution to
the Shareholders 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 and shall execute and file a certificate of
cancellation with the Secretary of State of the State of Delaware. Upon
termination of the Trust, the Trustees shall thereupon be discharged from all
further liabilities and duties hereunder, and the rights and interests of all
Shareholders shall thereupon cease.
11.3 Amendment Procedure. (a) Except as provided in subsection (b) of this
Section 11.3, this Declaration may be amended, after a majority of the Trustees
have approved a resolution therefor, by the affirmative vote required by Section
10.4 of this Declaration. The Trustees also may amend this Declaration without
any vote of Shareholders of any class or series to divide the Shares of the
Trust into one or more classes or additional classes, or one or more series of
any such class or classes, to determine the rights, powers, preferences,
limitations and restrictions of any class or series of Shares, to change the
name of the Trust or any class or series of Shares, to make any change that does
not adversely affect the relative rights or preferences of any Shareholder, as
they may deem necessary, or to conform this Declaration to the requirements of
the 1940 Act or any other applicable federal laws or regulations including
pursuant to Section 6.2 or the requirements of the regulated investment company
provisions of the Code, but the Trustees shall not be liable for failing to do
so.
(b) No amendment may be made to Section 2.1, Section 2.2, Section 2.3,
Section 3.9, Section 5.1, Section 5.2, Section 11.2(a), this Section 11.3,
Section 11.4, Section 11.6 or Section 11.7 of this Declaration and no amendment
may be made to this Declaration which would change any rights with respect to
any Shares of the Trust by reducing the amount payable thereon upon liquidation
of the Trust or by diminishing or eliminating any voting rights pertaining
thereto (except that this provision shall not limit the ability of the Trustees
to authorize, and to cause the Trust to issue, other securities pursuant to
Section 6.2), except after a majority of the Trustees have approved a resolution
therefor, by the affirmative vote of the holders of not less than seventy-five
percent (75%) of the Shares of each affected class or series outstanding, voting
as separate classes or series, unless such amendment has been approved by eighty
percent (80%) of the Trustees, in which case approval by a Majority Shareholder
Vote shall be required. Nothing contained in this Declaration shall permit the
amendment of this Declaration to impair the exemption from personal liability of
the Shareholders, Trustees, officers, employees and agents of the Trust or to
permit assessments upon Shareholders.
(c) An amendment duly adopted by the requisite vote of the Board of
Trustees and, if required, the Shareholders as aforesaid, shall become effective
at the time of such adoption or at such other time as may be designated by the
Board of Trustees or Shareholders, as the case may be. A certification in
recordable form signed by a majority of the Trustees setting forth an amendment
and reciting that it was duly adopted by the Trustees and, if required, the
Shareholders as aforesaid, or a copy of the Declaration, as amended, in
recordable form, and executed by a majority of the Trustees, shall be conclusive
evidence of such amendment when lodged among the records of the Trust or at such
other time designated by the Board.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of Shares of the Trust shall have become effective,
this Declaration may be terminated or amended in any respect by the affirmative
vote of a majority of the Trustees or by an instrument signed by a majority of
the Trustees.
11.4 Merger, Consolidation and Sale of Assets. Except as provided in
Section 11.7, the Trust may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of the Trust Property or the property, including its good
will, upon such terms and conditions and for such consideration when and as
authorized by two-thirds of the Trustees and approved by a Majority Shareholder
Vote and any such merger, consolidation, sale, lease or exchange shall be
determined for all purposes to have been accomplished under and pursuant to the
statutes of the State of Delaware.
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11.5 Subsidiaries. Without approval by Shareholders, the Trustees may cause
to be organized or assist in organizing one or more corporations, trusts,
partnerships, associations or other organizations 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 all or a portion
of the Trust Property to any such corporation, trust, limited liability company,
association or organization in exchange for the shares or securities thereof, or
otherwise, and to lend money to, subscribe for the shares or securities of, and
enter into any contracts with any such corporation, trust, limited liability
company, partnership, association or organization, or any corporation,
partnership, trust, limited liability company, association or organization in
which the Trust holds or is about to acquire shares or any other interests.
