TC Res. No. 1997-02RESOLUTION NO. 97-02
SERIES OF 1997
A RESOLUTION AUTHORIZING PARTICIPATION IN THE COLORADO SURPLUS
ASSET FUND TRUST ("CSAFF)
WHEREAS, the Town of Avon desires to pool its funds with other local
government entities by becoming a participant in CSAFE; and
WHEREAS, pursuant to the provisions of C.R.S. Section 2475-601 and 701, et
seq., as amended and C.R.S. 24-75-702, et seq. as amended, any local government entity
(including cities, towns, school district, special districts or counties) is authorized to pool
an y moneys in its treasury, which are currently surplus funds and not immediately required
to be disbursed, with similar, moneys from other local government entities, in order for
these entities to take advantage of short-term investments and maximize net interest
earnings; and
WHEREAS, CSAFE is formed as a common law trust under the laws of the State
of Colorado; and
WHEREAS, the governing body of the Town'of Avon desires to participate in ,
CSAFE formed in accordance with the aforesaid statues, in order to pool its surplus funds
with other local government entities; and
NOW, THEREFORE BE IT HEREBY RESOLVED BY THE TOWN COUNCIL
OF THE TOWN OF AVON:
1) that the Town Council of the Town of Avon has reviewed C.R.S. Section 24-
75-601, as amended and C.R.S. 24-75-701, et seq. as amended, of the Colorado
Revised Statutes 'and the merits of investing in a bust as permitted by C.R.S.
Section 24-75-601, as amended and C.R.S. 24-75-701, et seq. as amended,
including the trust's liquidity, risk diversification, flexibility, convenience, and
cost compared to the alternative direct purchase of comparable investments and
finds it is in the best interest of the Town and therefore hereby approves and
adopts that certain indenture of trust entitled CSAFE dated September 1, 1988,
which shall be amended from time to time and hereby joins as a participant with
other local government entities in the trust for the purpose of pooling- surplus
funds.
2) The terms of the above mentioned trust indenture shall be incorporated herein
by-this reference and a copy filed with the minutes of the meeting at which this
resolution is adopted.
3) No warranties, either expressed or implied, are part of this agreement between
CSAFE and the Town of Avon unless as set forth in the indenture of Trust.
4) CSAFE shall use its best efforts in conjunction with the Town of Avon to
accomplish these goals.
RESOLVE, further:
1) That Scott Wright, who is the local government official empowered to invest
funds of the Town of Avon or his successor in function, is hereby authorized
and directed to execute the indenture of Trust and any other documents
necessary to establish an account with CSAFE.
2) Scott Wright is hereby designated the "Treasurer" as that term is defined in the
Indenture of Trust and is therefore authorized to invest money from the-Town
of Avon treasury, from time to time, which are not immediately required,to be
disbursed, by purchasing shares of CSAFE with those available funds and is
authorized to redeem, from time to time, part or all of those shares as funds are
needed for other purposes.
ADOPTED AND PASSED, this 14" day of January, 1997
TOWN OF AVON
By: q'A
\ ack Fawcett-
"Mayor
Patty Lambeht, CMC
Town Clerk \
SAAFE!Z
COLORADO SURPLUS
ASSET FUND TRUST
INDEA TURF OF TRUST
DATED
OCTOBER 3, 1988
(As amended September 29, 1993)
Nil's
-TABLE OF CONTENTS
RECITALS
ARTICLE 1
The Trust
Section 1.1
Section 1.2
Section 1.3
Section 1.4
Section 1.5
ARTICLE II
Establishment; Name
Purpose; Participant Requirements;
and Changes of Incumbency
Location
Nature and Indenture of Trust
Definitions
Trust Operations
Page
6
6
7
8
8
8
11
Section 2.1 General
Section 2.2 Permitted Investments
Section 2:3 Legal Title
Section 2.4 Disposition of Assets
Section 2.5 Taxes
Section 2.6 Rights as Holders of Trust Property
Section 2.7 Delegation; Committees
Section 2.8 Collection Powers
Section 2.9 Powers; Payment of Expenses
Section 2.10 Borrowing and Indebtedness
Section 2.11 Deposits
Section 2.12 Valuation
Section 2.13 Fiscal Year; Accounts
Section 2.14 Self-Dealing Prohibited
Section 2.15 Investment Program "
Section 2.16 Power to Contract; Appoint, Retain
and Employ
Section 2.17 Insurance
Section 2.18 Seal
Section 2.19 Indemnification
Section 2.20 Remedies
Section 2.21 Information Statement
Section 2.22 Further Powers
ARTICLE III
The Investment Advisor and the Administrator
Section 3.1 Appointment
Section 3.2 Duties of the Advisor
11
12
13
13
14
14
14
14
15
16
16
16
16
16
17
17
18
18
18
18
19
19
19
19
19
Section 3.3 Duties of the Administrator 20
Section 3.4 Successors 20
ARTICLE IV
Investments 21
Section 4.1 Statement of Investment Policy
and Objective 21
Section 4.2 Restrictions Fundamental to the Trust 21
Section 4.3 Amendment of Restrictions 22
ARTICLE V
Limitations of Liability 22
Section
5.1
Liability to Third Persons
22
Section
5.2
Liability to the Trust or to the
Participants
23
Section
5.3
Indemnification
23
Section
5.4
Surety Bonds
25
Section
5.5
Apparent Authority
25
Section
5.6
Representative Capacity; Recitals
25
Section
5.7
Reliance on Experts, Etc.
26
Section
5.8
Liability Insurance
26
ARTICLE VI
Interests of Participants 26
Section
6.1
General
26
Section
6.2
Allocation of Shares
27
Section
6.3
Evidence of Share Allocation
27
Section
6.4
Redemption to Maintain Constant Net
Asset Value
28
Section
6.5
Redemptions
28
Section
6.6
Suspension of Redemption;'Postponement
of Payment-
28
Section
6.7
Minimum Redemption
29
Section
6.8
Defective Redemption Requests
29
ARTICLE VII
Record of Shares 29
Section 7.1 Share Register 29
Section 7.2 Registrar 30
Section 7.3 Owner of Record 30
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r:
Section 7.4 No Transfers of Shares 30
Section 7.5 Limitation of Fiduciary Responsibility 30
Section 7.6 Notices 30
ARTICLE VIII
Participants 31
Section
8.1
Rights of Participants
31
Section
8.2
Inspection of Records
31
Section
8.3
Meetings and Votes of Participants
31
Section
8.4
Annual Meetings or Annual Votes
32
Section
8.5
Notice of Meetings and Votes
32
Section
8.6
Record Date for Meetings and Votes
32
Section
8.7
Proxies
33
Section
8.8
Number of Votes
33
Section
8.9
Reports
33
ARTICLE IX
Trustees and officers 34
Section 9.1 Number, Qualifications, and
Succession of Trustees
34
Section
9.2
Organizational Trustees
35
Section
9.3
Vacancies
35
Section
9.4
Election, Appointment, Term of Office
36
Section
9.5
Resignation and Removal
37
Section
9.6
Officers and Advisors
37
Section
9.7
By-Laws
37
ARTICLE X
Determination of Net Asset Value and Net
Income; Distributions to Participants 38
Section
10.1
Net Asset Value
38
Section
10.2
Constant Net Asset Value; Reduction of
Allocated Shares
38
Section
10.3
Supplementary Distributions to
Participants
39
Section
10.4
Retained Reserves
39
ARTICLE XI
Custodian 39
Section 11.1 Duties 39
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Section 11.2 Appointment 40
Section 11.3 Disbursement and Collection Agent 40
Section 11.4 Successors 40
ARTICLE XII
Recording of Indenture of Trust
Section 12.1 Recording
ARTICLE XIII
40
40
Amendment or Termination of Trust; Duration of Trust 41
Section 13.1 Amendment or Termination 41
Section 13.2 Duration 42
ARTICLE XIV
Miscellaneous
42
Section
14.1
Governing Law
42
Section
14.2
Counterparts
42
Section
14.3
Reliance by Third Parties
43
Section
14.4
Provisions in conflict with Law
43
Section
14.5
Gender and Section Headings
43
Section
14.6
Adoption by'Local Government
43
Execution
44
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THIS INDENTURE OF TRUST, dated October 3, 1988, amended and
restated as of July 1, 1992, is made by and between Adams County
School District No. 14, Garfield County School District No. 2, and
Grand County Water & Sanitation District No. 1, hereafter referred
to as the "Initial Participants".
WITNESSETH
WHEREAS, pursuant to the provisions of C.R.S. Section 24-
75-601, et seq., as amended, and C.R.S. Section 24-75-701, et seg.,
as amended, any county, city and county, city, town, school
district or special district (a "Local Government Entity" or
"Entities") is authorized to pool any moneys in the treasury of
such Local Government Entity, which are not immediately required to
be disbursed, with the same such moneys in the treasury of any
Local Government Entity in order to take advantage of short-term
investments and maximize net interest earnings; and
WHEREAS, each of the
Government Entity located within
by C.R.S. Section 24-75-601, as
seg., as amended; and
initial Participants is a Local
the State of Colorado as defined
amended and C.R.S. 24-75-701, et
WHEREAS, the Initial Participants each desire to enter
into an agreement and thereby establish an entity for pooling their
funds for joint investments, under the provisions of C.R.S. Section
24-75-601, as amended and C.R.S. Section 24-75-701 et seg., as
amended, pursuant to this Indenture of Trust; and
WHEREAS, each of the Initial Participants has duly taken
all official action necessary and appropriate to become a party to
this Indenture of Trust; and
WHEREAS, it is the intent and purpose of this Indenture
of Trust pursuant to C.R.S. Section 24-75-601, as amended and
C.R.S. Section 24-75-702, et seq., as amended, to invest the pooled
funds in only those legal investments for governmental units as
provided by Part 6 of Article 75 of Title 24, Colorado Revised
Statutes ("Act Part 611), and that such pooled funds will be
invested and protected in accordance with Articles 10.5 and 47 of
Title 11, Colorado Revised Statutes (the "Public Deposit Protection
Acts"); and
WHEREAS, it is proposed that the beneficial interest in
the assets of the trust fund created pursuant to the provisions of
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this Indenture of Trust shall be divided into non-transferable
shares of beneficial interest, which shall be evidenced by a share
register maintained by the Trustee or its agent, the Administrator;
and
WHEREAS, the Initial Participants anticipate that other
Local Government Entities of the State of Colorado may wish to
become Participants by adopting this Indenture of Trust and thus
becoming a party hereto;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements contained herein, the parties hereto, now
and hereafter added pursuant to the provisions herein, mutually
undertake, promise and agree for themselves, their respective
representatives, successors and assigns that all moneys, assets,
securities, funds and property now or hereafter acquired by the
Trustees, their successors and assigns under this Indenture of
Trust shall be held and managed in trust for the equal and
proportionate benefit of the holders of record from time to time of
shares of beneficial interests herein, without privilege, priority
or distinction among such holders, and subject to the terms,
covenants, conditions, purposes and provisions hereof as follows:
ARTICLE I
The Trust
1.1 Establishment; Name.
A common law trust is hereby established under this Indenture
of Trust and shall be called the "Colorado Surplus Asset Fund
Trust" (the "Trust" or "CSAFE"). So far as may be practicable, the
Trustees shall conduct the Trust's activities, execute all
documents and sue or be sued under that name, which name (and the
words "Trust", and "CSAFE") wherever used in this Indenture of
Trust, except where the context otherwise requires, shall refer to
the Trustees in their capacity as Trustees, and not individually or
personally, and shall not refer to the officers, agents, employees,
counsel, advisors, consultants, accountants, or Participants.
