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Home My WebLink About17137t• LIRMF"Wa 'I= ORDINANCE NO. 17,137 1 2 AN ORDINANCE AUTHORIZING THE CITY OF LITTLE 3 ROCK, ARKANSAS TO ENTER INTO AN ARKANSAS 4 LOCAL GOVERNMENT JOINT INVESTMENT TRUST 5 FOR THE INVESTMENT OF PUBLIC FUNDS THROUGH 6 7 THE ARKANSAS LOCAL GOVERNMENT CASH 8 MANAGEMENT TRUST PROGRAM. 9 10 WHEREAS, the City of Little Rock, Arkansas (the "City") is a city of the first 11 class and a political subdivision of the State of Arkansas (the "State "), organized and 12 13 existing under the Constitution and laws of the State; and 14 WHEREAS, Arkansas Code Annotated Section 19 -8 -301 et seq. (the "Act") 15 provides that any ten (10) or more local governments, including cities, counties, school 16 districts or community college districts may create a trust under the Act for the purpose 17 18 of providing for the joint investment of moneys not immediately required for operations 19 or other governmental purposes by the local governments which become parties to the 20 trust; and 21 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF 22 23 THE CITY OF LITTLE ROCK, ARKANSAS: 24 25 SECTION 1. Authorization of Trust. That the City is hereby authorized to 26 become a participant in the Arkansas Local Government Cash Management Trust, in 27 substantially the form attached to this Ordinance and marked Exhibit A (the "Trust 28 Agreement "), submitted to and reviewed by the Governing Body of the City, a copy of 29 which shall be filed with the minutes of the meeting at which this Ordinance is adopted. 30 31 SECTION 2. Execution of Document. The Mayor and the City Clerk are hereby 32 authorized and directed to execute and attest, respectively, and deliver the Joinder 33 Agreement to the Trust Agreement for and on behalf of and as the act and deed of the 34 City. 35 36 1 Such officers are further authorized to execute and attest, respectively, such other 2 documents, certificates and instruments and to take and perform such further acts on 3 4 behalf of the City as may be necessary or desirable to carry out and comply with and 5 give effect to the intent of this Ordinance and the Trust Agreement. 6 SECTION 3. Authorization of Investments. The City hereby authorizes the investment and withdrawal of its available funds from time to time in accordance with 8 9 the Trust Agreement. The City hereby confirms that the permitted interests set forth 10 in the Trust Agreement do not violate any local ordinance or other governing documents 11 and shall indemnify and hold harmless the Arkansas Local Government Cash 12 Management Trust, its Board of Trustees and any employees or agents thereof for any 13 liability arising from any such violation. 14 15 SECTION 4. Treasurer. The following officer is hereby designated as Treasurer, 16 as defined in the Trust Agreement, who shall have full power and authority to invest and 17 withdraw invested funds of the City as provided in the Trust Agreement and shall 18 represent and vote on behalf of the City as a participant as provided in the Trust 19 Agreement: 20 21 John Pryor Finance Director & Treasurer 22 Printed Name ature Title 23 SECTION 5. Authorization to Serve as Member of Board of Trustees. The 24 25 members of the Governing Body and officers of the City are hereby authorized to serve 26 as members of the Board of Trustees of the Arkansas Local Government Cash 27 Management Trust if they are a full -time employee of the City and are elected or 28 appointed under the provisions of the Trust Agreement. 29 30 SECTION 6. Further Authority. The City shall, and the officers and agents of 31 the City are hereby authorized and directed to, take such action, expend such funds and 32 execute such other documents, certificates and instruments as may be necessary or 33 desirable to carry out and comply with and perform the duties of the City with respect 34 to the Trust Agreement. 35 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 PASSED: March 5, 1996 ATTEST: 1 5- .w . l APPROVED AS TO FORM: • ♦� • AUDIOMI, M_ Y Lei ! x60 APPROVED: I, �mm IN I �' JOINDER AGREEMENT TO THE ARKANSAS LOCAL GO CASK MANAGEMENT TRUST AGRF.F.MFNT The undersigned Mayor and City Clerk of the Local Government set forth below have been authorized by ordinance of the Local Government to become a party to the Arkansas Local Government Cash Management Trust Agreement and a Participant in the Arkansas Local Government Cash Management Trust pursuant to, the terms of said Trust Agreement. Participation in the Trust shall not become effective until this Joinder Agreement is filed with the Arkansas Secretary of State. IN WITNESS WHEREOF, the Local Government named below has caused its duly authorized officers to execute and deliver this Joinder Agreement this 7 A& day of 900017= - LOCAL GOVERNMENT: CITY OF LITTLE ROCK, ARKANSAS By: l ayor Jim Dailey By:a o' 1'; " pe Ck' City Clerk Robbie Hancock ARKANSAS LOCAL GOVERNMENT CASH MANAGEMENT TRUST This Instrument Prepared By: Joseph B. Hurst, Jr. Friday, Eldredge & Clark 2000 First Commercial Building 400 West Capitol Avenue Little Rock, Arkansas 72201 -3493 • • Exhibit 16� "A" ARKANSAS LOCAL GOVERNMENT CASH MANAGEMENT TRUST This Instrument Prepared By: Joseph B. Hurst, Jr. Friday, Eldredge & Clark 2000 First Commercial Building 400 West Capitol Avenue Little Rock, Arkansas 72201 -3493 TABLE OF CONTENTS ARTICLE I DEFINITIONS AND THE TRUST .............. 1 Section 1.1. Definitions .... ............................... 1 Section 1.2. Name ....... ............................... 3 Section 1.3. PuMgse ...... ............................... 4 Section 1.4. lion ..... ............................... 4 Section 1.5. Nature of the Trust Agreement ....................... 4 Section 1.6. Effective Date .. ............................... 4 ARTICLE H PARTICIPANTS .................... 4 Section 2.1. Adoption by a Local Government and Election to Become a Participant ........ ............................... 4 Section 2.2. Representation of Each Participant ..................... 5 Section 2.3. Withdrawal from the Trust ......................... 5 ARTICLE HI PARTICIPANTS' RIGHTS ................. 5 Section 3.1. Exercise of Participants' Rights ...................... 5 Section 3.2. Voting ....... ............................... 5 Section 3.3. Annual Vote of the Participants ...................... 5 Section 3.4. Right to Initiate a Vote of the Participants ................ 6 Section 3.5. Inspection of Records ............................ 6 Section 3.6. Meetings of the Participants ......................... 6 Section 3.7. Notice of Meetings .............................. 6 Section 3.8. Proxies ...... ............................... 6 Section 3.9. Record Date for Meetings and Votes ................... 6 Section 3.10. Number of Votes .............................. 7 ARTICLE IV THE BOARD OF TRUSTEES ................ 7 Section 4.1. Number and Oualification .......................... 7 Section 4.2. Term and Election .............................. 7 Section 4.3. Resignation and Removal .......................... 8 Section 4.4. Vacancies ..... ............................... 8 Section 4.5. Meetings ..... ............................... 9 Section 4.6. Officers ...... ............................... 10 Section 4.7. By- Laws ..... ............................... 10 Section 4.8. Execution of Documents ........................... 10 i ARTICLE V POWERS AND DUTIES OF THE BOARD OF TRUSTEES ...... 10 Section 5.1. General ...... ............................... 10 Section 5.2. Legal Title .... ............................... 11 Section 5.3. Powers ...... ............................... 11 Section 5.4. Disposition of Assets ............................. 11 Section 5.5. Delegation: Committees ........................... 11 Section 5.6. Collection ..... ............................... 11 Section 5.7. Payment of Expenses ............................. 12 Section 5.8. Borrowing and Indebtedness ........................ 12 Section 5.9. D si s ..... : ............................... 12 Section 5.10. Valuation .... ............................... 12 Section 5.11. Fiscal Year: Accounts ........................... 13 Section 5.12. Affiliates ............................... 13 Section 5.13. Investment Program ............................. 13 Section 5.14. Power to Contract. Appoint. Retain and Emplov ........... 13 Section 5.15. Insurance .... ............................... 13 Section 5.16. Seal ........ ............................... 14 Section 5.17. Indemnification . ............................... 14 Section 5.18. Remedies .... ............................... 14 Section 5.19. Information Statement ............................ 14 Section 5.20. Reports ..... ............................... 14 Section 5.21. Further Powers . ............................... 15 ARTICLE VI THE INVESTMENT ADVISOR, TRUST ADMINISTRATOR AND CUSTODIAN OF INVESTMENTS ............ 15 Section 6.1. AQpointment ... ............................... 15 Section 6.2. Duties of the Investment Advisor ..................... 16 Section 6.3. Duties of the Trust Administrator 16 Section 6.4. Duties of the Custodian of Investments 16 Section 6.5. Successors .... ............................... 16 ARTICLE VII INVESTMENTS ................... 16 Section 7.1. Statement of Investment Policy and Objective .............. 16 Section 7.2. Restrictions Fundamental to the Trust ................... 16 Section 7.3. Amendment of - Restrictions ......................... 17 Section 7.4. Maximum Aggregate Investment of Participants ............. 17 Section 7.5. Minimum Investment ............................. 17 Section 7.6. Closing an Investment in a Common Trust Fund ............ 17 Section 7.7. Collected Funds . ............................... 18 ii ARTICLE VIII LIMITATIONS OF LIABILITY ............... 18 Section 8.1. Liability to Third Persons .......................... 18 Section 8.2. Liability to the Trust or to the Participants ................ 18 Section 8.3. Indemnification . ............................... 18 Section 8.4. Surma Bonds ... ............................... 19 Section 8.5. Apparent Authority .............................. 19 Section 8.6. Recitals ...... ............................... 19 Section 8.7. Reliance on Experts. Etc ........................... 20 Section 8.8. Liability Insurance .............................. 20 ARTICLE IX UNITS OF PARTICIPATION ................ 20 Section 9.1. Division Into Units .............................. 20 Section 9.2. Allocation of Units .............................. 20 Section 9.3. Evidence of Unit Allocation ......................... 21 Section 9.4. Redemption of Units to Maintain Constant Net Asset Value ..... 21 Section 9.5. Redemption of Units at the Request of a Participant .......... 21 Section 9.6. Suspension of Redemption: Postponement of Payment ......... 21 Section 9.7. Minimum Redemption ............................ 22 Section 9.8. Defective Redemption Requests ....................... 22 ARTICLE X RECORD OF UNITS .................. 22 Section 10.1. Unit Register .. ............................... 22 Section 10.2. Registrar .... ............................... 22 Section 10.3. Owner of Record .............................. 23 Section 10.4. No Transfer of Units ............................ 