11.6 Conversion. Notwithstanding any other provisions of this Declaration
or the By-Laws of the Trust, a favorable vote of a majority of the Trustees then
in office followed by the favorable vote of the holders of not less than
seventy-five percent (75%) of the Shares of each affected class or series
outstanding, voting as separate classes or series, shall be required to approve,
adopt or authorize an amendment to this Declaration that makes the Shares a
"redeemable security" as that term is defined in the 1940 Act, unless such
amendment has been approved by eighty percent (80%) of the Trustees, in which
case approval by a Majority Shareholder Vote shall be required. Upon the
adoption of a proposal to convert the Trust from a "closed-end company" to an
"open-end company" as those terms are defined by the 1940 Act and the necessary
amendments to this Declaration to permit such a conversion of the Trust's
outstanding Shares entitled to vote, the Trust shall, upon complying with any
requirements of the 1940 Act and state law, become an "open-end" investment
company. Such affirmative vote or consent shall be in addition to the vote or
consent of the holders of the Shares otherwise required by law, or any agreement
between the Trust and any national securities exchange.
11.7 Certain Transactions. (a) Notwithstanding any other provision of this
Declaration and subject to the exceptions provided in paragraph (d) of this
Section, the types of transactions described in paragraph (c) of this Section
shall require the affirmative vote or consent of a majority of the Trustees then
in office followed by the affirmative vote of the holders of not less than
seventy-five percent (75%) of the Shares of each affected class or series
outstanding, voting as separate classes or series, when a Principal Shareholder
(as defined in paragraph (b) of this Section) is a party to the transaction.
Such affirmative vote or consent shall be in addition to the vote or consent of
the holders of Shares otherwise required by law or by the terms of any class or
series of preferred stock, whether now or hereafter authorized, or any agreement
between the Trust and any national securities exchange.
(b) The term "Principal Shareholder" shall mean any corporation, Person or
other entity which is the beneficial owner, directly or indirectly, of five
percent (5%) or more of the outstanding Shares of all outstanding classes or
series and shall include any affiliate or associate, as such terms are defined
in clause (ii) below, of a Principal Shareholder. For the purposes of this
Section, in addition to the Shares which a corporation, Person or other entity
beneficially owns directly, (a) any corporation, Person or other entity shall be
deemed to be the beneficial owner of any Shares (i) which it has the right to
acquire pursuant to any agreement or upon exercise of conversion rights or
warrants, or otherwise (but excluding share options granted by the Trust) or
(ii) which are beneficially owned, directly or indirectly (including Shares
deemed owned through application of clause (i) above), by any other corporation,
Person or entity with which its "affiliate" or "associate" (as defined below)
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of Shares, or which is its "affiliate" or
"associate" as those terms are defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, and (b) the outstanding
Shares shall include Shares deemed owned through application of clauses (i) and
(ii) above but shall not include any other Shares which may be issuable pursuant
to any agreement, or upon exercise of conversion rights or warrants, or
otherwise.
(c) This Section shall apply to the following transactions:
(i) The merger or consolidation of the Trust or any subsidiary of the
Trust with or into any Principal Shareholder.
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(ii) The issuance of any securities of the Trust to any Principal
Shareholder for cash (other than pursuant to any automatic dividend
reinvestment plan).
(iii) The sale, lease or exchange of all or any substantial part of
the assets of the Trust to any Principal Shareholder (except assets having
an aggregate fair market value of less than two percent (2%) of the total
assets of the Trust, aggregating for the purpose of such computation all
assets sold, leased or exchanged in any series of similar transactions
within a twelve-month period.)
(iv) The sale, lease or exchange to the Trust or any subsidiary
thereof, in exchange for securities of the Trust, of any assets of any
Principal Shareholder (except assets having an aggregate fair market value
of less than two percent (2%) of the total assets of the Trust, aggregating
for the purposes of such computation all assets sold, leased or exchanged
in any series of similar transactions within a twelve-month period).