Should the Trustees determine that the use of such name is not
practicable, legal or convenient, they may use such other designa-
tion or they may adopt such other name for the Trust as they deem
proper, and the Trust may hold property and conduct its activities
under such designation or name. The Trustees shall take such
action as they, acting with the advice of counsel, shall deem
necessary or appropriate to file or register such name in accor-
dance with the laws of the State of Colorado or the United States
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of America so as to protect and reserve the right of the Trust in
and to such name.
1.2 Purpose; Participant RecLuirements; and Changes of Incumbency.
(a) The purpose of the Trust is to provide a-local government
surplus funds trust fund in accordance with statute through which
a Local Government-Entity may pool any moneys in its treasury,
which are not immediately required to be disbursed, with the same
such moneys in the treasury of any other Local Government Entity in
order to take advantage of short-term investments and maximize net
interest earnings in accordance with the provisions of the Act Part
6 and the Public Deposit Protection Act of 1975 or other laws of
the State of Colorado, from time to time in effect, governing the
investment of moneys in the treasury of a local Government Entity,
and as extensively as allowed by law. No Participant shall be
required to appropriate any funds to establish the Trust. The
Board of Trustees may provide for the payment or repayment of any
establishment expenses from the earnings of the Trust.
(b) Only those Local Government Entities who have adopted
this Indenture of Trust and have complied with the provisions of
this Section 1.2 and Section 14.6 may become Participants. As used
in this Section 1.2 and hereinafter in this Indenture of Trust, the
phrase "Treasurer" shall refer to the treasurer, chief financial
officer, or other local official empowered to invest funds of each
Local Government Entity as provided in the "Resolution" as adopted
pursuant to this Section 1.2 hereof and in accordance with statute.
Such Treasurer shall be the legal representative to act for and on
behalf of each respective local government entity for purposes of
this Indenture of Trust and as such shall be a member of the Board
of Participants, which is,vested with the authority to supervise
the Trust and elect the Trustees to act as fiduciary on its behalf.
(c) Each Local Government Entity adopting this Indenture of
Trust, and otherwise complying with the provisions of sections 1.2
and 14.6 hereof shall become a Participant only upon depositing
into the Trust the minimum total investment as that amount is set
from time to time, by the Trustees. Initially and until changed by
affirmative action of the Trustees, the minimum total investment
shall be $1.00 for each account. Whenever the balance in a
Participant's account is less than the-minimum established by the
Trustees, the Trustees may redeem the shares and close the account,
provided that thirty days (30) prior notice is given to such
Participant. If the Trustees change the minimum total investment
to an amount greater than the investment of any Participant at the
time that such change becomes effective, the investment of such
Participant shall not be redeemed without such Participant's
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consent.
(d) In the event that a Treasurer shall die, resign, or be
removed from his office or his office shall otherwise become
vacant, any funds placed by him in the Trust shall be held
hereunder for the benefit of the Local Government Entity for which
he was acting at the time the vacancy occurred. Any Treasurer
assuming office as such either to fill a vacancy in such office or
to begin a new term following the expiration of the term in office
of his predecessor shall be the succeeding legal representative of
the Local Government Entity by filing written notification of such
with the Trustees in a form acceptable to the Trustees.
1.3 Location. The Trust shall maintain an office of record in the
State of Colorado and may maintain such other offices or places of
business as the Trustees may from time to time determine. The
initial office of record of time Trust shall be: CSAFE, P.O. Box
900, Denver, Colorado, 80201, or 1099 18th Street, Suite 2700,
Denver, Colorado, 80202. The office of record may be changed from
time to time by resolution of the Trustees, and notice of such
change of the office of record shall be given to each Participant.
1.4 Nature and Indenture of Trust.
(a) The Trust shall be a common law trust organized and
existing under the laws of the State of Colorado. 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 Trustees shall be solely in their capacity as
Participants and beneficiaries in accordance with the rights
conferred upon them hereunder.
(b) This Indenture of Trust is an agreement of indefinite
term regarding the deposit, redeposit, investment, reinvestment and
withdrawal of local government funds within the meaning of Act Part
6, Act Part 7 and the Public Deposit Protection Acts.
1.5 Definitions. As used in this Indenture of Trust, the
following terms shall have the following meanings unless the
context hereof otherwise requires:
"Act Part 6" shall mean Part 6, Article 75 of Title 24 of the
Colorado Revised Statutes as heretofore amended, as the same may be
amended from time to time.
"Act Part 7" or "the Statute" shall mean Part 7, Article 75 of
-8-
Title 24 of the Colorado Revised Statutes as heretofore amended,
and as the same may be amended from time to time.
"Administrator" shall mean any Person or Persons appointed,
employed or contracted with by the Trustees under the applicable
provisions of Section 3.1 hereof.
"Administration Agreement" shall mean the agreement with the
Administrator referred to in Section 3.3 hereof as the same may be
amended from time to time.
"Advisor" shall mean any Person or Persons appointed, employed or
contracted with by the Trustees under the applicable provisions of
Section 3.1 hereof.
"Affiliate" shall mean, 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 Participants" shall mean the group of Treasurers of the
respective Participants which is vested with the authority to
supervise the Trust and elect the Trustees.
"Board of Trustees" shall mean the Trustees of the Trust.
"CSAFE" shall mean the Colorado Surplus Asset Fund Trust as
established and governed by this document, sometimes herein
referred to as the "Trust".
"Custodian" shall mean any Person or Persons appointed, employed or
contracted with by the Trustees under the applicable provisions of
Section 11.2 hereof.
"Indenture of Trust" shall mean this Indenture of Trust as amended,
restated or modified from time to time. References in the
Indenture of Trust to "Indenture" , "hereof" , "herein" , "hereby" and
"hereunder" shall be deemed to refer to the Indenture of Trust and
shall not be limited to the particular text, article or section in
which such words appear unless otherwise as stated.
"Information Statement" shall mean the information statement or
other descriptive document or documents adopted as such by the
Trustees and distributed by the Trust to Participants and potential
Participants of the Trust as the same may be amended by the
Trustees from time to time.
"Initial Participants" shall mean those local government entities
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which have executed and-adopted this Indenture of Trust as of the
date of its establishment.
"Investment Advisory Agreement" shall mean the agreement with the
Advisor referred to in' Section 3.2 hereof as the same may be
amended from time to time.
"Laws" shall mean common law and all ordinances,-statutes, rules,
regulations, orders, injunctions, decisions, opinions or decrees of
any government or political subdivision or agency thereof, or any
court or similar entity established by any thereof.
"Local Government Entity" or "Local Government Entities" shall mean
any county, city and county, city, town, school district or special
district existing as a local government entity under the laws of
the State of Colorado, including home rule governments.
"Participants" shall mean the Local Government Entities which are
the Initial Participants and the Local Government Entities which
adopt this Indenture of Trust pursuant to Section 14.6 hereof.
"Permitted Investments" shall mean the investments referred to in
Paragraph (b) of Section 2.2 hereof.
"Person" shall mean and include individuals, corporations, limited
partnerships, general partnerships, joint stock companies or
associations, joint ventures, associations, companies, trusts,
banks, trust companies, land trusts, business trusts or other
entities (whether or not legal entities) and governments and
agencies and political subdivisions thereof.
"Public Deposit Protection Acts" shall mean Articles 10.5 and 47 of
Title 11 of the Colorado Revised Statutes as heretofore amended,
and as the same may be amended from time to time.
"Share" shall mean the unit used to denominate and measure the
respective pro rata beneficial interests of the Participants in the
Trust Property as described in Article VI.
"Share Register" shall mean the register of Shares maintained
pursuant to Article VII hereof.
"Treasurer" shall mean the treasurer, chief financial officer, or
other local official who is properly authorized to invest the
respective Local Government Entity's funds or as provided by
statute.
"Trust" shall mean the common law trust created by this Indenture
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of Trust.
"Trust Property" shall mean, as of any particular time, any and all
property, real, personal or otherwise, tangible or intangible,
which is transferred, conveyed or paid to the Trust or Trustees and
all income, profits and gains therefrom and which, -at such time, is
owned or held by, or for the account of, the Trust or the Trustees.
"Trustees" shall mean the Persons who become fiduciaries of the
Trust pursuant to Article IX hereof.
ARTICLE II
Trust Operations
2.1 General.
(a) Powers of the Board of Participants. The Board of
Participants shall have full, exclusive and absolute power of
supervision over the Trust and Board of Trustees, including the
power to monitor and supervise the operation of the Trust. The
Board of Participants has the full exclusive and absolute power and
authority to amend this Indenture of Trust, as provided in Article
VIII, to direct the investments of the Trust through the amendment
of the Trust, to elect the Board of Trustees and to terminate the
Trust, as well as all other powers provided herein. The Board of
Participants does hereby direct that the Trust shall be adminis-
tered by a Board of Trustees elected from the Board of Participants
as provided herein, subject to all rights of Participants stated in
the Indenture of Trust and subject to all other restrictions set
forth in this Indenture of Trust.