23 Section 10.5. Limitation of Responsibility ........................ 23 Section 10.6. Notices ..... ............................... 23 ARTICLE XI DETERMINATION OF NET ASSET VALUE AND NET INCOME OF A COMMON TRUST FUND .......... 23 Section 11.1. Net Asset Value ............................... 23 Section 11.2. Net Income ... ............................... 24 ARTICLE XII RECORDING OF TRUST AGREEMENT ............ 24 Section 12.1. Recordine .... ............................... 24 iii ARTICLE XM AMENDMENT OR TERMINATION OF TRUST; DURATION OF THE TRUST ................ 25 Section 13.1. Amendment or Termination ........................ 25 Section 13.2. Duration ..... ............................... 26 ARTICLE XIV MISCELLANEOUS ................... 26 Section 14.1. Governing Law . ............................... 26 Section 14.2. Counterparts .. ............................... 26 Section 14.3. Reliance by Third Parties ......................... 26 Section 14.4. Provisions in Conflict with Law ..................... 27 Section 14.5. Gender: Section Headings ......................... 27 iv TRUST AGREEMENT THIS TRUST AGREEMENT is entered into as by and among the Local Governments which have executed the Joinder Agreements to this Trust Agreement. WITNESSETH: WHEREAS, the Local Government Joint Investment Trust Act, Ark. Code Ann. §§ 19 -8- 301 et seq., ( "Act "), permits any ten (10) or more Local Governments to create a trust for the purpose of providing for the joint investment of moneys not currently needed so as to enhance their investment opportunities and increase investment earnings; and WHEREAS, the Act provides that Local Governments other than those initially creating a trust under the Act may become parties to the trust agreement; and WHEREAS, the initial ten (10) Local Governments entering into this Trust Agreement desire to create a trust as provided for in the Act; and WHEREAS, the initial ten (10) Local Governments entering into this Trust Agreement desire to permit other Local Governments to become parties to this Trust Agreement: NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained herein, the Local Governments that are parties hereto, now and hereafter added pursuant to the provisions herein, mutually undertake, promise and agree for themselves and for their respective representatives, successors and assigns that all moneys, assets, securities, funds and properties now or hereafter acquired by the trustees of the trust created hereunder and their successors and assigns under this Trust Agreement shall be held and managed in trust subject to the terms, covenants, conditions, purposes and provisions hereof as follows: ARTICLE I DEFINITIONS AND THE TRUST Section 1.1. Definitions. The following capitalized terms used herein shall have the following meanings unless the context otherwise requires: "Act" means the Local Government Joint Investment Trust Act, as codified at Ark. Code Ann. §§ 19 -8 -301 et seq., as the same may be amended from time to time. "Affiliate" means, with respect to any Person, another Person directly or indirectly controlled, controlled by or under common control with such Person, or any officer, director, partner or employee of such Person. "Board of Trustees" means the governing body of the Trust. 1 "Common Trust Fund" means a common trust fund as provided in the Act which is established by this Trust Agreement and which may be invested only in Permitted Investments. "Common Trust Fund Assets" means Trust Property held for the credit of a Common Trust Fund. "Custodian of Investments" means the Person appointed by the Board of Trustees pursuant to Section 6.1 hereof and acting as custodian of Common Trust Fund Assets. "Incidental Trust Property" means Trust Property, other than Common Trust Fund Assets, which is necessary to carry out the functions of the Trust. "Information Statement" means the information statement or other descriptive document or documents which sets forth the policy and objectives of the Trust, adopted as such by the Board of Trustees and distributed by the Trust to Participants and potential Participants as the same may be amended by the Board of Trustees from time to time. "Investment Advisor" means the Person appointed by the Board of Trustees pursuant to Section 6.1 hereof and acting as advisor to the Board of Trustees with respect to the investment of Common Trust Fund Assets. "Investment Advisory Agreement" means the agreement between the Board of Trustees on behalf of the Trust and the Investment Advisor, referred to in Section 6.2 hereof, as the same may be amended from time to time. "Joinder Agreement" means the written supplement to this Trust Agreement pursuant to which a Local Government becomes a party to this Trust Agreement. "League" means the Arkansas Municipal League. "Local Government" has the meaning set forth in the Act. "Local Government Association" has the meaning set forth in the Act. "Participant" means a Local Government that has executed a Joinder Agreement and is permitted in accordance with the provisions hereof to invest in a Common Trust Fund. "Permitted Investments" means those investments authorized under the Act for investment of the moneys held for the credit of a Common Trust Fund. "Person" means and includes individuals, corporations, limited partnerships, general partnerships, joint stock companies or associations, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts and other entities (whether or not legal entities) and governments and agencies and political subdivisions thereof. 2 "Private Agency" has the meaning set forth in the Act. "Secretary of State" means the State's Secretary of State. "State" means the State of Arkansas. "Treasurer" means the treasurer, chief financial officer or other official who is properly authorized by the Local Government to invest a Local Government's funds. "Trust Administrator" means the Person appointed by the Board of Trustees pursuant to Section 6.1 hereof and acting as administrator of the day -to -day affairs of the Trust. "Trust" means the Arkansas Local Government Cash Management Trust. "Trust Agreement" means this Trust Agreement as amended, restated, modified and supplemented from time to time. References in this Trust Agreement to "Agreement," "hereof," "herein," "hereby," and "hereunder" shall be deemed to refer to this Trust Agreement as a whole and shall not be limited to the particular text, article or section in which such words appear unless otherwise stated. "Trust Property" means, as of any particular time, all property, real, personal or otherwise, tangible or intangible, that is transferred, conveyed or paid to the Trust or Board of Trustees and at such time is held in and by or for the account of the Trust, including without limitation all income, profits and gains from such property at such time held in and by or for the account of the Trust. "Trustee" means the Board of Trustees. "Unit Register" means the register of Units with respect to a Common Trust Fund maintained pursuant to Section 10.1 hereof. "Units" means the units of participation into which the Common Trust Fund Assets are divided, which represent the respective pro rata beneficial interests of the Participants in a Common Trust Fund, as described in Article IX hereof. Section 1.2. Name. The name of the Trust shall be "Arkansas Local Government Cash Management Trust" or "CMT" and, so far as may be practicable, the Board of Trustees shall conduct the Trust's activities, execute all documents and sue or be sued under that name. Should the Board of Trustees determine that the use of such name is not practicable, legal or convenient, the Board 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 Board of Trustees shall take such action as they, acting with the advice of counsel, shall deem necessary or appropriate to file or register such name in 3 accordance with the laws of the State of Arkansas and /or the United States of America so as to protect and reserve the right of the Trust in and to such name. Section 1.3. Purpose. The purpose of the Trust is to establish Common Trust Funds pursuant to the Act through which Local Governments may pool moneys in their treasuries which are not currently needed in order to invest such cash balances more efficiently, enhance their investment opportunities and earn greater investment returns in accordance with the Act and other laws of the State of Arkansas from time to time in effect governing the investment of moneys of Local Governments. Section 1.4. Location. The Trust shall maintain an office of record in the State of Arkansas and may maintain such other offices or places of business as the Board of Trustees may from time to time determine. The initial office of record of the Trust shall be: Arkansas Local Government Cash Management Trust, c/o Arkansas Municipal League, 2nd & Willow Streets, North Little Rock, Arkansas 72114. The office of record may be changed from time to time by resolution of the Board of Trustees, and notice of such change of the office of record shall be given to each Participant. Section 1.5. Nature of the Trust Agreement. The Trust shall be a "local government joint investment trust" within the meaning of the Act, organized and existing under the laws of the State of Arkansas, in particular the Act. The Trust is not intended to be, shall not be deemed to be and shall not be treated as a general partnership, limited partnership, joint venture, corporation, investment company or joint stock company. The Participants shall be beneficiaries of the Trust, and their relationship to the Board of Trustees shall be solely in their capacity as Participants and beneficiaries in accordance with the rights conferred upon them hereunder. Section 1.6. Effective Date. This Trust shall be effective until ten (10) Local Governments have adopted this Trust. Agreement and this Trust Agreement and the Joinder Agreements executed by the ten (10) initial Local Governments is filed with the Secretary of State. ARTICLE II PARTICIPANTS Section 2.1. Adoption by a Local Government and Election to Become a Participant. Any Local Government may become a Participant of this Trust by: (i) taking any appropriate official action to adopt this Trust Agreement, including without limitation that required by the Act, (ii) furnishing the Board of Trustees with satisfactory evidence that such official action has been taken (i.e., a certified copy of such instrument shall constitute satisfactory evidence); and (iii) the Local Government's execution and delivery to the Board of Trustees of a Joinder Agreement reflecting such Local Government's admission as a Participant, in such form as may be prescribed by the Board of Trustees. Participation in the Trust by a Local Government shall not become effective until such Joinder Agreement is filed with the Secret-try of State. 4 • • 1. 