HomeMy WebLinkAbout20171005.tiffRESOLUTION
RE: APPROVE PARTICIPATION IN THE COLORADO STATEWIDE INVESTMENT POOL
WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS, pursuant to Article 24, Part 7, C.R.S., it is lawful for any local government to
pool any moneys in its treasury, which are not immediately required to be disbursed, with the
same such moneys in the treasury of any other local governments in order to take advantage of
short-term investments and maximize net interest earnings, and
WHEREAS, the Board has been presented with an Indenture of Trust entitled, "Colorado
Statewide Investment Pool" ("the Indenture of Trust"), wherein Weld County would join with other
local governments to pool funds for investment, and
WHEREAS, a copy of the Indenture of Trust is attached hereto, and
WHEREAS, the Indenture of Trust forms a statutory trust under the laws of the State of
Colorado on accordance with the provisions of Parts 6 and 7, Article 24 and Articles 10.5 and 47
of Title 11 of the Colorado Revised Statues regarding the investing, pooling for investments and
protection of public funds, and
WHEREAS, after review, the Board deems it advisable to participate in the Indenture of
Trust, as it may be amended from time to time.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld
County, Colorado, that participation with other local governments in the Indenture of Trust entitled,
"Colorado Statewide Investment Pool," pursuant to Title 24, Article 75, Part 7 of the Colorado
Revised Statues, be, and hereby is, approved.
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TR0030
APPROVE PARTICIPATION IN THE COLORADO STATEWIDE INVESTMENT POOL
PAGE 2
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 10th day of April, A.D., 2017.
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
ATTEST: dathiv ' addo•tx
Weld County Clerk to the Board
BY a .
eputy Clerk to the Board
County Attorney
Date of signature: 7/L-i
6
Julie A.
Steve Moreno, Pro-Tem
ozad, Chair
Cieffoci
Sean P. Conway
Freeman
arbara Kirkmeye
)-114
2017-1005
TR0030
COLORADO STATEWIDE INVESTMENT
COLORADO STATEWIDE
INVESTMENT POOL
AMENDED AND
RESTATED
INDENTURE OF TRUST
Dated as of April 4, 2017
633 17th Street
Suite 2250
Denver, CO 80202
Phone (855) 274-7468
Fax (888) 535-0120
2017-1005
4827-9561-5046.1
TROD 3O
TABLE OF CONTENTS
Page No,
ARTICLE I - DEFINITIONS 2
ARTICLE II - CREATION OF TRUST 4
2.1 Creation of Trust 4
2.2 Contributions to the Trust 4
2.3 Trustees' Duties 4
2.4 Qualification of Trust 4
2.5 Purpose; Participant Requirements; Changes of Incumbency 5
2.6 Trustees; Signatory Public Agencies And Participants 5
2.7 Voting 6
ARTICLE III - TRUST OPERATIONS 6
3.1 Powers of the Board of Trustees 6
3.2 Permitted Investments 6
3.3 Legal Title 6
3.4 Disposition of Assets 7
3.5 Taxes 7
3.6 Rights as Holders of Trust Property 7
3.7 Delegation: Committees 7
3.8 Collection Powers 8
3.9 Powers: Payment of Expenses 8
3.10 Borrowing and Indebtedness 9
3.11 Deposits 9
3.12 Valuation 9
3.13 Fiscal Year; Accounts 9
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3.14 Self -Dealing Prohibited 9
3.15 Investment Program 10
3.16 Power to Contract, Appoint, Retain and Employ 10
3.17 Indemnification 10
3.18 Remedies 10
3.19 Further Powers 11
ARTICLE IV- INVESTMENT ADVISER AND ADMINISTRATOR 11
4.1 Appointment 11
4.2 Duties of the Adviser 11
4.3 Duties of the Administrator 12
4.4 Successors 12
ARTICLE V - INVESTMENTS 12
5.1 Statement of Investment Policy and Objective 12
5.2 Restrictions Fundamental to the Trust 12
5.3 Amendment of Restrictions 12
ARTICLE VI - LIMITATIONS OF LIABILITY 13
6.1 Liability to Third Persons 13
6.2 Liability to the Trust or to the Participants 13
6.3 Indemnification 13
6.4 Surety Bonds 15
6.5 Apparent Authority 15
6.6 Representative Capacity; Recitals 15
6.7 Reliance on Experts 15
6.8 Insurance 16
ARTICLE VII - INTERESTS OF PARTICIPANTS 16
7.1 Beneficial Interest 16
7.2 Title to Trust Property 16
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7.3 Evidence of Investment 16
7.4 Redemptions 16
7.5 Suspension of Redemption; Postponement of Payment 17
7.6 Redemptions to Reimburse Trust for Loss on Nonpayment for Shares or for
Other Charges 17
7.7 Redemptions Pursuant to Constant Net Asset Value Policy 17
7.8 Redemptions in Kind 18
7.9 Defective Redemption Requests 18
7.10 Series or Portfolio Designations 18
ARTICLE VIII - RECORD OF SHARES 18
8.1 Share Register 18
8.2 Registrar 18
8.3 Owner of Record 19
8.4 No Transfers of Shares 19
8.5 Limitation of Fiduciary Responsibility 19
8.6 Notices 19
ARTICLE IX - RECORDS AND REPORTS 19
9.1 Inspection of Records 19
9.2 Reports 19
ARTICLE X - TRUSTEES AND OFFICERS 20
10.1 Number, Qualification and Succession of Trustees 20
10.2 Signatory Local Governments and Trustees 20
10.3 Vacancies 21
10.4 Elections and Appointments; Term of Office 22
10.5 Resignation and Removal 22
10.6 Officers and Advisers 22
10.7 By -Laws; Quorum of Trustees 22
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ARTICLE XI - DETERMINATION OF NET ASSET VALUE AND NET INCOME:
DISTRIBUTIONS TO PARTICIPANTS 23
11.1 Net Asset Value 23
11.2 Retained Reserves 23
ARTICLE XII - CUSTODIAN 23
12.1 Duties 23
12.2 Appointment 23
12.3 Disbursement and Collection Agent 23
12.4 Successors 24
ARTICLE XIII - RECORDING OF INDENTURE 24
13.1 Recording 24
ARTICLES XIV - AMENDMENTS TO INDENTURE AND PERMITTED
INVESTMENTS LIST; TERMINATION OF TRUST; DURATION
OF TRUST 24
14.1 Amendment to Indenture or Permitted Investments List;
Termination 24
14.2 Duration 25
ARTICLE XV - MISCELLANEOUS 25
15.1 Governing Law 25
15.2 Counterparts 26
15.3 Reliance by Third Parties 26
15.4 Provisions in Conflict with Law 26
15.5 Section Headings 26
15.6 Adoption by Local Government Entities; Written Investment Policies of
Participants; Resignation and Withdrawal of Participants 26
4827-9561-5046.1
INDENTURE OF TRUST
Colorado Statewide Investment Pool
WITNESSETH:
WHEREAS, the provisions of Title 24, Article 75, Part 7 of the Colorado Revised Statutes entitled
"Investment Funds — Local Government Pooling" (the "Investment Pooling Act") enable any county, city
and county, city, town, school district or special district, or any other political subdivision of the State of
Colorado, or any department, agency, or instrumentality thereof, or any political or public corporation of the
State of Colorado (a "Local Government") to pool any moneys in the treasury of such Local Government
which are not immediately required to be disbursed, with the same such moneys in the treasury of any other
Local Government in order to take advantage of short-term investments seeking to maximize net interest
earnings; and,
WHEREAS, it is the intent of the initial Local Governments signatory hereto (such Local
Governments, the "Signatory Local Governments") to create a local government investment pool,
known as the Colorado Statewide Investment Pool (the "Trust"), pursuant to the Investment Pooling
Act and that this Indenture of Trust (the "Indenture") shall serve as the agreement for such purpose;
and,
WHEREAS, it is the intent and purpose of this Indenture to provide for the investment and
deposit of pooled funds in only those legal investments for Local Governments in accordance with
Title 24, Article 75, Part 6 of the Colorado Revised Statutes (the "Legal Investments Act") and Title 11,
Articles 10.5 and 47 of the Colorado Revised Statutes entitled the Public Deposits Protection Act (the
"PDPA"); and,
WHEREAS, by resolutions duly adopted, the Signatory Local Governments hereby create
the Trust as a local government investment pool pursuant to this Indenture, which action serves a
governmental purpose for said Local Governments and is therefore in the best interests of said
Local Governments, their officials, officers, and citizens in that such a program will offer
professionally managed portfolios to meet investment needs, will result in economies of scale that
will create greater purchasing powers, and will thereby lower the costs traditionally associated
with the investment of the assets of said Local Governments; and,
WHEREAS, each of the Signatory Local Governments has duly undertaken all official
actions necessary and appropriate to become a party to this Indenture for the purpose of establishing
the Trust, and to perform hereunder, including, without limitation, the establishment of written
investment policies and the enactment of any resolutions or the undertaking of other actions
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required pursuant to the Investment Pooling Act or other applicable law and regulations; and,
WHEREAS, it is proposed that the beneficial interest in the assets of the trust fund created
pursuant to the provisions of this Indenture shall be divided into non -transferable Shares of
beneficial interest, which shall be evidenced by a share register maintained by the Trustees or their
agent, or by the Administrator; and,
WHEREAS, the Signatory Local Governments anticipate that other Local Governments
may wish to become Participants by adopting this Indenture and becoming a party hereto;
NOW, THEREFORE, the recitals set forth above are adopted and incorporated into this
Indenture of Trust. In consideration of the mutual promises, covenants and agreements contained
herein, the parties hereto, now and hereafter added pursuant to the provisions herein, mutually
undertake, promise and agree for themselves, their respective representatives, successors and
assigns that all monies, assets, securities, funds and property now or hereafter acquired by the
Trustees, their successors and assigns under this Indenture shall be held and managed in trust for
the equal and proportionate benefit of the holders of record from time to time of Shares of
beneficial interest herein, without privilege, priority or distinction among such holders, and subject
to the terms, covenants, conditions, purposes and provisions hereof as follows:
ARTICLE I - DEFINITIONS
For purposes of this Indenture, the following terms shall have the meanings set forth:
"Administrator" means the Trust Administrator appointed by the Trustees pursuant to Section 4.1
hereof and as constituted from time to time by agreement with the Trustees which has, or has been
delegated, the responsibility for administering the Trust or any aspects of it.