(b) Powers of the Board of Trustees. Subject to the rights
of the Participants as provided herein, the Trustees shall be the
investment officer of the Trust and shall have authority over the
Trust Property and the affairs of the Trust to administer the
operation of the Trust, subject to the requirements and restric-
tions of this Indenture of Trust. The Trustees may do and perform
such acts and things as in their judgement and discretion, subject
to the requirements and restrictions of this Indenture of Trust,
are necessary and proper for conducting the affairs of the Trust or
promoting the interest of the Trust and the Participants. The
enumeration of any specific power or authority herein shall not be
construed as limiting the aforesaid general power or authority or
any specific power or authority. The Trustees may exercise any
power authorized and granted to them by this Indenture of Trust and
except as may be limited by this Indenture of Trust shall have any
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and all powers granted under the Colorado Fiduciaries' Powers Act
(C.R.S. Section 15-1-804, et seq., as amended). Such powers of the
Trustees may be exercised without the necessity of any order of, or
resort to, any court.
2.2 Permitted Investments. The Trustees shall have full and
complete power, subject in all respects to Article IV hereof:
(a) To conduct, operate and provide an investment program for
the pooling of surplus funds of Local Government Entities to take
advantage of short-term investments and maximize net interest
earnings; and
(b) For such consideration as they may deem proper and as may
be required by Law, to subscribe for, invest in, assign, transfer,
exchange, distribute and otherwise deal in or dispose of investment
instruments of the following type and nature, which shall hereinaf-
ter be collectively referred to as "Permitted Investments" or as
allowed by law:
(i) bonds, notes, certificates of indebtedness, treasury
bills or other securities now or hereafter issued, which are direct
obligations of or unconditionally guaranteed by the full faith and
credit of the United States of America as to principal and
interest;
(ii) interest-bearing savings accounts, interest-bearing
certificates of deposit or interest-bearing time deposits consti-
tuting direct obligations of any bank or savings and loan, as
permitted by Colorado Statutes, provided, however, that such
deposit is insured by the Federal Deposit Insurance Corporation or
the Federal Savings and Loan Insurance Corporation; or if not so
insured, such deposit may only be made in an Eligible Public
Depository and properly collateralized in accordance with the
Colorado Public Deposit Protection Acts.
(iii) notes or bonds secured by mortgage or trust deed
insured pursuant to Title II of the "National Housing Act",
obligations of national mortgage associations or similar credit
institutions organized under Title III of the "National Housing
Act", debentures issued by the Federal Housing. Administration under
section 204-A of the "National Housing Act", and any security
issued by the Federal Farm Credit Bank or the Federal Land Bank.
(iv) repurchase agreements of any of the marketable
securities is defined herein as Permitted Investments where the
market value of such security is at all times at lease equal to the
moneys involved, and there is assignment of such security pursuant
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to current depository regulations. For purposes provided herein,
repurchase agreement means a- simultaneous agreement to sell a
security and to repurchase it at a later date.
(v) any other investment instruments now permitted by
the provisions of Act Part 6, Act Part 7 and the Public Deposit
Protection Acts or any other applicable statutes or hereafter
permitted by reason of the amendment or the adoption of any other
applicable statute as a part of the Colorado Revised Statutes.
(c) To contract for, and enter into agreements with respect
to, the purchase and sale of Permitted Investments.
2.3 Legal Title.
(a) Legal title to all of the Trust Property shall be vested
in the Trustees on behalf of the Participants, who shall be the
beneficial owners except that the Trustees shall have full and
complete power to cause legal title to any Trust Property to be
held, on behalf of the Participants, by or in the naive of the
Trust, or in the name of any other Person as nominee, on such
terms, in such manner, and with such powers as the Trustees may
determine, so long as in their judgment the interest of the Trust
is adequately protected in accordance with-reasonable and customary
practices.
(b) The right, title and interest of the Trustees in and to
the Trust Property shall vest automatically in all persons who may
hereafter become Trustees upon their due election and qualification
without any further act. Upon the resignation, disability,
removal, adjudication as an incompetent, or death of a Trustee he
(and in the event of his death, his estate) shall automatically
cease to have any right, title or interest in or to any of the
Trust Property, and the right, title and interest of such Trustee
in and to the Trust Property shall vest automatically in the
remaining Trustees without any further act.
2.4 Disposition of Assets. Subject in all respects Article IV
hereof, the Trustees shall have full and complete power to sell,
exchange or otherwise dispose of any and all Trust Property free
and clear of any and all trusts and restrictions, at public or
private sale, for cash or on terms, with or without advertisement,
and subject to such restrictions, stipulations, agreements and
reservations as they shall deem proper, and to execute and deliver
any deed, power, assignment, bill of sale, or other instrument in
connection with the foregoing including giving consents and making
contracts relating to Trust Property or its use.
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2.5 Taxes. The Trustees shall have full and complete power:
(a) To pay all taxes or assessments, of whatever kind or
nature, validly and lawfully imposed upon or against the Trust or
the Trustees in connection with the Trust Property or upon or
against the Trust Property or income or any part thereof;
(b) To settle and compromise disputed tax-liabilities; and
(c) For the foregoing purposes to make such returns and do
all such other acts and things as may be deemed by the Trustees to
be necessary or desirable.
2.6 Rights as Holders of Trust Property. The Trustees shall have
full and complete power to exercise on behalf of the Participants
all of the rights, powers and privileges appertaining to the
ownership of all or any Permitted Investments or other property
forming part of the Trust Property to the same extent that any
individual might, and, without limiting the generality of the
foregoing, to vote or give any consent, request or notice or waive
any notice either in person or by proxy or power of attorney, with
or without the power of substitution, to one or more Persons, which
proxies and powers of attorney may be for meetings or actions
generally, or for any particular meeting or action, and may include
the exercise of discretionary powers.
2.7 Delegation: Committees. The Trustees shall have full and
complete power (consistent with their continuing exclusive
authority over the management of the Trust, the conduct of its
affairs, their duties and obligations as Trustees, and the
management and disposition of the Trust Property) to delegate from
time to time to such one or more of their number (who may be
designated as constituting a Committee of the Trustees) or to
officers, employees or agents of the Trust (including, without
limitation, the Administrator, the Advisor and the Custodian) the
doing of such acts and things and the execution of such instruments
either in the name of the Trust, or the names of the Trustees or as
their attorney or attorneys, or otherwise as the Trustees may from
time to time deem expedient and appropriate in the furtherance of
the business affairs and purposes of the Trust.
2.8 Collection Powers. The Trustees shall have full and complete
power:
(a) To collect, sue for, receive and receipt for all sums of
money or other property due to the Trust;
(b) To consent to extensions of the time for payment, or to
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the renewal of any securities, investments or obligations;
(c) To engage or intervene in, prosecute; defend, compromise,
abandon or adjust by arbitration or otherwise any actions, suits,
proceedings, disputes, claims, demands or things_ relating to the
Trust Property;
(d) To foreclose any collateral, security or instrument
securing any investments, notes, bills, bonds, obligations or
contracts by virtue of which any sums of money are owed to the
Trust;
(e) To exercise any power of sale held by the Trustees, and
to convey good title thereunder free of any and all trusts, and in
connection with any such foreclosure or sale, to purchase or
otherwise acquire title to any property;
(f) To be parties to reorganization and to transfer to and
deposit with any corporation, committee, voting trustee or other
person any securities, investments or obligations of any person
which form a part of the Trust Property, for the purpose of such
reorganization or otherwise;
(g) To participate in any arrangement for enforcing or
protecting the interests of the Trustees as the owners or holders
of such securities, investments or obligations and to pay any
assessment levied in connection with such reorganization or
arrangement;
(h) To extend the time (with or without security) for payment
or delivery of any debts or property and to execute and enter into
releases, agreements and other instruments; and
(i) To pay or satisfy any debts or claims upon any evidence
that the Trustees shall deem sufficient.
2.9 Powers; Payment of Expenses. The Trustees shall have full and
complete power:
(a) To incur and pay charges or expenses which in the opinion
of the Trustees are necessary or incidental to or proper for
carrying out any of the purposes of this Indenture of Trust;
(b) To reimburse others for the payment therefor; and
(c) To pay appropriate compensation or fees from the funds of
the Trust to Persons with whom the Trust has contracted or
transacted business. The Trustees shall fix the compensation, if
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any, of all officers and employees of the Trust. In addition to
lawful compensation, the. Trustees may pay themselves or any one or
more of themselves reimbursement for expenses reasonably incurred
by themselves or any one or more of themselves on behalf of the
Trust.
Notwithstanding any provision of this Indenture of Trust to
the contrary, in no event shall any expenses of administration of
the Trust be payable from any source other than income received
from the earnings of the Trust.
2.10 Borrowing and Indebtedness. The Trustees shall not incur
indebtedness on behalf of the Trust, or authorize the Trust to
borrow money or incur indebtedness, except as provided in clause
(iv) of Section 4.2 of this Indenture of Trust, but only if and to
the extent permitted by Law.
2.11 Deposits. The Trustees shall have full and complete power to
deposit, in such a 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
Trustees, with one or more banks, trust companies or other banking
institutions whether or not such deposits will draw interest. Such
deposits are to be subject to withdrawal in such manner as the
Trustees may determine, and the Trustees shall have no responsibil-
ity for any loss which may occur by reason of the failure of the
bank, trust company or other banking institution with which the
moneys, investments, or securities have been deposited. Each such
bank, trust company or other banking institution shall comply, with
respect to such deposit, with all applicable requirements of all
applicable Laws including, but not limited to the Public Deposit
Protection Act of 1975.
2.12 Valuation. The Trustees shall have full and complete power to
determine good faith conclusively the value of any of the Trust
Property and to revalue the Trust Property.
2.13 Fiscal Year; Accounts. The Trustees shall have full and
complete power to determine the fiscal year'of the Trust and the
method or form in which its accounts shall be kept and from time to
time to change the fiscal year or method or form of accounts.
Unless otherwise determined by the Trustees pursuant to this
Section 2.13, the fiscal year of the Trust shall terminate on
December 31 and commence on January 1 of each calendar year.
2.14 Self-Dealing Prohibited.
(a) No Treasurer, Trustee, officer, employee or agent of the
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Trust shall cause or permit the Trust to make any-investment or
deposit, enter into any contract or other arrangement, or perform
any act which confers or might reasonably be expected to confer any
special benefit upon such person or any Affiliate of such person.