70 0 accordance with the laws of the State of Arkansas and /or the United States of America so as to protect and reserve the right of the Trust in and to such name. Section 1.3. Purpose. The purpose of the Trust is to establish Common Trust Funds pursuant to the Act through which Local Governments may pool moneys in their treasuries which are not currently needed in order to invest such cash balances more efficiently, enhance their investment opportunities and earn greater investment returns in accordance with the Act and other laws of the State of Arkansas from time to time in effect governing the investment of moneys of Local Governments. Section 1.4. Location. The Trust shall maintain an office of record in the State of Arkansas and may maintain such other offices or places of business as the Board of Trustees may from time to time determine. The initial office of record of the Trust shall be: Arkansas Local Government Cash Management Trust, c/o Arkansas Municipal League, 2nd & Willow Streets, North Little Rock, Arkansas 72114. The office of record may be changed from time to time by resolution of the Board of Trustees, and notice of such change of the office of record shall be given to each Participant. Section 1.5. Nature of the Trust Agreement. The Trust shall be a "local government joint investment trust" within the meaning of the Act, organized and existing under the laws of the State of Arkansas, in particular the Act. The Trust is not intended to be, shall not be deemed to be and shall not be treated as a general partnership, limited partnership, joint venture, corporation, investment company or joint stock company. The Participants shall be beneficiaries of the Trust, and their relationship to the Board of Trustees shall be solely in their capacity as Participants and beneficiaries in accordance with the rights conferred upon them hereunder. Section 1.6. Effective Date. This Trust shall be effective until ten (10) Local Governments have adopted this Trust. Agreement and this Trust Agreement and the Joinder Agreements executed by the ten (10) initial Local Governments is filed with the Secretary of State. ARTICLE II PARTICIPANTS Section 2.1. Adoption by a Local Government and Election to Become a Participant. Any Local Government may become a Participant of this Trust by: (i) taking any appropriate official action to adopt this Trust Agreement, including without limitation that required by the Act, (ii) furnishing the Board of Trustees with satisfactory evidence that such official action has been taken (i.e., a certified copy of such instrument shall constitute satisfactory evidence); and (iii) the Local Government's execution and delivery to the Board of Trustees of a Joinder Agreement reflecting such Local Government's admission as a Participant, in such form as may be prescribed by the Board of Trustees. Participation in the Trust by a Local Government shall not become effective until such Joinder Agreement is filed with the Secret-try of State. 4 • • 17' Section 2.2. Representation of Each Participant. Each Participant's Treasurer shall be the legal representative to act for and on behalf of such Participant for purposes of this Agreement and the Trust. In the event a Treasurer shall die, resign or be removed from his office or his office shall otherwise become vacant, any Treasurer assuming that office shall be the succeeding legal representative of the Participant by filing written notification of the same with the Board of Trustees. Section 2.3. Withdrawal from the Trust. Any Participant may resign and withdraw from the Trust by sending a written notice to such effect to the Chairman of the Board of the Trustees and by requesting the redemption of all Units then held by it. Such resignation and withdrawal shall not become effective until the receipt of such written notice by the Chairman of the Board of Trustees, the execution and delivery to the Board of Trustees of a supplement to this Trust Agreement reflecting such Local Government's withdrawal as a Participant, in such form as may be prescribed by the Board of Trustees, and the filing of such supplement with the Secretary of State. Notwithstanding the foregoing, a Participant shall have the unconditional right to withdraw from the Trust upon not more than ninety (90) days written notice. No resignation and withdrawal by a Participant shall operate to annul this Trust Agreement or terminate the existence of the Trust. ARTICLE HI PARTICIPANTS' RIGHTS Section 3.1. Exercise of Participants' Rights. All rights of a Participant as set forth in this Article shall be exercised by its Treasurer. Wherever in this Trust Agreement action is required by or allocated to a Participant, such action shall be taken by the Treasurer on behalf of the Participant. All notices required to be sent to a Participant shall be sent to such Participant's Treasurer. Section 3.2. Voting. Each Participant through its Treasurer shall be entitled to one (1) vote as a matter of right with respect to the following matters: (i) election of the Board of Trustees as provided in Sections 4.1 and 4.2 hereof; and (ii) amendment of this Trust Agreement or termination of the Trust as provided in Sections 7.3 and 13.1 hereof. It shall not be necessary for any minimum number of Units other than one (1) to be allocated to a Participant for the Participant to be entitled to vote. Section 3.3. Annual Vote of the Participants. An annual vote of the Participants shall be held within 120 days after the completion of each fiscal year of the Trust. The Board of Trustees shall prepare the ballot of matters to be considered in such vote which shall include the election of the Board of Trustees and may include such other questions or consideration of such matters as Participants may be entitled to vote upon as provided in this Article III, or as the Board of Trustees may determine. 172 Section 3.4. Right to Initiate a Vote of the Participants. The Participants shall, by an instrument or concurrent instruments in writing delivered to the Board of Trustees signed by at least ten percent (10 %) of the Participants, have the right to initiate a vote of the Participants, as to any matter described in clause (ii) of Section 3.2 hereof. Within twenty (20) days of receipt of such instrument or instruments, the Board of Trustees shall cause a ballot to be sent to each Treasurer, setting forth the matter to be voted on and the manner in which such ballots should be executed and delivered. Section 3.5. Inspection of Records. The records of the Trust shall be open to inspection by any Participant at all reasonable times. Section 3.6. Meetings of the Participants. (a) Meetings of the Participants may be called at any time by a majority of the Board of Trustees and shall be called by any Trustee upon written request of not less than ten percent (10 %) of the Participants, such request specifying the purpose or purposes for which such meeting is to be called. Any such meeting shall be held within the State of Arkansas at such place, on such date and at such time as the Board of Trustees shall designate, provided that a meeting requested by the Participants shall be held within 20 days of such request. (b) A majority of the Participants entitled to vote at such meeting present in person through their Treasurers (including, if permitted by applicable law, participation by conference telephone or similar communications equipment by means of which all individuals participating in the meeting can hear each other) or by proxy shall constitute a quorum at any annual or special meeting of Participants. Section 3.7. Notice of Meetings. Notice of all meetings of the Participants shall be given by the Board of Trustees by mail to each Participant at its registered address, mailed at least ten (10) days before the meeting. The notice shall state the time, place and purposes of the meeting. Only business stated in the notice of a meeting shall be considered at such meeting. Any adjourned meeting may be held as adjourned without further notice. Any notice required by any 'opening meeting," "sunshine" or similar law, whether now or hereafter in effect, shall also be given. Section 3.8. Proxies. At any meeting of the Participants, if permitted by applicable law, any Treasurer entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Board of Trustees for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of a majority of the Board of Trustees, proxies may be solicited in the name of one or more of the officers of the Trust. All proxies shall be revocable at the option of the Participant. Section 3.9. Record Date for Meetings and Votes. For the purposes of determining the Participants that are entitled to vote or act at any meeting or any adjournment thereof, or for the purpose of any other action, the Board of Trustees may from time to time fix a date not 0 r• M M OE • 1 r �.s more than twenty (20) days prior to the date of any meeting or vote of the Participants or other action as a record date for the determination of Participants entitled to vote at such meeting or any adjournment thereof or to cast a ballot in such vote or to be treated as Participants of record for purposes of such other action. Any Participant that was a Participant at the time so fixed shall be entitled to vote at such meeting or any adjournment therefor, or to cast a ballot in such vote, even though it then had no Units allocated to it or has since that date redeemed its Units. No Participant becoming such after that date shall be so entitled to vote at such meeting or any adjournment therefor or to cast a ballot in such vote or to be treated as a Participant of record for purposes of such other action. Section 3.10. Number of Votes. Only Participants of record shall be entitled to vote and each Participant shall be entitled to one (1) vote without regard to the number of Units allocated to it. 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. ARTICLE IV THE BOARD OF TRUSTEES Section 4.1. Number and Oualification. The governing body of the Trust shall be the Board of Trustees, the membership of which shall be determined as hereinafter provided. The number Trustees shall initially be nine (9) and shall thereafter be fixed from time to time by resolution of a majority of the Participants at such time; provided, however, that the number of Trustees shall in no event be less than seven (7). Any vacancy created by an increase in the number of Trustees may be filled by the appointment of an individual having the qualifications described in this Section 4.1 made by a resolution of a majority of the Trustees then in office. Any such appointment shall not become effective, however, until the individual named in the resolution of appointment shall have (i) accepted in writing such appointment, and (ii) agreed in writing to be bound by the terms of this Trust Agreement. No reduction in the number of Trustees shall have the effect of removing any Trustee from office prior to the expiration of his term. Whenever a vacancy on the Board of Trustees shall occur, until such vacancy is filled as provided in Section 4.4 hereof, the Trustees continuing in office, regardless of their number, shall have the powers granted to the Board of Trustees and shall discharge all the duties imposed upon the Board of Trustees by this Trust Agreement. Each Trustee shall be a natural person and a full -time employee of a Participant or a Local Government Association; provided, however, that a majority of the entire number of Trustees shall at all times be employees of Participants. The Trustees shall not be required to devote their entire time to