"Adviser" means the Investment Adviser appointed by the Trustees pursuant to Section
4.1 hereof and constituted from time to time by agreement with the Trustees which has, or has
been delegated, the responsibility to effect purchases, sales, or exchanges of Trust property on
behalf of the Trustees and to provide advice to the Trustees regarding the investment of Trust assets.
"Affiliate" means with respect to a person another person directly or indirectly controlled,
controlled by or under the common control with such person, or any officer, director, partner or
employees of such person.
"Code" means the Internal Revenue Code and any regulations promulgated pursuant thereto.
"Custodian" means a qualified financial institution selected by the Trustees pursuant to a
Custodian Agreement for the purpose of receiving and holding Trust assets.
"Custodian Agreement" means the agreement between the Trustees on behalf of the Trust
and Custodian.
"Designee" shall mean the individual designated as such by a Participant in writing. Such
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Designee shall be the legal representative to act on behalf of each Participant. Each Participant may
designate Alternate Designees.
"Eligible Public Depository" means an eligible public depository as defined in the PDPA.
"Indenture" means this Indenture of Trust as it may be amended from time to time.
"Investment Pooling Act" means Title 24, Article 75, Part 7 of the Colorado Revised Statutes, as
amended, and as may be further amended from time to time.
"Legal Investmenrts Act" means Tide 24, Article 75, Part 6 of the Colorado Revised Statutes, as
amended, and as may be further amended from time to time.
"Local Government" means any county, city and county, city, town, school district or special
district, or any other political subdivision of the State of Colorado, or any department, agency, or
instrumentality thereof, or any political or public corporation of the State of Colorado.
"Participants" means the Local Governments which adopts a Resolution to join and
execute this Indenture.
"PDPA" means Articles 10.5 and 47 of Title 11 of the Colorado Revised Statutes, as
amended, and as may be further amended from time to time.
"Permitted Investments" means those investments in Part 6, Article 75, Title 24 of the
Colorado Revised Statutes, as amended, and as may be further amended from time to time.
"Rules" means Rules of the Colorado Securities Act, Chapter 9 Local Government
Investsment Pool Trust Funds.
"Shares" shall have the meaning ascribed to such term in Section 7.1 hereof.
"Signatory Local Government" means a Local Government which has agreed to be a
signatory to this Indenture for the purpose of creating a statutory trust as authorized by the
Investment Pooling Act.
"Trust" means the trust created by this Indenture.
"Trust Property" means any and all property, real, personal or otherwise, tangible or
intangible, which is transferred, conveyed or paid to the Trust and all income, profits and gains
therefrom and which, at such time, is owned or held by, for the account of the Trust.
"Trustee" means any member of the Board.
"Trustees" means individuals appointed by the Board of Trustees and, unless otherwise
provided herein, approved by the Participants to administer and supervise the affairs of the Trust.
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ARTICLE II - CREATION OF TRUST
2.1 Creation of Trust. By these present, a Colorado statutory trust is hereby
established by this Indenture. The Trust shall be called the "Colorado Statewide Investment Pool".
The Trustees may use such other designations, including "CSIP", as the Trustees deem proper. So
far as may be practicable, the Trustees shall conduct the Trust's activities, execute all documents
and sue or be sued under that name or designation, which name or designation (and the word
"Trust") wherever used in this Indenture, except where the context otherwise requires, shall refer
to the Trustees in their capacity as Trustees, and not individually or personally, and shall not
refer to the officers, agents, employees, counsel, advisers, consultants, or accountants of the
Trustee, nor shall such term refer to the Signatory Local Governments or Participants. Should the
Trustees determine that the use of such name or designation is not practicable, legal or
convenient, they may use such other designation or they may adopt such other name for the Trust
as they deem proper, and the Trust may hold property and conduct its activities under such
designation or name. The Trustees shall take such action as they, acting with the advice of
counsel, shall deem necessary or appropriate to file or register such name or designation in
accordance with the laws of the State of Colorado or the United States of America so as to protect
and reserve the right of the Trust in and to such name or designation.
2.2 Contributions to the Trust.
(a) All contributions that a Participant makes to be invested by the Trustees shall be paid
and delivered to the Trustees to be held in the Trust.
(b) All payments made by a Participant to the Trust, and all other money or property that
lawfully becomes a part of the Trust, together with the income, appreciation or depreciation and
expenses, if any, therefrom, shall be held, managed and administered in trust, pursuant to the
terms of this Indenture. The Trustees accept this Trust and agree to perform the duties,
responsibilities and obligations under this Indenture allocated to them as fiduciaries.
2.3 Trustees' Duties. The Trustees shall not have the right and shall not be subject to
any duty to demand or collect contributions from the Participants, or from any other person or
entity, or to enforce or attempt to enforce any agreement that may be considered to require
contributions to this Trust. The Trustees shall be accountable only for transfers and contributions
made to the Trust fund in accordance with the terms of this Indenture.
The powers, rights, and obligations of the Trustees shall be established and governed solely
by this Indenture.
2.4 Qualification of Trust. This Trust is intended to be exempt from income tax
pursuant to Section 115 of the Code, and shall be construed and operated in all respects
consistently with that intention. The Trustees shall take no action which would adversely affect
the tax-exempt status of the Trust. The Trustees may demand assurances satisfactory to them
that any action which they are directed to take will not adversely affect the tax-exempt status
of the Trust. The Trustees, or their Designee, shall take any and all actions necessary to ensure
that the Trust obtains all appropriate qualifications and determination, to the extent necessary, that
it is and continues to be exempt from income tax under Section 115 of the Code.
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2.5 Purpose; Participant Requirements; Changes of Incumbency.
(a) The purpose of the Trust is to provide a surplus funds trust fund in accordance with
Colorado law permitting Local Governments to pool monies available in their treasuries, which
are not immediately required to be disbursed, with the same such monies in the treasuries of
other Local Governments, in order to invest them and earn interest in accordance with, and as
permitted by, the provisions of the Investment Pooling Act and the Legal Investments Act or other
laws of the State of Colorado governing the investment of monies of a Local Government, and as
allowed by law. No Participant shall be required to appropriate any funds or levy any taxes to
establish or contribute to this Trust. The Trustees may provide for the payment or repayment of
any expenses from the earnings of the Trust.
(b) Only those Local Governments which adopt this Indenture and have complied
with the provisions of this section may become Participants. The Designee empowered to invest
funds of each Local Government or such other person designated by the Participant to serve in
such capacity (an "Alternate Designee"), shall be the legal representative to act for and on behalf
of such Local Government for purposes of this Indenture.
(c) Each Local Government adopting this Indenture, and otherwise complying with the
provisions hereof, shall become a Participant only upon adopting this Indenture and depositing
into the Trust the minimum total investment as that amount is established from time to time by the
Trustees. Whenever the balance in a Participant's account is less than the minimum established
by the Trustees, the Trustees may redeem the Shares and close the account; provided that thirty
(30) days' prior notice shall be given to such Participant and redemption shall only be permitted if
the Participant has not restored the balance in the account to the minimum amount established
prior to the expiration of such thirty (30) day period which begins with the date of such notice.
If the Trustees change the minimum total investment to an amount greater than the investment
of any Participant at the time that such change becomes effective, the investment of such
Participant shall not be redeemed without such Participant's consent.
(d) In the event that a Designee shall no longer be authorized to act on behalf of such
Participant as a Designee, and in the absence of any duly -appointed Alternate Designee, any
funds placed in the Trust by such Designee shall be held hereunder for the benefit of the
Local Government for which he or she was acting at the time the vacancy or termination of
authority occurred. Any Designee assuming office, either to fill a vacancy in such office or to
begin a new term following the expiration of the term in office of his or her predecessor, or
otherwise becoming authorized to act as Designee on behalf of such Participant, shall become
the succeeding legal representative of the Local Government by the Local Government filing
written notification of such with the Trustees in a form acceptable to the Trustees.
