PUTNAM INVESTMENT GRADE MUNICIPAL TRUST III
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this
2nd day of October, 1992, by the Trustees hereunder and by the holders of shares
of beneficial interest to be issued hereunder as hereinafter provided
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts voluntary association with
transferable shares in accordance with the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets, which they may from time to time acquire in
any manner as Trustees hereunder, IN TRUST to manage and dispose of the same
upon the following terms and conditions for the benefit of the holders from time
to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
NAME
Section 1. This Trust shall be known as "Putnam Investment Grade
Municipal Trust II", and the Trustees shall conduct the business of the Trust
under that name or any other name as they may from time to time determine.
DEFINITIONS
Section 1. Whenever used herein, unless otherwise required by the
context or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as amended from
time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be
divided from time to time or, if more than one
class or series of Shares is authorized by the Trustees, the equal
proportionate transferable units into which each class or series of
Shares shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from time to
time;
(f) The terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Principal Underwriter" and "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section
2(a)(42) of the 1940 Act, whichever may be applicable) shall have the
meanings given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time;
(h) "Bylaws" shall mean the Bylaws of the Trust as amended from
time to time;
(i) The term "class" or "class of Shares" refers to the division
of Shares into two or more classes as provided in Article III, Section
1 hereof; and
(j) The term "series" or "series of Shares" refers to the division
of Shares representing any class into two or more series as provided in
Article III, Section 1 hereof.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed investment
primarily in securities, debt instruments and other instruments and rights of a
financial character.
ARTICLE III
Shares
DIVISION OF BENEFICIAL INTEREST
Section 1. The Trustees may, without Shareholder approval, authorize
one or more classes of Shares (which classes may be divided into two or more
series), Shares of each such class or series having such preferences, voting
powers and special or relative rights or privileges (including conversion
rights, if any) as the Trustees may determine and as shall be set forth in the
Bylaws. The number of Shares of each class or series authorized shall be
unlimited except as the Bylaws may otherwise provide. The Trustees may from
time to time divide or combine the Shares of any class or series into a greater
or lesser number without thereby changing the proportionate beneficial interest
in the class or series.
OWNERSHIP OF SHARES
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Section 2. The ownership of Shares shall be recorded on the books of
the Trust or a transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who
are the Shareholders of each class or series and as to the number of Shares of
each class or series held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 3. The Trustees shall accept investments in the Trust from
such persons and on such terms and for such consideration, which may consist of
cash or tangible or intangible property or a combination thereof, as they or
the Bylaws from time to time authorize.
NO PREEMPTIVE RIGHTS
Section 4. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
Section 5. Shares shall be deemed to be personal property giving only
the rights provided in this Declaration of Trust or the Bylaws. Every
Shareholder by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms of this Declaration of Trust and the
Bylaws and to have become a party hereto and thereto. The death of a
Shareholder during the continuance of the Trust shall not operate to terminate
the same nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against the Trust or the
Trustees, but only to the rights of said decedent under this Trust. Ownership
of Shares shall not entitle the Shareholder to any title in or to the whole or
any part of the Trust property or right to call for a partition or division of
the same or for an accounting, nor shall the ownership of Shares constitute the
Shareholders partners. Neither the Trust nor the Trustees, nor any officer,
employee or agent of the Trust shall have any power to bind personally any
Shareholder, nor except as specifically provided herein to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever other
than such as the Shareholder may at any time personally agree to pay.
ARTICLE IV
The Trustees
ELECTION
Section 1. Subject to the voting powers of one or more classes or
series of Shares as set forth in the Bylaws, in each year beginning in 1993, at
the annual meeting of Shareholders or
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at any special meeting held in lieu thereof, or at any special meeting held
before 1993, the Shareholders shall fix the number of and elect a Board of not
less than three Trustees each of whom shall serve until the next I annual
meeting or special meeting in lieu thereof and until the election and
qualification of his or her successor. or until he or- she sooner dies, resigns
or is removed. At any meeting called for the purpose and subject to the voting
powers of one or more classes of Shares as set forth in the Bylaws, a Trustee
may be removed by vote of the holders of two-thirds of the outstanding Shares
entitled to vote, except that a Trustee elected by the holders of one or more
classes of Shares may be removed only by vote of the holders of two-thirds of
the Shares entitled to vote for such Trustee. The initial Trustees, each of
whom shall serve until the first meeting of Shareholders at which Trustees are
elected and until his or her successor is elected and qualified, or until he or
she sooner dies, resigns or is removed, shall be George Putnam and Lawrence J.