(b) The Trust shall not enter into any investment transaction
with any Affiliate of the Trust, or with the Advisor or the
Administrator or any Affiliate thereof, or with any other officer,
director, employee or agent of the Trust or any Affiliate thereof.
The Trust may purchase and sell Permitted Investments from and to
the Custodian or an Affiliate of the Custodian.
2.15 Investment Program. The Trustees shall use their best efforts
to obtain through the Advisor or other qualified persons a
continuing and suitable investment program, consistent with the
investment policies and objectives of the Trust set forth in
Article IV of this Indenture of Trust, and the Trustees shall be
responsible for reviewing and approving or rejecting the investment
program presented by the Advisor or such other Persons. Subject to
the provisions of Section 2.7 and Section 3.1 hereof, the Trustees
may delegate functions arising under this Section 2.15 to one or
more of their number or to the Advisor.
2.16 Power to Contract. Appoint. Retain and Employ. Subject to the
provisions of Section 2.7 and Section 3.1, the trustees shall have
full and complete power to appoint, employ, retain, or contract
with any Person of suitable qualifications and high repute to
perform any or all of the following functions under the supervision
of the Trustees.
(a) Serve as the Trust's investment advisor and consultant in
connection with policy decisions made by the Trustees;
(b) Serve as the Trust's administrator or co-administrators;
(c) Furnish reports to the Trustees and provide research,
economic and statistical data in connection with the Trust's
investments;
(d) Act as consultants, accountants, technical advisors,
attorneys, brokers, underwriters, corporate fiduciaries, escrow
agents, depositaries, custodians or agents for collection, insurers
or insurance agents, registrars for Shares or in any other capacity
deemed by the Trustees to be necessary or desirable;
(e) Investigate, select, and, on behalf of the Trust, conduct
relations with Persons acting in such capacities and pay appropri-
ate fees to, and enter into appropriate contacts with, or employ,
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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;
(f) Substitute any other Person for any such Person;
(g) Act as attorney-in-fact or agent in the-purchase or sale
or other disposition of investments, and in the handling, prosecut-
ing or other enforcement of any lien or security securing invest-
ments; and
(h) Assist in the performance of such ministerial functions
necessary in the management of the Trust as may be agreed upon with
Trustees.
2.17 Insurance. The Trustees shall have full power to and may
obtain general and official liability and property damage insurance
for the protection of the Trust Property and the Trustees, Treasur-
ers, Participants, officers, auditors, employees and agents of the
Trust in the operation and conduct of the Trust in such amounts as
the Board of Trustees deems adequate to ensure against all claims
and liabilities of every nature, to the extent such insurance may
be available at reasonable rates.
2.18 Seal. The Trustees shall have full and complete power to
adopt and use a seal for the Trust, but, unless otherwise required
by the 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.
2.19 Indemnification. In addition to the mandatory indemnification
in Section 5.3 hereof, the 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 has dealings, including, without
limitation, the Advisor, the Administrator, and the Custodian, to
such extent as the Trustees shall determine in accordance with
statute.
2.20 Remedies. Notwithstanding any provision in this Indenture
Trust, when the Trustees deem that there is a significant risk that
an obligor to the Trust may default or is in default under the
terms of any obligation to the Trust, the Trustees shall have full
and complete power to pursue any, remedies permitted by Law which,
in their sole judgment, are in the interests of the Trust, and the
Trustees shall have full and complete power to enter into any
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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.
2.21 Information Statement. The Trustees shall have full and
complete power to prepare, publish and distribute an Information
Statement regarding the Trust and to amend or supplement the same
from time to time.
2.22 Further Powers. The Trustees shall have full and complete
power to take all actions, do all such matters and things and
execute all such documents and instruments as they deem necessary,
proper or desirable in order to carry out, promote or advance the
interests and purposes of the Trust although such actions, matters
or things are not herein specifically mentioned. Any determination
as to what is in the best interests-of the Trust made by the
Trustees in good faith shall be conclusive. In construing the
provisions of this Indenture of Trust, the presumption shall be in
favor of a grant of power to the Trustees. The Trustees shall not
be required to obtain any court order to deal with the Trust
Property.
ARTICLE III
The Investment Advisor and the Administrator
3.1 Appointment. The Trustees are responsible for implement-
ing the investment policy and program of the Trust, as provided in
Article IV, and for supervising the officers, agents, employees,
investment advisors, administrators, distributors, or independent
contractors of the Trust. The Trustees are not required personally
to conduct all of the routine business of the Trust and, consistent
with their ultimate responsibility as stated herein, the Trustees
shall appoint, employ or contract with an investment advisor
(herein "Advisor"), and may grant or delegate such authority to the
Advisor and the Administrator (pursuant to the terms of Section
2.16 hereof) or to any other Person whose services are obtained by
the Advisor or the Administrator, as the Trustees may, in their
sole discretion, deem to be necessary or desirable, for the
efficient management of the Trust, without regard to whether such
authority is normally granted or delegated by Trustees or other
fiduciaries. Gill & Associates, Inc. is hereby appointed as the
initial Advisor for the Trust.
3.2 Duties of the Advisor. The duties of the Advisor shall be
those set forth in the Investment Advisory Agreement to be entered
into between the Trust and the Advisor. Such duties may be
modified by the Trustees, from time to time, by the amendment of
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the Investment Advisory Agreement subject to the limitations
contained therein. Subject to Article IV hereof, the Trustees may
authorize the Advisor to effect purchases, sales, or exchanges of
Trust Property on behalf of the Trustees or may authorize any
officer, employee, agent or Trustee to effect such purchases,
sales, or exchanges pursuant to recommendations of"the Advisor, all
without further action by the Trustees. Any and-all of such
purchases, sales, and exchanges shall be deemed to be authorized by
all the Trustees. The Investment Advisory Agreement may authorize
the Advisor to employ other persons to assist it in the performance
of its duties. The Investment Advisory Agreement shall provide
that it may be terminated without cause and without the payment of
any penalty by the Trust on sixty (60) days written notice to the
Advisor. Nothing in this Indenture of Trust or in the Investment
Advisory Agreement shall limit or impair the right of the Trustees
to terminate the said Agreement for cause, or to suspend the
authority of the Advisor to act for or on behalf of the Trust
immediately upon written notice to the Advisor, upon a showing of
reasonable cause to believe that the Advisor has committed a
material breach of the Investment Advisory Agreement or any of its
fiduciary obligations to the Trust.
3.3 Duties of the Administrator. The duties of the Administrator
shall be those set forth in the Administration Agreement to be
entered into between the Trust and the Administrator. Such duties
may be modified by the Trustees, from time to time, by the
amendment of the Administration Agreement. The Administration
Agreement may authorize the Administrator to employ other persons
to assist it in the performance of its duties. The Administration
Agreement shall provide that it may be terminated without cause and
without the payment of any penalty by the Trust on sixty (60) days
written notice to the Administrator. Nothing in this Indenture of
Trust or in the Administration Agreement shall limit or impair the
right of the Trustees to terminate the said Agreement for cause, or
to suspend the authority of the Administrator to act for or on
behalf of the Trust immediately upon written notice to the
Administrator, upon a showing of reasonable cause to believe that
the Administrator has committed a material breach of the Admin-
istration Agreement or any of its fiduciary obligations to the
Trust.
3.4 Successors. In the event that, at any time, the position of
Advisor or of Administrator shall become vacant for any reason, the
Trustees may appoint, employ or contract with a successor Advisor
or Administrator.
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ARTICLE IV
Investments
4.1 Statement of Investment Policy and Objective. Subject to the
prohibitions and restrictions contained in Section 4.2 hereof, the
general investment policy and objective of the Trustees shall be to
provide to the Participants of the Trust the highest possible
investment yield, while maintaining liquidity and preserving
capital by investing in Permitted Investments in accordance with
the Statute, in accordance with the Public Deposit Protection Acts
and any other applicable provisions of Law as may be set forth more
fully in the Trust's Information Statement, as the same may be
amended from time to time.
4.2 Restrictions Fundamental to the Trust. Notwithstanding
anything in this Indenture of Trust which may be deemed to
authorize the contrary, the Trust:
(a) May not make any investment other than investments
authorized by the Statute, the Public Deposit Protection Acts, or
any other applicable provisions of Law, as the same may be amended
from time to time, all as herein defined as Permitted Investments;
provided, however, the Trustees and the Trust shall not be
responsible to comply with investment restrictions provided in a
Participant's Home Rule Charter, if such investment restrictions
are more restrictive than those provided by Colorado State law as
provided in this Section 4.2(a);
(b) May not purchase any Permitted Investment which has a
maturity date more than one year from the date of the Tru st_'s
purchase thereof, unless subject, at the time of such purchase by
the Trust, to an irrevocable agreement to repurchase it from the
Trust within one year; provided, however, any Permitted Investment
which is subject to an irrevocable agreement of the nature referred
to in the preceding portion of this clause (b) shall be deemed to
mature on the day on which the Trust is obligated to sell such
Permitted Investment back to a Responsible Person or the day on
which the Trust may exercise its rights under such agreement to
require the purchase of such Permitted Investment by a Responsible
Person. The term "Responsible Person" shall mean a Person listed
on the United States Treasury Department List of Primary Dealers or
any equivalent successor to such list, or savings and loan or a
bank organized and existing under the laws of the United States of
America or any state thereof having assets in excess of
$400,000,000.00;
(c) May not borrow money or incur indebtedness whether or not
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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;
(d) May not make loans, provided that the Trust may make
Permitted Investments;
(e) 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; and
(f) May not purchase securities or shares of investment
companies or any entities similar to the Trust.
4.3 Amendment of Restrictions. The restrictions set forth in
Section 4.2 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 entitled to vote, except that such
restrictions may be changed by the 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 Colorado and
the United States of America as they may from time to time be
amended.