(d) The provisions of this Section shall not be applicable to (i) any of
the transactions described in paragraph (c) of this Section if eighty percent
(80%) of the Trustees shall by resolution have approved a memorandum of
understanding with such Principal Shareholder with respect to and substantially
consistent with such transaction, in which case approval by a Majority
Shareholder Vote shall be the only vote of Shareholders required by this
Section, or (ii) any such transaction with any entity of which a majority of the
outstanding shares of all classes and series of a stock normally entitled to
vote in elections of directors is owned of record or beneficially by the Trust
and its subsidiaries.
(e) The Board of Trustees shall have the power and duty to determine for
the purposes of this Section on the basis of information known to the Trust
whether (i) a corporation, person or entity beneficially owns five percent (5%)
or more of the outstanding Shares of any class or series, (ii) a corporation,
person or entity is an "affiliate" or "associate" (as defined above) of another,
(iii) the assets being acquired or leased to or by the Trust or any subsidiary
thereof constitute a substantial part of the assets of the Trust and have an
aggregate fair market value of less than two percent (2%) of the total assets of
the Trust, and (iv) the memorandum of understanding referred to in paragraph (d)
hereof is substantially consistent with the transaction covered thereby. Any
such determination shall be conclusive and binding for all purposes of this
Section.
ARTICLE XII
Miscellaneous
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12.1 Filing. (a) This Declaration and any amendment or supplement hereto
shall be filed in such places as may be required or as the Trustees deem
appropriate. Each amendment or supplement shall be accompanied by a certificate
signed and acknowledged by a Trustee stating that such action was duly taken in
a manner provided herein, and shall, upon insertion in the Trust's minute book,
be conclusive evidence of all amendments contained therein. A restated
Declaration, containing the original Declaration and all amendments and
supplements theretofore made, may be executed from time to time by a majority of
the Trustees and shall, upon insertion in the Trust's minute book, be conclusive
evidence of all amendments and supplements contained therein and may thereafter
be referred to in lieu of the original Declaration and the various amendments
and supplements thereto.
(b) The Trustees hereby authorize and direct a Certificate of Trust, in the
form attached hereto as Exhibit A, to be executed and filed with the Office of
the Secretary of State of the State of Delaware in accordance with the Delaware
Statutory Trust Act.
12.2 Resident Agent. The Trust shall maintain a resident agent in the State
of Delaware, which agent shall initially be The Corporation Trust Company, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The Trustees may designate a
successor resident agent, provided, however, that such appointment shall not
become effective until written notice thereof is delivered to the office of the
Secretary of the State.
12.3 Governing Law. This Declaration is executed by the Trustees and
delivered in the State of Delaware and with reference to the laws thereof, and
the rights of all parties and the validity and construction
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of every provision hereof shall be subject to and construed according to laws of
said State and reference shall be specifically made to the Delaware General
Corporation Law as to the construction of matters not specifically covered
herein or as to which an ambiguity exists, although such law shall not be viewed
as limiting the powers otherwise granted to the Trustees hereunder and any
ambiguity shall be viewed in favor of such powers.
12.4 Counterparts. This 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.
12.5 Reliance by Third Parties. Any certificate executed by an individual
who, according to the records of the Trust, or of any recording office in which
this Declaration may be recorded, appears to be a Trustee hereunder, certifying
to: (a) the number or identity of Trustees or Shareholders, (b) the name of the
Trust, (c) the due authorization of the execution of any instrument or writing,
(d) the form of any vote passed at a meeting of Trustees or Shareholders, (e)
the fact that the number of Trustees or Shareholders present at any meeting or
executing any written instrument satisfies the requirements of this Declaration,
(f) the form of any By Laws adopted by or the identity of any officers elected
by the Trustees, or (g) the existence of any fact or facts which 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.
12.6 Provisions in Conflict with Law or Regulation. (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 Internal Revenue Code or with
other applicable laws and regulations, the conflicting provision shall be deemed
never to have constituted a part of this Declaration; 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
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
By: /s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Sole Trustee
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