EXHIBIT 8(c)
PLEDGE AGREEMENT
Agreement dated _____________________, 1985 among Prudential-Bache
Government Plus Fund, Inc. ("Fund"),_______________ ("Broker"), and State Street
Bank and Trust Company ("State Street"), hereinafter collectively known as the
"Parties".
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Fund has opened a trading account ("Trading Account")
with Broker, a registered Futures Commission Merchant, for the purpose of
trading in contracts for the future delivery of commodities traded on duly
registered boards of trade or commodities exchanges, including options on such
contracts ("Contracts"); and
WHEREAS, the rules and regulations of the Chicago Mercantile Exchange,
the Chicago Board of Trade, and such other exchanges on which Broker may effect,
or caused to be effected, Contract transactions for the Fund ("Exchange" or
"Exchanges") may require the Fund to deposit with Broker certain collateral with
respect to each Contract; and
WHEREAS, Broker understands that State Street is the custodian of the
Fund's securities and other assets pursuant to a custody agreement, dated
_______, 1985 and that in accordance therewith State Street will open and
maintain such separate custody accounts as the Fund may in writing direct, such
accounts to be subject to the terms of this Pledge Agreement among the Parties
("Pledge Account" or "Pledge Accounts").
Therefore, it is agreed as follows:
1. As used herein the following terms shall have the following
meanings:
"Initial Margin" means the margin required to enter into a
Contract by any Exchange on which transactions are effected by Broker
as broker for the Fund.
"Instructions from Broker" means a request, direction or
certification in writing signed in the name of Broker by a person
authorized to sign for Broker as certified in writing to State Street
by an officer of Broker. Such instructions shall be hand-delivered or
transmitted to it by facsimile sending device and may be amended from
time to time.
"Instructions from the Fund" means a request direction or
certification in writing signed in the name of the Fund by a person
authorized to sign for the Fund as provided in Section 2.17 of the
Custody Agreement dated ___________________, 1985 between the Fund and
State Street ("Custody Agreement") and delivered to State Street or
transmitted to it by a facsimile sending device, except that
instructions to
transfer cash or eligible U.S. Government securities to the Pledge
Account may be given by telephone and thereafter confirmed in writing
signed in the name of the Fund by a person authorized to sign for the
Fund as provided in Section 2.17 of the Custody Agreement.
"Notice by Broker to the Fund" or "Notice by State Street to the
Fund" means notice by telephone to a person designated by the Fund in
writing as eligible to receive such notice or, in the event no such
person is available, to any officer of the Fund.
"Notice by Broker to State Street" means notice, in writing, hand
delivered or transmitted by a facsimile sending device to a person
designated by State Street in writing as eligible to receive such
notice or in the event no such person is available to any officer of
the Custody and Shareholder Services Department of State Street.
"One Business Day" means a period commencing at the time the
required notice has been given on a day on which the Fund is open for
business and concluding at the same time on the next following day
that the Fund is open for business.
2. The Fund hereby gives Instructions from the Fund to State Street
to open and maintain a Pledge Account for Broker as pledgee of the Fund with
respect to the Trading Account established by the Fund with Broker. The account
shall be entitled "______________________________, Pledgee of Prudential-Bache
Government Plus Fund, Inc. (Customer Segregated Account)." The designation
"Customer Segregated Account" in the account title is intended to indicate the
status of the account under the Commodities Exchange Act and Commodity Futures
Trading Commission regulations; however, the provisions of this agreement shall
be controlling as to the rights of the Parties in the Collateral designated in
the Account.
3. The Fund shall deposit in the Pledge Account cash or eligible
U.S. Government securities, or any combination thereof (hereinafter called
"Collateral") in the amount of Initial Margin required with respect to any
Contract for the Trading Account for which the Pledge Account is maintained.
Such Collateral shall be maintained in the Pledge Account until termination or
satisfaction of the Contract. The Fund may deposit, or maintain on deposit,
Collateral in the Pledge Account in excess of such requirements ("Excess
Margin"). In determining whether Collateral is sufficient to satisfy Initial
Margin requirements of any exchange, eligible U.S. Government securities will
be valued at the current market value less 10% of the principal value thereof.
4. Collateral held in the Pledge Account (i) will be held by State
Street as agent of Broker subject to the terms and conditions of the Custody
Agreement, as modified by this Agreement, which shall be controlling with
respect to the Pledge Account in the event of
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conflicting provisions, (ii) may be released, transferred or sold only in
accordance with the terms of this Agreement and (iii) except as provided herein,
shall not be made available to Broker or to any person claiming through Broker
including creditors of Broker. The Fund hereby grants to Broker a continuing
security interest in the Collateral and the proceeds thereof, but not such
portion of the Collateral which constitutes Excess Margin, subject to the terms
and conditions of this Agreement, which security interest will terminate at the
earlier of (a) release of the Collateral by Broker as provided herein or (b)
such time as the Collateral becomes Excess Margin. The Collateral shall at all
times remain the property of the Fund subject only to the interest and rights
therein of Broker as pledgee and secured party thereof as provided in this
Agreement.