ARTICLE V
Limitations of Liability
5.1 Liability to Third Persons. No Participant shall be subject
to any personal liability whatsoever, in tort, contract or
otherwise to any Person or Persons other than the Trust in
connection with Trust Property or the affairs of the Trust; and no
Trustee, officer, employee or agent (including without limitation,
the Advisor, the Administrator and the Custodian) of the Trust
shall be subject to any personal liability whatsoever in tort,
contract or otherwise, to any Person or Persons other than the
Trust in connection with Trust Property or the affairs of the
Trust, except that each shall be personally liable for his bad
faith, willful misconduct, gross negligence or reckless disregard
of his duties or for his failure to act in good faith in the
reasonable belief that his action was in the best interests of the
Trust and except that the Advisor and the Administrator shall each
have personal liability for his willful or negligent failure to
take reasonable measures to restrict investments of Trust Property
to those permitted by Law and this Indenture of Trust. All Persons
other than the Trust shall look solely to the Trust Property for
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satisfaction of claims of any nature arising in connection with the
affairs of the Trust. If any Participant, Trustee, officer,
employee or agent (including, without limitation, the Advisor, the
Administrator and the Custodian) of the Trust is made a party to
any suit or proceedings to assert or enforce any such liability, he
shall not on account thereof be held to any personal liability.
5.2 Liability to the Trust or to the Participants. No Trustee,
officer, employee or agent (including, without limitation, the
Advisor, the Administrator and the Custodian) of the Trust shall be
liable to the Trust or to any Participant, Trustee, officer,
employee or agent (including, without limitation, the Advisor, the
Administrator and the Custodian) of the Trust for any action or
failure to act (including, without limitation, the failure to
compel in any way any former or acting Trustee to redress any
breach of trust) except for his own bad faith, willful misfeasance,
gross negligence or reckless disregard of his duties and except
that the Advisor and the Administrator shall each have personal
liability for his willful or negligent failure to take reasonable
measures to restrict investments of Trust Property to those
permitted by Law and this Indenture of Trust; provided, however,
that the provisions of this Section 5.2 shall not limit the
liability of any agent (including, without limitation, the Advisor,
the Administrator and the Custodian) of the Trust with respect to
breaches by it of a contract between it and the Trust.
5.3 Indemnification.
(a) As used in this Section 5.3:
(1) "Trust Representative" means an individual who is or
was a Trustee, officer, employee, or agent (including without
limitation the Advisor, the Administrator, and the Custodian).
(2) "Expenses" includes attorney fees.
(3) "Liability" means the obligation to pay a judgment,
settlement, penalty, fine, or reasonable expense incurred with
respect to a proceeding.
(4) "Party" includes an individual who was, is, or is
threatened to be named a defendant or respondent in a proceeding.
(5) "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, and whether formal or informal.
(b) Except as provided in subsection (c) hereof, the Trust
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shall,-to the extent of income or earnings of the Trust, indemnify
against liability incurred in any proceeding an individual made a
party to the proceeding because he is or was a Trust Representative
if he conducted himself in good faith, and (i) he reasonably
believed that his conduct was in the Trust's best interests or,
(ii) in the case of a criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(c) In no event may the Trust indemnify the Advisor or the
Administrator for expenses or liability arising out of any will-
ful or negligent violation by either of them of the restrictions on
investments,of the Trust Property. Further, the Trust shall not
indemnify any Trust Representative under this section either (i) in
connection with a proceeding by or in the right of the Trust in
which the Trust Representative was adjudged liable to the Trust, or
(ii) in connection with any proceeding charging improper personal
benefit to him, in which such person was ad- judged liable on the
basis that personal benefit was improperly received by him. In,
connection with a proceeding by or in the right of the Trust,
indemnification is in all cases limited to reasonable expenses
incurred.
(d) Except as provided in subsection (c) hereof, the term-
ination of any proceeding by judgment, order, settlement, or con-
viction, or upon a plea of nolo contendere or its equivalent; is
not of itself determinative that the individual did not meet the
standard of conduct set forth in Subsection (b) of this Section.
(e) No indemnification shall be made unless and until a
specific determination has been made that indemnification is
authorized under this Section 5.3. Such determination shall'be
made by the Board of Trustees by a majority vote of a quorum, which
quorum shall consist of Directors not parties to the proceeding.
If such quorum cannot be obtained, the determination shall be made
by a majority vote of a committee of Trustees designated by the
Board of Trustees, which committee shall consist of two or more
Trustees not party to the proceeding. Trustees who are parties to
the proceeding may participate in designating Trustees for the
committee. If the said quorum cannot be obtained or the committee
cannot be established, or if such quorum is obtained or committee
is designated and such quorum or committee so directs, the
determination may be made by independent legal counsel selected by
a vote of the Board of Trustees or the committee as specified
above, or by the Participants. If independent counsel determines
that indemnification is required under this section, authorization
of indemnification and evaluation as to reasonableness of expenses
shall be made by the body that selected such counsel.
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(f) The. Trust-may pay for or reimburse the reasonable
expenses incurred by a Trust Representative who is a party to a
proceeding in advance of final disposition thereof if (i) the Trust
Representative furnishes the Trust a written affirmation of his
good faith belief that he has met the standard of conduct described
in subsection (b) above and a written undertaking executed
personally to repay the advance if it is ultimately determined that
indemnification is not authorized under this Section, and (ii) it
is determined as provided in subsection (f) above that the facts
then known would not preclude indemnification under this Section.
- (g) Any indemnification of or advance of expenses to,a Trust
Representative pursuant to this Section shall be. reported in
writing to the Participants with or before notice of the next
Participants meeting, if such indemnification of or advance of
expenses arises out of a proceeding by or on behalf of the Trust.
(h) No Trust Representative entitled to indemnification may
take or be paid the same except out of the earnings of the Trust,
and no Participant shall be personally liable to any such Trust
Representative for all or any portion of such indemnity.
5.4 Surety Bonds. The Board of Trustees shall require the
Trustees, the Advisor, the Administrator, any custodian, the
Auditor, and any other agent of the Trust to give such surety and
other bonds as the Board of Trustees from time to time determines
are necessary to protect the Trust. The cost of any and all such
bonds shall be paid as an expense of administration of the Trust.
5.5 Apparent Authority. No purchaser, seller, transfer agent or
other Person dealing with the Trustees or any officer, employee or
agent of the Trust shall be bound to make any inquiry concerning
the validity of any transaction purporting to be made by the
Trustees or by such officer, employee or agent or make inquiry
concerning or be liable for the application of money or property
paid, transferred or delivered to or on the order of the Trustees
or of such officer, employee or agent.
5.6 Representative Capacity: Recitals. Any written instrument
creating an obligation of the Trust shall be conclusively taken to
have been executed by a Trustee or an officer-, employee or agent of
the Trust only in his capacity as a Trustee under this Indenture of
Trust or in his capacity as an officer, employee or agent of the
Trust. Any written instrument creating an obligation of the Trust
shall refer to this Indenture of Trust and contain a recital to the
effect that the obligation of the Trust shall refer to this
Indenture of Trust and contain a recital to the effect that the
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obligations thereunder are not personally binding upon, nor shall
resort be had to the property of, any of the Trustees, Partici-
pants, officers, employees or agents of the Trust, and that only
the Trust Property or a specific portion thereof shall be bound,
and such written instrument may contain any further similar recital
which may be deemed appropriate; provided however, that the
omission of any recital pursuant to this Section 5.6 shall not
operate to impose personal liability on any of the Trustees,
Participants, officers, employees or agents of the Trust, or to
void any obligations created in the instrument.
5.7 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 any
failure to act resulting from reliance in good faith upon the books
of account or other records of the Trust, upon an opinion of
counsel or upon reports made to the Trust by any of its officers or
employees or by the Advisor, the Administrator, the Custodian,
accountants, appraisers or other experts or consultants selected
with reasonable care by the Trustees or officers of the Trust.
5.8 Liability Insurance. The Trustees shall have full power to
and may obtain general and official liability and property damage
insurance for the protection of the Trust Property and the
Trustees, Treasurers, Participants, officers, auditors, employees
and agents of the Trust in the operation and conduct of the Trust
in such amounts as the Board of Trustees deems adequate to ensure
against all claims and liabilities of every nature, to the extent
such insurance may be available at reasonable rates.
ARTICLE VI
Interests of Participants
6.1 General. The beneficial interest of the Participants
hereunder in the Trust Property and the earnings thereon shall, for
convenience of reference, be divided into Shares, which shall be
used as units to measure the proportionate allocation to the
respective Participants of the beneficial interest hereunder. The
number of Shares that may be used to measure and represent the
proportionate allocation of beneficial interest among the Partici-
pants is unlimited. All Shares shall be of one class representing
equal distribution, liquidation and other rights. The beneficial
interest hereunder measured by the Shares shall not entitle a
Participant to preference, preemptive, appraisal, conversion, or
exchange rights of any kind with respect to the Trust or the Trust
Property. Title to the Trust Property of every description and the
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right to conduct any affairs hereinbefore described are vested in
the Trustees on behalf, and for the beneficial interest, of the
Participants, and the Participants shall have no interest therein
other than the beneficial interest conferred hereby and measured by
their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests
of the Trust nor can they be called upon to share or assume any
losses of the Trust or suffer an assessment of any kind by virtue
of the allocation of Shares to them, except as provided in Section
10.2 hereof.
6.2 Allocation of Shares.
(a) The Trustees, in their discretion, may, from time to
time, without vote of the Participants allocate Shares, in addition
to the then allocated Shares, to such party or parties, for such
amount and such type of consideration, (including, without
limitation, income from the investment of Trust Property), at such
time or times (including, without limitation, each business day in
accordance with the maintenance of a constant net asset value per
Share as set forth in Section 10.2 hereof), and on such terms as
the Trustees may deem best. In connection with any allocation of
Shares, the Trustees may allocate fractional Shares. The Trustees
may from time to time adjust the total 'number of Shares allocated
without thereby changing the proportionate beneficial interests in
the Trust. Reductions or increases in the number of allocated
Shares may be made in order to maintain a constant net asset value
per Share as set forth in Section 10.2 hereof. Shares shall be
allocated and redeemed as whole shares and/or one hundredths
(1/100ths) of a Share or multiples thereof.
(b) Shares may be allocated only to a Local Government Entity
that has become a Participant of the Trust in accordance with
Section 1.2 and Section 14.6 hereof. Each Participant may
establish more than one account within the Trust for such Particip-
ant's convenience.
(c) Unless otherwise determined by the Trustees pursuant to
this paragraph (c) of this Section 6.2 and Section 1.2(c), the
minimum amount of funds which may be maintained in an account in
the Trust by a Participant at any one time shall be $1.00.