the business and affairs of the Trust. Section 4.2. Term and Election. (a) Except as set forth in subsection (b) of this Section 4.2 with respect to certain of the Trustees serving on the initial Board of Trustees, each Trustee shall serve a term of three (3) 7 • • ' 7/1 years; provided, however, that each Trustee shall continue in office until his successor shall have qualified and been elected. (b) Immediately following the execution of this Trust Agreement by the initial Participants named on the signature page(s) hereof, such initial Participants shall elect the individuals who shall serve as the initial Trustees. Such election may be approved by the written consent of the initial Participants without a meeting. Each such initial Trustee shall serve a term of one (1), two (2) or three (3) years, the length of each initial Trustee's term to be determined by lot at the first meeting of such initial Board of Trustees, three Trustees to serve a term of one (1) year, three Trustees to serve a term of two (2) years, and three Trustees to serve a term of three (3) years. Thereafter, prior to each annual election of Trustees, the Board of Trustees shall determine those Trustees whose terms are to expire next and shall prepare the ballots to be submitted to the Participants in connection with the annual election of Trustees in accordance with such determination so that such Trustees' seats shall be included in the election. (c) The Board of Trustees may, but shall be under no obligation to, from time to time, direct that one or more specified seats on the Board of Trustees shall be held by (i) Participants of certain categories of Local Governments as defined in the Act so that all categories of Local Governments that are then Participants are represented on the Board of Trustees, and /or (ii) one or more Local Government Associations. The election of an individual to a seat on the Board of Trustees designated to be held by a Participant of a certain category of Local Government or by a Local Governmental Association shall not be effective unless such individual is a full -time employee of a Participant of such category or of the appropriate Local Governmental Association. (d) Trustees may succeed themselves in office. Election of Trustees shall be by the affirmative vote of at least a majority of the Participants voting. Section 4.3. Resignation and Removal. Any Trustee may resign (without need for prior or subsequent accounting) by an instrument in writing signed by him and delivered to the Chairman, the Vice Chairman or the secretary (referred to in Section 4.6 hereof) and such resignation shall be effective upon such delivery, or at a later date according to the terms of the notice. Any Trustee may be removed (provided that the aggregate number of Trustees after such removal shall not be less than the minimum number required by Section 4.1 hereof) with good cause, by the action of two- thirds (2/3) of the remaining Trustees. Upon ceasing to be a Trustee, he shall execute and deliver such documents as the remaining Trustees shall deem necessary. Upon the incapacity or death of any Trustee, his legal representative shall execute and deliver on his behalf such documents as the remaining Trustees shall deem necessary. Section 4.4. Vacancies. (a) A vacancy shall occur in the event of death, resignation, bankruptcy, adjudicated incompetence or other incapacity to exercise the duties of the office, or removal of a Trustee. If a Local Government fails to qualify as a Participant for a period of 30 days or withdraws as E a Participant, any employee of that Local Government who is a Trustee shall no longer qualify as a Trustee, and a vacancy will be deemed to have occurred. (b) No such vacancy shall operate to annul this Trust Agreement or to revoke any existing agency created pursuant to the terms of this Trust Agreement. In the case of an existing vacancy (other than by reason of an increase in the number of Trustees), a majority of the Trustees continuing in office acting by resolution may fill such vacancy, provided the requirements of Section 4.2(b) are complied with, and any Trustee so appointed by the Board of Trustees shall hold office until the next annual election of Trustees. Section 4.5. Meetings. (a) Meetings of the Board of Trustees shall be held from time to time upon the call of the Chairman, the Vice Chairman, the Secretary or any two Trustees. Regular meetings of the Board of Trustees may be held without call or notice at a time and place fixed by the by -laws or by resolution of the Board of Trustees. Notice of any other meeting shall be mailed or otherwise given not less than 48 hours before the meeting but may be waived in writing by any Trustee either before or after such meeting. Any notice required by the Freedom of Information Act of 1967 (Ark. Code Ann. §25 -19 -101 et seq.) shall also be given. The attendance of a Trustee at a meeting shall constitute a waiver of notice of such meeting except where a Trustee attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened. A quorum for all meetings of the Board of Trustees shall be a majority of the Trustees. Unless specifically provided otherwise in the Trust Agreement, any action of the Board of Trustees may be taken at a meeting by vote of a majority of the Trustees present (a quorum being present) or, if permitted by applicable law, without a meeting for the purpose of polling Trustees concerning any specific matter which any Trustee feels requires a vote of the Board of Trustees, but which he also feels is not sufficient to require calling a special meeting of the Board of Trustees. All action taken by polling the Trustees shall become final upon receipt 15 days written ratification by a majority of the Trustees of such action. (b) Any committee of the Board of Trustees, including an executive committee, if any, may act with or without a meeting. A quorum for all meetings of any such committee shall be a majority of the members thereof. Unless otherwise specifically provided in this Trust Agreement, any action of any such committee may be taken at a meeting by vote of a majority of the members present (a quorum being present) or, without a meeting, by written consent of a majority of the members. (c) With respect to actions of the Board of Trustees and any committee thereof, Trustees who have an interest in any action to be taken by the Board of Trustees or any committee may be counted for quorum purposes under this Section 4.5, but only if such Trustee has previously given notice to the Board of Trustees of such interest. Such Trustee shall not be entitled to vote. E 17G (d) All or any one or more Trustees may, if permitted by applicable law, participate in a meeting of the Board of Trustees or any committee thereof by utilizing conference telephone or similar communications equipment by means of which all individuals participating in the meeting can hear each other and participation in a meeting pursuant to such communications shall constitute presence in person at such meeting. The minutes of any meeting of the Board of Trustees held by utilizing such communications equipment shall be prepared in the manner as those of a meeting of the Board of Trustees held in person. Section 4.6. Officers. The Board of Trustees shall annually elect, from among its members, a Chairman and a Vice Chairman who shall have such duties as the Board of Trustees shall deem advisable and appropriate. The Board of Trustees may elect or appoint, from among their number or otherwise, or may authorize the Chairman to appoint, a Treasurer and a Secretary, one or more Assistant Secretaries and Assistant Treasurers and such other officers or agents, who shall have such powers, duties and responsibilities as the Board of Trustees may deem to be advisable and appropriate. Two or more offices, except those of Chairman, Vice Chairman, Treasurer and Secretary, may be held by the same Person. The Treasurer and the Secretary, if not themselves members of the Board of Trustees, shall attend meetings of the Board of Trustees but shall have no voting power. Section 4.7. By-Laws. The Board of 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. Section 4.8. Execution of Documents. All documents or instruments which require the signature of the Board of Trustees shall be signed by the Chairman of the Board of Trustees or by such other Person as is so designated by resolution of the Board of Trustees. ARTICLE V POWERS AND DUTIES OF THE BOARD OF TRUSTEES Section 5.1. General. Subject to the rights of the Participants as provided herein, the Board of Trustees shall have, without other or further authorization, power to administer the Trust and the affairs of the Trust and such powers of delegation as may be permitted by this Trust Agreement. The Board of Trustees may do and perform such acts and things as in their sole judgment and discretion are necessary and proper for the administration of the Trust and the investment of the Trust Property, but shall invest with that degree of judgment and care, under circumstances then prevailing, which Persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital and need for liquidity, as well as the probable income to be derived, to promote the interests of the Trust and the Participants. 10 Illl• � Ill)• � Illy �■ �■ � Il♦ Illy Ill>• Illy Il• Section 5.2. Leeal Title. Title to all of the Trust Property shall be vested in the Board of Trustees. The Board of Trustees shall have full and complete power to cause legal title to any Trust Property to be held 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 Board of Trustees may determine, so long as in its judgment the interest of the Trust therein is adequately protected. Section 5.3. Powers. The Board of Trustees shall have full and complete power, subject in all respect to Article V hereof: (a) to establish, conduct, and operate, one (1) or more Common Trust Funds for the pooling of funds of Participants; (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 Trust Property subject to subsection (c) and (d) below; (c) to contract for, and enter into agreements with respect to, the purchase and sale of Permitted Investments in a Common Trust Fund; and (d) to acquire Incidental Trust Property by lease, purchase, exchange or otherwise, and to dispose of such Incidental Property. Section 5.4. Disposition of Assets. Subject in all respects to Article VII hereof, the Board of 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. Section 5.5. Delegation: Committees. The Board of Trustees shall have full and complete power (consistent with its administration of the Trust, the conduct of its affairs, and the investment and disposition of the Trust Property) to delegate from time to time to such one or more of their number (who may be designated and shall constitute a committee of the Board of Trustees) or to officers, employees or agents of the Trust (including without limitation, the Trust Administrator, the Investment Advisor and the Custodian of Investments) the doing of such acts and things and the execution of such instruments either in name of the Board of Trustees or as its attorney or attorneys, or otherwise, as the Board of Trustees may from time to time deem expedient and appropriate in the