Lasser and such other persons as the Trustee or Trustees then in office shall,
prior to any sale of Shares pursuant to a public offering, elect.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 2. The death, declination, resignation, retirement, removal or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
POWERS
Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt Bylaws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the
Trust and may amend and repeal them to the extent that such Bylaws do not
reserve that right to the Shareholders of one or more classes or series.
Subject to the voting power of one or more classes or series of Shares as set
forth in the Bylaws, the Trustees may fill vacancies in or add to their number,
and may elect and remove such officers and appoint and terminate such agents as
they consider appropriate; they may appoint from their own number, and
terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the power and authority of the Trustees as the
Trustees may determine; they may employ one or more custodians of the assets of
the Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the central
handling of securities, retain a transfer agent or a Shareholder servicing
agent, or both, provide for the distribution of Shares by the Trust, through
one or more principal underwriters or otherwise, set record dates for the
determination of Shareholders with respect to various matters, and in general
delegate such authority as they consider desirable to any officer of the Trust,
to any committee of the Trustees and to any agent or employee of the Trust or
to any such custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
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(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust except as
otherwise provided in Article IX, Section 5;
(c) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute
and deliver proxies or powers of attorney to such person or persons as
the Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as
the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in
the name of the Trustees or of the Trust or in the name of a
custodian, subcustodian or other depositary or a nominee or nominees
or otherwise;
(f) To the extent necessary or appropriate to give effect to the
preferences, special or relative rights and privileges of any classes
or series of Shares, to allocate assets, liabilities, income and
expenses of the Trust to a particular class or classes or series of
Shares or to apportion the same among two or more classes or series;
(g) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer,
any security of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security held in the Trust;
(h) To join other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees
shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor
of or against the Trust or any matter in controversy, including but
not limited to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for
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payment thereof; and to mortgage and pledge the Trust property or any
part thereof to secure any of or all such obligations;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies
insuring the assets of the Trust and payment of distributions and
principal on its portfolio investments, and insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
investment advisers or managers, principal underwriters, or
independent contractors of the Trust individually against all claims
and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as
Shareholder, Trustee, officer, employee, agent, investment adviser or
manager, principal underwriter, or independent contractor, 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;
(n) To pay pensions for faithful service, as deemed appropriate
by the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for any or all
of the Trustees, officers, employees and agents of the Trust; and
(o) To purchase or otherwise acquire Shares.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by trustees. Except as otherwise
provided herein or from time to time in the Bylaws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
the Trustees (a quorum being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such means
shall constitute presence in person at a meeting, or by written consent of a
majority of the Trustees then in office.
PAYMENT OF EXPENSES BY TRUST
Section 4. The Trustees are authorized to pay, or to cause to be paid
out of the assets of the Trust, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal underwriter,
auditor, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and
charges as the Trustees may deem necessary or proper to incur.
OWNERSHIP OF ASSETS OF THE TRUST
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Section 5. Title to all of the assets of the Trust shall at all times
be considered as vested in the Trustees.