6.3 Evidence of Share Allocation. Evidence of Share allocation
shall be reflected in the Share Register maintained by or on behalf
of the Trust pursuant to Section 7.1 hereof, and the Trust shall
not be required to issue certificates as evidence of Share
allocation.
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6.4 Redemption to Maintain Constant Net Asset Value. The Share of
the Trust shall be subject to redemption pursuant to the procedure
for reduction of outstanding Shares set forth in Section 10.2
hereof in order to maintain the constant net asset value per Share.
6.5 Redemptions. Payments by the Trust to Participants, and the
reduction of Shares resulting therefrom, are, for convenience,
referred to in this Indenture of Trust as "redemptions." Any and
all allocated Shares may be redeemed at the option of the Partici-
pant whose beneficial interest hereunder is measured by such
Shares, upon and subject to the terms and conditions provided in
this Indenture of Trust. The Trust shall, upon application of any
Participant, promptly redeem from such Participant allocated Shares
for an amount per Share equivalent to the proportionate interest
measured by each Share in the net assets of the Trust at the time
of the redemption. The procedures for effecting redemption shall
be as adopted by the 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 substantially and materially restrict the
ability of the Participants to withdraw funds from the Trust by the
redemption of Shares, and provided further that no early withdrawal
or other penalty charges shall be imposed upon any Participant for
the redemption of its shares or withdrawal of its funds from the
Trust.
6.6 Suspension of Redemption; Postponement of- Payment. Each
Participant, by its adoption of this Indenture of Trust, agrees
that the Trustees may, without the necessity of a formal meeting of
the Trustees, temporarily suspend the right of redemption or
postpone the date of payment for redeemed Shares for the whole or
any part of any period:
(a) During which there shall have occurred any state of war,
national emergency, act of God, banking moratorium or suspension of
payments by banks in the State of Colorado or any general suspen-
sion of trading or limitation of prices on the New York or American
Stock Exchange (other than customary week-end and holiday closing);
or
(b) During which any emergency situation exists, as a result
of which disposal by the Trust of Trust Property is not reasonably
practicable because of the substantial losses which might be
incurred, or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets. Such suspension or
postponement shall not alter or affect a Participant's beneficial
interest hereunder as measured by its Shares or the accrued
interest and earnings thereon. Such suspension or payment shall
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take effect at such time as the Trustees shall specify but not
later than the close of business on the business day next following
the declaration of suspension, and thereafter- there shall be no
right of redemption or payment until the Trustees shall declare the
suspension or postponement at an end, except that the suspension or
postponement shall terminate in any event on the first day on which
the period specified in subsection (a) or in this subsection (b)
shall have expired, as to which the determination of the Trustees
shall be conclusive. In the case of a suspension of the right of
redemption or a postponement of payment for redeemed Shares, 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.
6.7 Minimum Redemption. There shall be a minimum of one (1) Share
which may be redeemed at any one time at the option of a Partici-
pant.
6.8 Defective Redemption Requests. In the event that a Partici-
pant shall submit a request for the redemption of a greater number
of Shares than are then allocated to such Participant, such request
shall not be honored and, each Participant, by its adoption of this
Indenture of Trust, agrees that the Trustees shall have full and
complete power to redeem an amount of the Shares allocated to such
Participant, at a redemption price determined in accordance with
Section 6.5 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 VII
Record of Shares
7.1 Share Register. The Share Register shall be kept by or on
behalf of the Trustees, under the direction of the Trustees, and
shall contain (i) the names and addresses of the Participants, (ii)
the number of Shares representing their respective beneficial
interests hereunder and (iii) a record of all allocations and
redemptions thereof. Such Share Register shall be conclusive as to
the identity of the Participants to which the Shares are allocated.
Only Participants whose allocation of shares is recorded on such
Share Register shall be entitled to receive distributions with
respect to Shares or otherwise to exercise or enjoy the rights and
benefits related to the beneficial interest hereunder represented
by the Shares. No Participant shall be entitled to receive any
distribution, nor to have notices given to it as herein provided,
until it has given its appropriate address to such officer or agent
of the Trust as shall keep the Share Register for entry thereon.
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7.2 Registrar. The Trustees shall have full and complete power to
employ a registrar. Unless otherwise determined by the Trustees,
the Share Register shall be kept by the Administrator which shall
serve as the registrar for the Trust. The registrar shall record
the original allocations of Shares in the Share Register. Such
registrar shall perform the duties usually performed by registrars
of certificates and shares of stock in a corporation, except as
such duties may be modified by the Trustees.
7.3 Owner of Record. No Person becoming entitled to any Shares in
consequence of the merger, reorganization, consolidated, bankruptcy
or insolvency of any Participant or otherwise, by operation of Law,
shall be recorded as the Participant to which such Shares are
allocated and shall only be entitled to the redemption value of
such Shares. Until the Person becoming entitled to such redemption
value shall apply for the payment thereof and present any proof of
such entitlement as the Trustees may in their sole discretion deem
appropriate, the Participant of record to which such Shares are
allocated shall be deemed to be the Participant to which such
Shares are allocated for all purposes hereof, and neither the
Trustees nor the registrar nor any officer or agent of the Trust
shall be affected by any notice of such merger, reorganization,
consolidation, bankruptcy, insolvency or other event.
7.4 No Transfers of Shares. The beneficial interests measured by
the shares shall not be transferrable, in whole or in part, other
than to the Trust itself for purposes of redemption.
7.5 Limitation of Fiduciary Responsibility. The Trustees shall
not, nor shall the Participants or any officer, registrar or other
agent of the Trust, be bound to see to the execution of any trust,
express, implied or constructive, or of any charge, pledge or
equity to which any of the Shares or any interest therein are
subject, or to ascertain or inquire whether any redemption of any
such Shares 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 Shares are allocated. The receipt of
the Participant in whose name any Share is recorded or of the duly
authorized agent of such Participant shall be a sufficient
discharge for all moneys payable or deliverable in respect of such
Shares and from all liability to see to the proper application
thereof.
7.6 Notices. Any and all notices to which Participants are
hereunder entitled and any and all communications shall be deemed
duly served or given if mailed, postage prepaid, addressed to
Participants of record at their last known post office addresses as
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recorded on the Share Register provided for in Section 7.1 hereof.
ARTICLE VIII
Participants
8.1 The Rights of Participants. The rights of Participants as
established in this Article shall be exercised by the Participant's
representative, the Treasurer, as set forth in this Indenture of
Trust. Each Participant, through its Treasurer, shall be entitled
to one vote with respect to the following matters:
(a) Amendment of this Indenture of Trust or termination of
the Trust as provided in Section 4.3 and Section 13.1 hereof;
(b) Election of Trustees; and
(c) The approval or disapproval of the annual report, as
provided in Section 8.9.
It shall not be necessary for any minimum number of Shares
other than one (1) to be allocated to a Participant for the
Participant to be entitled to vote. ,Participants may vote at
either an annual or special meeting or"Without a meeting. A vote
may be called by the Board of Participants at any time if at least
10$ of the members thereof contact the Secretary of the Trust
requesting a vote and stating the question to be voted on. Within
twenty (20) days of the receipt of such request, the Board of
Trustees shall cause a ballot to be sent to each Participant,
setting forth the matter to be voted on and the manner in which
such ballots should be executed and delivered. All Votes of
Participants shall be administered and the results thereof promptly
certified in writing to the Participants and the Board of Trustees
by the Secretary, or by such other person as the Participants may
from time to time direct, in such a manner as to assure complete
and accurate voting lists and vote counts, and anonymity of votes.
8.2 Inspection of Records. The records of the Trust shall be open
to inspection by any Participant at all reasonable business hours.
8.3 Meetings and Votes of Participants.
(a) A meeting or a vote of the Board of Participants may be
called at any time by the Trustees, or upon written request of at
least 10% of the members of the Board of Participants filed with
the Secretary of the Trust stating the purpose for the meeting or
the matter to be voted upon. Any such meeting shall be held within
the state of Colorado'at such place, on such day, and at such time
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as the Trustees shall designate, except that a meeting called by
the Participants must be held within thirty (30) days after the
qualifying request is made.
(b) A majority of the Participants entitled to vote at such
meeting present in person or by proxy shall constitute a quorum at
any annual or special meeting. For the purposes of this subsection
(b), Participants shall be deemed present in person or by proxy if
they or their proxies are participating by conference telephone or
similar communications equipment, by means of which all persons
participating in the meeting can hear and communicate with each
other.
8.4 Annual Meetings or Annual Votes. Annual Meetings or Annual
Votes of the Participants held without a meeting, shall be held
within one hundred twenty (120) days after the completion of the
Trust's first fiscal year and thereafter within one hundred twenty
(120) days after the completion of each succeeding fiscal year of
the Trust. The business transacted at such meetings, or matters
considered in such votes, shall include the election of Trustees
and may include the transaction of such other business or consider-
ation of such matters as Participants may be entitled to vote upon
as provided in this Article VIII, or as the Trustees may determine.
8.5 Notice of Meetings and Votes. Notice of all meetings of the
Participants, stating the time, place and purposes of the meeting,
and notice of any vote without a meeting, stating the purpose and
method thereof shall be given by the Trustees by mail to each
Participant at its registered address, maiied at least ten (10)
days and not more than thirty (30) days before the meeting or the
day by which votes must be cast. 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 "open meeting", "sunshine" or similar
law, whether now or hereafter in effect, shall also be given.
8.6 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 who are entitled to
participate in any vote, or for the purpose of any other action,
the Trustees may from time to time fix a date not more than thirty
(30) days prior to the date of any meeting or vote of Participants
or other action as a record date for the determination of Partici-
pants 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 which
was a Participant at the time so fixed shall be entitled to vote at
such meeting or any adjournment thereof, or to cast a ballot in
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such vote, even though it then had no Shares allocated to it or has
since that date redeemed its Shares. No Participant becoming such
after that date shall be so entitled to vote at such meeting or any
adjournment thereof or to cast a ballot in such vote or to be
treated as a Participant of record for purposes of such other
action.
8.7 Proxies. At any meeting of Participants, if permitted by
applicable law, any Participant entitled to vote thereat may vc~_e_
by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Secretary of the
Trust, or with such other officer or agent of the Trust as the
Secretary of the Trust may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a resolution
of a majority of the Trustees, proxies may be solicited in the name
of one or more of the officers of the Trust. All proxies shall be
revocable at the option of the Participant.