furtherance of the business affairs and purposes of the Trust. Section 5.6. Collection. The Board of Trustees shall have full and complete power: (i) to collect, sue for, receive and receipt for all sums of money or other property due to the Trust; (ii) to consent to extensions of the time for payment, or to the renewal of any securities, 11 7M investments or obligations; (iii) 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; (iv) 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; (v) to exercise any power of sale held by it, 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; (vi) to be a party 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; (vii) to participate in any arrangement for enforcing or protecting the interest of the Board of Trustees as the owner or holder of such securities, investments, or obligations, and to pay any assessment levied in connection with such reorganization or arrangement; (viii) 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 (ix) to pay or satisfy any debts or claims upon any evidence that the Board of Trustees shall deem sufficient. Section 5.7. Payment of Expenses. The Board of Trustees shall have full and complete power: (i) to incur and pay any charges or expenses which in the opinion of the Board of Trustees are necessary or incidental to or proper for carrying out any of the purposes of this Trust Agreement; (ii) to reimburse others for the payment therefore; and (iii) to pay appropriate compensation or fees from the funds of the Trust to Persons with whom the Board of Trustees has contracted or transacted business. The Board of Trustees shall fix the compensation, if any, of all officers, employees and agents of the Trust. The Board of Trustees may reimburse any Trustee for expenses actually and reasonably incurred by such Trustee on behalf of the Trust. Section 5.8. Borrowing and Indebtedness. The Board shall not have the power to borrow money or incur indebtedness on behalf of the Trust or authorize the Trust to borrow money or incur indebtedness except as authorized in Section 7.2(ii). Section 5.9. Deposits. The Board of Trustees shall have full and complete power to deposit, in such manner as may now and hereafter be permitted by law, any moneys or funds included in the Trust Property and intended to be used for the payment of expenses of the Trust or the Board of Trustees in interest - bearing accounts with one or more banks, trust companies, savings and loan associations or other financial institutions, provided such deposits are, at the time they are made, Permitted Investments. Such deposits shall be subject to withdrawal at such time and in such manner as the Board of Trustees may determine, and the Board of Trustees shall have no responsibility for any loss which may occur by reason of the failure of the depository. Section 5.10. Valuation. The Board of Trustees shall have full and complete power to determine in good faith conclusively the value of any of the Trust Property and to revalue the Trust Property. 12 Section 5.11. Fiscal Year: Accounts. The Board of 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. Unless otherwise determined by the Board of Trustees pursuant to this Section 5. 11, the fiscal year of the Trust shall terminate on December 31 and commence on January 1 of each calendar yam• Section 5.12. Affiliates. The Trust shall not enter into contracts or transactions with any Affiliate of a Trustee other than in the normal course of business. Section 5.13. Investment Program. The Board of Trustees shall use their best efforts to obtain through the Investment Advisor, a continuing and suitable investment program, consistent with the investment policies and objectives of the Trust set forth in Article VII of this Trust Agreement, and the Board of Trustees shall be responsible for reviewing and approving or rejecting the investment program presented by the Investment Advisor. Subject to the provisions of Sections 5.5 and 6.1 hereof, the Board of Trustees may delegate functions arising under this Section 5.13 to one or more Trustees. Section 5.14. Power to Contract. Appoint. Retain and Employ. Subject to the provisions of Sections 5.5 and 6.1 hereof with respect to delegation of authority by the Board of Trustees, the Board of Trustees shall have full and complete power to appoint, employ, retain or contract on behalf of the Trust with any Person of suitable qualifications and high repute (including any corporation, partnership, trust or other entity of which no Trustee may be an Affiliate) as the Board of Trustees may deem necessary or desirable for the transaction of the affairs of the Trust, including any Person or Persons who, under the supervision of the Board of Trustees, may, among other things: (i) serve as the Investment Advisor; (ii) serve as the Trust Administrator; (iii) serve as the Custodian of Investments; (iv) market the trust investment program; (v) furnish reports to the Board of Trustees and provide research, economic, and statistical data in connection with the Trust's investments; (vi) act as consultants, accountants, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians or agents for collection, insurers or insurance agents, registrar for Units or in any other capacity deemed by the Board of Trustees to be necessary or desirable; (vii) investigate, select and, on behalf of the Trust, conduct relations with Persons acting in such capacities and pay appropriate fees to, and enter into appropriate contracts 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; (viii) substitute any other Person for any such Persons; (ix) 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 (x) assist in the performance of such managerial functions necessary in the management of the Trust as may be agreed upon with the Board of Trustees. Section 5.15. Insurance. The Board of Trustees shall have full and complete power to purchase and pay for, entirely out of Trust Property, insurance policies, or other forms of risk 13 'im coverage, to insure or protect the Trust and members of the Board of Trustees, officers, employees and agents, of the Trust individually against all claims and liabilities of every nature arising by reason of holding or having held any such office or position, or by reason of any action alleged to have been taken or omitted by the Trust or any such Person as member of the Board of Trustees, officer, employee or agent, including any action taken or omitted that may be determined to constitute negligence, whether or not the Trust would have the power to indemnify such Person against such liability. The Board of Trustees is authorized to obtain such coverage from the Arkansas Municipal League Legal Defense Fund. Section 5.16. Seal. The Board of Trustees shall have full and complete power to adopt and use a seal for the Trust but, unless otherwise required by the Board of Trustees, it shall not be necessary for the seal to be placed on, and its absence shall not impair the validity of, any document, instrument or other paper executed and delivered by or on behalf of the Trust. Section 5.17. Indemnification. In addition to the mandatory indemnification provided for in Section 8.3 hereof, the Board of Trustees shall have full and complete power, to the extent permitted by applicable laws, to indemnify or enter into agreements with respect to indemnification with any Person with whom the Trust or the Board of Trustees has dealings including, without limitation, the Investment Advisor, the Trust Administrator and the Custodian of Investments, to such extent as the Board of Trustees shall determine. Section 5.18. Remedies. Notwithstanding any other provision in this Trust Agreement, when the Board of Trustees deems 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 Board of Trustees shall have full power to pursue any remedies permitted by law which in its sole judgment, are in the interests of the Trust, and the Board of 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. Section 5.19. Information Statement. The Board of Trustees shall prepare, publish and distribute the Information Statement and amend or supplement the same from time to time. Section 5.20. Reports. The Board of Trustees shall cause to be prepared annually: (i) a report of operations containing a statement of assets and liabilities and statements of operation and of changes in net assets of the Trust prepared in conformity with generally accepted accounting principles for and as of the end of the most recently completed fiscal year of the Trust; (ii) an opinion of an independent certified public accountant on such financial statements based on an examination of the books and records, of the Trust made in accordance with generally accepted auditing standards; and (iii) sufficient information to establish the Trust's compliance for such fiscal year with the investment policy established pursuant to this Agreement. A signed copy of such report and opinion shall be filed with the Board of Trustees within one hundred twenty (120) days after the close of the fiscal year covered thereby. Within five (5) days from the receipt thereof, the Board of Trustees shall cause a copy of such 14 T8.0� A81 documents to be (i) filed with the Secretary of State, and (ii) mailed to each Participant of record, by first class mail, postage prepaid. The Board of Trustees shall, in addition, furnish quarterly to each Participant a copy of an interim report containing an unaudited balance sheet of the Trust as at the end of such quarterly period and statements of operations and changes in net assets for the period from the beginning of the then current fiscal year to the end of such quarterly period. Section 5.21. Further Powers. The Board of Trustees shall have full and complete power to take all such actions, do all such matters and things and execute all such instruments as it deems 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 Board of Trustees in good faith shall be conclusive. In construing the provisions of this Trust Agreement, the presumption shall be in favor of a grant of power to the Board of Trustees. The Board of Trustees shall not be required to obtain any court order to deal with the Trust Property. ARTICLE VI THE INVESTMENT ADVISOR, TRUST ADMINISTRATOR AND CUSTODIAN OF INVESTMENTS Section 6.1. Appointment. The Board of Trustees is responsible for the investments of the Trust consistent with this Trust Agreement and for the general administration of the business and affairs of the Trust conducted by the officers, agents, employees, investment advisors, administrators, distributors or independent contractors of the Trust. However, the Trustees are not required personally to conduct all of the routine Business of the Trust and, consistent with their responsibility as stated herein, the Board of Trustees may appoint, employ or contact on behalf of the Trust with the Investment Advisor as an investment advisor to the Board of Trustees, the Trust Administrator as an administrator for the Trust and the Custodian of Investments as the custodian of Trust Property may grant or delegate such authority to the Investment Advisor, the Trust Administrator and the Custodian of Investments (pursuant to the terms of Section 5.5 hereof) or to any other Person the services of whom are obtained by the Investment Advisor, the Trust Administrator or the Custodian of Investments, as the Board of Trustees may, in its sole discretion, deem to be necessary or desirable for the efficient management of the Trust. The Board of Trustees may appoint one or more Persons to serve jointly as Investment Advisors, Trust Administrators and the Custodian of Investments. The same Person may serve simultaneously as the Trust Administrator, the Investment Advisor and /or the Custodian of Investments. Subject to the provisions of Section 6.2, Stephens Capital Management Company, a division of Stephens, Inc., is hereby appointed the Investment Advisor. Subject to the provisions of Section 6.3, the Arkansas Municipal League is hereby appointed the Trust Administrator. Subject to the provisions of Section 6.4, Stephens, Inc. is hereby appointed the Custodian of Investments. 