5. State Street agrees to transfer upon Instructions of the Fund, or
release to the Fund, Collateral held in the Pledge Account only upon
Instructions from Broker.
6. The Fund may substitute as Collateral eligible U.S. Government
securities or cash of equal or greater value. Broker agrees to give
Instructions from Broker to State Street to release from a Pledge Account cash
or eligible U.S. Government securities of an equal Value, or such lesser amount
as may be directed by the Fund, upon receipt of substitute Collateral.
7. Broker shall at the Fund's request promptly notify the Fund of
the amount of any Excess Margin in the Pledge Account. Upon request of the
Fund, Broker shall give Instructions from Broker to State Street to release to
the Fund cash or eligible U.S. Government securities selected by the Fund, the
value of which in the aggregate does not exceed the amount of any such Excess
Margin. In the event such Excess Margin shall at any time exceed $50,000, State
Street shall release to the Fund cash or eligible U.S. Government securities
selected by the Fund, the value of which in the aggregate does not exceed the
amount of any such Excess Margin, without the need to receive Instructions from
Broker.
8. Subject to Section 10, interest on securities held in the Pledge
Account will be automatically credited by State Street in Federal funds to such
demand deposit account or accounts designated in Instructions from the Fund on
the date that such funds become due and payable. Amounts due on securities
which mature or are redeemed will be credited to the Pledge Account in Federal
funds on the date funds are received.
9. State Street shall promptly give Notice by State Street to the
Fund and Broker of, and transmit to both written confirmation of, each transfer
into or out of a Pledge Account and shall transmit to Broker monthly a summary
of such transfers.
10. Broker shall have access to the Collateral only in accordance
with the following:
(a) If notice by Broker is given that additional margin is
required by any Exchange on which transactions are effected by Broker on
behalf of the Fund due to variation in the value of one or more Contracts
purchased or sold by the Fund ("Variation
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Margin") prior to 11:30 a.m. New York time on a day on which the Fund is open
for business, which Variation Margin shall first have been satisfied from any
amounts currently credited to the Fund's Trading Account with Broker in
connection with which the Variation Margin is required, the Fund shall transfer
to Broker such Variation Margin not later than 3:00 p.m. on the same day. If
Notice by Broker to the Fund is given of the need for Variation Margin
subsequent to 11:30 a.m. but prior to 4:00 p.m. New York time on a day on which
the Fund is open for business, the Fund shall provide such Variation Margin to
Broker not later than 10:30 a.m. New York time of the next succeeding day on
which the Fund is open for business. Notice by Broker to the Fund of the
receipt of Variation Margin shall be given promptly.
(b) If Broker has not received the requested Variation Margin
within the time period as provided in Paragraph (a), Notice by Broker to
the Fund of the failure to receive the Variation Margin shall be given
immediately.
(c) If Broker does not receive the Variation Margin within one
Business Day from the time of giving Notice by Broker to the Fund of the
failure to receive the Variation Margin, Broker may give (i) Notice by
Broker to State Street of the Fund's failure to provide Variation Margin
and the amount of Variation Margin required, which Notice shall indicate
the Pledge Account relating to the Trading Account in which the Variation
Margin is required, and (ii) Notice by Broker to the Fund that such Notice
has been given to State Street. Immediately upon receipt of Notice by
Broker to State Street but without prejudice to any rights of Broker
hereunder, State Street shall give Notice by State Street to the Fund of
its receipt of such Notice by Broker.
(d) No sooner than one Business Day after such Notice by Broker
to State Street, and only if the Fund has failed to transfer the required
Variation Margin to Broker during such period, Broker may give Notice by
Broker to State Street of the Fund's failure to provide Variation Margin
and may give Instructions from Broker to State Street (i) to transfer
eligible U.S. Government securities from such Pledge Account to Broker,
(ii) to sell at the prevailing market price such of the Collateral in the
Pledge Account relating to the Trading Account in which the Variation
Margin is required, in each case as necessary to provide for payment to
Broker of the amount of Variation Margin that Broker shall have specified
in the Notice, or (iii) with respect to Collateral in the form of cash,
Broker may give Instructions from Broker to State Street to immediately
transfer cash in the amount of the Variation Margin that Broker shall have
specified in such Notice from such Pledge Account to the account of Broker.