2.6 Trustees; Signatory Public Agencies and Participants. No Signatory Local
Government or Participant, nor any or its officers, employees, agents or representatives shall
have any liability under this Indenture as a result of service by its Designee as a Trustee.
2.7 Voting. Each Participant through its Designee or an Alternate Designee shall be
entitled to one vote as a matter of right with respect to the following matters: a) Election of the
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Board, b) Amendment of this Indenture, c) Termination of the Trust, and d) Reorganization of the
Trust.
Only Participants of record shall be entitled to vote. Each whole Share shall be entitled to
one vote as to any matter to which it is entitled to vote and each fractional Share shall be entitled to
a fractional vote. A proxy purporting to be executed by or on behalf of a Participant shall be
deemed valid unless challenged at or prior to its exercise and the burden of proving invalidity shall
rest on the challenger. The Trustees shall determine any such challenge and their decision shall be
final. The approval of a simple majority of those voting shall be sufficient to approve any action at
a meeting or other election of the Participants except as provided in Section 10.4.
ARTICLE III - TRUST OPERATIONS
3.1 Powers of the Board of Trustees. Subject to the rights of the Participants as
provided herein, the Trustees shall be the investment officer of the Trust and shall have
authority over the Trust Property and the affairs of the Trust to administer the operation of the
Trust, subject to the requirements, restrictions and provisions of this Indenture, including the power
to delegate such functions of administration pursuant to Section 3.16 hereof. The Trustees may do
and perform such acts and things as in their judgment and discretion, subject to the requirements
and restrictions of this Indenture, as are necessary and proper for conducting the affairs of the
Trust or promoting the interest of the Trust and the Participants. The enumeration of any specific
power or authority herein shall not be construed as limiting the aforesaid general power or
authority or any specific power or authority. The Trustees may exercise any power authorized
and granted to them by this Indenture. Such powers of the Trustees may be exercised without
the necessity of any order of, or resort to, any court.
3.2 Permitted Investments. The Trustees shall have the following investment powers:
(a) To conduct, operate and provide an investment program for the pooling of surplus
funds of a Local Government to invest in the Permitted Investments as may be modified from
time to time as provided in this Indenture;
(b) For such consideration as they may deem proper and as may be required by law, to
subscribe for, assign, transfer, exchange, distribute and otherwise deal in or dispose of
Permitted Investments; and
(c) To contract for, and enter into agreements with respect to, the purchase and sale of
Permitted Investments.
3.3 Legal Title.
(a) Legal title to all of the Trust Property shall be vested in the Trustees on behalf of the
Participants, who shall be the beneficial owners except that the Trustees shall have full and
complete power to cause legal title to any Trust Property to be held, on behalf of the Participants,
by or in the name of the Trust, or in the name of any other Person as nominee, on such terms, in
such manner, and with such powers as the Trustees may determine, so long as in their
judgment the interest of the Trust is adequately protected.
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(b) The right, title and interest of the Trustees in and to the Trust Property shall vest
automatically in all persons who may hereafter become Trustees upon their due selection
and qualification without any further act. Upon the resignation, disability, removal, adjudication
as an incompetent, disqualification pursuant to the terms of this Indenture, or death of a
Trustee, he or she (and in the event of his or her death, his or her estate) shall automatically cease
to have any right, title or interest in or to any of the Trust Property, and the right, title and interest
of such Trustee in and to the Trust Property shall vest automatically in the remaining Trustees
without any further act.
3.4 Disposition of Assets. In winding up the affairs of the Trust, the Trustees shall
have full and complete power to sell, exchange or otherwise dispose of any and all Trust
Property free and clear of any and all trusts and restrictions, at public or private sale, for cash
or on terms, with or without advertisement, and subject to such restrictions, stipulations,
agreements and reservations as they shall deem proper, and to execute and deliver any deed,
power, assignment, bill of sale, or other instrument in connection with the foregoing including
giving consents and making contracts relating to Trust Property or its use.
3.5 Taxes. The Trustees shall have full and complete power:
(a) To pay all taxes or assessments, of whatever kind or nature, validly and lawfully
imposed upon or against the Trust or the Trustees in connection with the Trust Property or upon or
against the Trust Property or income or any part thereof;
(b) To dispute, settle and compromise tax liabilities; and
(c) For the foregoing purposes to make such returns and do all such other acts and things
as may be deemed by the Trustees to be necessary or desirable.
3.6 Rights as Holders of Trust Property. The Trustees shall have full and complete
power to exercise on behalf of the Participants all of the rights, powers and privileges
appertaining to the ownership of all or any Permitted Investments or other property forming
part of the Trust corpus to the same extent that any individual might, and, without limiting
the generality of the foregoing, to vote or give any consent, request or notice or waive any
notice either in person or by proxy or power of attorney, with or without the power of
substitution, to one or more Persons, which proxies and powers of attorney may be for meetings
or actions generally, or for any particular meeting or action, and may include the exercise of
discretionary powers.
3.7 Delegation: Committees. The Trustees shall have full and complete power
(consistent with their continuing exclusive authority over the management of the Trust, the conduct
of its affairs, their duties and obligations as Trustees, and the management and disposition of the
Trust Property), in addition to the delegation powers set forth in Section 3.16 hereof, to delegate
from time to time to such one or more of their number (who may be designated as constituting
a Committee of the Trustees) or to officers, employees or agents of the Trust (including, without
limitation, the Administrator, the Adviser and the Custodian) the doing of such acts and things
and the execution of such instruments, either in the name of the Trust or the names of the
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Trustees or as their attorney or attorneys, or otherwise as the Trustees may from time to time
deem expedient and appropriate in the furtherance of the business affairs and purposes of the
Trust.
3.8 Collection Powers. The Trustees shall have full and complete power:
(a) To collect, sue for, receive and receipt for all sums of money or other property due to
the Trust including, without limitation, the power to file proofs of claim in any bankruptcy or
insolvency matter;
(b) To consent to extensions of the time for payment, or to the renewal of any securities,
investments or obligations;
(c) To engage or intervene in, prosecute, defend, compromise, abandon or adjust by
arbitration or otherwise any actions, suits, proceedings, disputes, claims, demands or things
relating to the Trust Property;
(d) To foreclose any collateral, security or instrument securing any investments, notes,
bills, bonds, obligations or contracts by virtue of which any sums of money are owed to the Trust;
(e) To exercise any power of sale held by the Trustees, and to convey good title
thereunder free of any and all trusts, and in connection with any such foreclosure or sale,
to purchase or otherwise acquire title to any property;
(f) To be parties to reorganization and to transfer to and deposit with any corporation,
committee, voting trustee or other person any securities, investments or obligations of any person
which form a part of the Trust Property, for the purpose of such reorganization or otherwise;
(g) To participate in any arrangement for enforcing or protecting the interests of the
Trustees as the owners or holders of such securities, investments or obligations and to pay
any assessment levied in connection with such reorganization or arrangement;
(h) To extend the time (with or without security) for payment or delivery of any debts or
property and to execute and enter into releases, agreements and other instruments; and
(i)
sufficient.
To pay or satisfy any debts or claims upon any evidence that the Trustees shall deem
3.9 Powers: Payment of Expenses. The Trustees shall have full and complete power:
(a) To incur and pay charges or expenses which in the opinion of the Trustees are
necessary or incidental to or proper for the carrying out any of the purposes of this Indenture;
(b) To reimburse others for the payment therefor; and
(c) To pay appropriate compensation or fees from the funds of the Trust to persons with
4827-9561-5046.1 8
whom the Trust has contracted or transacted business.
The Trustees may pay themselves or any one or more of themselves reimbursement for
expenses reasonably incurred by themselves or any one or more of themselves on behalf of the
Trust.
Notwithstanding any provision of this Indenture to the contrary, in no event shall any
expenses of administration of the Trust be payable from any source other than Trust Property.
3.10 Borrowing and Indebtedness. The Trustees shall not incur indebtedness on behalf
of the Trust, or authorize the Trust to borrow money or incur indebtedness, except as
expressly provided in Section 5.2(b) hereof.
3.11 Deposits. The Trustees shall have full and complete power to deposit, subject to
the provisions of the PDPA, in such a manner as may now and hereafter be permitted by this
Indenture or applicable law, any monies or funds included in the Trust Property and intended to
be used for the payment of expenses of the Trust or the Trustees, with one or more banks, trust
companies or other banking institutions whether or not such deposits will draw interest. Such
deposits are to be subject to withdrawal in such manner as the Trustees may determine, and the
Trustees shall have no responsibility for any loss which may occur by reason of the failure of the
bank, trust company or other banking institution with which the monies, investments, or securities
have been deposited. Each such bank, trust company or other banking institution shall comply,
with respect to such deposit, with all applicable requirements of all applicable laws including,
without limitation, with the PDPA.