15 M M M M Section 6.2. Duties of the Investment Advisor. The duties of the Investment Advisor shall be those set forth in the Investment Advisory Agreement to be entered into between the Board of Trustees on behalf of the Trust and the Investment Advisor. Such duties may be modified by the Board of Trustees from time to time by the amendment of the Investment Advisory Agreement. Subject to Article VII hereof, the Board of Trustees may authorize the Investment Advisor to effect purchases, sales or exchanges of Trust Property on behalf of the Board of Trustees or may authorize any officer, employee, agent or member of the Board of Trustees to effect such purchases, sales or exchanges pursuant to recommendations of the Investment Advisor, all without further action by the Board of Trustees. Any and all of such purchases, sales and exchanges shall be deemed to be authorized by the Board of Trustees. The Advisory Agreement may authorize the Investment Advisor to employ other Persons to assist it in the performance of its duties. Section 6.3. Duties of the Trust Administrator. The duties of the Trust Administrator shall be to provide day to day contact and information for the Participants; to approve and direct the payment of costs and expenses of the Trust; to provide overall supervision and direction for the operation of the Trust; to provide regular reports and recommendations to the Board of Trustees on the operations of the Trust; and perform other acts on behalf of the Board of Trustees as authorized by the Board of Trustees. Section 6.4. Duties of the Custodian of Investments. The duties of the Custodian of Investments shall be to act as safekeeping agent for investments of the Trust. Section 6.5. Successors. In the event that, at any time, the position of Investment Advisor, Trust Administrator or Custodian of Investments shall become vacant for any reason, the Board of Trustees may appoint, employ or contract with a successor Investment Advisor, Trust Administrator or Custodian of Investments. ARTICLE VII INVESTMENTS Section 7.1. Statement of Investment Policy and Objective. Subject to the prohibitions and restrictions contained in Section 7.2 hereof, the general investment policy and objective of the Trust shall be to provide the Participants of the Trust high investment yields while maintaining liquidity and preserving capital by investing in Permitted Investments. Section 7.2. Restrictions Fundamental to the Trust. Notwithstanding anything in this Trust Agreement which may be deemed to authorize the contrary, the Board of Trustees: (i) may not make any investment other than investments authorized by the Act or other applicable provisions of law, as the same may be adopted or amended from time to time, all as herein defined as Permitted Investments; provided, however, that the Board of Trustees and the Trust shall not be responsible to comply with investment restrictions set forth in a Participant's 16 182 • • 18T charter, other governing document(s), ordinances or elsewhere, if such investment restrictions are more restrictive than those provided herein; . (ii) may not borrow money or incur indebtedness, whether or not the proceeds thereof are intended to be used to purchase Permitted Investments, 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, such as by the use of a reverse repurchase transaction related to Permitted Investments owned by the Trust; (iii) may not make loans, unless such loans are Permitted Investments; and (iv) may not hold or provide for the custody of any Trust Property in a manner not authorized by law or by any institution or Person not authorized by law. Section 7.3. Amendment of Restrictions. The restrictions set forth in Section 7.2 hereof are fundamental to the operation and activities of the Trust and may not be changed without the affirmative vote of a majority of the Participants, except that such restrictions may be changed by the Board of Trustees so as to make them more restrictive when necessary to conform the investment program and activities of the Trust to the laws of the State of Arkansas and the United States of America as they may from time to time be amended. Section 7.4. Maximum Aegregate Investment of Participants. Notwithstanding any other provision hereof, the Trust shall not accept funds from a Participant for deposit into the Trust if the acceptance of such deposit would cause the sum of the investments of all Participants on deposit with the Trust at such time (not including for such purpose earnings on Participants' deposits) to exceed $500,000,000. This amount may be changed by action of the Board of Trustees. Section 7.5. Minimum Investment. The Board of Trustees may from time to time determine a minimum total investment for each Participant in a Common Trust Fund. Section 7.6. Closing an Investment in a Common Trust Fund. Whenever a Participant's investment in a Common Trust Fund is less than the minimum established by the Board of Trustees, the Board of Trustees may redeem the Units representing such balance and close the Participant's investment in such Common Trust Fund, provided that thirty days' prior notice is given to such Participant. If the Board of 'Trustees changes 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. Section 7.7. Collected Funds. Deposits to the Trust may be made by check or wire transfer, but must be collected funds before they will be invested in a Common Trust Fund. 17 ARTICLE VIII LIMITATIONS OF LIABILITY Section 8.1. Liability to Third Persons. No Treasurer shall be subject to any personal liability whatsoever, in tort, contract or otherwise to any Person or Persons in connection with Trust Property or the affairs of the Trust. No member of the Board of Trustees, officer, employee, advisor, consultant or agent of the Trust shall be subject to any personal liability whatsoever in tort, contract or otherwise, to any other Person or Persons in connection with Trust Property or the affairs of the Trust, except that each shall be personally liable for his bad faith, willful misconduct, gross negligence or reckless disregard of his duties or his failure to act in good faith in the reasonable belief that his action was in the best interests of the Trust. All such third Persons shall look solely to the Trust Property for satisfaction of claims of any nature arising in connection with the affairs of the Trust. Section 8.2. Liability to the Trust or to the Participants. No Trustee, officer, employee, advisor, consultant or agent of the Trust shall be liable to the Trust or to any Participant, Trustee, officer, employee, advisor, consultant or agent 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 his own bad faith, willful misfeasance, gross negligence or reckless disregard of his duties. The provisions of this Section 8.2 shall not limit the liability of any agent (including, without limitation, the Investment Advisor, the Trust Administrator and the Custodian of Investments) of the Trust with respect to breaches by it of a contract between it and the Board of Trustees. Section 8.3. Indemnification. (a) The Trust shall indemnify, but only to the extent of the earnings of the Trust, each of the Trustees and such officers, employees, advisors, consultants and agents as are designated by the Board of Trustees to receive such indemnification, against all liabilities and expenses (including, without limitation, amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees) reasonably incurred by him in connection with the defense or disposition of any action, suit or other proceeding by the Trust or any other Person, whether civil or criminal, in which he may be involved or with which he may be threatened, while in office or thereafter, by reason of his being or having been such a Trustee, officer, employee, advisor, consultant or agent, except as to any matter as to which he shall have been adjudicated to have acted in bad faith or with willful misfeasance or reckless disregard of his duties or gross negligence or, in the case of the Investment Advisor, the Trust Administrator or the Custodian of Investments in willful or negligent violation of the restrictions on investments of the Trust Property. The provisions of this Section 8.3 shall not be construed to permit the indemnification of any agent of the Trust with respect to breaches by it of a contract between it and the Board of Trustees. As to any matter disposed of by a compromise payment by the Trustee, officer, employee, advisor, consultant or agent pursuant to a consent decree or otherwise, no indemnification either for said payment or for any other expenses shall be provided unless the Trust shalt have received a written opinion from independent counsel approved by the Board of V Trustees to the effect that such compromise payment was generally consistent with the probable outcome of litigation. No Participant shall be liable to any Person with respect to any claim for indemnity or reimbursement, and any Trustee, officer, employee, advisor, consultant or agent may satisfy any right of indemnity or reimbursement granted herein or to which he may be otherwise entitled only out of the earnings of the Trust. The Board of Trustees may make advance payments in connection with indemnification under this paragraph (a) of this Section 8.3, provided that the indemnified Trustee, officer, employee, advisor, consultant or agent shall have given a written undertaking to reimburse the Trust in the event that it is subsequently determined that he is not entitled to such indemnification. (b) Any action taken by or conduct on the part of the Custodian of Investments, the Investment Advisor, the Trust Administrator, a Trustee, an officer, an employee or an agent of the Trust in conformity with, or in good faith reliance upon, the provisions of Section 8.7 hereof shall not, for the purpose of this Trust Agreement (including, without limitation, Sections 8.1 and 8.2 and this Section 8.3) constitute bad faith, willful misfeasance, gross negligence or reckless disregard of his duties. Section 8.4. 