Any Notice pursuant to this paragraph 10(d) must state that all conditions
precedent to Broker's right to direct the disposition of the Fund's assets
in such Pledge Account have been met. State Street shall immediately give
Notice by State Street to the Fund of its receipt of such Instructions from
Broker and, upon taking any action pursuant to such Instructions, shall
immediately give Notice by State Street to the Fund of such actions.
Subject to the notice provisions set forth above, State Street shall take
Instructions solely from Broker with respect to the
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sale of securities and/or the transfer of cash to Broker. In the event that
Broker receives eligible U.S. Government Securities pursuant to this paragraph
(d), it shall have the right to sell or otherwise dispose of such securities and
shall remit to the Fund any proceeds of such sale or disposition in excess of
the amount of Variation Margin specified in Instructions from Broker to State
Street.
(e) State Street shall release from the Pledge Account to the
Fund's custodial account any Collateral in excess of the amount of
Variation Margin specified in Instructions from Broker to State Street
including any proceeds from sale of securities in excess of such amount.
11. Neither Broker nor any person claiming through Broker shall have
access to Collateral in the Pledge Account established and maintained pursuant
to this Agreement other than the Pledge Account which relates to the Trading
Account in which the Variation Margin is required and only in accordance with
the provisions of this Agreement.
12. If State Street, upon receipt of Instructions from Broker to
release Collateral, fails to take the action specified in such Instructions as
provided herein in a timely fashion and the Fund incurs a loss by reason
thereof, State Street shall indemnify the Fund for such loss.
13. No amendment of this Agreement shall be effective unless in
writing and signed by persons thereunto duly authorized.
14. Written communications hereunder shall be, except as otherwise
required hereunder, hand-delivered or mailed first class postage prepaid, except
that written notice of termination shall be sent by certified mail addressed:
(a) if to State Street, to:
Custody and Shareholder Services
State Street Bank and Trust Company
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx
(b) (1) if to the Fund to:
The Prudential Insurance Company of America
Prudential Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
(2) With copies to:
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Xxxxxx X. Xxxxx
Prudential-Bache Government Plus Fund, Inc.
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx x0000
(c) if to Broker, to
__________________________________________
__________________________________________
__________________________________________
__________________________________________
15. Except as specifically provided herein, this agreement does not
in any way affect any other agreements entered into among the parties hereto and
any actions taken or omitted by any party hereunder shall not affect any rights
of any other party hereunder.
16. Any of the parties hereto may terminate this Agreement upon 30
days written Notice to both of the other parties hereto; provided, however, that
Collateral which has not been released by Broker at or prior to the time of
termination shall be transferred to a substitute custodian designated by the
Fund and acceptable to Broker.
17. This Agreement shall be construed according to, and the rights
and liabilities of the parties hereto shall be governed by the laws of the State
of New York.
STATE STREET BANK AND TRUST COMPANY
By :_________________________________________________
Authorized Signature
PRUDENTIAL-BACHE GOVERNMENT SECURITIES FUND, INC.
By :_________________________________________________
Authorized Signature
[BROKER]
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By :_________________________________________________
Authorized Signature
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CUSTOMER AGREEMENT
------------------
____________________________________________ ("Broker") and
Prudential-Bache Government Plus Fund, Inc. ("Customer") agree as follows:
1. Customer has opened a trading account ("Trading Account") with
Broker for the purpose of trading in contracts for the future delivery of
commodities traded on duly registered boards of trade or commodities exchanges,
including options on such contracts ("Contracts").
2. Customer authorizes Broker to purchase and sell Contracts for
Customer's account in accordance with Customer's telephone instructions.
Customer hereby waives any defense that any such instruction was not in writing
as may be required by the Statute of Frauds or any other law, rule or
regulation.
3. Customer shall, in connection with Contract transactions, pay
Broker (1) commission charges as agreed upon by Broker and Customer from time to
time, (2) any charges imposed on any transaction undertaken for Customer by the
exchange or clearinghouse through which it is executed and any tax, fees or
charges imposed on such transactions by any competent authority, (3) any margin
required by any exchange on which Contract transactions are effected by Broker
for Customer due to the variations in value of one or more outstanding Contracts
purchased or sold by Customer ("Variation Margin") in accordance with item 7
hereof and (4) interest and service charges on any Customer deficit balances at
the rates customarily charged by the Broker, together with Broker's costs and
attorney's fees incurred in collecting any such deficit. Such payments shall be
made in Federal funds to Broker at _____________________________________________
_______________.
4. Broker shall promptly credit to the Trading Account any margin
due to Customer resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any exchange on
which Contract transactions are effected by Broker for Customer. At Customer's
direction, Broker shall transfer Trading Account balances to Customer in Federal
funds to State Street Bank and Trust Company or such bank account in Customer's
name as Customer shall otherwise direct. Customer shall give such directions to
Broker by telephone, confirmed thereafter in writing.