3.12 Valuation. The Trustees shall have full and complete power to conclusively
determine in good faith the value of any of the Trust Property and to revalue the Trust Property as
the Trustees deem appropriate consistent with the provisions of this Indenture.
3.13 Fiscal Year; Accounts. The Trustees shall have full and complete power to
determine the fiscal year of the Trust and the method or form in which its accounts shall be kept
and from time to time to change the fiscal year or method or form of accounts. The fiscal
year shall be as set forth in the By -Laws.
3.14 Self -Dealing Prohibited.
(a) No Trustee, officer, employee or agent of the Trust shall cause or permit the Trust to
make any investment or deposit, enter into any contract or other arrangement, or perform any
act which confers or might reasonably be expected to confer any special benefit upon such
person or any Affiliate of such person.
(b) The Trust shall not enter into any investment transaction with any Affiliate of the
Trust, or with the Adviser or the Administrator or any Affiliate thereof, or with any other officer,
director, employee or agent of the Trust or any Affiliate thereof. Provided, however, the Trust
may deposit moneys and purchase and sell Permitted Investments from and to the Custodian or an
Affiliate of the Custodian.
4827-9561-5046.1 9
3.15 Investment Program. The Trustees shall use their best efforts to obtain, through
the Adviser or other qualified persons, a continuing and suitable investment program,
consistent with the investment policies and objectives of the Trust, and the Trustees shall be
responsible for reviewing and approving or rejecting the investment program presented by the
Adviser or such other persons. Subject to the provisions of this Indenture, the Trustees may
delegate functions arising under this Section 3.15 to one or more of their number or to the Adviser.
3.16 Power to Contract, Appoint, Retain and Employ. Subject to the provisions of
this Indenture, the Trustees shall have full and complete power to appoint, employ, retain, or
contract with any person of suitable qualifications and high repute to perform any or all of the
following functions under the supervision of the Trustees:
(a) Serve as the Trust's investment Adviser administrator or co -administrator pursuant
to Article IV;
(b) Furnish reports to the Trustees and provide research, economic and statistical data in
connection with the Trust's investments;
(c) Act as consultants, accountants, technical advisers, attorneys, brokers, underwriters,
corporate fiduciaries, escrow agents, depositaries, custodians or agents for collection, insurers
or insurance agents, registrars for Shares or in any other capacity deemed by the Trustees to
be necessary or desirable;
(d) Investigate, select, and, on behalf of the Trust, conduct or engage others to manage
relations with persons acting in such capacities and pay appropriate fees to, and enter into
appropriate contacts with, or employ, or retain services performed or to be performed by, any
of them in connection with the investments acquired, sold, or otherwise disposed of, or
committed, negotiated, or contemplated to be acquired, sold or otherwise disposed of;
(e) Substitute any other person possessing the same minimum qualifications for
any such person, such replacement to be made in the same manner as the original selection;
(1) Act as attorney -in -fact or agent in the purchase or sale or other disposition of
investments, and in the handling, prosecuting or other enforcement of any lien or security
securing investments; and
(g) Assist in the performance of such ministerial functions necessary in the management
of the Trust as may be agreed upon with Trustees.
3.17 Indemnification. Upon advice of counsel, the Trustees shall have full and
complete power, to the extent of Trust property (as provided in Section 6.1) and as permitted by
applicable laws, to indemnify or enter into agreements with respect to indemnification with any
person with whom the Trust has dealings, to such extent as the Trustees shall determine in
accordance with law. The Trust is authorized to purchase insurance to provide such
indemnification.
3.18 Remedies. Notwithstanding any provision in this Indenture, when the Trustees
4827-9561-5046.1
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deem that there is a significant risk that an obligor to the Trust may default or is in default under
the terms of any obligation to the Trust, the Trustees shall have full and complete power to
pursue any remedies permitted by law which, in their sole judgment, are in the interests of the
Trust, and the Trustees shall have full and complete power to enter into any investment,
commitment or obligation of the Trust resulting from the pursuit of such remedies as are
necessary or desirable to dispose of property acquired in the pursuit of such remedies.
3.19 Further Powers. The Trustees shall have full and complete power to take all
actions, do all such matters and things and execute all such agreements, documents and
instruments as they deem necessary, proper or desirable in order to carry out, promote or
advance the interests and purposes of the Trust although such actions, matters or things are
not herein specifically mentioned. Any determination as to what is in the best interests of the Trust
made by the Trustees in good faith shall be conclusive. In construing the provisions of this
Indenture, the presumption shall be in favor of a grant of power to the Trustees. No
provision in this Indenture, however, may be interpreted or construed in a manner which alters or
reduces the duties of the Trustees to act as fiduciaries of the Trust. The Trustees shall not be
required to obtain any court order to deal with the Trust Property.
ARTICLE IV- INVESTMENT ADVISER AND ADMINISTRATOR
4.1 Appointment. The Trustees are responsible for implementing the investment
policy and program of the Trust and for supervising the officers, agents, employees,
investment advisers, administrators, distributors, and independent contractors of the Trust. The
Trustees are not required personally to conduct all of the routine business of the Trust and,
consistent with their ultimate responsibility as stated herein, the Trustees may appoint,
employ or contract with an Adviser and an Administrator, and may grant or delegate such
authority to the Adviser and the Administrator or to any other Person whose services are
obtained by the Adviser or the Administrator, as the Trustees may, in their sole discretion,
deem to be necessary or desirable for the efficient management of the Trust, without regard to
whether such authority is normally granted or delegated by Trustees or other fiduciaries.
4.2 Duties of the Adviser. The duties of the Adviser shall be those set forth in an
Investment Advisory Agreement to be entered into between the Trust and the Adviser. Such
duties may be modified by the Trustees, from time to time, by the amendment of the Investment
Advisory Agreement subject to the limitations contained therein. Subject to the terms of this
Indenture, the Trustees may authorize the Adviser to effect purchases, sales, or exchanges of Trust
Property on behalf of the Trustees or may authorize any officer, employee, agent or Trustee to
effect such purchases, sales, or exchanges pursuant to recommendations of the Adviser, all without
further action by the Trustees. Any and all of such purchases, sales, and exchanges shall be
deemed to be authorized by all the Trustees. The Investment Advisory Agreement may authorize
the Adviser to employ other persons to assist it in the performance of its duties. The
Investment Advisery Agreement shall provide that it may be terminated without cause and without
the payment of any penalty by the Trust on no less than sixty (60) days' written notice to the
Adviser. Nothing in this Indenture or in the Investment Advisory Agreement shall limit or impair
the right of the Trustees to terminate the said Investment Advisory Agreement for cause, or to
suspend the authority of the Adviser to act for or on behalf of the Trust immediately upon written
notice to the Adviser, upon a showing of reasonable cause to believe that the Adviser has
4827-9561-5046.1
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committed a material breach of the Investment Advisory Agreement or any of its fiduciary
obligations to the Trust.
4.3 Duties of the Administrator. The duties of the Administrator shall be those set
forth in an Administration Agreement to be entered into between the Trust and the Administrator.
Such duties may be modified by the Trustees, from time to time, by the amendment of the
Administration Agreement. The Administration Agreement may authorize the Administrator
to employ other persons to assist it in the performance of its duties. The Administration
Agreement shall provide that it may be terminated without cause and without the payment of any
penalty by the Trust on no less than sixty (60) days' written notice to the Administrator. Nothing
in this Indenture or in the Administration Agreement shall limit or impair the right of the
Trustees to terminate the said Administration Agreement for cause, or to suspend the authority
of the Administrator to act for or on behalf of the Trust immediately upon written notice to the
Administrator, upon a showing of reasonable cause to believe that the Administrator has
committed a material breach of the Administration Agreement or any of its fiduciary obligations
to the Trust.
4.4 Successors. In the event that, at any time, the position of Adviser or of
Administrator shall become vacant for any reason, the Trustees may appoint, employ or
contract with a successor Adviser or Administrator.
ARTICLE V - INVESTMENTS
5.1 Statement of Investment Policy and Objective. Subject to the prohibitions and
restrictions contained in Section 5.2 hereof, the general investment policy and objective of
the Trustees shall be to provide to the Participants safety of capital, liquidity of funds, and
investment income, in that order, by investing in Permitted Investments in accordance with
this Indenture and any other applicable provisions of law, as the same may be amended from
time to time.
5.2 Restrictions Fundamental to the Trust. Notwithstanding anything in this
Indenture which may be deemed to authorize the contrary, the Trust:
(a) May not make any investment other than investments authorized by this Indenture,
which constitute Permitted Investments and which are consistent with the investment policies and
procedures set forth in the Information Statement and which are described therein, as the same
shall may be amended from time to time;
(b) May not borrow money or incur indebtedness except as a temporary measure to
facilitate withdrawal requests which might otherwise require unscheduled dispositions of
portfolio investments, and only as and to the extent permitted by law;
(c) May not make loans, provided that the Trust may make Permitted Investments
(which may include securities lending); and
(d) May not hold or provide for the custody of any Trust Property in a manner not
authorized by law.