ADVISORY, MANAGEMENT AND DISTRIBUTION
Section 6. Subject to a favorable Majority Shareholder Vote, the
Trustees may, at any time and from time to time, contract for exclusive or
nonexclusive advisory and/or management services with any corporation, trust,
association or other organization (the "Manager"), every such contract to
comply with such requirements and restrictions as may be set forth in the
Bylaws; and any such contract may contain such other terms interpretive of or
in addition to said requirements and restrictions as the Trustees may
determine, including, without limitation, authority to determine from time to
time what investments shall be purchased, held, sold or exchanged and what
portion, if any, of the assets of the Trust shall be held uninvested and to
make changes in the Trust's investments. The Trustees may also, at any time and
from time to time, contract with the Manager or any other corporation, trust,
association or other organization, appointing it exclusive or nonexclusive
distributor or principal underwriter for the Shares, every such contract to
comply with such requirements and restrictions as may be set forth in the
Bylaws; and any such contract may contain such other terms interpretive of or
in addition to said requirements and restrictions as the Trustees may
determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is
a shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
corporation, trust, association, or other organization, or of or for
any parent or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or distributor's
contract, or transfer, Shareholder servicing or other agency contract
may have been or may hereafter be made, or that any such organization,
or any parent or affiliate thereof, is a Shareholder or has an interest
in the Trust, or that
(ii) any corporation, trust, association or other organization with
which an advisory or management contract or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made also has an
advisory or management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other business or
interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
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ARTICLE V
Shareholders' Voting Powers and Meetings
VOTING POWERS
Section 1. Subject to the voting powers of one or more classes or
series of Shares as set forth in this Declaration of Trust or in the Bylaws,
the Shareholders shall have power to vote only (i) for the election of Trustees
as provided in Article IV, Section 1, (ii) for the removal of Trustees as
provided in Article IV, Section 1, (iii) with respect to any Manager as
provided in Article IV, Section 6, (iv) with respect to any termination of this
Trust to the extent and as provided in Article IX, Section 4, (v) with respect
to any merger, consolidation or sale of assets of the Trust to the extent and
as provided in Article IX, Section 5, (vi) with respect to any conversion of
the Trust as provided in Article IX, Section 6, (vii) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Article
IX, Section 9, (viii) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders, and (ix) with respect to such
additional matters relating to the Trust as may be required by this Declaration
of Trust, the Bylaws or any registration of the Trust with the Securities and
Exchange Commission (or any successor agency) or any state, or as the Trustees
may consider necessary or desirable. Each whole Share shall be entitled to one
vote as to any matter on which it is entitled to vote and each fractional Share
shall be entitled to a proportionate fractional vote. Notwithstanding any other
provision of this Declaration of Trust, on any matter submitted to a vote of
Shareholders, all Shares of the Trust then entitled to vote shall, except as
otherwise provided in the Bylaws, be voted in the aggregate as a single class
without regard to classes or series of . Shares. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy.
A proxy with respect to Shares held in the name of two or more persons shall be
valid if executed by any one of them unless at or prior to exercise of the
proxy the Trust receives a specific written notice to the contrary from any one
of them. A proxy purporting to be executed by or on behalf of a Shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Until Shares of any
class or series are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the Bylaws to be taken by Shareholders as to such class or series.
VOTING POWER AND MEETINGS
Section 2. There shall be an annual meeting of the Shareholders in
each year beginning in 1993 on the date fixed in the Bylaws at the office of
the Trust in Boston, Massachusetts, or at such other place as may be designated
in the call thereof, which call shall be made by the Trustees. In the event
that such meeting is not held in any year on the date fixed in the Bylaws,
whether the omission be by oversight or otherwise, a subsequent special meeting
may be called by the Trustees and held in lieu of the annual meeting with the
same effect as though held on such date. Special meetings of Shareholders of
any or all classes or series may also be called by the Trustees from time to
time for the purpose of taking action upon any matter
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requiring the vote or authority of the Shareholders of such class or series as
herein provided or upon any other matter deemed by the Trustees to be necessary
or desirable. Written notice of any meeting of Shareholders shall be given or
caused to be given by the Trustees by mailing such notice at least seven days
before such meeting, postage prepaid, stating the time, place and purpose of
the meeting, to each shareholder entitled to vote at such meeting at the
Shareholder's address as it appears on the records of the Trust. If the
Trustees shall fail to call or give notice of any meeting of Shareholders for a
period of 30 days after written application by Shareholders holding at least
25% of the then outstanding Shares of all classes and series entitled to vote
at such meeting requesting a meeting to be called for a purpose requiring
action by the Shareholders as provided herein or the Bylaws, then Shareholders
holding at least 25% of the then outstanding Shares of all classes and series
entitled to vote at such meeting may call and give notice of such meeting, and
thereupon the meeting shall be held in the manner provided for herein in case
of call thereof by the Trustees. Notice of a meeting need not be given to any
Shareholder if a written waiver of notice, executed by him or her before or
after the meeting, is filed with the records of the meeting, or to any
Shareholder who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote on a particular
matter shall be a quorum for the transaction of business on that matter at a
Shareholders' meeting, except in that where the Bylaws require that holders of
any class or series shall vote as an individual class or series, then a
majority of the aggregate number of Shares of that class or series entitled to
vote shall be necessary to constitute a quorum for the transaction of business
by that class or series. Any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a
reasonable time after the date set for the original meeting, without the
necessity of further notice. Except when a different vote is required by any
provision of this Declaration of Trust or the Bylaws, a majority of the Shares
voted shall decide any questions and a plurality shall elect a Trustee,
provided that where the Bylaws require that the holders of any class or series
shall vote as an individual class or series, a majority of the Shares of that
class or series voted on the matter (or a plurality with respect to the
election of a Trustee) shall decide that matter insofar as that class or series
is concerned.