8.8 Number of Votes. Only Participants of record shall be
entitled to vote. Each Participant shall be entitled to one vote
without regard to the number of Shares 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.
8.9Reports. The Trustees shall cause to be prepared at least
annually (i) a report of operations containing a statement of as-
sets, liabilities, operations, changes in investments and earnings
thereon, and changes in net assets of the Trust, prepared in
conformity with generally accepted accounting principles and (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. A signed copy of such report and opinion shall
be filed with the Trustees within ninety (90) days after the close
of the period covered thereby. The Board of Participants shall
review the annual report submitted by the Trustees. This review is
to establish that the Trust is operating in compliance with the
Indenture of Trust as set forth herein. The approval or disapprov-
al of the annual report, either in whole or in part shall be by
vote without a meeting. Results of the vote shall be reported to
the Participants within thirty (30) days after the voting deadline.
Any votes not submitted by the deadline will be counted as approval
of the annual report. The Trustees shall, in addition, furnish to
the Participants, at least quarterly, an interim report prepared in
conformity with generally accepted accounting principles containing
an unaudited balance sheet of the Trust as at the end of such
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quarterly period and statements showing details 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.
ARTICLE IX
Trustees and Officers
9.1 Number, Qualification and Succession of Trustees.
(a) The governing body of the Trust shall be the Board of
Trustees, the membership of which shall be determined as herein
provided.
(b) The number of Trustees shall initially be five (5) and
shall thereafter be fixed from time to time by resolution of a
majority of the Board of Participants, provided, however, that the
number of Trustees shall at no time be less than three (3) or more
than fifteen (15). No reduction in the number of Trustees shall
have the effect of removing any Trustee from office prior to the
expiration of his term.
(c) The Trustees shall be natural persons of which at least
a majority shall be members of the Board of Participants and thus
a Treasurer of a Participant. Any non-Treasurer Trustee must, how-
ever, be appointed or elected as a non-Treasurer Trustee, and if
any Trustee who is not elected or appointed as a non-Treasurer
Trustee ceases to be a Treasurer of a Participant during his term
as Trustee, he shall be deemed not to meet the requirements for
office within the meaning of Section 9.3(a)(v) hereof.
(d) Except as provided by Section 9.2 hereof concerning the
initial Trustees, Trustees shall be elected or appointed as
provided in Section 9.4 hereof. No such election or appointment
shall become effective, however, until the person elected or
appointed qualifies for such office by delivering to the Secretary
or Chairman of the, Board of Trustees a writing signed by him (i)
accepting such appointment, and (ii) agreeing to be bound by the
terms of this Indenture of Trust. Qualification must be completed
within twenty (20) days after such person is notified of his elec-
tion or appointment, and failure to meet this requirement shall
void the election or appointment.
(e) Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled, the Trustees or Trustee continuing in
office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed
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upon the Trustees by this Indenture of Trust.
(f) Upon the election or appointment and qualification of any
person to the office of Trustee, the Trust Property shall vest in
such new Trustee without necessity of any further act or convey-
ance.
(g) The Trustees, in their capacity as Trustees, shall not be
required to devote their entire time to the business and affairs of
the Trust.
9.2 Organizational Trustees. By the execution of this Indenture
of Trust, the Initial Participants appoint the following as
Trustees:
Gordon Griffin Adams County School District No. 14
Lennard Eckhardt Garfield County School District No. 2
George Herbst Grand County Water & Sanitation
District No. 1
Etta Everett
Steve Thompson
The Trustees now and hereafter shall consult for opinion the
advisory members, including the Advisor, Custodian, and Legal
Counsel prior to changing or modifying the investment policies or
operation of the Trust.
9.3 Vacancies.
(a) A Trustee's office shall be deemed vacant upon the
occurrence of any one of the following events:
(i) If for any reason*a properly qualified person is
not elected to such Trustee's office by the Participants at the
Regular Election next preceding the expiration of the Trustee's
term;
(ii) If a person who was duly elected or appointed
fails, neglects or refuses to qualify for office as required by
subsection 9.1(d) hereof within twenty (20) days after the date he
is notified of such election or appointment;
(iii) If a person who was duly elected or appointed
submits a written resignation to the Board of Trustees;
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(iv) If a person who was duly elected or appointed dies
during his term of office;
(v) If a person who was duly elected or appointed
ceases to meet the requirements for the office of Trustee as set
forth in Section 9.1 hereof;
(vi) If a person who was duly elected or appointed is
convicted of a felony or is or becomes the subject of an order for
Relief entered pursuant to the United States Bankruptcy Code (11
USC §§101 et sect.) ;
(vii) If a court of competent jurisdiction voids the
election or appointment or removes a person duly elected or
appointed for any cause whatsoever, but only after his right to
appeal has been waived or otherwise exhausted;
(viii) If the person who was duly elected or appointed is
removed from office pursuant.to Section 9.5 hereof.
(b) No vacancy in the office of any Trustee shall operate to
annul this Indenture of Trust or to revoke any existing agency
created pursuant to the terms of this Indenture of Trust, and title
to any Trust Property held in the name of such Trustee and the
other Trustees or otherwise, shall, in the event of a vacancy in
the office of such Trustee, vest in the continuing or surviving
Trustees without necessity of any further act or conveyance.
9.4 Election, Appointment, Term of Office.
(a) Trustees are elected for overlapping terms of three years
by a majority vote of the Participants present and entitled to vote
at an annual meeting or voting in an annual vote of Participants,
herein called a "Regular Election." At any time the Board of
Participants changes the number of Trustees it shall by the same
action specify the number of three-year terms to be filled at the
next Regular Election, but shall maintain as nearly equal as
possible the number of three-year terms to be filled at each
subsequent Regular Election. Trustees may succeed themselves in
office.
(b) Any vacancy on the Board of Trustees may be f illed by the
remaining Trustees, but such appointment is valid only until the
next Regular Election, at which time the vacancy for the then
unexpired portion of the term is filled by the Participants.
(c) A Trustee remains in office until a vacancy occurs in his
office as provided in Section 9.3 hereof, or until his successor is
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duly elected and qualifies for office as provided in Section 9.1(d)
hereof, whichever shall first occur.
9.5 Resignation and Removal.
(a) 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,
and such resignation shall be effective upon such delivery, or at
a later date according to the terms of the notice.
(b) Any Trustee may be removed without cause by the Partici-
pants, or for good cause by action of two-thirds of the other
Trustees.
(c) Upon ceasing to be a Trustee, such person shall execute
and deliver such documents as the remaining Trustees shall require
for the purpose of conveying to the Trust or the remaining Trustees
and Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his or her
legal representative shall execute and deliver on his or her behalf
such documents as the remaining Trustees shall require as provided
in the preceding sentence.
9.6 officers and Advisors. The Trustees shall annually designate
a Chairman who shall be the Chief executive officer of the Trust
and a Vice Chairman who shall have such duties as the Trustees
shall deem advisable and appropriate. The Trustees may elect or
appoint, from among their number or otherwise, 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 Trustees may deem to be advisable and
appropriate. Two or more officers, except those of Chairman, Vice
Chairman, Treasurer and Secretary, may be held by the same person.
The Treasurer, the Secretary, the Advisor, the Administrator,
Custodian and Legal Counsel may attend meetings of the Trustees
but, except in the case of a Treasurer or a Secretary who may be a
member of the Board of Trustees, shall have no voting power.
9.7 By-Laws. The Trustees may adopt and, from time to time, amend
or repeal By-Laws for the conduct of the business of the Trust, and
in such By-Laws, among other things, may define the duties of the
respective officers, agents, employees and,representatives of the
Trust.
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ARTICLE X
Determination of Net Asset Value and Net Income:
Distributions to Participants
10.1 Net Asset Value. The net asset value of each allocated Share
of the Trust shall be determined once on each business day at such
time as the Trustees by resolution may determine. The method of
determining net asset value shall be established by the Trustees
and shall be set forth in the Information Statement as the same may
be amended from time to time. The duty to make the daily calcula-
tions may be delegated by the Trustees to the Advisor, the
Administrator, the Custodian or such other Person as the Trustees
by resolution may designate.
10.2 Constant Net Asset Value: Reduction of Allocated Shares.
(a) The Trustees shall have full and complete power to
determine the net income (including unrealized gains and losses on
the portfolio assets) of the Trust once on each business day as
provided in Section 10.1 hereof and, upon each such determination
such net income shall be credited proportionately to the accounts
of the Participants in such manner, and with the result, that the
net asset value per Share of the Trust shall remain at a constant
dollar value of $1.00 or integral of 1/100ths thereof. Any change
in the constant dollar value shall be made on a pro rata basis by
increasing or reducing the number of each Participant's shares.
The general method used for the determination of the net income of
the Trust and the crediting thereof proportionately to the
respective accounts of the Participants shall be determined by the
Trustees and shall be set forth in the Information Statement as the
same may be amended from time to time. The duty to make the daily
calculations may be delegated by the Trustees to the Advisor, the
Administrator, the Custodian or such other Person as the Trustees
by resolution may designate. Fluctuations in value will be
reflected in the number of Shares allocated to each Participant.
If there is a net loss, the Trustees will first offset such amount
against income accrued to each Participant. To the extent that
such a net loss would exceed such accrued income, subject to the
last paragraph of Section 2.9 hereof, the Trustees will reduce the
aggregate number of the Trust's allocated Shares in an amount equal
to the amount by which the net loss exceeds accrued income by
having each Participant contribute to the Trust's corpus its pro
rata portion of the total number of Shares required to be redeemed
in order to permit the net asset value per Share of the Trust to be
maintained at a constant dollar value. Each Participant will be
deemed to have agreed to such contribution in these circumstances
by its investment in the Trust and its adoption of this Indenture
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of Trust. The purpose of the foregoing procedure is to permit the
net asset value per Share of the Trust to be maintained at a
constant dollar value per Share.
(b) The Trustees may discontinue or amend the practice of
attempting to maintain the net asset value per Share at a constant
dollar amount at any time and such modification shall be evidenced
by appropriate changes in the Information Statement as the same may
be amended from time to time.