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5.3 Amendment of Restrictions. The restrictions set forth in Section 5.2 hereof are
fundamental to the operation and activities of the Trust and may not be changed without the
consent of a majority of the Participants, except that such restrictions may be changed by the
Trustees, without Participant consent, when necessary to conform the investment program and
activities of the Trust to the laws of the State of Colorado and the United States of America as
they may from time to time be amended.
ARTICLE VI - LIMITATIONS OF LIABILITY
6.1 Liability to Third Persons. No Participant shall be subject to any personal liability
whatsoever, in tort, contract or otherwise to any person or persons other than the Trust in
connection with Trust Property or the affairs of the Trust; and no Trustee, officer, employee
or agent (including without limitation, the Adviser, the Administrator, and the Custodian) of the
Trust shall be subject to any personal liability whatsoever in tort, contract or otherwise, to any
person or persons other than the Trust in connection with Trust Property or the affairs of the Trust,
except that each shall be liable for its, his or her bad faith, willful misconduct, gross negligence
or reckless disregard of its, his or her duties or for its, his or her failure to act in good faith in
the reasonable belief that its, his or her action was in the best interests of the Trust, and except that
the Adviser and the Administrator shall each have liability for its, his or her failure to take
reasonable measures to restrict investments of Trust Property to those permitted by law and this
Indenture. All persons other than the Trust 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 Participant, Trustee, officer, employee or agent (including, without limitation, the
Adviser, the Administrator, and the Custodian) of the Trust is made a party to any suit or
proceedings to assert or enforce any such liability, it, he or she shall not on account thereof be held
to any personal liability. Provided, further, that notwithstanding anything in the foregoing to
the contrary, any vendor, Adviser, consultant, administrator, etc., employed by or under
contract with the Trust, shall be responsible to the Trust and its Participants as intended
beneficiaries, to perform in accordance with the standards imposed in a contract with such
party, by operation of law.
6.2 Liability to the Trust or to the Participants. No Trustee, officer, employee or
agent (including, without limitation, the Adviser, the Administrator and the Custodian) of the
Trust shall be liable to the Trust or to any Participant, Trustee, officer, employee or agent
(including, without limitation, the Adviser, the Administrator, and the Custodian) of the Trust for
any action or failure to act (including, without limitation, the failure to compel in any way any
former or acting Trustee to redress any breach of trust) except for its, his or her own bad faith,
willful misfeasance, gross negligence or reckless disregard of its, his or her duties, and except that
the Adviser shall have liability for the failure to take reasonable measures to restrict investments
of Trust Property to those permitted by law and this Indenture; provided, however, that the
provisions of this Section 6.2 shall not limit the liability of any agent (including, without
limitation, the Adviser, the Administrator, and the Custodian) of the Trust with respect to
breaches by it of a contract between it and the Trust.
6.3 Indemnification.
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(a) As used in this Section 6.3:
(1) "Trust Representative" means an individual who is or was a Trustee, officer,
employee, or agent (including without limitation the Adviser, the Administrator, and
the Custodian).
(2) "Expenses" includes attorney fees.
(3) "Liability" means the obligation to pay a judgment, settlement, penalty, fine,
or reasonable expense incurred with respect to a proceeding.
(4) "Party" includes an individual who was, is, or is threatened to be named a
defendant or respondent in a proceeding.
(5) "Proceeding" means any threatened, pending or completed action, suit,
or proceeding, whether civil, criminal, administrative, or investigative, and whether
formal or informal.
(b) Except as provided in subsection (c) hereof, the Trust shall indemnify against
liability incurred in any proceeding by an individual made a party to the proceeding because of
his status as a Trust Representative if he or she conducted him or herself in good faith, and (i) he
or she reasonably believed that his or her conduct was in the Trust's best interests or, (ii) in the
case of a criminal proceeding, he or she had no reasonable cause to believe his or her conduct
was unlawful.
(c) In no event may the Trust indemnify the Adviser or the Administrator for expenses
or liability arising out of any willful or negligent violation by either of them of the restrictions
on investments of the Trust Property. Further, the Trust shall not indemnify any Trust
Representative under this Section either (i) in connection with a proceeding by or in the right of
the Trust in which the Trust Representative was adjudged liable to the Trust, or (ii) in connection
with any proceeding charging improper personal benefit to him or her, in which such person was
adjudged liable on the basis that such personal benefit was improperly received by him or her in
connection with a proceeding by or in the right of the Trust. Indemnification is in all cases
limited to reasonable expenses incurred.
(d) Except as provided in subsection (c) of this Section, the termination of any
proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or
its equivalent, is not of itself determinative that the individual did not meet the standard of
conduct set forth in subsection (b) of this Section.
(e) No indemnification shall be made unless and until a specific determination has been
made that indemnification is authorized under this Section 6.3. Such determination shall be made by
the Trustees by a majority vote of a quorum, which quorum shall consist of Trustees not parties
to the proceeding. If such quorum cannot be obtained, the determination shall be made by a
majority vote of a committee of Trustees designated by the Trustees, which committee shall
consist of two or more Trustees not party to the proceeding. Trustees who are parties to the
4827-9561-5046.1
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proceeding may participate in designating Trustees for the committee. If the said quorum cannot
be obtained or the committee cannot be established, or if such quorum is obtained or
committee is designated and such quorum or committee so directs, the determination may be
made by independent legal counsel selected by a vote of the Trustees or the committee as
specified above. If independent counsel determines that indemnification is required under this
Section, authorization of indemnification and evaluation as to reasonableness of expenses shall be
made by the body that selected such counsel.
(0 The Trust may pay for or reimburse the reasonable expenses incurred by a Trust
Representative who is a party to a proceeding in advance of final disposition thereof if (i) the
Trust Representative furnishes the Trust a written affirmation of his good faith belief that he or
she has met the standard of conduct described in subsection (b) of this Section and a written
undertaking executed personally to repay the advance if it is ultimately determined that
indemnification is not authorized under this Section, and (ii) it is determined as provided in
subsection (e) above that the facts then known would not preclude indemnification under this
Section.
(g) Any indemnification of or advance of expenses to a Trust Representative pursuant to
this Section shall be reported in writing to the Participants as soon as practicable, if such
indemnification of or advance of expenses arises out of a proceeding by or on behalf of the Trust.
(h) No Trust Representative entitled to indemnification may take or be paid the same
except out of the earnings of the Trust, and no Participant shall be personally liable to any
such Trust Representative for all or any portion of such indemnity.
6.4 Surety Bonds. No Trustee shall, as such, be obligated to give any bond or surety or
other security for the performance of any of his duties.
6.5 Apparent Authority. No purchaser, seller, transfer agent or other person dealing
with the Trustees or 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
such officer, employee or agent or make inquiry concerning or be liable for the application of
money or property paid, transferred or delivered to or on the order of the Trustees or of such
officer, employee or agent.
6.6 Representative Capacity; Recitals. Any written instrument creating an obligation
of the Trust shall be conclusively taken to have been executed by a Trustee or an officer,
employee or agent of the Trust only in his capacity as a Trustee under this Indenture or in his or
her capacity as an officer, employee or agent of the Trust. My written instrument creating an
obligation of the Trust shall refer to this Indenture and shall contain a recital to the effect that
the obligations thereunder are not personally binding upon, nor shall resort be had to the
property of, any of the Trustees, Participants, officers, employees or agents of the Trust, and that
only the Trust Property or a specific portion thereof shall be bound, and such written instrument
may contain any further similar recital which may be deemed appropriate; provided however,
that the omission of any recital pursuant to this Section 6.6 shall not operate to impose personal
liability on any of the Trustees, Participants, officers, employees or agents of the Trust, or to void
any obligations created in the instrument.
4827-9561-5046.1
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6.7 Reliance on Experts. Each Trustee, officer and employee of the Trust shall, in
the performance of his or her duties, be fully and completely justified and protected with regard to
any act or any failure to act resulting from reliance in good faith upon the books of account or
other records of the Trust, upon an opinion of counsel or upon reports made to the Trust by
any of its officers or employees or by the Adviser, the Administrator, the Custodian, accountants,
appraisers or other experts or consultants selected with reasonable care by the Trustees or officers
of the Trust.
6.8 Insurance. The Trustees shall obtain general and official liability and property
damage insurance, errors and omission insurance and such other insurance as the Trustees may
deem advisable for the protection of the Trust Property and the Trustees, Treasurers officers and
employees of the Trust in the operation and conduct of the Trust in such amounts as the
Trustees deem adequate to ensure against all claims and liabilities of every nature, to the
extent such insurance may be available at reasonable rates. The cost of any and all such
insurance shall be paid from Trust property as an expense of administration of the Trust.