ACTION BY WRITTEN CONSENT
Section 4. Any action taken by Shareholders may be taken without a
meeting if a majority of Shareholders entitled to vote on the matter (or such
different proportion thereof as shall be required by any express provision of
this Declaration of Trust or the Bylaws) consent to the action in writing and
such written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote taken at
a meeting of Shareholders.
ADDITIONAL PROVISIONS
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Section 5. The Bylaws nay include further provisions, not inconsistent
with this Declaration of Trust, regarding Shareholders' voting powers, the
conduct of meetings and related matters.
ARTICLE VI
Distributions
The Trustees may each year, or more frequently if they so determine,
distribute to the Shareholders of each class or series such amounts as the
Trustees may determine subject to the preferences, special or relative rights
and privileges of the various classes or series of Shares. Any such distribution
to the Shareholders of a particular class or series shall be made to said
Shareholders pro rata in proportion to the number of Shares of such class or
series held by each of them. Such distributions shall be made in cash or Shares
or other property or a combination thereof as determined by the Trustees.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
COMPENSATION
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking or other services
and payment for the same by the Trust.
LIMITATION OF LIABILITY
Section 2. The Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, manager or
principal underwriter of the Trust, nor shall any Trustee be responsible for
the act or omission of any other Trustee, but nothing herein contained shall
which he or she would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office. protect any Trustee against any liability to
every note, bond, contract, instrument, certificate or undertaking and every
other act or thing whatsoever executed or done by or on behalf of the Trust or
the Trustees or any of them in connection with the Trust shall be conclusively
deemed to have been executed or done only in or with respect to their or his or
her capacity as Trustees or Trustee, and such Trustees or Trustee shall not be
personally liable thereon.
ARTICLE VIII
Indemnification
TRUSTEES, OFFICERS, ETC.
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Section 1. The Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such covered Person may be or may have been involved
as a party or otherwise or with which such Covered Person may be or may have
been threatened, while in office or thereafter, by reason of being or having
been such a Covered Person except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in any such action, suit or
other proceeding (a) not to have acted in good faith in the reasonable belief
that such Covered Person's action was in the best interests of the Trust or (b)
to be liable to the Trust or its Shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person (but excluding amounts paid in satisfaction
of judgments, in compromise or as fines or penalties), shall be paid from time
to time by the Trust in advance of the final disposition of any such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
Covered Person to repay amounts so paid to the Trust if it is ultimately
determined that indemnification of such expenses is not authorized under this
Article, provided, however, that either (a) such Covered Person shall have
provided appropriate security for such undertaking, (b) the Trust shall be
insured against losses arising from any such advance payments or (c) either a
majority of the disinterested Trustees acting on the matter (provided that a
majority of the disinterested Trustees then in office act on the matter), or
independent legal counsel in a written opinion, shall have determined, based
upon a review of readily available facts (as opposed to a full trial type
inquiry), that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Article.