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. Section 8.5. Apparent Authority. No purchaser, seller, transfer agent or other Person dealing with the Board of Trustees or the Investment Advisor shall be bound to make any inquiry concerning the authority of the Board of Trustees or the Investment Advisor with regard to the validity of any transaction purporting to be made by the Board of Trustees or the Investment Advisor 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 Board of Trustees or the Investment Advisor. Section 8.6. Recitals. Any written instrument creating an obligation of the Trust shall be conclusively taken to have been executed by the Board of Trustees or a Trustee, officer, employee or agent of the Trust only in such capacity under this Trust Agreement. Any written instrument creating an obligation of the Trust shall refer to this Trust Agreement and 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, Treasurers, 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. The omission of any recital required pursuant to this Section 8.6 shall not operate to impose personal liability upon any of the Trustees, Participants, Treasurers, officers, employees or agents of the Trust. Section 8.7. Reliance on Experts. Etc. Each Trustee and each officer of the Trust shall, in the performance of his duties, be fully and completely justified and protected with regard to any act or 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 Investment Advisor, the Trust Administrator, the Custodian 19 M 185- of Investments, accountants, appraisers or other experts or consultants selected with reasonable care by the Board of Trustees or officers of the Trust. Section 8.8. Liability Insurance. The Board of Trustees may obtain insurance or other forms of risk coverage for the protection of the Trust Property, and the Trustees, Participants, Treasurers, officers, employees and agents of the Trust in such amount as the Board of Trustees shall deem adequate to cover all foreseeable tort and contract liability to the extent available at reasonable rates. The Board of Trustees is authorized to obtain such coverage from the Arkansas Municipal League Legal Defense Fund. ARTICLE IX UNITS OF PARTICIPATION Section 9.1. Division Into Units. Common Trust Fund Assets held for the credit of a Common Trust Fund shall be divided into Units of participation, and each Participant who invests in such Common Trust Fund shall be the owner of such Units in proportion to the amount of the Participant's investment. The number of Units that may be used to measure and represent the proportionate allocation of beneficial interest among Participants is unlimited. All Units of a Common Trust Fund shall be of one class representing equal distribution, liquidation and other rights with respect to the Common Trust Fund. The beneficial interests hereunder measured by the Units shall not entitle a Participant in a Common Trust Fund to preference, preemptive, appraisal, conversion or exchange rights of any kind with respect to the Trust or the Trust Property. Title to the Trust Property of every description is vested in Board of Trustees on behalf, and for the beneficial interest, of the Participants. The Participants shall have no interest in Trust Property other than the beneficial interest conferred hereby and measured by their Units of participation in a Common Trust Fund 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 Units to them, except as provided in Section 11.2 hereof. Section 9.2. Allocation of Units. (a) The Board of Trustees, in its discretion, may, from time to time, allocate Units, in addition to the then allocated Units, to Participants in a Common Trust Fund for such amounts and such types of consideration (including, without limitation, each business day in accordance with the maintenance of a constant net asset value per Unit as set forth in Section 11.2 hereof), and on such terms as the Board of_Trustees may deem best. In connection with any allocation of Units, the Board of Trustees may allocate fractional Units. The Board of Trustees may from time to time adjust the total number of Units allocated to a Common Trust Fund without thereby changing the proportionate beneficial interests in the Common Trust Fund. Reductions or increases in the number of allocated Units may be made in order to maintain a constant net asset value per Unit as set forth in Section 11.2 hereof. Units shall be allocated and redeemed as whole Units and /or one hundredths (1 /100ths) of a Unit or multiples thereof. 20 � l� � � � � � 1. 11♦ >. � � a � � (b) Units may be allocated only to Local Governments that have become Participants in accordance with Section 2.1 hereof. (c) The minimum amount of funds which must be maintained in a Common Trust Fund by a Participant at any one time shall be as set forth in the Information Statement. Section 9.3. Evidence of Unit Allocation. Evidence of Unit allocation of a Common Trust Fund shall be reflected in the Unit Register maintained by or on behalf of the Trust pursuant to Section 10.1 hereof, and the Trust shall not be required to issue certificates as evidence of Unit allocation. Section 9.4. Redemption of Units to Maintain Constant Net Asset Value. Units shall be subject to redemption pursuant to the procedure for reduction of outstanding Units set forth in Section 11.2 hereof in order to maintain a constant net asset value per Unit. Section 9.5. Redemption of Units at the Request of a Participant. Payments by the Board of Trustees to Participants, and the reduction of Units resulting therefrom, are, for convenience, referred to in this Trust Agreement as "redemptions." Any and all allocated Units may be redeemed at the option of the Participant whose beneficial interest in a Common Trust Fund is measured by such Units, upon and subject to the terms and conditions provided in this Trust Agreement and the Information Statement. The Trust shall, upon application of any Participant, promptly redeem from such Participant allocated Units for an amount per Unit equivalent to the proportionate interest measured by each Unit in the net assets of the Common Trust Fund at the time of redemption. The procedures for effecting redemption shall be adopted by the Board of Trustees and as set forth in the Information Statement of the Trust, as the same may be amended from time to time; provided, however, that such procedures shall not be structured so as to restrict substantially and materially the ability of a Participant to withdraw funds from the Trust by the redemption of Units. Section 9.6. Suspension of Redemption; Postponement of Payment. Each Participant, by its adoption of this Trust Agreement, agrees that the Board of Trustees may, without the necessity of a formal meeting of the Board of Trustees, temporarily suspend the right of redemption or postpone the date of payment for redeemed Units for the whole or any part of any period (i) during which there shall have occurred any state of war, national emergency, banking moratorium or suspension of payments by banks in the State of Arkansas or any general suspension of trading or limitation of prices on the New York or American Stock Exchange (other than customary weekend and holiday closings) or (ii) during which any financial 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 as measured by its Units or the accrued interest and earnings thereon. Such suspension or payment shall take effect at such time as the Board of Trustees shall specify but not later than the close of business on the business day next following the declaration of suspension, and 21 1$g:. thereafter there shall be no right of redemption or payment until the Board of 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 the clause (i) or (ii) above shall have expired (as to which, the determination of the Board of Trustees shall be conclusive). In the case of a suspension of the right of redemption or a postponement of payment for redeemed Units, a Participant may either (i) withdraw its request for redemption or ,(ii) receive payment based on the net asset value existing after the termination of the suspension. Section 9.7. Minimum Redemption. The minimum redemption from a Common Trust Fund shall be as set forth in the Information Statement. Section 9.8. Defective Redemption Requests. In the event that a Participant shall submit a request for the redemption of a greater number of Units than are then allocated to such Participant, such request shall not be honored. Each Participant, by its adoption of this Trust Agreement, agrees that the Board of Trustees shall have full and complete power to redeem an amount of the Units allocated to such Participant, at a redemption price determined in accordance with Section 9.5 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. ARTICLE X RECORD OF UNITS Section 10.1. Unit Register. The Unit Register shall be kept by or on behalf of the Board of Trustees and shall contain (i) the names and addresses of the Participants, (ii) the number of Units representing their respective beneficial interests in a Common Trust Fund, and (iii) a record of all allocations and redemptions thereof. Such Unit Register shall be conclusive as to the identity of the Participants to which the Units are allocated. Only Participants whose allocation of Units is recorded on such Unit Register shall be entitled to receive distributions with respect to Units or otherwise to exercise or enjoy the rights and benefits related to the beneficial interest hereunder represented by the Units. No Participant shall be entitled to receive any distribution or to have notices given to it as herein provided until it has given its appropriate address to such officer or agent of the Trust as shall keep the Unit Register for entry thereon. Section 10.2. Re2istmr. The Board of Trustees shall have full and complete power to employ a registrar. Unless otherwise determined by the Board of Trustees, the Unit Register shall be kept by the Custodian for Investments which shall serve as the registrar for the Trust. The registrar shall record the origival allocations of Units in the Unit 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 Board of Trustees. Section 10.3. Owner of Record. No Person becoming entitled to any Units 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 ON Units are allocated. Such Person may become entitled to the redemption value of such Units as provided by law. Upon such Person becoming entitled to such redemption value and applying for the payment thereof and presenting proof of such entitlement as the Board of Trustees may in its sole discretion deem appropriate, the Participant of record to which such Units are allocated shall be deemed to be the Participant to which such Units are allocated under Section 9.2 hereof, and neither the Board of Trustees, the registrar nor any officer or agent of the Trust shall be affected for purposes of recording allocation of Units by any notice of such merger, reorganization, consolidation, bankruptcy, insolvency or other event. Section 10.4. No Transfer of Units. The beneficial interests measured by the Units shall not be transferable, in whole or in part, other than to the Trust itself for purposes of redemption. Section 10.5. Limitation of Responsibility. The Board of Trustees shall not, nor shall the Participants or any officer, registrar or other agent of the Trust, be bound to determine the existence of any trust, express, implied or constructive, or of any charge, pledge or equity to which any of the Units or any