ARTICLE VII - INTERESTS OF PARTICIPANTS
7.1 Beneficial Interest. The interest of the beneficiaries hereunder shall be divided into
transferable units to be called Shares, all of one series except as permitted by Section 7.10, without
par value. The number of Shares authorized hereunder is unlimited. Except as otherwise permitted
under Section 7.10 hereof, each Share shall represent an equal proportionate interest in the net
assets of the applicable series within the Trust. All Shares issued hereunder including, without
limitation, Shares issued in connection with a dividend in Shares or a split of Shares, shall be fully
paid and nonassessable.
7.2 Title to Trust Property. Title to the Trust Property of every description and the
right to conduct any affairs herein described are vested in the Trustees on behalf, and for the
beneficial interest, of the Participants, and the Participants shall have no individual interest
therein other than the beneficial interest conferred hereby and measured 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
suffer an assessment of any kind by virtue of the allocation of Shares to them, except as
expressly provided in this Indenture. Provided, further, that this provision shall not be
interpreted or construed to modify or limit any of the rights of Participants expressed anywhere
else in this Indenture or as provided by law. The beneficial interest hereunder measured by the
Shares shall not entitle a Participant to preference, preemptive, appraisal, conversion, or
exchange rights of any kind with respect to the Trust or the Trust Property, except as the Trustees
may determine.
7.3 Evidence of Investment. Evidence of each Participant's investment shall be
reflected in a Share Register maintained by or on behalf of the Trust in accordance with Section
8.1 hereof, and the Trust shall not be required to issue certificates as evidence of Share allocation.
7.4 Redemptions. In case any Participant at any time desires to dispose of its Shares, it
may deposit a written request or other such form of request as the Trustees may from time to time
4827-9561-5046.1
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authorize, at the office of the transfer agent or at the office of any bank or trust company, either in
or outside of Colorado which is a member of the Federal Reserve System and which the transfer
agent has designated by the Trust for that purpose, together with an irrevocable offer in writing in a
form acceptable to the Trustees to have the Shares redeemed by the Trust at the net asset value
thereof per share, next determined as provided in the Information Statement after such deposit.
Payment for redemption shall be made to the Participants within the number of business days
specified in the Trust's current Information Statement, unless the date of payment is postponed
pursuant to Section 7.5 hereof, in which event payment may be delayed beyond such period.
7.5 Suspension of Redemption; Postponement of Payment. Each Participant, by its
adoption of this Indenture, agrees that the Trustees may, without the necessity of a formal
meeting of the Trustees, temporarily suspend the right of redemption or postpone the date
of payment for withdrawal of funds from the Trust for the whole or any part of any period;
(a) During which there shall have occurred any state of war, national emergency, act of
God, banking moratorium or suspension of payments by banks in the State of Colorado or any
general suspension of trading or limitation of prices on the New York Stock Exchange or the
American Stock Exchange (other than customary week -end and holiday closing); or
(b) During which any emergency situation exists, as a result of which disposal by the
Trust of Trust Property is not reasonably practicable because of the substantial losses which might
be incurred, or it is not reasonably practicable for the Trust fairly to determine the value of its
net assets.
Such suspension or postponement shall not alter or affect a Participant's beneficial
interest hereunder or the accrued interest and earnings thereon. Such suspension or payment shall
take effect at such time as the Trustees shall specify but not later than the close of business on the
business day next following the declaration of suspension, and thereafter there shall be no right of
redemption or payment until the Trustees shall declare the suspension or postponement at an end,
except that the suspension or postponement shall terminate in any event on the first day on
which the period specified in subsection (a) or in this subsection (b) shall have expired, as to
which the determination of the Trustees shall be conclusive. In the case of a suspension of the
right of redemption or a postponement of payment to a Participant, a Participant may either
(i) withdraw its request for redemption or (ii) receive payment based on the net asset value next
determined after the termination of the suspension.
7.6. Redemptions to Reimburse Trust for Loss on Nonpayment for Shares or for
Other Charges. The Trustees shall have the power to redeem Shares owned by any Participant to
the extent necessary (i) to reimburse the Trust for any loss it has sustained by reason of the failure
of such Participant to make full payment for Shares purchased by such Participant, or (ii) to collect
any charge relating to a transaction effected for the benefit of such Participant which is applicable
to Shares as provided in the Information Statement. Any such redemption shall be effected at the
redemption price determined in accordance with Section 7.4. hereof.
7.7. Redemptions Pursuant to Constant Net Asset Value Policy. The following
provisions shall apply to any series or portfolio of investments of the Trust during any period that
the Trustees, in their discretion, establish a policy of maintaining a constant net asset value per
4827-9561-5046.1
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Share. If for any reason the net income of the Trust attributable to such Shares invested in the same
portfolio shall, at the time of any determination thereof in accordance with the provisions set forth
in the Information Statement be a negative amount, then the Trustees shall have power to cause the
number of outstanding Shares of such series or portfolio to be reduced by requiring each
Participant to contribute to the capital of the Trust such Participant's proportionate part of the total
number of Shares which have an aggregate current net asset value equal as nearly as may be
practicable to the amount of the Trust's net loss in respect of such series or portfolio. Each
Participant, by becoming a registered holder of Shares, agrees to make any such contribution which
may be required.
7.8. Redemptions in Kind. Payment for Shares redeemed pursuant to Section 7.4. may,
at the option of the Trustees, or such officer or officers as they may duly authorize for the purpose,
in their complete discretion be made in cash, or in kind, or partially in cash and partially in kind. In
case of payment in kind, the Trustees, or their delegate, shall have absolute discretion as to what
security or securities shall be distributed in kind and the amount of the same, and the securities
shall be valued for purposes of distribution at the figure at which they were appraised in computing
the net asset value of the Shares.
7.9 Defective Redemption Requests. In the event that a Participant shall submit a
request for the redemption of a greater amount than is then allocated to such Participant,
such request shall not be honored and, each Participant, by its adoption of this Indenture, agrees
that the Trustees shall have full and complete power to redeem no more than the
proportionate amount allocated to such Participant, at a redemption price determined in
accordance with Section 7.4 hereof, sufficient to reimburse the Trust for any fees, expenses,
costs or penalties actually incurred by the Trust as a result of such defective redemption request.
7.10 Series or Class Designations. The Trustees, in their discretion, may authorize the
division of Shares into two or more series, and within a series into two or more classes, and the
different series or classes shall be established and designated, and the variations in the relative
rights and preferences as between the different series or classes within a series shall be fixed and
determined by the Trustees; provided that, all Shares shall be identical except there may be
variations so fixed and determined between different series or classes within a series as to purchase
price, right of redemption and the price, terms and manner of redemption, special and relative
rights as to distributions on liquidation, conversion rights, and conditions under which the several
series or classes shall have separate voting rights and separate investment restrictions.
ARTICLE VIII - RECORD OF SHARES
8.1 Share Register. The Share Register shall be kept by or on behalf of the Trustees,
under the direction of the Trustees, and shall contain (i) the names and addresses of the
Participants (including both a post office address for regular United States mail and a valid
electronic mail address), (ii) the number of Shares representing their respective beneficial
interests hereunder, and (iii) a record of all allocations and redemptions thereof. Such Share
Register shall be conclusive as to the identity of the Participants to which the Shares are
allocated. Only Participants whose allocation of Shares are recorded on such Share Register
shall be entitled to receive distributions with respect to Shares or otherwise to exercise or
4827-9561-5046.1
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enjoy the rights and benefits related to the beneficial interest hereunder represented by the
Shares. No Participant shall be entitled to receive any distribution, nor to have notices given to it
as herein provided, until it has given its appropriate address to such officer or agent of the Trust
who shall keep the Share Register for entry thereon.
8.2 Registrar. The Trustees shall have full and complete power to employ a registrar.
Unless otherwise determined by the Trustees the Share Register shall be kept by the
Administrator which shall serve as the registrar for the Trust. The registrar shall record the
original allocations of Shares in the Share Register. Such registrar shall perform the duties usually
performed by registrars of certificates and shares of stock in a corporation, except as such duties
may be modified by the Trustees.
8.3 Owner of Record. No Person becoming entitled to any Shares in consequence of
the merger, reorganization, consolidation, bankruptcy or insolvency of any Participant or
otherwise, by operation of law, shall be recorded as the Participant to which such Shares are
allocated and shall only be entitled to the redemption value of such Shares. Until the person
becoming entitled to such redemption value shall apply for the payment thereof and present any
proof of such entitlement as the Trustees may in their sole discretion deem appropriate, the
Participant of record to which such Shares are allocated shall be deemed to be the Participant to
which such Shares are allocated for all purposes hereof, and neither the Trustees nor the registrar
nor any officer or agent of the Trust shall be affected by any notice of such merger,
reorganization, consolidation, bankruptcy, insolvency or other event.
8.4 No Transfers of Shares. The beneficial interests measured by the Shares shall not
be transferable, in whole or in part, other than to a Local Government, or the Trust itself for
purposes of redemption. Any attempted transfer to any other person shall be void and of no effect.
8.5 Limitation of Fiduciary Responsibility. The receipt of the Participant in whose
name any Share is recorded or of any party or agent in whose name any Share is recorded for the
benefit of the Participant shall be a sufficient discharge for all moneys payable or deliverable in
respect of such Shares and from all liability to see to the proper application thereof.