COMPROMISE PAYMENT
Section 2. As to any matter disposed of (whether by a compromise
payment, pursuant to a consent decree or otherwise) without an adjudication by
a court, or by any other body before which the proceeding was brought, that
such Covered Person either (a) did not act in good faith in the reasonable
belief that his or her action was in the best interests of the Trust or (b) is
liable to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office, indemnification shall be provided if (a) approved
as in the best interests of the Trust, after notice that it involves such
indemnification, by at least a majority of the disinterested Trustees acting on
the matter (provided that a majority of the disinterested Trustees then in
office act on the matter) upon a determination, based upon a review of readily
available facts (as opposed to a full trial type inquiry), that such Covered
Person acted in good faith in the reasonable belief that his or her action was
in the best interests of the Trust and is not liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office,
or (b) there has been obtained an opinion in writing
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of independent legal counsel, based upon a review of readily available facts
(as opposed to a full trial type inquiry), to the effect that such Covered
Person appears to have acted in good faith in the reasonable belief that his or
her action was in the best interests of the Trust and that such indemnification
would not protect such Covered Person against any liability to the Trust to
which he or she would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office. Any approval pursuant to this Section shall not
prevent the recovery from any Covered Person of any amount paid to such Covered
Person in accordance with this Section as indemnification if such Covered
Person is subsequently adjudicated by a court of competent jurisdiction not to
have acted in good faith in the reasonable belief that such Covered Person's
action was in the best interests of the Trust or to have been liable to the
Trust or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office.
INDEMNIFICATION NOT EXCLUSIVE
Section 3. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which such Covered Person may be
entitled. As used in this Article VIII, the term "Covered Person" shall include
such person's heirs, executors and administrators, and a "disinterested
Trustee" is a Trustee who is not an "interested person" of the Trust as defined
in Section 2(a)(19) of the 1940 Act (or who has been exempted from being an
"interested person" by any rule, regulation or order of the Securities and
Exchange Commission) and against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this Article shall
affect any rights to indemnification to which personnel of the Trust, other
than Trustees or officers, and other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of any such person.
SHAREHOLDERS
Section 4. In case any Shareholder or former Shareholder shall be held
to be personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled to
be held harmless from and indemnified against all loss and expense arising from
such liability.
ARTICLE IX
Miscellaneous
TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE
Section 1. All persons extending credit to, contracting with or having
any claim against the Trust shall look only to the assets of the Trust for
payment under such credit, contract
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or claim, and neither the Shareholders nor the Trustees, nor any of the Trust's
officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Declaration of Trust shall protect
any Trustee against any liability to which such Trustee would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee.
Every note, bond, contract, instrument, certificate or. undertaking
made or issued by the Trustees or by any officer or officers shall give notice
that this Declaration of Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and shall recite that the same was executed or
made by or on behalf of the Trust or by them as Trustee or Trustees or as
officer or officers and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually but
are binding only upon the assets and property of the Trust, and may contain such
further recital as he or she or they may deem appropriate, but the omission
thereof shall not operate to bind any Trustee or Trustees or officer or officers
or Shareholder or Shareholders individually.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND-OR SURETY
Section 2. The exercise by the Trustees of their powers and
discretions hereunder shall be binding upon everyone interested. A Trustee
shall be liable for his or her own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee, and for nothing else. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act or omission
in accordance with such advice or for failing to follow such advice. The
Trustees shall not be required to give any bond as such, nor any surety if a
bond is required.
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
Section 3. No person dealing with the Trustees shall be bound to make
any inquiry concerning the validity of any transaction made or to be made by
the Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
DURATION AND TERMINATION OF TRUST
Section 4. Unless terminated as provided herein, the Trust shall
continue without limitation of time. Subject to the voting powers of one or
more classes or series of Shares as set forth in the Bylaws, the Trust may be
terminated at any time by vote of Shareholders holding at least two-thirds of
the Shares entitled to vote (provided, however, if such termination is
recommended by two-thirds of the total number of the Trustees then in office,
the vote of a majority of the Shares entitled to vote shall be sufficient
authorization) or by the Trustees by written notice to the Shareholders. Upon
termination of the Trust, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated, of the
Trust as may be determined by the Trustees, the Trust shall, in accordance with
such
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procedures as the Trustees consider appropriate, reduce the remaining assets to
distributable form in cash or shares or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, ratably according to
the number of Shares held by the several Shareholders on the date of
termination, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any classes or
series of Shares.