interest therein are subject, or to ascertain or inquire whether any redemption of any such Units by any Participant or its representatives is authorized by such trust, charge, pledge or equity; or to recognize any Person as having any interest therein except the Participant recorded as the Participant to which such Units are allocated. The receipt of moneys by the Participant in whose name any Unit is recorded or by the duly authorized agent of such Participant shall be a sufficient discharge for all moneys payable or deliverable in respect of such Unit and from all responsibility to see to the proper application thereof. Section 10.6. Notices. Any and all notices to which Participants may be entitled and any and all communications shall be deemed duly served or given if mailed, postage prepaid, addressed to Participants of record at their last known post office addresses as recorded on the Unit Register provided for in Section 10.1 hereof. ARTICLE XI DETERMINATION OF NET ASSET VALUE AND NET INCOME OF A COMMON TRUST FUND Section 11.1. Net Asset Value. The net asset value of each allocated Unit of a Common Trust Fund shall be determined once on each business day and at such other times as the Board of Trustees by resolution may determine. The method of determining net asset value of a Common Trust Fund, including whether each Unit of a Common Trust Fund is intended to remain at a constant value of $1.00,per Unit, shall be established by the Board of Trustees and shall be set forth in the Information Statement. The duty to make the daily calculations may be delegated by the Board of Trustees to such person as the Board of Trustees may designate. If the Board of Trustees intends to maintain a constant net asset value of $1.00 per Unit for a Common Trust Fund and, in the opinion of the Board of Trustees, circumstances arise which present a significant risk that the price per Unit might change, the Board of Trustees may take whatever corrective actions they deem advisable in the circumstances, including reducing on a 23 M M 189 - pro rata basis each Participant's Units in the event of losses, distributing additional Units in the event of gains, suspension or rescission of dividends, declaration of a special capital distribution, sales of Common Trust Fund securities prior to maturity to reduce average maturity or to realize capital gains or losses, or redemption of Units in kind, in an endeavor to maintain a net asset value of $1.00 per Unit. Section 11.2. Net Income. The net income (including unrealized gains and losses on the portfolio assets) of a Common Trust Fund shall be determined once on each business day and at such other times as the Board of Trustees may determine. The method of determining net income of a Common Trust Fund shall be established by the Board of Trustees and shall be set forth in the Information Statement. The duty to make the daily calculations may be delegated by the Board of Trustees to such person as the Board of Trustees may designate. Net income will be accrued as full and fractional accrued Units at the rate of one (1) accrued Unit for each dollar of income. The accrued Units will then be allocated to Participants in proportion to their number of Units in the Common Trust Fund as of the close of business on such day. At the end of each calendar month, all accrued Units will be converted into actual Units and credited to each Participant, regardless of whether the Participant then has an investment in the Common Trust Fund. Units attributable to income of the Common Trust Fund may only be redeemed on or after the end of the calendar month for which they are credited to the Participant. ARTICLE XII RECORDING OF TRUST AGREEMENT Section 12.1. Recording. This Trust Agreement, each Joinder Agreement and amendment hereto shall be filed with the Secretary of State, and such documents (other than a supplement to add a Participant) shall be accompanied by a certificate signed and acknowledged by the Chairman of the Board of Trustees stating that such action was duly taken in the manner provided for herein; and unless such document sets forth some later time for the effectiveness of such document, such document shall be effective upon its filing. This Trust Agreement, each Joinder Agreement and any amendment hereto may further be filed, recorded or lodged as a document of public record in such place or places and with such official or officials as the Board of Trustees may deem appropriate. Each Joinder Agreement or amendment so filed, recorded or lodged shall be accompanied by a certificate signed and acknowledged by the Chairman of the Board of Trustees stating that such action was duly taken in the manner provided for herein; and unless such amendment or such certificate sets forth some earlier or later time for the effectiveness of such amendment, such amendment shall be effective upon its filing. A Trust Agreement amended pursuant to $ ection 13. 1, containing or restating this original Trust Agreement and all amendments therefore made, 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 Trust Agreement and the various amendments thereto. Notwithstanding the foregoing provisions of this Section 12. 1, no filing (other than filing with the Secretary of State) or recordation pursuant to the terms of this Section 24 i9d 12.1 shall be a condition precedent to the effectiveness of this Trust Agreement, any Joinder Agreement or amendment hereto. ARTICLE XIII AMENDMENT OR TERMINATION OF TRUST; DURATION OF THE TRUST Section 13.1. Amendment or Termination. (a) Except as provided in Section 7.4, the provisions of this Trust Agreement may be amended or altered, or the Trust may be terminated, at any meeting of the Participants called for that purpose, by the affirmative vote of a majority of the Participants, or by an instrument or instruments in writing, without a meeting, signed by two- thirds (2/3) of the Board of Trustees and a majority of the Participants. The Board of Trustees may, from time to time by a two - thirds (2/3) vote of the Trustees, and after fifteen (15) days' prior written notice to the Participants, amend or alter the provisions of this Trust Agreement, without the vote or assent of the Participants, to the extent deemed by the Board of Trustees in good faith to be necessary to conform this Trust Agreement to the requirements of applicable law or regulations or any interpretation thereof by a court or other governmental agency of competent jurisdiction, but the Board of Trustees shall not be liable for failing so to do. Notwithstanding the foregoing, no amendment may be made pursuant to this Section 13.1 that would: (i) change any rights with respect to any allocated Units of the Trust by reducing the amount payable thereof upon liquidation of the Trust or that would diminish or eliminate any voting rights of the Participants, except with the vote or written consent of two- thirds (2/3) of the Participants entitled to vote thereon; (ii) cause any of the investment restrictions contained in Section 7.2 hereof to be less restrictive without the affirmative vote of a majority of the Participants entitled to vote thereon; (iii) change the limitations on personal liability of the Participants and Trustees; or (iv) change the prohibition on assessments upon Participants. (b) 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 Participants or by the Board of Trustees as aforesaid and a copy of the Agreement, as amended, in recordable form, and executed by a majority of the Trustees, shall be conclusive evidence of such amendment. (c) Upon the termination of the Trust pursuant to this Section 13.1: (i) The Trust shall carry on no business except for the purpose of winding up its affairs; (ii) The Board of Trustees shall proceed to wind up the affairs of the Trust and all of the powers of the Board of Trustees under this Trust Agreement 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 25 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 dispositions 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 the affirmative vote of not less than a majority of the Trustees; 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 Board of Trustees shall distribute the remaining Trust Property, in cash, in kind or partly in each, among the Participants according to their respective proportionate allocation of Units in the Common Trust Funds. (d) 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 Board of 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 canceled and discharged. Section 13.2. Duration. The Trust shall continue in existence in perpetuity, subject in all respects to the provisions of this Article XIII. ARTICLE XIV MISCELLANEOUS Section 14.1. Governing Law. This Trust Agreement is executed by the initial Participants and delivered in the State of Arkansas 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 said State of Arkansas. Section 14.2. Counterparts. This Trust Agreement 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. Section 14.3. Reliance by Third Parties. Any certificate executed by an individual who, according to the records of the Trust, or of any official or public body or office in which this Trust Agreement may be recorded, appears to be a Trustee hereunder or the Secretary or the Treasurer of the Board of Trustees, certifying to (i) the number or identity of the Trustees or Participants; (ii) the due authorization of the execution of any instrument or writing; (iii) the form of any vote passed at a meeting of the Board of Trustees or Participants; (iv) the fact that the number of Trustees or Participants present at any meeting or executing any written 26 192 �I 7 instrument satisfies the requirements of this Trust Agreement; (v) the form of any by -laws adopted by or the identity of any officers elected by the Board of Trustees; or (vi) the existence of any fact or facts which in any manner related to the affairs of the Trust, shall be conclusive evidence as to the matters to certified in favor of any Person dealing with the Board of Trustees or any of them or the Trust and the successors of such Person. Section 14.4. Provisions in Conflict with Law. The provisions of this Trust Agreement are severable, and if the Board of Trustees shall determine, with the advice of counsel, that any one or more of such provisions (the "Conflicting Provisions ") are in conflict with applicable federal or Arkansas laws, the Conflicting Provisions shall be deemed never to have constituted a part of this Trust Agreement. Such a determination by the Board of Trustees shall not affect or impair any of the remaining provisions of this Trust Agreement or render invalid or improper any action taken or omitted (including, but not limited to, the election of the Board of Trustees) prior to such determination. Section 14.5. Gender: Section Headings. (a) Words of the masculine gender shall mean and include correlative words of the feminine and neuter genders, and words importing the singular number shall mean and include the plural number and vice versa. (b) Any headings preceding the texts of the several Articles and Sections of this Trust Agreement 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 Trust Agreement nor affect its meaning, construction, or effect. KFA