8.6 Notices. Any and all notices to which Participants are hereunder entitled and any
and all communications shall be deemed duly served or given if (a) mailed, postage
prepaid, addressed to Participants of record at their last known post office addresses, or (b) sent by
electronic mail addressed to the Participants of record at their last known electronic mail address,
in each case as recorded in the Share Register provided for in Section 8.1 hereof. Copies of such
notices shall be provided to the Participant's Designee.
ARTICLE IX - RECORDS AND REPORTS
9.1 Inspection of Records. The records of the Trust shall be open to inspection by any
Participant at all reasonable business hours. The Trustees shall use their best efforts to
communicate administrative and investment decisions to Participants through a website to be
established by the Trust.
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9.2 Reports. The Trustees shall cause to be prepared at least annually: (i) a report or
statements of financial operations of the Trust; (ii) an opinion of an independent certified public
accountant on such report or financial statements based on an examination of the books and
records of the Trust; and (iii) such other information as may be required by the Investment Pooling
Act or by Rules and regulations promulgated thereunder. A signed copy of such report and
opinion shall be filed with the Trustees within one hundred twenty (120) days after the close of the
period covered thereby. The Trustees shall cause copies of the annual report to be delivered to the
Participants of record within one hundred twenty (120) days after the close of the period covered
thereby.
In addition, the Trustees shall furnish to the Participants at least quarterly an interim report
containing such information as may be required by statute or regulation.
ARTICLE X - TRUSTEES AND OFFICERS
10.1 Number, Qualification and Succession of Trustees.
(a) The governing body of the Trust shall be the Board of Trustees, the membership of
which shall be determined as herein provided and as provided in the By -Laws.
(b) The number of Trustees shall be fixed from time to time by resolution of the
Trustees; provided that, the number of Trustees shall be at no time less than three (3) or more than
fifteen (15). No reduction in the number of Trustees shall have the effect of removing any
Trustee from office prior to the expiration of his or her term.
(c) The majority of Trustees shall be Designees of Participants. Any Trustee who at the
time of election or appointment is not a Designee of a Participant is referred to herein as a "Non -
Designee Trustee." The number and qualifications of Non -Designee Trustees shall be as provided
in the By -Laws. If a Designee of a Participant serves as a Trustee, and ceases to be a Designee,
such person shall no longer be qualified to serve as a Trustee, and shall not, by virtue of ceasing to
qualify as a Designee, be deemed to be a Non -Designee Trustee. The Trustees shall be natural
persons.
(d) Trustees shall be elected or appointed as provided in Section 10.4 hereof No such
election or appointment shall become effective, however, until the elected or appointed
person qualifies for such office by delivering to the President of the Board of Trustees a
writing signed by him or her (i) accepting such election or appointment, and (ii) agreeing to be
bound by the terms of this Indenture. Qualification must be completed within twenty (20) days
after such person is notified of his or her appointment or election, and failure to meet this
requirement shall void the appointment or election.
(e) Whenever a vacancy in the number of Trustees shall occur until such vacancy is
filled, the Trustees or Trustee continuing 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 Indenture.
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(t) Upon the appointment or election and qualification of any person to the office of
Trustee, the Trust Property shall vest in such new Trustee without necessity of any further act or
conveyance.
10.2 Signatory Local Governments and Trustees. In accordance with Section 10.1(b),
by the execution of this Indenture, the Signatory Local Governments appoint the following persons
as initial Trustees (the "Initial Trustees"):
• John Lefebvre, Treasurer, Weld County
• Rick Hinman, Asset and Revenue Manager, Centennial Water & Sanitation District
• Stephanie Stanley, Financial and Budgeting Analysis Manager, Highlands Ranch
Metropolitan District
• Jeanne Kinney, Director of Finance, City of Fort Morgan
The Initial Trustees shall have all the powers of Trustees provided herein and shall have the
power to appoint up to seven (7) additional Trustees, to serve until the Board of Trustees has been
elected in accordance with Section 10.4 hereof.
10.3 Vacancies.
(a) A Trustee's office shall be deemed vacant upon the occurrence of any one of the
following events:
(i) If a person who was duly appointed or elected fails, neglects or refuses to
qualify for office within twenty (20) days after the date he or she is notified of such
appointment or election;
(ii) If a person who was duly appointed submits a written resignation to the
Board of Trustees;
(iii) If a person who was duly appointed becomes disabled or dies during his or
her term of office, or for whom a guardian or conservator has been appointed;
(iv) If a person who was duly appointed ceases to meet the requirements for the
office of Trustee, as provided herein and in the By -Laws;
(v) If a person who was duly appointed is convicted of a felony or is or becomes
the subject of an Order for Relief entered pursuant to the United States Bankruptcy
Code (I1 U.S.C. § 101 etseq.);
(vi) If a court of competent jurisdiction voids the appointment or removes a
person duly appointed for any cause whatsoever, but only after his or her right to
appeal has been waived or otherwise exhausted; or
(vii) If the person who was duly appointed is removed from office pursuant to
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Section 10.5 hereof.
(b) No vacancy in the office of any Trustee shall operate to annul this Indenture or to
revoke any existing agency created pursuant to the terms of this Indenture, and title to any Trust
Property held in the name of such Trustee and the other Trustees or otherwise, shall, in the event
of a vacancy in the office of such Trustee, vest in the continuing or surviving Trustees without
necessity of any further act or conveyance. In the case of a vacancy, the majority of the Board
continuing in office acting by resolution, may fill such vacancy.
10.4 Elections and Appointments; Term of Office.
(a) Trustees are elected for overlapping terms of three years by a majority vote of the
Participants present and entitled to vote at an annual meeting or voting in an annual vote of
Participants, herein called an "Annual Election." At any time the Board changes the number of
Trustees it shall by the same action specify the number of three-year terms to be filled at the next
Annual Election, but shall maintain as nearly equal as possible the number of three-year terms to be
filled at each subsequent Annual Election. Trustees may succeed themselves in office. Candidates
shall be nominated as provided in the By -Laws. The candidate(s) with the highest number of votes
will be elected. The Board shall, at the next meeting following the election, review the election
returns and declare the appropriate candidate(s) elected.
(b) A Trustee remains in office until a vacancy occurs in his or her office as provided in
Section 10.3 hereof, or until his or her successor is duly appointed and qualifies for office.
10.5 Resignation and Removal.
(a) Any Trustee may resign (without need for prior or subsequent accounting) by an
instrument in writing signed by him or her and delivered to the President and such resignation
shall be effective upon such delivery or at a later date according to the terms of the notice.
(b) Any Trustee may be removed with or without cause by action of two-thirds of the
other Trustees.
(c) Upon ceasing to be a Trustee, such person 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 the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his or her legal representative shall execute
and deliver on his or her behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence.
10.6 Officers and Advisers. The Trustees shall annually designate a President who
shall be the Chief Executive Officer of the Trust and a Vice President, who shall have such
duties as the Trustees shall deem advisable and appropriate. The Trustees may elect or appoint,
from among their number or otherwise, a Treasurer and a Secretary, who shall have such powers,
duties and responsibilities as the Trustees may deem to be advisable and appropriate. The Trustees
may elect or appoint, from among their number or otherwise, or may authorize the President to
appoint, one or more Assistant Secretaries and Assistant Treasurers, and such other officers or
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agents, who shall have such powers, duties and responsibilities as the Trustees may deem to be
advisable and appropriate. Two or more offices, except those of President and Vice President,
may be held by the same person.
10.7 By -Laws; Quorum of Trustees.
(a) The Trustees may adopt and, from time to time, amend or repeal By -Laws for the
conduct of the business of the Trust, and in such By -Laws, among other things, may define
the duties of the respective officers, agents, employees and representatives of the Trust.
Notwithstanding the foregoing, absent adoption of By -Laws addressing the same, the Trustees
may define the duties of the respective officers, agents, employees and representatives of the
Trust, and such other matters regarding administration of the Trust not specifically addressed
in this Indenture, by resolution of the Board of Trustees.
(b) A quorum for the purposes of any meeting or vote of the Trustees shall consist of a
majority of the Trustees entitled to vote at a meeting of the Board of Trustees.
ARTICLE XI -
DETERMINATION OF NET ASSET VALUE AND NET INCOME:
DISTRIBUTIONS TO PARTICIPANTS
11.1 Net Asset Value. The net asset value of each allocated Share of the Trust shall be
determined by the method and frequency established by the Trustees and shall be set forth in an
Information Statement as the same may be amended from time to time. The duty to make the
calculations may be delegated by the Trustees to the Adviser, the Administrator, the Custodian
or such other person as the Trustees by resolution may designate.
11.2 Retained Reserves. The Trustees may retain from the earnings of the Trust such
amount as they may deem necessary to pay the debts and expenses of the Trust and to meet
other obligations of the Trust, and the Trustees shall also have the power to establish such
reasonable reserves from earnings as they believe may be required to protect the Trust and the
Participants against contingent liabilities.