MERGER, CONSOLIDATION AND SALE OF ASSETS
Section 5. The Trust may merge or other corporation, association,
trust or may sell, lease or exchange all or its assets, including its good
conditions and for such consideration at any meeting of Shareholders called
liquidate or dissolve when and as authorized, by the affirmative vote of the
holders of not less than two-thirds of the Shares entitled to vote, provided,
however, that if such merger, consolidation, sale, lease or exchange is
recommended by two-thirds of the total number of Trustees then in office, the
vote of the holders of a majority of the Shares entitled to vote shall be
sufficient authorization. Nothing contained herein shall be construed as
requiring approval of the Shareholders for any sale of assets in the ordinary
course of business of the Trust. The provisions of this Section shall be
subject to the voting powers of one or more classes or series of Shares as set
forth in the Bylaws.
CONVERSION
Section 6. Subject to the voting powers of one or more classes or
series of Shares as set forth in the Bylaws, the Trust may be converted at any
time from a "closed-end company" to an "open-end company" as those terms are
defined in Section 5(a)(2) and 5(a)(1) of the 1940 Act, respectively, as in
effect on the date of the execution hereof, upon the approval of such a
proposal, together with any necessary amendments to the Declaration of Trust to
permit such a conversion, by the holders of two-thirds of the Shares entitled
to vote, except that if such proposal is recommended by two-thirds of the total
number of Trustees then in office, such proposal may be adopted by a vote of
the majority of the Shares entitled to vote. Upon the adoption of such proposal
and related amendments by the Trust's Shareholders as provided above, the Trust
shall, upon complying with any requirements of the 1940 Act and state law,
become an "open-end" investment company. Such affirmative vote or consent shall
be in addition to the vote or consent of the holders of the Shares otherwise
required by law, the Bylaws or any agreement between the Trust and any national
securities exchange.
FILING AND COPIES, REFERENCES, HEADINGS
Section 7. The original or a copy of this instrument and of each
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. A copy of this instrument and of each amendment
hereto shall be filed by the Trust with the Secretary of State of The
Commonwealth of Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time be required.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such amendments have been made and as to any
matters in connection with the Trust hereunder, and,
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with the same effect as if it were the original, may rely on a copy certified
by an officer of the Trust to be a copy of this instrument or of any such
amendments. In this instrument and in any such amendment, references to this
instrument and all expressions like "herein", "hereof" and "hereunder" shall be
deemed to refer to this instrument as amended or affected by any such
amendments. Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
APPLICABLE LAW
Section 8. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth. The Trust shall be
of the type commonly called a Massachusetts business trust, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust.
AMENDMENTS
Section 9. Subject to the voting powers of one or more classes or
series of Shares, as set forth in the Bylaws, this Declaration of Trust may be
amended at any time by an instrument in writing signed by a majority of the
then Trustees (a) when authorized to do so by vote of Shareholders holding a
majority of the Shares entitled to vote, except that an amendment amending or
affecting the provisions of Section 1 of Article IV, Section 4, 5 or 6 of this
Article IX or this sentence shall require the vote of Shareholders holding
two-thirds of the Shares entitled to vote, or (b) without Shareholder approval
as may be necessary or desirable in order to authorize one or more classes or
series of Shares as provided in Section 1 of Article III. Amendments having the
purpose of changing the name of the Trust or of supplying any omission, curing
any ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require authorization by
Shareholder vote.
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IN WITNESS WHEREOF, each of the undersigned has hereunto set his hand
and seal in the City of Boston, Massachusetts for himself and his assigns, as of
the day and year first above written.
GEORGE PUTNAM
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George Putnam
LAWRENCE J. LASSER
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Lawrence J. Lasser
THE COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss. Boston, October 2, 1992
Then personally appeared the above-named George Putnam and Lawrence J.
Lasser and acknowledged the foregoing instrument to be their free act and deed,
before me,
ANNE B. MCCARTHY
Notary Public
My Commission Expires: 10/25/96
Trustees and Addresses
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George Putnam
36 Procter Street
Manchester, MA 01944
Lawrence Lasser
342 Warrent Street
Brookline, MA 02146
Registered Agent
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CT Corporation System
2 Oliver Street
Boston, MA 02109
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Trust Address
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Putnam Investment Grade Municipal Trust II
One Post Office Square
Boston, MA 02109
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