5. A detailed statement of all Contract transactions for or on the
Customer's behalf shall be furnished to Customer on a daily basis.
6. Customer shall timely deposit and maintain in a Pledge Account at
all times Initial Margin, as defined in Item 1 of the Pledge Agreement among
Broker, Customer and State Street Bank and Trust Company executed simultaneously
herewith ("Pledge Agreement"). As used herein, a timely deposit is one which is
effected within one Business Day, as defined in Item
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1 of the Pledge Agreement, following telephone notice by Broker to a person
authorized in writing by Customer to receive such notice ("Authorized Person of
Customer") of the requirement for Initial Margin.
7. If any Variation Margin is required to be paid by Customer, such
Variation Margin requirement shall first be satisfied by reducing the balance,
if any, currently credited, in accordance with Item 4 above, with respect to the
Trading Account with Broker in which the. Variation Margin is required. Any
remaining Variation Margin ("Net Variation Margin") shall be paid by Customer to
Broker within the time periods set forth in Item 10 of the Pledge Agreement.
8. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through Broker unless such Contracts have been terminated by an
offsetting purchase or sale prior to the delivery date. Customer shall, upon
request of Broker, advise Broker of its intentions with respect to the delivery
of or payment for such financial instruments, and Broker shall be entitled to
receive appropriate assurances with respect thereto.
9. In the event that Customer shall (a) become insolvent (as defined
below) (b) fail to deposit Initial Margin before the expiration of One Business
Day following telephone notice by Broker to an Authorized Person of Customer of
the failure to deposit Initial Margin in the Pledge Account within the time
period specified in Item 6 of this Agreement or (c) fail to make payment of Net
Variation Margin before the expiration of all notice periods specified in Item
10 of the Pledge Agreement, Broker may close out Customer's open Contracts in
whole or in part, and cancel any outstanding Contract orders and commitments
made by a Broker on behalf of Customer. Broker may take action pursuant to
clause (b) or (c) hereof only with respect to the particular Trading Account in
which the fail occurred. In the case of failure by Customer to make delivery of
a financial instrument in accordance with Item 8 hereof, Broker may borrow or
buy any property necessary to make such delivery, Any sale, purchase or
cancellation pursuant to this paragraph may be made at Broker's discretion on
the exchange or other market or through the clearinghouse where such business is
then transacted, at public auction or at private sale, without prior tender,
demand or call upon Customer. Customer shall remain liable for and shall pay to
Broker the amount of any deficiency resulting from any transaction described
above. As used above, the term insolvent means that (A) an order, judgment or
decree has been entered under the bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law (herein called the "bankruptcy Law") of any jurisdiction
adjudicating the Customer insolvent; or (B) the Customer has petitioned or
applied to any tribunal for, or consented to, the appointment of, or taking
possession by, a trustee, receiver, liquidator or similar official, of the
Customer, or commenced a voluntary case under the bankruptcy law of the United
States or any proceedings relating to the Customer under the bankruptcy Law of
any other jurisdiction, whether now or hereafter in effect; or (C) any such
petition or application has been filed, or any such proceedings commenced,
against the Customer and the Customer by any act has indicated its approval
thereof, consent thereto or acquiescence therein, or an order for relief has
been entered in an involuntary case against Customer under the bankruptcy Law of
the United
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States, as now or hereafter constituted, or an order, judgment or decree has
been entered therein appointing any such trustee, receiver, liquidator or
similar official, or approving the petition in any such proceedings, and such
order, judgment or decree remains unstayed and in effect for more than 60 days.
10. All communications, except notice pursuant to Item 6 hereof,
shall be sent to
(a) (1) if to Customer, to:
The Prudential Insurance Company of America
Prudential Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
(2) With copies to:
Xxxxxx X. Xxxxx
Prudential-Bache Government Plus Fund, Inc.
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(b) if to Broker, to
__________________________________________
__________________________________________
__________________________________________
__________________________________________
or to such other address as Customer may hereafter direct Broker in writing to
use.
11. This Agreement and the Pledge Agreement contain the entire
agreement between the parties and supersede any prior agreements between the
parties as to the subject matter of this Agreement. No provision of this
Agreement shall be amended except by an instrument in writing signed by a duly
authorized officer of Customer and a duly authorized officer of Broker.
12. This Agreement shall be construed according to, and the rights
and liabilities of the parties hereto shall be governed by, the laws of the
State of New York.
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13. This Agreement shall be binding on Broker, its successors and
assigns, and shall be binding upon Customer and Customer's successors and
assigns.
PRUDENTIAL-BACHE GOVERNMENT PLUS FUND, INC.
By :_______________________________________
Authorized Signature
[BROKER]
By :_______________________________________
Authorized Signature
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