ARTICLE XII - CUSTODIAN
12.1 Duties. The Trustees shall employ a bank or trust company organized under the
1 aws of the United States of America or of the State of Colorado as Custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements, if any, as may be
contained in this Indenture, the By -Laws of the Trust or otherwise determined by resolution
of the Board of Trustees, to perform the duties set forth in the Custodian Agreement to be
entered into between the Trust and the Custodian. Such Custodian must be designated as an
"eligible public depository" as provided in the PDPA.
12.2 Appointment. The Trustees shall have the power to select and appoint the
Custodian for the Trust. The Custodian Agreement may be terminated at any time without
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cause and without the payment of any penalty by the Trust on not less than sixty (60) days'
written notice to the Custodian.
12.3 Disbursement and Collection Agent. The Trustees may also authorize the
employment of a Disbursement and Collection Agent from time to time to perform acts and
services upon such terms and conditions, as may be agreed upon between the Custodian and said
agent and approved by the Trustees; provided, however, that, in every case, such Disbursement
and Collection Agent shall be a bank or trust company duly organized under the laws of the
United States of America or one of the states thereof and shall be a state -designated "eligible
public depository."
12.4 Successors. In the event that at any time the Custodian or the Disbursement and
Collection Agent shall resign or shall be terminated pursuant to the provisions of the
Custodian Agreement or disbursement and Collection Agreement, the Trustees shall appoint a
successor thereto.
ARTICLE XIII - RECORDING OF INDENTURE
13.1 Recording. This Indenture and any amendments hereto shall be filed, registered,
recorded or lodged as a document of public record in such place or places and with such official
or officials as may be required by law or as the Trustees may deem appropriate. An amended
Indenture, containing or restating the original Indenture and all amendments theretofore made,
may be executed any time or from time to time by a majority of the Trustees and shall, upon
filing, recording or lodging in the manner contemplated hereby, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the original Indenture
and the various amendments thereto.
ARTICLES XIV
AMENDMENTS TO INDENTURE AND PERMITTED INVESTMENTS
LIST; TERMINATION OF TRUST; DURATION OF TRUST
14.1 Amendment to Indenture or Permitted Investments List; Termination.
(a) The provisions of this Indenture may be amended or altered, or the Trust may be
terminated, by a vote of the Participants pursuant to Section 2.7 hereof. The Trustees may, from time
to time by a two-thirds vote of the Trustees, and after 45 days prior written notice to the Participants,
amend or alter the provisions of the Indenture, without the vote or assent of the Participants, which
the Trustees, in good faith deem necessary or convenient for the administration and operation of the
Trust, to establish and designate additional series or portfolios pursuant to Section 7.10 hereof, or to
the extent deemed by the Trustees in good faith to be necessary to conform this Indenture to the
requirements of applicable laws or regulations or any interpretation thereof by a court or other
governmental agency of competent jurisdiction, but the Trustees shall not be liable for failing so to
do. Notwithstanding the foregoing, no amendment may be made pursuant to this Section which
would:
(i) change any rights with respect to any allocated Shares of the Trust by reducing the
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amount payable thereon upon liquidation of the series or portfolio or which would
diminish or eliminate any voting rights of the Participants, except with the vote or
written consent of two-thirds of the Participants entitled to vote thereon;
(ii) Cause any of the investment restrictions contained herein to be less restrictive without
the affirmative vote of a majority of the Participants;
(iii) Change the limitations on personal liability of the Participants and Trustees; or
(iv) Change the prohibition of assessments upon Participants.
A certification signed by a majority of the Trustees setting forth an amendment and reciting
that it was duly adopted by the Participants or by the Trustees or a copy of the Indenture, as
amended, executed by a majority of the Trustees, shall be conclusive evidence of such amendment.
(b) The Trust may be terminated by the vote of the majority of authorized Trustees,
subject to the approval of the holders of not less than two-thirds of outstanding Shares, subject to
the provisions of Section 2.7 hereof. Upon the termination of the Trust pursuant to this Section
14.1(6), (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 Indenture shall continue until the affairs of the Trust shall have been wound
up, including, without limitation, the power to fulfill or discharge the contracts of the Trust,
collect its assets, sell, convey, assign, exchange, transfer or otherwise dispose of all or any part
of the remaining Trust Property to one or more persons at public or private sale for consideration
which may consist in whole or in part of cash, securities or other property of any kind,
discharge or pay its liabilities, and do all other acts appropriate to liquidate its affairs, provided,
however, that any sale, conveyance, assignment, exchange, transfer, or other disposition of all or
substantially all of the Trust Property shall require approval of the principal terms of the
transaction and the nature and amount of the consideration by affirmative vote of not less than a
majority of the Trustees entitled to vote thereon, and (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 in each, among the Participants according to their
respective proportionate allocation of Shares.
(c) Upon termination of the Trust and distribution to the Participants 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 the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder, and the right, title and interest of all
Participants shall cease and be cancelled and discharged.
(d) 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 as aforesaid or a copy of
the Indenture, as amended, in recordable form, and executed by a majority of the Trustees, shall be
conclusive evidence of such amendment.
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14.2 Duration. The Trust shall continue in existence in perpetuity, subject in all respects
to the provisions of this Article XIV.
ARTICLE XV - MISCELLANEOUS
15.1 Governing Law. This Indenture is executed by the Signatory Local Governments
and delivered in the State of Colorado and with reference to the laws thereof, and the rights of all
parties and the validity, construction and effect of every provision hereof shall be subject to and
construed according to the laws of the State of Colorado (without regard to its conflicts of law
rules). Venue for any dispute, breach or other legal action relating to the interpretation or
implementation of this Indenture shall lie in a court of competent jurisdiction in the City and
County of Denver, Colorado.
15.2 Counterparts. This Indenture may be executed in several counterparts, each of
which when so executed shall be deemed to be an original, and such counterparts, together, shall
constitute but one and the same instrument, which shall be sufficiently evidenced by any
such original counterpart.
15.3 Reliance by Third Parties. Any certificate executed by an individual who
according to the then current records of the Trust appears to be a Trustee, the Secretary or
the Treasurer of the Trust, certifying to (a) the number or identity of Trustees or Participants,
(b) the due authorization of the execution of any instrument or writing, (c) the results of any
vote of Trustees or Participants, (d) the fact that the number of Trustees or Participants
present at any meeting or executing any written instrument satisfies the requirements of this
Indenture, or the form of any By -Laws adopted by, or the identity of any officers or any 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 or any of them or the Trust and the
successors of such Person
15.4 Provisions in Conflict with Law. The provisions of this Indenture are
severable, and if the Trustees shall determine with the advice of counsel that any one or more
of such provisions are in conflict with applicable federal or Colorado laws, those conflicting
provisions shall be deemed never to have constituted a part of this Indenture, provided, however,
that such determination by the Trustees shall not affect or impair any of the remaining provisions
of this Indenture or render invalid or improper any action taken or omitted (including, but
not limited to, the election of Trustees) prior to such determination.
15.5 Section Headings. Any headings preceding the text of the several Articles and
Sections of the Indenture and any table of contents or marginal notes appended to copies
hereof, shall be solely for convenience of reference and shall neither constitute a part of
this Indenture nor affect its meaning, construction or effect.
15.6 Adoption by Local Government Entities; Written Investment Policies of
Participants; Resignation and Withdrawal of Participants.
(a) Any Local Government meeting the requirements hereof may become a Participant
of this Trust by (i) taking all required official action to adopt to a Resolution authorizing the
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execution of this Indenture including, without limitation, adopting or otherwise having in effect a
written investment policy consistent with this Indenture and the Permitted Investments list or
amending or modifying any existing written investment policy not consistent with this
Indenture or the Permitted Investments list, and (ii) furnishing the Trustees with satisfactory
evidence that such official action has been taken. A copy of this Indenture may be adopted by
executing a written instrument of adoption in such form as may be prescribed by the Trustees.
Delivering an acknowledged copy of such instrument shall constitute satisfactory evidence of the
adoption contemplated by this Section.
(b) By joining in or adopting this Indenture, each Participant agrees that it will
maintain a written investment policy consistent with the provisions of this Indenture and the
Permitted Investments list, as each of the same is amended from time to time.
(c) Any Participant may resign and withdraw from the Trust by sending a written notice
to such effect to the President of the Trust and the Administrator and by requesting the
redemption of all Shares then held by it or in accordance with any other procedure authorized by
the Trustees or Board of Participants. Such resignation and withdrawal shall become effective
upon the receipt thereof by the President of the Trust and the Administrator. No resignation
and withdrawal by a Participant shall operate to annul this Indenture or terminate the existence of
the Trust.
IN WITNESS WHEREOF, the Local Governments of the State of Colorado acting in the
capacity of Signatory Local Governments of the Trust have executed this Indenture together with
the Trustees by the execution of the addenda, which are attached to this Indenture. By the
execution of the addenda, the respective Trustees and Signatory Local Governments are intending
to adopt and be bound by the terms of this Indenture.
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