10.3 Supnlementary Distributions to Participants. In addition to
redemptions made at the request of individual Participants pursuant
to Section 6.5 hereof, the Trustees may from time to time also
declare and make to the Participants, in proportion to their
respective allocation of Shares, out of the earnings, profits or
assets in the hands of the Trustees, such supplementary distribu-
tions as they may determine. The declaration and making of such
supplementary distributions and the determination of earnings,
profits, and other funds and assets available for supplemental
distributions and other purposes shall lie wholly in the discretion
of the Trustees and may be made at such time and in such manner as
the Trustees may in their sole discretion from time to time
determine. Any or all such supplementary distributions may be made
among the Participants of record at -the time of declaring a
distribution or among the Participants of record at such other date
as the Trustees shall determine.
10.4 Retained Reserves. The Trustees may retain from the earnings
of the Trust such amount as they may deem necessary to pay the
debts and expenses of the Trust and to meet other obligations of
the Trust, and the Trustees shall also have the power to establish
such reasonable reserves from earnings as they believe may be
required to protect the Trust and the Participants against
contingent liabilities.
ARTICLE XI
Custodian
11.1 Duties. The Trustees shall employ a bank or trust company
organized under the Laws of the United States of America as
Custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be
contained in the By-Laws of the Trust, to perform the duties set
forth in the Custodian Agreement to be entered into between the
Trust and the Custodian. Such Custodian must be certified as a
qualified "public depository" as defined by the Public Depository
Protection Acts and shall safekeep all Trust Property in accordance
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therewith.
11.2 Appointment. The Trustees shall have the power to select and
appoint the Custodian for the Trust. The Custodian Agreement may
be terminated at any time without cause and without the payment of
any penalty by the Trust on sixty (60) days' written notice to the
Custodian.
11.3 Disbursement and Collection Agent. The Trustees may also
authorize the. employment of a disbursement and collection agent
from time to"time to perform acts and services upon such terms and
conditions, as may be agreed upon between the Custodian and said
agent and approved by the Trustees; provided, however, that, in
every case, such disbursement and collection agent shall be a bank
or trust company duly organized under the laws of the United States
of America or one of the states thereof and be a State-designated
eligible public depository.
11.4 Successors. In the event that at any time the Custodian or
the Disbursement and Collection Agent shall resign or shall be
terminated pursuant to the provisions of the Custodian Agreement or
disbursement and Collection Agreement, the Trustees shall appoint
a successor thereto.
ARTICLE XII
Recording of Indenture of Trust
12.1 Recording. This Indenture of Trust and any amendment hereto
shall be filed, registered, recorded or lodged as a document of
public record in such place or places and with such official or
officials as may be required by Law or as the Trustees may deem
appropriate. Each amendment so filed, recorded or lodged shall be
accompanied by a Certificate signed and acknowledged by a Trustee
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. An amended
Indenture of Trust, containing or restating the original Indenture
and all amendments theretofore made, may be executed any time or
from time to time by a majority of the Trustees and shall, upon
filing, recording or lodging in the manner contemplated hereby, be
conclusive evidence of all amendments contained therein and may
thereafter be referred to in lieu of the original Indenture of
Trust and the various amendments thereto. Notwithstanding the
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foregoing provisions of this Section 12. 1, no filing or recordation
pursuant to the terms of this Section 12.1 shall be a condition
precedent to the effectiveness of this Indenture.
ARTICLES XIII
Amendment or Termination of Trust; Duration of Trust
13.1 Amendment or Termination.
(a) The provisions of this Indenture of Trust may be amended
or altered or the Trust may be terminated by the affirmative vote
of a majority of the Participants entitled to vote at any meeting
of the Participants or pursuant to any vote of the Participants
called for that purpose, except that the affirmative vote of two-
thirds of the Participants entitled to vote shall be required to
enact any amendment which would change any rights with respect to
any allocated shares of the Trust by reducing the amount payable
thereon upon liquidation of the Trust, or which would diminish or
eliminate any voting rights of the Participants. Substantive
amendments to the limitations upon personal liability of the
Participants and Trustees and to the prohibition of assessments
upon Participants shall require the unanimous approval of all
Participants entitled to vote. Notwithstanding the foregoing,
after fifteen (15) days' prior written notice to the Participants,
the Board of Trustees may amend or alter the provisions of the
Indenture of Trust, without the vote or assent of the Participants,
to the extent deemed in good faith by the Board of Trustees to be
necessary to conform this Indenture of Trust to the requirements of
applicable laws or regulations or any interpretation thereof by a
court or other governmental agency of competent jurisdiction. No
liability shall attach to the Trustees, however, for any failure or
refusal on their part to act pursuant to the power herein granted.
(b) 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 Trustees shall
proceed to wind up the affairs of the Trust and all of the powers
of the Trustees under this Indenture of Trust shall continue until
the affairs of the Trust shall have been wound up, including,
without limitation, the power to fulfill or discharge the contracts
of the Trust, collect its assets, sell, convey, assign, exchange,
transfer or otherwise dispose of all or any part of the remaining
Trust Property to one or more persons at public or private sale for
consideration which may consist in whole or in part cash, securi-
ties or other property of any kind, discharge or pay its liabili-
ties, and do all other acts appropriate to liquidate its affairs;
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provided, however, that any sale, conveyance, assignment, exchange,
transfer, or other disposition of all or substantially all of the
Trust Property shall require approval of the principal terms of the
transaction and the nature and amount of the consideration by
affirmative vote of not less than a majority of the Trustees
entitled to vote thereon; and (iii) after paying or adequately
providing for the payment of all liabilities, and upon receipt of
such releases, indemnities and refunding agreements, as they deem
necessary for their protection, the Trustees may distribute the
remaining Trust Property, in cash or in kind or partly in each,
among the Participants according to their respective proportionate
allocation of Shares.
(c) Upon termination of the Trust and distribution to the
Participants as herein provided, a majority of the Trustees shall
execute and lodge among the records of the Trust an instrument in
writing setting forth the fact of such termination, and the
Trustees shall thereupon be discharged from all further liabilities
and duties hereunder, and the right, title and interest of all
Participants shall cease and be cancelled and discharged.
(d) A certification in recordable form signed by a majority
of the Trustees setting forth an amendment and reciting that it was
duly adopted by the Participants or by the Trustees as aforesaid or
a copy of the Indenture, as amended, in recordable form, and
executed by a majority of the Trustees, shall be conclusive
evidence of such amendment.
13.2 Duration. The Trust shall continue in existence in perpetu-
ity, subject in all respects to the provisions of this Article
XIII.
ARTICLE XIV
Miscellaneous
14.1 Governing Law. This Indenture of Trust is executed by the
Initial Participants and delivered in the state of Colorado and
with reference to the Laws thereof, and the rights of all parties
and the validity, construction and effect of every provision hereof
shall be subject to and construed according to the Laws of said
State of Colorado.
14.2 Counterparts. This Indenture of Trust 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.
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14.3 Reliance by Third Parties. Any certificate executed by an
individual who, according to the then current records of the Trust,
appears to be a Trustee, the Secretary or the Treasurer of the
Trust, certifying to (a) the number or identity of Trustees or
Participants; (b) the due authorization of the execution of any
instrument or writing; (c) the results of any vote of Trustees or
Participants; (d) the fact that the number of Trustees or Partici-
pants present at any meeting or executing any written instrument
satisfies the requirements of this Indenture of Trust; or (e) the
form of any By-Laws adopted by, or the identity of any officers, or
any facts which in any manner relate to the affairs of the Trust,
shall be conclusive evidence as to the matters so certified in
favor of any Person dealing with the Trustees or any of them or the
Trust and the successors of such Person.
14.4 Provisions. in Conflict with Law. The provisions of this
Indenture are severable, and if the Trustees shall determine, with
the advice of counsel, that any one or more of such provisions are
in conflict with applicable federal or Colorado Laws, those
conflicting provisions shall be deemed never to have constituted a
part of this Indenture of Trust, provided, however, that such
determination by the Trustee shall not affect or impair any of the
remaining provisions of this Indenture of Trust or render invalid
or improper any action taken or omitted (including, but not limited
to, the election of Trustees) prior to such determination.
14.5 Gender and Section Headinas.
(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 the Indenture of Trust and any table of contents or
marginal notes appended to copies hereof, shall be solely for
convenience of reference and shall neither constitute a part of
this Indenture of Trust nor affect its meaning, construction or
effect.
14.6 Adoption by Local Government.
(a) Any Local Government Entity meeting the requirements of
Section 1.2 hereof, may become a Participant of this Trust by (i)
taking any appropriate official action to adopt this Indenture of
Trust and (ii) furnishing the Trustees with satisfactory evidence
that such official action has been taken. A copy of this Indenture
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of Trust may be adopted by executing a written instrument of
adoption in such form as may be prescribed by the 'Trustees.
Delivering an acknowledged copy of such instrument shall constitute
satisfactory evidence of the adoption contemplated by this Section.
(b) Any Participant may resign and withdraw from the Trust by
sending a written notice to such effect to the Chairman of the
Trust and the Administrator and by requesting the redemption of all
Shares then held by it or, in accordance with any other procedure
authorized by the Trustees or Board of Participants. Such
resignation and withdrawal shall become effective upon the receipt
thereof by the Chairman of the Trust and the Administrator. No
resignation and withdrawal by a Participant shall operate to annul
this Indenture of Trust or terminate the existence of the Trust.
IN WITNESS WHEREOF, the undersigned Local Government Entities
of the State of Colorado, acting in the capacity of Initial
Participants of CSAFE and pursuant to the authority granted by
statute, and with respect to the Local Government Entities
indicated, have executed this Indenture of Trust together with the
Trustees as of the day first above written, as of which date of
this Indenture of Trust shall take, and come into, full force and
effect.
"Initial Participants and Trustees"
ADAMS COUNTY SCHOOL DISTRICT NO. 14
By:
Gordon Griffin
Treasurer as defined herein and as
Trustee
GARFIELD SCHOOL DISTRICT NO. 2
By:
Lennard Eckhardt
Treasurer as defined herein and as
Trustee
GRAND COUNTY WATER AND SANITATION DISTRICT
NO.1
By:
George Herbst
Treasurer as defined herein and as
Trustee
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"Trustees"
By:
Etta -Everett
Trustee as defined herein
By:
Steve Thompson
Trustee as defined herein
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